Our Franchisees� success is our success.- Kurt Todoroff“ ”

TODOROFF�S® ORIGINAL CONEY ISLANDFRANCHISEOPPORTUNITIES

TODOROFF�S® ORIGINAL CONEY ISLAND

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Dear Entrepreneur,

Thank you for your interest in becoming aTodoroff’s® Original Coney Island Franchisee.As you search for the perfect business to own,you will see that Todoroff’s® is outstanding invalue, product, and reputation. My great-grandfather developed his famous Coney

Island sauce in the first ConeyIsland restaurant 91 years ago.Now four generations later, itspopularity has spread nationwideinto the hands and mouths of ConeyIsland lovers everywhere.

Todoroff’s® has always valued qualityin our food, great service for ourpatrons, and reasonable pricing to fit

any budget. This has brought people back toour restaurants day after day and year afteryear to our consistent taste that is treasuredand unmistakably unique.

My first goal is to transfer our four generationsof food service experience to you in astreamlined, efficient business operation. Mysecond goal is to create a partnership with youfor our mutual success. To get into the fastfood market on a ground floor opportunity witha company that has many years of experience,read on. I have a team philosophy, and I willdo everything that I can to make you happy asa franchise team partner with me. Do youwant to be your own boss? Do you feel thatyou’re qualified? We can help you determinethis.

Todoroff’s® is pursuing highly qualified peopleto own and operate their own Todoroff’s®

Original Coney Island franchised restaurantbusiness and to join the Todoroff’s® family as

new franchisees. Restaurant experience is notrequired, but is desirable. We are committedto building value with hard working people.We emphasize personal integrity, anentrepreneurial spirit and strong desire tosucceed, strong leadership skills, andcommitment to customer service. We arelooking for people who value these businessattributes as much as we do, and who willwork hard to make theirown business a success.

If you have questions andwish to take the next step,then I would invite you tovisit our restaurant to tasteour products for yourself,and then meet with you todiscuss Todoroff’s®

franchising, and to providea franchise application to you. Then you canreview the facts and make a solid businessdecision for yourself and your futuregenerations. Become a winner in theAmerican way with an American favorite foodbusiness.

Be a market leader! Join the Todoroff’s®

Original Coney Island family as we build a newand innovative franchise system in theAmerican restaurant industry.

Again, thank you for your interest inTodoroff’s®.

Sincerely,

Kurt TodoroffTodoroff’s® Original Coney Island

We arecommitted tobuilding valuewith hardworkingpeople.

YOUR FRANCHISE OPPORTUNITY

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Our franchisees’ success is oursuccess. This statementembodies our philosophy on theessential importance of ourfranchisees, and it occupies aprominent position at thebeginning of our business plan.We are discriminating about ourfranchisees because they makeTodoroff’s® successful onefranchisee at a time. This is whywe look for potential franchiseeswho have the followingpersonality attributes:

u Strong personal integrity.

u Self-motivation.

u A challenge-driven personality.

u An intrinsic, natural desire tosucceed.

u A commitment to success andexcellence, and who don’taccept failure or second best.

And the following professionalattributes:

u An ambitious, energeticentrepreneurial spirit and a financial motivation to excel.

u A demonstrated record of business and personal accomplishment.

u Strong leadership skills.

u An ability to manage finances.

u A commitment to customerservice.

u A personal, professional, andfinancial commitment to givetheir best and to excel.

u A desire and a willingness tobecome proficient in allaspects of owning andoperating a Todoroff’s® OriginalConey Island restaurantbusiness.

u A commitment to personallydevote full time, energy, andbest efforts to the managementand operation of theirfranchised business.

We offer:

u A chance to own and run your ownbusiness with our support.

u Support in the areas of operations, training, finances, advertising, location, construction, and equipment.

u A chance to be a member of the Todoroff’s® team with otherfranchisees.

u The opportunity to be an innovator and to share your innovations with the Todoroff’s® team.

u The enjoyment that accompanies working with people: your staff, your suppliers, your customers, andyour community.

u Personal satisfaction as a business person and as a member of a new and innovative franchise system in the restaurant industry.

u Personal growth and business knowledge from your experience asa franchisee.

TODOROFF�S® AND YOUTODOROFF�S® IS SEEKING PEOPLEFOR FRANCHISE OWNERSHIP TODOROFF�S® WANTSTO BE YOUR PARTNER

The Todoroff�s ®Original ConeyIsland franchisesystemcapitalizes on atried and truebusinessmodel:independentbusinessownership �The AmericanDream.

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Our franchising business modelis based on the corepresumption that our Franchisesystem can only be successful ifour franchisees are successful.Franchisee success involves amixture of system standardsand individual initiative.Franchisees create great ideasand are closer to the customer,the employees, and thesuppliers. We rely on ourfranchisees for Todoroff’s® to bea great company, and tomaintain our reputation ofproviding great food and serviceto our customers.

To maintain our restaurant torestaurant and brandconsistency, franchisees mustuse Todoroff’s®

u Menu items, ingredients,recipes, and specification.

u Procedures for operations,logistics, marketing,accounting, andbookkeeping.

u Trademarks and service marks.

We are pursuing highly qualifiedindividuals or groups to own andoperate Todoroff’s® Original ConeyIsland franchise restaurants. Ourselection criteria is based on anassessment of a person’s overallpersonal qualifications and businessexperience. We are committed tobuilding value with hard workingpeople. We emphasize personalintegrity, an entrepreneurial spirit andstrong desire to succeed, strongleadership skills, and commitment tocustomer service. We are looking forpeople who value these businessattributes as much as we do, andwho will work hard to make their ownbusiness a success.

TODOROFF�S® AND YOUOUR RELATIONSHIP WITH OUR FRANCHISES WHAT WE LOOK FOR

Our productswere conceivedin a kitchen,not in alaboratory oron aspreadsheet.

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u An All-American favorite food: Hot Dogs & Coney Islands.

u Four generations of experience and success since 1914.

u Todoroff’s® Original Chili sauce recipe is the reason for our Coney’ssuccess.

u Over 30 million Coney Islands sold.

TODOROFF�S® TARGETMARKETu Business Lunch � convenient,

quick food that maximizes your lunch time.

u Families � easy and fast service for families in a rush. Our menu contains a variety of choices that are fresh, tasty, and easy on the pocketbook. Children love Coney Islands and hot dogs.

u Senior Citizens � healthy menu with reasonable prices for fixed incomes.

u Teenagers and CollegeStudents � affordable prices thatare quick and easy for lunch, dinner, and snacks after the movies.

u Everyone � loves Coneys!

u Restaurant experience is not required, but is desirable.

u Management background in food service is valuable.

u A complete training program to startyour business.

u Three weeks training at our training facility.

u Two weeks training at your location.

FRANCHISE SUPPORTu Periodic franchisee meetings and

an annual conference.

u Franchise newsletter.

u Periodic store visits.

u Operations Manual – a virtual experienced partner.

u Buying Power – economies of scale.

u Group Advertising – economies of scale.

u We are motivated to help you succeed.

u Your success is our success!

During the term of your franchise, theFranchise Agreement allows you tooperate a specific Todoroff’s® OriginalConey Island restaurant, according toTodoroff’s® standards, for a specifiedperiod.

u Term: the duration of the Franchise Agreement (usually 10 years).

u Franchise Fee: an initial fee that covers the cost of your franchise activation.

u Franchise Royalty: a weeklyfee based upon the restaurant’ssales performance (currently 5% ofweekly sales).

u Local Advertising Expenditure: All franchisees must advertise in their local area of business. The amount spent on advertising is based upon the restaurant’s sales performance (currently 2% of weekly sales).

u National Advertising Fund:A weekly fee based upon the restaurant’s sales performance used to fund national advertising (currently 2% of weekly sales). We currently do not collect this fee.

THE TODOROFF�S® FRANCHISE SYSTEMTODOROFF�S® FEATURES TRAINING PROGRAM AS A TODOROFF�S®FRANCHISEE

Comparativeadvertising does not need to be negativeadvertising.“

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FRANCHISE SALESu Over $1 trillion in sales in

2000.

u 40.9% of all retail sales.

u One in every twelve businessesare franchised companies.

FRANCHISE GROWTHu Every 8 minutes a new franchise

opens.FRANCHISE EMPLOYMENTu More than 8 million people are

employed by franchise establishments today.

u Each establishment employs an average of 8 to 14 employees.

u Total employed workers in franchising has doubled in the past 10 years.

u Franchise establishments have created more than 170,000 new jobs in the last twelve months.OWNER SATISFACTION

u 94% of franchise owners say that they are successful, based on a nationwide Gallup survey.

u 75% of franchise owners would repeat their franchise business again.

u In contrast, 39% of Americans would repeat their job or businessagain.

u The average gross income, before taxes, of franchisees is $124,290.

u 57% of respondents reported lessthan $100,000 gross income.

u 43% of respondents reported more than $100,000 gross income.

u Less than 5% of franchises are terminated on an annual basis as reported by the U.S. Commerce Department.

u In a study of 60 franchise industries, nearly 86% of all franchise operations that opened in the previous 5 years were still under the same ownership.

u In contrast, 62% of all new businesses were dissolved within the first 6 years due to failure, bankruptcy, retirement, or other reasons.

u Each franchise is a successful business formula. Why invent a new formula?

u Franchise = Risk Reduction.FRANCHISE SPENDINGu 1994 household income between

$50,000 - $69,000 spent 60% more money on food away from home.

u 1994 household incomes greater than $70,000 spent 125% more money on food away from home.

u Take-Out and Drive-Through convenience.

u Fast food had sales of $126 billion in 2000.

u Lower overhead than full-service restaurants.

u Convenience, Quality, and Affordability.

u No mess at home.

u Food Service sales exceeds 65%of all food sales in the USA.

u Fast food is 52% of all Food Service revenue in the USA.

u Dual income families crave fast food convenience.

u People come to YOU.

u Affordable average meal ticket is less than $5.00

u Baby Boomers spend most of their food dollars away from home.

FRANCHISING AND FOOD INSIGHT

The businessterm �franchise�is synonymouswith riskreduction.“

”SOURCE:

IFA HANDBOOKUSDA

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A Todoroff’s® Franchise Applicationmay be included with this brochure.If it is not, then you may request aTodoroff’s® Franchise Application bycontacting:

Director of New Franchise DevelopmentsThe Todoroff Group, LLC211 East Ganson StreetJackson, Michigan 49201–1422517–787–6168

or you may visit www.todoroffs.com

then click on “DOWNLOADS”.

When you submit an application,neither you nor Todoroff’s® isobligated in any way. It is only thefirst step in a process that will assistyou in learning about Todoroff’s®, andthat provides Todoroff’s® with anopportunity to evaluate yourqualifications.

We review and evaluate allapplications. We arrange aninterview for those candidatefranchisees who exhibit potential forsuccess within our franchise system.The interview generally covers yourbackground, personal andprofessional goals, businessexperience, financial status, and yourinterest in Todoroff’s®, as well as yoursuitability of the challenges of owningand operating a Todoroff’s® OriginalConey Island franchised restaurant.

If there is a mutual interest inproceeding to the next step, then wewill arrange for you to spend time ina Todoroff’s® Original Coney Islandrestaurant working side-by-side withthe staff and management. Thispreliminary experience provides twobenefits:

It provides Todoroff’s® the opportunity to evaluate you in the restaurant environment.

It provides you the opportunity to take a closer look at both Todoroff’s® and the restaurant environment.

Todoroff’s® will evaluate your financialposition and your exposure in therestaurant environment. If both youand Todoroff’s® agree to proceed,then we will schedule the following milestones:

Sign the Franchise Agreement and purchase the Todoroff’s®

franchise license.

Start your formal training.

Select a location and site for your Todoroff’s® Original Coney Island restaurant.

THE TODOROFF�S® APPLICATION PROCESSOurcontemporarystoreappearancerepresents ourtrademark:modern, forwardlooking, newideas, the futureversus the past.

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Q: What personal and businessqualifications does Todoroff’s® lookfor in its potential franchisees?A: The following qualifications, aswell as others, are essential for usto consider you for a Todoroff’s®

franchise:

The following personality attributes:

u Strong personal integrity.

u Self-motivation.

u A challenge-driven personality.

u An intrinsic, natural desire to succeed.

u A commitment to success and excellence, and who don’t accept failure or second best.

And the following professional attributes:

u An ambitious, energetic entrepreneurial spirit and a financial motivation to excel.

u A demonstrated record of business and personal accomplishment.

u Strong leadership skills.

u An ability to manage finances.

u A commitment to customer service.

u A personal, professional, and financial commitment to give their best and to excel.

u A desire and a willingness to become proficient in all aspects of owning and operating a Todoroff’s®

Original Coney Island restaurant business.

u A commitment to personally devote full time, energy, and best efforts to the management and operation of their franchised business.Q: How much does a Todoroff’s®

franchise restaurant cost?A: The actual cost will vary. Youmay choose to build a newrestaurant, or you may elect toremodel an existing building. Thecosts of land and construction willvary with geographic location.

Q: How much are the franchise feesto own and operate a Todoroff’s®

franchise?A: The initial franchise fee is$25,000. There is an ongoingroyalty fee of 5% of gross sales.Additionally, there is a nationaladvertising fee of 2% of grosssales payable to a nationaladvertising fund, and a localadvertising fee of 2% of grosssales that you must spend onadvertising in your local area ofbusiness.

Q: What are Todoroff’s® financial requirements for potentialfranchisees?A: Todoroff’s® requires candidatesdesiring to open one store to havea $150,000 net worth, with aminimum of $50,000 in liquid,unencumbered assets like cash.You must also be able to obtainfinancing to cover the total costsof opening a franchised location.

Q: Will Todoroff’s® finance theremaining balance of the cost ofthe franchise?A: No. Todoroff’s® does not provideany financing.

Q: If I don't meet the financial oroperational criteria to become afranchisee, can I partner withsomeone who does?A: Yes, however, The TodoroffGroup, LLC requires that you ownthe majority of your business (atleast 51%) if that partner is not aparticipating owner. A franchiseemust divest himself or herself of allother active business interests.

Q: May I obtain the funds to purchase afranchise from a relative, friend,associate, or investor?A: Yes, however The Todoroff Group,LLC requires that you own themajority of your business (at least51%). A franchisee must divesthimself or herself of all otheractive business interests.

Q: Do you need information from theperson or persons who areproviding financial assistance tome to purchase a franchise?A: Yes. The Todoroff Group, LLCrequires a complete applicationpackage from each member ofyour potential franchise group,including investors.

Q: How much money will I make?A: Profitability varies depending uponseveral factors. These includelocation, sales, operating costs,and the ability of the franchisee tomanage and control theirbusiness. We will discussquestions related to profit and lossduring a later stage of theselection process. The TodoroffGroup, LLC does not make orrelease earnings claims and itdoes not authorize anyone(including its employees) to makesuch claims.

Q: Does Todoroff’s® select the sitewhere I’ll have my franchise?A: No. You will select the area inwhich you are interested,however, The TodoroffGroup, LLC has finalapproval of the site.

FREQUENTLY ASKED QUESTIONS

Only the astute smart restaurantowners stay in business.“ ” 9

SUMMARYWe wish to be the best! Withthis goal, all success (by allmeasures) will naturally follow.

We are committed toexcellence! Excellence in allendeavors: technical, financial,business, and ethical.

We are committed to providinggreat food and great customerservice. We are committed toproviding clean restaurants, andto food safety.

We are committed to ourfranchisees. Our franchiseesare our customers. Ourfranchisees are closest to theday-to-day operations. Throughthem, we evaluate our businessmodel and our success. Ourfranchisees’ success is oursuccess.

We measure success in severalways. Sales volume is only oneof them. Customer satisfactionand happiness. Franchiseesatisfaction and happiness.Food quality. Store cleanliness.These are equally importantmeasures of our success.

Our company is small, but ourvalues are strong and rich.

The cornerstoneof Todoroff�s ®Original ConeyIsland success isexcellence in allendeavors:technical,financial,business, andethical.

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TODOROFF�S® ORIGINAL CONEY ISLAND

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THE TODOROFF GROUP, LLC211 EAST GANSON STREETJACKSON, MICHIGAN 49201-1422517-787-6168franchise.information@todoroffs.comwww.todoroffs.com

TREASURE THE TASTE

Todoroff �s® is a registered trademark of The Todoroff Group, LLC.Copyright© 2005 The T odoroff Group, LLC. All rights reserved.