mm LIB FRANCHISE DISCLOSURE DOCUMENT GOSH ENTERPRISES, INC. 2500 Farmers Drive, Suite 140 DMRLEYg Columbus, Ohio 43235 ^ PHILLY STEAks ' (614) 923-4700 www.charleys.com The franchise offered is for a restaurant operating under the name "Charleys Philly Steaks" featuring a limited menu of fresh grilled subs and other menu items as we may authorize from time to time ("Charleys Restaurant" or "Restaurant"). The total investment necessary to begin operation of a Charleys Restaurant is $101.572152.193 to $465,28245L2M (excluding real estate and related costs). This includes $24,500 that must be paid to us. This franchise disclosure document summarizes certain provisions of your franchise agreement and other agreements and information in plain English. Read this franchise disclosure document and all accompanying agreements carefully. You must receive this franchise disclosure document at least 14 calendar days before you sign a binding agreement with, or make any payment to, the franchisor or an affiliate in connection with the franchise sale or grant. Note, however, that no governmental agency has verified the information contained in this document. You may wish to receive your franchise disclosure document in another format that is more convenient for you. To discuss the availability of disclosure in different formats, contact Kelly Sayre, Corporate Paralegal, Gosh Enterprises, Inc., 2500 Farmers Drive, Suite 140, Columbus, Ohio and (614) 923-4700. The terms of your contract will govern your franchise relationship. Don't rely on the franchise disclosure document alone to understand your contract. Read all of your contract carefully. Show your contract and this franchise disclosure document to an advisor, like a lawyer or accountant. Buying a franchise is a complex investment. The information in this franchise disclosure document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this franchise disclosure document, is available from the Federal Trade Commission. You can contact the FTC at 1 877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising. There may also be laws on franchising in your state. Ask your state agencies about them. Date of Issuance: March -15. 201317. 2014 Charleys FDD March 2*m2M4 STATE CO^RPAGE Your state may have afranehise law that re^uiresafranehiser to register or file with a state franchise administrator hefore offering or selling in your state. REGfSTf^TfONOFAERANOHfSEBYASTATE DOES NOT MEAN THATTHE STATE RECOMMENDS THE ERANOHfSE OR HAS ERANOHfSEDfSOEOSURE DOCUMENT Oall the state franchise administrator listed in ExhihitCfor information ahout the franchisor or ahout franchising in your state. MANY FRANCHISE AGREEMENTS DO NOT AEEOW YOU TO RENEW UNCON^fTIONAEEYAETER THE INITIAL TERM EMPIRES YOUMAYHA^E TO SIGN ANEWAGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HA^E TO RENEWYOUR FRANCHISE, IF ANY^ANDWHATTERMS YOU MIGHTHA^E TO ACCEFTIN ORDER TO RENEW Please considerthe following RISKFACTORS hefore you huy this franchisee 1 THE FRANCHISE AGREEMENT REQUIRES THE FRANCHISEE TO ARBITRATE ANY DISPUTE WITH THE FRANCHISORONEYINTHE STATE OFTHE FRANCHISORS PRINCIPAL OFFICES, WHICH IS CURRENTLY OHIO OUT OF STATE ARBITRATION MAY FORCE YOU TOACCEPTALESS FAVORABLE SETTLEMENT FOR DISPUTES IT MAY ALSO COST MORE TO DEFEND AN ARBITRATION PROCEEDING FILED IN OHIO THAN ONE THAT IS FILED IN YOURHOME STATE 2 THE FRANCHISE AGREEMENT STATESTHATOHIOLAWGO^ERNSTHE AGREEMENT OHIO LAWMAYNOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS YOUR LOCAL LAW YOU MAY WANT TO COMPARE THESE LAWS 3 THEREMAYBEOTHERRISKS CONCERNING THIS FPANCHISE This disclosure document is for use in all states aud the District of Columhia. Certain states require franchisors to make additional disclosures related to the informati^^ contained in this disclosure document. Those disclosures are contained in ExhihitsHandl to this disclosure document. The Effective Date: See the next page for state effective dates. Ch^i^^DD M^^^^^Ot^ STATE EFFECTIVE DATES The following states require that the Franchise Disclosure Document be registered or filed with the state, or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin. This Franchise Disclosure Document is registered, on file or exempt from registration in the following states having franchise registration and disclosure laws, with the following effective dates: STATE EFFECTIVE DATE California Docombcr 10. 2013 Hawaii March 28, 2013 Illinois March 20, 2013 Indiana March 15, 2013 Maryland March 22. 2013 Michigan Minnesota March 21, 2013 New York March 20, 2013 North Dakota March 20, 2013 Rhode Island March 21. 2013 South Dakota March 20, 2013 Virginia April 11, 2013 Washington March 20. 2013 Wisconsin March 20, 2013 In all other states, the effective date of this Franchise Disclosure Document is the issuance date of March 15. 2013.17. 2014. Charleys FDD March 30132014 TABLE OF CONTENTS Page ITEM 1 THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES 1 ITEM 2 BUSINESS EXPERIENCE 4 ITEM 3 LITIGATION _____ 5 ITEM 4 BANKRUPTCY 7 ITEM 5 INITIAL FEES _ _ _ _ _ 7 ITEM 6 OTHER FEES ___ 7 ITEM 7 ESTIMATED INITIAL INVESTMENT 11 ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES 13 ITEM 9 FRANCHISEE'S OBLIGATIONS 17 ITEM 10 FINANCING _ _ __ _ _ _ _ _ _ 18 ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING . ...18 ITEM 12 TERRITORY .25 ITEM 13 TRADEMARKS 25 ITEM 14 PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION 27 ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS _ 28 ITEM 16 RESTRICTION ON WHAT THE FRANCHISEE MAY SELL 29 ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION 29 ITEM 18 PUBLIC FIGURES 32 ITEM 19 FINANCIAL PERFORMANCE REPRESENTATION 32 ITEM 20 OUTLETS AND FRANCHISEE INFORMATION ITEM 21 FINANCIAL STATEMENTS _ 4£M ITEM 22 CONTRACTS 46M ITEM 23 RECEIPTS _ 4642 EXHIBITS A FRANCHISE AGREEMENT B OPERATIONS MANUAL TABLE OF CONTENTS C LIST OF STATE AGENCIES/AGENTS FOR SERVICE OF PROCESS D LIST OF FRANCHISED RESTAURANTS E LIST OF COMPANY-OWNED RESTAURANTS F LIST OF FORMER FRANCHISEES G FINANCIAL STATEMENTS H STATE SPECIFIC AMENDMENTS TO FRANCHISE DISCLOSURE DOCUMENT I STATE SPECIFIC AMENDMENTS TO FRANCHISE AGREEMENT J COMPLIANCE QUESTIONNAIRE Charleys FDD March 3ft4320H THEFRANCHISORANOANYPA^ This franchise disclosure document provides certain information ahout Gosh Enterprises,fnc.^GEf^andthetermsonwhich it currently offers Charleys franchises in theUnited States of Americans required hy federal regulations and certain statelaws). This franchise disclosure document cannot and does not provide all the information a prospective franchisee shouldconsider in makingadecisionon whether toenterintoa Franchise Agreement. Prospective franchisees should make an independent investigation helbremakingadecision to enter intoaFranchise Agreement and should consult with their own advisors, such as an attorney or an accountant. Unless the context otherwiserequires, all references to^GFfB"we,"^us,"or"our" refer to Gosh Enterprises, fnc.^GFf^^ refer tothepersonwhoisgrantedafranchise. ff you areacorporation, limited liahility company, partnership or any other type of legal entity, theprovisionsof the Franchise Agreementalsoapplytoyourownershy virtue of therequirement that allyour owners personally guarantee, andhepersonally houndhy,yourohligationsundertheFranchise Agreement. The Franchisor, and any Parents^ Predecessors^ and Affiliated GEf offers the franchises described in this franchise disclosure document. GEfisan Ghio corporation. We were incorporated and began offering franchises for Charleys Restaurants in May 1990. We conduct business under our corporatenameandthenames "Charleys Philly Steaks^,"^ SteakeryFreshGrilledSubs". We currently franchise our Restaurants to operate under the name "CharleysPhilly Steaks^" We are transitioning the nameoftherestaurants from "Charley's Grilled Subs" to "Charleys Philly Steaks" Many of these restaurants may continuetooperateunderthename^Charley'sGrilledSubs"foraperiod of years during whichareasonable transition of signage to the name"Charleys Philly Steaks" is expected to occur. Inthis disclosure documentwerefertoCharleysPhillySteaksrestaurants and Charley's Grilled Subs restaurants as "Restaurants" or "Charleys Restaurants". Cur principal business address is 2500Farmers Drive, Suitel^O, Columbus, Ghio 43235. Gur agents for service of process are listed in Exhibit C. We are not engaged in any other business and have never offered franchises in any other line ofbusiness As of December 31, 2012^1^ there are 4^42 company-owned Restaurants and ^^^Lfranchised Restaurants inthedomesticUS.and5franchised Restaurants inthe U.S. territories of PuertoRicoandGuam(Seeltem 20). Wealsohave^^locationsin Bahrain,Prazil,Canada,Dominican Ro^ublicE^^^Germany,Guatemala.^ Italy, dapan, Korea, Kuwait, Mauritius, Gman, Panama, GntarPoiand Saudi Arabia, UnitedKin^dom. United Arab Emirates United Kingdom andVenezuela We do not have apredecessor, however, our CEG andfounder, Charley M Shin opened the ^rstCharley'sSteakery