Developing & Establishing

Franchise Advisory Councils

Panelists: Raymond Moore, CFEV.P. Franchise DevelopmentBrightStar Franchising, LLC

Ron BergerChairman & CEOFigaro’s Italian Pizza, Inc.

David MlotkiewiczFranchiseeLawn Doctor of Toms River, NJ

Moderator: Linda Shunk, CFEV.P. Retail Sales & FranchiseOreck Clean Home Centers

Raymond Moore, CFE

V.P. Franchise DevelopmentBrightStar Franchising, LLC

Franchisee expectations• Set and reinforce a limited mission • Train each Advisor for success in their role• Clarify the role and authority of the Council• Establish and maintain consistent procedures

• Agenda/meeting plan 45 days in advance• Single Spokesman concept• Franchisees self-manage

• Timely publication of meeting notes and action items

Franchisor expectations• Respect the limited mission and role/authority• Create an internal leadership framework • Invest in appropriate resources

• Personnel• Meeting facilities and amenities

• Maintain confidentiality• Establish reasonable term limits

Success• Over the years, most results will come through incremental

adjustments.

• Measure and improve the % of your franchisees who vote in the elections

• Measure the % of franchisees who are able to answer questions about the subjects covered in the most recent meeting.

Franchisee perspective“A successful Council requires excellent two-way

communication, truthfulness, and honesty… Live up to the spirit of the mission statement… Also, for an advisory council to be effective, I would strongly encourage the Franchisor to have a senior management employee be responsible for, and interact with, the council members on a regular and consistent basis…”

William Palmer – Franchisee and Senior Co-Chairman

Ron Berger

Chairman & CEOFigaro’s Italian Pizza, Inc.

Objectives• Improved Communications• Vehicle to debate new Initiatives• Support in new program Implementation

Figaro’sNationalAdvisoryBoard

“FNAB”

FIGARO’S ITALIAN PIZZA, INC.FIGARO’S NATIONAL ADVISORY BOARD (FNAB) BYLAWS

Article INAME

Figaro’s National Advisory Board (FNAB).

Article IIPURPOSE AND OBJECTIVES

Section 1: Purpose.The FNAB will consist of a representative group of franchisees who will meet periodically with themanagement of Figaro’s Italian Pizza, Inc. (FIP) to review plans and discuss other matters ofcommon interest.

The purpose of the FNAB is to promote constructive, open and two-way communications between all of the franchisees and the management of FIP. In addition, it is the desire of FIP to make the franchise owner an integral part of our planning as we grow and develop our franchise system. Finally, it is recognized that a group of this type can be instrumental in addressing andresolving concerns of general interest before they develop into major issues. It is understood that the FNAB serves in an advisory capacity and does not have authority to establish or modify the policies of FIP. However, FIP management will take into consideration the input of the FNAB in formulating plans, programs, and policies which affect franchisees.

Section 2: Objectives.1. Advise FIP on the image, products, and customer services to be offered in the Figaro’s

Franchise System.2. Assist FIP in coordinating advertising efforts among the various Franchisee Local Advertising

Committees (FLACs).3. Assist FIP in producing, reviewing and placing authorized advertising.4. Convey to FIP Franchisee input on merchandising, promotion, and the provision of products

and services.

NOMINATION FORM

FIGARO’S ITALIAN PIZZA, INC.

CANDIDATE QUALIFICATION FORM FOR FNAB POSITIONS

Franchisees in regions C and F are eligible to vote in the election of FNAB Members for the Figaro’s National Advisory Board (FNAB). The FNAB consists of five to nine members who supply input from the field to the company, consider system direction, and make recommendations at up to four meetings each year.

Participation is voluntary, but a number of qualifications must be met to ensure that all FNAB members are fully qualified to serve. The FNAB and the company have agreed on the following qualifications for all candidates. Please read them carefully, as no exceptions can be allowed.

To serve as an FNAB member, a franchise owner must:

* Be present at any conventions held during their term;* Be a shareholder or the owner of, and have had a Figaro’s Pizza store open

and operating on or before September 30, 2007.* Have completed the questionnaire below and returned it to Figaro’s Italian

Pizza, Inc. so that it is in the company’s possession on or before July 18th, 2008.

All questionnaire responses will be published verbatim by Figaro’s in late July, so that all franchisees in these regions will have the opportunity to review them.

1. Your name___________________ FNAB Region ____

2. How many operating Figaro’s Pizza units do you currently have?________

3. When was your first unit opened? _________________________________

4. Are you actively involved in the management of your stores?___________

5. Briefly describe your activities in your operations_____________________

6. What other business experience do you have? _______________________

7. In what ways will your experience benefit the FNAB? __________________

8. Which region are you running for? Check only one: C ______ F ______

OFFICIAL BALLOT – REGION D

The FNAB elections this year are being held by mail. There are two regions whose delegates’ terms expire next month. You will elect a representative from your region who will serve for a three year term. Each operating store in the region will have one vote in the election. You are located in Region D and may vote for any owner, regardless of where their stores are located, if they meet the other requirements for serving. The seat is currently held by RicardoDondisch.

Please select from the following candidates or write in a candidate.□ Ernie Cribb□ _______________________

Please print your name ____________________________________

Your signature ___________________________________________

Please mail, email or fax this ballot to the attention of Ron Berger at Figaro’s. Ballots must be received at Figaro’s on or before September 29, 2006, to be counted.

Mail to: Ron BergerFigaro’s Italian Pizza, Inc.1500 Liberty Street SE, Suite 160Salem, OR 97302

Or

E-mail: ron@figaros.com

Or

Fax to: Ron Berger at 503-363-5364

Bill Gates

Warren Buffett

FNAB AGENDAJune 22, 2004 - 9:00 a.m. – 5:00 p.m.

1. ServiceMJF/DS a) ‘WOW” Initiative/FERP Hiatus/New Mystery Shopper

ProgramMJF/DS b) Update on Speedline POSMJF/DS c) DeliveryJD d) Coupon BooksJD/MJF e) Improving Performance of the Field Support and Marketing

Department

2. Marketing IssuesJD a) LSM Tests in ProgressJD b) Irwin Frequency Card Test

RB/JD/DS c) Update on Tesser Store DesignJD d) Salem Cable TV TestJD e) Half Price TuesdaysJD f) Pizza Guaranty Program

RB/MJF/JD/DS g) Promotional Calendar:1) Dessert Pizza at Menu Price 2) Thin Crust Reintroduction to follow3) Move Sicilian to Future Period

JN h) Giant Versus Extra Large: Language

3. Product Issues:

DS a) Don Calzone TestingJN b) Baking Calzones and LasagnaDS c) Chicken – New ProductDS d) Light‘N’Healthy – Remain on Menu?

Low Carb to Continue Chain wide -DS e) Obsolescence Fund

f) FNAB Discussion of Revised Portion ChartsDS g) FIP Analysis of Reducing Cheese PortionST h) Purchasing and West Hills Transition

4. FNAB Issues:

a) Vote Individually/Act Collectivelyb) Ad Fund Budget Statusc) Subcommitteesd) Election

REPORT ON FNAB MEETING OF OCTOBER 19, 2004

FNAB and FIP met at the corporate offices for its first regularly scheduled meeting of this term. FNAB members in attendance were: Chairman Andy Anderson, Cindy Egnarski, Dana Kottek, Jim Newman, and Ed Wanner. Tom Hansen and Swen Sullivan were absent. Also attending were Jerry Doty, Mike Fitzgerald, Don Suklis, and Ron Berger.

The FNAB consists of a representative group of franchisees who meet periodically with the management of Figaro’s Italian Pizza (FIP) to review plans and discuss other matters of common interest.

The purpose of the FNAB is to promote constructive, open and two-way communications between all of the franchisees and the management of FIP. In addition, it is the desire of FIP to make the franchise owner an integral part of our planning as we grow and develop our franchise system. Finally, it is recognized that a group of this type can be instrumental in addressing and resolving concerns of general interest before they develop into major issues.

It is understood that the FNAB serves in an advisory capacity and does not have authority to establish or modify the policies of FIP. However, FIP management takes into consideration the input of the FNAB in formulating plans, programs, and policies which affectfranchisees.

The objectives of FNAB meetings are to:

1. Advise FIP on the image, products, and customer services to be offered in the Figaro’s Franchise System.2. Assist FIP in coordinating advertising efforts among the various Franchisee Local Advertising Committees (FLACs).3. Assist FIP in producing, reviewing and placing authorized advertising. 4. Convey to FIP Franchisee input on merchandising, promotion, and the provision of products and services.5. Promote the exchange of ideas among Franchisees and relay ideas and information from and to all Franchisees.6. Correlate Franchisee suggestions. Review recommendations on System-wide operations and services.

Ron Berger opened the meeting by recognizing that – in recent months – this system has shown a strong positive trend:At October 10, our system has enjoyed revenue increases in 23 of the past 26 weeks. Net effect – as of the October 10th week – our comp. store revenues chain-wide for 2004 stand at +6.7%.

It is clear that the development of delivery and Half Price Tuesday testing, as well as various local store marketing tests are all playing a role.

David Mlotkiewicz

FranchiseeLawn Doctor of Toms River, NJ

Built on Trust• Established or Endorsed By the Franchisor • Significant Franchisee Involvement• Encourages Honest and Open Communication• Benefits Franchisee’s and Franchisor

Built on Mistrust• Born Out of Franchisee Dissatisfaction• Could have Franchisor Endorsement or Involvement• Typically Franchisee Driven Agenda• Could Have Adversarial Approach

LAWN DOCTORS ADVISORY COUNCIL

• Elected Council with Alternate Positions• Made up of 10 Geographic Zones.• Dues schedule of 50 to 100 Dollars • First Year dues for New Franchisees• Term is Three years, Limit is Two Successive Terms• Two Meetings a Year –• Executive Committee.• All Lawn Doctor Department Directors participate

ORIENTATION• Review By-Laws.• Role of the Council.• Your Role in the Process.• Your Responsibilities as a Delegate.• National Forum/Not Personal Agenda• Advisory Council/Not Board of Directors

Lawn Doctor Agenda

• Opening and Welcome• Report on Zone Elections• Approval of Minutes• Report from Treasurer• Report from President of Lawn Doctor Inc.• Additional Reports from Lawn Doctor Inc.

Lawn Doctor Agenda

• Old Business• New Business• Special Presentations• Election of Executive Committee• Date, Time and Place of next meeting• Closing Remarks• Adjournment

COMMUNICATIONLawn Doctor to the Council

• Marketing• Franchise Development• Computer Support• Equipment Research and Development• Technical Services• Operations and Training• Accounting

COMMUNICATIONCouncil to Lawn Doctor

• Areas of Concern• Issues• New Ideas• Feedback

COMMUNICATION

Council to its Members

• Timely Minutes of Meetings to Members• Lawn Doctor Reports to Members• History of What the Council has Done

COMMUNICATIONHow We Accomplish

• Regional Business Meetings• Emails• Conference Call• Annual Conference

Compliance

• What is best for the System.• What is Fair• What is Reasonable • What are Cost involved• Timeline

COMPLIANCE

• Advertising and Marketing• Internet• Yellow Pages• Websites• Vanity Numbers

• Computers and Software• Equipment and Vehicles• Uniforms

Who Needs a Franchisee Advisory Council?

IFA web site: www.franchise.org/publications

Advisory Councils: Effective Two-Way Communications for Franchise Systems

How to Make Franchise Advisory Councils Work

Resource Materials:

Q & A Session