Franchisee Advertising Council

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Elevation Burger

This week, Elevation Franchise Ventures met with the elected regional franchisee representatives over a two day period to discuss a predetermined set of items on the nature of advertising as well as addressing concerns outlined by franchisees prior to convening. Outlined below is the agenda divided by day, with each item detailed in the coming pages.

TUESDAY 12.06.2011

1. Firefly/Granbury RS Presentation

2. Heartland E-Loyalty

3. Bacon Update

4. Wrap-up & Discussion for Next Meeting

MONDAY 12.05.2011

1. Review of Last Meeting Notes & Relevant Updates

2. PR & Social Media Update

3. Prospect Call

4. Mystery Shops

5. Menu Board Roll-Out, Price Increase, & COGs Discussion

6. Traitset Application Change

7. Outline of Changes to Training Program

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PR & SOCIAL MEDIA UPDATE

The next item of business brought us to a social media update. James Stewart, our Creative Fund & Brand Manager, discussed a series of recently launched, well-planned marketing promotions. He emphasized the importance of producing good marketing strategies designed as forms of leverage to keep customers returning to our restaurants. Among these strategies was a plan to lease two mini-coopers to qualified students who met certain prerequisites (based on GPA and the absence of DUIs, felonies, etc). This transitioned into a discussion on the five public relations firms who presented to the council at the last meeting. Ultimately, the council decided on Maloney & Fox to represent us, a relationship commemorated on October 1st. James noted the firm’s excitement and enthusiasm about our new partnership, and his confidence in Maloney & Fox to be artful, creative, and superlative in its methods of presenting a compelling EB Story. He then previewed an informative graphic developed by Maloney & Fox to discuss EB values from an internal point of view (that is, what the brand means to the franchisor and franchisees). Maloney & Fox aims to turn this graphic into a consumer facing document with more compelling terms to speak to the brand in a strong, promotional publication.

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REVIEW OF LAST MEETING NOTES AND RELEVANT UPDATES Day one of the Advertising Council began with Cynthia Hess, the appointed moderator for this convention, calling the session to order. In a recap of the previous Advertising Council, she presented the council members with a typed, six-page condensation of the last meeting’s minutes to be read independently.

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MYSTERY SHOPS

The council agreed to refine the template of Mystery Shops, which serve as a general tool for the benefit of Elevation Burger by creating accountability for restaurant performance. It was decided that the Mystery Shops in their current form, are useful to others for their potential to provide data to be viewed across the board in all Elevation Burger Locations. However, through the creation of our own tool and the hiring of people to do these Mystery Shops, the council aims to mine data from all franchisees through such means as the use of Enterprise (a service Firefly is providing for free), and the identification of regulars or the recruitment of anonymous third parties to give a wide-range of feedback. As a group, it

PR & SOCIAL MEDIA UPDATE [Cont’d] As for social media updates, there has been a creation of a template for media alerts to be used when venturing into new markets. James also announced the development of a franchisee social media manual that is going through another iteration of revisions concerning localized content and other various forms of media and types of social media posts to be used throughout the week on a regular basis. A Rude Q&A is under development as well, which will be used in turn to create a consumer-based Q&A. The council then turned its attention to the necessity of eliminating Group-On and Living Social relationships because it will destroy and devalue the brand – there was a general consensus among council members about this, as well as a unanimous desire to start growing as a national brand. In conclusion, it was decided that a specific time would be devoted to the refinement of marketing techniques at the next Ad Council meeting.

Elevation Burger

PROSPECT CALL

A conference call was made to Michael Brandt, a former franchisee candidate who holds exclusive rights to Party City in the Pennsylvania Area. During his prospective exploration of Elevation Burger, he flew to Washington and met with Hans and Michael and spent extensive amounts of time at the Lynwood Elevation Burger with Daniel Magnus. In the end, however, he walked away from franchising prospects because of the lack of response from other franchisees. Elevation Burger was too entrenched in the dealings of day-to-day business, and Brandt either received negative feedback, or no correspondence whatsoever, which raised concerns about the franchising culture. In response, one council member suggested we establish a communication tether to target high priority franchisees. This generated a consensus and there should be a follow-up email letting franchisees know who might calling.

MENU BOARD ROLL-OUT, PRICE INCREASE, & COGS DISCUSSION Hans opened the discussion by speaking about the price analysis and product mix at the Falls Church store. Price increase did not appear to be an issue, a neutral reaction in part facilitated by removing cheese from the definition of the Elevation Burger. The aim of such changes it to make menu engineering topics that help with COGs, which should fall within an ideal range around 30%.

James then led a discussion on menu board revisions, which draws individual attention to the separate elements, such as the left justification of all text to utilize more white space and increase readability. The Elevation Salad was moved to the Side board, and a description of Elevation Sauce is now included on the menu.

As for the menu options themselves, the calorie book is now on DataSource where it can be downloaded. The National Restaurant Association in the FDA will issue minor adjustments, and calories will be legally advertised in a range rather than an average. In response, the council voiced ideas about developing store-level products that boost the healthy aspects of our menu and how they interact with each other to benefit the customer. Eventually, we want to produce a chart that highlights these qualities of our product. Until then, during this upcoming 1st quarter the ideal roll-out for new board menus would be to have them in place by March 1, 2012 (note there is a 6-8 week ordering process).

Elevation Burger: Franchisee Advertising Council

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TRAITSET APPLICATION CHANGE Cynthia introduced the Indeed website, a completely self-regulated job application option viable for franchisee use. She reported that she has done it to recruit management and is now seeing if it can be used for standard team members. Besides the paid service, it also has a free resume searcher that allows follow-ups with job seekers who have posted on the Indeed site. This is a good alternative to Craigslist.

Traitset now has questions more useful to managers inserted into the standard application and can also transmit messages to constituents. For $29 per month, an added feature called OnBoarding can be used for sending vendor safe documents (a portion of the I-9s, W4, etc). OnBoarding ensures all document are filled out properly and are electronically kept and encrypted.

OUTLINE OF CHANGES TO TRAINING PROGRAM Cynthia devised a new training program that separates out class items to create a more focused environment that allows sufficient time to concentrate on mastering individual skills. There is now a classroom component taught by our trainer Jordan Moore at our new training facility off-site of the Falls Church location. Granbury will be providing us with two POS systems at no cost to be incorporated into the classroom segment and there is a class being written specifically for proper POS system usage. The new division of the three-week training is as follows: week 1 is for learning stations, week 2 is dedicated to management (taught in the classroom), and week 3 is for management practicum. In addition, starting in January, all new franchisees will be required to complete a 5-day owners’ classs divided in 10 half-day segments, each about 3 hours with time to process in between before three more hours of class in a given day. For one day, franchisees will be required to bring their book-keepers with them.

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