2. Early Growth Capital For Emerging Franchisees Facilitator: Ellen Hui, Managing Director M&A, National Franchise Sales Panelists: Mike Record, SVP/Manager of Program Finance, Restaurant Finance Group Angelo Crowell, CEO, Kalo Restaurant Group Kimberly Crowell, President, Kalo Restaurant Group

3. Franchisee Borrowing Lifecycle Disadvantages Advantages Borrowing Source Personal Cash Friends/Family/3 rd Party SBA Equipment Finance Companies Sale Leaseback/Build-to-Suit Local/Regional/National Bank Generalists Restaurant Finance Verticals Sub-Debt/Preferred Equity/2 nd Lien Fast; flexible; easy Access to capital Moderate equity requirements; available for startups Low equity requirements; available for smaller operators No equity requirements; can finance LB&E together Low cost of borrowing; readily available capital Industry expertise; low cost of borrowing Growth acceleration Ties up capital Can be costly; ownership dilution; can limit future borrowing ability Time consuming; excess collateral; higher debt costs No start-ups; higher borrowing costs; no RE or BV Not available for smaller operators; can be expensive; gives up RE ownership No start-ups; banks are restaurant- averse; lack of industry expertise No start-ups; lending to larger established concepts Costly; larger operators only; ownership dilution