VAPIANO

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FRANCHISE DISCLOSURE DOCUMENT

VAPIANO FRANCHISE USA, LLC

a Delaware limited liability company

8280 Greensboro Drive

McLean, Virginia 22102

Phone: (703) 665-4401

www.vapiano.com

vapiano@vapiano.com

The Franchise offered is for a "Vapiano" fast casual-style Restaurant which specializes in the sale of a wide range of dining options, covering lunch and dinner and featuring fresh pasta, pizza, salads, desserts, alcoholic beverages, coffee specialties and other non-alcoholic beverages all prepared in accordance with our recipes and specifications.

The total initial investment necessary to begin operation of a Vapiano franchised business is $1,776,000 to $2,931,500. This includes between $45,000 to $46,500 that must be paid to the franchisor or its affiliate. If you enter into a development agreement to develop more than one Restaurant, upon signing the Development Agreement You will pay a reservation fee equal to $22,500 for each Restaurant to be developed under the Development Agreement. Your total investment will depend on the number of Restaurants to be developed.

This disclosure document summarizes certain provisions of your franchise agreement and development agreement and other information in plain English. Read this disclosure document and all accompanying agreements carefully. You must receive the disclosure document at least 14 calendar days before you sign a binding agreement with, or make any payment to the franchisor or an affiliate in connection with the proposed franchise sale. Note, however, that no government agency has verified the information contained in this document.

You may wish to receive your disclosure document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact Kent Hahne, 8280 Greensboro Drive, McLean, Virginia 22102 and (703) 665-4401.

You may have elected to receive an electronic version of your disclosure document. If so, you may wish to print or download the disclosure document for future reference. You have the right to receive a paper copy of the disclosure document until the time of sale. To obtain a paper copy, contact Kent Hahne, 8280 Greensboro Drive, McLean, Virginia 22102 and (703) 665-4401.

The terms of your contract will govern your franchise relationship. Don't rely on the disclosure document alone to understand your contract. Read all of your contract carefully. Show your contract and this disclosure document to an advisor, like a lawyer or an accountant.

Buying a franchise I s a complex investment. The information in this disclosure document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this disclosure document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising.

There may also be laws on franchising in your state. Ask your state agencies about them.

Issuance Date: March 15, 2011

STATE COVER PAGE

Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.

Call the state franchise administrator listed in Exhibit J for information about the franchisor or about franchising in your state.

MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

Please consider the following RISK FACTORS before you buy this franchise:

THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT REQUIRE YOU TO RESOLVE DISPUTES WITH US BY ARBITRATION ONLY IN VIRGINIA. OUT OF STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE WITH US IN VIRGINIA THAN IN YOUR OWN STATE.
THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT STATE THAT VIRGINIA LAW GOVERNS THE AGREEMENTS, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.
THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
THE FRANCHISOR HAS BEEN IN EXISTENCE FOR A SHORT PERIOD OF TIME, SINCE JUNE 15, 2007. THEREFORE, THERE IS ONLY A BRIEF OPERATING HISTORY TO ASSIST YOU IN JUDGING WHETHER OR NOT TO MAKE THIS INVESTMENT.
LOCAL LAW MAY SUPERSEDE THESE FRANCHISE AND DEVELOPMENT AGREEMENT PROVISIONS. CERTAIN STATES REQUIRE THE SUPERSEDING PROVISIONS TO APPEAR IN AN ADDENDUM IN THIS DISCLOSURE DOCUMENT (SEE EXHIBIT G FOR THE STATE SPECIFIC ADDENDUM).

We use the services of one or more FRANCHISE BROKERS or referral sources to assist us in selling our franchise. A franchise broker or referral source represents us, not you. We pay this person a fee for selling our franchise or referring you to us. You should be sure to do your own investigation of the franchise.

TABLE OF CONTENTS

ITEM 1
THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

ITEM 2
BUSINESS EXPERIENCE

ITEM 3
LITIGATION

ITEM 4
BANKRUPTCY

ITEM 5
INITIAL FEES

ITEM 6
OTHER FEES

ITEM 7
ESTIMATED INITIAL INVESTMENT

ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

ITEM 9
FRANCHISEE'S OBLIGATIONS

ITEM 10
FINANCING

ITEM 11
FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING

ITEM 12
TERRITORY

ITEM 13
TRADEMARKS

ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

ITEM 15
OBLIGATIONS TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS

ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

ITEM 18
PUBLIC FIGURES

ITEM 19
FINANCIAL PERFORMANCE REPRESENTATIONS

ITEM 20
OUTLETS AND FRANCHISEE INFORMATION

ITEM 21
FINANCIAL STATEMENTS

ITEM 22
CONTRACTS

ITEM 23
RECEIPTS

EXHIBITS

A - FINANCIAL STATEMENTS
B - DEVELOPMENT AGREEMENT
C - FRANCHISE AGREEMENT
D - LIST OF FRANCHISEES AND DEVELOPERS
E - FRANCHISEES AND DEVELOPERS WHO HAVE LEFT THE SYSTEM
F - TABLE OF CONTENTS OF OPERATIONS MANUAL
G - STATE SPECIFIC ADDENDUM
H - GENERAL RELEASE
I - FRANCHISEE DISCLOSURE ACKNOWLEDGMENT STATEMENT
J - LIST OF STATE ADMINISTRATORS/AGENTS FOR SERVICE OF PROCESS

ITEM 1
THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

Franchisor

Vapiano Franchise USA, LLC (referred to in this Disclosure Document as "Vapiano," "We," "Us," or "Our") was formed as a Delaware limited liability company on June 15, 2007. Our principal place of business is 8280 Greensboro Drive, McLean, Virginia 22102, and we do business under Our corporate name and the Marks as described below. In this Disclosure Document, We refer to the person or entity that will be signing the Franchise Agreement (defined below) as "You" or "Your" which includes all franchise owners and partners, if You are a corporation, partnership or other entity.

We do not currently own or operate any Restaurants, but one of Our affiliate, Vapiano SE, owns and franchises "Vapiano" Restaurants in Germany and in other parts of Europe. We have not offered franchises in any other line of business and We do not engage in any other business activity.

Our agents for service of process are listed in Exhibit J.

We have written the Disclosure Document in "plain English" to comply with legal requirements. Any differences in the language in this Disclosure Document describing the terms, conditions or obligations under the Franchise Agreement, Development Agreement or any other agreements is not intended to alter in any way Your or Our rights or obligations under the particular agreement.

Our Parents, Predecessors and Affiliates

We have a parent and one affiliate. Our predecessor is Vapiano International LLC, a Delaware limited liability company formed on June 23, 2005 and which is headquartered at Our address ("Parent"). Shortly after Our Parent's formation in Delaware, it sold a 15-unit development deal in the Middle East, and an 8-unit development deal in Hungary. Both of these developers are scheduled to open their first Restaurants in 2007. In addition, a 3-unit development deal was sold in Florida in July 2007. All of these agreements were transferred from Our Parent to Us. Our Parent is a holding company and will not provide products or services to Our franchisees or area developers.

Our Affiliate is Vapiano SE located at Ollenhauerstrasse 1, 53113, Bonn, Germany. It is a German corporation founded in October, 2001 by the President of Our Affiliate and has been offering franchises since August 2004 in Germany and in parts of Europe. Currently, there are ten franchised and four company-owned "Vapiano" Restaurants in Germany and in other parts of Europe. Our Affiliate conducts a business of the type to be operated by you, and has done so since October 2001.

Except as previously disclosed, neither Our Affiliate nor Our Parent have offered franchises in this or any other line of business.

Description of Franchise

We offer franchises for the right to establish and operate a "Vapiano" Restaurant to be primarily located in up-scale areas or urban locations under the Marks and the System in accordance with the terms of the Franchise Agreement ("Restaurant" or "Franchised Business"). The marketing strategy of the Restaurant is to present an upscale, casual dining experience that caters to young professionals and their families as an alternative to other casual dining restaurant outlets currently saturating the casual dining food market. Each "Vapiano" will typically offer a menu of varying items serving two day parts (lunch and dinner), some prepared in accordance with Our proprietary recipes and ingredients. The Restaurants are established and operated under a comprehensive and unique system (the "System").

We offer the right to establish and operate a Restaurant under the terms of a single unit franchise agreement (the "Franchise Agreement"), Exhibit C to this Disclosure Document. You may be an individual, corporation, partnership or other form of legal entity (See Item 15).

In certain circumstances, We will offer to You the right to enter into a development agreement to develop more than one franchised Restaurant to be located within a specifically described geographic territory (the "Development Agreement"). Under the Development Agreement, You must establish Your Restaurants according to a development schedule, and to enter into a separate Franchise Agreement for each Restaurant established under the Development Agreement. The Franchise Agreement for the first Restaurant developed under the Development Agreement will be in the form attached as Exhibit C to this Disclosure Document. For each additional Restaurant developed under the Development Agreement, You must sign the form of Franchise Agreement that We are then offering to new franchisees.

The person or entity signing the Development Agreement is referred to as the "Developer." The Development Agreement contains concepts similar to the Franchise Agreement involving the "Developer's Principals," Controlling Principals of Developer, and an Operating Principal of Developer. Any reference to the "Agreements" means the Development Agreement and the Franchise Agreement, as applicable.

Market and Competition

The market for the food products and services offered by a Vapiano Restaurant is highly competitive. However, We believe Our competitive position is enhanced by Our operational format and by the food products offered by the Restaurants. We plan to continue controlled expansion into areas that We determine can support the Restaurants to improve name recognition and the reputation of the System through both franchised businesses and Restaurants operated by Our Affiliate.

You understand this is an early stage company which is naturally more risky and less certain in terms of how management will continue to evolve and lead and also how customers will support the concept.

Industry Regulations

The restaurant industry is heavily regulated. Many of the laws, rules and regulations that apply to business generally have particular applicability to restaurants, especially restaurants that offer full bar service. All "Vapiano" Restaurants must comply with federal, state and local laws applicable to the operation and licensing of a restaurant business, including obtaining all applicable health permits and/or inspections and approvals by municipal, county or state health departments that regulate food and liquor service operations. Your "Vapiano" Restaurant must also meet applicable municipal, county, state and federal building codes and handicap access codes. If applicable to your Restaurant, the Americans with Disability Act of 1990 requires readily accessible accommodation for disabled persons and therefore may affect your building construction, site elements, entrance ramps, doors, bathrooms, drinking facilities, etc. You should consider these laws and regulations when evaluating your purchase of a franchise.

You must have your liquor license before you open the Restaurant. The difficulty and cost of obtaining a liquor license and the procedures for securing the license vary greatly from area to area. There is also wide variation in state and local laws and regulations that govern the sale of alcoholic beverages. In addition, state "dram shop" laws give rise to potential liability for injuries that are directly or indirectly related to the sale and consumption of alcohol.

Among the other licenses and permits You may need are: Zoning or Land Use Approvals, Sunday Sale Permits, Sales and Use Tax Permits, Special Tax Stamps, Fire Department Permits, Food Establishment Permits, Health Permits, Alarm Permits, County Occupational Permits, Retail Sales Licenses, and Wastewater Discharge Permits. There may be other laws, rules or regulations which affect Your Restaurant, including minimum wage and labor laws along with ADA, OSHA and EPA considerations. We recommend that You consult with Your attorney for an understanding of them.

The U.S. Food and Drug Administration, the U.S. Department of Agriculture and state and local health departments administer and enforce regulations that govern food preparation and service and restaurant sanitary conditions. State and local agencies inspect restaurants to ensure that they comply with these laws and regulations.

The federal Clean Air Act and various state laws require certain state and local areas to meet national air quality standards limiting emissions of ozone, carbon monoxide and particulate matters, including caps on emissions from commercial food preparation. Some state and local governments have also adopted, or are considering proposals, that would regulate indoor air quality, including the limitation of smoking tobacco products in public places such as restaurants.

The United States enacted the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001" (the "USA Patriot Act"). We are required to comply with the USA Patriot Act. To help us comply with the USA Patriot Act, we ask you in the Franchise Agreement to confirm for us that neither you nor your directors, officers, shareholders, partners, members, employees, or agents are suspected terrorists or persons associated with suspected terrorists or are under investigation by the U.S. government for criminal activity. You may review the Patriot Act and related regulations at: http://epic.org/privacy/terrorism/hr3162.html.

ITEM 2
BUSINESS EXPERIENCE

President and Chairman of the Board of Directors: Kent Hahne	Mr. Hahne has been Our President and Chairman of the Board of Directors since June 2007, and has held similar positions with Our Parent since June 2005. From 1988 to the present he has owned and operated numerous McDonald's restaurants in Germany, as well as several Desert Moon Café franchises and Segafredo Coffee Bar franchises in Virginia.
Chief Executive Officer: Bill Bessette	Mr. Bessette has been our Chief Executive Officer since October 2008. From June 2007 to October 2008, he was Senior Vice President of Operations for Legal Sea Foods, Inc. located in Boston, Massachusetts. From January 2006 to June 2007, he was Vice President of Operations for Legal Sea Foods in Boston, and from May 2004 to January 2006, he was Area Director for Legal Sea Foods in New York/New Jersey. From February 2004 to May 2004, he was Regional Director for Charthouse Restaurants, Inc. located in North East Region (VA, NY, NJ, MD, MA, PA, OH), and from March 1996 to February 2004, he was General Manager for Charthouse Restaurants (CA, FL, PA, MD, VA, DC).
Vice President and Director: Gregor Gerlach	Mr. Gerlach has been Vice President and Director since June 2007, and has held similar positions with Our Parent since June 2005. Since 1996, Mr. Gerlach has been CEO of Seaside Hotels Germany, Chairman of Gerlach Wohnungsbau AG, CEO of Bagel Brothers, and Chairman of the Board of Directors of Our Affiliate.
Vice President and Director: Klaus Rader	Mr. Rader has been Vice President and Director since June 2007, and has held similar positions with Our Parent since June 2005. For the past 15 years through September 2005, Mr. Rader owned and operated KR System Gastro, GMBH, which was a multi-unit McDonald's franchisee in Munich, Germany. Since 1997, Mr. Rader has owned an operated a 4-unit Italian restaurant concept called Losteria.
Vice President of Operations: Anthony Felli	Mr. Felli joined Vapiano International, LLC in 2008 as the Vice President of Culinary & Purchasing. Prior to joining the Vapiano team, he was the Regional Director for Landry's Restaurants INC., where he was responsible for the oversight and direction of eleven units throughout the Northeastern and Mid-Atlantic regions of the United States. It was at the Chart House (owned by Landry's) where Mr. Felli first met current Vapiano Chief Executive Bill Bessette and they began their long-standing relationship in the restaurant industry. Mr. Felli also holds several degrees in culinary and restaurant management. In 1997, Mr. Felli received his A.S. in Baking & Pastries and his B.S. in Restaurant Management from the Culinary Institute of America in Hyde Park, New York. After graduating top of his class, he went on to earn his Master's Degree in Human Resources from Purdue University in 2000. A native of Sonoma County California, he currently resides in Alexandria, Virginia.
Director of Franchising and Operations: Tim Donah	Prior to his joining the Vapiano International LLC in October 2010, Mr Donah began his career in the industry in small town Litchfield, New Hampshire, as Operations Manager at the original Shorty's Mexican Roadhouse from 1994 to 1998. Timothy graduated from Johnson & Whales University in 1999 Summa Cum Laude in Food Service Management. Mr. Donah joined Legal Sea Foods in 1999 and thru ought his career held many positions including Restaurant Manager, Training Manager, General Manager and Regional Director of Operations. In an 11 year span with Legal Sea Foods he developed superior relationships at all levels of management and service positions, opened new stores and created the success that they are today. Utilizing his expert communication and extensive leadership skills he has been instrumental in developing and implementing numerous marketing programs and strong community relationships. Mr. Donah successfully increased revenue, perfected guest service and generated outstanding hospitality in this high-volume industry at several locations in New Jersey, New York, Pennsylvania, and Massachusetts. As a testament to his humanity he volunteered in Community Outreach programs, Boston Food Bank and the Kids Café program. He currently resides in Arlington, Virginia
Director of Finance/Controller: Shane Lease	Mr. Lease comes from an extensive restaurant and accounting background. He worked as a Manager and Accountant for Red Rock Canyon Grill, Greene Turtle, Buddy's Crabs & Ribs and The Cracker Barrel after attending Randolph-Macon College. He continued his accounting and finance career as Assistant Controller of Landon IP, Inc., a patent research firm based out of Alexandria, Virginia.

ITEM 3
LITIGATION

No litigation is required to be disclosed in this Item.

ITEM 4
BANKRUPTCY

No bankruptcy information is required to be disclosed in this Item.

ITEM 5
INITIAL FEES

Reservation Fee: If You sign a Development Agreement, You must pay Us a Reservation Fee equal to $22,500 for each Restaurant You commit to develop at the time You sign the Development Agreement. The Reservation Fee is fully earned by Us when received and is not refundable or credited against any other fees You must pay to Us.

Franchise Agreement: You must pay Us an initial franchise fee of $45,000 for the right to establish a single Restaurant under a Franchise Agreement. You must pay the initial franchise fee in full when You sign the Franchise Agreement and the initial franchise fee is the same for all franchisees under this offering. This fee is used in part for working capital and in part for profit. If You cannot obtain possession of an approved location for the Restaurant within six months after You have signed the Franchise Agreement, We have the right to terminate the Franchise Agreement and refund 75% of the initial franchise fee. The 25% non-refundable fee is in consideration of the administrative and other expenses incurred by us in granting you the franchise and for our lost or deferred opportunity to grant a franchise to any other potential franchisee. Before returning any initial fees, We will require You to demonstrate that You have made a good faith effort to obtain the financing or obtain possession of an approved location for the Restaurant. This policy may be revoked by Us at any time. If We decide to revoke this policy, We will provide written notice to franchisees that have signed a Franchise Agreement to establish a single Restaurant at least 60 days before the revocation takes effect.

Development Agreement: If You sign a Development Agreement with Us, then for each Restaurant You develop under the Development Agreement We will reduce the initial franchise fee to $22,500. The initial franchise fee is payable in a lump sum upon signing a lease or purchase agreement and the Franchise Agreement for the Restaurant or 90 days before the scheduled opening of the Restaurant, whichever occurs first, is fully earned upon receipt and is not refundable.

Initial Training Fee: We do not charge a training fee for the initial training of Your Operating Principal or General Manager. At Your request, and subject to space availability, We will provide initial training to additional members of Your personnel, but We may charge a fee for that initial training. The initial training fee We currently charge is $1,500 per person. This fee represents Our cost of providing the training, including Our administrative costs of making personnel available for training purposes, and the cost of materials. You must pay the initial training fee for the additional personnel before training begins and it is nonrefundable. The initial training fee is charged uniformly to all franchisees under this Disclosure Document, although actual dollar amounts may vary depending on how many additional persons are trained.

Additional Site Selection Fee: We reserve the right to charge a reasonable fee for additional on-site evaluations, after the first, as well as our expenses including the cost of travel, lodging, meals and wages.

There are no other purchases from or payments to Us or any Affiliate of Ours that You must make before Your Restaurant opens for business.

ITEM 6
OTHER FEES

Type of Fee (1)	Amount	Due Date	Remarks
Royalty Fee (2)	6% of Gross Sales	Monthly on the 5th day of each month	Amounts due will be withdrawn by EFT from Your designated bank account.
Creative Fund (3)	2% of Gross Sales	Payable at the same time and in the same manner as the Royalty Fee	You must contribute when We establish the Creative Fund. We have the right to increase this amount to 3% upon 30 days notice to you.
Local Advertising	1% of Gross Sales	Monthly - as incurred by You	Your contributions to an Advertising Cooperative are credited against Your local advertising obligations. There presently are no Advertising Cooperatives.
Cooperative Advertising (4)	Maximum - 1% of Gross Sales	As determined by Cooperative	Your Cooperative contribution may be allocated by Us to the Creative Fund.
Advertising & Promotional Materials	Varies, depending on Your advertising needs	When billed	See Items 7 and 11.
Interest	18% or highest rate allowed by applicable law, whichever is less	On demand	Interest may be charged on all overdue amounts.
Prohibited Product or Service Fine	$250 per day of use of unauthorized products or services	If incurred	In addition to other remedies available to us
Initial Training of additional or replacement and successor personnel	$1,500 per person	Before training	No additional charge for initial training for General Manager and Operating Principal (see Item 11).
Additional Assistance	If You request additional assistance, You must pay the current per diem charge for Our employees used to provide the assistance and Our associated costs. Current per diem is $500	When billed	We provide opening assistance without additional charge (see Item 11). Any additional assistance You request is billed at the current per diem rate.
Transfer Fee	$10,000 to reimburse Us for Our reasonable costs and expenses in reviewing the transfer application	Submitted with transfer application	No fee charged to an individual or partnership franchisee that transfers its rights to a corporation controlled by the same interest holders. A transfer fee of a similar amount is charged under both the Franchise Agreement and the Development Agreement.
Public Offering	$5,000	When billed	This covers Our cost to review the proposed offering of Your securities. The offering fee is the same amount under both the Franchise Agreement and the Development Agreement.
Additional or Remedial Training	Our cost in providing the training	Before additional training	We reserve the right to charge a fee for additional or remedial training that is not mandatory. We do not charge for mandatory training. Cost will vary based on the staff, location, and type of training being offered.
Inspection and Testing	Cost of inspection or testing	When billed	We may require You to pay Us or an independent laboratory for the cost of inspection or testing if You purchase or lease items used in the Restaurant from sources We have not previously approved (see Item 8).
Audit Fee	Cost of audit	When billed	Payable only if We find, after an audit, that You have understated any amount You owe to Us by more than 2%
Late Payment or Reporting Fee	$50 per day You are late	Daily	If You fail to pay royalties when due or fail to submit royalty reports weekly as required, We may charge You $50 per day until the payment or report is received.
Manual and/or Videos Replacement Fee	$500	When billed	If You request additional or replacement copies of the Manual or Videos (see Item 11).
Costs Associated with Dedicated Telephone Lines for Internet Access	$25 to $50 per month	When billed	This amount is paid to Your internet or telephone provider and not to Us
Renewal Fee	$20,000	Upon renewal	Paid when you renew your Franchise Agreement
Refurbishment or Upgrade of the Restaurant	Will vary	As incurred	We may require You to refurbish your Franchised Restaurant to meet Our then-current requirements for décor, layout, etc. We will not require you to refurbish the Restaurant more frequently than every five years
Development Period Extension Fee	$10,000 per extension	When extension is granted	These extension purchases may not apply if you have located a site that we have approved.
Liquidated Damages	See Note 5
Gift Card Program	Will vary under circumstances	As incurred	You must participate in our gift card program. Gift cards will be available for sale and redemption at any Vapiano Restaurant in the System.

Notes:

All fees described in this Item 6 are non-refundable, and uniformly imposed. Except as otherwise indicated in the preceding chart, We impose all fees and expenses listed and You must pay them to Us. Except as specifically stated above, the amounts given may be to increases based on changes in market conditions, Our cost of providing services and future policy changes. At the present time We have no plans to increase payments over which We have control.
For the purposes of determining the royalties to be paid under the Franchise Agreement, "Gross Sales" means the total selling price of all services and products and all income of every other kind and nature related to the Restaurant (including income related to catering and delivery activities, and any sales or orders of food products or food preparation services provided from or related to the Restaurant), whether for cash or credit and regardless of collection in the case of credit. If a cash shortage occurs, the amount of Gross Sales will be determined based on the records of the electronic cash register system and any cash shortage will not be considered in the determination. Gross Sales expressly excludes the following:
1. Receipts from the operation of any public telephone installed in the Restaurant or products from pre-approved vending machines located at the Restaurant, except for any amount representing Your share of the revenues;
2. Sums representing sales taxes collected directly from customers, based on present or future laws of federal, state or local governments, collected by You in the operation of the Restaurant, and any other tax, excise or duty which is levied or assessed against You by any federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the Restaurant, provided that the taxes are actually transmitted to the appropriate taxing authority; and
3. Proceeds from isolated sales of trade fixtures not constituting any part of Your products and services offered for resale at the Restaurant nor having any material effect on the ongoing operation of the Restaurant required under the Franchise Agreement.
We may authorize certain other items to be excluded from Gross Sales. Any exclusion may be revoked or withdrawn at any time by Us. The royalty fee will be withdrawn from Your designated bank account by electronic fund transfer ("EFT") on the 5th day of each month based on Gross Sales from the preceding calendar month, unless We require otherwise. You must maintain a minimum of $3,000 in Your designated bank account for the Restaurant. If the 5th day of any month is not a business day, the amounts will be due by EFT on the next business day.
We have established and will administer a national creative fund on behalf of the System (see Item 11) to provide national or regional creative materials for the benefit of the System.
Cooperatives will be comprised of all franchised Restaurants and Restaurants owned by Our affiliate located in designated geographic areas. Each Restaurant has one vote in the cooperative. No Cooperatives have been established as of the date of this Disclosure Document.
If we terminate your Franchise Agreement for cause, you must pay us within 15 days after the effective date of termination liquidated damages equal to the average monthly Royalty Fees you paid to us during the 12 months of operation preceding the effective date of termination multiplied by (a) 24 (being the number of months in two full years), or (b) the number of months remaining in the Agreement had it not been terminated, whichever is higher.

ITEM 7
ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT

Type of Expenditure	Amount	When Due	Method of Payment	To Whom Payment is to be Made
Initial Franchise Fee (1)	$45,000	On signing Franchise Agreement	Lump Sum	Us
Leasehold Improvements (2)	$700,000-$1,250,000	As Arranged	As Invoiced	Independent Contractors
Lease Payments and other rental expenses (3)	$10,000-$30,000	Monthly	Per Lease	Landlord
Equipment/ Millwork/ Owner Furnished Items (4)	$800,000-$1,200,000	As Arranged	As Invoiced	Designated Vendors
Signage (5)	$10,000-$50,000	As Arranged	As Invoiced	Designated Vendors
Initial Inventory (6)	$15,000-$25,000	As Arranged	As Invoiced	Designated Vendors
Architectural/ Engineering (7)	$50,000-$70,000	As Arranged	As Invoiced	Designated Vendor
Electronic Cash Register System with Modem (8)	$80,000-$90,000	Lump Sum	As Invoiced	Designated Vendor
Facsimile Machine (9)	$350-$500	Lump Sum	As invoiced	Designated independent vendor
Travel, lodging and meals for initial training (10)	$5,000-$20,000	As Incurred	As Incurred	Independent Suppliers
Business Supplies (stationery, business cards, brochures, presentation folders, paper and other materials) (11)	$1,000-$1,500	Lump Sum	As Invoiced	Us or Independent Suppliers
Business licenses, permits, utility deposits, etc. (for first year) (12)	$5,000-$10,000	As Arranged	As Incurred	Various Agencies
Insurance deposits and premiums (for first year) (13)	$10,000-$20,000	As Arranged	As Invoiced	Independent Carrier
Grand Opening Advertising (14)	$10,000	As Arranged	As Incurred	Suppliers
Ancillary Real Estate Fees (15)	$5,000-$10,000	As Arranged	As Incurred	Vendors
Additional Funds (for 3 months) (16)	$30,000-$100,000	As Arranged	As Incurred	Various Vendors
TOTAL	$1,776,000 to $2,931,500

In general, none of the expenses listed in the above chart are refundable, except any security deposits you must make may be refundable and the initial franchise fee is partially refundable in certain circumstances (see Item 5). We do not finance any portion of Your initial investment.

Notes:

You must pay an initial franchise fee of $45,000 when You sign a Franchise Agreement to obtain a single Restaurant. The initial franchise fee is non-refundable under the terms of the Franchise Agreement, except that We currently have a policy under which We will refund 75% of the initial franchise fee if You are unable to locate an acceptable site (see Item 5). When You sign the Development Agreement, You must pay us a development fee equal to $45,000 for the first Restaurant to be developed, and sign a Franchise Agreement for this first Restaurant, plus $15,000 for each additional Restaurant to be developed under the Development Agreement. For each Restaurant developed after the first, We will apply $15,000 toward the initial franchise fee due under the Franchise Agreement. No amounts for a separate development fee charged for the development of Restaurants in addition to the first Restaurant is included in the estimate since those payments are credited against franchise fees.
The cost of leasehold improvements will vary depending on numerous factors, including: (i) the size and configuration of the premises; (ii) pre-construction costs (e.g., demolition of existing walls and removal of existing improvements and fixtures); and (iii) cost or materials and labor which may vary based on geography and location. These amounts are based on the cost of adapting Our prototypical architectural and design plans to remodel and finish-out of the Restaurant and the cost of leasehold improvements. These figures are Our best estimate based on remodeling/finish-out rates and conditions in the Toronto metropolitan area where Our Affiliate has opened Restaurants and some estimates from US based general contractors. These amounts may vary substantially based on local conditions, including the availability and prices of labor and materials. These costs may also vary depending on whether certain of these costs will be incurred by the landlord.
The figures are for the initial phase of the business for rent and assume that the premises of the Restaurant will be in a strip shopping center or urban location ranging in size from approximately 5,000-10,000 square feet, and that no security deposit is required. Further, the figures assume base annual rental rates ranging from $20 to $30 per square foot. Landlords may also vary the base rental rate and charge rent based on a percentage of gross sales. In addition to base rent, the lease may require You to pay common area maintenance charges ("CAM Charges") for the mall and for the food court, Your pro rata share of the real estate taxes and insurance for the mall, and Your pro rata share of other charges. The actual amount You pay under the lease will vary depending on the size of the Restaurant, the types of changes that are allocated to tenants under the lease, Your ability to negotiate with landlords and the prevailing rental rates in the geographic region.
You must purchase equipment meeting Our specifications to be used in the Restaurant, including ice machine, microwave oven, work tables, shelving, grill, convection oven and oven stand proofer, and other items including smallwares. Your delivery vehicle, which can be leased (and which amount is estimated in these figures) can be either a van or a sedan. We have established relationships with equipment vendors for certain equipment used in the Restaurant that meet Our specifications.
These amounts represent Your cost for menu boards, menu panels, neon logo and descriptive signs. Your landlord may have different restrictions it places on interior and exterior signage which may affect Your costs.
These amounts represent Your initial inventory of food supplies and paper goods for use in the initial phase of operating the Franchised Business.
These fees are estimates of Your costs in obtaining any architectural and design services necessary for the construction of the Restaurant. You must adapt Our prototypical plans and specifications for the construction of the Restaurant.
We recommend that You use in the Restaurant the MS POS computer hardware and software, which includes complete back-office system: IBM compatible Personal Computer, 256 MB RAM, Modem, cd-rom 52X, Floppy 3.5, 20 Gb Hard disk, 15" Color Monitor, Windows XP or later version, inkjet or laser printer for reports, Zipdrive for back-ups 250 requested by customer and Mag card; floor requirements: Ecran stealth balck, Hub, Vga adapter, Cash drawer, Pos adapter (double), Network card, Mag card reader; Printers: Check printers thermals, Requisition printers for kitchen, Requisition printer (optional for Bar); Software: Positouch software 2 stations; Credit card interface, Time and attendance (included) and Inventory package; Installation and Training: Installation and wiring included, Server training, Management training, Live day. Typically You will use one terminal per Restaurant and one remote printer; however, many of Our locations use two or three terminals. We have also tested and made available a Video Display Unit ("VDU") for use with the MS POS System. We have the right, as described in Item 11, to poll Your system at Our discretion. You must pay the cost for Us to initiate access to Your system through Our monitoring software. We estimate the cost to range from $500 to $1,000 per Restaurant.
You must have a facsimile machine to communicate with Us and to accept fax menu/catering orders, and it must be able to cut pages as they are received or print on single sheet paper.
We provide initial training to Your Operating Principal and General Manager at no additional charge. These estimates include only Your out-of-pocket costs associated with the training of the Operating Principal and General Manager (including travel, room and board, and wages). These amounts do not include any fees or expenses for training any other personnel. Training is for three to six weeks. These costs will vary depending on Your selection of lodging and dining facilities and mode and distance of transportation.
You must purchase business cards, brochures and other written materials for use in the Franchised Business. You will typically purchase amounts that may last as long as six months. You may purchase these materials from Us or independent vendors that have been approved by Us.
These are estimates of the costs for obtaining local business licenses which typically remain in effect for one year. These figures do not include occupancy and construction permits which were included in the leasehold improvement costs. The cost of these permits and licenses will vary substantially depending on the location of the Franchised Business. The estimates also include Your utility deposits. Since the availability and expenses of acquiring a liquor license vary substantially from jurisdiction to jurisdiction, You should consult the appropriate governmental authority concerning the availability of this license and the associated expenses for Your Restaurant before You sign a Franchise Agreement. The cost of a liquor license can range from $5,000 to over $100,000, depending on the location and jurisdiction, but can be even higher in some states. We strongly recommend that You verify the cost of a liquor license and its availability before You purchase a Vapiano franchise.
These figures are estimates of the cost of the annual premiums for the insurance You must obtain and maintain for the franchised business as described in Item 8.
You must spend a minimum of $7,500 on a grand opening advertising campaign. We reserve the right to approve all advertisements used in Your grand opening advertising campaign, and Your campaign must be conducted in the 60 day period comprising 30 days before and 30 days following opening of Your Restaurant. You must submit to Us for Our approval a marketing plan and budget a minimum of 30 days before the opening date of Your Restaurant. If You do not provide Us with the marketing plan and budget, You must give Us the money and We will spend it for You.
These fees are for miscellaneous real estate costs, such as broker incentives and market analysis studies.
We have relied on Our Affiliate's principal's three years of experience in compiling these estimates. These amounts are Our estimate of the amounts needed to cover Your expenses for the start-up phase of Your business including: professional fees in connection with obtaining and establishing the Franchised Business; two months' lease payments; three months' payroll for a manager, two assistant managers and four hourly employees; utilities and telephone service for three months, Your minimum of $3,000 required to be in your checking account for EFT purposes and other costs. We estimated the start-up phase to be three months from the date the Restaurant opens for business. These figures are estimates and We cannot assure You that You will not have additional expenses starting the Restaurant. Your actual costs may vary greatly and will depend on factors such as the size and condition of the space and cost to convert to a Vapiano Restaurant, liquor licenses, Your management skill, experience and business acumen; local economic conditions; the local market for products; the prevailing wage rate; competition; and the sales level reached during the start-up phase. These amounts do not include any estimates for debt service. These are only estimates and your costs may vary based on actual rental prices in your area, and other site-specific requirements or regulations. The costs outlined in this Item 7 are not intended to be a forecast of the actual cost to you or to any particular franchisee.

Except as specifically stated above, the amounts given may be subject to increases based on changes in market conditions, Our cost of providing services and future policy changes. At the present time, We have no plans to increase payments over which We have control.

We have not included a separate table for the initial investment if You sign a Development Agreement. Other than the reduced initial franchise fee for Developers, actual start-up costs pertaining to the actual Restaurants opened under the Development Agreement are as estimated above, subject to potential increases over time or other changes in circumstances. If You sign a Development Agreement, Your professional fees such as legal and financial may be higher.

ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You must purchase or lease and install all fixtures, furnishings, equipment (including electronic cash registers, computer hardware and software), distinctive signage, interior and exterior design, décor items, signs and related items We require, all of which must conform to the standards and specifications in Our Manuals or otherwise in writing (as defined in Item 11), unless You have first obtained Our written consent to do otherwise. The computer hardware and software that You must purchase are listed in Footnote 8 of Item 7. You may not install or permit to be installed on the Restaurant premises any fixtures, furnishings, equipment, décor items, signs, games, vending machines or other items without Our written consent or which do not comply with Our specifications. If You lease any of the property described above from a third party, We must approve the lease in writing before it is signed. We will not approve the lease unless it permits Your interest in the lease to be assigned to Us if the Franchise Agreement terminates or expires and that prohibits the lessor from imposing an assignment or related fee on assignment.

There are no approved suppliers in which any of our officers owns an interest.

To ensure that the highest degree of quality and service is maintained, You must operate the Restaurant in strict conformity with the methods, standards and specifications that We prescribe in the Manuals or otherwise in writing. You must maintain in sufficient supply and use and sell at all times only those food and beverage items, ingredients, products, materials, supplies and paper goods that meet Our standards and specifications. All menu items must be prepared in accordance with the recipes and procedures specified in the Manuals or other written materials. You must not deviate from these standards and specifications by the use or offer of non-conforming items or differing amounts of any items, without obtaining Our written consent first. You must sell and offer for sale only those menu items, products and services that We have expressly approved for sale in writing. You must offer for sale all products and services required by Us in the manner and style We require, including dine-in and carry-out services and the sale of pre-packaged food products. You must not deviate from Our standards and specifications without obtaining Our written consent first. You must discontinue offering for sale any items, products and services We may disapprove in writing at any time. We can, and expect to, modify Our standards and specifications as We deem necessary. We will provide You notice of any changes in the Manuals.

You must permit Us or Our agents, at any reasonable time, to remove a reasonable number of samples of food or non-food items from Your inventory or from the Restaurant free of charge for testing by Us or by an independent laboratory to determine whether the samples meet Our then-current standards and specifications. Besides any other remedies We may have, We may require You to pay for the testing if We have not previously approved the supplier of the item or if the sample fails to conform to Our specifications (see Item 6).

Except for proprietary products and promotional materials provided by Us or Our designated suppliers, which we and our designated suppliers are the only approved suppliers, (or delivery vehicles that You may use in the operation of the Restaurant), You must obtain all food and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including electronic cash register, computer hardware and software), and other products used or offered for sale at the Restaurant solely from suppliers who demonstrate, to Our continuing reasonable satisfaction, the ability to meet Our then-current standards or in accordance with Our standards and specifications. Our criteria for supplier approval may be found in the Manuals. Among other things, the suppliers must have adequate quality controls and the capacity to supply Your needs promptly and reliably. If You wish to purchase, lease or use any products or other items from an unapproved supplier, You must submit a written request for approval, or must request the supplier to do so. We have to approve any supplier in writing before You make any purchases from that supplier. We can require that Our representatives be permitted to inspect the supplier's facilities, and that samples from the supplier be delivered, either to Us or to an independent laboratory, for testing. You must pay the cost of the inspection, and the actual cost of the test must be paid by You or the supplier (see Item 6). We reserve the right to re-inspect the facilities and products of any approved supplier and to revoke Our approval if the supplier fails to continue to meet any of Our then-current standards. Our supplier approval procedure does not obligate Us to approve any particular supplier. However, We will notify You within 30 days after We complete the inspection and evaluation process of Our approval or disapproval of any proposed supplier.

If You offer delivery and catering services, any vehicle that You use to deliver Restaurant products and services to customers must meet Our standards for appearance and ability to satisfy the requirements imposed on You under the Franchise Agreement. You must place the signs and décor items on the vehicle We require and must at all times keep the vehicle clean and in good working order. You must have each person providing those services to comply with all laws, regulations and rules of the road and to use due care and caution operating and maintaining the motor vehicles. Except as noted above, We do not have any standards or exercise control over any motor vehicle that You utilize.

We have and may continue to develop for use in the System certain products which are prepared from confidential proprietary recipes and other proprietary products which bear Our Marks, such as proprietary sauces, beers and other specialty food products. Because of the importance of quality and uniformity of production and the significance of those products in the System, it is to Your and Our benefit that We closely control the production and distribution of those products. Accordingly, if those products become a part of the System, You will use only Our proprietary recipes and other proprietary products and will purchase solely from Us or from a source designated by Us all of Your requirements for those products. You must purchase from Us for resale to Your customers certain merchandise identifying the System that We require, such as pre-packaged food products and "Vapiano" memorabilia and promotional products, in amounts sufficient to satisfy Your customer demand. You must also obtain certain upgrades for Your electronic cash register system.

All advertising and promotional materials, signs, decorations, paper goods (including menus and all forms and stationery used in the Restaurant) and other items We designate must bear the Marks (see Item 13) in the form, color, location and manner We prescribe. In addition, all Your advertising and promotion in any medium must be conducted in a dignified manner and must conform to the standards and requirements in the Manuals or otherwise. You must obtain Our approval before You use any advertising and promotional materials and plans if We have not prepared or approved them during the 12 months before their proposed use.

You must obtain Our approval of the site for the Restaurant before You acquire the site. You must also obtain Our approval of any contract of sale or lease for the Restaurant before You sign the contract or lease. We will not approve any lease unless a rider to the lease, prepared by Us, is signed by You, by Us and by the landlord. The rider will contain the following provisions:

During the term of the Franchise Agreement, the premises will be used only for the operation of the Restaurant.
The landlord consents to Your use of the Marks and signs, décor items, color schemes and related components of the System.
The landlord agrees to give Us copies of any and all letters and notices sent to You related to the lease and the premises, at the same time that these letters and notices are sent to You.
We may enter the premises to make any modification necessary to protect the System and Marks or to cure any default under the Franchise Agreement or under the lease, without being guilty of trespass or any other crime or tort. The landlord will not be responsible for any expenses or damages owing from Our conduct of those activities.
If We exercise Our option to obtain Your lease, You must assign the lease to Us or Our affiliates when the Franchise Agreement expires or terminates, and the landlord will consent to this assignment and will not charge any assignment fee or accelerate rent under the lease.
If the lease is assigned, We or any affiliate designated by Us will agree to assume from the date of assignment all of Your obligations remaining under the lease, and We or Our affiliate will assume Your occupancy rights, and the right to sublease the premises, for the remainder of the term of the lease.
You will not assign the lease or renew or extend the lease's term without obtaining Our written consent first.
The landlord and You will not amend or otherwise modify the lease in any manner that could materially affect any of the above requirements without obtaining Our written consent first.
The terms of the lease rider will supersede any conflicting terms of the lease.

Before You open the Restaurant for business, You must obtain the insurance coverage for the Restaurant specified below. This insurance coverage must be maintained during the term of the Franchise Agreement and must be obtained from a responsible carrier or carriers acceptable to Us with a minimum rating of "AVII" by A.M. Best Company.

Commercial General Liability Insurance with coverages of $1,000,000 per occurrence and $2,000,000 aggregate. This insurance must include coverage for the following risks: (a) property damage and bodily injury to others – including sickness, disease and death; (b) personal and advertising injury insuring liability for false arrest, libel, slander, defamation, false imprisonment, unlawful detention, wrongful or malicious prosecution or invasion of privacy sustained by any person; (c) liquor liability insuring Your liability for damages arising out of bodily injury or property damage by reason of any statute or ordinance or common law pertaining to the sale or serving of alcoholic beverages, if Your Restaurant serves or sells liquor (beer, wine or spirits); (d) contractual Liability insuring liability for bodily injury and property damage arising out of oral, written or incidental agreements, including hold harmless agreements and the indemnity provisions of Your Franchise Agreement; (e) independent contractors insuring liability You may incur for bodily injury or property damage arising out of operations performed for You by persons other than Your own employees; (f) premises/operation insuring bodily injury and property damage while work is performed on premises; (g) product liability insuring liability for bodily injury or property damage caused by products that You sell, handle or distribute whether the bodily injury or property damage occurs on or away from Your premises; (h) completed operations covering injury to property or person after the completion of work or services; (i) aggregate limits on a "per location" basis for the underlying general liability as well as the umbrella/excess coverage that may be in place; and (j) named perils pollution covering bodily injury or property damage arising out of heat, smoke or fumes from a hostile fire, and bodily injury sustained within a building and caused by smoke, fumes or vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests.
Commercial automobile with minimum coverage of $1,000,000 per accident combined single limit, including owned, non-owned, leased and hired vehicles.
Workers' compensation insurance in statutory amounts and employer's liability insurance with minimum coverages of $1,000,000 per accident, $1,000,000 for disease – each employee, and $1,000,000 for disease – policy limit.
Commercial property insurance and business interruption insurance with coverages of 100% of the replacement value of the Restaurant and its contents and full recovery of net profits and continuing expenses of the Restaurant for not less than 12 months.
Flood insurance for full replacement value of the Restaurant, if the Restaurant is in a special flood hazard zone.
Earthquake insurance for 50% or 75% replacement value of the Restaurant, depending on the hazard rating for the area in which the Restaurant is located.
Boiler and machinery/equipment breakdown insurance, including business interruption, with coverage of 100% of the replacement value of the machinery/equipment plus full recovery of net profits and continuing expenses of the Restaurant.
Crime insurance including coverages for employee dishonesty; forgery and alteration; money and securities; computer fraud; counterfeit paper currency; and robbery/safe burglary (other than money).
Umbrella insurance with a minimum limit of $5,000,000.
10. Other insurance required by the state or locality in which the Restaurant is located and operated, or as may be required by the terms of Your lease.

You may, after obtaining Our written consent, choose to have a deductible or self-insured retention above $5,000 or 5% of the replacement cost of the building. All of the policies must name Us, Our affiliates and the respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, as additional insureds and must include a waiver of subrogation in favor of all those parties.

In addition to the insurance You must have above during the operation of Your Restaurant, You must also obtain, or make sure that Your contractors have obtained, the following minimum insurance during any periods of construction or remodeling of Your Restaurant:

Statutory workers' compensation insurance and employer's liability insurance with minimum coverages of $1,000,000 per accident, $1,000,000 for disease – each employee, and $1,000,000 for disease – policy limit.
Commercial general liability insurance with minimum coverage of $1,000,000 per occurrence.
Auto liability insurance with minimum coverage of $1,000,000 per accident combined single limit, including owned, scheduled, hired and non-owned vehicles.
The contractor's insurance coverages may be satisfied with a combination of primary, umbrella and/or excess policies with a minimum limit of $5,000,000.
Builder's risk insurance on a 100% completed value/replacement cost basis, including business interruption coverage.
Flood insurance and earthquake insurance, if the Restaurant will be located in those special hazard areas.

More specific information concerning our insurance requirements is contained in the Confidential Operations Manual.

We may, when appropriate, negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of the System. As of the date of this Disclosure Document, there are no purchasing or distribution cooperatives for any of the items described above in which We require You to participate.

We may receive discounts on purchases of electronic cash register and software from approved suppliers, which discounts will be made available to You if You purchase through these suppliers. We may also receive discounts from approved suppliers of equipment for the Restaurant which We will make available to You as well. We may obtain certain materials such as cups, napkins, business cards, stationery, flyers, brochures and other promotional materials and memorabilia using Our Marks that You must obtain from Us or sources approved or designated by Us. You must purchase from Us or sources designated by Us certain proprietary sauces, beer and trademarked food products. We may sell these items to You or have You purchase them through designated sources at Our cost, plus shipping, handling, a reasonable mark up by the supplier and an amount to compensate Us for Our administrative overhead in connection with these arrangements.

For fiscal year ended December 31, 2010, no revenues were derived from any required purchases or leases.

We expect to derive revenue from franchisees' required purchases from suppliers in the next and following fiscal years through a program of rebates from some of Our designated or approved suppliers. We estimate that these rebates will range from 1% to 5% of these purchases. These rebates serve to partially reimburse Us for Our costs in the initial sourcing, approval and ongoing monitoring of compliance with Our quality standards of Our suppliers. We do not anticipate receiving rebates from all of our designated or approved suppliers because in many cases We will instead negotiate proportional reductions in the invoice price of the products sold to Us. We do not undertake any obligation to negotiate the proportional price reductions as each supplier has their own position on the granting (and tracking/accounting for) of price reductions vs. rebates.

You must purchase or lease virtually all goods and services necessary to establish and operate the Restaurants from Us or Our designees, from suppliers approved by Us, or in accordance with Our specifications. We estimate that Your purchases and leases from Us, Our affiliates, approved suppliers and in accordance with Our specifications will be approximately 90% to 100% of Your costs to establish and operate the Franchised Business.

When determining whether to grant new or additional franchises, We consider many factors, including compliance with the foregoing requirements.

ITEM 9
FRANCHISEE'S OBLIGATIONS

This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.

Obligation	Section in Agreement	Disclosure Document Item
a. Site selection and acquisition/ lease	Section 2 of Franchise Agreement	Items 8 and 11
b. Pre-opening purchases/leases	Sections 6, 7 and 8 of Franchise Agreement	Items 5, 6, 7, 8 and 11
c. Site development and other pre-opening requirements	Section 2 of Franchise Agreement	Items 1, 8 and 11
d. Initial and ongoing training	Section 6 of Franchise Agreement	Items 5, 6 and 11
e. Opening	Section 6 of Franchise Agreement	Items 5, 6 and 11
f. Fees	Sections 4 and 8 of Franchise Agreement and Section 2 of Development Agreement	Items 5 and 6
g. Compliance with standards and policies/Manuals	Sections 2, 3, 6, 8, 9, 10, 11 and 12 of Franchise Agreement	Items 11 and 14
h. Trademarks and proprietary information	Sections 9 and 10 and Attachment D of Franchise Agreement, Attachment B to Development Agreement	Items 11, 13 and 14
i. Restrictions on products/services offered	Section 7 of Franchise Agreement	Items 8 and 16
j. Warranty and customer service requirements	Section 7 of Franchise Agreement	Item 8
k. Territorial development and sales quotas	Section 3 of Development Agreement	Item 12
l. Ongoing product/service purchases	Section 7 of Franchise Agreement	Items 6 and 8
m. Maintenance, appearance and remodeling requirements	Sections 2, 7 and 14 of Franchise Agreement	Items 8 and 11
n. Insurance	Section 12 of Franchise Agreement	Items 7 and 8
o. Advertising	Section 8 of Franchise Agreement	Items 6, 8 and 11
p. Indemnification	Section 15 of Franchise Agreement and Section 10 of Development Agreement	Item 6
q. Owner's participation/ management/staffing	Sections 6, 14, 15 and 19 of Franchise Agreement and Section 6 of Development Agreement	Items 1, 11 and 15
r. Records and Reports	Sections 4, 7 and 11 of Franchise Agreement	Item 6
s. Inspections and audits	Sections 2, 7 and 11 of Franchise Agreement	Items 6, 8 and 11
t. Transfer	Section 14 of Franchise Agreement and Section 7 of Development Agreement	Items 6 and 17
u. Renewal or Extension of Rights	Section 3 of Franchise Agreement and Section 3 of Development Agreement	Items 6 and 17
v. Post-termination obligations	Section 18 of Franchise Agreement and Section 7 of Development Agreement	Items 6 and 17
w. Non-competition covenants	Section 10 and Attachment D of Franchise Agreement, Section 9 and Attachment B of Development Agreement	Item 17
x. Dispute Resolution	Section 19 of Franchise Agreement and Section 15 of Development Agreement	Items 6 and 17
y. Liquidated damages	Section 18 of Franchise Agreement	Item 6

ITEM 10
FINANCING

Neither we nor any agent or affiliate offers direct or indirect financing to you, guarantees any note, lease or obligation of yours, or has any practice or intent to sell, assign or discount to a third party all or part of any financing arrangement of yours.

ITEM 11
FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING

Except as listed below, We are not required to provide You with any assistance.

Pre-Opening Obligations: Before the opening of a Restaurant We will provide the following assistance and services:

Our written site selection guidelines and the site selection assistance We deem advisable. (Franchise Agreement, Section 5.1(1).) If You cannot obtain possession of an approved location for the Restaurant within six months after You have signed the Franchise Agreement, We have the right to terminate the Franchise Agreement and refund 75% of the initial franchise fee (see Item 5).
One on-site evaluation, and additional on-site evaluations as We deem necessary or in response to Your reasonable request for site approval. (Franchise Agreement, Section 5.1(2).)
On loan, one set of prototypical architectural and design plans and specifications for a Restaurant for adaptation by You, at Your expense. (Franchise Agreement, Section 5.1(3).)
On loan, one set of the Manuals and any Training Videos that may be developed in the future (as described below) which We may revise. (Franchise Agreement, Section 5.1(4).)
A list of Our approved suppliers. (Franchise Agreement, Section 5.1(9).)
An initial training program for Your Operating Principal and General Manager at no additional charge to You. If You wish to have additional personnel trained We may charge up to $1,500 per person (see Item 6). (Franchise Agreement, Section 5.1(10).)
One week of on-site pre-opening and one week of post-opening assistance at the Restaurant for Your first Restaurant and in Our discretion for each additional Restaurant. (Franchise Agreement, Section 5.1(11).)
Advertising and promotional materials for use in the pre-opening promotion of the Restaurant. (Franchise Agreement, Section 5.1(6).)

We are not required to provide any other service or assistance to You before the opening of the Restaurant.

Post-Opening Obligations: We are obligated by the Franchise Agreement to provide the following services and assistance after the opening of the Restaurant:

As We reasonably determine necessary, visits to, and evaluations of, the Restaurant and the products and services provided there to ensure that the high standards of quality, appearance and service of the System are maintained. (Franchise Agreement, Section 5.1(5).)
Advertising and promotional materials for in-store marketing and Local Advertising for the Restaurant at a reasonable cost to You. (Franchise Agreement, Section 5.1(6).)
Advice and written materials (including updates to the Manuals) concerning techniques of managing and operating the Restaurant, including new developments and improvements in equipment, food products, packaging and preparation. (Franchise Agreement, Section 5.1(7).)
Certain merchandise, including prepackaged food products and promotional products and memorabilia, for use in the Restaurant and for resale to Your customers, in quantities sufficient to meet Your customer demand, at a reasonable cost are made available to franchisees in the System. (Franchise Agreement, Section 5.1(13).)
One week of On-site post-opening assistance at the Restaurant. (Franchise Agreement, Sections 5.1(11) and 6.6(3).)
Training programs and seminars and other related activities regarding the operation of the Restaurant as We may conduct for You, or Restaurant personnel generally, which Your Operating Principal, General Manager and other Restaurant personnel may be required to attend. (Franchise Agreement, Section 6.5(2).)
Certain on-site remedial training for Your Restaurant personnel when You reasonably request it or as We find appropriate. If the remedial training is requested by You, We may require You to pay the per diem of the employees providing the training and Our expenses in providing the training (see Item 6). (Franchise Agreement, Section 6.5(4).)
Administration of the advertising fund and cooperatives. (Franchise Agreement, Section 8.3 and 8.4.)
Indemnification against and reimbursement for all damages for which You are held liable in any proceeding arising out of Your use of any of the Marks (including settlement amounts), provided that You and Your Controlling Principals have fully complied with the terms of the Franchise Agreement. (Franchise Agreement, Section 9.4.)

We are not required to provide any other service or assistance to You for the continuing operation of the Restaurant.

The above services will be provided to each Developer for each Franchise Agreement that the Developer signs under the Development Agreement.

Grand Opening Advertising: You must spend a minimum of $7,500 on a grand opening advertising campaign announcing the grand opening of Your Restaurant. Your grand opening advertising campaign must be conducted in the 60 day period comprising 30 days before and 30 days following the opening of Your Restaurant. You must submit to Us for Our approval a marketing plan and budget a minimum of 30 days before the opening date of Your Restaurant. If You do not provide Us with the marketing plan and budget, You must give Us the money and We will spend it for You. We reserve the right to approve the advertising You intend to use.

Advertising: You must spend annually, throughout the term of the Franchise Agreement, 1% of the Gross Sales of the Restaurant on advertising for the Restaurant in Your Area of Primary Responsibility for Local Advertising. This amount is not paid to Us, but rather is spent by You. If Your landlord requires You to participate in any marketing or promotion fund, the amounts You pay may be applied towards satisfying Your Local Advertising obligations. We must approve all advertising before You use it. You must not advertise or use Our Marks in any fashion on the Internet, World Wide Web or via other means of advertising through telecommunication without Our express written consent. You must provide Us with an advertising expenditure report monthly to show that You have complied with the Local Advertising requirements. Costs and expenditures You incur with any of the following are not to be included in Your expenditures on Local Advertising unless We approve in advance in writing:

Incentive programs for Your employees or agents, including the cost of honoring any coupons distributed in connection with the programs;
Marketing research expenditures;
Food costs incurred in any promotion;
Salaries and expenses of Your employees, including salaries or expenses for attendance at advertising meetings or activities;
Charitable, political or other contributions or donations;
In-store materials consisting of fixtures or equipment;
Seminar and educational costs and expenses of Your employees; and
Yellow pages advertising.

We also reserve the right to establish and administer a creative fund (the "Creative Fund") to advertise the System on a regional or national basis. When We do establish the Creative Fund, You must contribute to the Creative Fund a specified percentage of the Gross Sales of the Restaurant for each Accounting Period to be paid in the same manner as the royalty payments. Once established, the amount You must pay to the Creative Fund is 2%. We have the right to increase this amount to 3% upon 30 days notice to you. During the term of the Franchise Agreement, for certain special promotions, We may require You to allocate to the Creative Fund all or part of Your required Local Advertising expenditures and Cooperative contributions (described below).

The Fund is maintained and administered by Us or Our designee as follows:

We direct all advertising programs and have sole discretion to approve the creative concepts, materials and media used in the programs and their placement and allocation. The Creative Fund is intended to maximize general public recognition and acceptance of the Marks and improve the collective success of all Restaurants operating under the System. For Restaurants operated by Us or Our affiliates, We or Our affiliates will contribute to the Creative Fund generally on the same basis as You. In administering the Creative Fund, We and Our designees are not required to make expenditures for You that are equivalent or proportionate to Your contribution or to ensure that any particular franchisee benefits directly or pro rata from the placement of advertising.
The Creative Fund may be used to satisfy the costs of maintaining, administering, directing and preparing advertising, including the cost of preparing and conducting television, radio, magazine and newspaper advertising campaigns; direct mail and outdoor billboard advertising; public relations activities; employing advertising agencies; and costs of Our personnel and other departmental costs for advertising that We administer or prepare internally. All sums You pay to the Creative Fund will be maintained in a separate account and We may use them to defray Our reasonable administrative costs and overhead that We may incur in the administration or direction of the Creative Fund and advertising programs for You and the System. The Creative Fund and its earnings will not otherwise benefit Us. The Creative Fund is operated solely as a conduit for collecting and expending the advertising fees as outlined above. Any sums paid to the Creative Fund that are not spent in the year they are collected will be spent in the following year or returned to the contributors in proportion to the respective amounts paid by them, without interest, on the basis of their respective contributions.
We will prepare an annual statement of the operations of the Creative Fund that will be made available to You if You request it. We are not required to have the Creative Fund statements audited.
Although the Creative Fund is intended to be perpetual, We may terminate the Creative Fund at any time. The Creative Fund will not be terminated, however, until all monies in the Creative Fund have been spent for advertising or promotional purposes or returned to contributors on the basis described in paragraph 2, above.

We currently advertise the Restaurants and the products offered by the Restaurants primarily using point of purchase advertising materials and print media. As the number of Restaurants in the System expands, We envision using other forms of media, including: television, radio, magazine and newspaper advertising campaigns; and direct mail and outdoor billboard advertising. The majority of Our advertising is developed by members of Our staff or third-party consultants. Advertising presently is conducted on a local basis by affiliates. Once the franchise program has been established, We contemplate advertising on a national, regional and local basis through the use of the Creative Fund, Local Advertising and Cooperatives (described below).

We presently do not have a National Advertising Council, though we may choose to form one in the future. For the fiscal year ending December 31, 2010, We did not collect or spend any money on behalf of the Creative Fund.

We may designate any geographic area in which two or more Restaurants are located as a region for purposes of establishing an advertising Cooperative. The members of the Cooperative for any area will consist of all "Vapiano" Restaurants, whether operated by Us, Our affiliates or franchised. We will determine in advance how each Cooperative will be organized and governed and when it must start operation. We have the right to dissolve, merge or change the structure of the Cooperatives. Each Cooperative will be organized for the exclusive purposes of administering advertising programs and developing, subject to Our approval, promotional materials for use by the members in Local Advertising. If a Cooperative has been established for a geographic area where Your Restaurant is located when the Franchise Agreement is signed, or if any Cooperative is established during the term of the Franchise Agreement, You must sign all documents We request and become a member of the Cooperative according to the terms of the documents. A copy of the Cooperative documents applicable to the geographic area in which Your Restaurant will be located will be provided to You if you request it.

You must contribute to the Cooperative the amounts required by the documents governing the Cooperative. However, You will not need to contribute more than 1% of Your Gross Sales during each month to the Cooperative unless, subject to Our approval, the members of the Cooperative agree to the payment of a larger fee. The payments may be applied by You toward satisfaction of Your Local Advertising requirement. Your contributions to a Cooperative may also be allocated by Us to the Creative Fund, as described above. All contributions to the Cooperative will be maintained and administered in accordance with the documents governing the Cooperative. The Cooperative will be operated solely as a conduit for the collection and expenditure of the Cooperative fees for the purposes outlined above. No advertising or promotional plans or materials may be used by the Cooperative or furnished to its members without first obtaining Our approval. Currently, no Cooperatives exist. Each Cooperative is obligated to prepare an annual financial statement reporting its expenditures for the previous year to its members.

If We establish a Creative Fund and a Cooperative applicable to Your Restaurant, Your total required contribution to the Creative Fund and the Cooperative will not exceed 4% of Your Gross Sales, if we effect the 1% increase in the Creative Fund.

Neither the Creative Fund nor any Cooperative will use any funds for advertising that is principally a solicitation for the sale of franchises for Restaurants.

You must also pay Your pro rata share of the cost of a Yellow Pages trademark or other business listings to be placed by Us on behalf of all "Vapiano" Restaurants in the Restaurant's local market area. If You operate the only "Vapiano" under the System in the local market area, You must pay for any Yellow Pages trademark advertising or other business listing, unless We determine, in Our sole discretion, that placement of a Yellow Pages trademark listing or other business listings for the local market area is not economically justified. Any amount You pay for Yellow Pages trademark or other business listings may not be applied by You toward satisfaction of Your Local Advertising requirement.

Except as described above, We are not obligated to spend any amount on advertising in the area where Your Restaurant is located.

Training: No later than 30 days before the date the Restaurant begins operation, Your Operating Principal and General Manager must attend and complete, to Our satisfaction, Our initial training program. We will conduct this training at Our corporate headquarters and a Restaurant operated either by Us or by Our Affiliate in Washington, D.C. or at another location We designate. Initial training programs will be offered at various times during the year depending on the number of new franchisees entering the System, replacement operating principals and general managers and other personnel needing training, the number of new Restaurants being opened by Our franchisees and the timing of the scheduled openings of Restaurants to be operated by Us and Our franchisees generally. It is anticipated that the initial training program will be offered five or six times a year. The initial training program will generally last approximately two weeks. We will provide instructors and training materials for the initial training of Your Operating Principal and General Manager at no additional charge to You. You may also have additional personnel trained by Us for the Restaurant, although We may charge $1,500 per person for that training. We will determine whether the Operating Principal and any General Manager have satisfactorily completed initial training. If the Operating Principal or General Manager does not satisfactorily complete the initial training program or if We determine that these persons cannot satisfactorily complete the training program, You must designate a replacement to satisfactorily complete the training. Any Operating Principal or General Manager subsequently designated by You must also receive and complete the initial training. We reserve the right to charge a reasonable fee for the initial training We provide to a replacement or successor Operating Principal, or General Manager if We have not approved You to provide the training. We currently charge $1,500 per person for initial training. You will pay all expenses You and Your Operating Principal, General Manager and other personnel incur for any training program, including costs of travel, lodging, meals and wages (see Item 6).

The Operating Principal, General Manager and other personnel must attend the additional training programs and seminars We offer if required to do so. For all of these programs and seminars, We will provide the instructors and training materials. If the training is mandatory, We will not charge You a fee for attending the training. We reserve the right to charge a reasonable fee for the additional training programs and seminars that We provide on an optional basis. You will also pay for all expenses You or Your Operating Principal, General Manager and other personnel incur in participating in any additional training, including costs of travel, lodging, meals, and wages (see Item 6).

For the opening of the Restaurant, We will provide You with one of Our trained representatives. The trained representative will provide on-site pre-opening and opening training, supervision, and assistance to You for one week. This training and assistance will be provided to You at no additional expense. For any additional assistance requested by You and any similar assistance that We provide to a replacement Restaurant, if the premises are destroyed or the Restaurant is required to be closed for any other reason, We reserve the right to require You to pay Us the per diem fee then being charged to franchisees generally for trained representative assistance, including payment of any expenses the trained representative incurs, such as costs of travel, lodging, meals and wages (see Item 6).

We maintain a formal training staff who will be conducting the opening training described below. Claus Sauer will oversee training. We may also draw on the substantial experience of other Restaurant personnel of Our affiliates in conducting Restaurant operations training. The instructional materials used in the initial training consist of Our Operations Manual, Our Training Video Series ("Videos"), marketing and promotion materials, programs related to the operation of the point of purchase system, and other written directives related to the operation of the Restaurant (collectively, the "Manuals").

The training schedule and activities of the initial training program, which are divided into two main categories of training, are described below:

TRAINING PROGRAM

Subjects	Time Begun	Hours of Classroom Training	Hours of On-the-Job Training	Location
Cooking (1)	1st Week		None	Washington, DC or a location we designate
Stewarding		2 days		Washington, DC or a location we designate
Preparation		3 days		Washington, DC or a location we designate
Production		3 days		Washington, DC or a location we designate
Salad		3 days		Washington, DC or a location we designate
Pasta		5 days		Washington, DC or a location we designate
Pizza		4 days		Washington, DC or a location we designate
Service (2)	2nd Week		None	Washington, DC or a location we designate
Reception		2 days		Washington, DC or a location we designate
Service		2 days		Washington, DC or a location we designate
Bar		3 days		Washington, DC or a location we designate

Cooking – Instruction in job-specific knowledge, including HACCP, product knowledge, recipes, food preparation, cooking, work method, workplace set up and clean up, "mise en place" and service process.
Service – Instruction in job-specific knowledge.
Location – All of Our training will take place at a Restaurant operated by Us or Our Affiliate in Washington, D.C., or at another location We designate.

Claus Sauer will initially be in charge of our training program. His employment history is detailed in Item 2.

The entire training program is subject to change due to updates in materials, methods, manuals and personnel without notice to You.

Training programs will begin on a Monday morning. The subjects and time periods allocated to the subjects actually taught to a specific franchisee and its personnel may vary based on the experience of those persons being trained.

If You reasonably request or as We deem appropriate, We will, during the term of the Franchise Agreement, subject to the availability of personnel, provide You with additional trained representatives who will provide on-site remedial training to Your Restaurant personnel. For additional training that You request, You may have to pay the per diem fee then being charged to franchisees under the System for the services of Our trained representatives, plus their costs of travel, lodging, meals, and wages. The per diem fee will not be charged if the assistance is provided based on Our determination that the training is necessary; however, We reserve the right to charge for Our reasonable expenses incurred in providing the assistance.

The Table of Contents for Our Operations Manual is attached to this Disclosure Document as Exhibit F. Our Operations Manual includes approximately 69 pages.

Site Selection: You must assume all costs, liabilities, expenses and responsibility for locating, obtaining and developing a site for the Restaurant within the Assigned Area and for constructing and equipping the Restaurant at the accepted site. You will select the site for the Restaurant subject to Our approval. The Restaurant may not be relocated without first obtaining Our written consent. Before You lease or purchase the site for the Restaurant, You must locate a site that satisfies Our site selection guidelines. You must submit to Us in the form We specify a description of the site, including evidence that the site satisfies Our site selection guidelines, together with other information and materials that We may reasonably require, including a letter of intent or other evidence that confirms Your favorable prospects for obtaining the site. You must submit information and materials for the proposed site to Us for approval no later than 30 days after You have signed the Franchise Agreement. We will have 15 days after We receive this information and materials from You to approve or disapprove the proposed site as the location for the Restaurant. Our approval is not a warranty or guaranty that You will be successful at the approved site. Our approval only indicates that the site meets Our minimum criteria for a Vapiano Restaurant.

We will provide You with Our current written site selection guidelines and any other site selection counseling and assistance We think is advisable. Our guidelines for site selection may require that You conduct, at Your expense, an evaluation of the demographics of the market area for the location (including the population and income level of residents in the market area), aerial photography, size and other physical attributes of the location, shopping mall, tenant mix, proximity to residential neighborhoods and proximity to schools, shopping centers, entertainment facilities and other businesses that attract consumers and generate traffic.

We will also provide You one on-site evaluation of the proposed site, without additional charge. We will not provide an on-site evaluation for any proposed site before receiving from You the materials You must submit to Us as described above. After that, if We think it is necessary or if You reasonably request it, We will provide additional on-site evaluations. For those additional on-site evaluations, or if the Franchise Agreement does not relate to Your first Restaurant, We reserve the right to charge a reasonable fee for each evaluation as well as a fee for Our reasonable expenses including the cost of travel, lodging, meals and wages.

We estimate that the time from the signing of the Franchise Agreement to the commencement of operations of the Restaurant will be approximately six to twelve months. This time may be shorter or longer depending on the time necessary to obtain an accepted site, to obtain financing, to obtain the permits and licenses for the construction and operation of the Restaurant, to complete construction or remodeling as it may be affected by weather conditions, shortages, delivery schedules and other similar factors, to complete the interior and exterior of the Restaurant, including decorating, purchasing and installing fixtures, equipment and signs, and to complete preparation for operating the Restaurant, including purchasing inventory and supplies. You must open the Restaurant and begin business within 120 days after You obtain possession of the accepted location, unless You obtain a written extension of this time period from Us. If You do not obtain a site that We approve within six months from the date you sign the Franchise Agreement as stated in Section 4.1 of the Franchise Agreement, and construct the Restaurant within the time periods required in Section 2 of the Franchise Agreement, We may terminate the Franchise Agreement.

If We and You cannot agree on a site, We retain the right to terminate Your Franchise Agreement and refund 75% of the initial franchise fee (see Item 5).

If You are a Developer, You must sign Your first Franchise Agreement at the same time You sign the Development Agreement. The typical length of time between the signing of the Franchise Agreement and the opening of Your Restaurant is the same as for an individual Franchisee.

Computer and Electronic Cash Register Systems: As described in Items 6, 7 and 8, You must purchase and use certain electronic cash register systems, computer hardware and software that meet Our specifications and that are capable of electronically interfacing with Our computer system. The computer system is used by Us to collect and monitor point of sale information, and may be expanded to collect and monitor inventory control and shrinkage, payroll and accounting information, and credit card processing.

The system is designed to enable Us to have immediate access to the information monitored by the system, and there is no contractual limitation on Our access or use of the information We obtain. You must install and maintain equipment and a telecommunication line in accordance with Our specifications to permit Us to access the electronic cash register (or other computer hardware and software) at the Restaurant premises as described above. This will permit Us to inspect and monitor electronically information concerning Your Restaurant's Gross Sales and any other information that may be contained or stored in the equipment and software. You must make sure that We have access at the times and in the manner We specify, at Your cost.

The hardware system You must purchase is itemized in Footnote 8 of Item 7. Typically, Your required computer hardware will use one terminal per Restaurant and one remote printer; however, many of Our locations use two or three terminals. We may revise Our specifications for the hardware as We determine necessary to meet the needs of the System. There is no contractual limitation on Our ability to require the hardware be improved or upgraded.

You shall obtain and maintain Internet access or other means of electronic communication, as specified by Us. It will be a material default under the Franchise Agreement if You fail to maintain the equipment, lines and communication methods in operation and accessible to Us at all times throughout the term of the Franchise Agreement. We must have access at the times and in the manner as We specify.

You must, at Our option, sign the forms and documents that We deem necessary to appoint Us your true and lawful attorney-in-fact with full power and authority for the sole purpose of assigning to Us upon the termination or expiration of the Franchise Agreement: (i) all rights to the telephone numbers of the Restaurant and any related and other business listings; and (ii) Internet listings, domain names, Internet Accounts, advertising on the Internet or World Wide Web, websites, listings with search engines, e-mail addresses or any other similar listing or usages related to the Restaurant. You have no authority to and will not establish any website or listing on the Internet or World Wide Web without Our express written consent.

ITEM 12
TERRITORY

Franchise Agreement: The Franchise Agreement grants You the right to operate a Restaurant at a single location that You select within the Assigned Area and that We approve. Attachment A to the Franchise Agreement lists the specific street address of the accepted location. You must operate the Restaurant only at this accepted location and may not relocate the Restaurant without first obtaining Our written consent. You may not establish or operate another Restaurant unless You enter into a separate Franchise Agreement.

During the term of the Franchise Agreement, if You are in compliance with the Franchise Agreement, We and Our affiliates will not establish a Restaurant or authorize any other person or entity to establish a Restaurant within the Assigned Area. The Assigned Area will be described in Attachment A to the Franchise Agreement. It will generally consist of the contiguous property controlled by the landlord in which the Restaurant is located, such as a travel plaza, shopping mall or airport terminal. We may, however, consider sites such as train stations, sports arenas, airports, or other captive market spaces on a case by case basis ("Non-Traditional Location"). If Your Restaurant is located in a an urban location, Your Assigned Area will be a two mile radius from the Restaurant. In certain circumstances, such as a location in a travel plaza, shopping mall, airport terminal, the Assigned Area will be limited to the specific physical space occupied by the Restaurant. We will determine the Assigned Area before the Franchise Agreement is signed based on various market and economic factors such as an evaluation of market demographics, the market penetration of the System and similar businesses, the availability of appropriate sites and the growth trends in the market. Any delivery or catering business that you engage in shall be limited to Your Assigned Area. You shall not be permitted to solicit catering or delivery business outside of Your Assigned Area.

Our affiliates currently operate, or may in the future operate, restaurants under different marks and with operating systems that are the same or similar to the System, and that any of these restaurants might compete, directly or indirectly, with Your restaurant. We and any of Our current or future affiliates may own, acquire, establish and/or operate, and license others to establish and operate, businesses under other proprietary marks and/or other operating systems, regardless of whether those businesses are the same, similar, or different from the Restaurant. We and any of Our current or future affiliates may also offer and sell and authorize others to offer and sell: (i) collateral products under the Marks, at or from any location, such as pre-packaged food or beverage products and "Vapiano" memorabilia, (ii) food and beverage services under the Marks at or through any "Vapiano" Restaurant or other permanent, temporary or seasonal food service facility providing in whole or in part the products and services offered by a "Vapiano" Restaurant in any Reserved Area (as defined below), and (iii) any products or food and beverage services under any other names and marks. A "Reserved Area" is defined in the Franchise Agreement as any area of retail sales establishments or food courts (other than in the retail shopping mall in which the Restaurant is located), airports, hospitals, cafeterias, commissaries, schools, hotels and stadiums, arenas, ballparks, festivals, fairs and other mass gathering locations or events, and the premises of certain customers with corporate campus or institutional feeding sites that have an agreement with Us to place a "Vapiano" Restaurant in more than one of their facilities ("National Accounts").

Under the Franchise Agreement, We will also designate a non-exclusive geographic area known as the Area of Primary Responsibility where You have to conduct Local Advertising activities and use all commercially reasonable efforts to advertise and promote the Restaurant. The Area of Primary Responsibility is not exclusive except if it includes the Assigned Area. The typical Area of Primary Responsibility is the Assigned Area which may be a city, town, county, state, etc. and will include the territory boundaries.

This offering is generally for a Restaurant of approximately 5,000 -10,000 square feet located in an in-line space, in strip shopping centers or in urban locations. Generally, Our franchise sites will not vary significantly from the prototypes described above; however, We may consider other, non-traditional locations on a case-by-case basis.

You may sell Our products and related merchandise to retail customers and prospective retail customers who live anywhere but who choose to dine in Your Restaurant. You may not engage in any promotional activities or sell Our products or similar products or services, whether directly or indirectly, through or on the Internet, the World Wide Web, or any other similar proprietary or common carrier electronic delivery system (collectively, the "Electronic Media"); through catalogs or other mail order devices sent or directed to customers or prospective customers located anywhere; or by telecopy or other telephonic or electronic communications, including toll-free numbers, directed to or received from customers or prospective customers located anywhere. You may not place advertisements in printed media and on television and radio that are targeted to customers and prospective customers located outside of Your Assigned Area. You have no options, rights of first refusal, or similar rights to acquire additional franchises. You may not sell Our products to any business or other customer for resale (besides other Restaurants).

Although We have not done so, We and Our affiliates may sell products under the Marks within and outside Your Assigned Area through any method of distribution other than a dedicated Vapiano Restaurant, including sales through channels of distribution such as the Internet, catalog sales, telemarketing or other direct marketing sales (together, "alternative distribution channels"). You may not use alternative distribution channels to make sales outside or inside Your Assigned Area except as described in the following paragraph and You will not receive any compensation for Our sales through alternative distribution channels except as described in the following paragraph.

If We engage in electronic commerce through any Internet, World Wide Web or other computer network site or sell through any other alternative distribution channel, and We receive orders for any products offered by a Vapiano Restaurant calling for delivery or performance in Your Assigned Area, then We will offer the order to You at the price We establish. If You choose not to fulfill the order or are unable to do so, then We, one of Our affiliates or a third party We designate (including another franchisee) may fulfill the order, and You will not be entitled to any compensation in connection with this. This electronic commerce program has not yet been instituted, but We may do so in the future.

We have not yet established other franchises or company-owned outlets or another distribution channel selling or leasing similar products or services under a different trademark. We describe earlier in this Item 12 what We may do this anywhere and at any time.

Except for the Restaurants operated by Our affiliates, neither We nor any parent or affiliate has established, or presently intends to establish, other franchised or company-owned Restaurants which sell Our products or services under a different trade name or trademark, but We reserve the right to do so in the future, without first obtaining Your consent.

Development Agreement: Under the Development Agreement, You are assigned a Territory where You have to develop two or more Restaurants in accordance with a specified development schedule which will be listed in Section 3 of the Development Agreement and agreed to before it is signed (the "Development Schedule"). The size of the Territory may be an Area of Dominant Influence or "ADI," a single or multi-county area, single state area or some other area, and will be described in Section 1.1 of the Development Agreement. We will determine the Territory before You sign the Development Agreement based on various market and economic factors such as those described above regarding the Assigned Area and the number of Restaurants to be developed.

Except as stated below, if You are in compliance with the Development Agreement, We will not establish or authorize any other person or entity, other than You, to establish a franchised Restaurant within the Territory during the term of the Development Agreement. The grant of these rights do not affect the rights of Our affiliates which may continue to develop company-owned "Vapiano" Restaurants located in within the Territory. We, any "Vapiano" franchisee and any other authorized person or entity may, at any time, advertise and promote the System, the Territory. We and Our affiliates may also offer and sell and authorize others to offer and sell: (i) collateral products under the Marks, at or from any location, such as pre-packaged food or beverage products and "Vapiano" memorabilia, (ii) food and beverage services under the Marks at or through any "Vapiano" Restaurant or other permanent, temporary or seasonal food service facility providing in whole or in part the products and services offered by a "Vapiano" Restaurant in any Reserved Area (as defined above) in the Territory; and (iii) any products or food and beverage services under any other names and marks.

You must exercise the development rights only by entering into a separate Franchise Agreement with Us for each Restaurant. We may, in Our discretion, permit You to exercise the development rights through affiliated entities that are either Your wholly owned subsidiaries or commonly controlled entities with ownership identical to Yours. The Franchise Agreement to be signed for the first Restaurant You develop under the Development Agreement must be signed and delivered to Us concurrently with the signing and delivery of the Development Agreement and will be in the form of the Franchise Agreement attached to this Disclosure Document. All additional Restaurants developed under this Development Agreement must be established and operated under Our form of Franchise Agreement then being used by Us for Restaurants under the System. The then-current form of Franchise Agreement may differ from the form attached to the Disclosure Document.

The territorial rights granted to You under the Franchise Agreement or the Development Agreement are not dependent on the achievement of a certain sales volume, market penetration or other contingency except as stated below. Also, except as stated below, the Territory may not be altered before the Development Agreement expires or terminates.

You must open each Restaurant developed and commence business in accordance with the Development Schedule, unless You obtain an extension of the Development Period (as defined in the Development Agreement), at the expiration of which You were to have had a Restaurant open and in operation. You may, subject to Our approval, apply to Us for extensions of the Development Period as may be necessary to complete construction and commence operation of the Restaurant. Each extension granted will be for an additional 90 day period commencing on the expiration of the applicable Development Period, including any previous extensions ("Extension Date"). No more than two extensions of any Development Period will be permitted. If an extension of a Development Period is granted by Us, the Opening Date (as defined in the Franchise Agreement) will be extended to the Extension Date. No extension of any Development Period will affect the duration of any other Development Period or any of Your other development obligations. If an extension is requested in the final Development Period, the term of the Development Agreement will be extended to the Extension Date and You will have no further rights under the Development Agreement.

You must notify Us in writing at least 60 days before the Projected Opening Date (as defined in the Development Agreement) for a Restaurant that You will be unable to complete construction and begin operating the Restaurant by the expiration date of the Development Period in which the Restaurant was to have been opened. You must include in the notice a description of the reasons for the failure to develop in a timely manner and the expected date of completion of construction and opening. No extension fee will be charged for any Restaurant for which We have accepted a site in accordance with the Franchise Agreement and You have commenced construction, as defined in the Franchise Agreement.

If You fail to open a Restaurant in compliance with the Development Schedule as required in the Development Agreement, or otherwise commit a material event of default under the Development Agreement as described in Item 17 and above, We may, in addition to Our other remedies, terminate or modify Your territorial rights, reduce the area of territorial rights, reduce the number of Restaurants that You may establish, or accelerate the development schedule under the Development Agreement.

Except as described above, We generally do not grant any right of first refusal to obtain additional Restaurant locations. If You wish to obtain an additional location, You must either have entered into a Development Agreement that grants You the right to establish more than one Restaurant or enter into a separate Franchise Agreement for the additional location.

Neither We nor Our affiliates currently operate, franchise, or conduct business through alternative channels of distribution offering products or services similar to those offered by the Restaurant under different marks. There are, however, no restrictions in either the Franchise Agreement or Development Agreement that would limit Our ability to do so.

ITEM 13
TRADEMARKS

The Franchise Agreement grants You the right to use certain trademarks, trade names, service marks, symbols, emblems, logos and indicia of origin designated by Us, including the Marks described in Item 1. These Marks may be used only in the manner We authorize and only for the operation of Your Restaurant at the location specified in the Franchise Agreement.

You may not use the Marks as a part of Your corporate or other legal name, and You must comply with Our instructions in filing and maintaining trade name or fictitious name registrations. You must sign any documents We require to protect the Marks or to maintain their continued validity and enforceability. In addition, You may not directly or indirectly contest the validity of Our or Our Affiliate's ownership of, or Our or any of Our Affiliate's rights in and to, the Marks.

Our Affiliate has applied for registration for the following principal Marks with the U.S. Patent and Trademark Office ("USPTO") on the Principal Register. Our Affiliate has licensed the Marks to Us under a perpetual non-cancelable license agreement.

Mark	Serial Number	Application Date	Registration Number	Registration Date
Vapiano	79/011,228 79/975,002	March 31, 2005 July 9, 2004	3,275,305 3,101,008	August 7, 2007 June 6, 2006

There are no currently effective determinations of the USPTO, the trademark trial and appeal board, the trademark administrator of any state or any court, no pending infringement, opposition or cancellation proceedings and no pending litigation involving any of the Marks that may significantly affect the ownership or use of any Mark listed above.

There are no agreements currently in effect which limit our right to use or to license others to use the Marks, except as stated above.

We know of no superior prior rights or infringing uses of any Mark that could materially affect Your use of the Marks in this or any other state.

You must immediately notify Us of any apparent infringement of the Marks or challenge to Your use of any of the Marks or claim by any person of any rights in any of the Marks. You and Your Controlling Principals are not permitted to communicate with any person other than Us, or any designated affiliate, Our counsel and Your counsel involving any infringement, challenge or claim. We can take action and have the right to exclusively control any litigation or USPTO or other administrative or agency proceeding caused by any infringement, challenge or claim or otherwise relating to any of the Marks. You must sign any and all documents, and do what may, in Our counsel's opinion, be necessary or advisable to protect Our interests in any litigation or USPTO or other administrative or agency proceeding or to otherwise protect and maintain Our interests and the interests of any other person or entity (including Our Affiliate) having an interest in the Marks.

We will indemnify You against and reimburse You for all damages for which You are held liable for Your use of any of the Marks, provided that the conduct of You and Your Controlling Principals in the proceeding and use of the Marks is in full compliance with the terms of the Franchise Agreement.

Except as provided above, We are not obligated by the Franchise Agreement to protect any rights granted to You to use the Marks or to protect You against claims of infringement or unfair competition with respect to them. Although We are not contractually obligated to protect the Marks or Your right to use them, as a matter of corporate policy, We intend to defend the Marks vigorously.

We may require You, at Your expense, to discontinue or modify Your use of any of the Marks or to use one or more additional or substitute trade names, service marks, trademarks, symbols, logos, emblems and indicia of origin if We determine that an addition or substitution will benefit the System.

The license to use the Marks granted in the Franchise Agreement is non-exclusive to You. We and Our Affiliate have and retain certain rights in the Marks including the following:

To grant other licenses for the use of the Marks in addition to those licenses already granted to existing franchisees;
To develop and establish other systems using the Marks or other names or marks, and to grant licenses or franchises in those systems without providing any rights to You; and
To engage, directly or indirectly, at wholesale, retail or otherwise, in (a) the production, distribution, license and sale of products and services and (b) the use of the Marks and any and all trademarks, trade names, service marks, logos, insignia, slogans, emblems, symbols, designs and other identifying characteristics We may develop for that purpose.

ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

Patents and Copyrights: We have no patents, pending patents or registered copyrights that are material to the "Vapiano" franchise.

Confidential Manuals: You must operate the Restaurant in accordance with the standards and procedures specified in the Manuals. One copy of the Manuals will be loaned to You by Us for the term of the Franchise Agreement.

You must treat the Manuals and any other manuals We create or approve for use in Your operation of the Restaurant, and the information contained in them, as confidential. You must also use all reasonable efforts to maintain this information as secret and confidential and You must not duplicate, copy, record or otherwise reproduce these materials, in whole or in part, or make them available to any unauthorized person. The Manuals remain Our sole property and must be kept in a secure place on the Restaurant premises.

We may revise the contents of the Manuals and You must comply with each new or changed standard. You must also insure that the Manuals are kept current at all times. If there is a dispute as to the contents of the Manuals, the terms of the master copy maintained by Us at Our home office will be controlling. You must return to Us all pages that are replaced in the Manuals.

Confidential Information: We claim proprietary rights in certain of Our recipes which are included in the Manuals and which are Our trade secrets. You and each of Your Controlling Principals are prohibited, during and after the term of the Franchise Agreement, from communicating, or using for the benefit of any other person or entity, and, after the term of the Franchise Agreement, from using for Your or their own benefit, any confidential information, knowledge or know-how concerning the methods of operation of the Restaurant that may be communicated to You or any of Your Controlling Principals or that You may learn about, including these trade secrets. You and each of Your Controlling Principals can divulge this confidential information only to Your employees who must have access to it to operate the Restaurant. Neither You nor Your Controlling Principals are permitted at any time, without first obtaining Our written consent, to copy, record or otherwise reproduce the materials or information nor make them available to any unauthorized person. Any and all information, knowledge, know-how and techniques related to the System that We communicate to You, including the Manuals, plans and specifications, marketing information and strategies and site evaluation, selection guidelines and techniques, are considered confidential.

If We ask, You must have Your General Manager and any of Your personnel who have received or will have access to confidential information sign similar covenants. (See Item 17.) The covenants will be substantially as set forth in Attachment D to the Franchise Agreement and Attachment B to the Development Agreement. Your Principals also must sign these covenants.

If You or Your Controlling Principals develop any new concept, process or improvement in the operation or promotion of the Restaurant, You must promptly notify Us and give Us all necessary information, free of charge. You and Your Controlling Principals must acknowledge that any of these concepts, processes or improvements will become Our property and We may give the information to other franchisees.

Training Video Series: We will loan You one copy of any Training Videos that We may develop in the future for the term of the Franchise Agreement.

You must treat the Videos and any other videos We create or approve for use in Your operation of the Restaurant, and the information contained in them, as confidential. You must also use all reasonable efforts to maintain this information as secret and confidential and You must not duplicate, copy, record or otherwise reproduce these materials, in whole or in part, or make them available to any unauthorized person. The videos remain Our sole property and must be kept in a secure place on the Restaurant premises.

We may revise the contents of the Videos and You must return to Us videos that are replaced by any updates We issue.

ITEM 15
OBLIGATIONS TO PARTICIPATE
IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS

When You sign the Agreements, You must designate and retain at all times an individual to serve as the "Operating Principal" under the Agreements. If You are an individual, You must perform all obligations of the Operating Principal. If You are a corporation, partnership or other form of entity, the Operating Principal must be one of Your Controlling Principals and must hold an ownership interest in You or any entity that directly or indirectly controls You. Except as otherwise provided in the Agreements, the Operating Principal's interest in You must remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or purchase right or option.

The Operating Principal may, at his option, and subject to Our approval, designate an individual to perform the duties and obligations of the Operating Principal described in the Agreements and in this Disclosure Document. The Operating Principal must take all necessary action to ensure that the designee conducts and fulfills all of the Operating Principal's obligations and will remain fully responsible for his performance. The Operating Principal (or his designee, if applicable) must devote substantial full time and best efforts to the supervision and performance of the Restaurant under the Agreements. The Operating Principal must sign the Agreements as one of Your Controlling Principals, and will individually guarantee all of Your obligations, and will be jointly and severally bound by all of Your obligations and the obligations of the Operating Principal and Your Controlling Principals under the Agreements.

The Operating Principal (and any designee) must meet Our standards for these positions, as provided in the Manuals or other written instructions. Under the Agreements, the Operating Principal (or his designee) must satisfy the training requirements stated in the Franchise Agreement.

If, during the term of the Agreements, the Operating Principal or any designee cannot serve as Operating Principal or no longer qualifies, You must promptly notify Us and designate a replacement within 15 days after the Operating Principal or designee stops serving or no longer meets the requirements. Any replacement must meet the same qualifications listed above. You must provide for interim management of the Restaurant until You designate a replacement. This interim management must be conducted in accordance with the Agreements.

As described in Item 1, we have identified certain persons under the Franchise Agreement and Development Agreement that We refer to in this Disclosure Document as Your Principals. Your Principals include Your spouse, if You are a married individual, and those of Your business entity's officers and directors (including the officers and directors of Your general partner, if applicable) whom We designate as Your Principals, and all holders of an ownership interest in You and in any entity that directly or indirectly controls You, and any other person or entity controlling, controlled by, or under common control with You.

If We designate certain of Your Principals as Controlling Principals, they must sign the Franchise Agreement and Development Agreement, as applicable, and agree to be individually bound by certain obligations under the Agreements, including confidentiality and non-competition covenants and to personally guarantee Your performance under the Agreements. We typically designate Your principal equity owners and executive officers, as well as any other affiliated entities that operate "Vapiano" Restaurants as Controlling Principals.

You must retain at all times a General Manager and the other personnel as are needed to operate and manage the Restaurant. The General Manager must satisfy Our educational and business criteria as provided to You in the Manuals or other written instructions, and must be individually acceptable to Us. In addition, the General Manager must be responsible for the supervision and management of the Restaurant, and must devote full time and best efforts to this activity. The General Manager also must satisfy the applicable training requirements in the Franchise Agreement. If the General Manager cannot serve in the position or does not meet the requirements, he or she must be replaced within the same time period and under the same conditions stated above for the Operating Principal. Your General Manager does not have to own an equity interest in the Franchised Business.

If You employ any individual as General Manager or in a managerial position who is at the time employed in a managerial position by Us or any of Our affiliates, or by another of Our franchisees, You must pay the former employer for the reasonable costs and expenses the employer incurred for the training of the employee.

You must also obtain covenants not to compete, including covenants applicable on the termination of the person's relationship with You, from Your General Manager and any of Your other personnel who have received or will have access to Our training before employment, and any holder of a beneficial interest in You (except for any limited partners) who is not designated as a Controlling Principal and does not sign the Franchise Agreement as a Controlling Principal. You must have all of Your management personnel to sign covenants that they will maintain the confidentiality of information they receive or have access to based on their relationship with You (see Item 14). These covenants will be in substantially the same form attached to the Franchise Agreement as Attachment D and the Development Agreement as Attachment B. We reserve the right, in Our discretion, to decrease the period of time or geographic scope of the non-competition covenants contained in the attachments or eliminate the non-competition covenants altogether for any party that must sign an agreement as described in this paragraph. (See Item 17.)

Your Restaurant must be open to the public each day of the year (no holiday closures), unless We provide You with Our advance written consent to a closure. This closure policy is subject to applicable law and/or the terms of Your lease.

ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You must comply with all of Our standards and specifications relating to the purchase of all food, food products and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including electronic cash register, computer hardware and software), utensils and other kitchen items and products used or sold at the Restaurant (see Item 8).

You must sell or offer for sale all menu items, food products, and other products and services We require, in the manner and style We require, including dine-in and carry-out, as expressly authorized by Us in writing. You must sell and offer for sale only the menu items and other products and services that We have expressly approved in writing. You must not deviate from Our standards and specifications without first obtaining Our written consent. You must discontinue selling and offering for sale any menu items, products or services that We may disapprove in writing at any time. We have the right to change the types of menu items, products and services offered by You at the Restaurant at any time, and there are no limits on Our right to make those changes.

You must maintain in sufficient supply and use and sell only the food and beverage items, ingredients, products, materials, supplies, and paper goods that conform to Our standards and specifications. You must prepare all menu items with Our recipes and procedures for preparation contained in the Manuals or other written instructions, including the measurements of ingredients. You must not deviate from Our standards and specifications by the use or offer of nonconforming items or differing amounts of any items, without first obtaining Our written consent.

You must keep the Restaurant very clean and maintain it in good repair and condition. You must make any additions, alterations, repairs and replacements, including repainting or replacement of obsolete signs, furnishings, equipment, and decor as We may reasonably direct. You must not make any changes to the premises without obtaining Our written consent before You make the changes. You must obtain and pay for any new or additional equipment, including electronic cash registers, computer hardware and software, fixtures, supplies and other products and materials that We require You to have to offer and sell new menu items from the Restaurant or to provide the Restaurant's services by alternative means, such as through carry-out, catering or delivery arrangements.

We may ask You to make other improvements to modernize the Restaurant premises, equipment, including electronic cash registers, computer hardware and software, signs, interior and exterior decor items, fixtures, furnishings, supplies and other products and materials required to operate the Restaurant, to Our then-current standards and specifications. You must, at Our request, make the capital improvements or modifications described in the Franchise Agreement (i) on or before the fifth anniversary of the date You signed the Franchise Agreement or (ii) at any time during the term of the Franchise Agreement, when a majority of the Restaurants that We or Our affiliate operate have made or are exercising their best efforts to make the improvements or modifications.

We may offer guidance concerning the selling price for the goods, products and services offered from Your Restaurant. Except for maximum prices described below, You are in no way bound to adhere to any recommended or suggested price. You have the right to sell Your products and provide services at any price that You determine, except that We reserve the right to establish maximum prices for any given product or service nationwide or within an advertising market (as determined by Us). You must not exceed any maximum price We establish, but You at all times remain free to charge any price below the maximum We establish. You must sign any instruments or other writings We require to facilitate the provision of the products and services. If You elect to sell any or all of Your products or merchandise at any price recommended by Us, We make no guarantees or warranties that offering the products or merchandise at the recommended price will enhance Your sales or profits.

We and Our affiliates have developed certain products for use in the System that are prepared from confidential recipes and that are trade secrets of Ours and certain products that bear Our Marks. Because of the importance of quality and uniformity of production and the significance of the proprietary recipe and trademarked products in the System, it is to Our and Your benefit that We closely control the production and distribution of the products. You must use Our proprietary recipe products. You must purchase all of Your requirements for these products only from Us or from sources designated by Us.

All advertising and promotional materials, signs, decorations, and paper goods used in the Restaurant and on any Restaurant delivery vehicles and other items that We designate must have the Marks in the form, color, location and manner We specify.

We may make available and may require You to purchase from Us for resale to Your customers certain pre-packaged food products and promotional merchandise, such as T-shirts and re-fill cups in amounts sufficient to meet Your customer demand.

We do not impose any other restrictions in the Franchise Agreement or otherwise, as to the goods or services that You may offer or sell or as to the customers to whom You may offer or sell (see Item 8).

ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

THE FRANCHISE RELATIONSHIP

This table lists certain important provisions of the franchise and related agreements pertaining to renewal, termination, transfer and dispute resolution. You should read these provisions in the agreements attached to this disclosure document.

Provision	Section in Franchise Agreement	Summary
a. Length of the franchise term	Section 3.1	Term continues for 20 years from the date of the Franchise Agreement unless terminated earlier
b. Renewal or extension of the term	Section 3.2	Agreement may be renewed at Your option for an additional 10 year term
c. Requirements for franchisee to renew or extend	Section 3.2(1) - (8)	You must give at least six months’ notice, repair and update equipment and Restaurant premises, not be in breach of any agreement with Us or Our affiliates, have satisfied all monetary obligations owed to Us or Our affiliates, have the right to remain in possession of Restaurant premises, sign current agreement and general release, and comply with current qualification and training requirements You may be asked to sign a contract with materially different terms and conditions than Your original contract, but the boundaries of Your territory will remain the same, and the fees on renewal will not be greater than the fees that We then impose on similarly situated renewing franchisees
d. Termination by franchisee	Not applicable	You may terminate the Franchise Agreement on any grounds available by law.
e. Termination by franchisor without cause	Not applicable	Not applicable
f. Termination by franchisor with “cause”	Section 17.1(1)	Each of Your obligations under the Franchise Agreement is a material and essential obligation, the breach of which may result in termination.
g. “Cause” defined – curable defaults	Sections 17.1(3) and 17.2	We may terminate You for cause if You fail to cure certain defaults, including: if You or any of Your affiliates fail to pay any monies owed to Us, or Our affiliates or vendors, and do not cure within five days after notice (or longer period required), fail to obtain signed copies of the Confidentiality and Non-competition Covenants contained in the Franchise Agreement within five days after a request, fail to procure and maintain required insurance within seven days after notice, use the Marks in an unauthorized manner and fail to cure within 24 hours after notice, fail to cure any other default that is susceptible of cure within 30 days after notice
h. “Cause” defined – noncurable defaults	17.1(2) and 17.1(3)	We may terminate You for cause if You fail to cure certain defaults, including: if You become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against You under federal bankruptcy laws, have outstanding judgments against You for over 30 days, sell unauthorized products or services, fail to acquire an accepted location within time required, fail to remodel when required, fail to open Restaurant when required, fail to comply with any term and condition of any sublease or related agreement and have not cured the default within the given cure period, abandon or lose right to the Restaurant premises, are convicted of a felony or other crime that may have an adverse affect on the System or Marks, transfer any interest without Our consent or maintain false books or records. In addition, a default under one agreement with us may result in a termination of all of your other agreements with us. This is known as a cross-default provision.
i. Franchisee’s obligations on termination/non-renewal	Section 18	Obligations include: You must cease operating the Restaurant and using the Marks and System and completely de-identify the business, pay all amounts due to Us or Our affiliates, return all Manuals and software and other proprietary materials, comply with confidentiality requirements, and at Our option, sell or assign to Us Your rights in the Restaurant premises and the equipment and fixtures used in the business
j. Assignment of contract by Franchisor	Section 14.1	We have the right to transfer or assign the Franchise Agreement to any person or entity without restriction. However, no assignment will be granted except to an assignee who, in our good faith judgment, is willing and able to assume our obligations
k. “Transfer” by franchisee – defined	Section 14.2(1)	Includes sale, assignment, conveyance, pledge, mortgage or other encumbrance of any interest in the Franchise Agreement, the Restaurant or You (if You are not a natural person)
l. Franchisor approval of transfer by franchisee	Section 14.2(2)	You must obtain Our consent before transferring any interest. We will not unreasonably withhold Our consent
m. Conditions for franchisor approval of transfer	Section 14.2(2)	Conditions include: You must pay all amounts due Us or Our affiliates, not otherwise be in default, sign a general release, and pay a transfer fee. Transferee must meet Our criteria, attend training and sign current Franchise Agreement
n. Franchisor’s right of first refusal to acquire franchisee’s business	Section 14.4	Within 30 days after notice, We have the option to purchase the transferred interest on the same terms and conditions
o. Franchisor’s option to purchase franchisee’s business	Sections 18.11 and 14.4	Other than assets on termination, non-renewal or right of first refusal, We have not right or obligation to purchase Your business
p. Death or disability of franchisee	Section 14.5	If You or a Controlling Principal are a natural person, on death or permanent disability, distributee must be approved by Us, or franchise must be transfer to someone approved by Us within 12 months after death or within six months after notice of permanent disability
q. Non-competition covenants during the term of the franchise	Section 10.3(1)	You are prohibited from operating or having an interest in a similar business
r. Non-competition covenants after the franchise is terminated or expires	Section 10.3(2)	You and Your Controlling Principals are prohibited from operating or having an interest in a similar business which is located, or is intended to be located within a 25-mile radius of any Restaurant in existence or under construction as of the earlier of (i) the expiration or termination of, or the transfer of all of Your interest in, the Franchise Agreement or (ii) the time a Controlling Principal ceases to satisfy the definition of a Controlling Principal, as applicable, and continuing for two years
s. Modification of the agreement	Sections 10.1(5) and 19.2	Franchise Agreement may not be modified unless mutually agreed to in writing. You must comply with Manuals as amended
t. Integration/merger clause	Section 19.2	Only the terms of the Franchise Agreement and other related written agreements are binding (subject to applicable state law). No other representations or promises will be binding
u. Dispute resolution by arbitration or mediation	Sections 19.7, 19.8, 19.9, 19.10 and 19.11	Except for actions brought by Us for monies owed, injunctive or extraordinary relief, or actions involving real estate, all disputes must be arbitrated in Fairfax County, Virginia
v. Choice of forum	Section 19.8	The venue for all proceedings related to or arising out of the Franchise Agreement in Fairfax County, Virginia, unless otherwise brought by Us (see Addendum and State Amendments to this Disclosure Document and Agreements)
w. Choice of Law	Section 19.8	The Franchise Agreement is to be interpreted, governed and construed under Virginia law (see Addendum and State Amendments to this Disclosure Document and Agreements)

THE DEVELOPER RELATIONSHIP

Provision	Section in Development Agreement	Summary
a. Length of the franchise term	Section 5	Term continues until You have completed Your development obligations in accordance with the Development Schedule. The initial term is 10 years, unless terminated earlier
b. Renewal or extension of the term	Section 3.2	We may extend the term of the Development Agreement to allow You to develop additional Restaurants
c. Requirements for Developer to renew or extend	Sections 3.2(2) and 3.2(3)	You must develop the additional Restaurants, sign the Franchise Agreement and pay the fee
d. Termination by Developer	Not applicable	You may terminate the Development Agreement on any grounds available at law
e. Termination by Franchisor without cause	Not applicable	Not applicable
f. Termination by Franchisor with “cause”	Sections 7.1 – 7.4	Following certain defaults, We may terminate the Agreement of modify Your territorial rights or alter Your Development Schedule, rather than terminate the Agreement
g. “Cause” defined - curable defaults	Sections 7.2 and 7.3	We may terminate You for cause if You fail to cure certain defaults, including: If You or Your affiliates fail to pay any monies owed to Us, or Our affiliates or vendors, and do not cure within five days after notice (or longer period required), fail to obtain signed copies of the Confidentiality and Non-competition Covenants contained in the Agreement within 30 days after a request, us the Marks in an unauthorized manner and fail to cure within 24 hours after notice or fail to cure any other default that is susceptible of cure within 30 days after notice. If You have both a Development Agreement, and uncured default under one is also a default under the other
h. “Cause defined - noncurable defaults	Sections 7.1 and 7.2	We may terminate You for cause based on certain non-curable defaults, including: If You become insolvent, make a general assignment for benefit of creditors, file a petition or have a petition initiated against You under federal bankruptcy laws or similar state laws, have outstanding judgments against You for over 30 days, fail to comply with the Development Schedule, fail to comply with any term and condition of any sublease or related agreement and have not cured the default within the given cure period, are convicted of a felony or other crime that may have an adverse effect on the System or Marks, or transfer any interest without Our consent
i. Developer’s obligations on termination/non-renewal	Sections 7.4 and 7.5	Obligations include: You must cease developing Restaurants or, on a partial termination of territorial or development rights under Section 7.4, must continue to develop only in accordance with any modified Development Schedule, and must comply with all applicable confidentiality and non-competition covenants
j. Assignment of contract by Franchisor	Section 8.1	We have the right to transfer or assign the Development Agreement to any person or entity without restriction. However, no assignment will be granted except to an assignee who, in our good faith judgment, is willing and able to assume our obligations
k. “Transfer” by Developer - defined	Section 8.2(1)	Includes sale, assignment, conveyance, gift, pledge, mortgage or other disposal or encumbrance of any direct or indirect interest in the Agreement or You (if You are not a natural person)
l. Franchisor approval of transfer by Developer	Section 8.2(2)	You must obtain Our consent before transferring any interest. We will not unreasonably withhold Our consent.
m. Conditions for Franchisor approval of transfer	Section 8.2(2)	Conditions include: You must pay all amounts due Us and Our affiliates, not otherwise be in default, sign a general release, remain liable for pre-transfer obligations and pay a transfer fee. Transferee must meet Our criteria, assume post-transfer obligations, sign Our then-standard Agreement and attend training.
n. Franchisor’s right of first refusal to acquire Developer’s business	Section 8.4	Within 30 days after notice, We have the option to purchase the transferred interest on the same terms and conditions offered by a third party
o. Franchisor’s option to purchase Franchisee’s business	Not applicable	Not applicable
p. Death or disability of Developer	Section 8.5	If You or a Controlling Principal are a natural person, on death or permanent disability, distributee must be approved by Us, or interest must be transferred to someone approved by Us within 12 months after death or six months after notice of permanent disability
q. Non-competition covenants during the term of the Development Agreement	Section 9.3(2)	Except for Restaurants You operate under Franchise Agreements with Us, You and Your Controlling Principals are prohibited from operating or having an interest in a similar business in the U.S. or anywhere else We have used, registered or sought to register the Marks or where we operate or license others
r. Non-competition covenants after the Development Agreement is terminated or expires	Section 9.4(3)	Except for Restaurants You operate under Franchise Agreements with Us, You and Your Controlling Principals are prohibited from operating or having an interest in a similar business which is located, or is intended to be located within a 25-mile radius of any Restaurant or food service facility in existence or under construction as of the earlier of (i) the expiration, termination, or the transfer of all of Your interest in the Agreement or (ii) the time a Controlling Principal ceases to satisfy the definition of a Controlling Principal, as applicable, and continuing for two years.
s. Modification of the agreement	Sections 9.7 and 15	Agreement may not be modified unless mutually agreed to in writing, except We may unilaterally decrease the scope of certain non-competition covenants
t. Integration/merger clause	Section 15.1	Only the terms of the Agreement and other related written agreements are binding (subject to applicable state law). No other representations or promises will be binding.
u. Dispute resolution by arbitration or mediation	Sections 15.2, 15.3, 15.4, 15.5 and 15.6	Except for actions brought by Us for monies owed, injunctive or extraordinary relief, or actions involving real estate, all disputes must be arbitrated at Our headquarters in Fairfax County, Virginia.
v. Choice of forum	Section 15.3	The venue for all proceedings related to or arising out of the Agreement is Fairfax County, Virginia, unless otherwise brought by Us (see Addendum and State Amendments to this Disclosure Document and Agreements)
w. Choice of law	Section 15.3	The Agreement is to be interpreted and construed under Virginia law (see Addendum and State Amendments to this Disclosure Document and Agreements)

ITEM 18
PUBLIC FIGURES

We do not use any public figure to promote Our franchise.

ITEM 19
FINANCIAL PERFORMANCE REPRESENTATIONS

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Kent Hahne, 8280 Greensboro Drive, McLean, Virginia 22102, (703) 665-4401, the Federal Trade Commission, and the appropriate state regulatory agencies.

ITEM 20
OUTLETS AND FRANCHISEE INFORMATION

Systemwide Outlet Summary
For years 2008, 2009, 2010

Column 1 Outlet Type	Column 2 Year	Column 3 Outlets at the Start of the Year	Column 4 Outlets at the End of the Year	Column 5 Net Change
Franchised	2008	1	1	0
	2009	2	1	+1
	2010	3	2	-1
Company-Owned	2008	2	2	0
	2009	2	1	-1
	2010	3	1	+1
Total Outlets	2008	3	1	+1
	2009	4	2	+2
	2010	6	3	+3

Transfers of Outlets from Franchisees to New Owners (other than the Franchisor)
For years 2008, 2009, 2010

Column 1 State	Column 2 Year	Column 3 Number of Transfers
None	2008	0
	2009	0
	2010	0
Total	2008	0
	2009	0
	2010	0

Status of Franchised Outlets
For years 2007, 2008, 2009,2010

Col 1 State	Col 2 Year	Col 3 Outlets at Start of Year	Col 4 Outlets Opened	Col 5 Termina-tions	Col 6 Non-Renewals	Col 7 Reacquired by Franchisor	Col 8 Ceased Operations – Other Reasons	Col 9 Outlets at End of the Year
Florida	2008	0	1	0	0	0	0	1
	2009	1	0	0	0	0	0	1
	2010	1	0	0	0	0	0	1
Massachusetts	2008	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0
	2010	0	1	0	0	0	0	1
New York	2008	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0
	2010	0	1	0	0	0	0	1
Texas	2008	0	0	0	0	0	0	0
	2009	0	1	0	0	0	0	1
	2010	1	0	0	0	0	0	1
Virginia	2008	1	0	0	0	0	0	1
	2009	1	0	0	0	0	0	1
	2010	1	0	0	0	0	0	1
Total	2008	1	1	0	0	0	0	2
	2009	2	1	0	0	0	0	3
	2010	3	2	0	0	0	0	5

Status of Developers
For years 2008, 2009, 2010

Col 1 State	Col 2 Year	Col 3 Outlets at Start of Year	Col 4 Outlets Opened	Col 5 Termina-tions	Col 6 Non-Renewals	Col 7 Reacquired by Franchisor	Col 8 Ceased Operations – Other Reasons	Col 9 Outlets at End of the Year
None	2008	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0
	2010	0	0	0	0	0	0	0
Total	2008	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0
	2010	0	0	0	0	0	0	0

Status of Company-Owned Outlets
For years 2008, 2009, 2010

Col 1 State	Col 2 Year	Col 3 Outlets at Start of Year	Col 4 Outlets Opened	Col 5 Outlets Reacquired from Franchisee	Col 6 Outlets Closed	Col 7 Outlets Sold to Franchisee	Col 8 Outlets at End of the Year
None	2008	2	0	0	0	0	2
	2009	2	1	0	0	0	3
	2010	3	1	0	0	0	4

As of December 31, 2006, Our Affiliate owns four Restaurants located in Germany that are presently operating, as described in Item 1.
Our fiscal year end is December 31.

PROJECTED OPENINGS
AS OF FISCAL YEAR ENDED DECEMBER 31, 2010

States	Franchise Agreements Signed But Restaurant Not Open	Projected Franchised Restaurant Openings	Projected Company-Owned Restaurant Openings
California	1	0	0
Massachusetts	0	0	0
Michigan	1	0	0
New York	1	0	0
North Carolina	1	0	0
Texas	1	0	0
Virginia	0	0	0
TOTALS	5	0	0

A list of the names of all franchisees and the addresses and telephones numbers of their Stores are provided on Exhibit D to this Disclosure Document.

The name, city, state and current business telephone number (or if unknown, the last known home telephone number) of every franchisee who had a Store terminated, cancelled, not renewed or otherwise voluntarily or involuntarily ceased to do business under the Franchise Agreement during the most recently completed fiscal year or who has not communicated with us within 10 weeks of the issuance date of this disclosure document are listed on Exhibit E to this Disclosure Document. If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.

During the last three fiscal years, we have not had any franchisees sign confidentiality provisions that would restrict their ability to speak openly about their experience with the Vapiano System.

There are no trademark-specific organizations formed by our franchisees that are associated with the Vapiano System.

ITEM 21
FINANCIAL STATEMENTS

Attached to this Disclosure Document as Exhibit A are Our audited financial statements for the period ended December 31, 2007, December 31, 2008, December 31, 2009, December 31, 2010

Our fiscal year end is December 31st.

ITEM 22
CONTRACTS

Attached as Exhibits to this Disclosure Document are the following contracts and their attachments:

1.	Development Agreement	Exhibit B
2.	Franchise Agreement	Exhibit C
3.	General Release	Exhibit H

ITEM 23
RECEIPTS

Two copies of an acknowledgment of your receipt of this Disclosure Document appear at the end of the Disclosure Document. Please return one signed copy to us and retain the other for your records.

EXHIBIT A TO THE DISCLOSURE DOCUMENT
FINANCIAL STATEMENTS

THESE FINANCIAL STATEMENTS ARE PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAD AUDITED THESE FIGURES OR EXPRESSED HIS/HER OPINION WITH REGARD TO THE CONTENT OR FORM.

(FOR USE ONLY IN THE STATE OF MARYLAND AND THE COMMONWEALTH OF VIRGINIA)

EXHIBIT B TO THE DISCLOSURE DOCUMENT
DEVELOPMENT AGREEMENT

EXHIBIT C TO THE DISCLOSURE DOCUMENT
FRANCHISE AGREEMENT

EXHIBIT D TO THE DISCLOSURE DOCUMENT
LIST OF FRANCHISEES AND DEVELOPERS

VAP Fort LLC
9924 Gulf Coast Main #130
Fort Myers, Florida 33913

Vapiano Boston LLC
Alfred Keilen
502 Glen Road
Weston, MA 02495

TJCA Dallas, LLC
Tim McCallum
5140 Standing Oaks
Rockwall, Texas 75032

Vapiano Charlotte LLC
Lars Kruse
14284 Nolen Lane
Charlotte, NC 28277

EXHIBIT E TO THE DISCLOSURE DOCUMENT
LIST OF FRANCHISEES AND DEVELOPERS WHO HAVE LEFT THE SYSTEM

None

EXHIBIT F TO THE DISCLOSURE DOCUMENT
TABLE OF CONTENTS OF OPERATIONS MANUAL

OPERATIONS MANUAL
TABLE OF CONTENTS

TABLE OF CONTENTS		1
1.	ORGANIZATIONAL CHART	5
2.	TRAINING PROCEDURE	6
3.	AUTHORIZATIONS AND JOB SPECIFICATIONS	7
4.	DRESS CODE	8
5.	TRAINING PROCEDURE AND CONTENTS	9
6.	COMPLYING WITH THE TRAINING PROCEDURE	11
7.	FIRST-DAY ORIENTATION TOUR	12
	Orientation Checklist	13
8.	JOB DESCRIPTION AND WORKING INSTRUCTIONS	14
	Teamwork at VAPIANO	15
	Hygiene	17
	The Dishwashing area	18
	The touch terminal – Entering the order for the Stations	19
	The Preparation Kitchen	20
	The Pasta Production	21
	The Salad bar	22
	The Pasta station	23
	The Pizza station	24
	The Service area	25
	The Bar	27
	Reception and Cash register desk	28
9.	TRAINING PREPARATION AND LISTS	29
	The VAPIANO Team	30
	Control questions for hygiene instruction	31
	The Dishwashing area	33
	The touch terminal at the stations	34
	The Preparation Kitchen	35
	The Pasta Production	36
	The Salad bar	37
	The Pasta station	39
	The Pizza station	41
	The Service area	43
	The Bar	44
	Reception and Cash register desk	45
10.	CHECKLISTS FOR CONTROLLING THE MINIMUM REQUIREMENTS	46
	Check list: Terminal	47
	Check list: Salad bar	48
	Check list: Pasta	49
	Check list: Pizza	50
	Check list: Production	51
	Check list: Preparation Kitchen	52
	Check list: Service	53
	Check list: Dishwashing area	54
	Check list: Bar	55
	Reception and Cash register desk	56
11.	JOB DDESCRIPTIONS TO	57
	BE HANDED OUT TO EMPLOYEES	57
	The Dishwashing area	58
	The Bar	59
	The Cash register desk area	60
	The Service area	61
	The Preparation Kitchen	62
	The Salad bar	64
	The Production	65
	The Pasta station	66
	The Pizza station	68
12.	TRAINING RECORD.	69

EXHIBIT G TO THE DISCLOSURE DOCUMENT
STATE SPECIFIC ADDENDUM

EXHIBIT G
ADDENDUM TO VAPIANO FRANCHISE USA, LLC
DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF CALIFORNIA

CALIFORNIA APPENDIX

California Business and Professions Code Sections 20000 through 20043 provide rights to you concerning termination or non-renewal of a franchise. If the Franchise Agreement or Area Development Agreement contains provisions that are inconsistent with the law, the law will control.
The Franchise Agreement and Area Development Agreement provide for termination upon bankruptcy. This provision may not be enforceable under Federal Bankruptcy Law (11 U.S.C.A. Sec. 101 et seq.).
The Franchise Agreement and Area Development Agreement contain covenants not to compete which extend beyond the termination of the agreements. These provisions may not be enforceable under California law.
Section 31125 of the California Corporation Code requires the franchisor to provide you with a disclosure document before asking you to agree to a material modification of an existing franchise.
Neither the franchisor, any person or franchise broker in Item 2 of the Disclosure Document is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 79a et seq., suspending or expelling such persons from membership in such association or exchange.
The franchise agreement requires binding arbitration. The arbitration will occur in Virginia with the costs being borne by the franchisee and franchisor. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5 Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The Franchise Agreement and Area Development Agreement require application of the laws of Virginia. This provision may not be enforceable under California law.
You must sign a general release if you renew or transfer your franchise. California Corporation Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043).
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G

ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC DISCLOSURE DOCUMENT,
FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT
REQUIRED BY THE STATE OF ILLINOIS

The following item is required to be included within the Disclosure Document and shall be deemed to supersede the language that is in the Disclosure Document itself:

Section 4 of the Illinois Franchise Disclosure Act ("Act") dictates that "any provision in the franchise agreement which designates jurisdiction or venue in a forum outside of this State if void with respect to any cause of action which otherwise is enforceable in this State, provided that a franchise agreement may provide for arbitration in a forum outside of this State." Therefore, the Act supersedes any contrary provisions contained in the Franchise Agreement.
Article 20.C of the Franchise Agreement, Section "Acknowledgements" of the Area Development Agreement and Item 23, Receipt, of the Disclosure Document are hereby amended to reflect Illinois minimum disclosure period of 14 calendar days as required by Section 5(2) of the Act.
The Act governs the Franchise Agreement and Area Development Agreement.
Any releases that the Franchisor requests the Franchisee to sign must conform with the Act.
Under Illinois law, a franchise agreement may not provide for a choice of law of any state other than Illinois. Accordingly, Items 17(v) and (w) are amended to state "none". The Franchise Agreement and Area Development Agreement are amended accordingly.
Article 25.D of the Area Development Agreement is hereby amended in accordance with Section "1" above.
The Franchise Agreement is hereby amended to comply with Section 41, Waivers, of the Act.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G

STATE ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC DISCLOSURE DOCUMENT, FRANCHISE AGREEMENT AND
DEVELOPMENT AGREEMENT FOR THE STATE OF INDIANA

To be added to Item 3 of the Disclosure Document, is the following statement:

There are presently no arbitration proceedings to which the Franchisor is a party.
Item 17 of the Disclosure Document is amended to reflect the requirement under Indiana Code 23-2-2.7-1 (9), which states that any post term non-compete covenant must not extend beyond the franchisee's exclusive territory.
Item 17 is amended to state that this is subject to Indiana Code 23-2-2.7-1 (10).
Under Indiana Code 23-2-2.7-1 (10), jurisdiction and venue must be in Indiana if the franchisee so requests. This amends Article 19 of the Franchise Agreement and Article 15 of the Area Development Agreement.
Under Indiana Code 23-2-2.7-1 (10), franchisee may not agree to waive any claims or rights.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G

ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC
DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF MARYLAND

This will serve as the State Addendum for the State of Maryland for Vapiano Franchise USA, LLC's Disclosure Document and for its Franchise and Development Agreements. The amendments to the Franchise and Development Agreements included in this addendum have been agreed to by the parties.

The provision contained in the termination sections of the Franchise and Development Agreements may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101 et seq.).
Item 11 of the Disclosure Document shall be amended to state that a franchisee may obtain an accounting of the advertising fund as required by COMAR 02.02.08.04B(2), by requesting same in a written request to Franchisor.
Pursuant to COMAR 02.02.08.16L, Item 17 of the Disclosure Document shall be amended at the sections dealing with the issuance of general releases to the effect that the general release required as a condition of renewal and/or assignment/transfer are not intended to nor shall they act as a release, estoppel or waiver of any liability under the Maryland Franchise Registration and Disclosure Law. The appropriate sections of the Franchise Agreement and Development Agreement are hereby deemed to be amended accordingly. Exhibit I (General Release) of the Disclosure Document shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Section 14-226 of the Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a prospective franchisee to assent to any release, estoppel or waiver of liability as a condition of purchasing a franchise. Any disclaimer regarding the occurrence and/or acknowledgment of the non-occurrence of acts that would constitute a violation of the Franchise Law in order to purchase the franchise are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
Item 17 of the Disclosure Document and the appropriate sections of the Franchise Agreement and Development Agreement are amended to state that any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of the franchise.
Item 17 of the Disclosure Document is hereby amended to state that the Franchise Agreement and Development Agreement require binding arbitration, the site of which is in the state of Virginia, the costs of which are borne by the parties equally and any issues not decided by arbitration may be brought in a court of competent jurisdiction. The law of the State of Virginia governs the arbitration. However, pursuant to Section 14-216(c)(25) of the Maryland Franchise Registration and Disclosure Law, a franchisee is permitted to enter into litigation with the Franchisor in the State of Maryland, notwithstanding the language in the Franchise Agreement and Development Agreement.
The Franchise Agreement and Development Agreement are hereby amended to state that any representations which require a prospective franchisee to assent to any release, estoppel or waiver of liability as a condition of purchasing a franchise are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
The registered agent authorized to receive process in Maryland is the Maryland Securities Commissioner, 200 St. Paul Place, Baltimore, Maryland 21202-2020.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G
DISCLOSURE REQUIRED BY THE STATE OF MICHIGAN

THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:

A prohibition on the right of a franchisee to join an association of franchises.
A requirement that a franchisee assent to a release, assignment, novation, waiver or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.
A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than thirty (30) days, to cure such failure.
A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than five (5) years, and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least six (6) months' advance notice of franchisor's intent not to renew the franchise.
A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.
A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:
1. Failure of the proposed transferee to meet the franchisor's then-current reasonable qualifications or standards.
2. The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
3. The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.
4. The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).
A provision which permits the franchisor to directly or indirectly convey, assign or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services.

THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE ATTORNEY GENERAL.

If the franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000, franchisee has the right to request an escrow arrangement.

Any questions regarding this notice should be directed to:

Consumer Protection Division
Attn: Marilyn McEwen
525 W. Ottawa Street, 6th Floor
Lansing, Michigan 48933
(517) 373-7117

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC
DISCLOSURE DOCUMENT
REQUIRED BY THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK

The following Items are required to be included within the Disclosure Document and shall be deemed to supersede the language in the Disclosure Document itself:

3. LITIGATION

Neither the Franchisor, any predecessor nor any person listed under Item 2 or an affiliate offering franchises under Franchisor's principal trademark:

has an administrative, criminal or civil action pending against that person alleging: a felony; a violation of a franchise, antitrust or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; unfair or deceptive practices; or comparable civil or misdemeanor allegations.
has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise; anti-fraud or securities law; fraud; embezzlement; fraudulent conversion or misappropriation of property; unfair or deceptive practices; or comparable allegations.
is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a Federal, State or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent.

4. BANKRUPTCY

Neither the Franchisor, its affiliate, its predecessor, officers, or general partner during the ten year period immediately before the date of the Disclosure Document: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the bankruptcy code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within one year after the officer or general partner of the Franchisor held this position in the company or partnership.

17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

Provision (d) for the Area Development Agreement and Franchise Agreement is amended by adding the following language in the Summary column:

"The Franchisee may terminate the agreement on any grounds available by law."

Provision (w) for the Area Development Agreement and provision (w) for the Franchise Agreement are amended by adding the following language in the Summary column:

"The foregoing Choice of law should not be considered a waiver of any right conferred upon the Franchisor or the Franchisee by the General Business Law of the State of New York, Article 33."

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G

ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC
DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF MINNESOTA

Item 17 of the Disclosure Document, Article 19 of the Franchise Agreement and Article 15 of the Development Agreement are deemed to include the following:

Minnesota Statutes, Section 80C.21 and Minnesota rule 2860.4400 (J) prohibit the franchisor from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trail, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchisee Disclosure Documents or agreement(s) can abrogate or reduce any of franchisee's rights as provided for in Minnesota Statutes, Chapter 80C, or franchisee's rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction.
The Disclosure Document, Article 17 of the Franchise Agreement and Article 7 of the Development Agreement are deemed to include the following:

With respect to franchises governed by Minnesota law, the franchisor will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4 and 5 which require, except in certain specified cases, that a franchisee be given 90 days notice of termination (with 60 days to cure) and 180 days notice for non-renewal of the franchise agreement.
Item 17 of the Disclosure Document and Sections 3.2(6) and 14.2(2)(c) of the Franchise Agreement are hereby amended to comply with Minn. Rule 2860.4400D, which prohibits a franchisor from requiring a franchisee to assent to a general release.
Section 19.8 of the Franchise Agreement is amended to comply with Minn. Rule 2860.4400J, which states that the franchisee cannot consent to the franchisor obtaining injunctive relief, but the franchisor may seek injunctive relief.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT G
ADDENDUM TO THE VAPIANO FRANCHISE USA, LLC
DISCLOSURE DOCUMENT REQUIRED BY THE STATE OF WASHINGTON

The State of Washington has a statute, RCW 19.100.180, which may supersede the Franchise Agreement in your relationship with the Franchisor, including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the Franchise Agreement in your relationship with the Franchisor, including the areas of termination and renewal of your franchise.

In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either in the State of Washington or in a place mutually agreed upon at the time of the arbitration, or as determined by the arbitrator.

In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW shall prevail.

A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act or rights or remedies under the Act, such as a right to a jury trial, may not be enforceable.

Transfer fees are collectable to the extent that they reflect the Franchisor's reasonable estimated or actual costs in effecting a transfer.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Addendum dated this ______ day of ______________, 20___.

ATTEST		VAPIANO FRANCHISE USA, LLC

________________________________		By:_____________________________
Witness		Name:___________________________
		Title:____________________________

		FRANCHISEE:

_________________________________		_________________________________
Witness

EXHIBIT H TO THE DISCLOSURE DOCUMENT

VAPIANO FRANCHISE USA, LLC
GENERAL RELEASE AGREEMENT

THIS AGREEMENT ("Agreement") is made and entered into this ____ day of ______________, 20___ by and between Vapiano Franchise USA, LLC, a Delaware limited liability company, having its principal place of business at 8280 Greensboro Drive, McLean, Virginia 22102 (the "Franchisor"), and __________________, an individual residing at _______________________ (hereinafter referred to as "Releasor"), wherein the parties hereto, in exchange for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, and in reliance upon the representations, warranties, and comments herein are set forth, do agree as follows:

Release by Releasor:

Releasor does for itself, its successors and assigns, hereby release and forever discharge generally the Franchisor and any affiliate, wholly owned or controlled corporation, subsidiary, successor or assign thereof and any shareholder, officer, director, employee, or agent of any of them, from any and all claims, demands, damages, injuries, agreements and contracts, indebtedness, accounts of every kind or nature, whether presently known or unknown, suspected or unsuspected, disclosed or undisclosed, actual or potential, which Releasor may now have, or may hereafter claim to have or to have acquired against them of whatever source or origin, arising out of or related to any and all transactions of any kind or character at any time prior to and including the date hereof, including generally any and all claims at law or in equity, those arising under the common law or state or federal statutes, rules or regulations such as, by way of example only, franchising, securities and anti-trust statutes, rules or regulations, in any way arising out of or connected with the Agreement, and further promises never from this day forward, directly or indirectly, to institute, prosecute, commence, join in, or generally attempt to assert or maintain any action thereon against the Franchisor, any affiliate, successor, assign, parent corporation, subsidiary, director, officer, shareholder, employee, agent, executor, administrator, estate, trustee or heir, in any court or tribunal of the United States of America, any state thereof, or any other jurisdiction for any matter or claim arising before execution of this Agreement. In the event Releasor breaches any of the promises covenants, or undertakings made herein by any act or omission, Releasor shall pay, by way of indemnification, all costs and expenses of the Franchisor caused by the act or omission, including reasonable attorneys' fees.
Releasor hereto represents and warrants that no portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released hereby has been assigned or transferred by Releasor party to any other party, firm or entity in any manner including, but not limited to, assignment or transfer by subrogation or by operation of law. In the event that any claim, demand or suit shall be made or institute against any released party because of any such purported assignment, transfer or subrogation, the assigning or transferring party agrees to indemnify and hold such released party free and harmless from and against any such claim, demand or suit, including reasonable costs and attorneys' fees incurred in connection therewith. It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
Each party acknowledges and warrants that his, her or its execution of this Agreement is free and voluntary.
Virginia law shall govern the validity and interpretation of this Agreement, as well as the performance due thereunder. This Agreement is binding upon and inures to the benefit of the respective assigns, successors, heirs and legal representatives of the parties hereto.
In the event that any action is filed to interpret any provision of this Agreement, or to enforce any of the terms thereof, the prevailing party shall be entitled to its reasonable attorneys' fees and costs incurred therein, and said action must be filed in the Commonwealth of Virginia.
This Agreement may be signed in counterparts, each of which shall be binding against the party executing it and considered as the original.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this agreement effective as of the date first above.

Witness:		RELEASOR:

________________________________		_________________________________
		(Name)

		VAPIANO FRANCHISE USA, LLC

Witness:
		By:_____________________________
_________________________________		Name:___________________________
		Title:____________________________

EXHIBIT I TO THE DISCLOSURE DOCUMENT

FRANCHISEE DISCLOSURE ACKNOWLEDGMENT STATEMENT

As you know, Vapiano Franchise USA, LLC (the "Franchisor") and you are preparing to enter into a franchise agreement (the "Franchise Agreement") for the establishment and operation of a Vapiano Restaurant. The purpose of this Questionnaire is to determine whether any statements or promises were made to you by employees or authorized representatives of the Franchisor, or by employees or authorized representatives of a broker acting on behalf of the Franchisor ("Broker") that have not been authorized, or that were not disclosed in the Disclosure Document or that may be untrue, inaccurate or misleading. The Franchisor, through the use of this document, desires to ascertain (a) that the undersigned, individually and as a representative of any legal entity established to acquire the franchise rights, fully understands and comprehends that the purchase of a franchise is a business decision, complete with its associated risks, and (b) that you are not relying upon any oral statement, representations, promises or assurances during the negotiations for the purchase of the franchise which have not been authorized by Franchisor.

In the event that you are intending to purchase an existing Vapiano Restaurant from an existing Franchisee, you may have received information from the transferring Franchisee, who are not employees or representatives of the Franchisor. The questions below do not apply to any communications that you had with the transferring Franchisee. Please review each of the following questions and statements carefully and provide honest and complete responses to each.

1.	Are you seeking to enter into the Franchise Agreement in connection with a purchase or transfer of an existing Vapiano Restaurant from an existing Franchisee? Yes _____ No _____
2.	I had my first face-to-face meeting with a Franchisor representative on _______________, 20___.
3.	Have you received and personally reviewed the Franchise Agreement, each addendum, and/or related agreement provided to you? Yes _____ No _____
4.	Do you understand all of the information contained in the Franchise Agreement, each addendum, and/or related agreement provided to you? Yes _____ No _____ If no, what parts of the Franchise Agreement, any Addendum, and/or related agreement do you not understand? (Attach additional pages, if necessary.)
5.	Have you received and personally reviewed the Franchisor's Disclosure Document that was provided to you? Yes _____ No _____
6.	Did you sign a receipt for the Disclosure Document indicating the date you received it? Yes _____ No _____
7.	Do you understand all of the information contained in the Disclosure Document and any state-specific Addendum to the Disclosure Document? Yes _____ No _____ If No, what parts of the Disclosure Document and/or Addendum do you not understand? (Attach additional pages, if necessary.) __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________
8.	Have you discussed the benefits and risks of establishing and operating a Vapiano Restaurant with an attorney, accountant, or other professional advisor? Yes _____ No _____ If No, do you wish to have more time to do so? Yes _____ No _____
9.	Do you understand that the success or failure of your Vapiano Restaurant will depend in large part upon your skills and abilities, competition from other businesses, interest rates, inflation, labor and supply costs, location, lease terms, your management capabilities and other economic, and business factors? Yes _____ No _____
10.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement or promise concerning the actual or potential revenues, profits or operating costs of any particular Vapiano Restaurant operated by the Franchisor or its franchisees (or of any group of such businesses), that is contrary to or different from the information contained in the Disclosure Document? Yes _____ No _____
11.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement or promise regarding the amount of money you may earn in operating the franchised business that is contrary to or different from the information contained in the Disclosure Document? Yes _____ No _____
12.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement or promise concerning the total amount of revenue the Vapiano Restaurant will generate, that is contrary to or different from the information contained in the Disclosure Document? Yes _____ No _____
13.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement or promise regarding the costs you may incur in operating the Vapiano Restaurant that is contrary to or different from the information contained in the Disclosure Document? Yes _____ No _____
14.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement or promise concerning the likelihood of success that you should or might expect to achieve from operating a Vapiano Restaurant? Yes _____ No _____
15.	Has any employee of a Broker or other person speaking on behalf of the Franchisor made any statement, promise or agreement concerning the advertising, marketing, training, support service or assistance that the Franchisor will furnish to you that is contrary to, or different from, the information contained in the Disclosure Document or franchise agreement? Yes _____ No _____
16.	Have you entered into any binding agreement with the Franchisor concerning the purchase of this franchise prior to today? Yes _____ No _____
17.	Have you paid any money to the Franchisor concerning the purchase of this franchise prior to today? Yes _____ No _____
18.	Have you spoken to any other franchisee(s) of this system before deciding to purchase this franchise? If so, who? __________________________________________________________________ __________________________________________________________________

If you have answered No to question 9, or Yes to any one of questions 10-17, please provide a full explanation of each answer in the following blank lines. (Attach additional pages, if necessary, and refer to them below.) If you have answered Yes to question 9, and No to each of questions 10-17, please leave the following lines blank.

__________________________________________________________________

I signed the Franchise Agreement and Addendum (if any) on _______________, 20___, and acknowledge that no Agreement or Addendum is effective until signed and dated by the Franchisor.

Please understand that your responses to these questions are important to us and that we will rely on them. By signing this Questionnaire, you are representing that you have responded truthfully to the above questions. In addition, by signing this Questionnaire, you also acknowledge that:

You recognize and understand that business risks, which exist in connection with the purchase of any business, make the success or failure of the franchise subject to many variables, including among other things, your skills and abilities, the hours worked by you, competition, interest rates, the economy, inflation, franchise location, operation costs, lease terms and costs and the marketplace. You hereby acknowledge your awareness of and willingness to undertake these business risks.
B. You agree and state that the decision to enter into this business risk is in no manner predicated upon any oral representation, assurances, warranties, guarantees or promises made by Franchisor or any of its officers, employees or agents (including the Broker or any other broker) as to the likelihood of success of the franchise. Except as contained in the Disclosure Document, you acknowledge that you have not received any information from the Franchisor or any of its officers, employees or agents (including the Broker or any other broker) concerning actual, projected or forecasted franchise sales, profits or earnings. If you believe that you have received any information concerning actual, average, projected or forecasted franchise sales, profits or earnings other than those contained in the Disclosure Document, please describe those in the space provided below or write "None".

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________

__________________________________________________________________
You further acknowledge that the President of the United States of America has issued Executive Order 13224 (the "Executive Order") prohibiting transactions with terrorists and terrorist organizations and that the United States government has adopted, and in the future may adopt, other anti-terrorism measures (the "Anti-Terrorism Measures"). The Franchisor therefore requires certain certifications that the parties with whom it deals are not directly involved in terrorism. For that reason, you hereby certify that neither you nor any of your employees, agents or representatives, nor any other person or entity associated with you, is:
1. a person or entity listed in the Annex to the Executive Order;
2. a person or entity otherwise determined by the Executive Order to have committed acts of terrorism or to pose a significant risk of committing acts of terrorism;
3. a person or entity who assists, sponsors, or supports terrorists or acts of terrorism; or
4. owned or controlled by terrorists or sponsors of terrorism.

You further covenant that neither you nor any of your employees, agents or representatives, nor any other person or entity associated with you, will during the term of the Franchise Agreement become a person or entity described above or otherwise become a target of any Anti-Terrorism Measure.

Acknowledged this _____ day of ________________, 20____.

Sign here if you are taking the franchise as an INDIVIDUAL		Sign here if you are taking the franchise as a CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP

________________________________		_________________________________
Signature		Print Name of Legal Entity

Print Name _______________________		By:______________________________
		Signature
_________________________________
Signature		Print Name _______________________

Print Name _______________________		Title:____________________________

_________________________________
Signature

Print Name _______________________

_________________________________
Signature

Print Name _______________________

EXHIBIT J TO THE DISCLOSURE DOCUMENT
STATE ADMINISTRATORS/AGENTS FOR SERVICE OF PROCESS

Listed here are the names, addresses and telephone numbers of the state agencies having responsibility for franchising disclosure/registration laws and for service of process. We may not yet be registered to sell franchises in any or all of these states.

If a state is not listed, Vapiano Franchise USA, LLC has not appointed an agent for service of process in that state in connection with the requirements of franchise laws. There may be states in addition to those listed above in which Vapiano Franchise USA, LLC has appointed an agent for service of process.

There may also be additional agents appointed in some of the states listed.

CALIFORNIA
California Commissioner of Corporations
Department of Corporations:
320 West 4th Street, Suite 750
Los Angeles, CA 90013
(213) 576-7500 Toll Free (866) 275-2677

1515 K Street, Suite 200
Sacramento, CA 95814
(916) 445-7205

1350 Front Street
San Diego, CA 92101
(619) 525-4233

71 Stevenson Street, Suite 2100
San Francisco, CA 94105
(415) 972-8559

CONNECTICUT

State of Connecticut
Department of Banking
Securities & Business Investments Division
260 Constitution Plaza
Hartford, CT 06103-1800
(860) 240-8230

Agent: Banking Commissioner

HAWAII
(state administrator)

Business Registration Division
Department of Commerce and Consumer Affairs
335 Merchant Street, Room 203
Honolulu, Hawaii 96813
(808) 586-2722

(agent for service of process)

Commissioner of Securities
State of Hawaii
335 Merchant Street
Honolulu, Hawaii 96813
(808) 586-2722

ILLINOIS

Franchise Bureau
Office of the Attorney General
500 South Second Street
Springfield, Illinois 62706
(217) 782-4465
ILLINOIS

Franchise Bureau
Office of the Attorney General
500 South Second Street
Springfield, Illinois 62706
(217) 782-4465

INDIANA
(state administrator)

Indiana Secretary of State
Securities Division, E-111
302 Washington Street
Indianapolis, Indiana 46204
(317) 232-6681

(agent for service of process)
Indiana Secretary of State
201 State House
200 West Washington Street
Indianapolis, Indiana 46204
(317) 232-6531

MARYLAND
(state administrator)

Office of the Attorney General
Securities Division
200 St. Paul Place
Baltimore, Maryland 21202-2021
(410) 576-6360

(for service of process)
Maryland Securities Commissioner
200 St. Paul Place
Baltimore, Maryland 21202-2021
(410) 576-6360

MICHIGAN
(state administrator)

Consumer Protection Division
Antitrust and Franchise Unit
Michigan Department of Attorney General
525 W. Ottawa Street, 6th Floor
Lansing, Michigan 48933
(517) 373-7117

(for service of process)
Corporations Division
Bureau of Commercial Services
Department of Labor and Economic Growth
P.O. Box 30054
Lansing, Michigan 48909

MINNESOTA
(state administrator)

Minnesota Department of Commerce
85 7th Place East, Suite 500
St. Paul, Minnesota 55101-2198
(651) 296-6328

(for service of process)
Minnesota Commissioner of Commerce

NEW YORK
(state administrator)

New York State Department of Law
Bureau of Investor Protection and Securities
120 Broadway, 23rd Floor
New York, New York 10271
(212) 416-8211

(for service of process)
Secretary of State of New York
41 State Street
Albany, New York 12231
(518) 474-4750

NORTH DAKOTA

North Dakota Securities Department
State Capitol, Fifth Floor, Dept. 414
600 East Boulevard Avenue
Bismarck, North Dakota 58505
(701) 328-4712

OREGON

Department of Insurance and Finance
Corporate Securities Section
Labor and Industries Building
Salem, Oregon 97310
(503) 378-4387

RHODE ISLAND

Securities Division
Department of Business Regulation
Bldg. 69, First Floor
John O. Pastore Center
1511 Pontiac Avenue
Cranston, RI 02920
401-462-9500

SOUTH DAKOTA

Division of Securities
Department of Revenue & Regulation
445 East Capitol Avenue
Pierre, South Dakota 57501
(605) 773-4823

VIRGINIA

State Corporation Commission
Division of Securities and Retail Franchising
1300 East Main Street, 9th Floor
Richmond, Virginia 23219
(804) 371-9051

(for service of process)
Clerk of the State Corporation Commission
1300 East Main Street, 1st Floor
Richmond, Virginia 23219
(804) 371-9733

WASHINGTON
(state administrator)

Department of Financial Institutions
Securities Division
P.O. Box 9033
Olympia, Washington 98507-9033
(360) 902-8760

(for service of process)
Director, Department of Financial Institutions
Securities Division
150 Israel Road S.W.
Tumwater, Washington 98501

WISCONSIN
(state administrator)

Division of Securities
Department of Financial Institutions
345 W. Washington Ave., 4th Floor
Madison, Wisconsin 53703
(608) 266-1064

(for service of process)
Administrator, Division of Securities
Department of Financial Institutions
345 W. Washington Ave., 4th Floor
Madison, Wisconsin 53703

RECEIPT

(RETURN ONE COPY TO US)

This disclosure document summarizes certain provisions of the franchise agreement and other information in plain language. Read this disclosure document and all agreements carefully.

If Vapiano Franchise USA, LLC offers you a franchise, it must provide this disclosure document to you 14 calendar days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale. New York and Rhode Island require that we give you this disclosure document at the earlier of the first personal meeting or 10 business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. Michigan, Oregon, Washington and Wisconsin require that we give you this disclosure document at least 10 business days before the execution of any binding franchise or other agreement or the payment of any consideration, whichever occurs first.

If Vapiano Franchise USA, LLC does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, DC 20580 and the appropriate state agency listed on Exhibit J.

The franchisor is Vapiano Franchise USA, LLC, located at 8280 Greensboro Drive, McLean, Virginia 22102. Its telephone number is (703) 665-4401.

Issuance date: ____________________ .

The franchise seller for this offering is:

_________________________________________________________

_________________________________________________________.

Vapiano Franchise USA, LLC authorizes the agents listed in Exhibit J to receive service of process for it.

I have received a disclosure document dated _________________, 20___ that included the following Exhibits:

A – Financial Statements		F – Table of Contents of Operations Manual
B – Development Agreement		G – State Specific Addendum
C – Franchise Agreement		H – General Release
D – List of Franchisees and Developers		I – Franchisee Disclosure Acknowledgment Statement
E – List of Franchisees and Developers Who Have Left the System		J – List of State Administrators/Agents for Service of Process

Date:_____________________________		_________________________________
(Do not leave blank)		Signature of Prospective Franchisee

		Print Name _______________________

You may return the signed receipt either by signing, dating and mailing it to Vapiano Franchise USA, LLC at 8280 Greensboro Drive, McLean, Virginia 22102, or by faxing a copy of the signed and dated receipt to Vapiano Franchise USA, LLC at (703) 665-4410.

RECEIPT

(RETURN ONE COPY TO US)

This disclosure document summarizes certain provisions of the franchise agreement and other information in plain language. Read this disclosure document and all agreements carefully.

The franchisor is Vapiano Franchise USA, LLC, located at 8280 Greensboro Drive, McLean, Virginia 22102. Its telephone number is (703) 665-4401.

Issuance date: ____________________ .

The franchise seller for this offering is:

_________________________________________________________

_________________________________________________________.

Vapiano Franchise USA, LLC authorizes the agents listed in Exhibit J to receive service of process for it.

I have received a disclosure document dated _________________, 20___ that included the following Exhibits:

A – Financial Statements		F – Table of Contents of Operations Manual
B – Development Agreement		G – State Specific Addendum
C – Franchise Agreement		H – General Release
D – List of Franchisees and Developers		I – Franchisee Disclosure Acknowledgment Statement
E – List of Franchisees and Developers Who Have Left the System		J – List of State Administrators/Agents for Service of Process

Date:_____________________________		_________________________________
(Do not leave blank)		Signature of Prospective Franchisee

		Print Name _______________________