UFOC 1

Sample UFOC

Arby's Brands, LLC

1000 Corporate Drive

Fort Lauderdale, Florida 33334

(954)351-5100

(800) 487-2729

www.TJCinnamons.com

INFORMATION FOR PROSPECTIVE FRANCHISEES

REQUIRED BY FEDERAL TRADE COMMISSION

***********

TO PROTECT YOU, WE'VE REQUIRED YOUR FRANCHISOR TO GIVE YOU THIS INFORMATION. WE HAVEN'T CHECKED IT. AND DON'T KNOW IF IT'S CORRECT. IT SHOULD HELP YOU MAKE UP YOUR MIND. STUDY IT CAREFULLY. WHILE IT INCLUDES SOME INFORMATION ABOUT YOUR CONTRACT, DON'T RELY ON IT ALONE TO UNDERSTAND YOUR CONTRACT. READ YOUR ENTIRE CONTRACT CAREFULLY. BUYING A FRANCHISE IS A COMPLICATED INVESTMENT. TAKE YOUR TIME TO DECIDE. IF POSSIBLE, SHOW YOUR CONTRACT AND THIS INFORMATION TO AN ADVISOR, LIKE A LAWYER OR AN ACCOUNTANT. IF YOU FIND ANYTHING YOU THINK MAY BE WRONG OR ANYTHING IMPORTANT THAT'S BEEN LEFT OUT, YOU SHOULD LET US KNOW ABOUT IT. IT MAY BE AGAINST THE LAW.

THERE MAY ALSO BE LAWS ON FRANCHISING IN YOUR STATE. ASK YOUR STATE AGENCIES ABOUT THEM.

FEDERAL TRADE COMMISSION

Washington, D.C. 20560

Issue Date: October 31, 2003

EFFECTIVE DATE: The effective dates in California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin are set forth on those States' receipts attached at the end of this Offering Circular.

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AM

FRANCHISE OFFERING CIRCULAR

Arby's Brands, LLC

A Delaware Limited Liability Co.

1000 Corporate Drive

Fort Lauderdale, Florida 33334

(954)351-5100

The Franchise offered is for either a T.J. Cinnamons® Classic Bakery or a T.J. Cinnamons® Signature Bakery. If you qualify, you will have the opportunity to convert your existing Arby's Restaurant to include a T.J. Cinnamons Classic Bakery. If you are not currently an Arby's Franchisee, then you may qualify for the opportunity to open a T.J. Cinnamons Signature Bakery in an Alternate Channel location.

Whether your Bakery is a T.J. Cinnamons® Classic Bakery or a T.J. Cinnamons® Signature Bakery, it will feature gourmet cinnamon rolls and other bakery products and may include branded coffees.

If you qualify for a T.J. Cinnamons Classic Bakery, you will pay a non-refundable franchise fee of $5,000 per T.J. Cinnamons Classic Bakery. The estimated initial investment for a T.J. Cinnamons Classic Bakery ranges from $23,400 to $39,200 - See Item 7 for further details.

If you qualify for a T.J. Cinnamons Signature Bakery, you will pay a non-refundable franchise fee of $5,000 per bakery. The estimated initial investment for a T.J. Cinnamons Signature Bakery ranges from $22,100 to $36,200 - See Item 7 for further details.

Risk Factors:

1.            THE FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO SUE ARBY'S ONLY IN FLORIDA. OUT OF STATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT. IT MAY ALSO COST MORE TO SUE WITH ARBY'S IN FLORIDA THAN IN YOUR HOME STATE.

2.            THE FRANCHISE AGREEMENT STATES THAT FLORIDA LAW GOVERNS THE AGREEMENT AND THE LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.

3.

THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Information about comparisons of franchisors is available. Call the state administrators listed in Exhibit 1 or your public library for sources of information.

Registration of this franchise with the state does not mean that the state recommends it or has verified the information in this Offering Circular. If you learn that anything in this Offering is untrue, contact the Federal Trade Commission and the appropriate state authority listed in Exhibit I.

Issue Date: October 31, 2003

EFFECTIVE DATES: See applicable State Receipt located at the end of this Offering Circular for the effective dates in California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin.

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NOTICE REQUIRED BY 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.

Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:

a)   A prohibition of the right of a franchisee to join an association of franchisees.

b)   A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel that 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.

c)   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 provisions 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 30 days, to such failure.

d)   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 values at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials that 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.

e)   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.

f)    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.

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THE MICHIGAN NOTICE APPLIES ONLY TO FRANCHISEES WHO ARE RESIDENTS OF MICHIGAN OR LOCATE THEIR FRANCHISES IN MICHIGAN.

g) A provision that 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 refusal to purchase the franchise. Good cause shall include, but is not limited to:

(i) The failure of the proposed transferee to meet the franchisor's then-current

reasonable qualifications or standards. (ii) The fact that the proposed transferee is a competitor of the franchisor or

subfranchisor. (iii) The unwillingness of the proposed transferee to agree in writing to comply with

all lawful obligations. (iv) 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.

h) A provision that requires the franchisee to resell to the franchisor items 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.

A provision that 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 CONSITITUE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE ATTORNEY GENERAL.

Any questions regarding this Notice should be directed to:

STATE OF MICHIGAN

Department of Attorney General

Consumer Protection Division

Attention: Franchise

670 Law Building

Lansing, Michigan 48913

Telephone Number: (517)373-7117

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TABLE OF CONTENTS

ITEM                                                                                                                     Page#

1.    THE FRANCHISOR, ITS PREDECESSORS, AND AFFILIATES........................................................1

2.    BUSINESS EXPERIENCE..........................................................................................................................7

3.    LITIGATION..............................................................................................................................................10

4.    BANKRUPTCY..........................................................................................................................................16

5.    INITIAL FRANCHISE FEE......................................................................................................................17

6.    OTHER FEES.............................................................................................................................................18

7.    INITIAL INVESTMENT........................................................................................;..................................29

8.    RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES..................................................32

9.    FRANCHISEE'S OBLIGATIONS............................................................................................................34

10.  FINANCING...............................................................................................................................................37

11.  FRANCHISOR'S OBLIGATIONS...........................................................................................................38

12.  TERRITORY..............................................................................................................................................48

13.  TRADEMARKS..........................................................................................................................................SI

14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION.................................................53

15.  OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS...................................................................................................................................................55

16.  RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL..........................................................56

17.  RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION...................................57

18.  PUBLIC FIGURES.....................................................................................................................................74

19.  EARNINGS CLAIMS.................................................................................................................................75

20.  LIST OF OUTLETS...................................................................................................................................76

21.  FINANCIAL STATEMENTS....................................................................................................................86

22.  CONTRACTS..............................................................................................................................................87

23.  RECEIPT.....................................................................................................................................................89

Applicable Addenda to Offering Circular

EXHIBITS

A......................................................................................................................................................List of Bakeries

B.............................................................................................................Arby's Brands, LLC Financial Statements

C...........................................................................................................................Third Party Consent Agreement

D-l...................................................................T.J. Cinnamons Classic Bakery Franchise Agreement & Addenda

D-2.......................................................T.J. Cinnamons Signature Bakery Franchise Agreement & Addenda

E.......................................................Acknowledgement of Receipt T.J. Cinnamons Operating Standards Manual

F.................................................................................................Guarantees - Classic Bakery & Signature Bakery

G................................................................................................Compliance Certification & Maryland Addendum

H.............................................................................................................Transfer Agreements & General Releases

I..................................................................................................................State Administrators

J..........................................................................................Registered Agents for Service of Process

Receipts of Offering Circular

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Iteml THE FRANCHISOR, ITS PREDECESSORS, AND AFFILIATES

To simplify the language in this offering circular "we" or 4tus" or "our" means Arby's Brands, LLC, the franchisor (the "Franchisor"). "You" or "your" means the person, corporation, partnership, or other entity that buys the franchise (the "Franchisee").

The Franchisor

We are a Delaware limited liability company formed on August 1, 2000. We are an indirect wholly-owned subsidiary of Arby's, Inc., a Delaware corporation incorporated on March 21, 1994, under the name Arby's Merger Corporation. Our principal business address is 1000 Corporate Drive, Fort Lauderdale, Florida 33334, and our telephone number is (954) 351-5100. You will find the addresses and telephone numbers of our predecessors and affiliates below. Our Agent for Service of Process and those of Arby's, Inc. (which acts as our Franchise Sales Agent) are disclosed in Exhibit J.

On August 29, 1996, TJ Holding Company, Inc. (a Delaware corporation incorporated on April 16, 1996) ("TJHC") acquired the T.J. Cinnamons name, trademark, service mark, and other intellectual property from an unrelated company, T.J. Cinnamons, Inc. (known as Paramark Enterprises, Inc.), and granted to our affiliate Arby's, Inc. a license to use (and sublicense) that name and mark in connection with: (a) the wholesaling of T.J. Cinnamons gourmet cinnamon rolls and other bakery products and beverages through non-franchised bakeries, and (b) franchising retail T.J. Cinnamons bakeries and dual-branded Arby's/T.J. Cinnamons Bakeries (see below under "Dual Brand Concepts"). In November 2000, TJ Holding Company, Inc. was merged into Arby's Brands, LLC, with Arby's Brands, LLC the surviving company, and Arby's, Inc. assigned all existing T.J. Cinnamons franchise and license agreements to Arby's Brands, LLC. Simultaneously, Arby's IP Holder Trust granted a 99-year license to Arby's Brands, LLC to use the Arby's trademarks, service marks, and other intellectual property in the United States and Canada. At the same time, we granted Arby's Franchise Trust a license to use the T.J. Cinnamons trademarks, service marks and other intellectual property rights in connection with the T.J. Cinnamons Coffee Program where applicable to Arby's® Restaurants (see below).

Our Predecessors and Affiliates

Arby's, Inc., an Ohio corporation incorporated on April 2, 1964, opened the first Arby's restaurant in Youngstown, Ohio, on July 23, 1964. Arby's, Inc. began franchising Arby's restaurants in 1965.

The ownership of Arby's, Inc. changed hands through merger and acquisition activity on a number of occasions between 1976 and 1994. Following the last such transaction, on March 21, 1994, Arby's, Inc. merged with Arby's Merger Corporation (which emerged as the surviving company and changed its name to Arby's, Inc.) and became a wholly-owned subsidiary of RC/Arby's Corporation. RC/Arby's Corporation was a wholly-

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owned subsidiary of CFC Holdings Corporation which, in turn, was owned by Triarc Companies, Inc., a Delaware corporation headquartered in New York, New York. Since 1996, Arby's, Inc. has also done business under the name "Triarc Restaurant Group" to reflect the company's commitment to multi-branded concepts.

In November 2000, in connection with a securitization financing transaction, Arby's, Inc. sold and assigned to Arby's Franchise Trust all Arby's Franchise Agreements governing Arby's restaurants located in the United States and Canada; all Market Development Agreements and other agreements relating to the development of future Arby's restaurants in the United States and Canada; and all rights to expand and administer the Arby's network and system (through new franchise sales and other means). In connection with this securitization financing transaction, Arby's, Inc. simultaneously sold its trademarks, service marks, and all other intellectual property rights relating to the Arby's Brand to Arby's IP Holder Trust, a Delaware business trust formed on August 8, 2000. Arby's IP Holder Trust in turn granted Arby's Franchise Trust a 99 year license to use the Arby's trademarks, service marks and other intellectual property rights throughout the United States and Canada. Arby's Franchise Trust is a Delaware business trust formed on August 8, 2000. It does business under the name "Arby's". Arby's Franchise Trust is an indirect wholly-owned subsidiary of Arby's Finance, LLC, a Delaware limited liability company incorporated on August 1, 2000. Arby's Finance, LLC is a wholly-owned subsidiary of Arby's Holdings, LLC, a Delaware limited liability company incorporated on August 1, 2000, which, in turn, is a wholly-owned subsidiary of Arby's, Inc., a Delaware corporation incorporated on March 21, 1994.

On October 25, 2000, Triarc Companies, Inc. sold its Snapple Beverage Group, including Snapple®, Royal Crown®, Diet Rite®, Mistic®, and other beverage brands, to Cadbury Schweppes pic.

On October 25, 2000, our former affiliate, RC/Arby's Corporation, sold its Royal Crown Company, Inc., a Delaware corporation, to an affiliate of Cadbury Schwepps pic.

Under a Servicing Agreement between us and Arby's, Inc., entered into in November 2000, Arby's, Inc. will, on our behalf, perform all of our duties and obligations under T.J. Cinnamons Franchise Agreements governing T.J. Cinnamons Bakeries situated in the United States, including fulfilling all our obligations to franchisees; managing the T.J. Cinnamons franchise network; marketing, offering, and negotiating new and renewal Franchise Agreements; furnishing assistance to our United States Franchisees; implementing our quality assurance programs and, otherwise, fulfilling all duties we owe under T.J. Cinnamons Franchise Agreements governing United States bakeries.

On December 27, 2002, Triarc Companies, Inc. acquired Sybra, Inc. (formerly a subsidiary of I.C.H. Corporation, a Delaware corporation headquartered in New York), the second largest franchisee of the Arby's Brand that owns and operates Arby's Restaurants in nine states located primarily in Michigan, Texas, Pennsylvania, New Jersey, and Florida. Sybra, Inc. is a wholly-owned subsidiary of Triarc Companies, Inc., and independently manages its daily affairs.

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The principal business address of our predecessor, affiliate, and corporate "grandparent", Arby's, Inc., is 1000 Corporate Drive, Fort Lauderdale, Florida 33334, and its telephone number is (954) 351-5100. The principal business address of our affiliate, Arby's IP Holder Trust, is 1000 Corporate Drive, Fort Lauderdale, Florida 33334, and its telephone number is (954) 351-5184. The principal address of our affiliate, Arby's Finance, LLC, is 1000 Corporate Drive, Fort Lauderdale, Florida 33334, and its telephone number is (954) 351-5186. The principal business address of our corporate "parent", Arby's Holdings, LLC, is 1000 Corporate Drive, Fort Lauderdale, Florida 33334, and its telephone number is (954) 351-5193. The principal business address of our affiliate, Arby's of Canada, Inc., is 6299 Airport Road, Suite 111, Mississauga, Ontario, Canada, and its phone number is (905) 672-2729. The principal business address of our affiliate, Sybra, Inc., is 780 Third Avenue, New York City, New York 10017, and its telephone number is (212) 317-0185.

Prior Business Experience of the Franchisor, its Predecessors, and Affiliates.

Our predecessors and affiliates have in the past offered, and continue to offer, franchises for other restaurant concepts, as described below under the subheading "The Licensed Concepts". Except as set forth in this Item 1 below, neither we nor our affiliates offer franchises in any other line of business.

Our predecessor and affiliate, Arby's, Inc., granted franchises for the operation of T.J. Cinnamons Classic Bakeries from December 2, 1996, until November 2000.

Paramark Enterprises, Inc., a Delaware corporation incorporated on August 23, 1993, owned, operated, and franchised others to operate retail locations ("TJC Bakeries"), licensed others at certain retail locations with a more limited T.J. Cinnamons offering ("TJC Retail Locations"), and licensed others (such as "H.J. Heinz Company") to manufacture, and in certain instances, distribute for retail sale, certain T.J. Cinnamons branded items. Paramark maintained its office at 1 Harmon Plaza, Secaucus, New Jersey 07094-3618. Paramark's predecessor was Signature Foods, Inc., a Missouri corporation ("SFI") with its principal place of business at 1010 West 39th Street, Kansas City, Missouri in 1985. In June 1992, there were 107 franchised T.J. Cinnamons Bakeries and 1 SFI owned bakery in operation. In September 1993, SFI merged into T.J. Cinnamons, Inc., a Delaware corporation formed on August 23, 1993. T.J. Cinnamons, Inc. changed its name to Paramark on September 18, 1996. Paramark does not offer franchises using the T.J. Cinnamons concept and does not own or operate any TJC Bakeries.

Also, on August 29, 1996, TJHC entered into a Management Agreement with Paramark whereby TJHC agreed to maintain, operate, manage, and supervise the 46 franchised TJC Bakeries operating at that time along with the related Franchise Agreements (collectively referred to as the "TJC Franchise System") from August 1996 until August 27, 1998, at which time Arby's assumed the Franchise Agreements from Paramark. The Management Agreement was terminated effective August 27, 1998. As of the date of this circular, there are eight (8) single brand Bakeries open arid operating. We do not offer franchises

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for the single brand Bakeries and do not own or operate any TJC single brand Bakeries.

Arby's, Inc. began operating the first T.J. Cinnamons Classic Bakery ("TJC Classic Bakery") on December 2, 1996, in Fort Lauderdale, Florida. Prior to registering the TJC Classic Bakery concept as a franchise offering, Arby's conducted a test of the concept and allowed 8 existing Arby's Franchisees to test the TJC Classic Bakery concept for a limited period, in 48 Arby's Restaurants, in 19 states throughout the United States. Only existing Arby's Franchisees who, in Arby's sole opinion, met the financial and operational objectives were considered to participate in the test at their sole cost and expense. Subsequent to the test period and registration of the concept offering, the TJC Classic Bakeries were licensed to those Franchisees testing the concept. The company-owned TJC Classic Bakeries were transferred to RTM Operating Company, a Delaware corporation, an affiliate of the RTM Restaurant Group on May 5, 1997, and were operated under test agreements until June 30,1997.

The TJC Classic and Signature Bakeries are very similar in the way they are operated. Both Bakeries specialize in the sale of freshly-baked gourmet cinnamon rolls and other distinctive food and non-alcoholic beverage products, including T.J. Cinnamons branded coffees (the "Products"). The Bakeries are operated under the procedures outlined in the TJC Operating Manual (more fully described in Item 11). The Bakeries operate under a unique and distinctive system (the "TJC System") which is identified by certain trade names, service marks, trademarks, symbols, logos, emblems and indicia of origin including, but not limited to, the mark T.J. CINNAMONS® and such other trade names, service marks and trademarks as may be developed in the future to identify for the public the source of services and products marketed under these marks and under the TJC System and representing the TJC System's high standards of quality, appearance and service (collectively, the "TJC Proprietary Marks"). The TJC System includes, without limitation, specially designed fixtures, equipment, containers and other items used in preparing, servicing and dispensing food and beverage products; signs and emblems bearing the TJC Proprietary Marks; distinctive recipes for gourmet cinnamon rolls and other food and beverage products; distinctive food and beverage production and delivery systems; distinctive design, decor, color schemes, and furnishings; various trade secrets and other confidential and proprietary information; and instructional and training material and courses, all of which we may change, improve, or further develop from time to time.

The Licensed Concepts

This offering circular offers franchises for the operation of a T.J. Cinnamons Bakery, using the T.J. Cinnamons name and the T.J. Cinnamons System for either the T.J. Cinnamons Classic Bakery to be operated in an Arby's Restaurant, or the T.J. Cinnamons Signature Bakery to be operated in an existing business (described as an Alternate Channel location).

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. T.J. Cinnamons Classic Bakery

A TJC Classic Bakery ("Licensed Business") is operated in an Arby's Restaurant and features gourmet cinnamon rolls and branded coffees in addition to and in conjunction with the Arby's Restaurant menu.

If we and our affiliate, Arby's Franchise Trust, grant you franchises, Arby's Franchise Trust will grant you a franchise for an Arby's Restaurant under a separate offering circular and we will grant you a franchise for a TJ. Cinnamons Classic Bakery under this circular. If you are another existing business, we may grant you a T.J. Cinnamons Signature Franchise Agreement under this circular.

The T.J. Cinnamons Signature Bakery

The T.J. Cinnamons Signature Bakery specializes in the sale of freshly baked, par-baked, or other types of baked or prepared gourmet cinnamon rolls and other distinctive foods and baked goods and non-alcoholic beverage products. This bakery will be operated within another existing business or food-service operation that is located in an Alternate Channel location that operates under a name or mark other than T.J. Cinnamons® or Arby's®. Alternate Channel includes locations such as hotels, specialty shops, convenience stores, or other retailers, grocery stores, cruise ships, colleges, universities, institutional venues, coliseums, kiosks, or other similar venues or facilities.

T.J. Cinnamons Gourmet Coffee Program

With our approval, an Arby's Restaurant may participate in the TJ. Cinnamons Gourmet Coffee Program (the "Coffee Program"), under which they will serve TJ. Cinnamons Gourmet branded coffees instead of the standard Arby's coffee without entering into a TJ. Cinnamons Classic Bakery Franchise Agreement with us. We will authorize TJ. Cinnamons Gourmet branded coffees for sale in an Arby's Restaurant as approved branded products. The only supplier currently approved for this program is Royal Cup Coffee. The Coffee Program is an optional program for Arby's Franchisees only in Arby's Restaurants that do not also operate a TJ. Cinnamons Classic Bakery franchise, and the Arby's Franchisees are not obligated in any way to participate unless they elect to do so. The Coffee Program ends on December 31, 2007. There is no promise or assurance that the Franchisees who participate in the Coffee Program will be able to continue selling T J. Cinnamons branded coffees after that date.

The Coffee Program is not applicable to the purchase of a new T J. Cinnamons franchise and relates only to existing Arby's Restaurants or new Arby's Restaurants.

The Market and Competition

T J. Cinnamons Bakeries serve a wide range of age groups throughout the general public in a variety of locations such as free standing Arby's Restaurants and Alternate Channel locations in hotels, casinos, convenience stores, specialty shops, retailers, grocery stores, restaurants, malls, and university campuses, to name a few.

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Throughout the United States, the food-service and bakery industries are highly competitive, with constantly changing market conditions. They are characterized by a profusion of operators, including well-financed and highly sophisticated national and regional chains. You will compete with the outlets operated by national and regional chains, independent operators, existing Arby*s franchised restaurants, and institutional operations that may be operating in existing or new facilities. To some extent, you will also compete with these competitors for customers, access to desirable locations, and food-service personnel.

Laws, Rules and Regulations

Your T.J. Cinnamons Bakery will be subject to federal, state and local regulations and guidelines governing the food-service or bakery industry. The Food and Drug Administration, the United States Department of Agriculture and food industry organizations, including the National Restaurant Association, have established rules affecting the restaurant food service or bakery business. In addition, you must be knowledgeable about federal, state, county, and local health and consumer protection laws and regulations concerning food preparation, baking, handling, and storage. You must also familiarize yourself with the requirements of laws, rules, and regulations concerning "Truth in Menu" (concerning menu item names and product labeling), nutritional claims, and access to your Restaurant facility by persons with disabilities under the Federal Americans with Disabilities Act which requires readily accessible accommodations for disabled people. You must also comply with requirements and standards for building construction, site elements, entrance ramps, doors, seating, bathrooms, drinking facilities, etc., real estate permits and licenses, and operational licenses.

You must be aware of federal, state, and local labor regulations, including those regulating no smoking areas, equal employment opportunities (EEOC), occupational safety and health (OSHA), employment, minimum age, minimum wages, hours of employment, sexual harassment, and so forth. You must investigate local zoning rules because they may limit where you can locate a bakery or the remodeling of your existing facility or Arby's Restaurant, and may affect design features, including the building facade and signs. You must also be aware of federal, state, and local environmental laws that may affect the disposal of waste materials and the packaging you use.

It will be your responsibility to investigate and comply with all laws, ordinances, rules, and regulations that may affect your bakery operations and to investigate the need for, and obtain and maintain all licenses necessary for, your bakery to open and operate. In addition, the laws, rules, and regulations that apply to businesses in general will affect you. Consult your lawyer about all these laws, rules, ordinances, regulations, and licensing requirements.

Our Agent for Service of Process is disclosed in Exhibit J.

[END OF ITEM 1]

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Item 2

BUSINESS EXPERIENCE

Chairman: Jonathan P. May

Jonathan May has served as Chairman of our company since December 2000. Before December 2000 and since our company began, Mr. May was our Chief Executive Officer. Mr. May also serves as the Chairman of Arby's, Inc. He was promoted to that position in December 2000. Before that time, he was the Chief Executive Officer of Arby's, Inc. From June 1999 through July 1999, Mr. May was employed by Triarc Companies, Inc. in New York, New York, and served as a consultant to Arby's, Inc. From August 1996 through May 1999, Mr. May served as the Vice President of Concept Development of Arby's Inc., in Fort Lauderdale, Florida.

President and Chief Executive Officer: Michael C. Howe

Michael Howe was promoted to President and Chief Executive Officer of our company in February 2001. He served as our President and Chief Operating Officer from August 1999 until that promotion. He also serves as Chief Executive Officer of Sybra, Inc. and has held that position since December 2002, and also serves as the President and Chief Executive Officer of Arby's, Inc. From August 1999 until his promotion to CEO, Mr. Howe served as President and Chief Operating Officer of Arby's, Inc. Mr. Howe was the Senior Vice President, Operations, of Arby's, Inc., located in Ft. Lauderdale, Florida, from January 1998 until August 1999.

Senior Vice President & General Counsel: Curtis S. Gimson

Curtis Gimson has been our Senior Vice President & General Counsel since our formation. He also serves as the Senior Vice President & General Counsel of Arby's, Inc., Ft. Lauderdale, Florida, and has held this position since 1997. He also serves as Senior Vice President and General Counsel of Sybra, Inc., and has held that position since December 2002.

Senior Vice President. Business Development: Stanley Jeska

Mr. Jeska has served as our Sr. Vice President of Business Development since August 2001. In addition, since August 2001, Mr. Jeska has also served as Sr. Vice President of Business Development for Arby's, Inc. of Fort Lauderdale, Florida. From 1996 until July 2001, Mr. Jeska was the Vice President, Franchise Development, for Sonic Corp. & Subsidiaries, Oklahoma City, Oklahoma.

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Senior Vice President and Chief Financial Officer: Kenneth A. Thomas

Mr. Thomas has served as our Senior Vice President and Chief Financial Officer since our formation. In addition, since February 1997, Mr. Thomas has served as the Senior Vice President and Chief Financial Officer of Arby's, Inc. in Fort Lauderdale, Florida. He also serves as Senior Vice President of Sybra, Inc., and has held that position since December 2002.

Senior Vice President. Operations: Michael T. Welch

Mr. Welch has served as our Senior Vice President, Operations, since our formation. In addition, since January 2000, Mr. Welch has served as the Senior Vice President, Operations, for Arby's, Inc. in Fort Lauderdale, Florida. From June 1998 through November 1999, Mr. Welch was President and Chief Operating Officer of International Fast Food Corp. located in Miami Beach, Florida. Before that time Mr. Welch worked for Checkers Drive-In Restaurants, Inc. where he was their Vice President of Operations, Research and Development, and Purchasing from January 1997 to May 1998.

Vice President & Associate General Counsel: Jeffrey B. Brams

Mr. Brams has served as our Vice President & Associate General Counsel since our formation. In addition, Mr. Brams serves as the Vice President & Associate General Counsel of Arby's, Inc. located in Fort Lauderdale, Florida, since he joined the company in August 2000. From 1995 to August 2000, Mr. Brams was the General Counsel of Sign*A*Rama Inc. located in West Palm Beach, Florida.

Vice President, Business Development: Robert Cross

In 2001, Mr. Cross became our Vice President, Business Development. Mr. Cross also serves as the Vice President, Business Development, for Arby's, Inc. From 2000 until his promotion, Mr. Cross was the Director, Business Development, for Arby's, Inc. From May 1997 to January 2000, Mr. Cross was the Director of Operations, Concept Development, and from January 1996 to May 1997, he was a Director of Company Operations for Arby's, Inc., located in Fort Lauderdale, Florida .

Vice President, Franchise Sales: Peter Hultgren

In February 2003, Mr. Hultgren joined Arby's, Inc., Fort Lauderdale, Florida, as our Vice President, Franchise Sales. From May 2001 up until January 2003, he was a partner with International Development Consultants (IDC), Palo Alto, California. From June 1998 to April 2001, Mr. Hultgren worked for Round Table Franchise Corp, Walnut Creek, California, as Chief Development Officer and Franchise Sales Director. Prior to that, Mr. Hultgren was the Sr. Director of Market Development with MicroAge, Inc., Phoenix, Arizona.

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Vice President Franchising: Karen L. Shelledv

Ms. Shelledy has served as our Vice President, Franchising, since our formation. Ms. Shelledy has also served as the Vice President, Franchising, for Arby's, Inc. since 1999. From April 1990 through July 1999, Ms. Shelledy was the Vice President, Franchise Services, for Arby's, Inc. located in Fort Lauderdale, Florida.

Vice President, Operations Services: Charles Sliker

Mr. Sliker has served as our Vice President, Operations Services, since our formation in August of 2000. Mr. Sliker also serves as the Vice President, Operations Services, of Arby's, Inc., Fort Lauderdale, Florida, and has done so since February 1992.

Trustee: Wilmington Trust Company

Wilmington Trust Company has served as our sole trustee since our formation in August 2000. The headquarters of Wilmington Trust Company are in Wilmington, Delaware. Wilmington Trust Company is a bank and trust with about 60 branches in Delaware, Pennsylvania, Maryland, and Florida. The parent company of Wilmington Trust Company is Wilmington Trust Corporation; Wilmington Trust Corporation's stock is traded on the New York Stock Exchange. The Wilmington Trust organization was founded nearly 100 years ago.

Franchise Sales Agent: Arby's, Inc.

As detailed above, under a Servicing Agreement entered into in November 2000 between Arby's, Inc. and us, Arby's, Inc. will act as our franchise sales agent. Arby's, Inc. will also - on our behalf- perform all of our duties and obligations under Arby's franchise agreements. See "Corporate History" for information concerning Arby's, Inc., and see above in this Item 2 for the principal officers of Arby's, Inc.

[END OF ITEM 2]

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Item 3

LITIGATION

In March 21, 1994, our affiliate Arby's, Inc. merged with a predecessor company also known as Arby's, Inc (an Ohio corporation) and, as the surviving company, agreed to assume all obligations of that predecessor company. As a result, all references to Arby's, Inc. in this Item which relate to matters arising on or before March 21, 1994, include that predecessor Arby's, Inc.

Pending Litigation:

Arthur Amro. Pierre Payette, and Andre Gareau vs. Arby's. Inc. and Arbv's Canada. Inc. (Canada Superior Court, Province of Quebec, District of Montreal, Case No. 500-05-039301-989), filed February 9, 1998. Plaintiffs, former shareholders of P. R. A. G. (the former Master Developer for the Province of Quebec), seek approximately $3.5 million for alleged wrongful termination of PRAG's Master Development Agreement. Plaintiffs seek $3,496,034.00 jointly and $100,000 individually plus interest, costs, and attorneys' fees. Defendants' Motion to dismiss for lack of jurisdiction was denied May 21, 1998. This action has remained dormant since 1998.

Concluded Litigation:

South City Food Services. Inc.. a Florida Corporation vs. Arbv's, Inc.. d/b/a Triarc Restaurant Group, a Delaware Corporation (The Circuit Court of the Seventeenth Judicial Circuit for Broward County, Florida, Case No. 02-12543 CACE 14), filed June 26, 2002. In June 2002, Arby's terminated Plaintiff, South City Food Services, Inc., for failure to spend required advertising on their unit. Plaintiffs filed a Complaint for Declaratory and Injunctive Relief, asking the Court to enjoin Arby's for terminating them. Arby's filed a Complaint in the Circuit Court for permanent injunctive relief and money damages against Peter Solomine, individually, and South City Food Services, Inc. (Case No. 02-013653 CACE 18) for, among other things, breach of contract, breach of fiduciary obligations, trademark infringement, and misappropriation of trade secrets. In October

2002,  a Stipulation of Dismissal was filed by the parties and the case was settled on favorable terms. The franchisee de-identified his location and paid thousands of dollars in damages to Arby's. Arby's later filed a Contempt Motion against South City Food Services, Inc. for violating their Settlement Agreement. The defendant was still serving roast beef sandwiches in violation of its non-competition agreement. On February 4,

2003, a Settlement and Release was entered into resolving the issues between the parties in connection with the Contempt Motion, South City Food Services paid to Arby's, Inc. substantial additional monies, and contemporaneously with the execution of the Settlement Agreement, Arby's agreed to file a Notice of Settlement and Withdrawal of its Motion.

Arbv's Franchise Trust, a statutory Delaware business trust, and Arby's Brands. LLC, a Delaware limited liability company vs. Gerald O. Roush. Jr.. Samuel Lykens. Lykens &

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; Roush. Inc., a Pennsylvania corporation, and JRL, Inc.. a Pennsylvania corporation (United States District Court Southern District of Florida - Case No. 02-60833- CIV-ZLOCH/SNOW), filed June 2002. Arby's terminated Franchisee for failure to participate in a co-op. Franchisee continued to use Arby's and T.J. Cinnamons marks, system, and know-how. A permanent Injunction was entered by the Court on July 8, 2002, enjoining defendants from using the Arby's and T.J. Cinnamons marks, system, and know-how, and upholding Arby's right to enforce its non-compete.

B & R Management & Leasing Corporation vs. Triarc Companies. Inc.. Arby's. Inc. d/b/a Triarc Restaurant Group. Grant Avenue Development Inc.. Mark G. Dunn. R. Daniel Soules. BW Streeter. Inc.. Trevor Streeter. Syracuse Arby's Advertising Group. Inc. and Ross T. Simons (Supreme Court of the State of New York, Case No. 32-00-0207) filed March 3, 2000. B & R Management & Leasing was the Franchisee of four Arby's Restaurants located in New York that were terminated on June 5, 1997 for failure to cure defaults under its License Agreements relating to outstanding co-op fees. On June 6, 1997, the Franchisee filed a Complaint in the Supreme Court of New York (Case No. 97-010459) seeking a preliminary injunction to prevent termination of its License Agreements. Arby's, Inc. filed a Motion to Dismiss the state court action and a separate lawsuit in the Northern District Court of New York (Case No. 97 CV-0845) seeking an injunction for the Franchisee's Lanham Act violations. Although the state court granted the Franchisee's preliminary injunction on March 3, 1999, the appellate court later overturned this on February 16, 2000, vacating the injunction and granting Arby's, Inc.'s Motion to Dismiss the Complaint. The Franchisee then filed a new Complaint in the state court on March 3, 2000, (Case No. 32-00-0207). In its new suit, the Franchisee alleged that the other defendants, most of which are also Franchisees of Arby's, Inc. and who also participated in the Syracuse Advertising Co-op, conspired with Arby's, Inc. to force the Franchisee to sell its restaurants at a lower price. The Franchisee sought damages in excess of $2,500,000 and punitive damages of $5,000,000, injunctive relief, restoration of the Franchisee in good standing, costs, disbursements, and other relief as may be granted in the new state court action. The Appellate Division vacated the State Court's Temporary Restraining Order on May 11, 2001. On July 13, 2001, the state court dismissed the case against Arby's. On November 7, 2001, the Federal Court held that Arby's was entitled to a Preliminary Injunction, and we properly terminated the franchise agreements. B & R ceased operations and closed its stores on August 13, 2001. In April 2002, the Federal Court dismissed all of B & R's claims except for its claim that Defendants interfered with B & R's efforts to sell its stores. The remaining claims were dismissed, and mutual releases exchanged in December 2002. The parties stipulated to discontinue the actions with prejudice and without costs to either party.

Marie Yeh. Wang & Yeh. Inc. & SNY Corporation vs. Arbv's. Inc.. an Ohio corporation. Triarc Restaurant Group and Does 1 through 100. inclusive. (Superior Court of California, Contra Costa, Case no. CIVMSC-99-03026), filed August 23, 1999. Marie Yeh, an Arby's Franchisee, filed suit alleging breach of contract, breach of the covenant of good faith and fair dealing, and fraud. Plaintiff claimed that Arby's, Inc. falsely represented on or about April 2, 1992, that she would be allowed to sell her franchises to any qualified individual. Plaintiff was seeking in excess of $11,000,000. Arby's, Inc.

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removed the matter to the U. S. D. C. for the Northern District of California and filed an Answer denying Plaintiffs allegations. Arby's, Inc. also filed a Motion to Transfer the matter to the U. S. D. C. for the Southern District of Florida. Arby's, Inc.'s Motion to Transfer was heard on March 1, 2000, and was granted on March 13, 2000. Thereafter, the matter was transferred to the U. S. D. C. for the Southern District of Florida. A settlement was reached in May 2000 wherein Arby's, Inc. paid plaintiffs $15,000 in full settlement.

Samuel Firetti. Michael Firetti. Joann Firetti. and Hamada Makarita. Victoria Frve and Glowbal Concepts, Inc.. vs. Arby's. Inc., ZuZu, Inc. and ZuZu Franchising Corporation. Triarc Companies d/b/a Triarc Restaurant Group, Mark Wiser. Horatio Lonsdale-Hands and Richard Prior (Circuit Court of Fairfax County, Virginia, Case No. 176766), filed December 8, 1998. (Removed to United States District Court for the Eastern District of Virginia, Case No. 99-0014-A). Plaintiffs filed a Motion for Judgment alleging they were fraudulently induced to purchase an existing ZuZu franchise from a Franchisee in Virginia in April, 1995, as a result of misrepresentations made by Hands, Wiser, Prior and/or other agents of Defendants. Plaintiffs further alleged that in May 1997, they were told the ZuZu Handmade Mexican Food concept was being abandoned and restructured as a "fast food" equivalent to be known as "Speedy Tortilla". Plaintiffs converted and opened the Speedy Tortilla concept in September 1997, and alleged that two months later they were told by ZuZu and ZuZu franchising that they could no longer obtain food through their commissary or suppliers, causing the restaurant to cease operations. Plaintiffs sought judgment against the Defendants in the amount of $350,000 for each of their claims of Constructive Fraud, Actual Fraud, Tortious Interference, and Common Law Conspiracy, and punitive damages aggregating $750,000, plus costs, attorneys fees, and such other relief as may be granted. In April 1999, all claims against Triarc, Arby's, Inc. and Mr. Wiser were settled for $30,000.

Food International. Inc. vs. Arby's. Inc.. AFA Service Corporation and Arby's Pittsburgh Advertising Co-operative (U.S. District Court, Western District of Pennsylvania, Case No. 97-2086), filed November 20, 1997. Plaintiff, a former Arby's licensee, alleged an antitrust tying claim based on language in its Arby's License Agreement requiring participation in the local advertising Co-operative. On May 26, 1998, the Court entered an Order Dismissing the Appeals of the Debtor and entered the Preliminary Injunction against the Debtor. The debtor's attorney filed an Appeal of these decisions on June 5, 1998. The Court entered a Dismissal of the District Court Antitrust lawsuit on August 28, 1998. In December 1998, the parties reached an agreement to settle the continuing bankruptcy matter. The parties entered into a Stipulation for Dismissal of all claims, with prejudice, and the U.S.D.C. entered an order dismissing the action on February 26, 1999. The Order Dismissing the Appeal was entered on March 4, 1999. Arby's, Inc. was not held liable in this action.

Arby's Restaurants. S. A. De C.V., vs. Arby's. Inc. (United States District Court, Southern District of Florida, Case No. 97-6467), filed April 23, 1997. Arby's Restaurants S. A. De C.V. a Mexican corporation ("AR"), the former master Franchisee of Arby's in Mexico, alleged that (i) Arby's, Inc. had engaged in fraudulent negotiations with AR in 1994-

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1995 with the purpose of weakening AR's financial condition in order to force them to sell the master franchise rights for Mexico to Arby's, Inc. cheaply and (ii) Arby's, Inc. had tortiously interfered with an alleged business opportunity that AR had with a third party. AR sought judgment against Arby's, Inc. for general, special, actual, and consequential damages for intentional interference and punitive damages, interest, costs, and such other relief as the court deems just and proper. The parties agreed to settle all the litigation, including, related proceedings pending in Mexico, in order to avoid the expense of continuing litigation. Pursuant to an October 7, 1999, settlement, Arby's, Inc. paid $1.65 million to Arby's Restaurants, and Arby's Restaurants also received the right to open four restaurants without paying an initial franchise fee and $150,000 in future credits.

ZuZu. Inc.. et al. vs. Arby's. Inc., et al. (District Court of Dallas County, Texas, Case No. 97-05121), filed June 3, 1997. Plaintiffs alleged that Arby's, Inc. and Triarc Companies, Inc. conspired to steal the ZuZu Speedy Tortilla concept and convert it to their own use. ZuZu sought actual damages in the amount of $70,000,000 plus interest and punitive damages in the amount of not less than $200,000,000 against Triarc Companies, Inc. Additionally, plaintiffs sought preliminary and permanent injunctive relief against Arby's, Inc. and Triarc Companies, Inc. ZuZu Franchising Corporation ("ZFC") also made a demand for arbitration in Dallas, Texas seeking unspecified monetary damages from Arby's, Inc., alleging that Arby's, Inc. had breached a Master Franchise Agreement between ZFC and Arby's, Inc. Arby's, Inc. asserted counterclaims against ZuZu in the arbitration proceeding for unjust enrichment, breach of contract, and breach of the duty of good faith and fair dealing, and successfully moved to transfer the proceeding to the Atlanta, Georgia, office of the American Arbitration Association. On June 3, 1998, the Arbitrator awarded ZFC $765,000 on their claims against Arby's, Inc. and $75,000 to Arby's, Inc. on its counterclaim against ZFC. On November 30, 1998, all of the forgoing proceedings were settled, together with the Katz case, discussed below, for an aggregate payment by Arby's, Inc. of $820,000.

Gregg Katz. Susan Katz Zweig and ZuZu of Orlando. LLC vs. Arby's. Inc.. ZuZu. Inc., ZuZu Franchising Corporation, and Triarc Companies d/b/a Triarc Restaurant Group (Superior Court of Fulton County, GA, Case No. E67524), filed March 13, 1998. Plaintiffs alleged, in connection with the ZuZu Hand Made Mexican Food concept and Speedy Tortilla concept, fraud, fraudulent concealment, breach of development and Franchise Agreements, tortious interference, breach of oral agreement, Quantum Meruit, violation of Fla. Stat. §817.416, violation of Florida Civil remedies for Criminal Practices Act, violation of Sale of Fla. Business Opportunity Act, violation of Little FTC Act, violation of Texas Business Opportunity Act, Money had and received. Plaintiffs sought actual damages on all counts of not less than $600,000, consequential damages; punitive damages, expenses, costs, treble damages, pre-judgment interest, attorneys' fees, and such other relief deemed just, equitable and proper by the Court. An Answer was filed by the Defendants on May 26, 1998. On November 30, 1998, the case was settled together with the ZuZu litigation, discussed above, for an aggregate payment by Arby's, Inc. of $820,000.

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Pueblo Management Co.. Inc. vs. Daddv-O's Express. Inc. et al.. (District Court for Pottawattamie County, Iowa, No. 66835), filed March 9, 1994. Plaintiff, a Daddy-O's Franchisee, filed suit against Arby's, Inc. alleging fraud and violation of the duty of good faith imposed under the Iowa Franchise Act, and failure to fulfill representations made in the Offering Circular and License Agreement in connection with a Daddy-O's Restaurant. Plaintiff sought an unspecified amount for actual damages, punitive damages, reasonable attorneys, and experts fees and costs. The action did not concern an Arbv's Restaurant or an Arbv's License Agreement. Instead, Pueblo contended that insofar as Daddy-O's was a wholly-owned subsidiary of Arby's, Inc., Arby's, Inc. was liable for the alleged acts of omissions by certain officers and employees of Arby's, Inc. in connection with Daddy-O's. The parties entered into a Settlement Agreement on March 31, 1997, in which Daddy-O's paid Pueblo $72,000 without any admission of any liability of any of the parties. The action was dismissed with prejudice.

Harold Flick vs. Arbv's. Inc.. (Circuit Court of the Eleventh Judicial Circuit for Dade County, Florida; Case No. 94-13830), filed July 27, 1994. The Plaintiff, an Arby's licensee, brought this action for declaratory relief, breach of contract, and tortious interference with contract. The Complaint sought a declaration of the parties' rights and damages of $350,000. The parties settled this litigation in May 1996 with Arby's, Inc. agreeing to allow Mr. Flick the right to transfer, for a limited time period, a right to two modified license agreements. Arby's, Inc. also agreed to issue Mr. Flick a license fee credit to be applied toward two license fees, provided the credit is used by a specified time frame.

Avenue D. Inc. vs. Triarc Companies, Inc.. Daddv-O's Express. Inc.. Arbv's. Inc.. Donald L. Pierce, Nelson Peltz and Peter W. May. (United States District Court for the Northern District of Georgia, Rome Division; Civil Action No. 95-CV-0017-HLM), filed January 13, 1995. The Plaintiff, a former Daddy-O's Franchisee, filed suit alleging breach of contract, breach of an implied covenant of good faith and fair dealing, breach of fiduciary duty, misrepresentation, fraudulent inducement, and violation of the civil provisions of the Federal and Georgia RICO Statutes. The Plaintiff sought actual damages of $8,000,000 and punitive damages of $25,000,000, together with attorneys' fees and other litigation costs. Daddy-O's was a wholly-owned subsidiary of Arby's, Inc. This action did not concern an Arby's Restaurant or an Arby's License Agreement. The parties settled this matter in February 1996 to avoid the expense of litigation before the completion of discovery and to resolve claims of a company no longer operating, Daddy-O's agreed to pay Avenue D $175,000, over time. The Plaintiff acknowledged in the Settlement Agreement that it did not have valid claims against Triarc, Arby's, Inc., or any of the individual defendants. All settlement obligations were undertaken by Daddy O's.

S. D. Management Corp. vs. Arbv's. Inc.. (United States District Court for the District of New Jersey, Civil Action No. 3:95 CV01835), filed April 24, 1995. The Plaintiff, an Arby's licensee, filed suit alleging misrepresentation, wrongful and indirect termination, without good cause, imposition of unreasonable standards of performance, breach of contract, breach of implied covenant of good faith and fair dealing, violations of the New Jersey Consumer Fraud Act and New Jersey Franchise Practices Act, common law fraud,

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and illegal tying. The parties settled the case on September 29, 1996, by each dismissing their respective claims. A stipulation for Voluntary Dismissal with Prejudice was filed October 31, 1996.

Arby's. Inc. vs. B.W. Streeter. Inc.. et al. (United States District Court of the Eastern District of Virginia [Alexandria Division], Case #93-863-A). On July 8, 1993, Arby's, Inc. filed an action against B.W. Streeter, Inc., an Arby's licensee, and certain principals of B.W. Streeter, seeking to enjoin the unauthorized use of Arby's, Inc.'s trademarks. On July 28, 1993, Defendants filed a counterclaim alleging that Arby's, Inc. wrongfully terminated the Franchise Agreement and alleged that the termination breached the agreement and violated provisions of the Virginia Retail Franchising Act concerning termination. The Court entered a Permanent Injunction against Defendants, and dismissed all of Defendants' Counterclaims against Arby's, Inc. on December 17, 1993. The Court's decision denying the Motion to Intervene and/or to certify a class action and the order enjoining the Defendants from unauthorized use of Arby's, Inc.'s trademarks and dismissing their counterclaims were appealed. The Court of Appeal affirmed the Court's decision in favor of Arby's, Inc. on January 26, 1995.

We have not been involved in any litigation. Other than the 14 lawsuits described above that involve our predecessor and affiliates, no further litigation is required to be disclosed in this Offering Circular.

[END OF ITEM 3]

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Item 4

BANKRUPTCY

On May 20, 1994, Mr. Michael T. Welch (currently our Senior Vice President, Operations) filed a Petition for Relief under Chapter 7 of the U.S. Bankruptcy Code. Mr. Welch had incurred certain federal tax liabilities as a result of his status as a partner in a partnership that operated fast-food restaurants. Mr. Welch fully satisfied the tax liabilities and obtained a Discharge August 26, 1994. (U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, Case No. 94-05014-8B7).

Other than the above action, no person previously identified in Items 1 or 2 of this Offering Circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code.

[END OF ITEM 4]

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Item 5 INITIAL FRANCHISE FEE

Franchise Fee

Whether you are opening one of our TJC Signature Bakeries or you are an Arby's® Franchisee opening a TJC Classic Bakery, you must pay to us a non-refundable initial franchise fee of $5,000 ("Franchise Fee") for each franchised location. This fee is due upon execution of your Franchise Agreement. Within ninety (90) days of the execution of your Franchise Agreement, your TJC Bakery must be opened for business.

[END OF ITEM 5]

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Item 6 OTHER FEES

TJC Classic Bakery

FEE

AMOUNT

DUE DATE

REMARKS

Royalty1

4% of Gross Sales.

Onorbeforethe 10th day following each sales period (one calendar month).

See Foot Notes for definition of Gross Sales.2

Grand Opening Advertising

$3,000.00.

Within 30-90 days of store opening.

We or a designee may provide certain promotional materials to you at our cost to be used in your grand opening. You are not required to purchase any of your promotional materials from us.

Advertising and Promotional Services Fund ("Fund")4

Arty's has the right to increase the contribution to a maximum of 4% of Gross Sales (Currently 2% of Gross Sales).5

Onorbeforethel0th day following each sales period (one calendar month).

The Advertising and Promotional Service Fund is an advertising and promotional service fund we established and administer for the purpose of advertising the TJC System on a local, regional, and/or national basis ("Fund"). Payment is made to us. If we open a company-owned TJC Classic Bakery, we will be required to contribute to the Fund on the same basis as your TJC Classic Bakery.

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FEE

AMOUNT

DUE DATE

REMARKS

Local Advertising

Not less than 3% of Gross Sales.6

As incurred.'

Amount is divided between your individual local market participation in the area co-operative advertising program. The advertising expenditure is a minimum expenditure requirement. Therefore, your participation in the local co-operative organization may exceed 3% of Gross Sales and is generally between 2% and 7%.

Co-operative Advertising 8

If applicable no more than 3% of Gross Sales, unless, subject to our approval, the members of the Cooperative, in accordance with the by-laws of the Cooperative, agree to the payment of a larger fee, which is generally between 2% and 7%.

As incurred.

Any contribution to an advertising co-operative will be credited against your local advertising obligation. The cooperative advertising expenditure is a minimum requirement. Therefore, your participation in the local Co-operative, if required, is in addition to any monies paid to the Fund, as defined above under Advertising and Promotional Services Fund remarks.

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FEE

AMOUNT

DUE DATE

REMARKS

Advertising and On-Going Promotional Materials

Varies, depending on your advertising

needs.

As incurred.

We may provide you with advertising materials periodically at our cost. See Items 7 and 11.

Training Fee

Your initial training fee is included in your initial franchise fee. However, all costs and expenses attendant to your training are your sole responsibility, including any salaries paid to you or your employees while training.

Included in the fee paid at the time franchise fee is paid.

Prior to opening of the TJC Classic Bakery, at least one manager and one designated operations persons must complete the initial training program, as further described in Item 11.

Additional Training

No Fee. Cost and expenses are your responsibility. 9

As incurred.

We may require you, your manager, designated operations person, and other employees to attend further or refresher training programs.

Replacement of TJC Manuals

$100 for each

additional

manual.

As incurred.

Cost of replacing your TJC Manuals.

Approval of Suppliers

Costs and expenses incurred.

As incurred.

We may charge the proposed supplier reasonable costs and expenses incurred in our evaluation and investigation. The costs of such expenditures may range from $2,500 to $10,000. These charges may be passed on to you by Supplier.

Testing of Samples for

Arbys Approval10

Cost of samples.

As incurred.

This covers the costs of testing new products or inspecting new products you propose. See Item 8.

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FEE

AMOUNT

DUE DATE

REMARKS

Inspection and Testing

Cost of inspection or test.

As incurred.

We may require you to pay us or an independent laboratory for the cost of a test on samples of your inventory items if we have not previously approved the supplier of the item or if the sample fails to conform to our specifications. You must also pay the cost of inspection and testing under our supplier approval procedure. See Item 8 (Approval of Suppliers).

Repairs, Maintenance and Remodeling

As assessed.

As incurred.

You must maintain the Bakery in good condition and state of repair as necessary to comply with and satisfy the requirements of the then-current Manual. This obligation may require significant capital or other expenditures.

Insurance"

Premium is set by your insurance carrier.

Before opening your Bakery.

See Notes below."

Transfer Fee (Ownership)12

$1,000.

As incurred.

We may agree to waive part of the fee if a substantial number of TJC Classic Bakeries are sold, transferred, or assigned as part of the same transaction.

Renewal

You must tender an administrative fee of 30% of the then-current franchise fee at least thirty (30) days prior to the expiration of your Franchise Agreement.

You must apply at least 120 days prior to the expiration date of your TJC Classic Bakery Franchise Agreement.

Ifyou meet all the criteria under Article 13:2 of your Franchise Agreement, then you are entitled to a new Franchise Agreement.

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FEE

AMOUNT

DUE DATE

REMARKS

Coffee Mark-up Fee13

You pay an up-charge of $1.00 per pound from 1/01/03 through 12/31/07.

Payable upon net terms established by the distributor.

This amount is fully rebated to you as our Franchisee in consideration of your royalty payment.

De-Identification

Will vary under circumstances.

As incurred.

If we terminate your Franchise Agreement or it expires and you do not de-identify the premises promptly, we have the right to remove all signs and distinctive TJC Proprietary designs so that the premises do not resemble a TJC Classic Bakery, and to charge you all cost and expenses incurred.

Taxes, Assessments, Penalties, Interest, and Additional Charges

As assessed.

Promptly as incurred.

You are responsible for paying all taxes, assessments, penalties, interests, and any other charges assessed against your licensed business.

Costs and Attorneys' Fees

Will vary under

circumstances.

As incurred.

Payable if you fail to comply with your Franchise Agreement.

Indemnification

Varies according to

loss.

On demand.

You must indemnify us if we are sued or held liable for claims arising from your operations.

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TJC Signature Bakery

FEE

AMOUNT

DUE DATE

REMARKS

Royalty14

There is no monthly royalty. Each time you purchase certain products, you pay an up-charge to the distributor. The supplier then remits this up-charge to us. The up-charge is presently fixed at $9.00 per case for each case of our cinnamon rolls purchased, and $11.81 for each case of cinnamon or chocolate twists purchased. The up-charge may be applied to additional products in the future. 5

As incurred.

The product up-charge may or may not increase. However, if we should elect to increase it due to business reasons, then we can not increase it more than 15% every 2 years.

Advertising and Promotional Services Fund ("Fund")

There is currently no fund. However, we reserve the right to establish one in the future as we assess the needs of our growing franchise.

The Advertising and Promotional Service Fund would be a fund we establish and administer for the purpose of advertising the TJC System on a local, regional, and/or national basis.

Local Advertising

You must spend a minimum of $1000.00 each year on your local area advertising for your Signature Bakery.

As incurred.

We define your local area.

Advertising and On-Going Promotional Materials

Varies, depending on your advertising needs.

As incurred

We may provide you with advertising materials periodically at our cost. See Items 7 and 11.

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FEE

AMOUNT

DUE DATE

REMARKS

Training Fee

Your initial training fee is included in your initial franchise fee. However, all costs and expenses attendant to your training are your sole responsibility.

Included in the fee paid at the time franchise fee is paid.

Prior to opening your TJC Signature Bakery at least one manager and one designated operations persons must complete the initial training program, as further described in Item 11.

Additional Training

No Fee. Cost and expenses are your responsibility.9

As incurred.

We may require you, your manager, designated operations person, and other employees to attend further or refresher training programs.

Replacement of TJC Manuals

You must pay to us $100 for each additional manual.

As incurred.

Cost of replacing your TJC Manuals.

Approval of Suppliers

Costs and expenses incurred.

As incurred.

We may charge the proposed supplier reasonable costs and expenses incurred in our evaluation and investigation. The costs of such expenditures may range from $2,500 to $10,000. These charges may be passed on to you by Supplier.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

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FEE

AMOUNT

DUE DATE

REMARKS

Testing of Samples for Our Approval

Cost of samples.

As incurred.

This covers the costs of testing new products or inspecting new products you propose. See Item 8.

Inspection and Testing

Cost of inspection or test.

As incurred.

We may require you to pay us or an independent laboratory for the cost of a test on samples of your inventory items if we have not previously approved the supplier of the item or if the sample fails to conform to our specifications. You must also pay the cost of inspection and testing under our supplier approval procedure. See Item 8 and Note above (Approval of Suppliers).

Repairs, Maintenance, and Remodeling

As assessed.

As incurred.

You must maintain the Bakery in good condition and state of repair as necessary to comply with and satisfy the requirements of the then-current Manual. This obligation may require significant capital or other expenditures.

Insurance"

Premium is set by your insurance carrier.

Before opening your Bakery.

See Notes below.10

Transfer Fee (Ownership) I2

$1,000.

As incurred.

We may agree to waive part of the fee if a substantial number of TJC Signature Bakeries are sold, transferred, or assigned as part of the same transaction.

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FEE

AMOUNT

DUE DATE

REMARKS

Renewal

You must pay the then-current franchise fee at least thirty (30) days prior to the expiration of your Franchise Agreement.

You must apply at least 120 days prior to the expiration date of your Franchise Agreement.

If you meet all the criteria under Article 13:2 of the your Franchise Agreement, then you are entitled to a new Franchise Agreement.

Coffee Mark-up Feeu

If you would like to carry our delicious coffee, then you must pay an up-charge fee per pound on T.J. Cinnamons Gourmet Coffee purchases.

Payable upon net terms established by the distributor.

We are presently establishing a Coffee Program for Signature Bakeries and have not yet determined the details. However, coffee will remain an optional menu item for you, and you will not be obligated to add it to your product offerings if you choose not to.

De-Identification

Will vary under circumstances.

As incurred.

If we terminate your Franchise Agreement or it expires and you do not de-identify the premises promptly, we have the right to remove all signs and distinctive TJC Proprietary designs so that the premises do not resemble a TJC Signature Bakery, and to charge you all cost and expenses incurred.

Taxes, Assessments, Penalties, Interest, and Additional Charges

As assessed.

Promptly as incurred.

You are responsible for paying all taxes, assessments, penalties, interests, and any other charges assessed against your licensed business.

Costs and Attorneys' Fees

Will vary under circumstances.

As incurred.

Payable if you fail to comply with your Franchise Agreement.

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FEE

AMOUNT

DUE DATE

REMARKS

Indemnification

Varies according to

On demand.

You must indemnify us if

loss.

we are sued or held liable for claims arising from your operations.

NOTES

1.   You pay your royalties directly to us and they are non-refundable.

2.  "Gross Sales" is the total amount received from the sale of TJC Products, on or from the Licensed Premises, whether for cash or credit, but excluding sales tax or any similar tax which are required by law to be computed separately and paid by the customer. TJC Products shall include T.J. Cinnamons Branded Coffees sold at your TJC Bakery ("TJC Beverages"). Gross Sales do not include revenue from the sale of the Existing Business Products, or any other revenue generated at the Existing Business that is not specifically encompassed in the definition of Gross Sales. If there is any question regarding whether a product or service which is sold at or from the Licensed Premises should be treated as "Gross Sales" and be subject to royalty payments pursuant to Section 3:1 of the TJC Classic Bakery Franchise Agreement as opposed to being treated as an Existing Business Product and subject to royalty payments as "Gross Sales" under the Existing Business License, Franchise or other Agreement, you will follow our reasonable direction regarding the appropriate application of such payments, but without duplication of any royalty payment obligation.

3. Classic Bakery Franchisees: If you are opening a TJC Classic Bakery, then you must spend a minimum

of $3,000 on the grand opening advertising. We may provide you with certain promotional materials to be used in this grand opening. Any materials you purchase from us will be sold to you at cost - we do not make a profit on advertising materials. You do not have to buy any promotional material from us at all. In addition, you are not required to spend this amount prior to opening.

Signature Bakery Franchisees: It's just good business to promote your grand opening. However, our Signature Bakery Franchisees place their Bakeries in so many different types of locations that it makes it impractical for us to set a monetary requirement for your grand opening. Therefore, as a Signature Bakery Franchisee, you do not share the grand opening expenditure requirement.

4.  You make your Fund payments directly to us. We may terminate the Fund. All monies will be expended for advertising or promotional purposes or returned to contributing franchised or any company operated bakeries (if applicable), without interest, on the basis of their respective contributions. See Item 11.

5.   Any increase in the Fund shall be subject to approval by an affirmative vote of 65% of the then licensed TJC Bakeries in good standing.

6.   Expenditures on (1) incentive programs for your employees or agents, including the cost of honoring any coupons distributed in connection with such programs; (2) research expenditures; (3) food or coupon discounts incurred in any promotion; (4) salaries and expenses of any of your employees including salaries or expenses for attendance at advertising meeting or activities; (5) charitable, political or other contributions or donations; (6) press parties or other expenses of publicity; (7) seminar and educational costs and expenses for your employees; and (8) specialty merchandise items, such as T-shirts, ceramic mugs, pottery, sweatshirts, caps and watches, unless these items are part of a market-wide advertising program and then only to the extent that the cost of these items are not recovered by the promotion are not included toward the fulfillment of your local advertising obligation.

7.  You must submit your advertising expenditure report accurately reflecting expenditures for the preceding calendar quarter within 10 days following the end of the calendar quarter.

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8.   We may designate any geographic area in which two or more TJC Classic Bakeries are located as a region for establishing an advertising Co-operative ("Co-operative"). In most cases the geographic area will be based on the Designated Marketing Area ("DMA") as the term is used in the advertising industry. The members of the Co-operative for any area will consist of all TJC Classic Bakeries (whether operated by a Franchisee, us, or our affiliates). There currently are no Co-operatives established. We expect that each TJC Classic Bakery would have one vote in any Co-operative that is established, including any company owned TJC Classic Bakeries. All advertising is, however, subject to our approval.

9.   Cost of transportation, room, and board is your responsibility. No compensation of any kind is paid by us to you or your employees while training, and we will not reimburse you for any expenses associated with training. You may be required to purchase training films or other instructional material from us. Monies paid to us are non-refundable.

10. You must furnish us, at your expense, adequate samples, or if not feasible, with copies of descriptions,

specifications, and pictures of such items.

11. You must name Arby's Brands, LLC, our parent company, and affiliates (if any), as additional insureds.

You must maintain personal injury, bodily injury, property damage, product liability, and contractual liability in an amount not less than One Million Dollars ($1,000,000) in an ongoing basis. We may, upon notice to you, increase the minimum amount of insurance required. If you do not maintain the required insurance, we may, upon notice to you, obtain such insurance, and you must pay us the cost thereof, plus a reasonable administrative fee. See Item 8.

12.  All fees are non-refundable, unless stated otherwise.

13.  The coffee supplier will provide monthly coffee purchase data and a check representing the mark-up fee collected for that month's sales to us, who will then verify and process the rebate checks in the quarter following the coffee purchases.

14.   The next opportunity that we may increase this up-charge is 12/31/03. We may not increase the up-charge more than 15%. You will receive notice of our intention to increase the up-charge 30 days prior to when such increase will go into effect.

15.    This product up-charge is based on price per case for our cinnamon rolls, cinnamon twists, and chocolate twists . Other products added to our list of Products may have varying up-charge rates.

[END OF ITEM 6]

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Item 7

INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT

Below, we've estimated your costs and fees when you add a TJC Classic or TJC Signature Bakery to your existing Business.

TJC Classic Bakery:

DESCRIPTION

AMOUNT LOW-HIGH

METHOD OF PAYMENT

WHEN DUE

TO

WHOM

PAYMENT

IS MADE

Initial Franchise Fee (1)

$5,000

See Item 5

See Item 5

Us

POP Kit (2)

$300-$500

Negotiable

Negotiable

Us

Equipment (3 & 5)

$8,000-$12,000

Note 3

Note 3

Suppliers

Signage/Menuboards (4 & 5)

$500-$5,000

Note 4

Note 4

Suppliers

Construction (6)

$1,000-$4,000

As incurred

As incurred

Contractors

Miscellaneous Opening Costs (7)

$1,500 -$3,000

As incurred

As

incurred

Suppliers

Opening Inventory (8)

$1,500-$2,500

As incurred

Prior to Opening

Suppliers

Grand Opening Promotion Expense (9)

$3,000

As incurred

Within 30-90 days of

store opening

Vendors

Training Costs (10)

None

N/A

N/A

N/A

Management/employee pre-opening salary/wage Costs (11)

$600-$1,200

As incurred

As incurred

Employees

Additional Funds (12)

$2,000-$3,000

Note 12

Note 12

Note 12

TOTAL: (13)

$23,400- $39,200 |

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TJC Signature Bakery:

DESCRIPTION

AMOUNT LOW-HIGH

METHOD OF PAYMENT

WHEN DUE

TO

WHOM

PAYMENT

IS MADE

Initial Franchise Fee (1)

$5,000

See Item 5

See Item 5

Us

Equipment (2 & 4)

$10,000-514,000

Note 2

Note 2

Suppliers

Signage/Menuboards (3 & 4)

$500 - $3,000

Note 3

Note 3

Suppliers

Construction (5)

$1,000-$4,000

As incurred

As incurred

Contractors

Miscellaneous Opening Costs (6)

$1,500-$3,000

As incurred

As incurred

Suppliers

Opening Inventory (7)

$1,500-$3,000

As incurred

Prior to Opening

Suppliers

Training Costs (8)

None

N/A

N/A

N/A

Management/employee pre-opening salary/wage Costs (9)

$600-$1,200

As incurred

As incurred

Employees

Additional Funds (10)

$2,000 - $3,000

Note 11

Note 11

Note 11

TOTAL: (11)

$22,100-$36,200

NOTES:

1.         The current non-refundable Initial Franchise Fee is $5,000 for each TJC Classic or TJC Signature Bakery.

2.         These amounts include costs for such equipment as a specialized oven, holding cabinet, display cabinet, shelving unit, coffee maker and air-pots (if purchased), small-wares, retail display rack, and other miscellaneous equipment required for a TJC Classic or TJC Signature Bakery operation. The exact costs will be subject to negotiations between you and our approved suppliers and may vary depending on the size and anticipated sales volume of the retail location. These amounts are non-refundable.

3.         These amounts are estimates of your costs for interior and exterior signage. (The cost of signage may vary depending on the zoning restrictions in your area). These amounts are non-refundable,

4.         Depending on your financial position, you may be able to finance 50%-75% of the Equipment and Signage costs through a bank or leasing company. The amounts in the table do not include taxes, freight, or installation charges.

5.         The amounts include costs associated with electrical upgrades, and counter and incidental alterations required to be made at the retail location. These amounts are non-refundable.

6.         These amounts include the estimated cost for items such as permits, fire inspections, legal expenses, and insurance. Insurance costs may vary depending on the value of the equipment and improvements and your past claim history. These amounts are nonrefundable.

7.         These amounts include your inventory needs (food, beverages, disposables and small-wares) for the first ten days of operation as well as the TJC Gourmet Coffee product mark-up fee (See Item 6). These amounts may vary according to your sales volume and suppliers' terms and are non-refundable.

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8.         There is no training fee. Training is "self-taught" and conducted by each Franchisee at their own individual location. As no travel is required to a training facility, we do not anticipate you will incur any costs for travel, lodging, or meals.

9.         Based on the wage and salary costs for one 52-hour week (26 hours for each individual), which may be required for the self-taught training program and pre-opening of the TJC Classic or TJC Signature Bakery at the retail location. The individuals considered are: 1 manager and 1 assistant manager. We have not allocated any of this overhead to your existing business. 100% of the wage and salary costs are assigned to your TJC Classic or TJC Signature Bakery. In addition, we recommend that six (6) of your employees spend 3 hours each under Phase III of our training.

10.        These amounts estimate your initial start up expenses for the TJC Classic or TJC Signature Bakery operation for a three-month period. These expenses include cost of food, paper, distribution fees, employee's salaries, benefits and incentives, utilities, maintenance, various operating costs, cleaning, uniforms, cash overages and shortages, insurance, free food, advertising, and royalty, if applicable.

11.        We have limited historical data relating to the operation of a Signature Bakery operation. We relied on our 30 years of experience in the fast-food industry. You should review these figures carefully with a business advisor, your accountant, and/or attorney before making any decision to purchase a franchise. With the exception of the product mark-up fee, no other payments in Notes 2 through 10 are likely to be refundable, although this may depend on your negotiations with others. We do,not offer, either directly or indirectly through affiliated companies, financing to Franchisees for the initial fee, investment, or any related items.

We cannot guarantee that you will not have additional expenses in starting your TJC Classic or TJC Signature Bakery operations. Your investment will depend on many factors, including your management skills, experience, and business acumen; local economic conditions; local real estate and construction costs; the local market for our product; the prevailing wage rate; professional service fees; competition, and the sales level reached during the initial period.

[END OF ITEM 7]

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Item 8

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You must purchase all the items you will need to operate your TJC Classic or TJC Signature Bakery from suppliers approved by us and only those approved suppliers. (In order to be approved by us, a supplier must meet our standard specifications as outlined in the then-current T.J. Cinnamons Start-up Manual, T.J. Cinnamons Operations Manual, T.J. Cinnamons Bakery Training Guide, or the Vendor Expectations Manual. We will review, approve, or disapprove the supplier within 90 days.) These items may include food, beverages, ingredients, supplies, and equipment. Currently, we only have one approved supplier for the T.J. Cinnamons' Branded Coffees referenced in Item 1.

To ensure that the highest degree of quality and service is maintained, you must operate your TJC Classic or TJC Signature Bakery in strict conformity with the methods, standards, and specifications we prescribe in the TJC Manuals or otherwise in writing. You must prepare, sell, and dispense only TJC Products that are specified in the then-current TJC Manuals, or other written materials. You must sell and offer for sale only those menu items, products, and services we have expressly approved for sale in writing. Whether you are a TJC Classic or Signature Bakery, 100% of your equipment, initial supplies, and products are required purchases. The products that make up your core menu are all required purchases on an ongoing basis. We estimate that the required purchases described above are 30% to 33% of the cost to establish a franchised T.J. Cinnamons Classic Bakery and approximately 12% of operating expenses, and we estimate that the required purchases described above are 28% to 34% of the cost to establish a franchised T.J. Cinnamons Signature Bakery and approximately 12% of operating expenses.

If you are a Signature Bakery Franchisee, you will pay a product up-charge to the distributor or manufacturer in lieu of paying us a royalty (see Item 6). This up-charge is currently set at $9.00 per case for our cinnamon rolls, and $11.81 per case for our cinnamon twists and chocolate twists. We will then collect this fee from the distributor or manufacturer. Other than the product up-charge, our affiliates and we do not derive income based on your required purchases or leases. We and our affiliates do not derive any other revenues from suppliers. However, in the future, if we permit certain distributors to sell trademarked products to our Franchisees, then we may derive revenue from the manufacture and sale of those products for the licensing rights and services rendered for establishment, processing, and monitoring the quality control over trademarks.

We may require you to purchase other branded products bearing the T.J. Cinnamons Trademark from only approved distributors or manufacturers. We currently have a long-term strategic plan to offer the sale of T.J. Cinnamons branded products through other third-party channels of distribution such as supermarkets, grocery stores, or institutional type facilities, either for ourselves or through Franchisees. If these products are developed as branded products, you must purchase, display, and sell all branded products

TJCUFOC.0603.doc

32


-, we authorize for sale. Manufacturers of branded products must pay us a fee for the licensing for the use of our trademark.

All of your advertising and promotion in any medium must conform to the standards and requirements outlined in the TJC Manuals. You must obtain our approval in writing before your proposed site/location may be used for a TJC Classic or TJC Signature Bakery. You are responsible for obtaining all zoning classifications and clearances that may be required by state or local laws, ordinances, or regulations.

We will give you a TJC Start-up Manual once you have executed the TJC Classic or TJC Signature Bakery Franchise Agreement (See Item 11 for further details). The TJC Startup Manual includes suggested layouts for your Bakery. Your site may be different than the layout depicted, however it is your responsibility to adapt the layouts to the accepted site and submit the proposed final working plans for our approval.

You must obtain your insurance coverage before opening your TJC Classic or TJC Signature Bakery for business and forward proof of insurance to us. This insurance coverage must be maintained during the term of your Franchise Agreement. We, our parent company, and any of our affiliates must be named as additional insureds to your policy. The policy must provide coverage on an ongoing basis for personal injury, bodily injury, property damage, product liability, and contractual liability in an amount of not less than One Million Dollars ($1,000,000).

Classic Bakery Franchisees:

If you are a Classic Bakery Franchisee selling our branded coffee, you must pay to our supplier a $1.00 per pound up-charge fee on coffee purchases made between January 1, 2003, and December 31, 2007. We collect this up-charge from the supplier and then we fully rebate this up-charge back to you. Our affiliates and we do not derive income based on your purchases.

As a TJC Classic Bakery Franchisee, you have to account for sales of T.J. Cinnamons Products separately from the other products you sell at your location. (TJC Signature Franchisees do not have this requirement). You have sole discretion as to the prices to be charged to customers for the offer and sale of all menu items, products, merchandise, and services. You must observe and obey all local, state, and federal laws in determining and setting such prices.

Our affiliates and we do not supply the system with any ongoing products or goods except for POP promotional material that is made available to you at our cost; however, you must pay shipping, handling, and any applicable tax. Furthermore, we do not derive any revenue from your purchases or leases from approved suppliers if you are a TJC Classic Bakery Franchisee.

[END OF ITEM 8]

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33


f

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 OFFERING CIRCULAR.

TJC CLASSIC BAKERY

OBLIGATION

LOCATION IN AGREEMENT

ITEM IN OFFERING CIRCULAR

a. Site Selection and acquisition/lease

Article 1 of FA

Item 7, 8 and 11

b. Pre-opening purchases/leases

Article 7 of FA

Item 5, 7, 8 and 11 '

c. Site development and other pre-opening requirements

Article5&7ofFA

Item 6, 7, 8 and 11

d. Initial and Ongoing Training

Article 6 of FA

Item 6 and 11 1

e. Opening

Articled 6 &7 of FA

Item 5 and 11 1!

f. Fees

Article 2, 3, 4,10, 14, 15 & 16 of FA

Item 5, 6 and 7 j

g. Compliance with standards and policies/Operating Manual

Article 1,4, 7&9of FA Section5&6ofDBCA

Item 8,11, 14 and j 17

h. Trademarks and proprietary information

Preamble

Article 1,7, 11 & 13 of FA

Item 11,13, 14 '! and 17

i. Restrictions on products/services offered

Article l,4&7ofFA

Item 8, 11 and 16

j. Warranty and customer service requirements

None

Item 11

k. Territorial development and

sale quotas

Article 1 & 5 of FA

Item 12

1. On-going product/service purchases

Article4&7ofFA

Item 8 and 11

m. Maintenance, appearance and remodeling requirements

Article 5 & 14 of FA

Item 5, 6, 8 and 11

n. Insurance

Article 11 of FA

Item 6, 7 and 8

o. Advertising

Article 9 &10 of FA

Item 6, 7 and 11

p. Indemnification

Article 12 of FA

Item 6

q. Owner's participation

Article 6, 12, 13 & 16 of FA

Item 11 and 15

r. Records/reports

Article 3 & 9 of FA

Item 6

s. Inspections/audits

Article3,7&9ofFA Section 6 of DBCA

Item 6 and 17

t. Transfer

Article 15 of FA

Item 6 and 17

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u. Renewal

Article 13 of FA

Item 6 and 17

v. Post-termination

Article 14 of FA Section 10 of DBCA

Item 14 and 17

w. Non-competition covenants

Article 13 of FA

Item 14 and 17

x. Dispute resolution

Article 14 of FA Section 12 of DBCA

Item 17

NOTES:

The acronym "DBCA" is the Third Party Consent Agreement The acronym "FA" refers to the Franchise Agreement

TJC SIGNATURE BAKERY

OBLIGATION

LOCATION IN AGREEMENT

ITEM IN OFFERING CIRCULAR

a. Site Selection and acquisition/lease

Article 1 of FA

Item 7, 8 and 11

b. Pre-opening purchases/leases

Article 7 of FA

Item 5, 7, 8 and 11

c. Site development and other pre-opening requirements

Article4,5&7ofFA

Item 6, 7, 8 and 11

d. Initial and Ongoing Training

Article 6 of FA

Item 6 and 11

e. Opening

Article 4, 6, 7 of FA

Item 5 and 11

f. Fees

Article 2, 3, 4, 10, 13, & 15 of FA

Item 5, 6 and 7

g. Compliance with standards and policies/Operating Manual

Article 1, 4, 7 &9 of FA Section 5 &6 of DBCA

Item 8,11, Hand 17

h. Trademarks and proprietary information

Preamble

Article 1,7, 11 & 13 of FA

Item 11, 13, 14

and 17

i. Restrictions on products/services offered

Article l,4&7ofFA

Item 8, 11 and 16

j. Warranty and customer service requirements

None

Item 11

k. Territorial development and sale quotas

Article 1 of FA

Item 12 .

I. On-going product/service purchases

Article l,4&7ofFA

Item 8 and 11

m. Maintenance, appearance and remodeling requirements

Article 5 & 14 of FA

Item 5, 6, 8 and 11

n. Insurance

Article 12 of FA

Item 6, 7 and 8

o. Advertising

Article 9 of FA

Item 6, 7 and 11

p. Indemnification

Article 11 of FA

Item 6

q. Owner's participation

Article 6, 12 & 15 of FA

Item 11 and 15

r. Records/reports

Article 3 of FA

Item 6

TJCUFOC.0603.doc

35


s. Inspections/audits

Article 3,4&7ofFA Section 6 of DBCA

Item 6 and 17

t. Transfer

Article 15 of FA

Item 6 and 17

u. Renewal

Article 13 of FA

Item 6 and 17 t

v. Post-termination

Article 14 of FA Section 10 of DBCA

Item 14 and 17 |

i

w. Non-competition covenants

Article 12 of FA

Item 14 and 17 [

x. Dispute resolution

Article 20 of FA Section 12 of DBCA

Item 17 l

NOTES:

The acronym "DBCA" is the Third Party Consent Agreement The acronym "FA" refers to the Franchise Agreement.

[END OF ITEM 9]

TJCUFOC.0603.doc


Item 10

FINANCING

Neither we nor any of our affiliates offer financing to Franchisees. Lender recommendations are available upon request. We do not collect a referral fee, and we do not guarantee any notes, leases, or obligations.

[END OF ITEM 10]

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Item 11

FRANCHISOR'S OBLIGATIONS

We gladly provide you with the following assistance. Except as noted below, we are not required to provide any additional support.

Pre-opening Obligation: Before you open your business, we will:

1)     Designate the specific and limited geographical locations that you may convert to include the operation of a TJC Classic or TJC Signature Bakery. (see Article 1:A of your Franchise Agreement);

2)     Offer counseling and advice in the site selection (see Article 1 :A of your Franchise Agreement);

3)     Review and accept or reject the proposed site (see Article 1:A of your Franchise Agreement);

4)     Execute and deliver the TJC Classic or TJC Signature Bakery Franchise Agreement to you upon payment of the required fees and performance of all required pre-opening obligations specified under the Franchise Agreement (see Article 2 of your Franchise Agreement);

5)    Provide an initial self-taught training program, related materials, counseling and assistance to you, your manager and any designated operations person regarding the training courses and materials (see Article 6:2:B(3) of your Franchise Agreement);

6)    Make available to you supervision and consultation regarding opening your TJC Classic or TJC Signature Bakery from corporate personnel trained to provide such consultation and supervision. We do not currently anticipate that any on-site supervision or assistance will be provided (see Article 6:2:B(4) of your Franchise Agreement);

7) Provide you with a copy of the TJC Manuals and supplementary material as issued and revised from time to time by us (see Article 4 of your Franchise Agreement). The TJC Manuals identify the licensed trademarks, contains mandatory and suggested standards, specifications, operating procedures and rules prescribed from time to time by us as well as other information relative to other obligations you may have under the TJC Classic Bakery or TJC Signature Franchise Agreement and operation of the business. We have the right to supplement, modify and revise the TJC Manuals from time to time as deemed necessary.

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The TJC Manuals (comprised of three manuals) jointly contain 169 pages. The following tables identify the subjects contained in each of the manuals and number of pages devoted to the subject.

The TJ. Cinnamons Start-up Manual currently contains 85 pages. The following table identifies the subjects and number of pages devoted to the subject contained in the manual:

TABLE OF CONTENTS

Manual Section

Pages

Welcome

2

Introduction

4

Equipment/Signs/Menu Boards

7

Facility Layout

. 26

Ordering

5

Store Opening Marketing

1

Training

24

Countdown

12

Certification

2

Resources

2

Total

85

1. This section applies only to Classic Bakeries.

The TJ. Cinnamons Operations Manual currently contains 69 pages. The following table identifies the subjects and number of pages devoted to the subject contained in the manual:

TABLE OF CONTENTS

Manual Section

Pages

Introduction & Vision

1

History & Quality

3

Menu/Product

13

Equipment

5

Opening Procedures

8

Closing Procedures

2

Labor

2

Employee Standards/Guest Service

4

Operating Forms

25

Troubleshooting

6

Total

69

The TJ. Cinnamons Bakery Training Guide currently contains 32 pages. The following table identifies the subjects and number of pages devoted to the subject contained in the manual:

TJCUFOC.0603.doc

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TABLE OF CONTENTS

Manual Section

Pages

Equipment Setup / Tempering

2

The Original Gourmet Cinnamon Roll®

3

The Pecan Sticky Bun

3

Cinnachips®

2

TJ. Cinnamons Icing

1

Misc. Products

4

T.J. Cinnamons Mocha Chill®

8

T.J. Cinnamons Cinnamon Twists™

9

Total

32

8)     Provide specifications and names of approved suppliers for opening inventory, supplies and related materials (see Article 7:2 of your Franchise Agreement), and

9)    For Classic Bakery Franchisees only, we will provide consultation regarding your Grand Opening promotion (see Article 10:2 of your Franchise Agreement).

Post-opening obligation: During the operation of your business, we will provide the following:

1)     Maintain, supplement, modify and revise the TJC Manuals periodically, as deemed necessary, and provide you with updated materials on an ongoing basis throughout the term of your TJC Classic or TJC Signature Bakery Franchise Agreement (see Article 4:1:1B of your Franchise Agreement). The TJC Manuals contain confidential proprietary information and must be returned to us upon termination or expiration of your TJC Classic Bakery or TJC Signature Franchise Agreement for any reason;

2)     Provide a list of approved suppliers and required product specifications (see Article 7: IB of your Franchise Agreement), as more fully described in Item 8 of this circular;

3)    You must maintain the high standards of quality, appearance and service of your TJC Classic or TJC Signature Bakery. Further, you must permit us to perform inspections and evaluations of your products and services and to audit your operations to assure compliance with standards (see Article 4 & 7 of your Franchise Agreement);

4)    Consider for approval new food products or beverages as requested by Franchisee (see Article 7:1:1 of your Franchise Agreement);

5)    Consider for approval new specifications, suppliers and distributors as requested by Franchisees (see Article 7:2:1 of your Franchise Agreement);

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6)     For Classic Bakery Franchisees only, we administer an advertising and promotional service fund (see Article 10:1:3 of the your Franchise Agreement). This advertising and promotional service fund is described in detail later in this Item;

7)    Police and maintain the TJC Marks. We will indemnify you against and reimburse you for damages, which you are held liable for in any proceeding arising from your use of any of the TJC Marks, provided that your conduct with respect to such proceedings and use of the TJC Marks is in compliance with the TJC Classic or TJC Signature Bakery Franchise Agreement (see Article 10 of your Franchise Agreement);

8)    Issue to you a New Franchise Agreement with respect to the Licensed Business for an additional term, upon your written request, subject to your compliance with the conditions set forth under the TJC Classic or TJC Signature Bakery Franchise Agreement (see Article 13 of your Franchise Agreement);

9)    Review and prepare the necessary transfer documents in connection with a proposed transfer (see Article 17 of your Franchise Agreement).

Advertising and Promotional Services Fund

The following section applies only to TJC Classic Bakery Franchisees: We have established and will administer an advertising and promotional services fund for the purpose of advertising the TJC System on a local, regional, and/or national basis (the "Fund"). As referenced under Item 6 above, upon commencement of the operations of your TJC Classic Bakery, you must contribute an amount equal to 2% of the Gross Sales to the Fund. During the term of your TJC Classic Bakery Franchise Agreement, we may review and modify the amount of the continuing advertising fee up to a maximum limit of 4% of Gross Sales, if such increase is approved by the affirmative vote of 65% of the then licensed TJC Classic Bakeries in good standing (such sum is in addition to your local market expenditure requirements). In reviewing and modifying the advertising fee, we may consider the level of advertising expenditures by competitors of the TJC System, TJC Classic Bakery, media costs, available marketing resources, population changes, changes in market conditions, the degree of market penetration of the TJC System, and such other factors as we deem relevant to the operation of the Fund. The advertising fees will be paid at the same time and in the same manner as the payment of the royalty fee -directly to us by you. The Fund will be maintained and administered by us or our designee. If a balance remains in the Fund at the end of the fiscal year, the balance rolls over to be used in the upcoming year. An accounting of these funds can be,made. available to you upon your written request.

We will direct all advertising programs and have sole discretion to approve or disapprove the creative concepts, materials, and media used in the advertising programs, along with

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their placement and allocation. The Fund is intended to maximize general public recognition and acceptance of the TJC System. One hundred percent of the Fund was or will be used to develop and prepare advertising materials including television, radio, magazine and newspaper advertising campaigns; direct mail and outdoor billboard advertising; public relations activities; employing advertising agencies; salaries, benefits, and other costs of our personnel and other departmental costs for advertising and marketing that is internally administered or prepared by us; reasonable administrative and personnel costs and overhead that are reasonably related to the administration or direction of the Fund; creating and administering advertising programs and other related services for Franchisees and TJC Classic Bakeries, and costs of providing other advertising material to the TJC Classic Bakeries operated under the TJC System. During the last fiscal year (ending December 29, 2002), the fund was expended as follows: 40% on P.O.P., 2% on the redesign of product packaging, 10% for special promotions, 15% for new product roll-out, and 33% retained funds held in reserve for future campaigns. We will be reimbursed for providing goods and/or services with monies from the Fund.

Although we may close the fund at anytime, we will not do so while there are funds in it. Instead, we will spend all monies in the Fund for advertising or promotional purposes, or return the remainder to the contributing Franchisees.

We are not required to spend advertising fund money in the area where your TJC Classic Bakery is located. Nor do we have the obligation to make expenditures which are equivalent or proportionate to your contribution, or to ensure any particular Franchisee benefits directly or pro rata from the placement of advertising. We have the right and may, in the future, name an organization to administer the advertising and marketing activity and Fund.

In addition to the Fund, we may periodically develop and administer advertising and sales promotion programs designed to promote TJC Classic Bakeries. You will have the right to participate actively in all advertising and sales promotion programs, but only in complete accordance with the terms and conditions established by us for each program. In all aspects of these programs, including the type, quantity, timing, placement, choice of media, market areas, and advertising agencies, the standards and specifications established by us will be final and binding upon you.

TJC Signature Bakery Franchisees: We may establish an advertising fund on behalf of Signature Bakery Franchisees in the future. However, at this time, no such fund exists and we currently do not have plans to start one.

Local Advertising

Whether you are a TJC Classic Bakery or a TJC Signature Bakery Franchisee, you must advertise locally. As a TJC Signature Bakery Franchisee, you must spend $1000 annually on your local advertising. As a TJC Classic Bakery Franchisee, you must spend 3% of the Gross Sales of your Bakery each year on your local advertising. All expenditures must be made within your local market area ("Local Advertising"). Local market area will be an

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area, determined by us, that encompasses your TJC Classic Bakery License Premises. In addition to the restrictions below, costs and expenditures that you incur in any of the following will not be included in your expenditures on Local Advertising: (1) incentive programs for your employees or agents, including the cost of honoring any coupons distributed in connection with such programs; (2) research expenditures; (3) food or coupon discounts incurred in any promotion; (4) salaries and expenses of any of your employees, including salaries or expenses for attendance at advertising meetings or activities; (5) charitable, political, or other contributions or donations; (6) press parties or other expenses of publicity; (7) seminar and educational costs and expenses of your employees, and (8) specialty merchandise items such as T-shirts, ceramic mugs, pottery, sweatshirts, caps, and watches, unless these items are part of a market-wide advertising program and then only to the extent that the cost of these items is not recovered by the promotion.

Local Advertising Co-operative

For TJC Classic Bakery Franchisees only: We may, in our sole discretion, designate any geographic area in which two or more TJC Classic Bakeries are located as a region for purposes of establishing a Local Advertising Co-operative ("Co-operative"). In addition, we may require co-operatives to be changed, dissolved, or merged. We do not have this right for TJC Signature Bakery Franchisees. In most cases the geographic area will be based on the Dominant Marketing Area ("DMA"), as the term is used in the advertising industry. The members of the Co-operative for any area will consist of all TJC Classic Bakeries. Each Co-operative must be organized and governed in a form and manner to begin on a date determined by us in our sole discretion. Each Co-operative will be organized for the exclusive purpose of administering advertising programs and developing promotional materials (subject to our approval) for use by the members in Local Advertising. If at the time of the signing of the TJC Classic Bakery Franchise Agreement, a Co-operative has been established for a geographic area that encompasses your TJC Classic Bakery or if any Co-operative is established during the term of the TJC Classic Bakery Franchise Agreement, you must sign the documents required immediately upon our request and become a member of the Co-operative. You agree to participate in the Co-operative, if established.

The Co-operative will be organized and governed by written Co-operative By-Laws in a form and manner determined by us in our sole discretion. The Co-operative By-Laws may be made available for review by participating members of the Co-operative and prospective Franchisees if a Co-operative is functioning in the selected area. The Cooperative will be operated solely as a conduit for the collection and expenditure of the Co-operative fees as described above.

You must contribute to the Co-operative such amounts as are required by the Cooperative By-Laws; except that you will not be required to contribute more than 3% of your Gross Sales during each Sales Period unless, subject to our approval, the members of the Co-operative, in accordance with the Co-operative By-Laws, agree to the payment of a larger fee. The percent of contribution based on Gross Sales will generally be in the

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range of 2% and 7%. The payment of the Co-operative fee may be applied by you toward your Local Advertising required minimum expenditure of 3%.

You must submit to the Co-operative and to us such statements and reports as may be required by us or by the Co-operative, including an advertising expenditure report consisting of invoices or other documents which accurately reflect your expenditures for Local Advertising and/or the Co-operative Contributions for the preceding calendar quarter within 10 days following the end of calendar quarter.

No advertising or promotional plans or materials may be used by the Co-operative or furnished to its members without our prior approval. All such plans and materials must be submitted to us.

Internet

You must obtain our approval before utilizing any electronic advertising media. Our approval will be granted (or not) within 30 days of application.

Grand Opening

For TJC Classic Bakery Franchisees only: You agree to plan and carry out a grand opening promotion for the commencement of operations of the TJC Classic Bakery in accordance with the TJC Manuals or other written directives. We will consult with you regarding your grand opening promotion. Any advertising and promotional items that you use in such grand opening must be approved by us. You agree to spend a minimum of $3,000 in the grand opening promotion. Any such amount will not be credited toward any other advertising obligation of yours.

Price Determination

You may sell your products and merchandise and offer services at any prices you determine, and will in no way be bound by any price which may be recommended or suggested by us. You must observe and obey all local, state, and federal laws in determining and setting such prices.

Electronic Cash Registers and Computer Systems:

We currently do not require you to buy or use electronic cash registers or a computer system in the TJC Bakery. However, most companies, including us, are dependent on information technology and functional application systems. Without them we could not accept orders, schedule and process manufacturing of products, arrange for delivery, accept payments, process invoices, or pay employees. Telephone systems, the Internet, electronic banking, and other mainstays of the modern economy can affect your business if not operating properly. Although we do not require you to buy or use specific electronic cash registers, POS or computer systems, it is your responsibility to be able to operate the Licensed Business utilizing such equipment as may be necessary. We are not

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■ obligated to provide services or assist you in obtaining your computer systems and POS systems or provide services related to any such systems.

Site/Location Selection

The time limit for site approval is 30 days from date of application. If we do not agree to a site within that time frame, we will automatically terminate your franchise agreement and refund your initial franchise fee. At a minimum, for us to determine that a site is appropriate for the operation of a TJC Bakery, the site must meet our current image and must have the required physical space. The TJC Classic or TJC Signature Bakery requires a minimum of 30 square feet to a maximum of 200 square feet of space within the Licensed Premises. The Bakery is comprised of a counter top, retail display station (approximately 3.5 feet wide and 3 feet deep), and a bakery oven (approximately 30 inches wide and 26 inches deep) to be placed on a work counter in the service area of the Licensed Premises. Ancillary equipment takes up the remaining square footage within the Licensed Premises. No site may be used for the location of a TJC Classic or TJC Signature Bakery unless first approved by us.

If you are a TJC Classic Bakery Franchisee, then upon execution of your Franchise Agreement, you will be provided with a T.J. Cinnamons® Start-Up Manual (See Item 8) that will include two suggested layouts (1 Preferred and 1 Alternative). Your Bakery site may be different, however, it is your responsibility to adapt the layouts to the accepted site or location and submit the proposed final working plans to us for approval.

After the proposed site has been accepted by us, it is your responsibility to obtain a consent, in the form of a Third Party Consent Agreement (attached as "Exhibit C"), to operate the TJC Classic Bakery from any franchisor, licensor, landlord, lessor, owner, or other third party that has control, oversight, or approval rights of your operations of the existing business and of the licensed premises of the location if you are not an Arby's Franchisee. As an Arby's Franchisee, you will be granted our consent to establish a TJC Classic Bakery upon execution of the TJC Classic Bakery Franchise Agreement. It is also your responsibility to obtain necessary zoning and construction approvals and permits, architectural services, contracts for construction or remodeling as required, and equipment in accordance with the final equipment plans as approved by us.

Time between signing of Agreement and Opening of Business

The Licensed Business must commence operations within ninety (90) days after execution of the your Franchise Agreement or such extended period as may be granted by us in writing. Typically the length of time between payment of the franchise fee and the opening of each Bakery scheduled to open under the TJC Bakery Franchise Agreement is thirty (30) days. The opening of each TJC Bakery will depend on such factors as the location selection, obtaining acceptable financing arrangements, necessary zoning and permits, meeting other local ordinances or community requirements, weather conditions, shortages, slow delivery, and other factors relating to completion of construction,

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p

remodeling, decorating, purchasing and installing equipment, fixtures, signs, and similar factqrs.

Initial Training

Prior to opening your TJC Classic or TJC Signature Bakery for business, you must have at least one manager and one designated operations person satisfactorily complete and be certified under the TJC Classic or TJC Signature Bakery initial self-taught training program ("TJC Training Program") or another comparable program approved in advance by us. The TJC Training Program is designed to develop the technical and management skills necessary for the operation of a TJC Classic or TJC Signature Bakery. The TJC Training Program is conducted, as required, and on an ongoing basis. The TJC Training Program is administered by the Senior Vice President of Operations, Michael T. Welch (See Item 2).

The TJC Training Program requires 2 people (Manager and designated operations person) approximately 26 hours each to complete. Additionally, we suggest that 6 of your employees spend 3 hours each to be trained under Phase III of the training program. The following table outlines the TJC Training Program.

Subject

Time Begun

Instructional Manual / Reference Aids

Hours of Classroom

Hours on the job

Instructor

Phase I: Certification Training - Training the Trainer

Varies

Operating Standards Manual ("OSM"); Operations Video ("OV"); Start-up Manual ("SM") & Start-up Video ("SV")

Notel

14 hours

Note 2

Note 3

Phase II: Certification Training - Trainer's Skill Practice

Varies

OSM; OV & BTG

Notel

8 hours Note 2

Note 3

Certifying Success

Varies

Certification Test

Note 1

1 hour

Note 2

Note 3

Phase III: Team Training

Varies

OSM; OV & BTG

Note 1

3 hours Note 2

Note 3

FOOT NOTES:

JThe TJC Training Program is self-taught and self-administered. No formal classroom training is provided by Arby's.

2Hours spent on the job will vary depending on each Franchisee and how they administer the TJC Training Program. The hours given are for two individuals. In total, we have determined that approximately 52 hours collectively are required of your Manager and their assistant to complete the TJC Training Program. No on-the-job training is provided by us.

3We will loan you a set of TJC Manuals, which are the basis of the TJC Training Program. In conjunction with the TJC Manuals, we will provide instructional and training materials for the TJC Training Program at no additional charge to you, and will also provide counseling and assistance regarding the training courses and materials. We will make available supervision and consultation regarding the Bakery opening from corporate personnel trained to provide such assistance before the opening of the Bakery. No on-site supervision or assistance will be provided.

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^The above referenced materials include safe-handling standards and procedures. Consult Local State Laws for further requirements.

We do not charge tuition for the TJC Training Program and we will provide instructional and training materials for the TJC Training Program at no additional charge. All other costs and expenses of any kind are your responsibility for yourself or any of your employees. Further, we do not pay you or your employees while in training.

We may require you to attend further or refresher-training programs for you or your managers, designated operating persons, and employees. You will pay all costs incurred in complying with the training requirements. You may be required to purchase training films or other instructional materials from us.

[END OF ITEM 11]

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Item 12 TERRITORY

TJC Classic Bakery Franchise Agreement

If you are a TJC Classic Bakery Franchisee, then your agreement authorizes you to operate one TJC Classic Bakery within a specific and limited geographical area. You may only expand within your territory if you open another Arby's Restaurant within the defined geographical boundaries. In that case, you must pay to us a new non-refundable initial franchise fee of $5,000 and enter into a new and separate Franchise Agreement for each new TJC Classic Bakery location. Otherwise, you do not have any option rights, the right to expand to contiguous territories, or a right of first refusal. In your license, we identify this area as the Licensed Premises surrounding your TJC Classic Bakery ("Assigned Area"). We, in our sole discretion, determine your Assigned Area and then we specifically describe it for you in Attachment A of your TJC Classic Bakery Franchise Agreement. Your Assigned Area may encompass up to two miles in diameter (1 mile radius) including the location of the TJC Classic Bakery. While your territory is not exclusive, we will not operate, or authorize another person or entity to operate, any other bakery using the TJC Proprietary Marks within the Assigned Area. You will retain your territory for as long as your Arby's remains open and you are not in default leading to termination, and continuation of your assigned area is not dependent upon achievement of a certain sales volume.

Your Assigned Area is not exclusive because we can, within your Assigned Area, advertise the TJC System, sell, or authorize others to sell, package goods using the TJC Proprietary Marks in grocery stores (but not convenience stores within the Assigned Area), and sell products, services, and merchandise whether or not similar to those offered under the then-current TJC Classic Bakery under other names and marks outside the Assigned Area.

Further, we can establish, authorize others to establish, and grant franchises for the establishment of a TJC Classic Bakery in the interior structural confines of a shopping mall, all college and university campus student unions and other similar institutional facilities, toll plazas, military bases, theme parks, and special location activity centers. In the case of locations, such as service facilities located in shopping malls, the Assigned Area will be for the interior structural confines of the mall only. For military facilities, schools, colleges, universities and other similar institutional facilities, toll plazas, theme parks, and special location activity centers, the Assigned Area will be specifically determined by us, based upon anticipated customer traffic counts. The Assigned Area will typically be site specific and in no event greater than the previously described 1-mile radius.

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; We may operate, license, or franchise TJC Classic Bakeries in any location outside of the Assigned Area (including other QSR's and convenience stores) using the T.J. Cinnamons trademarks, service marks, and trade names listed in the TJC Manuals.

As a TJC Signature Bakery Franchisee, you are not granted a specific trade area beyond the licensed premises.

We may require you to purchase any branded products bearing the T.J. Cinnamons Trademark from approved distributors or manufacturers. We have a long-term strategic plan to offer the sales of T.J. Cinnamons branded products through other channels of distribution facilities owned by third parties such as supermarkets, grocery stores, retail outlets, and institutional type facilities, either for ourselves or through Franchisees. If these products are developed as branded products, you must purchase, display and sell all branded products we authorize for sale. Manufacturers of branded products will be required to pay us a fee for the licensing of the use of our trademark.

Additionally, and as described in Item 1, Arby's Franchisees who participate in the T. J. Cinnamons Gourmet Coffee Program are granted a one-mile radius from their Arby's Restaurant serving T.J. Cinnamons branded coffees in which Arby's will not establish or operate, or authorize another person or entity to establish or operate, a quick service restaurant or a convenience store serving T.J. Cinnamons coffees. Such limitation shall not apply to food service facilities in non-traditional locations such as airports, shopping malls or food courts, hotels, business and industry settings, hospitals, college and university campus properties, toll plazas, theme parks, military bases, and special location activity centers. Arby's shall also have the right to sell T.J. Cinnamons branded coffees in grocery stores and through sales over the Internet or by mail order.

You may not relocate your TJC Classic or TJC Signature Bakery without our prior written consent. Further, you cannot operate, sell, or offer any TJC Products or services with any business other than the Existing Business without our prior written consent. We may permit a transfer and relocation for economic reasons in our sole discretion.

Our objective is to maximize the ability of the company and its Franchisees to develop and operate TJC Classic Bakeries, as well as other concepts. As indicated above, with respect to operating TJC Classic Bakeries, we will not grant its Assigned Area greater than a one-mile radius surrounding a TJC Classic Bakery. In conflicts between the Franchisees and us, the terms of the TJC Classic Bakery Franchise Agreement will control.

A TJC Classic Bakery Franchise Agreement, and any amendments, may only be granted by a written agreement signed by a Senior Vice President of ours or another officer who has been authorized to do so by our CEO and/or President.

You will retain your rights to your Assigned Area if you are in compliance with the terms of your TJC Classic Bakery Franchise Agreement. Once we approve an Assigned Area

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under the TJC Classic Bakery Franchise Agreement, the Assigned Area can only be modified by mutual agreement between us and yourself during the term of the specified agreement. As a result, if a development opportunity arises for another Franchisee who is interested in developing in your Assigned Area during the term of your Agreement, we will not permit it without your prior written consent.

Neither us nor any of our affiliates have any present plans to operate, franchise a business, or develop another channel of distribution selling products similar to those of a TJC Classic Bakery under a different trademark, but we and our affiliates may do so in the future. As described in Item 1, our Affiliate, Arby's Franchise Trust, currently offers franchises for the operation of full service Arby's under a separate offering circular. Your TJC Classic Bakery is only offered to you as an Arby's Franchisee. If you are not a current Arby's Franchisee, then you may become a TJC Signature Bakery Franchisee. We may in the future, operate, franchise, or license the T.J. Cinnamons concept as a single brand bakery/restaurant under a separate offering circular.

Our principal business address is identified in Item 1. There are no plans to maintain a separate office or other facilities regarding the TJC Classic or TJC Signature Bakery Franchise. We, and all related corporate, regional, and field personnel, intend to provide support to the TJC Classic or TJC Signature Bakery Franchisee. Specific personnel may be designated solely for the support of the TJC Classic or TJC Signature Bakery operations; however, the day-to-day responsibilities for support of the TJC System in all respects will be managed by the same Arby's, Inc. personnel, officers, and directors.

[END OF ITEM 12]

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Item 13

TRADEMARKS

You will have the right during the term of your TJC Classic or TJC Signature Bakery Franchise Agreement to operate a TJC Bakery under the name "T.J. Cinnamons" and use the TJC Proprietary Marks only in the manner authorized and permitted by us. You may use the trademarks and service marks only as provided in the TJC Manuals and the TJC Classic or TJC Signature Bakery Franchise Agreement.

The following list includes all the principal trademarks and service marks (the "Principal Marks"). All of the Principal Marks have been registered with the United States Patent and Trademark Office on the Principal Register. We have filed all required affidavits of use to secure registration.

MARK

FEDERAL

REGISTRATION

NUMBER

REGISTRATION DATE

T.J. CINNAMONS®

1,392,724

05/06/86

T.J. CINNAMONS®

1,397,029

06/10/86

THE ORIGINAL GOURMET CINNAMON ROLL®

1,426,955

01/27/87

THE ORIGINAL GOURMET CINNAMON ROLL®

1,427,659

02/03/87

HOME OF THE ORIGINAL T.J. CINNAMONS SINCE 1984 GOURMET CINNAMON ROLL (& Design)®

1,983,873

07/02/96

CINNACHIPS®

1,978,200

06/04/96

T.J. CINNAMONS® (For Coffee)

2,311,533

01/25/00

There are no currently effective material determinations of the Patent and Trademark Office, Trademark Trial and Appeal Board, the trademark administrator of any State or any court; no pending infringement, opposition, or cancellation proceedings, and no pending material litigation involving the Principal Trademarks.

We have applied for registration of the following TJC Proprietary Marks with the U.S. Patent and Trademark Office on the Principal Register:

Description

Federal Registration Number

Registration Date

T.J. Cinnamons Mocha Chill®

2,480,547

08/21/01

There are no agreements currently in effect that significantly limit our right to use or license the use of the Principal Marks.

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You must notify us, in writing, of any suspected infringement of the licensed trademarks and cooperate with us in stopping such infringements. We determine the need for any legal action with respect to any infringement and to control and direct the action. We will pay the cost of any litigation for the policing of the licensed trademarks against infringement. You may not take any legal action for infringement or unfair competition relating to the licensed trademarks without our consent. You must agree to execute all instruments and documents, provide any assistance that may be necessary to protect our interests in any litigation or Patent and Trademark Office, or other administrative or other agency proceeding, or to otherwise protect our interest in the TJC Proprietary Marks. We will indemnify you against and reimburse you for all damages you are held liable for in any proceeding arising out of your use of the TJC Proprietary Marks, provided that your conduct during the proceedings and use of the TJC Proprietary Marks is in compliance with the terms of the your Franchise Agreement.

We may add or substitute different trade names, service marks, trademarks, symbols, logos, emblems, and indicia of origin for the TJC Proprietary Marks for use in identifying the TJC System and the businesses operating thereunder if the current TJC Proprietary Marks no longer can be used, or if we determine that the addition or substitution of different trade names, service marks, trademarks, symbols, logos, emblems, and indicia of origin will be beneficial to the TJC System. In such an event, we will reimburse you for your direct out-of-pocket expenses incurred in such change up to a maximum of $2,000.

[END OF ITEM 13]

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Item 14

PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

We do not own any patents or copyrights applicable to the Licensed Business, but consider that the T.J. Cinnamons Intellectual Property, TJC System, TJC Products, TJC Manuals, TJC Classic or TJC Signature Bakery Franchise Agreement (Exhibit D-l & D-2), and any other Arby's or T.J. Cinnamons materials, processes, and so forth are proprietary. All information, knowledge, know-how, and techniques related to the TJC System that we communicate to you, including the TJC Manuals, plans and specifications, marketing information and strategies, site evaluation and selection guidelines and techniques, and uniform operational techniques are considered confidential (the "Confidential Information"). You must use all reasonable efforts to maintain the secrecy of the Confidential Information as secret and confidential, and you must not copy any of these materials or make them available to any unauthorized person. All Confidential Information must be kept in a secure place at the Licensed Premises.

You must operate the TJC Classic or TJC Signature Bakery in accordance with the standards and procedures specified in the TJC Manuals. You will receive one set of the TJC Manuals for the TJC Classic or TJC Signature Bakery on loan from us, and you must keep the set of TJC Manuals, or any replacements, while the TJC Classic or TJC Signature Bakery Franchise Agreement remains in effect. You must execute a Confidentiality Agreement (see Exhibit E) upon receipt of the TJC Manuals. We may provide the TJC Manuals on computer disk(s) or other media we deem appropriate for the term of the TJC Classic or TJC Signature Bakery Franchise Agreement.

We may revise the contents of the TJC Manuals and you must comply with each new or changed standard. You must also insure that the TJC Manuals are kept current at all times. If there is a dispute over the contents of the TJC Manuals, the terms of the master copies maintained by us at our principal corporate office will control.

We claim confidentiality and proprietary rights in all T.J. Cinnamons Intellectual Property, including the TJC System and TJC Products included in the TJC Manuals, such as the cinnamon roll frozen dough, streusel blend, sticky smear icing, and string icing, which we consider trade secrets. Further, we will claim proprietary rights to any future TJC secret recipes and TJC Products developed by or on behalf of us and included in the TJC Manuals. We will have sole right, title, and interest to any and all modifications, changes, or improvements to the TJC System developed by us or you with respect to the actual operations and operating procedures of the TJC Classic or TJC Signature Bakery. Neither you, nor any partner or shareholder holding at least a 15% interest in the franchise may divulge, disclose, or otherwise communicate, either directly or indirectly, to any other person or entity any Confidential Information or knowledge concerning the TJC Products and/or the TJC System or matters set forth in the TJC Manuals except as required in connection with the operation of the Licensed Business. You shall take reasonable measures to protect the confidentiality thereof. You may only divulge this

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Confidential Information to your employees who must have access to it to operate the TJC Classic or TJC Signature Bakery.

You must promptly inform us, in writing, when you learn about an unauthorized use of the TJC Proprietary Marks. We determine the need for any legal action with respect to any infringement that may occur and to control and direct any such action. We will pay the cost of any litigation initiated to protect the TJC Proprietary Marks. We may consent to you entering into an action to defend the proprietary information and may control and direct such defense. We will indemnify you under the TJC Classic or TJC Signature Bakery Franchise Agreement for all damages you are held liable for in your use of the TJC Proprietary Marks, if you have complied with the terms of the TJC Classic or TJC Signature Bakery Franchise Agreement.

We may require you to discontinue or modify the use of the proprietary information at any time.

[END OF ITEM 14]

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Item 15

OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE

FRANCHISE BUSINESS

As either a TJC Classic or TJC Signature Bakery Franchisee, you are not required to participate personally in the direct operation of the Licensed Business. However, you must use your best efforts to hire, train, and properly supervise sufficient and qualified personnel to assure overall operational compliance and standards are satisfied at all times.

We recommend that you or other individuals, partners, members, officers, or shareholders of the Franchisee complete the TJC Training Program, but it is not mandatory. You must at all times employ at least one manager and one designated operations person, who have completed satisfactorily the TJC Training Program. The training obligations are described further in Item 11.

Neither you, nor any partner, nor any member, nor any shareholder holding at least a fifteen percent (15%) interest in the franchise, may, without our prior written permission, either directly or indirectly, for himself, or on behalf of or in conjunction with any other person, persons, partnership, or corporation, own, maintain, engage in, manage or have a controlling interest or, in any event, a fifteen percent (15%) or greater interest, in any business within the Assigned Area which is the same as or similar to the Licensed Business, including any business that operates or franchises bakeries or similar retail outlets specializing in gourmet cinnamon rolls or both gourmet cinnamon rolls and branded coffees. A business that offers gourmet cinnamon rolls is the present concept commonly known as CINNABON®, but neither Starbucks Coffee Company® nor Einstein's Brothers Bagel Company® is presently considered a similar business. These restrictions or any other restrictions do not apply to your management staff.

You may not permit the Licensed Business to be operated, managed, directed, or controlled (directly or indirectly), by any person or entity other than the Franchisee who has been approved by us.

[END OF ITEM 15]

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Item 16

RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You will sell our delicious TJC Products as identified in your Franchise Agreement and as periodically updated in writing by us. You cannot sell unapproved products in your TJC Classic or TJC Signature Bakery. You must prepare all menu items according to the T.J. Cinnamons recipes and procedures for preparation contained in the TJC Manuals or other written instructions. We have the right to change the types of menu items, products, and services offered by you at your TJC Bakery at any time, and there are no limits on our right to make those changes. We may, under limited circumstances, authorize the sale of the licensed products for special short-term events or programs.

As an Arby's Franchisee, you must discontinue selling and offering for sale any coffees other than T.J. Cinnamons Branded Coffees in your Arby's Restaurant. However, coffee is not a mandatory menu item for Signature Bakery Franchisees.

Some TJC Products are prepared from highly confidential recipes, and those recipes are our trade secrets. Because of the importance of quality and uniformity of production, we closely control the production and distribution of the products. You have to use only T.J. Cinnamons secret recipe products. You must purchase all of your requirements for these products only from our approved sources of supply. We may also modify both the standards and products periodically, as set forth in the TJC Manuals.

[END OF ITEM 16]

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Item 17

RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION

THIS TABLE LISTS CERTAIN IMPORTANT PROVISIONS OF THE FRANCHISE AND RELATED AGREEMENTS. YOU SHOULD READ THESE PROVISIONS IN THE AGREEMENTS ATTACHED TO THIS OFFERING CIRCULAR.

THE TJC CLASSIC BAKERY AGREEMENT:

PROVISION

LOCATION IN AGREEMENT

SUMMARY

a. Term of the franchise

Article 13:1 of FA

Shall expire the earlier of (1) 20 years from the effective date of your Franchise Agreement, or (2) the expiration or earlier termination of the agreement relating to the operation of the existing business. Our consent to operate the additional brand restaurant at your existing business is concurrent with the term of your Franchise Agreement as described below.

b. Renewal or extension of term

Article 13:2 of FA

If you are in good standing, have complied with all material terms throughout the agreement, have satisfied all of the requirements of your Franchise Agreement and meet our approval criteria, you may renew on our then-current terms (for 20 years), which will expire the earlier of 20 years or the expiration or termination of the existing business agreements.

c. Requirements for you to renew or extend

Article 13:2 of FA

If you desire to renew your Franchise Agreement, you must give us a written notice of your intent to renew at least twelve months before the end of your initial term; modernize the TJC Classic Bakery at the Licensed Premises, including building, signs, equipment, furnishings, and decor, to reflect the then-current image appropriate to a TJC Classic Bakery;

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

make written application for such renewal of your Franchise Agreement at least 120 days prior to term expiration; tender an administrative fee of 30% of the then-current franchise fee at least thirty (30) days prior to the expiration of your Franchise Agreement; provide evidence that Arby's has issued to you a renewal or extension and include a consent from your Lessor to operate the TJC Classic Bakery; execute all of the then-current forms of agreements relating to the TJC Classic Bakery; execute a General Release with respect to the TJC Classic Bakery, and meet our current qualification and training requirements.

d. Termination by you

Article 14:1:6 of FA

You may terminate your Franchise Agreement at any time during the term of your Franchise Agreement by giving us 30 days notice of

termination.

e. Termination by us without cause

None

—

f. Termination by us with cause

Article 14 of FA

Section 8 and 10 of DBCA

We can terminate your Franchise Agreement if you default or fail to comply with any clause.

We can immediately terminate your Franchise Agreement if your Arby's License is terminated.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

g. "Cause" defined: defaults that can be cured

Article 14:1:3, 14:1:4 and 14:1:5 of FA

You have 30 days to cure: noncompliance with any clause of your Franchise Agreement; failure to operate the Licensed Business strictly in accordance to current TJC Manuals; activity detrimental to the TJC System image.

You have 10 days to cure: nonpayment of any fees due under your Franchise Agreement.

You have a maximum of 180 days to re-open and restore the License Premises in the event the Licensed Premises is rendered inoperable by any casualty.

h. "Cause" defined: defaults that cannot be cured

Article 14:1:1 and 14:1:2 of FA

Your Franchise Agreement will automatically terminate without notice if you file under the Bankruptcy Act; you enter into a general assignment for the benefit of creditors; a receiver is appointed by the Court; you discontinue or abandon your Licensed Business, or you assign or transfer your Franchise Agreement or Licensed Business without our prior written approval. We may terminate your Franchise Agreement immediately on notice if your rights to the Licensed Premises are terminated; you violate any State or Federal Law or any administrative regulation and/or are convicted for same; you fail to submit requested information or submit false or misleading information; you duplicate any portion of the TJC System and know-how in any food-service outlet not franchised by us;

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

you violate any covenant regarding) non-compete or non-disclosure; you deny or restrict our right to inspect the Licensed Business, samples for testing, or books and records of the Licensed Business, or if your continued operation of the Licensed Business would result in imminent health or safety dangers to the public.

i. Your obligations on termination/ non-renewal

Article 14:3 of FA Section lOofDBCA

You shall immediately cease operating or using, or permitting use of (a) TJC Proprietary Marks; (b) all advertising, promotional material and programs, menu boards signs, supplies, uniforms or other items bearing the TJC Proprietary Marks; (c) the TJC Products and the TJC System; (d) the TJC Manuals, and (e) the TJC Classic Bakery design. Upon termination for any reason, you must return the TJC Manuals and immediately remove all signs and distinctive TJC proprietary designs so that the premises do not resemble any TJC Classic Bakery (de-identify the Licensed Premises).

You must immediately cease operations of both the Arby*s Restaurant and the TJC Classic Bakery at the Licensed Premises if the Arby's Franchise Agreement is terminated.

j. Assignment of contract by us.

None

No restriction on our right to assign your Franchise Agreement.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

k. "Transfer" by you: definition

Article 15:1 of FA

You cannot sell, assign, or transfer without our prior written approval. This restriction includes transfer of your Franchise Agreement, assets, Licensed Business, or any change in the legal composition or ownership of any corporation or partnership. The Licensed Business cannot be managed, operated, directed, or controlled by any person or entity other than you without our consent.

1. Our approval of transfer by Franchisee

Article 15:2 of FA

We have the right to approve any proposed transfer by Franchisee but will not unreasonably withhold our approval.

m.Conditions for our approval of transfer

Article 15:2 and 15:6 of FA

The prospective Franchisee qualifies and is approved by us; the prospective Franchisee and transferor execute transfer agreements that include the execution of a new Franchise Agreement (by the new Franchisee) that may include higher fees (also see "r" below); transfer fee is paid; you have paid all amounts due us; the new Franchisee and all appropriate personnel satisfactorily complete training; the transferor and the transferee execute a general release in our favor for any and all claims against us, our parents, subsidiaries, and our affiliates and their respective officers, directors, shareholders, partners, employees, servants, representatives, and agents, in their corporate and individual capacities, arising under your Franchise Agreement and under any federal, state, and local laws, and rules and ordinances.

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p

PROVISION

LOCATION IN AGREEMENT

SUMMARY

n.Our right of first refusal to acquire your business

Article 15:7 of FA

If a right of first refusal provision is in your Arby's Agreement, those terms shall apply.

o.Our option to purchase your

business

None

—

p.Your death or disability

Article 15:3 of FA

Upon your death, your Franchise Agreement may by devise or bequest or by operation of laws of descent and distribution be transferred to a family member or family trust of the stockholders. If no family members, all transfer requirements apply, see "k", T and "m" above.

q.Non-competition covenants during the term of the franchise

Article 12 of FA

Neither you, nor any your partners, nor any shareholder holding at least 15% interest in your corporation, may without our prior written approval, directly or indirectly own, maintain, engage in, manage or have a controlling interest (15% or greater interest) in, any business within the Assigned Area, which is the same as or similar to the Licensed Business, including any business that operates or franchises bakeries or similar retail outlets specializing in gourmet cinnamon rolls or in both gourmet cinnamon rolls and branded coffees. A business that offers gourmet cinnamon rolls is (by way of example only and not by limitation) the concept known as CINNABON®, but not Starbucks Coffee Company® or Einstein's Brothers Bagel Company®.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

r. Non-competition covenants after the franchise is terminated or expires

Article 12 of FA

For a period of 12 months after termination, neither you nor any partner of Franchisee, if Franchisee is a partnership, nor any shareholder holding at least 15% interest, if Franchisee is a corporation, may, without our prior written approval, directly or indirectly, own, maintain, engage in, manage, or have a controlling interest (15% or greater interest) in any business within the Assigned Area, that is the same as or similar to the Licensed Business, including any business that operates or franchises bakeries or similar retail outlets specializing in gourmet cinnamon rolls or in both gourmet cinnamon rolls and branded coffees.

s. Modification of the Agreement

Article 20:6 of FA Section 15ofDBCA

Any modification to your Franchise Agreement must be by a written document executed by both of us.

Any modification to the DBCA must be by a written document executed by both of us.

t. Integration/merger clause

Article 20:6 of FA Section 15 of DBCA

Only the terms of your Franchise Agreement are binding (subj ect to state law). Any other promises may not be binding.

Only the terms of the DBCA are binding (subject to state law). Any other promises may not be binding.

u. Dispute resolution by arbitration or mediation

None

—

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PROVISION

LOCATION IN AGREEMENT

SUMMARY |

i i

v. Choice of Forum

Article 20:3 of FA

You must file litigation in the federal or state court having jurisdiction where our principal office is then located. At the present time, that location is Fort Lauderdale, Florida. (Subject to state law - see Risk Factors, if any, cited on Cover Page of this Offering Circular and Caveats cited below.)

We may file litigation in the federal or state court located in the jurisdiction where our principal office is located or in the jurisdiction where you reside or do business or where the Licensed Premises are or were located or where the claim arose.

w. Governing Law

Article 20:2 of FA Section 11 ofDBCA

Florida law applies, unless those laws would nullify any portion of your Franchise Agreement while the whole Franchise Agreement would be enforceable under the laws of the state in which the Licensed Premises are located, in which case the laws of that state will govern. Additionally, the terms of Article 20:2 shall not invoke any jurisdiction of any franchise business opportunity or similar law if such law would not be applicable by its terms. (Subject to state law - see Risk Factors, if any, cited on the Cover Page of this Offering Circular and Caveats cited below.)

Florida Law applies, unless those laws would nullify any portion of the Franchise Agreement while the whole Franchise Agreement would be enforceable under the laws of the state in which the Licensed Premises are located, in which case, the laws of that state will govern. (Subject to state

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

w. Governing Law - continued.

law - see Risk Factors, if any, cited on the Cover Page of this Offering Circular and Caveats cited below.)

NOTES:

The acronym "DBCA" is the Third Party Consent Agreement. The acronym "FA" is the Franchise Agreement.

THE TJC SIGNATURE BAKERY AGREEMENT:

PROVISION

LOCATION IN AGREEMENT

SUMMARY

a. Term of the franchise.

Article 13:1 of FA Section 2 of DBCA

10 Years.

b. Renewal or extension of term.

Article 13:2 of FA

If you are in good standing, have complied with all material terms throughout the agreement, have satisfied all of the requirements per the of your Franchise Agreement and meet Arb/s approval criteria, you may renew on our then-current terms (for 10 years), which will expire the earlier of 10 years or the expiration or termination of the Existing Business agreements.

c. Requirements for you to renew or extend.

Article 13:2 of FA

If you desire to renew your Franchise Agreement, you must give us a written notice of your intent to renew at least twelve months before the end of your initial term; modernize the TJC Signature Bakery at the Licensed Premises, including building, signs, equipment, furnishings, and decor, to reflect the then-current image appropriate to a TJC Signature Bakery; make written application for such renewal of your Franchise Agreement at least 120 days prior to

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1

PROVISION

LOCATION IN AGREEMENT

SUMMARY

c. Requirements for you to renew or extend - continued.

term expiration, pay the then-current franchise fee at least 30 days prior to the expiration of your Franchise Agreement; provide evidence that Arby's has issued to you a renewal or extension and include a consent from your Lessor to operate the TJC Signature Bakery; execute all of the then-current forms of agreements relating to the TJC Signature Bakery; execute a General Release with respect ■ to the TJC Signature Bakery, and meet our current qualifications.

d. Termination by you.

Article 14:1:6 of FA

You may terminate your Franchise * Agreement at any time during the term of your Franchise Agreement by giving us 30 days notice of termination.

e. Termination by Arty's without cause.

None.

—

f. Termination by Arby*s with cause.

Article 14 of FA

Section 8 and 10 of DBCA

We can terminate your Franchise Agreement if you default or fail to comply with any clause.

We can immediately terminate your Franchise Agreement if your existing License is terminated.

g. "Cause" defined: defaults that can be cured.

Article 14:1:3, 14:1:4 and 14:1:5 of FA

You have 30 days to cure: noncompliance with any clause of your Franchise Agreement; failure to operate the Licensed Business strictly in accordance with current TJC Manuals; activity detrimental to the TJC System image.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

g. "Cause" defined: defaults that can be cured - continued.

You have 10 days to cure: nonpayment of any fees due under your Franchise Agreement.

You have a maximum of 180 days to re-open and restore the License Premises in the event the Licensed Premises is rendered inoperable by any casualty.

h. "Cause" defined: defaults that cannot be cured.

Article 14:1:1 and 14:1:2 of FA

Your Franchise Agreement will automatically terminate without notice if you file under the Bankruptcy Act; you enter into a general assignment for the benefit of creditors; a receiver is appointed by the Court; you discontinue or abandon your Licensed Business; you assign or transfer your Franchise Agreement or Licensed Business without our prior written approval. We may terminate your Franchise Agreement immediately on notice if your rights to the Licensed Premises are terminated; you violate any State or Federal Law or any administrative regulation and/or are convicted for same; you fail to submit requested information or submit false or misleading information; you duplicate any portion of the TJC System and know-how in any food-service outlet not franchised by us; you violate any covenant regarding non-compete or non-disclosure; you deny or restrict our right to inspect the Licensed Business, samples for testing, or books and records of the Licensed Business, or if your continued operation of the Licensed Business would result in imminent health or safety dangers to the public.

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I

PROVISION

LOCATION IN AGREEMENT

SUMMARY

i. Your obligations on termination/ non-renewal.

Article 14:3 of FA Section 10 of DBC A

You shall immediately cease operating! or using, or permitting use of (a) TJC Proprietary Marks; (b) all advertising, promotional material and programs, menu boards signs, supplies, uniforms or other items bearing the TJC Proprietary Marks; (c) the TJC Products and the TJC System; (d) the TJC Manuals, and (e) the TJC Signature Bakery design. Upon termination for any reason, you must return the TJC Manuals and immediately remove all signs and distinctive TJC proprietary designs so that the premise does not resemble any TJC Signature Bakery (de-identify the Licensed Premises).

j. Assignment of contract by us.

Article 20:1 of FA

No restriction on our right to assign your Franchise Agreement.

k."Transfer" by you: definition.

Article 15:1 ofFA

You cannot sell, assign, or transfer without our prior written approval. This restriction includes transfer of your Franchise Agreement, assets, Licensed Business, or any change in the legal composition or ownership of a corporation or partnership. The Licensed Business cannot be managed, operated, directed, or controlled by any person or entity other than you without our consent.

1. Our approval of transfer by Franchisee.

Article 15:2 of FA

We have the right to approve any proposed transfer by Franchisee but will not unreasonably withhold our approval.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

m. Conditions for our approval of transfer.

Article 15:2 and 15:6 of FA

The prospective Franchisee qualifies and is approved by us; the prospective Franchisee and transferor execute transfer agreements that include execution of a new Franchise Agreement and that may include higher fees, signed by new Franchisee (also see "r", below); transfer fee is paid; you have paid all amounts due us; new Franchisee and all appropriate personnel satisfactorily completes training; the transferor and the transferee execute a general release in our favor for any and all claims against us, our parents, subsidiaries, and our affiliates and their respective officers, directors, shareholders, partners, employees, servants, representatives and agents, in their corporate and individual capacities, arising under your Franchise Agreement or under any federal, state and local laws, and rules and ordinances.

n. Our right of first refusal to acquire your business.

None

—

o.Our option to purchase your business.

None

—

p. Your death or disability.

Article 15:3 of FA

Upon your death, your Franchise Agreement may by devise or bequest or by operation of laws of descent and distribution be transferred to a family member or family trust of the stockholders. If no family members, all transfer requirements apply, see "k", "1", and "m" above.

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f"

PROVISION

LOCATION IN AGREEMENT

SUMMARY

q. Non-competition covenants during the term of the franchise.

Article 12:1 of FA

Neither you, nor any your partners, nor any shareholder holding at least 15^4 interest in your corporation, may1 without our prior written approval; directly or indirectly own, maintain^ engage in, manage or have a controlling interest (15% or greater interest) in, any business within the Assigned Area, that is the same as or similar to the Licensed Business^ including any business that operates or franchises bakeries or similar retail; outlets specializing in gourmet cinnamon rolls or in both gourmet cinnamon rolls and branded coffeesL A business that offers gourmet cinnamon rolls is (by way of example only and not by limitation) the concept known as CINNABON®, but not Starbucks Coffee Company® or Einstein's Brothers Bagel Company®.

r. Non-competition covenants after the franchise is terminated or expires.

Article 12:1 of FA

For a period of 12 months after termination neither you, nor any partner of Franchisee, if Franchisee is a partnership, nor any shareholder holding at least 15% interest, if Franchisee is a corporation, may without our prior written approval' directly or indirectly own, maintain; engage in, manage or have a controlling interest (15% or greatej^ interest) in any business which is the; same as or similar to the Licensed Business, including any business that operates or franchises bakeries or similar retail outlets specializing in gourmet cinnamon rolls or in both gourmet cinnamon rolls and branded coffees.

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L


PROVISION

LOCATION IN AGREEMENT

SUMMARY

s. Modification of the Agreement.

Article 20:6 of FA Section 15 of DBCA

Any modification to your Franchise Agreement must be by a written document executed by both of us.

Any modification to the DBCA must be by a written document executed by both of us.

t. Integration/merger clause.

Article 20:6 of FA Section 15 of DBCA

Only the terms of your Franchise Agreement are binding (subject to state law). Any other promises may not be binding.

Only the terms of the DBCA are binding (subject to state law). Any other promises may not be binding.

u. Dispute resolution by arbitration or mediation.

None

—

v. Choice of Forum.

Article 20:3 of FA

You must file litigation in the federal or state court having jurisdiction where our principal office is then located. At the present time, that location is Fort Lauderdale, Florida. (Subject to state law - see Risk Factors, if any, cited on Cover Page of this offering circular and Caveats cited below.)

We may file litigation in the federal or state court located in the jurisdiction where our principal office is located or in the jurisdiction where you reside or do business or where the Licensed Premises are or were located or where the claim arose.

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PROVISION

LOCATION IN AGREEMENT

SUMMARY

w. Governing Law.

Article 20:2 of FA Section 11 ofDBCA

Florida law applies, unless those laws) would nullify any portion of your Franchise Agreement while the whole* Franchise Agreement would be enforceable under the laws of the state, in which the Licensed Premises are located, in which case the laws of that state will govern. Additionally, the; terms of Article 20:2 shall not invoke any jurisdiction of any franchise! business opportunity or similar law if such law would not be applicable byj its terms. (Subject to state law - sees Risk Factors, if any, cited on the Cover Page of this Offering Circular and] Caveats cited below.)

Florida Law applies, unless those laws would nullify any portion of the Franchise Agreement while the whole Franchise Agreement would be enforceable under the laws of the state in which the Licensed Premises are located, in which case, the laws of that| state will govern. (Subject to state law| - see Risk Factors, if anv. cited on

Cover Paee of this Offering Circular

and Caveats cited below.)

NOTES:

The acronym "FA" is the Franchise Agreement.

The acronym "DBCA" is the Third Party Consent Agreement

These states have statutes which may supersede the Franchise Agreement in your relationship with us including the areas of termination and renewal of your franchise: ARKANSAS [Code Sections 4-72-201 - 4-72-210], CALIFORNIA [Bus. & Prof. Code Sections 20000-20043], CONNECTICUT [Gen. Stat. Sections 42-133e - 42-133h], DELAWARE [Code Sections 2551 - 2556], HAWAII [Rev. Stat. Section 482E-6], ILLINOIS [815 ILCS Sections 705/4 and 705/17 - 705/20], INDIANA [Code Sections 23-2-2.7-1 - 23-2-2.7-7], IOWA [Code Sections 523H.1 - 523H.17 and 537A.10], MICHIGAN [Stat. Section 19.854(27)], MINNESOTA [Stat. Sections 80C.14 and 80C.21], MISSISSIPPI [Code Sections 75-24-51 - 75-24-63], MISSOURI [Rev. Stat. Sections 407.400 - 407.413 and 407.420], NEBRASKA [Rev. Stat. Sections 87-401 -87-410], NEW JERSEY [Rev. Stat. Sections 56:10-1 - 56:10-12], RHODE ISLAND

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[Stat. Section 19-28.1-14-19-28.1-16; Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim enforceable under this Act."], SOUTH DAKOTA [SDCL Sections 37-5A-51 and 37-5A-51.1], VIRGINIA [Code Sections 13.1-557 - 13.1-574], WASHINGTON [Rev. Code Section 19.100.180], WISCONSIN [Stat. Sections 135.01 - 135.07]. These and other states may have court decisions that may supersede the Franchise Agreement in your relationship with us including the areas of termination and renewal of your franchise.

[END OF ITEM 17]

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Item 18

PUBLIC FIGURES

We do not use any public figure to promote the licensed business. Public figures may, however, be used from time to time in our consumer advertising programs or promotional activities relating to T.J Cinnamons.

[END OF ITEM 18]

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Item 19 EARNINGS CLAIMS

WE DO NOT FURNISH OR AUTHORIZE OUR SALES PEOPLE TO FURNISH ANY ORAL OR WRITTEN INFORMATION CONCERNING THE ACTUAL OR POTENTIAL SALES, COSTS, INCOME, OR PROFITS OF A.TJC SIGNATURE BAKERY OR A TJC CLASSIC BAKERY. ACTUAL RESULTS VARY FROM UNIT TO UNIT AND WE CANNOT ESTIMATE THE RESULT OF ANY PARTICULAR FRANCHISE.

IF YOU RECEIVE SUCH INFORMATION FROM ANY EMPLOYEE OF OURS, THIS INFORMATION SHOULD BE DEEMED UNRELIABLE AND SHOULD NOT BE CONSIDERED AS A BASIS FOR ENTERING INTO OUR FRANCHISE AGREEMENT.

FURTHERMORE, YOU SHOULD CONTACT ONE OF OUR OFFICERS LISTED IN ITEM 2 OF THIS OFFERING CIRCULAR, IN WRITING, IF YOU BELIEVE YOU HAVE RECEIVED THE INFORMATION MENTIONED IN THE ABOVE PARAGRAPH FROM ANY OF OUR EMPLOYEES. WE DO NOT MAKE ANY REPRESENTATIONS THAT YOU WILL DERIVE INCOME IN EXCESS OF YOUR INITIAL INVESTMENT.

[END OF ITEM 19]

75


F

Item 20

LIST OF OUTLETS

T.J. CINNAMONS® CLASSIC BAKERY

FRANCHISED STORES STATUS SUMMARY

FOR YEARS 2002/2001/2000

Cancelled or Not Reacquired by Left System Total Left Franchises Operating State_________________Transfers_______Terminated_______Renewed__________Arty's___________Other__________Columns________At End of Yearl!

02/

01/

00/

02/

01/

00/

02/

01/

00/

02/

01/

00/

02/

01/

00/

02/

01/

00/

02/

01/

00/

Alabama

0

0

0

0

0

0

0

0

0

0

0

0

1

0

0

1

0

0

29

30

la 26

Alaska

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

1

!' 1

Arizona

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

0

0

1

0

0

i; o

Arkansas

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

1

i 1

California

0

0

1

0

0

0

0

0

0

0

0

0

1

0

0

1

0

1

6

6

I. 5

Colorado

0

0

0

0

0

0

0

0

0

0

0

0

15

0

1

15

0

1

18

33

I; 33

Connecticut

2

0

2

0

0

0

0

0

0

2

0

0

0

0

0

4

0

2

0

2

! 2

Delaware

0

0

0

0

0

0

0

0

0

0

0

0

0

1

0

0

1

0

4

3

I 4

Florida

0

0

0

0

0

0

0

0

0

0

0

0

1

0

11

1

0

11

7

7

! 7

Georqia

0

0

0

0

0

0

0

0

0

0

0

0

27

1

24

27

1

24

5

32

IJ33

Hawaii

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

1

1

I" 1

Idaho

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

2

2

L 1