Receipt Page - OFFICE COPY

Operations Manual

This Confidential Operations Manual is the property of We Are Crackin’ LLC. It is loaned to the franchisee to provide the information needed to operate an Egg N’ Joe franchise. This manual contains trade secrets of We Are Crackin’ LLC. and must be kept in a secure location. The contents are confidential and proprietary and may not be reproduced by any means or disclosed to third parties in any manner whatsoever without the express, prior written permission of We Are Crackin’ LLC. Certain sections and/or pages of this manual may be disseminated to franchisee’s personnel to facilitate the performance of their job responsibilities.

Online access to this manual will be terminated immediately upon termination or transfer of the Franchise Agreement or upon demand. Printed sections of this manual must be returned immediately to the Home Office upon termination or transfer of the Franchise Agreement or upon demand.

Version Date and Number: ______20__; # ______

Franchisee’s Name (printed): ______

Franchisee’s Signature: ______

Date Received: ______

Receipt Page - FRANCHISEE COPY

Operations Manual

This Confidential Operations Manual is the property of Egg N’ Joe Franchise Systems, LLC. It is loaned to the franchisee to provide the information needed to operate an Egg N’ Joe Franchise Systems, LLC franchise. This manual contains trade secrets of Egg N’ Joe Franchise Systems, LLC and must be kept in a secure location. The contents are confidential and proprietary and may not be reproduced by any means or disclosed to third parties in any manner whatsoever without the express, prior written permission of Egg N’ Joe Franchise Systems, LLC. Certain sections and/or pages of this manual may be disseminated to franchisee’s personnel to facilitate the performance of their job responsibilities.

Online access to this manual will be terminated immediately upon termination or transfer of the Franchise Agreement or upon demand. Printed sections of this manual must be returned immediately to the Home Office upon termination or transfer of the Franchise Agreement or upon demand.

Version Date and Number: ______20__; # ______

Franchisee’s Name (printed): ______

Franchisee’s Signature: ______

Date Received: ______

CONFIDENTIAL OPERATIONS MANUAL

Property of We Are Crackin’ LLC. DO NOT DUPLICATE All rights reserved. No reproduction by any means whether mechanical or electronic. Version 1.0 • Modified March 2017

Business Address

We Are Crackin’ LLC 8338 NE Alderwood Road, #175 Portland, OR 97220

(503) 252-1485

www.eggnjoe.com

Trademarks

We grant to you the non-exclusive right to operate a restaurant using the name “EGG N’ JOE ®” and under the other current or future names or marks which we may designate. The following chart lists the principal marks that you may use with your franchise, subject to our standards and policies.

We have registered and applied for the following marks on the Principle Register with the United States Patent and Trademark Office (“USPTO”.)

Mark Comment Registration # EGG N’ JOE Words Only 4,933,904 EGG N’ JOE Stylized Design 4,938,100 Elmer’s Stylized Design 1,492,699 Elmer’s Northwest Fresh! Stylized Design 3,629,891 ELMER’S BREAKFAST· LUNCH· DINNER Stylized Design 2,473,108 ELMER’S BREAKFAST· LUNCH· DINNER Words Only 2,479,353 Northwest Lodge Blend Words Only 3,752,840 Northwest Lodge Blend Coffee Stylized Design 3,752,841 The Official Restaurant of Grandparent’s Stylized Design 4,353,029 Day The Official Restaurant of Grandparent’s Words Only 4,331,554 Day

All other product and company names in this manual may be trademarks or registered trademarks of their respective companies.

Legal Notice

This document and related documents are governed by the Franchise Agreement and remain the property of We Are Crackin’ LLC. Except as permitted by your Franchise Agreement, no part of this document or related documents may be used, reproduced, displayed, distributed, disclosed, stored in a retrieval system, or transmitted in any form or by any means without the prior written permission of We Are Crackin’ LLC.

This document contains confidential, proprietary and trade secret information of We Are Crackin’ LLC and is protected under the United States intellectual property laws. This document and related documents are subject to change without notice.

Revision History

The following revisions have occurred to this document since its original release. Please refer to the support site for our most recently updated version of this document.

Date Comment March 2017 Version 1.0

Table of Contents Chapter 1 - Introduction ...... 1 1. How to Use this Manual ...... 2 2. Contact Information ...... 3 3. History of Egg N’ Joe ...... 4 4. Establishing Your Business Entity ...... 5 4.1. Naming and Identification ...... 5 4.1.1. Correct Use of the Name ...... 6 4.1.2. Sample Business Names ...... 6 4.2. Tax Identification Numbers ...... 6 Chapter 2: The Franchise ...... 1 1. The Franchisee/Franchisor Relationship...... 2 1.1. Independent Contractor ...... 2 1.2. Independently Owned and Operated ...... 2 1.3. You Are the CEO of Your Business ...... 2 1.4. Pricing and Price Fixing ...... 3 2. Franchisor Responsibilities ...... 5 2.1. Pre-opening Obligations ...... 5 2.2. Continuing Assistance ...... 6 3. Franchisee Responsibilities ...... 8 3.1. Reporting Requirements ...... 9 3.1.1. Financial Reports ...... 9 3.1.2. Audits and Inspections ...... 10 3.2. Meeting Attendance ...... 11 3.3. Approved Products ...... 11 3.4. Continuing Payments ...... 12 3.4.1. Gross Sales ...... 12 3.4.2. Service Fee ...... 13 3.4.3. System Marketing and Advertising Fee ...... 13 3.4.4. How Fees Are Remitted ...... 14 3.5. Other Fees ...... 14 3.5.1. Advertising Deficiency ...... 14 3.5.2. Audit Fee ...... 14 3.5.3. Late Submission Fee ...... 14 3.5.4. Late Payment Fees and Charges ...... 14 3.5.5. Conference Fees ...... 15 3.5.6. Additional Training Fee ...... 15 3.5.7. Renewal Fee ...... 15 3.5.8. Transfer Fee ...... 15 3.6. Participation in the Business ...... 16 3.7. Trademark Use ...... 16 3.8. Standards and Maintenance ...... 16 3.9. Authorized Items and Vendors ...... 16 3.10. POS System ...... 17 3.11. Compliance ...... 17 3.11.1. Legal Compliance ...... 18 3.11.2. Alcohol and Beverage Control Laws ...... 18

Version Number: 1.0 • March 2017 Page i We Are Crackin’ LLC Table of Contents Confidential Operations Manual

3.11.3. Vending Gaming Machines and Tickets ...... 18 3.12. Marketing Requirements ...... 18 3.12.1. Advertising Fund ...... 18 3.12.2. Required Expenditures ...... 19 3.12.2.1. Local ...... 19 3.12.2.2. Grand Opening ...... 20 3.12.3. Approved Material ...... 20 3.12.3.1. Process...... 20 3.12.4. Gift Cards and Certificates...... 20 4. Franchise Standards ...... 21 4.1. Objectivity and Measurement ...... 21 4.2. Insurance ...... 21 4.3. Training ...... 23 4.3.1. Training Employees ...... 24 4.3.2. Ongoing Education ...... 24 4.3.3. Conferences ...... 24 4.4. Communication...... 25 Chapter 3: Restaurant Operations ...... 1 1. Overview ...... 2 2. Mission and Values ...... 3 3. Brand Standards ...... 4 3.1. Hours of Operation ...... 4 3.1.1. Holiday Hours ...... 4 3.2. Signs and Marketing ...... 4 3.3. Music ...... 5 3.4. Cleanliness and Organization Standards ...... 5 3.5. Interior ...... 6 3.5.1. Lobby/Cashier Desk ...... 6 3.5.2. Dining Room ...... 7 3.5.3. Restrooms ...... 9 3.5.4. Servers’ Aisle ...... 10 3.5.5. Kitchen Line ...... 12 3.5.6. Kitchen Prep ...... 13 3.5.7. Dish Room ...... 14 3.5.8. Bar Lounge (If applicable) ...... 16 3.6. Exterior ...... 17 3.6.1. Parking Lot ...... 17 3.6.2. Exterior Lights...... 18 3.6.3. Dumpster/Garbage Area ...... 18 3.6.4. Building ...... 18 3.7. Uniform Appearance and Standards ...... 19 3.7.1. FOH Team Members ...... 19 3.7.2. BOH Team Members ...... 21 3.7.3. FOH Manager - Male ...... 23 3.7.4. FOH Manager – Female ...... 23 3.8. Hygiene and Grooming Standards ...... 24 3.9. Behavior ...... 26 3.9.1. Smoking ...... 27 4. Hospitality ...... 28

Version Number: 1.0 • March 2017 Page ii We Are Crackin’ LLC Table of Contents Confidential Operations Manual

4.1. Service Sequence and Timing Standards ...... 29 4.2. Handling Complaints ...... 29 4.2.1. Assess, Acknowledge, Listen, Sincere Apology, Resolve and Entice ...... 30 4.2.2. Follow-Up ...... 31 4.3. Dealing with Difficult Guests ...... 31 4.4. Dealing with Inebriated Guests ...... 31 4.5. Requests for Information ...... 32 4.6. Sensitive Subjects ...... 33 4.7. Service Animals ...... 33 5. Processing the Order ...... 34 5.1. Cash ...... 34 5.1.1. Cash Handling ...... 34 5.2. Credit and Debit Cards ...... 35 5.3. Gift Cards ...... 36 5.3.1. Gift Card Reordering ...... 36 5.3.2. Selling Gift Cards ...... 36 5.3.3. Redeeming Gift Cards ...... 36 5.3.4. Gift Card Pooling ...... 37 6. Restaurant Operations ...... 38 7. Working the Floor ...... 39 7.1. Daily ...... 39 7.2. Weekly ...... 40 7.3. Monthly...... 40 7.4. Signals ...... 40 7.4.1. Guest Signals ...... 41 7.4.1.1. Door ...... 41 7.4.1.2. Table ...... 41 7.4.1.3. Cashier ...... 42 7.4.2. Product Signals ...... 42 7.4.2.1. Floor...... 42 7.4.2.2. Line ...... 42 7.4.2.3. Wheel ...... 43 7.4.3. Employee Signals ...... 43 7.4.3.1. Behavior...... 43 7.4.3.2. Appearance ...... 43 7.4.3.3. Stations Assignment ...... 43 7.4.4. Cleanliness Signals ...... 43 7.4.4.1. Exterior, Entrance, Restrooms ...... 43 7.4.4.2. Service Area ...... 44 7.4.4.3. Floor...... 44 7.4.5. Supply Signals ...... 44 7.4.5.1. Floor...... 44 7.4.5.2. Bus Tray ...... 44 7.4.5.3. Dish Room ...... 44 8. The Egg N’ Joe Restaurant Menu ...... 46 8.1. Recipes ...... 46 8.2. Food Quality ...... 47 ...... 47 8.2.1. Steam Table ...... 47

Version Number: 1.0 • March 2017 Page iii We Are Crackin’ LLC Table of Contents Confidential Operations Manual

8.2.2. Line Check ...... 48 8.2.3. Line Check Troubleshooting ...... 49 8.2.4. Portioning Control ...... 49 8.3. Banquets ...... 50 8.4. Kitchen Stations ...... 51 8.4.1. Pancake Station ...... 51 Duties ...... 51 8.4.2. Egg Station...... 51 8.4.3. Lunch Station ...... 52 8.4.4. Wheel Cook ...... 53 8.5. Equipment...... 54 8.5.1. Proper Use of Equipment – Breakfast Cook ...... 54 8.5.2. Proper Use of Equipment – Lunch Station Cook ...... 59 9. Restaurant Review ...... 62 9.1. Quality Inspections ...... 62 9.2. Other Feedback...... 62 10. Suggested Register and Banking Procedures ...... 63 10.1.1. Banking Tips to Avoid Robbery...... 63 11. Cleaning and Sanitizing ...... 65 11.1. Chemicals ...... 65 11.2. Daily Cleaning ...... 65 11.2.1. What Does Clean Mean? ...... 66 11.2.2. What Does Sanitary Mean? ...... 66 12. General and Scheduled Maintenance ...... 67 12.1. Equipment...... 67 12.1.1. Refrigerators and Freezers ...... 67 12.1.2. Fryers ...... 68 12.1.3. Oven, Stove Tops and Grills ...... 68 12.1.4. Slicer ...... 68 12.1.5. Scales ...... 68 12.1.6. Exhaust Hoods and Filters ...... 68 12.1.7. Ice Machine ...... 68 12.1.8. Sinks and Faucets ...... 69 12.1.9. Dishwasher ...... 69 12.1.10. Grease Traps/Interceptors ...... 69 12.1.11. Wine/Beer Taps (If applicable) ...... 70 12.1.12. Coffee Brewers ...... 70 12.2. Manager’s Role in Reducing Maintenance Costs ...... 71 12.3. Maintenance Troubleshooting ...... 75 12.4. Energy Savings ...... 76 13. Problem Solving ...... 77 Chapter 4: Staffing ...... 1 1. Overview and Disclaimer ...... 2 2. Laws and Requirements ...... 3 3. Job Descriptions ...... 4 3.1. Elements of a Job Description ...... 4 3.2. Key Positions ...... 5 4. Setting a Pay Scale ...... 6 4.1. Elements of a Fair Wage ...... 6

Version Number: 1.0 • March 2017 Page iv We Are Crackin’ LLC Table of Contents Confidential Operations Manual

5. Lead Sources ...... 7 Chapter 5: Safe Food Handling and Preparation ...... 1 1. Overview ...... 2 2. Health Regulations and Sanitation Standards ...... 2 3. Food Borne Illness ...... 3 3.1. About Food Borne Illness ...... 3 3.2. Food Borne Illness Complaints ...... 3 4. Food Borne Illness Complaint Reporting and Investigation Procedures ...... 5 5. Cross-Contamination ...... 7 5.1. General Health Considerations ...... 7 6. Hand Washing ...... 9 6.1. Importance of Hand Washing ...... 9 6.2. When to Wash Hands ...... 9 6.3. How to Wash Hands ...... 10 7. Knife Safety ...... 11 8. Infestations ...... 12 8.1. Rodent Infestation ...... 12 8.1.1. Rodent Droppings ...... 12 8.1.2. Signs of Rodent "Feeding Stations" ...... 12 8.1.3. Evidence of Gnawing ...... 12 8.1.4. Odd, Stale Smell ...... 12 8.1.5. Seeing a Rodent in the Restaurant ...... 13 8.2. Abatement ...... 13 8.2.1. The Three Rs of Pest Control ...... 13 8.2.2. Removing Sources of Food and Water ...... 13 8.3. Insect Infestation ...... 14 8.3.1. Common Signs of Infestation ...... 14 8.3.2. Insect Abatement ...... 15 Chapter 6: Restaurant Administration ...... 1 1. Key Performance Indicators and Profitability ...... 2 1.1. Sales ...... 2 1.1.1. Guest Count...... 2 1.1.2. Average Check ...... 2 1.2. Food and Beverage Sales ...... 2 1.3. Beer and Wine Sales ...... 3 1.4. Costs ...... 3 1.4.1. Labor Costs ...... 3 1.4.1.1. Strategies for Managing Labor ...... 4 1.4.1.2. Scheduling Within Your Budget ...... 5 1.5. Food Costs ...... 6 1.5.1. Actual Food Cost ...... 7 1.5.2. Potential Food Costs ...... 7 1.5.3. Standard Food Costs ...... 8 1.5.4. How They Relate ...... 8 1.6. Six Steps to Controlling Food and Liquor Costs ...... 9 2. Managing the Numbers ...... 10 2.1. POS Reports ...... 10 2.1.1. Daily ...... 10

Version Number: 1.0 • March 2017 Page v We Are Crackin’ LLC Table of Contents Confidential Operations Manual

2.1.2. Weekly ...... 10 2.1.3. Monthly ...... 10 3. Inventory Management ...... 11 3.1. FIFO ...... 11 3.2. The Importance of Inventory Control ...... 11 3.3. Merchandise/Beverage Inventory ...... 12 3.4. Ordering ...... 12 3.5. Inventory Control ...... 13 4. Risk Management ...... 14 4.1. Crime ...... 14 4.2. Internal Theft ...... 15 4.3. Cash on Hand ...... 16 4.3.1. Cash Drawers ...... 17 4.3.2. Safe ...... 17 4.4. Locked Doors ...... 18 4.5. Cameras and Digital Video Recorders (DVR) ...... 18 4.6. General Safety ...... 18 4.6.1. Spills and Water ...... 18 4.6.2. Working with Equipment ...... 19 4.6.3. Lifting ...... 20 4.7. Emergencies – Restaurant Closings ...... 20 4.7.1. Fire, Flood and Earthquake Safety ...... 20 4.7.2. Severe Weather ...... 21 4.7.3. Evacuation ...... 22 4.7.4. Armed Robbery ...... 22 4.7.5. Workplace Violence ...... 23 4.8. Emergencies – Remain Open ...... 23 4.8.1. Power Outage ...... 24 4.8.2. Water Loss ...... 27 4.9. Emergency Care ...... 28 4.10. Crisis Management ...... 28 4.10.1. Defining a Crisis ...... 28 4.10.2. Crisis Communication ...... 28 4.10.3. First Responders ...... 29 4.11. Spokesperson ...... 30 4.12. Member Liaison ...... 30 4.13. Documentation Specialist ...... 31 4.14. Dealing with the Press ...... 31 4.14.1. Who May Talk to the Public ...... 31 4.14.2. What Not to Say ...... 32

Version Number: 1.0 • March 2017 Page vi

CHAPTER 1 - INTRODUCTION

Version Number: 1.0 • February 2017 Page 1 We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

1. How to Use this Manual

This manual is intended for use as a guide to running a profitable and efficient operation. The procedures have been tried and proven over many years. They are meant to be general, not limiting.

The material in this manual is the definitive source of information on how to run your “EGG N’ JOE ®” restaurant franchise. Procedures and policies are mandatory unless otherwise stated. The manual will be updated periodically through memos, website postings and version updates. We reserve the right to revoke, change or supplement the operating policies at any time. You are responsible for reading and knowing this material. You are the CEO of your own business and are responsible for knowing how to run it.

In this manual, third person pronouns and collective nouns are used in the masculine gender for convenience purposes only. The following references will be used throughout this manual:

• We Are Crackin’ LLC., the franchisor, will be referred to as “WAC,” “we” or “us.” WAC is a wholly owned subsidiary of and is supported by Elmer’s Restaurants, Inc. (ERI.) • When referring to the trade name (“EGG N’ JOE”) or the concept in general, we will use “ENJ” • References to the operating unit will be “restaurant.” • The end-user will be referred to as the “Guest.” • The franchisee and its employees will be referred to as “you.”

If you have a question about operations, please consult this manual before calling the WAC support team; our answers are going to be based on the information here. We are happy to explain this information in greater depth or application if you have questions.

All forms referenced in this manual are available on our support site.

Version Number: 1.0 • March 2017 Page 2

We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

2. Contact Information

Our staff is dedicated to helping you with your business. Our Home Office hours are Monday through Friday, 8:00 a.m. to 5:00 p.m., Pacific Time.

Our primary phone number is (503) 252-1485

We are happy to take your calls and questions. We do check messages periodically on nights, weekends and holidays and will be available for emergency responses at those times.

Please send all hardcopy correspondence and remittances to:

Elmer’s Restaurants, Inc. 8338 NE Alderwood Road, #175 Portland, OR 97220 www.eggnjoe.com

Version Number: 1.0 • March 2017 Page 3

We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

3. History of Egg N’ Joe

Egg N’ Joe originated with the success of ELMER’S® BREAKFAST· LUNCH · DINNER. A Northwest favorite since 1960 started by Walter Elmer, Elmer’s was an immediate success, and has expanded from one restaurant to over two dozen restaurants in four Western states.

Egg N’ Joe arose out of a desire to further expand the Elmer’s legacy with a modern twist. Elmer’s owns breakfast in the Northwest, and Egg N’ Joe takes the best of Elmer’s and places these concepts into a smaller footprint with breakfast and lunch only.

The core ideals of Egg N’ Joe are the same as those held by Elmer’s: bringing people together in a warm, friendly atmosphere, and offering a family-oriented menu that specializes in local, fresh ingredients that delights every Guest.

Version Number: 1.0 • March 2017 Page 4

We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

4. Establishing Your Business Entity

A business is separate from a person. The business is its own entity and that format must be established. There are many different business formats which offer different levels of personal protection and various tax benefits. Consult with your attorney and/or accountant before choosing a format that is right for you. Be sure to tell them that you will be hiring employees, which can have an impact on your choice. Some of the better-known business formats are Sole Proprietorship, Corporation (S or C,) Limited Liability Company (LLC) and Partnership (Limited or General.) For details regarding these business types and the state and federal obligations, visit the Small Business Administration’s website at http://www.sba.gov.

Visit the support site for a current listing of Home Office staff and email confirmation your new entity name to the appropriate staff member. Write “NEW BUSINESS ENTITY” in the subject line.

Note: We Are Crackin’ LLC. and its staff are not your professional business advisors and will not make recommendations to you about your business format. Please consult an attorney and/or accountant for advice.

4.1. Naming and Identification

We will assign a location designation to the Franchise Agreement for your restaurant. These designations cannot be changed by you and are separate from your business entity name.

You must register an assumed or fictitious business name with the appropriate state or local government agency that includes the words “EGG N’ JOE”. Check requirements with your local government office.

Visit the support site for a current listing of Home Office staff and email a copy of the public notice to the appropriate staff member.

Version Number: 1.0 • March 2017 Page 5

We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

4.1.1. Correct Use of the Name

Under the terms of the Franchise Agreement, you may not use any of our marks as part of a corporate or partnership name. You may not use any of our marks or design with any modifying words, designs, colors, or symbols, or with the sale of any unauthorized goods or services, or in any manner not authorized in writing by us. You should use the name and the marks only when referring to products and services, us and operation of your restaurant.

Correct use of your business name and the Egg N’ Joe name and marks applies to all uses including, but not limited to, business filings, business contracts, business stationery, bank checks, public relations materials, marketing materials, employment forms and employee manuals.

4.1.2. Sample Business Names

You may not use the word “Egg N’ Joe” or any of our marks as part of your corporate or partnership name.

Acceptable Naming Unacceptable Naming A Family Dining Place, Inc. Egg N’ Joe’s Family Restaurant, Inc. DBA EGG N’ JOE® John Doe and Company Egg N’ Joe Restaurant Corporation DBA EGG N’ JOE® The Breakfast, Lunch, Dinner, LLC Egg N’ Joe’s Restaurant of Hollywood, DBA EGG N’ JOE® LLC.

4.2. Tax Identification Numbers

When you have successfully formed your business entity, you must then register with the state and federal governments to obtain tax identification numbers. You will be assigned an FEIN (Federal Employer Identification Number) and an SEIN (State Employer Identification Number.) These numbers are the identifiers needed for all taxes and most other business transactions. Your accountant and/or attorney can apply for these, or you can work directly with the state government and the Internal Revenue Service if you prefer. For a federal number:

Version Number: 1.0 • March 2017 Page 6

We Are Crackin’ LLC. Chapter 1 Confidential Operations Manual Introduction

• Go to https://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Apply-for-an-Employer-Identification-Number(EIN)- Online • Select “Apply for an EIN online” • Follow the instructions

For a state number, search for your state’s tax entity online and follow the instructions on their site (these sites can be accessed through http://www.SBA.gov.)

When registering for these numbers, the state and federal agencies will usually supply business starter kits. These kits include most of the required reporting forms and other business information. It is your responsibility to familiarize yourself with the reporting requirements and comply with them. We recommend you seek professional guidance for these requirements.

Visit the support site for a current listing of Home Office staff and email your FEIN and SEIN to the appropriate staff member. Write, “FEIN/SEIN Egg N’ Joe (your local designation)” in the subject line.

Version Number: 1.0 • March 2017 Page 7

CHAPTER 2: THE FRANCHISE

Version Number: 1.0 • March 2017 Page 1 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

1. The Franchisee/Franchisor Relationship

1.1. Independent Contractor

In franchising, you are independent of us and must operate in that manner. We cannot direct, manage, hire, fire or discipline your employees. We do not hire, fire or manage your contract labor such as architects and contractors. We do not make general business operations decisions for you; we develop, manage and protect the brand. It is important that we both understand our roles and respect them.

You are required to follow the brand standards and the ENJ methods so that the Guest has a consistent experience in each restaurant. In this manual, we will tell you which methods are required and which are suggested best practices. In general, those actions that have a direct effect on the Guests’ experience are required, while those that focus on back-of-the-house management, labor law and business administration are suggested.

1.2. Independently Owned and Operated

In each franchise system, there is a franchisor and franchisees, and you must alert your Guests to this fact. Therefore, you must include the phrase, “Independently licensed and operated” on all written materials including, but not limited to, stationery, contracts, marketing materials and brochures.

In addition, the following sign must be posted in a conspicuous place in your restaurant:

“This Egg N’ Joe is locally owned and operated by ______under license from We Are Crackin’ LLC.”

1.3. You Are the CEO of Your Business

The International Franchise Association (IFA) slogan, “With franchising you are in business for yourself, not by yourself” is a very comforting concept, but do not misunderstand! This franchise is your business, not ours; you alone are responsible for its success. The concept, the marks and the brand are ours. We have developed a system for operating and

Version Number: 1.0 • March 2017 Page 2 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

marketing that has proven its worth in the marketplace. How it is applied, when action is taken, and how resources are allocated is up to you. Remember, you are the CEO of this business.

Being the boss is hard work, so be prepared to make tough decisions. From hiring and staffing, to purchasing restaurant equipment and paper clips, every decision will have an impact on your business’ success. You will have to make decisions carefully and thoughtfully. We will explain how our system components can be used to reach your goals. However, ultimately you will make the decisions that can create your profitability. We are here to coach, advise and continue to refine a system that is beneficial to all, and we are confident that, with care, you can make sound choices.

1.4. Pricing and Price Fixing

We will not set prices for you. You are expected to set your own menu prices that will support your business goals. Periodically, we publish our suggested standard brand prices that you can use as a guideline.

It is easy to rely on your fellow franchisees for pricing information, but be careful. You cannot decide as a group (two or more) to set a price. To do so is price fixing and it is a felony (as well as bad business.) As the market drives much of pricing, it is probable that prices will be similar throughout the system, but they must be yours and yours alone.

This applies to setting food prices and staff wages. Consult your business plan and the marketplace to determine what a fair price/wage is and what can support your plans for growth.

The best way to set your pricing is to start as an investigator and then become a secret shopper. Visit every competitor in your trade area, including national chains, regional brands and independent brands. Consider all the variables:

• Your competitors’ menu options • Their food quality • The friendliness and quality of the service • The cleanliness and comfort of the restaurant • The décor and quality of the furniture, fixtures and equipment (FF&E) • How staff is dressed

Version Number: 1.0 • March 2017 Page 3 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• Restaurant location (both within its center and the community)

When you have gathered all this information from all competitors in your area, compare their offerings to your own. Before you create your pricing matrix, plug these numbers into your business plan to determine their effect on your earning capabilities. You may need to adjust the price or the sales volume to reach your goals.

Be sure to stay current with price changes by your competitors and suppliers, and adjust accordingly.

Version Number: 1.0 • March 2017 Page 4 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

2. Franchisor Responsibilities

We are dedicated to the success of our franchise network. Therefore, each franchisee can expect consistent support from us. As part of this continuing support, the following services have been developed to assist you in all aspects of operating your ENJ franchise. The items listed here are some of what we are required to provide, but we may provide additional support.

2.1. Pre-opening Obligations

Before you open your ENJ restaurant, we will provide key support to assist you in opening your restaurant within the allotted time, in an approved area, designed and built to look like an ENJ restaurant.

Services we provide prior to your restaurant’s opening include:

• Assisting you in selecting and then accepting a specific site for your restaurant. We may also assist in your negotiating a lease, sublease, or purchase agreement for your restaurant site. We do not choose the site, but may give you support and guidance in selecting a site and we may reject a site proposed by you. • Providing site criteria and a site evaluation form which you must complete. Factors we use to evaluate a site include, but are not limited to: • General location, neighborhood characteristics and demographics, competition, traffic volume and patterns, location size, physical characteristics of surrounding buildings, available parking, zoning laws and other local ordinances, lease or sale terms, and general economic conditions of the community. • You have up to one year after signing the Franchise Agreement to locate a site and open your restaurant for business, unless we extend this time. If you fail to begin operating your restaurant within the required timeline, or by a later date if agreed to by us, you will lose your franchise fee and the right to open a restaurant. • Providing a list of WAC-approved architects who can provide architectural plans and specifications for an ENJ restaurant.

Version Number: 1.0 • March 2017 Page 5 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• Approving all changes, modification, or revisions to the architectural plans and specifications and to construction drawings based on those plan and specifications. • Licensing the marks necessary to begin the franchised business. • Assisting you in ordering opening inventory. You will order some proprietary food items from our affiliate or us. The rest of the items you will order from our Approved Vendor List. • Loaning you one copy of the Operations Manual (including a Recipe Manual) which contains mandatory and suggested specifications, standards, and procedures. • Providing grand opening assistance through our personnel, including planning and developing a grand opening promotional program. • Giving periodic guidance (as we deem necessary) about the development, opening, and operation of your restaurant, including advice regarding equipment selection and layout. • Providing two phases of training before you commence operating the restaurant.

2.2. Continuing Assistance

Services we provide during the operation of your restaurant include:

• Giving periodic guidance (as we deem necessary) about: • Methods and procedures to be used at your restaurant • Advertising and promotion • Recipes, food formulas, and specifications • Bookkeeping and accounting • Purchasing and inventory control • Inspections • New developments and improvements to the ENJ franchise system • Notifying you of changes to, or the creation of: • Restaurant standards and specifications • Approved or designated suppliers, the termination of existing approved or designated suppliers • Refraining from operating or granting a third party the right to operate an ENJ restaurant within a one-mile radius of your restaurant without providing you first right of refusal • Giving you access to advertising and promotional materials we develop

Version Number: 1.0 • March 2017 Page 6 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• Providing additional training for you and your managers at our discretion

Version Number: 1.0 • March 2017 Page 7 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

3. Franchisee Responsibilities

You have contractual obligations that are set out in the Franchise Agreement. In this section, we will mention those that directly relate to the operations of your restaurant. This list is not complete.

As a franchisee, your main responsibilities are:

• To fulfill the ENJ mission and values completely. • To protect the name and brand of ENJ restaurants by adhering to our operational systems and processes. • To respect the importance of each Guest and the care delivered to that Guest, every time. • To select, open and operate the restaurant in accordance with our standards and policies. • To obtain design and layout plans. • To purchase equipment and supplies. • To obtain required licenses and certifications. • To hire staff. • To require all employees to wear uniforms and abide by our dress guidelines. • To complete the initial and ongoing training. • To ensure that at least one of the individuals who has completed our initial training program is at the restaurant at all times during normal business hours. • To open on time. • To take responsibility for the actions of the business and your staff and solve problems as needed. • To be an active member of the ENJ franchise community and contribute to its growth and development. • To pay all fees fully and on time. • To use the marks of the brand correctly and protect them. • To display only approved interior and exterior signage, as required by us. • To remain current with all the system’s requirements and use them appropriately. • To participate in system-wide promotional programs. • To comply with ongoing product and service requirements. • To participate in local marketing. • To furnish complete financial reports on time, as scheduled.

Version Number: 1.0 • March 2017 Page 8 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• To maintain your restaurant in accordance with our standards and requirements. • To update the equipment and appearance as required. • To purchase and maintain the required insurance. • To fully comply with all inspections and audits.

3.1. Reporting Requirements

We require that you regularly provide us with accurate reports and records on all aspects of your business so we can monitor and grow the system. All reports must be prepared in accordance with the generally accepted accounting principles of the United States, to the extent applicable.

All the data provided by you, either by uploading it to our computer system or by downloading it from your computer system to ours, is and will be owned exclusively by us and we have the right to use such data in any manner that we deem appropriate.

3.1.1. Financial Reports

Current reporting obligations include:

• Our Franchise and Advertising Fund Fee Report statement showing relevant gross sales to be delivered with payment of the Service Fee and Advertising Fee no later than 5:00 p.m. on each Tuesday, unless we direct you otherwise • A monthly or four-week period (at our discretion) unaudited balance sheet and profit and loss statement covering your franchise business for the prior month and fiscal year to date, all of which you must certified as true and correct and delivered to us no later than the eight day after the end of the period in our required format. • Annual financial statements compiled or reviewed by an independent certified public accountant in our required format, which must include the following and are due within 90 days of year end: • Statement of income and retained earnings • Statement of cash flows • Balance sheet

Version Number: 1.0 • March 2017 Page 9 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• If you do not, in the ordinary course of business, obtain financial statements compiled or reviewed by an independent certified public accountant, then you may provide internally prepared financial statements that must be certified as true and correct by you or your principal executive officer or chief financial officer if your entity is a partnership, corporation, or limited liability company. • We have the right at any time to require audited annual statements to be provided to us, at your expense. • Annual copy of your signed 1120 or 1 120 S tax form including all supporting schedules as filed with the Internal Revenue Service (or any forms which take the place of those form,) and all other federal, state, and local sales and use and income tax reports you are required to file, all to be delivered within 30 days after filing. • A statement of local advertising expenditures for each calendar quarter and fiscal year to date, using our required form, along with invoices documenting the expenditures (if we require it,) to be delivered within 15 days after the end of each calendar quarter. • Insurance certificates upon the annual renewal of the policies and all health and safety inspection reports. • Any other data, information, and supporting records that we may reasonably request.

All reports or other information must be submitted to our Home Office. If any of the required reports or other information are not received by us by the stated deadline, we may charge you a late submission fee.

3.1.2. Audits and Inspections

For five years from the date your records are prepared, you must maintain, preserve and make available to us all accounting and bookkeeping documents, including sales receipts, monthly sales reports, tax returns, profit and loss statements and other supporting material.

On occasion, we may, without notification, enter your restaurant and demand to inspect your financial records if we have reason to believe accounting irregularities or errors may have occurred. If, upon inspection, we detect irregularities, we may perform an audit on your financial accounting for a period of up to five years.

Version Number: 1.0 • March 2017 Page 10 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

This type of audit should not be confused with a tax audit performed by a state or federal agency. Nor should it be confused with unannounced site audits when we inspect the degree to which your restaurant adheres to our general operation standards, or when we conduct an annual audit and reconciliation of your balance sheet and income statement.

Note: Any audits we perform shall be at our expense unless it is found you understated your reported sales by two percent (2%) or more during the period being examined, in which case you will be responsible for the expense of the audit.

3.2. Meeting Attendance

You must attend, at your expense, any annual franchise conventions we may hold or sponsor, and all meetings relating to new products or product preparation procedures, new operational procedures or programs, education, restaurant management, sales or sales promotion or similar topics. You are responsible for all related travel and living expenses and wages related to mandatory meetings.

3.3. Approved Products

You must offer and sell only the menu items and other goods and services that we have approved.

Menu

• We have the right to require you to carry the required menu items that we dictate and that we determine are appropriate for ENJ restaurants. • You must offer all menu items, goods, and services that we designate, and no others. • We may make all modifications to our approved menu, whether by a change in this Operations Manual, through an amendment to the Franchise Agreement, or by another form of written directive. • You must label and identify all food items by the same name or designation we give them. • You must follow our specifications for portion size, food display, food preparation, and storage procedures.

Version Number: 1.0 • March 2017 Page 11 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

• Unless authorized or required by us, you may not sell any menu items or ingredients to Guests for the purpose of resale, nor may you engage in sales to wholesale accounts. • If we allow you to operate or contract with a delivery service, which permission will be granted at our sole discretion, you may engage in delivery sales for only those products designated by us and on terms and conditions established solely by us.

Non-Approved Food and Ingredients

• We may remove or destroy any foods or ingredients that are not approved for use or sale by us or are stale, spoiled, or improperly prepared, without paying you compensation. • We may give you a limited opportunity (on 24 hours’ notice) to remove non-conforming items, but we do not have to do so.

Gaming

• You may not have or use or permit the presence or use of video game machines or vending machines or any similar device or machine at your restaurant unless we give you our written consent.

3.4. Continuing Payments

You are required to make weekly Service Fee and Advertising Fee payments.

3.4.1. Gross Sales

Gross sales means the amount of sales of all products and services sold in, on, about, or from your restaurant, together with any other revenues derived from the operation of your restaurant, whether by you or by any other person, whether or not in accordance with the terms of your Franchise Agreement, and whether for cash or on a charge, credit, barter, or time basis, including, but not limited to, all sales and services where orders originate and/or are accepted by you in the restaurant but delivery or performance is made from or at any place other than your restaurant or are the result of telephone, electronic orders or other similar orders received or filled at or in your restaurant.

Version Number: 1.0 • March 2017 Page 12 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

For purposes of determining the Service Fee and Advertising Fee, gross sales do not include the amount of refunds, allowances, or discounts to Guests (including coupon sales) up to 5% of the gross sales, provided the related sales have previously been included in gross sales; and the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority (if included in gross sales.)

3.4.2. Service Fee

Service Fees are ongoing payments made to us for the continued use of the name, the marks, the concept and how they contribute to your business. These are not paid in exchange for support, materials or education. The Service Fee is a percentage of your franchise business’ gross sales.

Unless we grant you a different reporting and payment schedule, Service Fees are payable weekly every Wednesday (unless Wednesday is not a business day, then it is due on the next business day.) Service Fees are payable together with the Advertising Fee. The sales week starts each Monday and ends at the close of business on Sunday. Payments are due on Wednesday of the following week.

All payments will be withdrawn from your designated account by an Electronic Funds Transfer (EFT) through Automated Clearing House (ACH.)

Consult your Franchise Agreement for the percentage of gross sales that is due.

3.4.3. System Marketing and Advertising Fee

Unless we grant you a different reporting and payment schedule, Advertising Fees are due weekly, and are payable together with the Service Fee. The sales week starts each Monday and ends at the close of business on Sunday. Payments are due on Wednesday of the following week.

Consult your Franchise Agreement for the percentage of gross sales that is due.

Version Number: 1.0 • March 2017 Page 13 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

3.4.4. How Fees Are Remitted

The Service and Advertising Fees reported on your weekly Franchise and Advertising Fund Fee Report will be withdrawn from your designated bank account by automated bank draft weekly on Wednesday, based on gross sales for the preceding week ending Sunday.

This amount must be available in the bank account you have designated for EFT transfers. The bank will transfer the funds from your designated account to ours on Wednesday morning (Pacific Time.)

3.5. Other Fees

There are other fees that are required in the operation of your ENJ franchise. This list focuses on those related to operations and is not complete. Refer to your Franchise Agreement for a complete list.

3.5.1. Advertising Deficiency

If you fail to make the required local advertising expenditures, we can do so on your behalf and you must reimburse us for those expenditures. This fee will be invoiced and due upon demand.

3.5.2. Audit Fee

If an audit discloses that you have underreported gross sales by more than 2%, you will pay us the costs of an audit. Costs include professional fees and expenses billed to us by the independent CPA we hire to audit your operation. This fee will be invoiced and due upon demand.

3.5.3. Late Submission Fee

If any of the reports or other information you must provide to us are not submitted by the required deadline, we may charge you a late submission fee equal to $100.

3.5.4. Late Payment Fees and Charges

All overdue payments for Service Fees, Advertising Fees, and other fees required to be paid by you under your Franchise Agreement will bear

Version Number: 1.0 • March 2017 Page 14 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

interest from the date due at the rate we specify, up to the highest rate permitted by the law.

In addition to our right to charge interest on overdue payments, we may charge you a $200 late payment fee and a $100 insufficient funds fee for each check, automated bank draft payment, or other payment method that is not honored by your financial institution.

3.5.5. Conference Fees

If we require you to attend a conference or another meeting, you may have to pay a reasonable fee to attend. Amounts for travel, food and lodging to attend conferences and meetings will depend on distance traveled and chosen accommodations. Fees will be paid, as incurred, to various vendors. Certain expenses may be refundable under various circumstances. Currently, we organize an annual conference that you are required to attend.

3.5.6. Additional Training Fee

If we notify you in writing that you have failed to maintain standards at your restaurant, and you fail to cure in the time allowed, we have the right to assign trainers to your restaurant and you must reimburse us for the trainers’ salaries, travel, living expenses, and other related expenses, and pay us a training fee.

3.5.7. Renewal Fee

If you renew your Franchise Agreement, you will pay the renewal fee reflected in your Agreement. Other conditions also apply to renewal.

3.5.8. Transfer Fee

If you assign (transfer) your Franchise Agreement, you will pay us a transfer fee to off-set expenses for all administrative, legal, training, and other expenses incurred by us in connection with the transfer. We will determine the exact amount of the fee at our sole discretion.

Version Number: 1.0 • March 2017 Page 15 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

3.6. Participation in the Business

The restaurant must have four persons that you designate to assume primary responsibility for managing the restaurant and will devote full time and best efforts to its management and operation.

At all times, you must keep us informed of the names of these managers, including all additions to and successors. Visit the support site for a current listing of Home Office staff and email management changes/additions to the appropriate staff member. Write “MANAGER – ENJ (local designation)” in the subject line.

3.7. Trademark Use

You may only use the trademarks and proprietary information that we choose to share with you in the operation and promotion of your restaurant during the term of the Franchise Agreement and only in the manner that we authorize. Any misuse of company trademarks and imagery can be construed as a violation of your Franchise Agreement.

3.8. Standards and Maintenance

We have the right to establish quality standards regarding the business operations of Egg N’ Joe restaurants to protect the distinction, goodwill and uniformity symbolized by the trademarks and the system, and you must comply with all our standards.

3.9. Authorized Items and Vendors

Uniformity of operations is central to the ENJ system. To achieve this, this Operations Manual, Recipe Manual, and other manuals or information (collectively called the “Manuals”) contain mandatory specifications pertaining to all aspects of restaurant operations. Specifications exist for all food and beverage products sold from ENJ restaurants, as well as for cooking equipment, food preparation methods, recipes, and ingredients. In some cases, the specifications identify products or ingredients by brand name, although you may purchase the item from any supplier who sells that brand. In some cases, the specifications may restrict you to purchase items from a designated supplier.

Version Number: 1.0 • March 2017 Page 16 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

You must purchase all the Proprietary Items, including, but not limited to, certain breakfast and/or bakery items and coffee, from us or our designated manufacturer. The Proprietary Items were formulated and are manufactured and sold only by our designated manufacturer or us. We do not disclose our formulas or recipes, except to our designated manufacturer. You must purchase Proprietary Items only from us or our designated manufacturer and must not use any substitutes for those Proprietary Items in preparing the food or beverages sold in your restaurant.

Except for our proprietary ingredients, we do not intend to be, or intend to appoint, any of our affiliates as an authorized supplier of any products, supplies, equipment, or other items used in the operation of the restaurant. However, we reserve the right to designate ourselves and/or any of our affiliates as an approved supplier in the future, and we may even designate ourselves or an affiliate as the sole supplier of one or more items, in which case you would have to buy the item from us or our affiliate at our or their then-current price. Our standards and specifications and the names of approved or designated suppliers are contained within the Manuals.

3.10. POS System

You must purchase and use the currently approved POS system. This includes hardware and software updates. The POS system will also include any credit card processing system we designate.

At present, we have not identified a single supplier to supply the POS system. We may designate a single supplier and negotiate a volume sale discount for the POS system and if we do, we intend to pass some or all discounts directly to you. We may also require you to purchase a maintenance program from the supplier covering training, equipment repair and replacement, 24-hour, 365-day a year help desk, and programming.

3.11. Compliance

You are obligated to remain in compliance with the terms of your Franchise Agreement and any changes and updates that are reflected in the Manuals or any other memo or posting. This protects your business

Version Number: 1.0 • March 2017 Page 17 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

and the ENJ brand. You are also responsible for ensuring that your employees comply with our standards and practices.

3.11.1. Legal Compliance

You are obligated to be aware of and follow all laws (federal, state and local,) as they pertain to running your business. This includes credit card data, labor, anti-terrorism laws, food safety and health codes. We are not responsible for informing you of new requirements or changes to existing ones.

3.11.2. Alcohol and Beverage Control Laws

You must carry a liquor license for your restaurant allowing you to sell beer and wine. If you wish to apply for a hard alcohol permit, you must first send us a written request. If approved by us, you may then proceed with getting state/regulatory agency approval.

You are obligated to be aware of and follow all local, state or federal alcohol and beverage control laws.

3.11.3. Vending Gaming Machines and Tickets

You may not, except with our prior written permission, install jukeboxes, electronic games, vending machines, ATMs, newspaper racks, entertainment devices, coin/token-operated machines, gambling devices or kiosks on the restaurant premises.

You are not permitted to sell or allow employees to sell any tickets, subscriptions, chances, raffles, lottery tickets or pull tabs, unless authorized by us in writing.

3.12. Marketing Requirements

You are expected to abide by all the following marketing requirements.

3.12.1. Advertising Fund

The Advertising Fund is comprised of the weekly contributions made from ENJ restaurants system-wide, including our corporate restaurants.

Version Number: 1.0 • March 2017 Page 18 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

The Advertising Fund is not a trust or escrow account, and we have no fiduciary obligation to you with respect to it. We will make a good faith effort to use the fees in the best interests of the system. We have the right to determine the expenditures and the methods of marketing, advertising, media employed and contents, terms and conditions of marketing campaigns and promotional programs. We may use funds from the Advertising Fund for advertising to solicit the sale of franchises.

We are not required to spend a prorated amount on each restaurant or in each advertising market. We may reimburse ourselves for the costs to develop and administer marketing plans, including creative, administration and payroll. We will provide you an annual unaudited statement of the financial condition of the Advertising Fund upon request.

3.12.2. Required Expenditures

You must promote and advertise your restaurant, and participate in any local marketing and promotional programs we establish. Upon our request, you must provide us with itemization and proof of marketing expenditures and an accounting of the monies that you have spent. If you fail to make the required expenditure, we have the right to collect and contribute the deficiency to the Advertising Fund.

3.12.2.1. Local

You must spend funds each calendar quarter for local market advertising. You determine the amount of advertising funds expended for your individual local market advertising in consultation with us, subject to minimum requirement specified in your Franchise Agreement. Local advertising expenditures do not include incentive programs, including, without limitation, costs of honoring coupons, food costs incurred in honoring sales promotions, salaries, contributions, donations, press parties, in-store fixtures or equipment, menus, serving guides and nutritional facts, and exterior or interior signage. If you fail to make the required local advertising expenditures, we have the right to spend an amount whose aggregate does not exceed 2% of the gross sales of the restaurant on local advertising on your behalf, and you must reimburse us for those expenses. Failure to comply with these requirements is deemed a material breach of your Franchise Agreement.

Version Number: 1.0 • March 2017 Page 19 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

3.12.2.2. Grand Opening

You must develop and implement a grand opening promotion that we approve for your restaurant. You must spend a minimum of $2,000 for the grand opening promotion.

Visit the support site for a current listing of Home Office staff and email your plan to the appropriate staff member. Write, “GRAND OPENING Egg N’ Joe (your local designation)” in the subject line.

3.12.3. Approved Material

You must use the marketing materials (including print, radio, television, electronic, social media, or others) as we furnish them, approve or make available. The materials must be used only in the manner that we prescribe.

3.12.3.1. Process

Any promotional activities you conduct in the restaurant or on its premises are subject to our approval. We will not unreasonably withhold approval of any sales promotion materials or media and activities, if they are current, in good condition, in good taste, accurately meet brand standards and depict the trademarks.

Visit the support site for a current listing of Home Office staff and email sales promotional materials, media or activities to the appropriate staff member for approval. Write “Promotion Proposal” in the subject line.

3.12.4. Gift Cards and Certificates

You must use and honor only system-wide gift cards and certificates that we designate, all of which must be obtained from an approved supplier.

Version Number: 1.0 • March 2017 Page 20 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

4. Franchise Standards

Guests choose franchised establishments because they want an experience that is familiar, pleasant and a good value. A franchise brand is viewed as a guarantee of a specific experience; the brand equals the promise.

To protect the brand and fulfill the promise, all ENJ restaurants must deliver a consistent experience. Your success is dependent upon the satisfaction of your Guests. No business can expect to succeed without a staff of responsible people who are committed to providing excellent service.

4.1. Objectivity and Measurement

In order to protect the brand, we have developed a set of standard operating procedures. Periodically, we will conduct a review of your restaurant using our team members or another company of our choosing to inspect the operations, measure the performance of your restaurant and its adherence to our operating and brand standards. You are required to comply with all standards and ensure that your employees are also compliant.

We or our authorized representative have the right to enter your restaurant at all reasonable times during the business day to conduct these reviews, to inspect and evaluate the building, land and equipment, and to test, sample, inspect and evaluate the supplies, ingredients and products, storage, preparation and formulation and the conditions of sanitation and cleanliness in the storage, production, handling and serving of food. Any failure of an inspection is a default of the Franchise Agreement. If we determine that any condition in the restaurant presents a threat to Guests or public health or safety, we may take whatever measures we deem necessary, including requiring you to immediately close the restaurant, until the situation is remedied to our satisfaction.

4.2. Insurance

You must purchase and maintain in full force and effect, at your expense, insurance that covers both you and us, and any other persons we specify. Insurance must be purchased from carriers approved by us.

Version Number: 1.0 • March 2017 Page 21 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

The types of insurance include:

• Comprehensive general liability insurance with coverage for $1,000,000 per occurrence and $2,000,000 aggregate for: • Products liability • Contractual liability • Personal and advertising injury • Fire damage and medical expenses with limits of not less than $300,000 for one fire and $5,000 for one person. • Liquor liability. • Non-owned auto liability insurance. • Auto liability insurance if you own and/or operate a vehicle bearing our marks. • Excess liability umbrella insurance in the amount not less than $5,000,000 per occurrence and aggregate. • Workers’ compensation insurance in coverage required by statute. • Comprehensive crime and employee dishonesty insurance. • Business interruption for a minimum of six months to cover net profits and continuing expenses, including Service Fees. • Extra expense insurance and personal property insurance. • Any other insurance coverage or amounts as required by lease, law, or other agreement related to the restaurant.

Additional insurance requirements include:

• The insurance certificate must name WAC as an additional insured and provide that we will be given 30 days’ prior written notice of a material change in, termination or cancellation of the policy. • Severability of interests and/or separation of insured provisions must be included in the liability policies. • All policies must be primary and non-contributing with any insurance policy carried by WAC. • The insurance coverage must begin as of the date you sign a lease or purchase agreement for the authorized location. • You must deliver to us, at the start, annually or at our request, a certificate of insurance for each policy. We also may request copies of all policies.

We may, from time to time, modify the required minimum limits and require additional insurance coverage by providing written notice to you,

Version Number: 1.0 • March 2017 Page 22 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

as conditions require, to reflect changes in relevant circumstances, industry standards, experiences in the ENJ system, standards of liability and higher damage awards. If you do not obtain and maintain the required insurance coverage, we have the right, but not the obligation, to purchase insurance coverage at your expense, along with a reasonable fee for the expenses we incur in doing so. You must pay these amounts to us immediately upon written notice.

4.3. Training

Before you commence operating the restaurant, we provide you with two phases of training. You must fully complete all training and pass with a minimum score, determined by us. If additional or supplemental training is required, you may be charged a fee.

1. Phase 1: initial training of up to eight weeks for the four individuals who will assume primary responsibility for managing your restaurant, and will devote full time and best efforts to manage your restaurant. 2. Phase 2: lasting up to three weeks, to be conducted in your restaurant by our opening team. It will involve you and your newly hired staff, which we will help you to hire. It covers the span of up to two weeks before you open your restaurant and up to one week immediately after you open your restaurant.

Your designated managers must attend and successfully complete to our satisfaction our specified initial management training program or a comparable one approved in advance by us in our sole discretion. Each manager required to complete the initial training program must successfully complete it before your restaurant opens for business. We do not charge a fee for the four managers’ participation in the training program; however, you are responsible for the costs and expenses (such as transportation, lodging, meals, and compensation) of each person who attends the training.

During operational hours, at least one manager who has successfully completed the initial training program must be at the restaurant all times. When a manager ceases active employment at the restaurant, you must notify us of this within five days of his last day. The qualified replacement must be enrolled in the initial management training program within 30 days the former manager’s final shift. We, in our sole discretion, reserve the right to waive all or a portion of the required training program.

Version Number: 1.0 • March 2017 Page 23 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

In addition, all employees, including managers, must obtain food- handling permits from the appropriate government agency at their own expense.

Visit the support site for a current listing of Home Office staff and email management changes/additions to the appropriate staff member. Write “MANAGER – ENJ (local designation)” in the subject line.

4.3.1. Training Employees

You are responsible for the proper training of your employees. You must not employ any person who fails or refuses to complete your training program or is unqualified to perform his duties at the restaurant in accordance with our standards and requirements.

4.3.2. Ongoing Education

You, your managers and employees must attend and conduct any additional training programs related to restaurant operations that we reasonably require. You may be required to purchase training videos or other instructional materials we specify from time to time.

4.3.3. Conferences

In addition to attending our prescribed courses, you must attend an annual conference of all franchisees at a location we designate. We will not require attendance at the annual meeting for more than three days during any calendar year. This conference may include review of such topics as brand goals, changes since the last annual conference, state of the industry, menu updates, training and other related matters.

Although we are not obligated under the Franchise Agreement, we may hold periodic conferences, management meetings, or refresher courses to discuss sales techniques, personnel training, bookkeeping, accounting, inventory control, business trends, legal issues, related matters. These conferences may be held at our Portland, Oregon location or any other place that we may designate and may last one or two days.

We may charge you a reasonable fee to attend these meetings or conferences. You are responsible for all related travel and living expenses and wages.

Version Number: 1.0 • March 2017 Page 24 We Are Crackin’ LLC Chapter 2: Confidential Operations Manual The Franchise

4.4. Communication

Email will be the primary form of written communication between you and WAC. Visit the support site for a current listing of Home Office staff, their responsibilities and contact information.

Version Number: 1.0 • March 2017 Page 25

CHAPTER 3: RESTAURANT OPERATIONS

Version Number: 1.0 • March 2017 Page 1

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

1. Overview

In this section, we will discuss and provide detail on brand standards, values, best practices and the daily operations of the restaurant.

Version Number: 1.0 • March 2017 Page 2

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

2. Mission and Values

Our mission is, simply: Delight our Guests.

We expect all our franchisees to honor and live our values. Share this values statement with your employees.

Version Number: 1.0 • March 2017 Page 3

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

3. Brand Standards

3.1. Hours of Operation

Restaurant hours must be consistent so Guests can make plans to visit any restaurant and satisfy their expectation that it will be open. Your Franchise Agreement requires you to operate your restaurant for the hours and days that we dictate. You must be open seven days a week. Our recommended restaurant hours are 6:00 a.m. – 9:00 p.m., seven days a week. Your operating hours must be posted next to your front door.

However, we do allow for regional variances and situations when your lease requires you to have different operating hours that do not meet our standards. You must complete and submit a request to the Director of Franchise Operations before your hours can vary from our recommended standards.

If you close your restaurant for any reason during normal operating hours, you must notify the WAC Home Office immediately, via either email or telephone.

3.1.1. Holiday Hours

You are required to be open all days except Christmas Day and Thanksgiving, but may choose to remain open on those holidays.

Any temporary signs noting holiday closures must be removed at the start of the first shift after the event.

3.2. Signs and Marketing

We have worked hard to create an image that is professional and that instills Guests with confidence in the brand, so it is important that you maintain that image in your restaurant.

Our sign vendor, Security Signs, will provide you with currently approved sign specifications. We also have pre-approved sign templates that are available at no cost to you through the Marketing department.

Version Number: 1.0 • March 2017 Page 4

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

We recognize that sign requirements and local ordinances vary from city to city. Security Signs can assist you in the event that you are unable to use our required signage. Any deviation from our standard signage must receive prior written permission from the Home Office.

• Only standard ENJ signs are allowed. Your Franchise Agreement allows us to remove or destroy unauthorized signs or advertising. • No handwritten or “homemade” signs can be posted in view of the Guests. • You are responsible for meeting all requirements relating to the posting of federal, state and locally mandated signage throughout your restaurant. • Any approved illuminated signs must be in full working order at all times. • You may not advertise other businesses or offer their promotions in your restaurant. • Temporary signs noting holiday closures must be removed at the start of the first shift after the event. • Exterior signs must be lit at sundown and remain lit until closing. • Window painting is not allowed. • No signs saying “open” or “closed” are allowed. • The operating hours must be posted next to your front door. Hours may not be posted on the door.

3.3. Music

All music played in your restaurant must be acquired though our approved vendor, currently PlayNetwork, a provider of in-store entertainment for retail, restaurant, and hospitality environments.

3.4. Cleanliness and Organization Standards

The interior and exterior of your restaurant must be 100% neat and clean at all times. You are required to follow all food safety and health codes at all times, and are solely responsible for not only meeting all related governmental standards, but also staying up-to-date on regulation changes and new requirements.

Version Number: 1.0 • March 2017 Page 5

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

3.5. Interior

To attract Guests and to uphold the ENJ brand, each area inside your restaurant must adhere to the highest standards. Some of these standards are described in the following sections. You may also use the Ambiance Standards of Performance as a daily checklist.

3.5.1. Lobby/Cashier Desk

Front Doors

• Front doors must properly seal when they are closed. • Doors must open and close easily and quietly. • Handles must be polished and glass clean and smudge-free. • Hours of operation must be clearly posted next to the door, but not on the door.

Vending Machines

• The newspaper machine must be in good working order. • No unapproved vending machines must be present, e.g. toy machines.

Floors

• Tiles must be clean, dry and in good repair.

Entryway Lighting

• All bulbs must be lit and in good working order. • Chandeliers must be clean and cobweb-free.

Plants

• All plants must be eye appealing, healthy and dusted.

Pictures and Plaques

• Pictures and plaques must be set straight on the wall. • Frames and glass must be in good repair, subject matter up-to- date and in good taste.

Version Number: 1.0 • March 2017 Page 6

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Lobby Seating

• Seating must be comfortable, clean and in good condition.

Lobby/Cashier’s Stand

• The lobby area and cashier’s stand must be neat, organized, uncluttered and eye appealing. • Comment and manager cards must be available.

Menus

• Menus must be stocked in ample amount, be clean and in good repair. • Only the featured, approved menu must be in use.

3.5.2. Dining Room

Carpet

• Carpet must be clean and in good repair, with no loose seams or tears.

Chairs, Highchairs and Booster Seats

• All adult and child chairs must be clean and in good repair.

Tables

• Tabletops must have no chips and no gum stuck underneath. • Condiments must be organized, clean and filled. • Table bases must be clean and properly set so they are stable.

Booths and Seats

• Booths and seats must have clean upholstery and be free of tears and holes.

Version Number: 1.0 • March 2017 Page 7

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Lights and Chandeliers

• All bulbs must be lit and in good working order. • Light fixtures must be clean and cobweb-free. • Exit lights must all be lit and clean.

Pictures

• Pictures must be set straight on the wall. • Frames and glass must be in good repair, subject matter up-to- date and in good taste.

Music

• All music played in your restaurant must be acquired though our approved vendor. • Music must be appropriate for the meal period, clear and set at the proper volume.

Room Temperature/HVAC System

• Temperature must be set in accordance with our Ambiance Standards of Performance. • Vents must be clean and dirt/grease-free.

Walls and Ceiling

• Walls and ceilings must be painted, clean, have no nail holes and be cobweb-free.

Windows and Curtains

• Windows must be in good repair and working order. • Sills and panes must be clean and smudge-free. • Curtains/blinds must be clean and in good working order.

Version Number: 1.0 • March 2017 Page 8

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Bus Stations/Carts

• Bus stations and carts must be clean and stocked with proper sanitizing solutions and towels.

Wi-Fi

• Wi-Fi signal must be strong throughout the entire restaurant. • The Wi-Fi user name must be clear and logical, e.g. “EggNJoe” or “ENJ Guest.” • No password must be required.

3.5.3. Restrooms

Lighting

• All bulbs must be lit, covers on lights must be clean.

Walls, Partitions and Ceiling Fans

• All walls, partitions and ceiling fans must be free of dirt and graffiti. • Wallpaper and painted surfaces must be in good condition. • Fans must be working properly.

Floors

• Floors must be clean, dry and in good repair. • There must be no towels or other debris on the floor.

Sinks and Mirrors

• Sinks and mirrors must be clean and in perfect repair. • There must be no spots on mirrors.

Supplies

• All supplies must be fully stocked, including: • Seat covers • Toilet paper • Soap • Hand towels

Version Number: 1.0 • March 2017 Page 9

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Fixtures

• Fixtures must be clean, free of stains and odor-free.

Waste Baskets

• Waste baskets must be clean, liner in place and odor-free.

Sanitary Containers

• Sanitary containers must be clean and odor-free. • Waste can must be clean, lined with wax paper bags and covered.

Flowers

• Fresh flowers must be present in the women’s restroom, should be eye appealing and well maintained.

Baby Changing Table

• Changing tables must be attached properly, be clean and in good working order.

3.5.4. Servers’ Aisle

Equipment

• All equipment must be clean and in good repair, including, but not limited to: • Pop machine • Maple syrup dispenser • Sink and faucet • Toasters • Microwave • Reach-in coolers • Coffee makers • Coffee urns • Blender • Iced tea dispenser • Milk dispenser • Bread warmer

Version Number: 1.0 • March 2017 Page 10

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Juice reach-in • Hot cocoa/cappuccino maker • Soup wells • Ice cream freezer and shake machine

Counter Tops

• Counter tops should be clean, organized with good use of space.

Cupboards

• Cupboards must be clean, neat, organized, utilizing proper rotation.

Floors and Floor Drains

• Flooring must have no tears, stain or burns, be clean, dry and in good repair. • Floor drains must be clean, have no stains and be in good repair.

Coffee Cup and Glass Racks

• Racks must be clean and organized.

Stock

• All stock must be clean. • Only approved coffee cups, glasses, side plates, ramekins, etc. must be used. • Refer to our current Managed Order Guide (MOG) on our support site for specifications.

Silverware

• All silverware must be clean. • Tips of knives and tines of forks should be properly stored, rolled, and well protected within the napkin roll.

Version Number: 1.0 • March 2017 Page 11

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

3.5.5. Kitchen Line

Sanitation Signs and Safety Regulations

• You are responsible for ensuring all government-mandated signs such as handwashing, water changing, temperature, sanitation, under 18 and other safety signs are clearly posted, and related policies are adhered to in your restaurant.

Equipment

• All equipment must be clean and in good repair, including, but not limited to: • All refrigeration • Heat lamps • Star burner/hot plates • Microwaves • Steam table • Waffle irons • Pancake guns • Baked potato warmer • German ovens • Sink and faucet • Fryers • Freezer

Grills

• All grills and the hot holding drawers must be clean and temperatures set at the correct level. Equipment includes grills for: • Hashbrowns • Pancakes/crepes • Breakfast meats • Eggs and omelets • Lunch and dinner

Scales and Thermometers

• Portions scales must be available and in use. • Working thermometers must be in all drawers and ovens. • Fine-tipped pocket thermometers must be available and in use.

Version Number: 1.0 • March 2017 Page 12

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Exhaust Hoods and Make-Up Air (MUA) Vents

• Exhaust hoods and MUA vents should be clean. • Exhaust filters should be clean.

Walls and Ceilings

• Walls and ceilings must be clean and painted.

Lights

• All bulbs must be lit and lights properly covered.

Floors, Drains and Mats

• All flooring must be clean, dry and in good repair. • Drains and mats must be clean and in good repair.

3.5.6. Kitchen Prep

Back Door

• Back door must be clean. • Security alarm, if applicable, must be in working order.

Equipment

• All equipment must be clean and in good repair, including, but not limited to: • Chopper/dicer • Food processor • Employee hand sink, equipped with soap, eye rinse and towels • Scales • Mixers • Prep sink and faucet • Slicer • Oven and stove top

Pots, Pans and Utensils

• All pots, pans and utensils must be clean, organized and stored. • All black marks and stickers must be removed.

Version Number: 1.0 • March 2017 Page 13

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Thermometers

• Pocket thermometers must be available and in use.

Bulk Items

• Bulk items should be covered and labeled.

Recipe Book

• Recipe book must be up-to-date and in use.

Exhaust Hoods and Make-Up Air (MUA) Vents

• Exhaust hoods and MUA vents should be clean. • Exhaust filters should be clean.

Walls and Ceilings

• Walls and ceilings must be clean and painted.

Lights

• All bulbs must be lit and lights properly covered.

Floors and Floor Drains

• Floor tiles must be clean, dry and in good repair. • Floor drains must be clean, have no stains and be in good repair

3.5.7. Dish Room

Sanitation Signs and Safety Regulations

• You are responsible for ensuring all government-mandated signs such as handwashing, water changing, temperature, sanitation, under 18 and other safety signs are clearly posted, and related policies are adhered to in your restaurant.

Version Number: 1.0 • March 2017 Page 14

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Dish Machine

• Dish machine must be clean inside and out. • Must operate at the correct operating temperature. • The soap concentrate must dispense properly. • A sanitizing solution must be in use for chemical machines.

Ice Machine

• The ice machine must be clean and in good working order.

Spray Arms

• Spray arms must have no leaks, the jets must be clean, must spray properly and be in good repair.

Garbage Disposal and Trash Compactor

• The garbage disposal and trash compactor (if applicable) must be in good working condition.

Pot Sinks

• Pot sinks must be clean with no leaking faucets

Counter Tops

• Stainless steel counters must be clean with caulking in good repair.

Garbage Cans

• Garbage cans must be clean and odor-free. • Liners and magnets must be used.

Exhaust Hoods and Make-Up Air (MUA) Vents

• Exhaust hoods and MUA vents must be clean. • Exhaust filters must be clean.

Floor

• Floor tiles must be clean, dry and in good repair.

Version Number: 1.0 • March 2017 Page 15

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

3.5.8. Bar Lounge (If applicable)

Bar Reach-Ins and Back Bar

• Reach-in must be clean, organized and properly stocked. • Must be set at the appropriate temperature. • Back bar must be clean and organized. • Bar brands must be quality selections.

Bar Equipment

• All bar equipment must be clean and in working order.

Floor

• Floor must be clean and in good repair.

Chairs and Booths

• Chairs and booths must be clean and in good repair.

Tables and Bar

• All tables and the bar must be clean and in good repair.

Lights

• All bulbs must be lit and free of cobwebs.

Walls

• Walls must be painted, clean, have no nail holes and be cobweb-free.

Windows and Curtains

• Windows must be in good repair and working order. • Sills and panes must be clean and smudge-free. • Curtains/blinds must be clean and in good working order.

Version Number: 1.0 • March 2017 Page 16

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Pictures

• Pictures must be set straight on the wall. • Frames and glass must be in good repair, subject matter up-to- date and in good taste.

3.6. Exterior

Maintaining a clean, well-lit and inviting space outside your restaurant is critical for attracting new Guests and retaining existing ones. Before they even step foot into your restaurant, Guests will notice the level of cleanliness maintained outside, and use this as a basis on which to form an opinion about the quality of food and service they can expect to receive inside. Even if the interior of your restaurant is immaculate, many potential Guests will simply walk by if the space surrounding your business is dirty and unwelcoming.

3.6.1. Parking Lot

Signs and Reader Board

• Signage must be up-to-date, clean and in good repair. • The hours of operation sign must be up-to-date and look fresh and new. • If your restaurant has a reader board, it must be well lit and in good working order. Always check for proper spelling and appropriate messaging.

Lot

• Parking lot and curbs must be clean and in good repair, drains free of leaves, stones, paper, plastics, cans, debris, etc. • Striping must be highly visible. • Drain covers must be on all parking lot storm drains.

Landscape

If your restaurant is located in an area that features landscaping, make sure the space surrounding your restaurant is eye appealing and free of weeds and trash.

Version Number: 1.0 • March 2017 Page 17

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Clear away any leaves or branches that might litter the exterior space, especially on the sidewalk and at the restaurant entrance. • Ensure plants and trees are well maintained and healthy. • Ensure landscaping is mowed, edged and properly hedged. • If the terms of your lease include landscaping fees, contact your landlord immediately if the landscaping surrounding your property is not being regularly maintained according to the terms of your lease.

3.6.2. Exterior Lights

Exterior lights often make the first impression your Guests have of your restaurant. Proper lighting can attract passing by Guests into your restaurant. Outside lighting should provide safety by illuminating steps, sidewalks and other hazards while projecting a sense of security.

• Architectural highlights, entryways and parking areas must be well lit. • All building and parking lot lights must clean and in good repair. • Replace all outside lights immediately when they burn out or break, or let the landlord know when exterior lights are not operating correctly.

3.6.3. Dumpster/Garbage Area

• The cement area around the dumpster must be clean, free of litter and fenced in. • Dumpster lid and gates must be closed. • Dumpsters should be cleaned or changed out regularly to avoid food source build up for flies and maggots.

3.6.4. Building

Walls

• Walls must be clean, properly painted/stained and in good repair.

Version Number: 1.0 • March 2017 Page 18

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Sidewalks

• Sidewalks must be swept and free of litter and gum. • Must have no cracks or tripping hazards.

Ashtray and Garbage Cans

• Ashtrays and garbage cans must be clean, have no odor and be emptied regularly so they are fee of butts and garbage.

Newspaper Stand

• The newspaper stand must be wiped down and well stocked with current publications.

3.7. Uniform Appearance and Standards

As a franchisee and the CEO of your business, you are responsible for establishing the right brand image and atmosphere in your restaurant. You must set a good example by demonstrating a professional attitude and wearing appropriate attire and by coaching your staff when they do not uphold brand standards. You are required to maintain these standards, as we may change from time to time. Failure to do so could result in a notice of default.

Currently, shirts, nametags and aprons may be purchased through our approved vendor. Visit the support site for contact information.

3.7.1. FOH Team Members

Pants

• All black slacks – non-faded (not jeans, denim, or corduroy, and not cargo style – total of four pockets only.) • Pants must just reach the top of the shoe, and not bunch up over the shoe. • Pants must fit and be worn at the waist. • Must be conservative style and fit appropriately (not too tight, not too baggy.) • Must be clean, sharp, and wrinkle-free. • Belts must be worn with pants and skirts that have a belt loop.

Version Number: 1.0 • March 2017 Page 19

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Shorts (Optional year-round):

• Resort-type shorts only (not jean, denim, corduroy, or cargo) – no shorter than 2 inches above the knee. • Shorts must be all black – non-faded. • Shorts must fit and be worn at the waist. • Must be clean, sharp, and wrinkle-free • Belts must be worn with shorts that have a belt loop. • If shorts are worn, short black socks must also be worn that are long enough to cover the ankle.

Skirts

• Skirts should follow all the same standards as pants with the exception of the waist. Skirts should fall below the knees but above the calf. • Black or nude tights or nylons must be worn with skirts.

Shirt

• Black in color – non-faded. • Freshly pressed each day with visible creases on the sleeves. • Absolutely no wrinkles.

Male Shirt

• Button–up collared shirt. • Short sleeve (at least 4” sleeve,) three-quarter sleeve or long sleeve. Long sleeve may be rolled up neatly. • Shirt must be tucked in. • Nothing must be placed in the shirt pocket. • Only top button may be open.

Female Shirt

• Button-up collared shirt – may be tailored or straight (tucked in if not tailored.) • Short sleeve (at least 4” sleeve,) three-quarter sleeve or long sleeve. Long sleeve may be rolled up neatly. • Females must wear a brassiere.

Version Number: 1.0 • March 2017 Page 20

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Only top button may be open. • No additional garment must be worn over the shirt, such as a sweater. • Undergarments not visible.

Nametag (unless name is embroidered on shirt)

• Worn on the upper quadrant of the shirt.

Apron (servers only)

• Black half-apron. • Worn at the waist. • Clean and wrinkle-free.

Shoes

• Black color with polishable leather. • Must have a certified slip-resistant sole from a manufacturer such as “Shoes for Crews.” • Closed heel and toe. • No mesh or athletic shoes. • No high heels or platforms. • Clean, polished, and in good shape.

Socks

• Dark color.

Note: no other item should be worn over or with the uniform. For example: jackets, sweaters, hats, bandannas, scarves, cleaning towels, etc.

3.7.2. BOH Team Members

The following BOH uniform and appearance standards are presented as best practices. All clothing and items worn by you and your employees must comply with legal health codes and OSHA requirements.

Pants

• Pants must fit and be worn at the waist.

Version Number: 1.0 • March 2017 Page 21

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Shirt

• Only top button may be open. • No additional garment must be worn over the shirt, such as a sweater. • Undergarments not visible.

Chef Coat (Kitchen Manager)

• White or black. • All buttons must be buttoned. • Worn untucked.

Apron

• Change as needed. • Worn at the waist. • Tied in back. • Dishwashers must wear plastic apron (optional.)

Shoes

• Black color with polishable leather. • Must have a certified slip-resistant sole from a manufacturer, such as “Shoes for Crews.” • Closed heel and toe. • No mesh or athletic shoes. • No high heels or platforms. • DMOs may wear slip resistant soled rubber boots.

Hat

• Clean for each shift. • Absolutely no visible stains.

Note: no other item should be worn over or with the uniform. For example: jackets, sweaters, hats, bandannas, scarves, cleaning towels, etc.

Version Number: 1.0 • March 2017 Page 22

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

3.7.3. FOH Manager - Male

Pants

• Slacks, poly blend fabric that will not fade, no jeans or corduroys. • Pants must fit at the waist. • Pants must be of conservative style, anything fitting baggy or tight is inappropriate. • Must be pressed and creased with no stains. • Color coordinated with shirt.

Shirt

• Long sleeve collared shirt, color optional. • Must be pressed and creased with no stains. • Undershirt is required. • Only top button may be open.

Shoes/Socks

• Dark: blue, brown or black shoes, coordinated with pants. • Leather uppers which are polishable with a slip resistant sole; closed heel and toe; no mesh, tennis or athletic shoes. • Dark colored socks, color coordinated with pants.

3.7.4. FOH Manager – Female

Pants

• Slacks, poly blend fabric that will not fade, no jeans or corduroys. • Pants must fit at the waist. • Pants must be of conservative style, anything fitting baggy or tight is inappropriate. • Must be pressed and creased with no stains. • Color coordinated with shirt.

Skirt

• Poly or silk blend fabric that will not fade. • Length is to be no shorter than 2” above the knee and no longer than just below the knee. • Color must be coordinated with shirt.

Version Number: 1.0 • March 2017 Page 23

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Shirt

• Button-up shirt; or • Long or short-sleeved blouse. • Must be pressed and creased with no stains. • Only top button may be open.

Shoes

• Leather uppers which are polishable with a slip resistant sole; closed heel and toe; no mesh, tennis or athletic shoes. • Color coordinated with outfit. • No high heels.

Socks

• Nylon stockings, color coordinated with outfit; or • Dark colored socks, color coordinated with pants.

3.8. Hygiene and Grooming Standards

Health

• Staff who are ill should not work or handle food. • No one should come to work when sick with a severe cold, diarrhea or vomiting, as this presents a higher risk for transferring bacteria to food or others.

Aftershave, Cologne, Perfume, Hand Lotion, and Deodorant

• Due to close contact with food, beverages, Guests and other team members, the use of deodorant or antiperspirant is required. • The heavy use of aftershave, cologne, lotion, perfume or any other strong scents is prohibited.

Fingernails

• Nails must be kept clean and trimmed to a professional length. Long nails are difficult to keep clean with normal hand washing and can hold bacteria between the nail and the skin, which could be transferred to food.

Version Number: 1.0 • March 2017 Page 24

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• BOH team members are not allowed to wear fingernail polish or fake nails (e.g. acrylic, porcelain, shellac, wraps, tips, etc.) • If FOH team members use fingernail polish, it be must be a professional color and be well maintained.

Make-up

• The ENJ image is a fresh, natural look. • If make-up is worn, it should be subtle and minimal. • Natural foundation and/or blush, mascara, light eye shadow and subtle lip color.

Tattoos

• To the extent possible, tattoos should not be visible. • Visible tattoos must not be political, religious, drug-related or offensive in nature.

Jewelry

• All jewelry must be simple and conservative. Safety is the primary concern. • Rings – permitted, must be professional and cannot interfere with performing the job. • Earrings – permitted, however hoop styles and dangling earrings cannot pose safety concerns. • Ear Gauges – permitted if they are no larger than a quarter and are a muted color that blends with the uniform. • Piercings – facial piercings of any kind are highly discouraged, including tongue rings, eyebrows, and nose and lip rings/piercings. • Necklaces – a single, simple necklace is acceptable but must be worn on the inside of the shirt and be flat or small-link. • Bracelets – permitted, must be professional and cannot interfere with the job. • Watches – permitted, must be simple and tight to the wrist.

Hair

• BOH team members are required to wear longer hair in a tight ponytail and/or tucked into a hairnet. • Tight braids or buns are highly encouraged.

Version Number: 1.0 • March 2017 Page 25

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• FOH team members must keep hair above or behind the shoulder, restrained so it does not fall forward when leaning forward. • Any hair restraints must be professional and color-coordinated with the uniform. • Hair should look professional and be a conservative style and color.

Facial Hair

• If not shaved, facial hair must be kept neatly trimmed, even when growing out, and be no longer than ½” in length. • BOH team members with facial hair longer than ½” in length must wear a beard net. • FOH team members must keep facial hair conservative in style.

3.9. Behavior

To ensure an environment of respect and to provide Guests with an excellent experience, you must follow certain standards of conduct and ensure that your employees do the same. Failure to enforce these standards could result in a notice of default.

• No gum chewing is allowed. • Be pleasant and courteous to each other and Guests. If you are friendly, people will generally be friendly in return. • Speak in a friendly, hospitable tone of voice. • Treat people as if they are Guests in your home. The tone of your voice, or how you say something, is as important as the words you use. • Use sincere greetings and say “Thank you” when appropriate. • Use appropriate language at all times. • Handle difficult Guests in a gracious, hospitable way. • Take action to protect the safety of you, your co-workers and Guests. • Have fun, but not at the expense of others. Be kind.

The following conduct is prohibited. This list is not all-inclusive, but is illustrative of the types of conduct that will not be tolerated:

• Making false or malicious statements about the brand or its products/services.

Version Number: 1.0 • March 2017 Page 26

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Use of abusive, profane or threatening language. • Possession of explosives, firearms, or other dangerous weapons on the premises. • Fighting or disorderly conduct, horseplay or playing dangerous practical jokes while on the premises. • Purchase, sale, possession, use or being under the influence of intoxicating beverages or illegal drugs on the restaurant premises, on a work shift or not. • Any action, such as discourtesy to ENJ Guests, which may result in loss of good will toward the brand. • Any violation of the policy on serving alcohol. • Failure to report promptly and/or to correct any contagious or dangerous condition.

3.9.1. Smoking

ENJ restaurants provide a smoke-free environment. Smoking on or in front of an ENJ restaurant is prohibited. Where applicable, you are expected to prohibit smoking within 25’ of any entryway into your restaurant.

Employees must remove ENJ aprons and additional uniform pieces prior to smoking before, after or during a break from a shift.

Version Number: 1.0 • March 2017 Page 27

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

4. Hospitality

You are the ambassador for your ENJ restaurant and as such must present a professional and welcoming image at all times.

Excellent Guest service means everything to us. Our goal is that every ENJ Guest leaves happy. We have a terrific concept, but it will not work without your commitment to Guest service, quality, cleanliness and teamwork. The following service standards have been established to help you achieve this goal:

• The Guest is always right. • No dining experience is complete unless the Guest is absolutely satisfied. • Every order must be 100% accurate. • You must provide your Guests with menu items that meet our quality standards. • When necessary, you will help Guests to special order menu items to meet their dietary needs or personal tastes. • You must provide a clean, pleasant environment.

Guest Awareness

• All staff must be courteous and enthusiastic. • Guests should see good teamwork happening around them. • Your Guests’ needs must be met at all times. • You should regularly engage in “table touching” - manager visiting a table at least once during a Guest’s visit.

Table Acknowledgement

• Display a sense of urgency.

Taking the Order

• Make eye contact. • Servers must know the menu, be able to make suggestions. • Take the order accurately.

Version Number: 1.0 • March 2017 Page 28

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Server Checkback

• Ensure the Guest’s satisfaction (within two minutes.)

Send Off

• Thank the Guests upon leaving and invite them to return. • The cashier should be efficient and courteous.

4.1. Service Sequence and Timing Standards

Step Service Sequence Timing Standards 1 Greet Guest(s) at the door Immediately (everyone) 2 Seat Guest ASAP 3 Greet Guest tableside ASAP (within 2 minutes of being seated) 4 Take and deliver beverage order At time of tableside greeting 5 Offer to take entrée order At the earliest opportunity 6 Deliver soup/salad When applicable, after order rung 7 Deliver entrée Within 1 minute of ready 8 Check back Within 2 minutes of delivering meal 9 Refill beverages, clear plates Continually, as needed 10 Deliver the check When first Guest done with meal 11 Thank Guest(s) and invite back Before Guest(s) leaves

4.2. Handling Complaints

At an ENJ restaurant, no dining experience is complete unless the Guest is absolutely satisfied. Empower your staff to do whatever it takes to take care of your Guests.

Happy Guests are the brand’s best assets; unhappy ones can be your biggest liability because unhappy Guests talk. As they retell their stories, their complaint grows and the brand is damaged. It is much easier to prevent a problem than to fix one. The best way to prevent most complaints is to be sure all the tasks performed in your restaurant are done every time with care.

If a Guest comes to you with a problem, concern or complaint, you own that complaint. Take immediate action to make that Guest happy that they chose to eat at your restaurant. It is important to note that every Guest interaction will produce a different outcome, and no particular method will work 100% of the time. However, there are several steps you

Version Number: 1.0 • March 2017 Page 29

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations can take to quickly dissipate Guest anger/frustration and resolve the complaint amicably. Remember: the Guest must always be treated with respect and courtesy.

Successfully handling a Guest complaint is a wonderful opportunity to exceed that Guest’s expectations and improve your standing with them. Doing this right is an investment in your business.

4.2.1. Assess, Acknowledge, Listen, Sincere Apology, Resolve and Entice

Assess – When you approach an upset Guest, take the time to fully assess the situation before jumping to conclusions. It is better to take time to ask questions and fully understand the Guest’s perspective than to start off on the wrong path to solving the problem. If you begin by answering a question he did not ask, the Guest may become more upset.

Acknowledge – Once you feel that you understand the issue, repeat back what you heard from your Guest. This way you can clear up any details before you offer a solution.

Listen – The Guest may be frustrated but until you hear them out, you have no idea why. Only after the Guest has felt like he has said his piece should you attempt to resolve the problem. Sometimes you can tell more about what would satisfy him by paying attention to what he did not say or by his non-verbal cues.

Sincere Apology – Tell the Guest that you are sorry that he is frustrated. This is not necessarily the same as admitting fault or accepting blame for the situation. If the fault is yours, do express that to the Guest. This shows that you are there to help and are interested in his welfare. Without this empathy, your reactions may fuel their disappointment. Understand that most angry Guests are not angry with you personally, but rather with the situation in which they currently find themselves.

Resolve – If you can do exactly what your Guest wants, that is fantastic! If you can't, have another proposal ready that would be a good alternative.

Entice – When a Guest brings forward an issue that helps you better meet the needs of your other Guests, thank him for allowing you to provide better service or a better product in your restaurant.

Version Number: 1.0 • March 2017 Page 30

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

4.2.2. Follow-Up

There are two ways to follow up on a Guest complaint:

1. Rectify the situation 2. Check in with the Guest

Deal immediately and calmly with whatever sparked the complaint. Remove all spoiled food; clean the area or whatever else it takes to fix the situation. If this involves an employee, wait for a break in the Guest flow and the two of you excuse yourself from the line. Go to the office or another private area and discuss the situation.

4.3. Dealing with Difficult Guests

In the section above, we talked about handling problems and assumed the Guest would behave civilly, but that does not always happen. Guests can sometimes be rude, loud, boisterous and disruptive to other Guests and the flow of business. It is important that you manage the behavior quickly and resolve the situation.

Do not fight; remain calm and compassionate. Usually your demeanor will calm an agitated Guest. Often, an upset Guest wants attention, and your calm demeanor will demonstrate that they will not get that kind of attention at your restaurant.

4.4. Dealing with Inebriated Guests

The key to dealing with intoxicated Guests is preparation and awareness. Preparation comes from providing the knowledge and skills to deal with alcohol-related issues. Awareness is being alert to the signs of impending trouble and effectively reacting before the situation escalates. Remain vigilant at all times. As you move about the restaurant, be alert to Guests’ speech and movement. If slurred speech, impaired coordination and disruptive behavior begin, intervene and do what you can to prevent it from escalating.

If someone has had too much to drink and the disruptive person is with friends, it is better not to confront him directly. Enlist his companions to contain his behavior.

Version Number: 1.0 • March 2017 Page 31

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

It may be necessary to refuse a Guest continued alcohol service. This delicate situation should be approached with care. The goal is to contain the situation and not have it escalate to a point where it disrupts the environment and other Guests’ dining experience.

Once a course of action is decided upon, remain respectful yet intent on removing the intoxicated Guest from the restaurant.

• Do not argue; remain calm and polite. • Talk in a low and soothing voice. • Maintain eye contact. • Ask him to step outside, where you can talk privately. • Never touch the Guest. • Make it clear that such behavior is not tolerated at any ENJ restaurant. • Use the problem-solving techniques above. • Ask the Guest to leave. • Arrange alternative transportation if the Guest is trying to drive. Remember, you can bear some legal responsibility for a Guest’s actions when he is over-served in your restaurant. As such, it is in the best interest of the business to ensure that an intoxicated Guest gets home safely. • If these tactics fail, signal an employee to call the police.

4.5. Requests for Information

There are several options at your disposal for answering Guest questions. Feel free to answer all general questions from Guests, including questions about the products, hours of operation, working, fundraising events, etc. If you cannot answer a particular question, take their email or phone number and follow up.

Version Number: 1.0 • March 2017 Page 32

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

4.6. Sensitive Subjects

Regular Guests can become friends over time, and they will expand the opportunities for conversation. This is encouraged, but the conversation must be kept professional while you are representing the brand. Never discuss:

• Specific sales or cost numbers • The competition • Other Guests • Religion • Politics

The ENJ brand represents all of us and will not be associated with any particular faith, religion, political or social agenda, and neither must you. If the conversation drifts that way, smile and either change the subject or withdraw from the conversation.

4.7. Service Animals

Under the Americans with Disabilities Act (ADA,) privately owned businesses that serve the public are prohibited from discriminating against individuals with disabilities. The ADA requires these businesses to allow people with disabilities to bring their service animals onto business premises in whatever areas Guests are generally allowed.

You do not need to see proof that the animal is a licensed service animal. The service animal must be permitted to accompany the individual with a disability to all areas of the restaurant where Guests are normally allowed to go.

Non-service animals and pets are not permitted in the restaurant or on any outside dining. Check your local laws regarding accommodations and policies relating to service animals.

Version Number: 1.0 • March 2017 Page 33

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

5. Processing the Order

5.1. Cash

ENJ restaurants take in a large amount of cash. It is easy for people to make mistakes with cash, or to steal. Though there is no perfect solution, the following suggestions are intended to make your staff accountable and to let them know that you are aware and observant of cash handling procedures in your restaurant. This offers ways to keep employees honest.

Remember that as a franchisee, you are responsible for Service Fees and Advertising Fees on all sales, whether or not you have successfully collected the money. Therefore, it is very important that you carefully monitor the cash in your restaurant.

5.1.1. Cash Handling

It is easy to make mistakes when giving change, and Guests will be quick to complain if their change is incorrect. Counting out the change to the Guest is a good Guest care tool, as well as a sound accounting practice. We recommend that you include a test on making correct change as part of the interview process for all employees. There are “short change artists” who make a practice of confusing cashiers and getting a lot of money before the confusion is reported. When there is a system in place and it is followed, these types of incidents can be minimized. Although some over or short variance on the cash drawer is typical, careful monitoring of cashier performance will help you quickly identify issues.

Recommended cash-handling guidelines:

• Never leave cash unattended for any reason. • Secure cash before handling other tasks. • Ensure all restaurant funds are returned to the safe, then close and lock the safe. • All unused register tills should remain in the safe. • All restaurant funds should be locked in the safe at closing. • Staff should not "borrow" money from restaurant funds, petty cash or deposits for any reason.

Version Number: 1.0 • March 2017 Page 34

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• When making change, leave the bill tendered by the Guest on top of the drawer until the Guest accepts his change. This keeps the Guest from claiming he gave a larger denomination bill. • Accept all bill denominations. • Always give exact change with no rounding up or down

5.2. Credit and Debit Cards

You must accept all major credit and debit cards and are required to use our payment vendor for all your credit and debit card processing.

You must adhere to all laws and regulations regarding credit and debit card handling and the security of all Guest data, including names and account numbers.

The following recommendations are based on best practices within the system:

• Credit card transactions are transmitted electronically to a processor that sends an electronic confirmation or denial of the charge. All the confirmed transactions are guaranteed to be valid and you will receive payment accordingly. • It is your responsibility to ensure that each credit card transaction is completed correctly by your staff. • If a credit or debit card transaction is ever denied at the point of sale, the Guest should be advised discreetly and given the opportunity to make payment with alternative means. A simple, “Do you have another card I could try, as this one was not accepted?” is appropriate. • Your Guests trust you with their credit cards and associated card information, so employees must exercise caution and discretion when handling cards. You are responsible for knowing and complying with all CCPI standards, codes and requirements for credit card safety. • Any unauthorized use of a Guest’s credit card accounts is strictly prohibited. Check your state and local laws for details. • When a credit card is left behind, immediately call the credit card company to report it and then secure the card in your safe. They can reach the holder of the card and alert them to come and retrieve it. We recommend you ask the credit card company how long you should hold the card and how to

Version Number: 1.0 • March 2017 Page 35

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

dispose of it after that time has elapsed. Each card company has its own protocols.

Note: If there is credit card theft or an unrecorded sale, you are still responsible for Service Fees and Advertising Fees on those amounts.

5.3. Gift Cards

Participation in the ENJ gift card program is mandatory and all cards must be processed through our approved vendor. Guests may also purchase gift cards from our public website.

Over $100 billion worth of gift cards are purchased every year in the United States. Gift cards are a very effective way to spread brand awareness, as well as add to your fiscal bottom line. Most consumers will spend 25% more than the face value of the card while redeeming it in an ENJ restaurant. Because gift cards are always paid in full upon purchase, they can yield very high returns.

5.3.1. Gift Card Reordering

We recommend you reorder gift cards before the stock level reaches 100 remaining cards. Reorders can be made through our current vendor, GISI.

5.3.2. Selling Gift Cards

Gift cards are a liability until they are spent. Only when they are fully redeemed are they considered part of sales.

Follow the instructions in the POS manual to process gift cards as a form of payment.

You must stay updated on your state’s laws concerning gift card refund laws and remain in compliance.

5.3.3. Redeeming Gift Cards

Gift cards are redeemed by accessing the pay screen in the POS system and following the instructions in the POS manual. If the card’s balance is

Version Number: 1.0 • March 2017 Page 36

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations not enough to cover the check, the POS will calculate and display the balance owed.

5.3.4. Gift Card Pooling

Gift cards transactions are pooled in a central account each month overseen by our approved second party vendor. The gift card processor looks at the loads (the original amounts assigned to the gift cards) vs. redemptions. If loads are more than redemptions, the difference is debited from your account and credited to the pool account. If redemptions are more than loads, the difference will be debited from the pool account and credited to your accounts.

Our approved vendor helps maintain the pool and the gift card program in compliance with the laws, and maintains the pool.

Version Number: 1.0 • March 2017 Page 37

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

6. Restaurant Operations

In order to provide the absolute best Guest experience, you must adhere to our standard operating procedures. The procedures outlined below are suggestions and best practices that can result in delivering the consistently excellent Guest experience that is synonymous with the ENJ restaurant brand.

Unless specified, these are best practices only. We cannot dictate which of your employees should be assigned each task, but we have made recommendations based on the experiences in the system.

Restaurants are allowed to have lounges, with our prior written approval. All brand standards apply to the lounge and you are required to comply with all Alcohol Beverage Control regulations.

Version Number: 1.0 • March 2017 Page 38

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

7. Working the Floor

Satisfied Guests are not concerned with how you worked behind the scenes to deliver the great service and food they received at your restaurant. Simply, Guests expect a quality experience at an ENJ restaurant.

Being able to work the floor effectively plays a major role in delivering an excellent Guest experience. There are two primary components:

1. The preparation stage 2. The recognition stage

The following checklists/schedules represent the preparation stage. Many details must be addressed in a timely manner on a routine basis in order for the second stage, the recognition stage, to be successful.

7.1. Daily

• Confirm cover shifts • Repeatedly check: • Line • Restrooms • Entrance glass, tile, carpet • Floor, carpet, tile • Product level • Employee dress, behavior, grooming, hygiene • Security • Deliveries, properly stored, secured • Walk-in prep quality, quantity • Service line backups • Cook line backups • Cashier stand backups • Carry out system • Side work assignments • All departments are ready (pre-rush readiness) • Supplies are stocked • Follow through on any delegated assignments

Version Number: 1.0 • March 2017 Page 39

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

7.2. Weekly

• Inventory, order food, beverages to par. • Check floor supply level, stock as needed. • Review equipment operation. • Check CO2 levels.

7.3. Monthly

• Inventory small wares, order to par. • Inspect equipment, maintain or repair as needed. • Review marketing plan, anticipate changes: • Menu • Specials • Promotions • Review projection plan for: • Display changes • Hiring, training • Side work assignments • Management, employee meetings • Holidays • Assess Relief Manager availability. • Inventory uniforms, order to par. • Review linen supply; ensure ample supply. • Review property management issues: • Timing of sprinkler system • Timing of exterior lighting • Carpet, wall, ceiling surfaces • HVAC systems (air, heat, exhaust) • Table/base integrity - fix all tables

7.4. Signals

After successfully completing the preparation stage, you are now ready to move on to the recognition stage.

Working the floor, engaging in “table touching,” is similar to the role of an orchestra conductor. You lead, support and direct the various parts of your restaurant to produce your Guest's satisfaction.

Version Number: 1.0 • March 2017 Page 40

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

There are five parts to our "Ideal Model” - the systems of your restaurant that require your management during a meal period:

1. Guest 2. Product 3. Employee 4. Cleanliness 5. Stock

Each of the five parts should operate in unison when the floor is being managed properly. If you allow one of the parts to slow its pace, the others will do likewise, resulting in poor Guest satisfaction.

To manage or conduct your systems properly, you need to develop your skill in recognizing what needs your attention as you focus on a system. These are what we refer to as signals; the central points of each system in which you must have a high level of awareness.

The key to artfully working the floor lies in your ability to recognize and then read the signals that call out for your attention. Taking pro-active measures to resolve issues will ensure Guest satisfaction. When you simply react to a problem (because you have missed the signal,) you have lost the opportunity to be pro-active. You are then placed in a position where you have to minimize the effect of poor service or poor product quality, rather than avoiding the situation entirely.

The following section identifies the signals for each part of the system, enabling you to: recognize, read and remedy.

7.4.1. Guest Signals

7.4.1.1. Door

• More than one party at the door. • Multiple parties waiting to sit. • Host away from cashier stand.

7.4.1.2. Table

• Three or more tables seated at once.

Version Number: 1.0 • March 2017 Page 41

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Large party seated. • Two or more tables with menus. • Beverages only one-third full. • Entrées served while Guests are on appetizer. • Server involved in lengthy conversation with Guest.

7.4.1.3. Cashier

• More than one party waiting to pay. • Two or more credit card transactions. • Banquet room Guests are paying at cashier stand. • Host involved in lengthy conversation with Guest.

7.4.2. Product Signals

7.4.2.1. Floor

• Entrées left uneaten. • Veggies left uneaten. • Bus trays have product left by Guest. • Beverages not consumed. • Toaster area disorganized. • Salad area disorganized. • Fountain area disorganized. • Service area backups gone.

7.4.2.2. Line

• Steam table inserts nearly empty. • No hashbrowns cooking -- tickets in window. • Fryers not skimmed. • Frozen food items thawed. • Absence of backup products on busy shift. • Fryer oil level low. • Chicken, steaks thawing at room temperature. • Hashbrowns frozen/partially thawed. • Batter too thick. • Absence of soup back up on busy day.

Version Number: 1.0 • March 2017 Page 42

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

7.4.2.3. Wheel

• New inside wheel person. • Grillman on fryer/broiler side. • Wheel has more than seven checks. • Tickets in wheel, but food not up. • Servers waiting for food. • Large party ticket in wheel. • Orders up in window.

7.4.3. Employee Signals

7.4.3.1. Behavior

• As read when you arrive. • During the shift. • Toward the end of shift.

7.4.3.2. Appearance

• Reports to work in uniform. • Mid-shift uniform - is it presentable? • Overly tired, sluggish. • Grooming/hygiene problems.

7.4.3.3. Stations Assignment

• Cooks in area of expertise. • Dishwasher not out front as a bus person. • New server on busy station.

7.4.4. Cleanliness Signals

7.4.4.1. Exterior, Entrance, Restrooms

• High wind, rain outside, snow, or freezing rain. • Heavy traffic of Guests.

Version Number: 1.0 • March 2017 Page 43

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

7.4.4.2. Service Area

• Stainless counters soiled. • Ladles messy at handles. • Butter scraper soiled. • Condiment area soiled. • Milkshake area soiled. • Employees working too quickly.

7.4.4.3. Floor

• Bus tray area soiled. • Service line soiled. • Bus persons wiping food off tables onto carpet. • Bus persons not wiping chairs or booth seats. • Food or beverage spill. • Windows dirty.

7.4.5. Supply Signals

7.4.5.1. Floor

• Service line china levels. • Service line glass/cup levels. • Service fine silver levels.

7.4.5.2. Bus Tray

• Majority are empty. • Majority are full. • Silver mixed with china. • China and glass are mixed. • Type and quantity of food left by Guest.

7.4.5.3. Dish Room

• Silver soak not in use. • Silver bunched too tightly when cleaned. • Supply tube above soap line. • Sanitizer pump not working. • No clean supplies ready to be stocked. • Full bus trays stacked up.

Version Number: 1.0 • March 2017 Page 44

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Dish racks jammed after leaving dish machine. • Floor heavily soiled. • Garbage cans overflowing. • Pot and pan sink heaped with dirty pans. • Dish and insert rack disorganized.

When you recognize a signal, read the situation well and direct your staff (or take action yourself) to eliminate that signal.

The following are methods that you can employ. Choose the one that best fits your current situation. Always check back later to ensure that the signal is gone:

• Direct employee to address weak area • Direct crew to address weak area • Provide direct employee with your assistance • Provide individual employee with help from others • Bring out more stock

Version Number: 1.0 • March 2017 Page 45

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

8. The Egg N’ Joe Restaurant Menu

We have created a wide range of menu options for breakfast, lunch and dinner that are sure to delight!

You must offer all the menu items that we require, and only those menu items, including categorized meals such as Lighter Fare and Signature items.

If you offer your Guests the option to order to-go items from your menu, these items must also meet all our menu standards and requirements.

Our Core Menu is subject to change and can be found on our support site.

8.1. Recipes

It is important that each Guest have the same experience of flavors and tastes when they eat at your restaurant. You must follow each step-by step recipe precisely to achieve consistency and to help you control inventory. You cannot deviate from the formulas, recipes or specifications of materials and ingredients of food in those recipes without our prior written permission.

Recipes can be found on the support site.

Version Number: 1.0 • March 2017 Page 46

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

8.2. Food Quality

Our brand commitment is to quality. Quality of ingredients used in the meals created at each ENJ restaurant, as well as the service provided to Guests.

Refer to our Quality Assurance Master Checklist on the support site for standards on maintaining the highest quality food products in your restaurant.

8.2.1. Steam Table

The steam table is used to keep your gravies, sauces, and a few other high-use items between 145° and 170° F.

• Never bring product to temperature with this piece of equipment - it is only for holding. • Always keep the water level so that it covers the bottom of the inserts so that they almost float.

Version Number: 1.0 • March 2017 Page 47

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Once the water is hot enough, always turn the temperature dial in the range of 4.5 to 5.0. NEVER turn up to "high" and keep it there. • During non-peak times, put lids on all inserts. • Keep the steam tabletop edges wiped off throughout the shift.

8.2.2. Line Check

At least twice per day, all equipment must be inspected to check: full working order, proper temperatures, meets food quality, sanitation and food safety standards. Notations must be made of any issues (broken equipment, improper holding, food quality issues, wrong sanitation levels, etc.) and issues must be resolved as soon as possible. We recommend retaining completed line checks for three rolling months in case of claims of food borne illness and/or Health Department questions.

The Line Check Form is available on the support site.

Version Number: 1.0 • March 2017 Page 48

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

8.2.3. Line Check Troubleshooting

The Line Check Troubleshooting Form is available on the support site.

8.2.4. Portioning Control

To ensure consistency among all ENJ restaurants, portion sizes must be to our recipe specifications. This is the most effective way to ensure consistent and specified portioning devices (ladles, measuring cups, etc.)

During the Quality Assurance inspection, the Home Office representative will examine the portioning devices currently in use at your restaurant and will measure the products to recipe specifications.

Version Number: 1.0 • March 2017 Page 49

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

The Portioning Device List is available on the support site.

8.3. Banquets

Best practice only.

The General Manager (or a manager authorized by the General Manager) should be the only staff members authorized to book a banquet. If a Guest calls to book a banquet and the managers are unavailable, thank the Guest for calling, take their number and let them know that the Banquet Manager will call them to make arrangements.

If the event is for less than 15 people or if the Guest does not want to have full meals, the reservation can be taken without booking the banquet room and it can be categorized as a “non-banquet” function, not requiring you to bring in additional staff.

Version Number: 1.0 • March 2017 Page 50

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

8.4. Kitchen Stations

There are several “stations” in a kitchen. Each station has a separate purpose. Below are best practices for the priorities and duties for each station. Keep in mind that during non-peak times, one person may work in multiple stations.

8.4.1. Pancake Station

The breakfast cook has specific priorities in addition to his overall cooking duties.

• Priority #1: Prepare all recipes in a timely manner using the ENJ Recipe Manual, creating the highest quality food obtainable, cost effectively and according to specifications. • Priority #2: Prepare timely plate set-ups for other stations in a quality conscious, cost-effective manner, in accordance with recipe specifications. • Priority #3: Prepare any recipe as directed by the wheel cook or printed ticket orders in a cost-effective and timely manner in accordance with recipe specifications.

Duties

• All pancakes and crepes, including any toppings. • All hash browns. • All waffles. • The grill must be kept clean and organized at all times. • The workstation must be stocked adequately for business. • The pancake station may often also serve as the wheel station.

8.4.2. Egg Station

The egg cook has specific priorities in addition to his overall cooking duties:

• Priority #1: Prepare all recipes in a timely manner using the ENJ Recipe Manual, creating the highest quality food obtainable, cost effectively and according to specifications.

Version Number: 1.0 • March 2017 Page 51

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Priority #2: Prepare timely plate set-ups for other stations in a quality conscious, cost-effective manner, in accordance with recipe specifications. • Priority #3: Prepare any recipe as directed by the wheel cook in a cost-effective and timely manner in accordance with recipe specifications.

Duties

• All egg orders, including sides and providing the other stations with any cooked eggs or meats that are needed to complete their recipes. • Pot of water on a burner for poaching eggs should be held at a simmer, not a boil as eggs are poached in simmering water (190° F.) One tablespoon of vinegar for each gallon of water will help keep egg whites together during poaching. • Change poaching water regularly. • Basting lid - stored on shelf behind grill. Never use a lid without a handle as it may cause you to burn yourself. • The grill must be kept clean and organized at all times. • The workstation must be stocked adequately for business. • All grilled breakfast meats (cook on groove grill or grill): • Bacon • Breakfast ham • Sausage • Drop chicken fried steak into fryer.

8.4.3. Lunch Station

The lunch station cook has specific priorities in addition to their overall cooking duties:

• Priority #1: Prepare all recipes in a timely manner using the ENJ Recipe Manual, creating the highest quality food obtainable, cost effectively and according to specifications. • Priority #2: Prepare timely plate set-ups for other stations in a quality conscious, cost-effective manner, in accordance with recipe specifications. • Priority #3: Prepare any recipe as directed by the wheel cook in a cost-effective and timely manner in accordance with recipe specifications.

Version Number: 1.0 • March 2017 Page 52

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Duties

All grilled meats:

• Hamburgers: • Monitor your beef patties closely; it is easy to overcook them. • Only turn once. • Never press on burger with meat weight or spatula during cooking process. • Fish, chicken breasts, etc. • All grilled or melted sandwiches, e.g. patty melts and burgers. • For all sautéed items: • KEEP YOUR FLAMES AT NO MORE THAN 1/2" OR MEDIUM—HIGH FOR ELECTRIC BURNERS. • Note: Fries must be cooked to order, never sandbag. Keep fries frozen prior to cooking.

8.4.4. Wheel Cook

The wheel cook has specific priorities in addition to their overall cook duties:

• Priority #1: Coordinating and controlling every order to ensure the kitchen runs smoothly, every order is produced in a quality manner and is complete when the server is called to pick up the order. • Priority #2: Ensure the servers pick up food within a maximum of one minute from being called “on the rail.” • Priority #3: Prepare all of the recipes cost effectively, in a timely manner and according to specification. • Priority #4: Be the sole communication point with all dining room staff, to include re-orders, changes, and handling complaints from the servers and the Guests.

Duties

The wheel cook is the lead cook for the shift. They must have a working knowledge of procedures, plate presentations, and time required for preparation of all products on the line. The wheel calls out orders to the different stations and is the liaison between the kitchen team and the

Version Number: 1.0 • March 2017 Page 53

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

servers. All communication goes though the wheel. This reduces the amount of conversation and thus reduces ticket times.

8.5. Equipment

8.5.1. Proper Use of Equipment – Breakfast Cook

There are several pieces of equipment on the breakfast cook's line.

Waffle Bakers

• Keep the lid open when not in use. • Do not use non-stick spray on grids in between cooking each waffle. • For best results, use a daily maintenance program.

Pancake Dispenser

• Use: • Use the setting that produces 5” pancakes. Settings may vary. • Hold the dispenser in a vertical position approximately 2-3" above the grill in order to produce round pancakes with uniform edges.. • Care: • Keep the batter-filled dispenser refrigerated except during peak breakfast periods. • During peak breakfast periods, keep dispenser upright on a flat surface to prevent damage and spillage. • Cleaning: • Never send through the dish machine. • Hand wash daily. • Dis-assemble gently, clean, and re-assemble immediately.

Microwave Oven

• Use: • To reheat product. • Bring previously prepared product up to temperature (165° F.) • Care: • Always treat this machine with care; it is an expensive piece of equipment.

Version Number: 1.0 • March 2017 Page 54

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• NEVER PUT METAL IN THE OVEN. • Always close the door gently - never slam. This is the major cause of loss of use and damage. • Any problems should be reported to the manager immediately. • Cleaning: • Open the oven door. • Remove the plastic shield (if present) covering the inside top of the oven. • Hand wash the plastic shield. • Using a clean cloth and the appropriate solution (refer to your Safety Data Sheet [SDS],) wipe the interior of the oven, especially the inside top and including the inside of the door. • Wipe the exterior of the oven, including the front, sides, back and top. Pay particular attention to the inside of the handle. • Re-install the newly-washed plastic shield in the oven.

Steam Tables

• Use: • Keeping gravies, sauces, and a few other high-use items between 145 and 170° F. • Never heat product to temperature with this piece of equipment, it is only for holding. • Care: • It is extremely important to keep enough water in the steam table. The water level should be covering the bottom inch of the inserts when filled with product. Inserts will float when empty. • Continually monitor temperature of product to ensure range of between 145 and 170° F. • During non-peak times, put lids on all inserts. • Keep the steam tabletop edges wiped off throughout the shift. • Daily cleaning: • Turn off the steam table at the dial. • Remove the inserts and place product in the appropriate container for cooling and storage in the walk-in (4" or less in height.) • Place the inserts and adapter bars in the dish tank. • Remove the water in the bottom of the steam table well and wipe out thoroughly with a clean cloth and sanitizing solution (refer to SDS.)

Version Number: 1.0 • March 2017 Page 55

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Cold Table

• Use: • An easily accessible storage area for high-use cold products. • It is imperative that all product in this area remain at a refrigerated temperature of 41° F or below. • Care: • Monitor the product in this area constantly to ensure proper temperature. An accurate thermometer must be in place at all times. • Keep wiped down throughout the shift. • Whenever restocking product, change inserts and put all old product in last- using the "First In/First Out" method (FIFO.) • During non-peak times, always keep the covers over all inserts and lower hinged cover. • If you note any problems with this equipment, notify the manager immediately. • Daily cleaning: • Remove inserts one at a time and place product in fresh inserts, using the FIFO method. • Give all adapter bars and inserts to the dishwasher. • Wipe down all stainless with a sanitizing solution and a clean towel. • Replace support bars and inserts of product and cover with the hinged cold tabletops.

Refrigerated Reach-Ins/Walk-Ins

• Use: • Storage for non-high-use refrigerated product. • Back-up for high-use product in the cold table. • Care: • Never leave door open while not in use. • Always maintain pars so that there is enough for business demands but not so much as to overload the equipment nor provide opportunity for waste. • Keep wiped down throughout the shift. • Keep all product covered and labeled. • Monitor the temperature periodically to maintain the proper environment and protect against bacterial growth. • An accurate thermometer must be in place at all times.

Version Number: 1.0 • March 2017 Page 56

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Report any problems to the manager immediately. • Daily cleaning: • Remove all product to a sheet pan, or move to the side, maintaining its position so that oldest product is in front. • Clean all shelves and wipe down all walls. • Wipe down all sides of the doors and handles, clean and sanitize gaskets. • Clean drip pans and drain hole to ensure free drainage. • Replace all shelves and product, maintaining position to keep oldest product in the front.

Six-Foot Grill

• Use: • French toast, crepes, pancakes and hashbrowns. • All grilled sandwiches. • Chicken and fish. • Care: • Always keep surface temperature between 350 and 375° F. • Keep wiped off. • Scrape after each use and periodically clean during shift • Use space efficiently. • Daily cleaning: • With grill-use oven mitts, use a grill scraper and dough cutter to remove all residue. Be careful not to splash grease. • Apply the grill screen or grill brick to the grill's surface working in a circular motion until the entire grill has been worked. • Wipe damp grill towel over surface to remove remaining debris. • Re-season grill with a light coating of oil. • Wipe down backsplash.

Toasters – Pop-up (typically placed in server aisle)

• Use: • Used during non-peak times to conserve energy and reduce the buildup of heat on the line. • Used for all non-grilled toast. • Care: • Keep wiped off during shift.

Version Number: 1.0 • March 2017 Page 57

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Never put anything other than bread products in the openings unless the unit is unplugged. • Daily cleaning: • Unplug the toaster. • Empty the crumb tray and wipe clean. • Turn the toaster upside down and gently shake out remaining crumbs. • Set toaster aside and clean surrounding area with a sanitizing solution. • Wipe clean the outside of toaster.

Toasters – Rotary

• Use: • The rotary toaster is used during peak times to facilitate the preparation of large amounts of toast. • Care: • This toaster produces a lot of heat and uses a lot of energy, so it must be shut off during non-peak times. • Keep wiped down throughout shift. • Daily cleaning: • Unplug the toaster. • Empty the crumb tray and wipe clean. • Reach into bottom of toaster and wipe out any remaining crumbs. • Wipe clean the outside of toaster.

Hand Sink

• Use: • The hand sink is used for washing hands only. • No other objects should be washed in this area. • Care: • Keep this area wiped down throughout shift. • Restock paper towels and hand soap at shift's end, or when product runs low. • Daily cleaning: • Using a damp cloth and cleanser, scrub entire sink, fixtures, and pipes underneath. • Using a clean cloth, polish faucet head. • Using a clean cloth, polish the towel and soap dispensers.

Version Number: 1.0 • March 2017 Page 58

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

8.5.2. Proper Use of Equipment – Lunch Station Cook

There are several pieces of equipment on the lunch station cook’s line.

Refrigerated Drawers

• Use: • Storage of high-used product on the line. • Care: • Keep these drawers clean and stocked at all times throughout your shift. Include base of drawer, lip around edge-facing· gasket drawers and gasket. • Whenever open while other workers are in the area, say, "open drawer" so that they do not trip on them and fall onto the grills or into the fryers. • Never slam or abuse the drawer. • Keep stocked to par to keep an adequate supply of product on hand for the business volumes and to avoid waste. • An accurate thermometer must be in place at all times. • Daily cleaning: • Remove all containers. • Remove drawers. • Using a sanitizing solution, wipe out all surfaces to include the floors, walls, ceiling, door guides, and entry portal. • Using a sanitizing solution, thoroughly wipe down all surfaces of the drawer, including the gaskets, and replace. • Replace all product after changing containers using the FIFO method.

Reach-In Freezer/Walk-In Freezer

• Use: • Freezer storage of highly perishable high-use products. • Care: • Keep this unit clean at all times. • Never leave door open or ajar. • When other workers are in the area, say "door open" so that they don’t trip over the door. • Never slam or abuse the door. • An accurate thermometer must be in place whenever the freezer is in operation.

Version Number: 1.0 • March 2017 Page 59

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Cleaning – weekly: • Place all food items in the walk-in freezer (reach-in freezer cleaning only). • Remove the shelf and clean with sanitizing solution. • Turn the dial to defrost and close the door, or turn off at circuit breaker. • Clean all interior surfaces, door, and door gaskets with sanitizing solution. • Replace shelf and turn dial back to normal, or turn back on at circuit breaker. • When the freezer reaches the proper temperature, replace the food.

Heat Lamp

• Use: • The heat lamp is used as a momentary staging area for completed entrees. • No item should remain under heat lamp for more than one minute. • Care: • Turn off lamp during non-peak times to save energy. • Daily cleaning: • Turn off at switch. • Wipe exterior of lamp clean with a mild detergent and wipe with sanitizing solution and a green scrub.

Deep Fryers

• Use: • Deep-frying. • There are fryers for specific items such as French fries, onion rings and seafood. • Seafood should be fried in separate well from other products. • Care: • Always keep at 350° F. • Turn on only those fryers needed for the business flow. • Turn off fryers when not needed. • Always lift the fryer basket out of the oil to place product into it so that the oil will not splash onto you. Then lower the basket into the oil to cook.

Version Number: 1.0 • March 2017 Page 60

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Never load the basket more than half way or the product will take a lot longer to cook. • When the product is finished cooking, always lift the basket and let the excess oil drain from the food. • Use a stainless streel bowl or tray when the food has finished draining. • Use the tongs when handling the hot food - it is safer in terms of cleanliness and safety. • Be aware of the condition of the oil in the fryers. • Cleaning: • WEAR ALL SAFETY EQUIPMENT PROVIDED (gloves, apron, goggles.) • Strain fryer oil once a day • After day shift • Procedures: • Turn off fryers at switch. Allow to cool for 20 minutes. • Swing up heating element and hook into up position (if applicable.) • Position large stock pot below fryer and place china cap with a fryer-straining filter onto the top of the stock pot. • Pour the oil through the filtered china cap and into the stock pot. • Place old oil into the grease-recycling dump in the dumpster compound. • Fill fryer well with water and chemical (if recommended by manufacturer,) boil, drain and allow to dry. • Scrub down fryer table with de-greaser, tops and front, and remove all vestiges of grease or oil from area. Wipe off with sanitizing solution. • Repeat process with other fryer(s) and place freshly filtered oil back in fryer and turn on (unless new oil is needed). • If new oil is needed (dark, foamy, smoking, discolored,) rotate oil from the freshest end to the oldest end and out. • Place fresh oil in remaining fryer.

Version Number: 1.0 • March 2017 Page 61

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

9. Restaurant Review

9.1. Quality Inspections

We will periodically inspect your restaurant to ensure it is meeting our quality standards. On an annual basis (or more frequently if your restaurant has a low score or in any way fails our inspection standards,) we will conduct two inspections:

1. Quality, Hospitality, Facilities (QHF) standards review conducted by our Director of Franchise Operations. 2. The Quality Assurance (QA) review conducted by our Head Chef.

The QHF Master and QA Master forms used in these inspections can be found on the support site.

9.2. Other Feedback

If we receive feedback through our public website or through other online channels such as Yelp or Trip Advisor, we will forward this information to you for your review.

Version Number: 1.0 • March 2017 Page 62

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

10. Suggested Register and Banking Procedures

Anytime a team member is handling cash, whether opening and closing the register or handling the banking, he can be placed in a vulnerable position. To ensure everyone’s safety and accurate handling of cash, we suggest the following best practices:

• The opening register count should be done at least 30 minutes before the scheduled opening hour. • Assume someone who wants the cash is watching you and act accordingly. For the closing count, we recommend following the 10-minute rule: start closing procedures and keep one register open for 10 minutes to assist the last Guests. • Extra care must be taken if a drawer is being counted and closed during operating hours. The closing reports should be run and the drawer taken in the back to be counted, out of sight of the Guests and passers-by. We make this recommendation because: • Though we all know businesses sell things, the Guests don’t need to be reminded of how much you take in • Guests may interrupt the count, resulting in inaccuracies • Thieves can watch the count and know the amount of cash on hand • Keep cash in register at a minimum. Perform cash drops in office safe when necessary. • At the end of the day after reconciling, lock away register drawers and cash in office and keep the now-empty cash drawer in an open position to show that it contains no cash. • We recommend that you routinely audit the Employee Balance for irregular activity such as discounts, shortages/overages or excessive cancels and voids.

10.1.1. Banking Tips to Avoid Robbery

The list below contains general guidelines to follow to ensure safety while making bank deposits. These are presented as best practices only. For more information regarding crime prevention and safety, see the Risk Management section in this manual.

Version Number: 1.0 • March 2017 Page 63

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Secure the services of an armored car service. • If you make deposits yourself: • Do not tell employees that you are leaving to make a bank deposit within earshot of any Guests. • Do not wear any clothing that displays an ENJ logo during your trip to the bank. • Transport the deposit in a non-descript bag or carrier. • Do not go to the bank at the same time every day. Vary your routine. • Do not park in the same parking spot every time you deposit money.

Version Number: 1.0 • March 2017 Page 64

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

11. Cleaning and Sanitizing

It is extremely important to the Guest’s comfort and safety that your restaurant be thoroughly cleaned and maintained every day. ENJ standard is “clean like new.”

Your restaurant must be operated and maintained at all times in compliance with all applicable health and sanitary standards prescribed by governmental authority. You must also comply with any standards that we prescribe. Often, our standard of cleanliness is higher than health department standards. If your restaurant is subject to any sanitary or health inspection by any governmental authorities under which it may be rated in one or more than one classification, it must be maintained and operated so as to be rated in the highest available health and sanitary classification. In the event you fail to be rated in the highest classification or receive any notice that you are not in compliance with all applicable health and sanitary standards, you must immediately notify us of such failure or non-compliance.

11.1. Chemicals

Not all chemicals and cleaners are safe to use near food preparation and service areas.

All the chemicals used in your restaurant are regulated and you must have a Safety Data Sheet (SDS) on hand for each of them. Your chemical provider will supply the SDS for each product.

To be certain that you are all compliant with regulations, we require each restaurant use only state-regulated cleaning chemicals.

11.2. Daily Cleaning

There are regularly scheduled activities that must be done in order to maintain the equipment and fixtures within your restaurant. You are responsible for adhering to and protecting our standards by projecting a clean and healthy environment to your Guests. In this section, we will outline the cleaning techniques, supplies and equipment we require you to use for your restaurant.

Version Number: 1.0 • March 2017 Page 65

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

11.2.1. What Does Clean Mean?

Clean equipment prevents bacteria from growing and being passed on to other areas or to the food. Clean means:

• There is no visible debris on any counter or equipment surface. • No crumbs, fruit, mixes, grease, dirt or stains. • There is no debris on the floor and surfaces are not sticky.

11.2.2. What Does Sanitary Mean?

Sanitizer solution kills bacteria. Sanitary means free of harmful levels of contamination, such as disease-causing bacteria.

• Use sanitizer solutions in buckets to help sanitize surfaces, and in the third compartment of the back sink to sanitize utensils and equipment after washing them. • Clean surfaces with approved multi-surface cleaning solution at least once per day. • Continue to wipe surfaces throughout the day with clean sanitized towels to help keep the surfaces free of harmful bacteria.

Version Number: 1.0 • March 2017 Page 66

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12. General and Scheduled Maintenance

12.1. Equipment

All equipment in your restaurant must be properly maintained to manufacturer and Health Department standards, must be “clean like new” and in good working order.

The following is some of the equipment typically found in an ENJ restaurant as well as recommended maintenance schedules, general maintenance tips and troubleshooting tips for common issues. Refer to the manufacturer’s instructions for cleaning and maintenance recommendations, and follow manufacturer instructions whenever they differ from the information below.

12.1.1. Refrigerators and Freezers

• Clean fan covers daily. • Clean the condensers on all refrigerators and freezers at least once a month. • Regularly check refrigerator/freezer temperatures. The refrigerator/walk-in temperature should remain between 38 to 41º F and freezers should be set between 10 to 0º F. If temperatures are not accurate, clean condensers. If that does not fix the problem, call your service technician immediately. • Walk-In Cooler and Walk-In Freezer – quarterly: • Condensing unit - check Freon charge, check vibration mounts for wear, clean condenser • CO2 tank - remove lint dust, etc. • Evaporator coil - check drain for sludge build up • Coil – check for ice formation, dirt, etc. • Control devices - check for correct calibration • Clean fan cover as needed • Walk-In Freezer only – quarterly: • Completely defrost system • Check mullion heaters in the door, and heat cable on drain line

Version Number: 1.0 • March 2017 Page 67

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12.1.2. Fryers

• Check calibration daily. • Clean and boil out with fryer cleaner weekly, or as needed. • Filter oil daily.

12.1.3. Oven, Stove Tops and Grills

• Maintain working thermometers and check temperatures daily. • Check motor and calibration for convection oven monthly. • Check calibrations and clean range monthly. • Check grill-top calibration with thermometer monthly, or if cook times start differing from normal.

12.1.4. Slicer

• Check for sharpness and cutting blade nicks. • Check shaft for trueness. • Check safety guard for proper functioning. • Check base for steady support. • Check wiring for tightness and cord cuts. • Always clean and sanitize.

12.1.5. Scales

• Check condition and accuracy. • Keep clean and serviced.

12.1.6. Exhaust Hoods and Filters

• Have hoods cleaned professionally quarterly. • Replace filters as needed.

12.1.7. Ice Machine

• Clean bin and descale quarterly. • Change filters quarterly or as needed.

Version Number: 1.0 • March 2017 Page 68

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12.1.8. Sinks and Faucets

• Inspect faucets and pre-rinse units for loose fittings at least monthly. • Replace worn washers as needed, keep repair kit on hand.

12.1.9. Dishwasher

• Machine is clean internally and externally. • All drains free and operable. • All internal baffles in place. • Are there any undue vibrations or noises in mechanism? • Water piping is secure. • Any leaking in piping or valves. • Temperature on wash cycle and rinse cycle correct. • All wash cycles working properly and chemicals dispensing correctly. • Exhaust system is working properly. • Spray nozzles clean and operable. • Magnets are in use on the garbage can and the hole where the trash goes in. • Are there slide bars over the sink area for dish rack? • Ensure the booster turned on daily for high-temp machines. • Ensure daily that sanitation levels are at correct ppm for low- temp machines • Ensure garbage disposal has been cleaned and maintained. • Ensure the temperature of the wash and rinse cycles are being monitored. • Only use proper scrapers - do not use metal scrapers on dishes, only pots and pans.

12.1.10. Grease Traps/Interceptors

• Check for vibrations. • Check for leaky water valves. • Check for leaky housing gaskets. • Check for loose wiring. • Ensure traps and interceptors are professionally cleaned regularly.

Version Number: 1.0 • March 2017 Page 69

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12.1.11. Wine/Beer Taps (If applicable)

• During the day, the taps, handles, drain covers and tap platforms must be wiped with a soft cloth to maintain cleanliness. • All spills must be cleaned immediately. • Drain covers, tap platforms and handles must be thoroughly washed and dried, and hot water must be poured down each drain. • At the end of each day, the wine and beer taps should be thoroughly wiped with a soft cloth and wrapped in plastic wrap or sealed with an appropriate plug to prevent build up and pest infestation.

12.1.12. Coffee Brewers

• Units should be clean and level. • All parts intact. • Wiring should be secured and all controls covered. • Clean the sprayer above the filter daily and once a week with urn cleaner. • Check brewing temperatures and levels regularly.

Other equipment typically found in an ENJ restaurant includes, but may not be limited to:

• Heat lamps • Star burner • Microwaves • Steam table • Waffle irons • Pancake guns • Baked potato warmers • German ovens • Scales • Toasters • Thermometers • Mixers • Slicer • Food processor • Chopper/dicer

Version Number: 1.0 • March 2017 Page 70

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12.2. Manager’s Role in Reducing Maintenance Costs

The following best practices are a guide only and are not intended to be all inclusive of the maintenance program your restaurant may need.

The number of costly repairs can be reduced or even avoided by performing regularly scheduled preventative maintenance. Improved operating efficiency and reduced maintenance expense can lead to increased profits.

• We recommend that you keep a Maintenance Log. • Keeping equipment clean allows equipment to function efficiently and permits easier observation of wear points. • Ensuring your personnel are trained in the proper use of equipment will directly reduce maintenance expense. Careless use and abuse of equipment should not be tolerated. • Excessive or repetitive service calls usually indicates either poor maintenance, improper equipment use, or abuse of equipment. • Ensure your contractor(s) shares in the responsibility for controlling maintenance costs in your restaurant. If the quality of work is not up to standard and maintenance/repair costs are excessive, quickly work to resolve these issues.

Equipment – General Maintenance

• Keep equipment clean at all times: front, rear, sides, top and bottom. • Tighten loose fasteners. • Clean strainers, screens and traps. • Clean condenser coils on top-mounted compressor unit on reach-in coolers. • Thoroughly clean vent stacks on ovens and fryers. • Tighten all control knobs on equipment for ON-OFF temperature settings, defrost, etc. • Check to make certain no equipment legs or castors are resting on power cords. • Check for cuts in power cords. • Ensure smoke alarms are in working order.

Version Number: 1.0 • March 2017 Page 71

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Signs

• Signs are properly lit and in full working order. • Fire Extinguishers properly signed and at required height for handicapped Guests • Proper signage posted on/near the doors. • All applicable state/federal-mandated signs and notices are posted.

Sprinkler System and Fire Suppression

Maintenance should be performed by your outside contractor bi- annually.

Backflow Assemblies

• Must be tested by a professional annually. • Must be tested by a professional if moved or repaired.

Telephone System

Maintenance should be performed by your outside contractor.

Ventilator - Roof

• Exhaust hoods and MUA vents should be clean. • Exhaust filters should be clean.

Carpet

• Clean spills immediately to avoid staining. • Vacuum daily. • Spot clean regularly. • Clean high-traffic areas monthly. • Have whole floor cleaned once a quarter.

Version Number: 1.0 • March 2017 Page 72

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Manual Doors

• Check door sweeps for gaps, replace as needed. • Check hinges, bucks, knobs and closures are in proper condition. • Ensure panic hardware is operable. • Lock sets in good condition. • Ensure doors are not bent or damaged. • Condition of paint or finish is satisfactory. • Check windows are not cracked or broken. • Check leaks around doors.

Hot Water Heater Room (if applicable)

• Room should be clean and not used as a storeroom. • Check regularly for leaking pipes, valves, and fittings. • All control boxes should be closed and secured. • Check for leaks in fire pumps, seals, piping and valves. • All gauges and thermometers are operable. • Any irregular vibrations noted in boiler burner, pumps or flue. • Any paint blistering on any areas adjacent to piping or flues or excessive temperature or corrosion. • Check flue for smoke when running; stack should be clean. • Is there proper ventilation on the door leading to the room to allow airflow? • Check flue for corrosion and rotting. • Check thermometers for proper temperature.

Controls - Heating and Ventilating

• Covers should be on all thermostats. • Thermostats and controls are being adjusted or set by authorized personnel only. • Thermostats should be mounted securely to walls. • Control diagrams and manuals should remain on premises. • Check thermostat and batteries monthly. • Set temperatures for seasonal variations.

Version Number: 1.0 • March 2017 Page 73

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Roof

• Do not allow materials of any kind to be stored on the roof. • Inspect the roof for holes and tears. • Inspect all roof flashing around vent stacks, ducts, fans, air conditioning and heating units for deterioration. • Have metal roofs power washed annually. • Make certain all roof-mounted equipment is secured. • Inspect gravel stops and gutters for proper fastening. • Check to make certain all drains from air conditioning draw pans and exhaust fan drains discharge on pads or are piped directly to roof drains.

Roof-Mounted Air Conditioning Equipment

• Ensure area is not being used for storage. • Units are securely mounted on the roof structures. • All flashings and curbing secured. • Units free from excessive vibration. • Check driving belts on the pulleys. • Dampers free and operable. • Inlet screens clean and free of debris. • Filters clean and in place. • Inspection plates and covers properly secured. • Wiring, power and control secured and closed. • All units being lubricated.

Drains - Roof and Parking Lot

• Drain covers are present on all parking lot storm drains. • Roof and parking lot drains free of leaves, stones, paper, plastics, cans, debris, etc. • Are there any objectionable odors coming from parking lot or roof drains. • All clean outs in paving properly covered. • Check for broken pipes or clogged drains. • Gutters and downspouts should be maintained and cleaned every three months.

Version Number: 1.0 • March 2017 Page 74

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

12.3. Maintenance Troubleshooting

Best practice only.

To minimize unnecessary service calls (especially calls made outside of normal business hours that are charged at a premium rate,) you can perform some basic troubleshooting before calling your contractor and service providers.

Electrical

• Is the power cord properly plugged in? • Is the plug in a twist? • Is the power disconnect switch in the ON position? • Have circuit breakers been knocked out by an electrical storm or turned off causing power interruption, and if so have they been re-set? • Have all reset buttons on motors with built-in overloads been depressed? • Are there damaged controls or wet conditions that have drowned out electrical components? • Have all safety devices been reset to permit restart of device? • Are all parts intact - driving belts on - shafts bent bearings dry and tied up? • Is equipment jammed by dirt or foreign material preventing electrical start? • Are housings on fans jamming fan blades stalling motors? • Check that toasters and coffee machines are plugged in properly and in the right voltage. • Coffee machines and other appliances have a reset switch, have you checked them? • Have you checked the dimmer switches on the lights to see they have not been turned off?

Air Conditioning System

• Are thermostats set for cooling mode? • Check for all power switches in the ON position for air conditioning units. • Check for belts broken on roof top drives to compressors. • Check for coil leaks or piping leaks causing loss of Freon. • Check for plugged filters or material blocking air intake dampers.

Version Number: 1.0 • March 2017 Page 75

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

• Check motors for odor of burned insulation or overheating. • Make sure tube for airflow is not plugged, crinkled, bent or broken.

12.4. Energy Savings

Best practice only.

Opening

• Turn on only those lights that are needed until the restaurant is open. • Turn on equipment only as needed. Do not fire up all the equipment at once. • With electric cooking equipment, wait several minutes between turning on each piece of equipment. Energy costs go up when the electrical demand peaks.

Operating Hours

• Use day/night settings on HVAC thermostat. • Be aware of room temperatures. • Do not heat/cool banquet rooms that are not in use. • Keep HVAC fans on "auto" instead of "on" to ensure air balance. • Keep filters clean. • Keep refrigerator, freezer, cold drawers, and heated drawers closed. • Do not turn equipment on until it is needed. • Turn equipment, particularly ovens, off when not needed. • Keep burners off when not in use. • Turn off exterior lights during the day. Keep the signage and neon on.

Closing

• Turn off fireplaces after last Guest leaves. • Shut down cooking equipment as soon as possible. • At shift change, make sure that prep equipment and unneeded cooking equipment is turned off. • Turn off unnecessary lights after closing.

Version Number: 1.0 • March 2017 Page 76

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

13. Problem Solving

The following list identifies problems that can be obstacles towards delivering excellent service to your Guests. Solutions are listed in a priority fashion; the first solution listed is generally the most effective. However, there are no perfect solutions to problems affecting Guest satisfaction. Each incident requires a hands-on evaluation and a personally crafted solution to fit the circumstances.

Problem Solutions Short a server • Cover shift (call in personnel) • Expand adjacent stations • Control seating rate -- keep entire floor open • Close a station farthest from Guest view • Manager can take orders as needed • Utilize personnel (bartender) 86 food (SOLD OUT) • Sub a similar or better product at lower cost • Expedite food personally (Manager on duty) • Buy Guests a complimentary dessert Pre-check or cash register is down • Attempt to quickly perform a fix • Put out calculator and menus for immediate use -- fix machine after meal period • Assign individual to cash duty as cash drawer may be inoperable • After meal period perform procedures to get machine back on-line, call for service Short a host • Manager assumes primary duty • If possible, reduce station size so a designated server can assist with cash or seating Server is snowed • Determine cause of problem: • Kitchen slow? • Kitchen fast? • Seating too heavy? • Service problem only? • Assist in solution personally or direct others to assist as needed

Version Number: 1.0 • March 2017 Page 77

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Problem Solutions Glass breaks over food • Inform staff of hazard • Discard contaminated food and resupply • Inform Guests of delay as may be required Extreme employee behavior • Pull person off the floor • Restructure staff assignments • Send home for later counseling and resolution • Assist as required Guest complaint • Pull person off the floor • Restructure staff assignments • Send home for later counseling and resolution • Assist as required Guest complaint • Manager personally involved in solution: • Acknowledge problem • Resolve problem • Expedite problem • Extend parting thanks for their business Kitchen is snowed • Is the backup cook on the line? • Is the Kitchen Manager on the line? • So you need to support the kitchen – determine need and fill it • Consider slowing the pace of seating Guests Host is snowed • Ensure host is performing host duties, not servers duties • Assist host as needed • Direct other personnel to assist host Delivery is attempted during meal • Refuse delivery except in specific cases of period authorized exceptions • Call vendor and revise time period of deliveries Beginning server in busy station • Combine adjacent stations to reduce station of beginning server • Consider switching servers under your supervision Disorderly Guest conduct • Privately ask Guest to modify behavior or leave • If Guest behavior remains disorderly, tell Guest to leave • If Guest does not cooperate, call police for assistance • Contact Director of Operations regarding legal action to take if arrest is made

Version Number: 1.0 • March 2017 Page 78

We Are Crackin’ LLC Chapter 3: Confidential Operations Manual Restaurant Operations

Problem Solutions Loitering • lf person(s) not conducting themselves as a Guest, you have a right to ask them to do so or to leave • Do not single out a person out of a paying party -- use your judgment with individuals and groups • Focus on their behavior -- if they are not conducting business with us, they are generally loitering

Version Number: 1.0 • March 2017 Page 79

CHAPTER 4: STAFFING

Version Number: 1.0 • March 2017 Page 1

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

1. Overview and Disclaimer

Information in this section is presented as a general guide to staffing matters, and the emphasis is on concepts. Since laws pertaining to civil rights, equal employment opportunity, and related issues are changing continuously and are dependent on local, state, and federal interpretations, this section is not intended for use as a legal reference source. Seek professional legal counsel concerning employee hiring and termination procedures, as well as all other aspects of employee administration.

We do not help you screen candidates or select your employees. We are not involved in your hiring process. We will not terminate your employees for you. All decisions pertaining to hiring, firing, promotions, benefits, and other employment terms are matters that you must handle as the independent owner of your business. Your employees work for you, not us.

Your employees are your representatives. If they engage in conduct that constitutes a breach of the Franchise Agreement, you will be declared in breach. If they cause an accident that results in liability to a third party, you will be responsible. Therefore, it is imperative that you actively supervise your employees.

We provide this information as an accommodation to acquaint you with the obligations and expectations of being an employer. For the most part, this consists of suggestions, not mandatory requirements.

Version Number: 1.0 • March 2017 Page 2

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

2. Laws and Requirements

There are many rules and laws, both state and federal, which control the employer/employee relationship. These include taxes, break times and durations, posting of schedules, benefits and more. As the CEO of your business, you are responsible for learning and following those rules. We will not act as your employment advisors. You are required to faithfully follow all applicable employment law.

Version Number: 1.0 • March 2017 Page 3

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

3. Job Descriptions

3.1. Elements of a Job Description

Simply put, a job description describes a job; and the more information a job description contains, the easier it is to find and keep the right employee. The job description is the foundation of the selection process. The way in which the job is advertised, the screening criteria applied to job applicants, and the questions asked in interviews must all stem from the duties and responsibilities of a position as documented in the job description.

A job description is not intended to describe how the job should be performed; it defines the requirements needed to perform a certain job in your restaurant. The Americans with Disabilities Act (ADA) requires that hiring decisions be justified based on the applicant’s ability to perform the essential functions of the job.

Job descriptions can be used during interviews to guide you in the job duties the applicants will be expected to perform, and the qualities they must have. This will help you formulate meaningful questions for them that will enable you to make smart hiring decisions.

It is important to remember that it is not always necessary for each role to be performed by a separate person. The same employee can sometimes perform more than one position.

Although federal law does not require it at this time, it is recommended as a best practice that all positions in a company with 15 or more employees have a job description on file for each position.

We have provided guidelines for creating job descriptions to make the hiring process easier for you and for job candidates. You may modify certain portions of them as necessary, such as hours worked. In either case, you must not use the ENJ logo on any personnel form. Use your business name so employees know they are your employees, not ours. You are responsible for developing your own job descriptions.

Each job description contains three types of information:

Version Number: 1.0 • March 2017 Page 4

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

Basic Job Identification:

• Job title • Supervisory responsibilities, if any • Reporting responsibilities • Job status (full-time, part-time, hourly, etc.) • Job summary

Essential Functions of the Job:

• Job duties listed in order of importance and categorized

Requirements of the Job:

• Embody the ENJ culture • Education • Experience • Specific skills and/or traits • Machines or equipment operated • Physical capability

3.2. Key Positions

Based on the best practices in the ENJ system, we have found that filling the following key positions can lead to a better-run restaurant. These are offered as a suggestion only:

• Franchisee/General Manager • Kitchen Manager • Supervisor • Lead Server • Server • Host/Hostess • Cashier • Busser • Dishwasher • Prep/Line Cook • Line Cook

Version Number: 1.0 • March 2017 Page 5

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

4. Setting a Pay Scale

You are expected to pay a fair wage. That does not mean the highest wage in the market, but one that adequately compensates the employee for the work he is expected to do. A wage is comprised of the actual pay and the flexibility of schedule, as well as the work expectations.

Note: Each ENJ franchisee is an independent business owner and you cannot agree or collude to set the pay scale within the system. This is considered price fixing.

4.1. Elements of a Fair Wage

A fair wage, simply put, is paying people what they are worth to the company for the results they produce (not the amount of work they do.)

In reality, a fair wage is a complex number. It includes the actual pay rate, the number of hours, the desirability of the shift, flexibility, vacation and/or personal days as well as any employee benefits, auto allowances and other compensations you are offering. It must be competitive in the local marketplace, too. Study, thought and a sense of fairness is needed to decide on a fair wage for each employee.

The next step is to “shop” the competition. Who is the competition? The competitors are all those businesses that want to hire the same people you do. The people who want to work for you may be employed at other restaurants, service, retail and/or other unrelated businesses. When you look closely at the job description you create, you will know where the people you want will be working.

Next, find out what those compensation packages are. The best way to do this is to apply for a job. First, call and see how much information you can get from a phone conversation. Ask detailed questions about the job requirements, education, hours of work, benefits and growth potential. Call at least four businesses to get a true picture of what you will need to offer to attract quality candidates. If your investigation requires an interview, either go yourself or send someone else to pose as a job candidate.

Version Number: 1.0 • March 2017 Page 6

We Are Crackin’ LLC Chapter 4: Confidential Operations Manual Staffing

5. Lead Sources

Finding the right employees is a crucial step in the startup, growth and success of your business. Once you have determined the kind of candidate you want and how you will compensate them, it is time to find the best people. Do not wait until you are in a desperate situation because you may then settle for anyone who applies, and he may not be the right person for the job. Consult your business plan, look ahead and be selective. You should always be willing to accept applications, even if you are not hiring at the time. When you do need help, you will have a good base from which to start.

Referrals are always a strong lead source. A third party is willing to put their reputation on the line in order to build your business. They are also the most affordable source. Ask everyone! Start with your employees. People tend to spend time with people who are similar to them. If you are pleased with the work the current employee is doing, there is a good chance his friend will also work well.

State employment offices are hungry for placement opportunities and will accept postings. If your restaurant is near a college campus, place an ad with their placement office. Students are always looking for good jobs with part-time and flexible schedules.

So far, all of these lead sources have been free, but there are times when you have to pay to get the quality you want. Consider reserving these search methods for shift leaders and managers. Paid job listings are also a good source, if you can control the cost. You want to avoid a major metropolitan newspaper with broad coverage if you are serving a small area.

Do not overlook Internet job posting sites. For example, Craigslist (www.craigslist.org) is very popular and affordable as a lead source. Be cautious, some Internet job boards may charge a fee.

Version Number: 1.0 • March 2017 Page 7

CHAPTER 5: SAFE FOOD HANDLING AND PREPARATION

Version Number: 1.0 • March 2017 Page 1 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

1. Overview

The purpose of this section is to help educate you and your employees on the safe and effective way to handle food products, resulting in better health and safety for your employees and Guests.

This is a general guide to safe food handling and these are best practices only. Many laws and regulations govern food handling in your area. It is your responsibility to become familiar with your state and local laws and to abide by them.

All your employees must have a current food handler's permit from your state’s Health Department before they start work. We also require all your managers have a valid ServSafe® certificate from an accredited training provider.

2. Health Regulations and Sanitation Standards

It is vital that health and sanitation standards are maintained at your restaurant. You work with fresh produce, meats and dairy, all of which are highly perishable, so using the FIFO (First In/First Out) method and date marking are critical.

Keep the kitchen and work areas clean, including sinks and drains, counters, shelves and tables. Organize the cupboards/pantry and clean the ice machine to avoid deposits and build up. A clean restaurant helps prevent food borne illnesses as well as rodent and pest problems.

Version Number: 1.0 • March 2017 Page 2 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

3. Food Borne Illness

3.1. About Food Borne Illness

The Centers for Disease Control and Prevention (CDC) estimates that 76 million food borne illness cases occur in the United States every year. This amounts to 1:4 Americans becoming ill after eating foods contaminated with such pathogens as E. coli O157:H7, Salmonella, Hepatitis A, Campylobacter, Shigella, Norovirus and Listeria.

3.2. Food Borne Illness Complaints

All Guest and employee complaints about food borne illness and/or a medical confirmation of an infectious disease must be taken seriously and acted upon immediately to protect the individuals involved as well as the brand.

A food borne illness has the greatest potential of becoming a crisis when:

• A Guest has a confirmed medical report of a life-threatening communicable disease that could affect other Guests. Diseases like this must be reported to your state’s Health Department and become public information. • Two or more unrelated persons experience the same illness after ingesting a common food, and an investigation shows that food is the likely source of the illness. • The Health Department calls to notify you that your food is a suspected cause of a communicable disease. • A Guest threatens to call the press and/or a lawyer about becoming ill from the food at your restaurant. • An employee with an infectious disease becomes a crisis when infection of others is suspected or the Health Department is notified and makes it public information.

A food borne illness should not be confused with an allergic reaction. Many food allergies and sensitivities are not life threatening. However, there are about 1,000 cases each year of individuals who go into anaphylactic shock when eating even a tiny amount of some types of foods or ingredients. If a Guest is having an allergic reaction while in your restaurant, call 911 and get medical help immediately.

Version Number: 1.0 • March 2017 Page 3 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

If a Guest calls to report an allergic reaction, especially when a doctor or hospital stay is involved, your employee taking the call must refer the Guest to you immediately.

Employees should not be allowed to tell Guests they should or should not eat a particular product. There is great legal liability attached to such suggestions. The only information they are allowed to disclose is a product’s ingredients. They should check with you or the shift leader, or provide the Guest a nutritional data sheet.

Version Number: 1.0 • March 2017 Page 4 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

4. Food Borne Illness Complaint Reporting and Investigation Procedures

If you receive a complaint from a Guest relating to a food borne illness, you must take swift action as outlined in this section.

Notify

• You must immediately send a Guest Incident Report to the Home Office, and follow up with a call to the Director of Franchise Operations.

Report

• You must report all findings to the Home Office. • Refer all media or attorney questions and correspondence to the Home Office. • Report the incidents and action taken to the local Health Department. • Report the incident as follow-up to your liability insurance company

Best practices only.

If a complaint comes in, we recommend the following procedures:

Reassure

• Let the Guest know you take the complaint very seriously. • Reassure the Guest that you will be investigating the incident immediately. • Do NOT: • Argue • Be defensive • Assume responsibility or liability • Say "I'm sorry we made you sick," or "I'm sorry our food made you sick" • Offer insurance, medical or legal opinions on the complaint • Mention or suggest symptoms normally associated with particular illnesses • Say whether you have had similar calls

Version Number: 1.0 • March 2017 Page 5 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

Inform

• Inform the Guest that the safety of your Guests is your top priority. • Tell the Guest that your safety documentation is up-to-date and no other reports of illness have been reported (if that is the case.) • Ask permission to write down details that will help you investigate the incident.

Inquire

• Take the Guest’s name, contact information, date and time of visit. • How many members in the party? • Which foods were eaten and by whom? • Has the Guest received medical attention? If they want to seek medical attention, inform the Guest that you are not authorized to accept liability, however you will be forwarding the Guest incident report to your insurance company. • Once all information has been collected, tell the Guest, “Thank you. I will report this to the Home Office and it will be investigated. I hope you feel better soon.”

If there appears to be a risk or if there are multiple complaints of illness, the Home Office representative will follow these steps:

Investigate

• Secure any ingredients with potential contamination and label as “possibly contaminated food” and store in refrigerator away from other food. • Pull all Quality Safety Checks (line checks) from the day before, day of, and day after the alleged incident. • Print a report of how many of the suspected menu items were sold that day and how many related items were sold that use the same ingredients as in the suspected food.

Cooperate

• Cooperate with the local Health Department and any investigations.

Version Number: 1.0 • March 2017 Page 6 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

5. Cross-Contamination

The following procedures are in place to prevent the potential of cross- contamination from raw products to ready-to-eat products. Cross- contamination is the unintended presence of microorganisms in ready-to- eat foods as a result of contact, directly or indirectly, with raw foods.

One of the best ways to prevent cross-contamination is by always washing hands thoroughly and putting on a fresh pair of gloves when preparing or handling any ingredients.

There are many ways to inadvertently cross-contaminate foods. The most common are:

• Storing raw foods above ready-to-eat foods. • Using the same utensils and cutting boards for the preparation of raw and ready-to-eat foods without cleaning, rinsing and sanitizing between uses. • Having the preparation areas for ready-to-eat foods near the area for preparation of raw foods. • Failing to wash hands after handling any raw foods. • Failing to wash hands before putting on gloves. • Failing to change gloves between tasks involving raw foods, peanuts and any other materials.

5.1. General Health Considerations

Having the restaurant well-staffed is important, but not at the cost of safe food handling. Employees who are ill and injured should be discouraged from attending work and sent home if symptoms present themselves while on the job.

Employees exhibiting the following symptoms should not be allowed to handle food:

• Fever • Diarrhea • Upset stomach • Nausea • Vomiting • Sore throat

Version Number: 1.0 • March 2017 Page 7 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

• Sinus infection • Coughing • Frequent sneezing • Dizziness

Employees with cuts, burns, boils, sores and/or infections should have the affected areas bandaged. All bandages must be clean and dry. Waterproof, disposable gloves must be worn over any bandages that are on the hands.

You and your employees must not touch their face, hair, nose or mouth while handling or serving food.

General guidelines for you and your employees:

• If you must use a handkerchief or tissue, do so away from the Guests and food and wash your hands after using and properly disposing of the tissue. • If you have a cut or an open wound, keep it covered with a clean bandage. • Always wash your hands between activities, after touching your face or hair, sneezing or coughing, returning to work from a break, and after using the restroom.

Version Number: 1.0 • March 2017 Page 8 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

6. Hand Washing

6.1. Importance of Hand Washing

One of the most important processes in safe food handling is personal hygiene, specifically washing your hands. Failure to wash hands properly or at the appropriate time is the major contributor to food borne illness. The local ordinances concerning this are very clear. To comply with these ordinances, you must provide a place that is dedicated to hand washing only. This dedicated sink is to be equipped with:

• Hot and cold running water • A single-use paper towel dispenser • Soap dispenser • Signage approved by your local municipality stating the requirement to wash hands • Sign stating, “This sink is for hand washing only.”

6.2. When to Wash Hands

Train all your employees to be aware of what they are touching and to wash their hands at the appropriate times. Below is a list of the minimum times one should wash hands before handling food:

• At the start of the work shift • Before returning to work after breaks • After drinking or eating, whether on a break or not • After smoking • After handling raw foods • After touching hair, face or body • After using the restroom for any reason • After handling garbage • After chewing gum or tobacco • After cleaning or bussing the restaurant • After handling cash • After shaking hands or making other contact with another person • After touching anything that could contaminate hands

Version Number: 1.0 • March 2017 Page 9 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

6.3. How to Wash Hands

Washing hands is effective only when done properly. To ensure the health and safety of your employees and Guests, the following procedure must be followed each time you or an employee washes hands:

• Turn on the water and let it run until it is warm. • Use warm water to wet hands. Leave the water running. • Apply soap to hands. • Lather the soap and rub hands in the lather for 20 seconds or more. Pay attention to the fingertips, nails and cuticles. • Rinse thoroughly. • Turn off the water without directly touching the faucet knob. Either grip the knob with a paper towel or shut it off with your elbow. • Dry hands with either a single-use paper towel or an air dryer.

Version Number: 1.0 • March 2017 Page 10 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

7. Knife Safety

• Before use, knives must be washed, rinsed and sanitized. • Clean, rinse and sanitize the knife between uses to avoid cross- contamination. • An employee that is cut should see you or the shift leader for first aid immediately.

Version Number: 1.0 • March 2017 Page 11 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

8. Infestations

8.1. Rodent Infestation

8.1.1. Rodent Droppings

Droppings are one of the most reliable signs that you have a rodent problem. You will most likely find droppings in places where you store food. Because rodents like to run in places that offer them some protection from predators, you may find droppings in cupboards or under the sink, along walls, or on top of wall studs or beams. Rodents leave droppings near their nests. Storage rooms loaded with boxes, bags and other objects make an ideal home for rodents, and so you may find droppings there, even inside boxes and other containers. Rodents can chew through plastic, so plastic bags do not make safe food storage containers.

8.1.2. Signs of Rodent "Feeding Stations"

These are semi-hidden spots where rodents eat food they have collected. At these stations, rodents may leave larger-than-normal amounts of droppings and urine, plus remnants of a variety of foods, bits of plastic or paper, and even cockroach carcasses.

8.1.3. Evidence of Gnawing

To get to food, rodents will gnaw on almost anything, including wood, paperboard, cloth sacks and other hard materials.

Because rodents' teeth grow continuously, they must gnaw to keep them short. That may help to explain why chair legs or similar surfaces show gnawed spots or tooth marks in rodent-infested areas.

8.1.4. Odd, Stale Smell

In closed-up rooms infested by rodents, you will commonly smell an unusual, musky odor.

Version Number: 1.0 • March 2017 Page 12 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

8.1.5. Seeing a Rodent in the Restaurant

Rodents are normally active at night, and generally avoid humans. If you have rodents, unless the infestation is large, you may never see one. If you see one, contact your pest control company immediately.

8.2. Abatement

You must contract with a reputable pest control company for monthly service to eliminate and control all pests. Between treatments, we recommend you use the controls detailed in this section.

8.2.1. The Three Rs of Pest Control

1. Eliminate the REASON rodents are in or near your place of work: a. FOOD - Rodent populations are always in direct proportion to the amount of food available. b. SHELTER - Mice and rats like to stay out of sight, even when feeding, if possible, to avoid predators. They do most of their food foraging in the dark. Clutter provides a safe shelter for rodents. Once they sense the warmth of a building, they will try to find entry points. 2. Eliminate ROUTES. Skull size is the only thing that restricts rodents entering small holes or cracks. For a mouse, this could be as small as a pen. Rats will burrow or chew to make small holes large enough to fit through. Mice will often chew wiring where it passes through holes. Holes made for plumbing provide easy access to all levels of a building. 3. Eliminate the RODENT. Contact your exterminator to notify them that you have a rodent problem; ask them to take additional measures (above and beyond your monthly maintenance program.)

8.2.2. Removing Sources of Food and Water

Although an obvious and extremely important method of abatement, reducing the amount of food and water available to rodents is often overlooked. Baiting and trapping programs often fail because adequate food is available. The rodents, therefore, simply ignore the traps and baits, preferring the existing cuisine. Reducing access to their normal diet or

Version Number: 1.0 • March 2017 Page 13 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation using this food to attract the rodent will substantially improve trapping and baiting programs.

Concentrate on the following:

Outdoors

• Close and/or repair waste receptacles and dumpsters. Ensure they are emptied and cleaned regularly and are located away from the restaurant. • Clean the area around waste receptacles, ensuring spilled or improperly discarded debris does not collect. • If possible, do not let water collect in areas outside the restaurant. Not only does this provide a necessary resource for rodents, in particular, biting insects often use these areas to breed.

Indoors

• Examine all entrances and storage areas for food spills and water leaks. Ensure employees eat and drink only in designated areas. • Examine incoming and stored food products for packaging damage. Return or discard immediately. Ensure food products are rotated properly (FIFO) and are stored on pallets or shelves, not on the ground or against walls. Pallets (when applicable) should be at least 18” from sidewalls and placed so that aisles permit inspection and cleaning. • Reduce clutter in rarely used rooms. Organize storage areas. • Do not allow pallets or storage to collect for an extended period.

8.3. Insect Infestation

You must contract with a reputable pest control company for monthly service to eliminate all pests and prevent future infestation.

8.3.1. Common Signs of Infestation

You will typically see signs of any insect infestation. Each type of insect is attracted to different food types. Common pests that might be found in your restaurant are:

Version Number: 1.0 • March 2017 Page 14 We Are Crackin’ LLC Chapter 5: Confidential Operations Manual Safe Food Handling and Preparation

• Cockroaches • Spiders • Fruit flies • Ants • Silver fish • Flies

8.3.2. Insect Abatement

While it may be difficult to eliminate insects entirely from your restaurant, there are preventative measures you can take. Below are some tips for preventing insect infestations:

• Remove decaying food ingredients or crumbs found underneath equipment. • Remove standing water under equipment/sinks. • Empty all trash and from every trashcan throughout the restaurant. • Rinse out trashcans completely after each trash run. • Rotate or discard any overripe or decaying food. • Scrub all floor drains and area around the drains. • Scrub grout. • Clean all walls/cabinets/trash cans of any food particles. • Clean all machines. • Rinse any brooms used to sweep up food. • Clean refrigerator floors, doors and walls. • Cover floor drains overnight after cleaning. • Stand mop up (mop head up) to completely air dry.

Version Number: 1.0 • March 2017 Page 15

CHAPTER 6: RESTAURANT ADMINISTRATION

Version Number: 1.0 • March 2017 Page 1

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

1. Key Performance Indicators and Profitability

To run your ENJ restaurant effectively, you will need accurate and timely information on which to base your business decisions. Because the purpose of your business is to make a profit, you need to know your exact total sales and costs on a daily, weekly and monthly basis. This way, if you are having problems, you can quickly identify their source and take corrective action, and if you are having success, you will know why and can begin to maximize these advantages.

This chapter deals with the general concepts of effective administration and best practices for such administration.

1.1. Sales

An obvious primary indicator of your restaurant’s performance and profitability is the amount of sales your restaurant generates in a given period. Gross sales are defined as the total amount of revenue that has been generated in your restaurant before any costs or deductions are subtracted.

1.1.1. Guest Count

Guest count is the number of Guest served each day, week and month. It is important to monitor this trend because it is a reliable measure of Guest loyalty and therefore reflects the quality of your Guest service.

1.1.2. Average Check

What was the average price Guests’ paid per order? You will be able to access this information by generating a report from the POS system.

1.2. Food and Beverage Sales

Determining the total amount of food and beverage sales is an important metric and can help determine profitability, purchasing volume and

Version Number: 1.0 • March 2017 Page 2

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

many other factors. You will be able to determine total food sales on a daily, weekly, and monthly basis by generating a report from the POS system. It is for this reason that it is important that all food sales be accounted for in the POS system.

1.3. Beer and Wine Sales

As with food, it is important that you carefully track all beer and wine sales in your restaurant. All beer and wine sales should be accurately tracked in the POS system. Reports for daily, weekly, and monthly sales can be generated. Knowing this number can help with ordering, profitability and many other factors.

1.4. Costs

Costs are the expenses you pay to run your business. Like sales, they are calculated on a daily, weekly, and monthly basis.

1.4.1. Labor Costs

Labor costs are one of your largest expense items but can be managed and controlled effectively with proper care. If labor costs are too high, your profitability will suffer. However, if you schedule too few employees, service will be slow, Guests will not return and profitability will suffer. Guest care is a top priority, so adequate staffing is critical, particularly during busy days and holidays.

• Post schedules in advance, according to the law. We recommend you post the schedule at least two weeks in advance and email it to all employees at the same time, or use an online scheduling system. • Be sure that employees are consistently clocking in and out at the beginning and end of shifts, as well as before and after breaks. This is the number one problem in managing labor. Carefully monitor time clock punches each day and fix problems immediately. • Adjust labor coverage daily and throughout each shift. Minimize coverage during slow times, while keeping the focus on Guest care. Ask employees to leave early when shift coverage is

Version Number: 1.0 • March 2017 Page 3

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

sufficient for business in the restaurant. However, avoid cutting labor so much that Guest care is impacted. Note: You are responsible for checking local labor laws for restrictive scheduling laws or ordinances. • As much as possible, avoid overtime. Be aware of the hours employees have worked and are scheduled to work. • Carefully monitor the productivity of employees during opening and closing periods, when the restaurant is closed and sales are not being generated. Determine the time required to close the restaurant and have associates work efficiently to close within that time goal.

1.4.1.1. Strategies for Managing Labor

DISCLAIMER: You are responsible for checking local labor laws for restrictive scheduling laws or ordinances.

The goal in managing labor is to meet demand with supply. In other words, the goal is to have just enough employees working so that Guests can always be served efficiently and the restaurant can be properly maintained.

Operating with too few employees is not only bad for Guests; it is also very stressful for employees and may lead to high turnover. Operating with too many employees is also detrimental for three reasons:

1. Total cost of labor will be too high. 2. Employees will get bored if they have nothing to do and that can increase turnover rates. 3. A sense of urgency for serving the Guest is lost and service times will suffer.

Here is a list of things that you can do to effectively manage labor costs:

• Be proactive. Make changes to the schedule throughout the week. Don't wait until the end of the week to make necessary adjustments. It is common for a schedule to be adjusted after being posted. • Shifts may need to be added or extended, or cut or shortened.

Version Number: 1.0 • March 2017 Page 4

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Be proactive about hiring. Don't wait until you absolutely need people before you start conducting interviews. If you can avoid hiring out of desperation, you can avoid many costly hiring mistakes. • Minimize turnover. Maintain high restaurant morale by hiring employees that are pleasant to work with (friendly, hardworking, flexible.) Be cautious of personalities that might bring down morale. • Provide comprehensive education. Do not ask employees to perform a task before they have been properly educated. • Be clear about the shifts employees want to work and number of shifts they will be scheduled to work. Be clear about the changing schedule and shifts based on the needs of the business. • Create sensible schedules. Avoid scheduling shifts that are shorter than four hours or longer than eight hours unless an employee has requested it. • Consider availability when hiring. Look for applicants that have availability that meets your scheduling needs. • Leverage strengths. Place your most outgoing employees at the stations where they have most contact with Guests. • Avoid Overtime. Hire additional employees to avoid needing to schedule overtime. • Here are some additional tips for controlling your labor costs: • Always be aware of local laws and regulation on breaks, age limits, shift lengths, under 18 workers permits, etc. These may vary by city or state. • Create a balanced shift: if some people are more suited for back- of-house work make sure to schedule others that can handle front-of-house work.

1.4.1.2. Scheduling Within Your Budget

A labor budget and employee schedule is determined by an individual restaurant’s revenue. How you create the schedule will affect how much revenue is generated.

Although your labor budget is based on your previous and projected revenue, do not let your revenue determine your labor budget. Use your labor budget to drive and build revenue.

Version Number: 1.0 • March 2017 Page 5

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• If you are under-staffed, you may not be able to serve Guests efficiently and effectively. • If you are over-staffed, you may be wasting labor hours that could be used more effectively during busier times. Those funds could have been used to implement other revenue-generating activities. • Remember that you may need to occasionally use some of your employees for marketing and promotional activities that drive restaurant revenue.

1.5. Food Costs

Food costs are another one of the largest expenses that you can control, and has a direct impact on a restaurant’s operating profit. Because no two operations are identical, it is necessary to calculate the monthly food cost of your particular restaurant. Industry averages cannot be used as an accurate standard.

The concept of food cost must be examined at several different levels to consider all variables. For example, menu sales mix. When one menu item sells better than another does, there will be variances in your overall food cost and you should know how this affects your profits.

Essentially, there are four aspects of food cost that must be individually calculated for each operation:

1. Maximum allowable food cost percentage. 2. Actual food cost percentage calculated for the income statement. 3. Potential food cost percentage, determined by the sales mix. 4. Standard food cost percentage, which includes a waste allowance.

The maximum allowable food cost figure determines the food cost percentage an operation needs to achieve its profit objectives. It is calculated from the actual operating budget of the business.

To calculate the maximum allowable food cost percentage, select a representative accounting period and determine the amounts for these three areas:

Version Number: 1.0 • March 2017 Page 6

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

1. Payroll related expenses (salaries, wages, taxes, and fringe benefits.) 2. Overhead expenses (marketing, utilities, maintenance, other supplies excluding food costs.) 3. Include a target figure for profits before tax.

Convert the dollar value for the three areas to a percentage of the total sales. Remember that food cost is not included. Now subtract these numbers from 100 to determine the maximum allowable food cost percentage.

Example: If you are working with the following percentages of sales (payroll of 27%, overhead of 20%, profit of 15%,) then the maximum allowable food cost percentage is 37% (100 minus 63.)

1.5.1. Actual Food Cost

The actual food cost percentage typically appears on the monthly income statement. This is the cost of the food consumed by your Guests, and does not include employee meals or spoilage.

Although the actual food cost indicates what the food cost is currently, it has little value unless you know what the target percentage should be.

1.5.2. Potential Food Costs

Potential food cost is a theoretical or ideal percentage which indicates what the food cost should be in a perfectly run restaurant, given the sales mix. It reflects the fact that the most popular menu items will have the greatest influence on the overall food cost percentage.

If the sales mix produces a potential food cost that exceeds the maximum allowable cost, profit objectives cannot be realized.

To calculate the food cost percentage of each dish:

• Multiply the food cost per item with the number of portions sold. • Multiply the sales price by the number of portions sold.

Version Number: 1.0 • March 2017 Page 7

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Add both columns and multiply the total cost by 100, and then divide it by the total of the sales column. • The result is the potential food cost.

Example: Total cost = $ 3,000. Sales = $ 10,000. Potential food cost percentage = 30%.

1.5.3. Standard Food Costs

You need to adjust the potential food cost to include waste and spoilage that occurs during normal preparation, as well as an allowance for complimentary or discounted meals to employees and Guests.

The exact percentage is determined from management studies. The standard food cost percentage is calculated by adding this variance percentage to the potential food cost.

The difference between actual food cost and standard food cost reflects inefficiencies that should have been controlled by management.

1.5.4. How They Relate

Bringing all four aspects of food cost together shows the importance of each when calculating food costs.

Example: Assume that you have a maximum allowable food cost of 35%. The month-end food sales and inventory figures for the same period result in an actual food cost of 34%. If the food cost analysis stops at this point, you might conclude that the cost of food is in line because the actual food cost is slightly below the maximum allowable food cost percentage.

However, further analysis using the weighted sales mix analysis reveals a potential food cost of 29.4%. The variance that exists between the actual and potential food cost percentage is 4.6%, which is much too high for the existing menu sales mix.

Thus, minimum profit objectives are being exceeded but they are not being optimized. Investigation is required and its results could improve the financial performance of the restaurant in the future.

Version Number: 1.0 • March 2017 Page 8

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

1.6. Six Steps to Controlling Food and Liquor Costs

1. Ordering The first step is to order correctly. Control spoilage, wasted storage space and lost interest on your money by timing orders well. Ordering late can incur premium costs and delivery charges. 2. Receiving Verify all orders and get credit memos from delivery employees when orders are incorrect. 3. Storing Be sure that you store goods appropriately, at the correct temperature and securely, to avoid spoilage and theft. 4. Issuing Be judicious about granting access to materials and do careful inventories regularly to spot waste and loss. 5. Preparation Use proper tools and a clean and neat working area. 6. Education One element of controlling food cost covers all categories: thorough education. Give your employees the ability, knowledge and confidence to do their jobs properly and to your specifications. Focus on proper portioning and recipe knowledge. Inconsistency and failure to enforce procedures will drive costs skyward. Failure here is throwing money away.

Version Number: 1.0 • March 2017 Page 9

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

2. Managing the Numbers

2.1. POS Reports

The POS system provides an extensive report library that you can use to access critical data concerning your business. For instructions on generating POS reports, see the POS System manual on the support site.

2.1.1. Daily

Print and review the Daily Sales Report to calculate sales revenue and the detailed action of the team. Pay close attention to the No Sale and Void reports, as these can indicate a need for additional education of the team members or, if the amounts are too high, could be an indicator of theft.

2.1.2. Weekly

The Weekly Sales Analysis is a useful report to see Guest flow and trends of Guest counts. Use this information for more efficient scheduling and inventory control.

2.1.3. Monthly

The Monthly Sales Analysis delivers an overall view of sales. This important economic tool can be used to see past trends and make plans to stay on target. Note seasonal trends and adjust accordingly. We recommend you save these reports in a binder with dividers for each month. Make notes of specific events or conditions such as weather, road construction, economic trends, holidays, etc. so you can review this information in the next year and plan accordingly.

Version Number: 1.0 • March 2017 Page 10

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

3. Inventory Management

Inventory is defined as assets that are intended for sale, are in process of being produced for sale, or are to be used in producing goods.

The following equation expresses how a company's inventory is determined:

Beginning Inventory + Net Purchases - Cost of Goods Sold (COGS) = Ending Inventory.

In other words, you take what the company has in the beginning, add what was purchased, subtract what was sold and the result is what is remaining.

The accounting method that you decide to use to determine the costs of inventory can directly impact the balance sheet, income statement and statement of cash flow. We recommend the First In/First Out (FIFO) inventory-costing method.

3.1. FIFO

The FIFO (First In/First Out) method assumes that the first unit making its way into inventory is the first sold.

Example: A bakery produces 200 loaves of bread on Monday at a cost of $1 each, and 200 more on Tuesday at $1.25 each. FIFO states that if the bakery sold 200 loaves on Wednesday, the Cost of Goods Sold (COGS) were $1 per loaf (recorded on the income statement) because that was the cost of each of the first loaves in inventory. The $1.25 loaves would be allocated to ending inventory (appears on the balance sheet.)

3.2. The Importance of Inventory Control

If inflation were nonexistent, then any inventory valuation method would produce the exact same results. When prices are stable, the bakery example would be able to produce all its loaves of bread at $1, and the average costs of business would give us a cost of $1 per loaf.

Version Number: 1.0 • March 2017 Page 11

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

Unfortunately, the world is more complicated. Over the long term, prices tend to rise, which means the choice of accounting method can dramatically affect valuation ratios.

If prices are rising, the FIFO accounting method gives a better indication of the value of ending inventory (on the balance sheet,) but it also increases net income because inventory that might be several years old is used to value the cost of goods sold.

Note: if prices are decreasing, then the opposite of the above is true.

3.3. Merchandise/Beverage Inventory

It is also important to audit inventory every time a new shipment is received. Once completed, enter the new quantities into the system immediately.

3.4. Ordering

Proper ordering is vital to controlling product cost. You must have sufficient product on hand to keep your restaurant running, while being careful not to overstock the restaurant. Unless inventory is strictly monitored, expired product, unnecessary use of storage space and excessive expenditures on unused materials will occur and can negatively affect the success of your restaurant.

You are responsible for ensuring that orders to all distributors are submitted on time and confirmed. Depending on your restaurant location, you will work with a few different distributors. Product ordering frequency may vary according to high restaurant traffic.

Use an Order Guide to ensure ordering inventory is not forgotten. Place the list in a visible place to remind shift leaders when to place an order and when orders are expected to be delivered.

Remember, good purchasing procedures will identify and reduce potential waste before it enters your business.

Version Number: 1.0 • March 2017 Page 12

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

3.5. Inventory Control

Inventory control procedures are important for reducing management costs associated with excess and expired materials and product. Below are some tips to help control inventory levels:

• Set inventory limits. • Minimize inventory. • Buy and stock only what you need (food and merchandise.) • Carefully consider large purchases to maximize discounts. • Time deliveries to coincide with production needs. • Track materials. • Effectively track the shelf life of foods and use the oldest stock first. • Label, date and inspect new products as they are received. • Keep records of dates of receipt and usage to help reduce overstock and spoilage. • Conduct restaurant inventory properly. • Maintain proper temperature, humidity, etc. to reduce product waste. • Track inventory in the POS system.

Version Number: 1.0 • March 2017 Page 13

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4. Risk Management

Risk involves many aspects including theft, robbery and accidents. Though some of these things are inevitable, it is important to be prepared and diligent so that you can minimize the occurrences and their consequences.

According to the National Restaurant Association, the statistics on the costs of employee and Guest malfeasance show what you are up against every day:

• Slips, trips and falls by patrons are the most common General Liability insurance claims filed by restaurants. • Slips, trips and falls represent 27% of Workers’ Compensation claims. • Employees are responsible for 75% of inventory shortages; they steal the equivalent of 4% of sales in restaurants and 1.6% of retail sales. • Internal theft costs the food service industry approximately $3 - $6 billion each year. • According the US Department of Commerce, 75% of employees steal from the workplace, at least once and half of that group steals repeatedly. • According to a National Retail Federation study, administrative error costs business 14% a year, and vendor theft is responsible for another 4%.

Note: Even if the money or goods are stolen or there is a loss to claim, Service and Advertising Fees are due on all sales. Protect your business. We offer the following sections as a warning, and offer suggestions to protect you and your business. These are presented as best practices only. Further measures might be necessary.

4.1. Crime

Burglary (a theft where there is no contact between the thief and the victim) and robbery (theft with interaction) know no bounds. It is not something that happens more at night, in urban settings, in inner cities or

Version Number: 1.0 • March 2017 Page 14

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

to or by any particular ethnic group. They are crimes that happen everywhere, all the time. Be prepared with good controls and make those controls obvious. When you take those measures and your restaurant is being cased, it will seem an unattractive target and more likely to be skipped.

Restaurants take in a large amount of cash. It is easy for people to make mistakes with cash or to steal. Though there is no perfect solution, these are meant to make employees accountable and to let them know that you are aware and observant of the cash handling in the restaurant. It is a way to keep employees honest.

Note: Remember that, as a franchisee, you are responsible for service and advertising fees on all sales, whether or not you have successfully collected the money. Therefore, it is very important that you monitor this area.

4.2. Internal Theft

Employee theft can take many forms. The variety of ways in which an employee can steal from a company is limited only by the imagination.

• Stealing cash and/or supplies and merchandise. • Non-registered sales. • Check kiting. • Cash over or short when the drawer is not being counted correctly, the wrong amount was collected or the wrong change was given. • Payroll fraud. • Expense account fraud. • Creation of phony suppliers. • Missing deposits – the employee either holds deposits or the deposits are not received by the bank. • Credit card discrepancies. • Various forms of business sabotage.

Employee theft cannot be prevented entirely, but can be minimized by using simple and consistent methods. However, by far the most important step is for you to set a good example by inspiring honesty among your employees. We offer these best practices as suggestions only.

Version Number: 1.0 • March 2017 Page 15

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

Preventative Measures: Employee Hiring

• Thoroughly investigate the background of prospective employees. Check personal and employment references. • Number and log all keys before issuing them to new managers. • Conduct "exit interviews" with employees who are leaving. Significant information may be revealed regarding various kinds of internal theft at the point when an employee is leaving the company.

Preventative Measures: Employee Relations

• Encourage a spirit of teamwork. Provide a consistent example of honesty, fairness and accountability. • Provide proper training so other employees can recognize others’ behavior. • Promptly address employee concerns or problems. If an employee seems upset, take the time to find out why. • Remove temptation and opportunity. • Correctly use cash control and accounting measures. Let employees know there are systems in place and that you take them very seriously.

4.3. Cash on Hand

The best way to avoid theft and robberies is to limit the cash on hand.

Cash control is as important to each individual restaurant as it is to the ENJ brand. The network of information among thieves is strong, so if one restaurant is hit and the take is good, others will be targeted. The following procedures are designed to keep you, your employees and Guests safer.

To discourage robbery, and as a general safety precaution, hire an armored car service, or make bank deposits regularly and determine the smallest amount of cash on hand needed to open and run your restaurant, and keep only that amount of money in the drawer.

Version Number: 1.0 • March 2017 Page 16

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4.3.1. Cash Drawers

We recommend having only one employee assigned to a drawer per shift. This will help minimize the number of people who have access to the cash drawer at any time, allowing greater control over the cash. This also helps pinpoint if there is a problem with one particular drawer.

4.3.2. Safe

A time-delayed safe will slow down a robber. A time-delayed safe has a 15-minute waiting period before the safe can be opened. That poses too much risk and most criminals will pass you by in favor of an easier mark. It is a deterrent and a safety factor.

Within the safe, maintain a cash change supply with a mix of coins, $1s and $5s.

• Keep the safe locked at all times. A safe is useless if it is open and accessible. • Choose a safe with a drop slot. This slot is used during the day to deposit: • Bills larger than a $20. • Cash amounts in excess of $500. • Only you and your shift leader should have access to any safes. Most theft is internal, carried out by disgruntled employees or those looking to take advantage of an easy opportunity. • Change the combination when a shift leader leaves your employ. • Choose a safe that has a compartment in which you can store a cash drawer with the morning bank. • Change in safe and cash drawer should be audited daily. • Safes with compartments have open areas where extra rolls of change and small bills can be stored. Keep these at the minimum levels required so losses can be contained.

Version Number: 1.0 • March 2017 Page 17

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4.4. Locked Doors

• The back door to the restaurant should remain closed and locked at all times. Delivery drivers will knock to announce their presence, and an employee can let them in. • We recommend an auto-locking mechanism and a peephole be installed on the back door. • Discourage team members from propping the door open for ventilation; proper ventilation should be installed during construction. • Front doors are to remain locked during morning preparations, until five minutes before the posted opening time and again as soon as the last Guest is served at closing. • In the event of a crime in the restaurant, the doors are to be locked immediately and remain locked until law enforcement arrives.

4.5. Cameras and Digital Video Recorders (DVR)

• Cameras can act as a good deterrent to potential robbers, especially when the cameras are visible. • A DVR system can be used to provide footage to local authorities in the case of a robbery or another incident.

4.6. General Safety

Safety in the restaurant is important because it will protect you, your employees and your Guests. It is also expensive to be unsafe. You can be open to lawsuits, lost custom and lost time due to injured employees.

4.6.1. Spills and Water

Spills are the most common causes of accidents in a restaurant. Spills and water should be mopped up immediately, with a hazard sign placed over the affected area until it dries. If there is a persistent leak that causes water on the floor, repair it immediately. This is not the time to be frugal.

Version Number: 1.0 • March 2017 Page 18

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4.6.2. Working with Equipment

Like any environment in which food is prepared, kitchens contain knives and electric machinery. This equipment can be very dangerous if not handled properly. The following guidelines should be followed at all times by all your employees:

When using knives, all employees should always adhere to the following:

• Use the proper knife for the job. • Keep blades sharp. • Keep your eyes focused on the task. • Cut away from yourself and others. • Store knives properly. • Never leave knives unattended on tabletops. • Never put knives in a filled sink where others might not see them and could get hurt. • Clean the knives and return to rack immediately after use. • If a knife falls, let it fall! Do not try to catch it. Step back so it does not hit your foot.

Below are some additional safety tips:

• Never operate any kitchen equipment you have not been properly trained to use. • Do not leave machinery running. Turn it off even if you intend to return right away. • Always verify that the switch is in the “off” position or lock out controls, before cleaning machinery. Never try to clean a machine while it is running. • Never attempt to retrieve any object that falls into a food processor chute or slicer while the machine is running. Turn off the power source immediately.

Version Number: 1.0 • March 2017 Page 19

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Assume all kettles, pans, and ovens are hot. Test before grasping. • Make sure your feet and the floor are dry before touching any electrical equipment or switches.

4.6.3. Lifting

Improper lifting can cause serious and permanent damage to backs, hips, knees, arms and shoulders.

• All employees must be able to lift at least 50 pounds, or as noted in the job description. Cartons and materials should not weigh more than that. • Do not overload; carry only what you can manage comfortably. • When lifting an object, face it directly. • Bend your knees. • Grasp it securely. • Use your leg muscles to push your body and the object up. • Exhale slightly as you lift. • If it is too heavy, ASK FOR HELP. • Do not drop the object. • Bend your knees and lower yourself and the object to the level of the surface that will hold the object.

4.7. Emergencies – Restaurant Closings

4.7.1. Fire, Flood and Earthquake Safety

Fires, floods and earthquakes can happen without notice, creating panic among employees and Guests. Staying calm is best, panic will only cause more harm. In an emergency:

• Stop what you are doing. • Assess the situation. • You or the shift leader takes the lead.

Version Number: 1.0 • March 2017 Page 20

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• If there is a fire, call 911. • Turn off all the equipment. • Lock the safe. • Lock the cash drawer. • Escort Guests out and away from the fire. • Have Guests seek cover in the restaurant in the event of an earthquake or tornado. • Lock the door behind you and wait for an emergency team to respond. • Do not stop to retrieve personal belongings. • Call the Director of Franchise Operations at the Home Office as soon as possible to report the incident.

4.7.2. Severe Weather

Severe weather can happen without notice, and can cause panic among employees and Guests. Staying calm is best, panic will only create more harm. In an emergency:

• Stop what you are doing. • Assess the situation. • You or the shift leader take the lead. • Turn off all the equipment. • Lock the safe. • Lock the cash drawer. • Escort Guests out to a shelter, if necessary. • Lock the door behind you and wait for the danger to pass. • Do not stop to retrieve personal belongings. • When you emerge from the center, assess the damage to the restaurant. • Allow Guests and team members in to retrieve personal items only if it is safe to do so. • Call for emergency services as needed. • Call the Director of Franchise Operations at the Home Office as soon as possible to report the incident.

Version Number: 1.0 • March 2017 Page 21

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4.7.3. Evacuation

If you are directed to evacuate the building for any reason, such as fire, flood, earthquake, gas leak, bomb threat, etc., we recommend the following:

• Remain calm. Do not shout “Fire,” as it may cause panic. • Call 911 if necessary. • Assist in evacuating Guests through the emergency exits of the building. • Do not re-enter the building or try to retrieve personal belongings. • Remain in a group once outside to ensure no one is missing. • Do not re-enter the building until given permission by the proper authorities. • Call the Director of Franchise Operations at the Home Office as soon as possible to report the incident.

4.7.4. Armed Robbery

In the event of an armed robbery, we recommend the following:

• Do not try to be a hero. • Cooperate with the offender(s) so he will leave as quickly as possible. • Never chase the offender. • Stand still and do not make any sudden movements. • Speak only when spoken to. Answer any questions honestly (e.g. “I’ll get you the money but I need to put an order into the register to get the drawer to open.”) • Communicate your actions (e.g. “I am opening the cash drawer now.”) • Stay out of the offender’s personal space and keep your hands visible. • Place the money on the counter and take a step back. • Carefully observe his characteristics without staring at him directly. Make a mental note of the following so you can help the police with an identification of the suspect: • Accents • Knowledge of restaurant layout

Version Number: 1.0 • March 2017 Page 22

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Use of restaurant terminology • Possession of restaurant keys • Height, weight, eye color, approximate age, skin color, clothing, visible tattoos or other distinguishing characteristics

4.7.5. Workplace Violence

Violence in the workplace includes any incident where an employee or employer is abused, threatened or assaulted at work. Violence and aggression include verbal and emotional threats or abuse and physical attacks on an individual or to property by another individual or group.

The potential for violence can be increased by factors such as:

• Alcohol consumption • Substance abuse • Personal or social problems • Extreme levels of fatigue • Personality or psychological disorders

Violent acts include:

• Verbal abuse (in person or over the telephone) • Written abuse • Harassment or discrimination • Threats • Physical or sexual assault • Armed robbery • Malicious damage to property

4.8. Emergencies – Remain Open

Your restaurant will usually be able to remain open for business in the following circumstances. If you do need to close, call the Director of Franchise Operations at the Home Office immediately.

Snow and Excessive Ice

• Salt the walkways and parking lot.

Version Number: 1.0 • March 2017 Page 23

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• In the case of a heavy snowfall, remove the snow from the roof. We recommend that you hire a contractor to perform snow and ice removal from the roof.

Sewer Leak in Your Water

• DO NOT SERVE COFFEE, TEA, BEVERAGE OR ANY OTHER FOOD PREPARED WITH CONTAMINATED WATER. • If possible, have bottled water delivered and continue service. • If you are unable to access bottle water, call the Home Office to discuss a possible restaurant closure.

4.8.1. Power Outage

In the event of a power outage, it is imperative to make a quick assessment of the situation and take action to protect your food. A power outage can affect safe food operations in a restaurant in the following ways:

• Refrigeration will not be functional. • Cooking, hot holding, mechanical dishwashing equipment that require power for operation will not be functional. • Hot water may not be available. • The restaurant may not have water service if it is supplied by a well with an electric pump.

In most cases of power failure, the restaurant should be closed. However, if your restaurant has a backup power generator or gas-powered appliances, such as stoves or hot water heaters, you may possibly be able to continue to operate.

• You need to have access to large amounts of ice for cooling foods and maintaining product temperatures. • You need to implement alternative procedures that allow your restaurant to meet the requirements of the Food Sanitation Rules. This may entail limiting sales of non-potentially hazardous foods or foods that require little or no preparation. • Cooking processes that require mechanical ventilation by the fire department would have to discontinued or approved by the Fire Marshall.

Version Number: 1.0 • March 2017 Page 24

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• To protect foods from being temperature abused, refrigerator and freezer units should be kept closed to maximize the cool air in the units. • When the power is restored, the food temperatures can be taken and food assessed for salvage.

No Hot Water

Dishwashing requires hot water to efficiently clean and sanitize utensils. Without water, utensils and hands cannot be washed.

• If there is no hot water, single service ware could be considered for a short-term 'interruption' in the hot water supply. • If the interruption is long-term, then products requiring utensils for preparation or service should be discontinued.

Refrigerated Foods

When power is restored, potentially hazardous foods must be evaluated to determine whether proper storage temperatures have been maintained.

• The temperature of potentially hazardous foods should be taken to make sure they are at 45° F or below. • Foods above 45° F should be cooled to 45° F or below in ice and placed back into refrigeration, if power has been out for four hours or less. • If the power is NOT expected to be back on immediately, then potentially hazardous foods should be packed in ice to maintain a temperature of 45° F or below.

If the power is out for MORE than four hours or you are unsure of the time of outage, food temperatures should be taken.

• Potentially hazardous foods with temperatures of 45° F or less should be iced immediately. • For foods with temperatures greater that 45° F, you should strongly consider discarding this food. • The general rule is 'WHEN IN DOUBT, THROW IT OUT!"

Version Number: 1.0 • March 2017 Page 25

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

Frozen Foods

Foods stored in freezers will generally stay frozen or below 45° F for a day or two during a power outage. The actual time the food will remain cold, however, depends on the size and type of freezer, the amounts of food stored in the unit, the temperature of the frozen food, and whether the unit is well insulated.

Full or well-insulated freezers will keep food frozen longer than partially full or poorly insulated ones, and larger freezers will keep food frozen longer than smaller units will. Foods such as meat and poultry will stay frozen longer than baked goods. In addition, frozen foods stored at less than 0° F will stay frozen longer than foods stored at temperatures greater than 0° F.

• Foods should be moved to a functional freezer if one is available. Make sure the food is insulated and protected from contamination during transportation. • If the food cannot be moved, leave it in the freezer and cover the unit with blankets or newspapers to minimize temperature increase or thawing. • Foods should be grouped together to keep foods colder longer. • Meat and poultry should be stored below and away from other foods during thawing to prevent cross contamination from dripping juices. • Dry ice can be used in the unit to keep foods cold if it is available.

Frozen Foods that have been Thawed

Potentially hazardous foods that have been thawed or are in a partially thawed state need to be checked to see if they are still safe to keep or refreeze when the power is restored.

• If the power has been out long enough for foods to thaw, then product temperatures should be taken. • Potentially hazardous foods at 45° F or less should be iced and maintained at that temperature. • If foods are above 45° F, discarding is highly recommended. • Any potentially hazardous food above 45° F for more than four hours must be discarded.

Version Number: 1.0 • March 2017 Page 26

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

Hot Foods

Gas appliances can keep food hot in ovens or hot holding devices, if they are still functional.

• Foods that are cooked or are in a holding device when the power goes out should be cooled immediately, in ice, to 45° F or below, and kept iced until the power is restored and the food can be placed under refrigeration. • If there is insufficient ice to cool hot foods, then they should be discarded.

Computers

• All computer equipment should have Fire Marshall approved surge protectors on them. • Most ENJ restaurants are equipped with battery backup on their computers to allow enough time to back up any unsaved data and turn off the machine until the power is restored. Check to see if your unit has such a system. If it does not, then simply turn your equipment off until the power is restored. • Back up your data regularly to prevent loss of information.

4.8.2. Water Loss

Without water, utensils and hands cannot be washed.

• If there is no water source at all, then no items other than prepared packaged items should be sold. • Dishwashing requires hot water to efficiently clean and sanitize utensils. If there is no hot water, single service ware could be considered for a short-term 'interruption' in the hot water supply. • If the interruption is long-term, then products requiring utensils for preparation or service should be discontinued.

Version Number: 1.0 • March 2017 Page 27

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

4.9. Emergency Care

• Each restaurant should have a first aid kit, and we recommend management be educated in CPR. These precautions are to address minor accidents and incidents only. • In the case of a major cut or burn, seizure, loss of consciousness, choking or another event, immediately call 911. • Do not try to act as a doctor or other educated medical professional. Get help immediately. • Keep Guests calm and report the incident.

4.10. Crisis Management

4.10.1. Defining a Crisis

A crisis is any event generally characterized by one or more of the following:

• Possible or actual harm to individuals or property in and around the restaurant. • Imminent threat to the restaurant’s usual business operations. • Imminent threat to the restaurant or brand reputation.

Examples of crises include medical emergencies, death, fire, natural disaster, terrorist acts, and incidences of abuse, confrontations, major food contamination and others. If such a situation arises, being prepared with a plan is vital.

4.10.2. Crisis Communication

The first step in creating a crisis plan is to determine the people to be involved in formulating responses and communicating information during a crisis. These people should be chosen for their ability to remain calm and levelheaded during a crisis, their ability to speak comfortably in front of a group, as well as for their level of responsibility in the daily operations of the restaurant. Members of the crisis communication team should be:

• Easily reached by phone when off-duty

Version Number: 1.0 • March 2017 Page 28

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Decision makers with authority to act • Able to accept and execute responsibility You determine who on your staff will be part of your crisis team. Those not on the team should be trained to call emergency services and local management and respond directly to the situation. They should not communicate with the press.

Any person on the team can fill more than one role. You may choose to delegate all the responsibilities to one or two staff members, or each member of the team may have different responsibilities. The organization is your decision.

The most important thing to remember about the roles and responsibilities is that they must all be covered. Spreading the responsibilities among several staff members can effectively ensure the responsibilities are all are met. Cross-training several team members in different responsibilities can also ensure the responsibilities will be met if a team member is absent.

Each of the crisis managers should report to you for guidance and support. Emotions can run high during a crisis and team members might not remember what steps they should be taking. Schedule crisis practices throughout the year to be sure everyone is comfortable with their roles and responsibilities.

These descriptions are suggestions only, based on our system’s best practices. They are not required.

4.10.3. First Responders

You choose who will be a first responder. You need to establish procedures for each potential crisis and define the order in which they are executed. Responsibilities might include:

• Assessing the crisis • Calmly determining the course of action • Contacting other members of the crisis communication team • Contacting emergency services

Version Number: 1.0 • March 2017 Page 29

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Calling contact persons listed in the Guests’ files

These responsibilities are not necessarily in order of priority. The individual crisis and the crisis team will determine priorities for each individual crisis. For example, during a fire, the emergency services are called first and then you; in the case of a serious illness, the rescue personnel are called first, then you should be called, and finally the health department if appropriate.

4.11. Spokesperson

You should assume the role of spokesperson. You need to be an articulate communicator who will be able to present information to the media and community effectively. Be familiar with ENJ protocol, the community and the situation at hand.

Your spokesperson responsibilities include:

• Communicating with WAC to create verbal and written responses to the media and community. • Presenting initial information to the media/community. • Working with us to create press release statements to local media and community. • Contacting local government agencies such as the Health Department or Social Services. • Developing relationships with local media and community members. • Communicating strategies and the crisis plan to co-workers.

4.12. Member Liaison

We recommend you have a member liaison to establish communication with the Guests’ emergency contacts during the crisis. This person should be a trustworthy member of the team able to communicate clearly and empathetically with family members and others.

Guest liaison responsibilities can include:

Version Number: 1.0 • March 2017 Page 30

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• Working with the team to develop a plan of action concerning how to communicate information to the Guests’ family members. • Creating a script to be used when communicating the crisis with contacts. • Informing contacts as soon as it is appropriate to do so. • Guiding the designated team members on how to inform contacts properly.

4.13. Documentation Specialist

A documentation specialist may be needed. This person may be responsible for maintaining all paperwork related to the crisis including contact lists and procedural documentation to thoroughly document the events of a crisis.

Documentation specialist responsibilities may include:

• Recording the events of a crisis situation thoroughly. • Assisting the witnesses to a crisis in completing written accounts of the event and other paperwork. • Creating and maintaining all paperwork involved in the crisis plan. • Training co-workers on the proper methods of completing paperwork after a crisis has occurred.

4.14. Dealing with the Press

4.14.1. Who May Talk to the Public

Only designated Home Office employees can represent the brand.

• Contact us immediately so that we can carefully draft a statement about the crisis and establish talking points to avoid sharing any details that must remain confidential. • You should instruct all your employees that they are not permitted to talk with media, and to refer media inquiries to the Home Office or franchise operator.

Version Number: 1.0 • March 2017 Page 31

We Are Crackin’ LLC Chapter 6: Confidential Operations Manual Restaurant Administration

• If members of the media call the restaurant, the staff should politely refer them to the Home Office or franchise operator. • If you are contacted for an interview, request that the interview questions be emailed to you in advance.

4.14.2. What Not to Say

If a camera crew shows up and wants to film, they are required by law to ask permission since it is your private property. In these cases:

• You or your staff present at the time should politely decline the request, saying that it would be disruptive, and the Guests have not given permission to be filmed. • You cannot stop media from filming the exterior of a location from across the street. You can only prevent them from filming on your private property. • Do not try to block the crew from filming by putting your hands over the camera. • Never tell a camera crew to, “Please leave.” This action could be shown on the news and appear to be extremely evasive.

Version Number: 1.0 • March 2017 Page 32