10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  FORM 10-K

R   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended:  December 31, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT

For the transition period from ____ to ____

Commission file number: 000-538-53

BOURBON BROTHERS HOLDING CORPORATION

 (Exact name of the registrant as specified in its charter)

Colorado	80-0182193
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

2 N. Cascade Avenue, Suite 1400

Colorado Springs, CO 80903

(Address of principal executive offices)

719-265-5821

Telephone number, including

Area code

Securities registered under Section 12(b) of the Exchange Act: None

Title of Each Class	Name of Each Exchange on Which Registered
NONE	NONE

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, no par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

Yes o No R

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes o No R

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes R No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes R   No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes oNo R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

Large accelerated filer o       Accelerated filer o       Non-accelerated filer o       Smaller reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

There were 43,841,241 shares of the issuer's common stock, no par value, outstanding as of March 19, 2014.

The aggregate market value of common stock held by non-affiliates of the Registrant as of June 30, 2013, computed by reference to the closing sales price on that date was approximately $14,286,000.  

BOURBON BROTHERS HOLDING CORPORATION

FORM 10-K

FOR THE PERIOD ENDED DECEMBER 31, 2013

CONTENTS

PART I	2
Item 1.  Business	2
Item 1A. Risk Factors	4
Item 2.  Properties	10
Item 3. Legal Proceedings	10
Item 4. Mine Safety Disclosures	10
PART II	10
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	11
Item 6. Selected Financial Data	12
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	18
Item 8. Financial Statements and Supplementary Data	18
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18
Item 9A. Controls and Procedures	19
Item 9B. Other Information	20
PART III	21
Item 10.  Directors, Executive Officers and Corporate Governance	21
Item 11. Executive Compensation	24
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	28
Item 13. Certain Relationships and Related Transactions, and Director Independence	30
Item 14. Principal Accountant Fees and Services	31
Item 15. Exhibits, Financial Statement Schedules	32
Signatures	33

1

Cautionary Statement about Forward-Looking Statements

This Form 10-K contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, the continuing development of the Company’s business plan operations, the Company’s anticipated growth and potentials in its business, the financial performance and/or gains by companies in which the Company holds a position, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified elsewhere herein, including under “Risk Factors.” Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.

PART I

Item 1. BUSINESS.

General Discussion

Bourbon Brothers Holding Corporation (“BBHC” or the “Company”) is a Colorado corporation that was formed on January 29, 2008. The Company, on January 22, 2014, with approval of a majority of the Company’s shareholders, changed its name from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.

The Company’s wholly-owned subsidiary, Southern Hospitality Franchisee Holding Corporation (“SH”) entered into a franchise agreement and area development agreement with SH Franchising & Licensing LLC, dba Southern Hospitality BBQ (the “Franchisor”) in November 2011. In May 2012, SH formed Southern Hospitality Denver Holdings, LLC (“SHDH”), a wholly-owned subsidiary, and Southern Hospitality Denver, LLC (“SHD”). SHD was formed for the purpose of owning and operating the Company’s first franchised restaurant in Denver, Colorado. As of December 31, 2013, SHD is 51% owned by SHDH and 49% owned by non-controlling interest holders, of which a director of the Company is a 22% non-controlling interest holder. On September 23, 2013, the Company amended the Franchise Agreement (“FA”) with the Franchisor. The amendment to the FA resulted in a substantial reduction in the royalty fees for the Company’s Denver restaurant to be paid to the Franchisor beginning January 1, 2014. The Company, at the same time, terminated the Area Developer Agreement (“ADA”) with the Franchisor for the exclusive rights for the first 10 cities identified in the ADA, subject to customary conditions and exceptions, and for the ownership and operation of up to 30 Southern Hospitality restaurants in the United States. Any new potential locations will be reviewed with the Franchisor on a case by case basis.

On November 13, 2012, the Company, f/k/a Art Dimensions, Inc. (“ADI”), entered into an Agreement and Plan of Merger and Reorganization with SH whereby the Company acquired SH in a reverse triangular merger (the “SH Acquisition”). On November 13, 2012, the parties closed the SH Acquisition, and a Statement of Merger was filed and effective with the Colorado Secretary of State on that day. Upon closing the SH Acquisition, the Company issued a total number of common shares to the SH shareholders in exchange for all of their ownership interests in SH such that they owned approximately 89% of the Company on the date of the SH Acquisition. The shareholders of the Company prior to the SH Acquisition owned approximately 11% of the Company after the closing of the SH Acquisition. On November 13, 2012, the Company and SH closed the SH Acquisition, and the Company’s wholly owned subsidiary, ADI Merger Corp., was merged with and into SH. An aggregate of 5,259,029 Company shares were issued in the SH Acquisition.  The number of ADI common shares received by SH’s shareholder depended on the number of shares each held and that were outstanding at the closing of the SH Acquisition.  Additionally, upon the effective date of the SH Acquisition all outstanding SH warrants, options and outstanding promissory notes were exchanged for options, warrants and promissory notes to acquire ADI common stock on equivalent terms.  Pursuant to the SH Acquisition, on November 13, 2012, the Company changed its name from Art Dimensions, Inc. to Southern Hospitality Development Corporation. The Registrant was a public shell company (as defined in Rule 12b-2 of the Exchange Act) at the date of the SH Acquisition. Therefore, the SH Acquisition was accounted for as a reverse acquisition and recapitalization. SH is the acquirer for accounting purposes and ADI is the acquired company. Accordingly, SH’s historical financial statements for periods prior to the SH Acquisition become those of ADI, retroactively restated for, and giving effect to the number of shares received in the SH Acquisition. The accumulated deficit of SH is carried forward after the SH Acquisition. Operations reported for periods prior to the SH Acquisition are those of SH. Earnings per share for the period prior to the SH Acquisition are restated to reflect the equivalent number of shares outstanding.

2

The Company, on May 3, 2013, with approval of a majority of the Company’s shareholders, changed its name from Southern Hospitality Development Corporation to Smokin Concepts Development Corporation.

On September 30, 2013, the Company entered into an Acquisition Agreement with Bourbon Brothers Holding Company, LLC (“BBHCLLC”) to acquire all of the equity interests in BBHCLLC (the “BB Transaction”) and its subsidiaries. BBHCLLC is a Colorado limited liability company (“LLC”) formed in May 2013, for the purpose of developing and managing all aspects of operating units related to a recently developed “Bourbon Brothers” brand.  As of December 31, 2013, BBHCLLC was a development stage company. BBHCLLC’s subsidiaries (all LLCs formed in April 2013) include Bourbon Brothers Restaurant Group, LLC (“BBRG”), Bourbon Brothers Franchise, LLC (“BBF”) and Bourbon Brothers Brand, LLC (“BBB”). BBRG is to own the stores that will encompass several Bourbon Brothers brands, and owns 51% of Bourbon Brothers Southern Kitchen Colorado Springs, LLC (“BBSK”), which opened its first restaurant in January 2014. BBRG owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC (“BBSF”). BBB manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company’s core brand.

On November 8, 2013, the Company and BBHCLLC amended the Acquisition Agreement by entering into a First Amendment to Acquisition Agreement.  On January 22, 2014, the parties entered into a Second Amendment to Acquisition Agreement, identifying the final common share conversion ratio of 1.82427.  The Second Amendment identified the number of shares to be issued in the BB Transaction as 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHCLLC Class A Voting members.  These shares were issued at the closing of the BB Transaction.  All outstanding options and warrants to acquire BBHCLLC units were assumed by the Company, applying the conversion ratio to the number of units and strike price.

Competition

We have a limited operating history, and therefore, anticipate that we will compete with national and regional casual and upscale casual dining restaurants. Our competition may also include a variety of locally owned restaurants and several major store chains. The number, size and strength of competitors vary by region, market and even restaurant. Competitors to our restaurants compete based on a number of factors, including taste, quality, speed of service, price and value, name recognition, location, customer service and the ambience and condition of the competitor.

Restaurant Site Selection

We believe that site selection is critical to our success and thus we devote substantial effort to evaluating potential locations. Our site selection process includes the use of external real estate brokers with expertise in specific markets. Locations proposed by real estate managers are reviewed on site by an executive of the Company. We study the surrounding trade area, demographic and business information within that area, and available information on competitors.

Employees

As of December 31, 2013, the Company had 52 employees, of which 11 are full-time employees.  These employees are employed by SHD.

Additional Information

The Company files reports with the Securities and Exchange Commission (the “SEC”) as required by Section 13(a) of the Exchange Act. The public may read and copy materials filed by the Company with the SEC at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

3

Item 1A.RISK FACTORS

Our future performance is subject to a variety of risks and uncertainties. Although the risks described below are the risks that we believe are material, there may also be risks of which we are currently unaware, or that we currently regard as immaterial based upon the information available to us that later may prove to be material. The Company’s securities are highly speculative and involve a high degree of risk, including among other items the risk factors described below.

RISKS RELATED TO OUR BUSINESS

General Company Risks

The Company has a limited operating history.  The Company did not begin active business operations until late February 2013.  Therefore the Company is subject to many risks common to enterprises with limited or no operating history, including potential under-capitalization, limitations with respect to personnel, financial and other resources, and limited customers and revenue sources.  Our ability to successfully generate sufficient revenues from operations is dependent on a number of factors, including availability of funds to fund our current and anticipated operations, and to commercialize our business concept.  There can be no assurance that we will not encounter setbacks with the on-going development and implementation of our business plan.  In addition, our assumptions and projections may not prove to be accurate, and unexpected capital needs may arise. If such needs arise our inability to raise additional funds, either through equity or debt financing, will materially impair our ability to implement our business plan and generate revenues.  Further, as a result of the recent volatility of the global markets, a general tightening of lending standards, and a general decrease in equity financing and similar type transactions it could be difficult for us to obtain funding to allow us to continue to develop our business operations.

We likely will need additional capital in the future and it may not be available on acceptable terms.  The development of our business model will likely require significant additional capital in the future to, among other things, fund our operations and growth strategy.  We may rely on bank financing and also may seek access to the debt and/or equity capital markets.  There can be no assurance, however, that these sources of financing will be available on reasonable terms, or at all.  Our ability to obtain additional financing will be subject to a number of factors, including market/economic conditions, our operating performance, and investor sentiment.  These factors may make the timing, amount, terms and conditions of additional financings unattractive to us.  If we are unable to raise additional capital, our growth could be significantly impeded and/or we may be unable to execute upon our business model.

New or less mature restaurants, once opened, may vary in profitability and levels of operating revenue for six months or more and may under perform compared to existing or established restaurants.   New and less mature restaurants typically experience higher operating costs in both dollars and percentage of revenue initially when compared to restaurants in the comparable restaurant base.  Further, restaurants located in one city or location may not perform as well as restaurants in another city or location.  We expect that our restaurants may take several months to reach normalized operating levels due to inefficiencies typically associated with new restaurants.  These include operating costs, which are often significantly greater during the first several months of operation.

The restaurant industry is highly competitive and subject to changes in consumer preferences.The Company’s business is to own and operate southern-food themed restaurants in several cities in the United States.  Competition in the restaurant industry is increasingly intense. Our competitors include a large and diverse group of restaurant chains and individual restaurants that range from independent local operators that have opened restaurants to well-capitalized national restaurant companies. Many of our competitors are well established and some of our competitors have substantially greater financial, marketing, and other resources than do we. Accordingly, they may be better equipped than us to increase marketing or to take other measures to maintain their competitive position.

Moreover, the bar and restaurant industry is characterized by the continual introduction of new concepts and is subject to rapidly changing consumer preferences, tastes and habits.  Our success depends on the popularity of Southern U.S. based foods and drinks, and shifts in consumer preferences away from this cuisine and style would likely have a material adverse effect on our future profitability.

4

Our operating results will likely experience significant fluctuations. Our operating results may fluctuate significantly due to various risks and unexpected circumstances, increases in costs, seasonality, weather, and other factors outside our control.  The restaurant and bar business is subject to a number of significant risks such as: general economic conditions; extended periods of inclement weather which may affect guest visits as well as limit the availability of key commodities and items that are important ingredients in our products; increases in energy costs, costs of food, supplies, maintenance, labor and benefits, as well as other operating costs; and unanticipated expenses such as repairs to damaged or lost property. Moreover, our business may be subject to seasonal fluctuations. Accordingly, our results of operations from any given period may not necessarily be indicative of results to be expected for any particular future period.

Our expansion into new markets may present increased risks due to our unfamiliarity with those areas.  Our expansion strategy also entails opening restaurants in markets in which we have little or no operating experience. These new markets may have different competitive conditions, consumer tastes and discretionary spending patterns. In addition, our new restaurants will typically take several months to reach budgeted operating levels due to problems associated with new restaurants, including lack of market awareness, inability to hire sufficient staff and other factors. Restaurants opened in new markets may never reach expected sales and profit levels, thereby affecting our overall profitability. Although we have attempted to mitigate these factors by paying careful attention to training and staffing needs, there can be no assurance that we will be successful in operating new restaurants on a profitable basis.

Our ability to open new restaurants on schedule in accordance with our targeted capacity growth rate may be adversely affected by delays or problems associated with securing suitable restaurant locations and leases and by other factors, some of which are beyond our control and the timing of which is difficult to forecast accurately. Our objective is to grow our business and increase shareholder value primarily by (i) establishing and then expanding our base of restaurants that are profitable; and (ii) once established, increasing sales at existing restaurants.  Due in part to the unique nature of each proposed restaurant location, we cannot predict the timing or ultimate success of our site selection process or these lease negotiations. Delays encountered in negotiating, or our inability to finalize to our satisfaction, the terms of a restaurant lease may delay our actual rate of new restaurant growth and cause a significant variance from our targeted capacity growth rate. In addition, our scheduled rate of new restaurant openings may be adversely affected by other factors, some of which are beyond our control, including the following:

• the availability and cost of suitable restaurant locations for development;

• our ability to compete successfully for suitable restaurant locations;

• the availability of adequate financing;

• the timing of delivery of leased premises from our landlords so we can commence our build-out construction activities;

• construction and development costs;

• labor shortages or disputes experienced by our landlords or outside contractors, including their ability to manage union activities such as picketing or hand billing which could delay construction and which could create adverse publicity for our business and operations;

• any unforeseen engineering or environmental problems with the leased premises;

• our ability to hire, train and retain additional management and restaurant personnel;

• our ability to secure governmental approvals and permits, including liquor licenses;

• our ability to successfully promote our new restaurants and compete in the markets in which our new restaurants are located;

• weather conditions or natural disasters; and,

• general economic conditions.

As a franchisee we have obligations to our Franchisor.  We are obligated to pay the Franchisor royalties on gross sales from the SHD restaurant. These fees will require that the Company devote a substantial amount of its financial resources to paying such fees, which could negatively affect the Company’s results of operations and liquidity.

5

Our success depends on our ability to protect intellectual property used in our business operations. We rely on trade secrets and proprietary know-how in operating our restaurants, and we expect to employ various methods to protect those trade secrets and that proprietary know-how. However, such methods may not afford adequate protection and others could independently develop similar know-how or obtain access to our know-how, concepts and recipes.  We cannot offer any assurance that third parties will not claim that the trademarks or menu offerings we utilize infringe upon their proprietary rights. Any such claim, whether or not it has merit, could be time-consuming, result in costly litigation, cause delays in introducing new menu items in the future or require us to enter into royalty or licensing agreements. As a result, any such claim could have a material adverse effect on our business, results of operations, financial condition or liquidity.

If we fail to manage our growth effectively, it could harm our business. Failure to manage our growth effectively could harm our business.  Our business model anticipates that we will open multiple restaurants in various cities across the United States.  Our restaurant management systems, financial and management controls and information systems may not be adequate to support our planned expansion. Our ability to manage our growth effectively will require us to develop and enhance these systems, procedures and controls and to locate, hire, train and retain management and operating personnel. We cannot offer any assure that we will be able to respond on a timely basis to all of the changing demands that our planned expansion will impose on management and on our infrastructure. If we are unable to manage our growth effectively, our business and operating results could be materially adversely impacted.

Our operations will be susceptible to the changes in cost and availability of food which could adversely affect our operating results. Our profitability will depend in part on our ability to anticipate and react to changes in food costs. Various factors beyond our control, including adverse weather conditions, governmental regulation, production, availability, recalls of food products, and seasonality, as well as the impact of the current macroeconomic environment on our suppliers, may affect our food costs or cause a disruption in our supply chain. Changes in the price or availability of commodities for which we do not have fixed price contracts could materially adversely affect our profitability. Expiring contracts with our food suppliers could also result in unfavorable renewal terms and therefore increase costs associated with these suppliers or may even necessitate negotiations with alternate suppliers. We cannot predict whether we will be able to anticipate and react to changing food costs by negotiating more favorable contract terms with suppliers or by adjusting our purchasing practices and menu prices, and a failure to do so could adversely affect our operating results. In addition, the ability of our suppliers to meet our supply requirements upon favorable terms, if at all, may be impacted by the economic recovery.

The restaurant business is subject to a significant amount of regulation and licensing requirements. Our proposed business is subject to various federal, state, and local government regulations, including those relating to the food safety and disclosure, alcoholic beverage sale and control, public accommodations, and public health and safety. These regulations are subject to continual changes and updating. Difficulties or failures in obtaining or maintaining the required licenses and approvals or maintaining compliance with existing or newly enacted requirements could delay the opening or affect the continued operation and profitability of one or more restaurants in a particular area.

We are also subject to "dram shop" statutes in certain states, such as Colorado.  These statutes generally allow a person injured by an intoxicated person to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Failure to comply with alcoholic beverage control or dram shop regulations could subject the Company to liability and could adversely affect our business.

Various federal and state employment laws will govern our relationship with our team members and affect operating costs.  These laws govern minimum wage requirements, overtime pay, meal and rest breaks, unemployment tax rates, workers' compensation rates, citizenship or residency requirements, labor relations, child labor regulations, and discriminatory conduct. Additional government-imposed increases in federal and state minimum wages, overtime pay, paid leaves of absence, and mandated health benefits, increased tax reporting and tax payment requirements for team members who receive tips or a reduction in the number of states that allow tips to be credited toward minimum wage requirements could harm our operating results.

6

The food service industry is affected by litigation and publicity concerning food quality, health and other issues, which can cause guests to avoid our restaurants and result in significant liabilities or litigation costs.  Food service businesses can be adversely affected by litigation and complaints from guests, consumer groups or government authorities resulting from food quality, illness, injury or other health concerns or operating issues stemming from one restaurant or a limited number of restaurants. Adverse publicity about these allegations may negatively affect us, regardless of whether the allegations are true, by discouraging guests from eating at our restaurants. We could also incur significant liabilities if a lawsuit or claim results in a decision against us or litigation costs regardless of the result.

Health concerns relating to the consumption of certain food products could affect consumer preferences and could negatively impact our results of operations.   Like other restaurants, consumer preferences could be affected by health concerns about the consumption of certain food products (such as beef or chicken), or negative publicity concerning food quality, illness and injury in general. In recent years there has been negative publicity concerning e-coli, hepatitis A, "mad cow," "foot-and-mouth" disease and "bird flu." The restaurant industry has also been subject to a growing number of claims that the menus and actions of restaurant chains have led to the obesity of certain of their guests, resulting in legislation in some jurisdictions which require nutritional information to be disclosed to guests. Nutritional labeling could be enacted in many additional states, counties or cities as well as on a federal level. Nutritional labeling requirements and negative publicity concerning any of the food products we serve may adversely affect demand for our food and could result in a decrease in guest traffic to our restaurants. If we react to the labeling requirements or negative publicity by changing our concept or our menu offerings or their ingredients, we may lose guests who do not prefer the new concept or products, and we may not be able to attract sufficient new guests to produce the revenue needed to make our restaurants profitable. In addition, we may have different or additional competitors for our intended guests as a result of a change in our concept and may not be able to compete successfully against those competitors. A decrease in guest traffic to our restaurants as a result of these health concerns or negative publicity or as a result of a change in our menu or concept could materially harm our business.

Uncertainty regarding the economic recovery may negatively affect consumer spending and has adversely impacted our revenues and our results of operations and may continue to do so in the future.   Current uncertainty regarding economic conditions and the existence and rate of any economic recovery may have an adverse effect on the businesses, results of operations and financial condition of the Company and its customers, distributors and suppliers. These conditions include continued unemployment, weakness and lack of consistent improvement in the housing markets; downtrend or delays in residential or commercial real estate development; volatility in financial markets; inflationary pressures and reduced consumer confidence. As a result, our customers may continue to remain apprehensive about the economy and maintain or further reduce their already lowered level of discretionary spending. This could impact the frequency with which our customers choose to dine out or the amount they spend on meals while dining out, thereby decreasing our revenues and potentially negatively affecting our operating results. We believe there is a risk that prolonged negative economic conditions might cause consumers to make long-lasting changes to their discretionary spending behavior, including dining out less frequently on a more permanent basis, which would have an adverse effect on our business.

We expect to rely heavily on information technology, and any material failure, weakness or interruption could prevent us from effectively operating our business.The restaurant industry relies heavily on information systems, including point-of-sale processing in restaurants, payment of obligations, collection of cash, credit and debit card transactions and other processes and procedures. Our ability to efficiently and effectively manage our business will in part depend on the reliability and capacity of these systems.  The failure of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms could result in delays in guest service and reduce efficiency in our operations.  Remediation of such problems could result in significant, unplanned capital investments.

We identified material weaknesses in our disclosure controls and procedures and our Internal Controls Over Financial Reporting.  Section 404 of the Sarbanes-Oxley Act of 2002 requires management to assess our internal controls over financial reporting (“ICFR”) pursuant to a defined framework.  In making that assessment, management identified a material weakness in our disclosure controls as a result of several material weaknesses identified in our ICFR as described in Item 9A below.  There are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective ICFR can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements.  Material weaknesses make it more likely that a material misstatement of annual or interim financial statements will not be prevented or detected.  In addition, effective ICFR at any point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

7

We have signed leases under long-term non-cancelable terms for which we may remain obligated to perform under even after a restaurant closes, and we may be unable to renew leases at the end of their terms. Our current SHD lease for our first Denver restaurant is a non-cancelable ten-year lease with an option to renew for two five year terms. Our current Colorado Springs lease is a non-cancelable ten-year lease with an option to renew for a ten-year term.  If we were to close or fail to open a restaurant at a location we lease, we would generally remain committed to perform our obligations under the applicable lease, which could include, among other things, payment of the base rent for the balance of the lease term. Our obligation to continue making rental payments and fulfilling other lease obligations in respect of leases for closed or unopened restaurants could have a material adverse effect on our business and results of operations. Alternatively, at the end of the lease term and any renewal period for a restaurant, we may be unable to renew the lease without substantial additional cost, if at all. If we cannot renew such a lease we may be forced to close or relocate a restaurant, which could subject us to construction and other costs and risks.

The Company is significantly leveraged and has significant debt service requirements.  The Company has a significant amount of indebtedness which could limit the Company’s ability to incur additional indebtedness for capital raising purposes, securing a line of credit, or otherwise. The Company’s indebtedness could adversely affect the Company’s operations, including among other things its ability to obtain additional financing if necessary, and a significant portion of the Company’s cash flow from operations could be dedicated to the repayment of interest and principal on the debts which would reduce the amount of funds available for other corporate purposes.  The Company’s ability to meet its debt service obligations and reduce its indebtedness will be dependent upon the Company’s future performance, which will be subject to the success of its business strategy, general economic conditions, and other factors affecting the Company’s operations, many of which are beyond the Company’s control.

The Company is not required to establish a sinking fund (or any similar type of segregated accounts) for the repayment of its debt. There can be no assurance that the Company’s business operations will generate sufficient cash flow from operations to meet its debt service requirements and the potential payment of principal in cash when due, and the if the Company is unable to do so, it may be required to liquidate assets, to refinance all or a portion of the indebtedness or seek to obtain additional financing.

8

RISKS RELATED TO OUR SECURITIES

The Company does not intend to declare any dividends in the foreseeable future.  The Company intends to retain any of its profits to fund the Company’s business operations.  Investors who require income from dividends should not purchase our common stock.

 As our stock is not listed on a national securities exchange, trading in our shares will be subject to rules governing "penny stocks," which will impair trading activity in our shares.   Our stock is not on a national securities exchange. Therefore, our stock is subject to rules adopted by the SEC regulating broker dealer practices in connection with transactions in "penny stocks." Those disclosure rules applicable to "penny stocks" require a broker dealer, prior to a transaction in a "penny stock" not otherwise exempt from the rules, to deliver a standardized list disclosure document prepared by the SEC. That disclosure document advises an investor that investment in "penny stocks" can be very risky and that the investor's salesperson or broker is not an impartial advisor but rather paid to sell the shares. The disclosure contains further warnings for the investor to exercise caution in connection with an investment in "penny stocks," to independently investigate the security, as well as the salesperson with whom the investor is working and to understand the risky nature of an investment in this security. The broker dealer must also provide the customer with certain other information and must make a special written determination that the "penny stock" is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Further, the rules require that, following the proposed transaction, the broker provide the customer with monthly account statements containing market information about the prices of the securities.

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. Many brokers may be unwilling to engage in transactions in our common stock because of the added disclosure requirements, thereby making it more difficult for shareholders to dispose of their shares. You will also find it difficult to obtain accurate information about, and/or quotations as to the price of, our common stock.  In general, buying low-priced penny stocks is very risky and speculative.  The Company’s common stock is currently defined as a penny stock under the Securities and Exchange Act of 1934, and rules thereunder.   You may not be able to sell your shares when you want to do so, if at all.  The penny stock rules may affect the ability of broker-dealers to make a market in or trade our common stock and may also affect your ability to resell any shares you may purchase in the public markets.

The over-the-counter market for stock such as ours is subject to extreme price and volume fluctuations. You may not be able to resell your shares at or above the public sale price. The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in the our industry and in the investment markets generally, as well as economic conditions and quarterly variations in our operational results, may have a negative effect on the market price of our common stock.

As a company with a class of securities registered pursuant to the Exchange Act the Company has significant obligations under the Exchange Act. Having a class of securities registered under the Exchange Act is a time consuming and expensive process and subjects the Company to increased regulatory scrutiny and extensive and complex regulation.  Complying with these regulations is expensive and requires a significant amount of management’s time.  For example, public companies are obligated to institute and maintain financial accounting controls and for the accuracy and completeness of their books and records.  These requirements could necessitate additional corporate spending on procedures and personnel requiring us to reallocate funds from other business objectives.

We are a holding company and depend on the cash flow of our subsidiaries. We are a holding company with no material assets other than the equity interests of our subsidiaries. Our subsidiaries conduct substantially all of our operations and own substantially all of our assets. Consequently, our cash flow and our ability to meet our obligations depends upon the cash flow of our subsidiaries and the payment of funds by our subsidiaries directly or indirectly to us in the form of dividends, distributions and other payments. Any inability on the part of our subsidiaries to make payments to us could have a material adverse effect on our business, financial condition and results of operations.

There may be future sales or other dilution of our equity which may adversely affect the market price of our common stock. We are not restricted from issuing additional common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or preferred stock or any substantially similar securities. Our Board of Directors is authorized to issue additional shares of common stock and additional classes or series of preferred stock without any action on the part of the stockholders. Our Board of Directors also has the discretion, without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, rights and preferences with respect to dividends or upon the liquidation, or winding up of our business and other terms. If we issue preferred shares in the future that have a preference over our common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that dilute the voting power of our common stock, the rights of our common stockholders or the market price of our common stock could be adversely affected.

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Item 2. PROPERTIES

The Company’s principal executive office, for all operations, is located at 2 North Cascade Avenue, Suite 1400, Colorado Springs, CO 80903.  The Company does not own any real property.  The following table provides certain information regarding our businesses leased as of March 14, 2014:

		Operating
	Principal	Square
Location	Uses	Feet		Interest
Denver, Colorado	Restaurant		7,464	Leased (a)
Colorado Springs, Colorado	Corporate Office		4,450	Leased (b)
Colorado Springs, Colorado	Restaurant		9,191	Leased (c)

(a)	Occupied under the terms of a 124.5 month lease with an unaffiliated party.  We pay $15,550 per month escalating up to $20,289 per month in year 10.
(b)	Occupied under the terms of a 78 month lease with an unaffiliated party. We pay approximately $5,800 per month escalating up to $6,000 per month in year 6.
(c)	Occupied under the terms of a 120 month lease with a related party.  We pay $32,083 per month escalating by approximately 10% every 60 months.

Item 3. LEGAL PROCEEDINGS

None.

Item 4.  MINE SAFETY DISCLOSURES

None.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is currently quoted on the OTCQB under the symbol “RIBS”. The table below sets forth the high and low bid prices of the Company’s common stock during the periods indicated as reported on Yahoo Finance (http://finance.yahoo.com).  The quotations reflect inter-dealer prices without retail mark-up, mark-down or commission and may not reflect actual transactions.

Quarter Ended	High		Low
December 31, 2013	$	1.30	$	0.30
September 30, 2013		1.50		1.05
June 30, 2013		2.85		0.51
March 31, 2013		3.00		1.92
December 31, 2012	$	2.50	$	1.01
September 30, 2012		1.01		0.80
June 30, 2012		0.80		0.80
March 31, 2012		1.01		0.80

The closing sales price of the Company’s common stock as reported on March 14, 2014, was $0.50 per share, which was last reported trade of the Company’s common stock on the OTCQB.

Holders

As of December 31, 2013, there were 165 holders of record of the Company’s common stock. This does not include persons who hold our common stock in brokerage accounts and otherwise in “street name.”  As a result of the BB Transaction, on January 31, 2014, there were 209 holders of record of our common stock, and 14 holders of record of our preferred stock.

Dividends

Since its inception, the Company has not declared or paid cash or other dividends on its common stock.  The Company has no plans to pay any dividends, although it may do so if its financial position changes.  There are no restrictions in the Registrant’s articles of incorporation or bylaws that restrict it from declaring dividends.  

Equity Compensation Plan Information

The Company has adopted one equity compensation plan being its 2012 Stock Option Plan (the “Plan”).   The Company’s shareholders approved the adoption of the Plan on November 14, 2012.  A total of 1,500,000 shares of Company common stock were reserved for issuance under the Plan as of December 31, 2013. That amount was increased to 3,000,000 on January 22, 2014, with approval of the Company’s shareholders.

Under the Plan, the Company may grant stock options, restricted and other equity awards to any employee, consultant, independent contractor, director or officer of the Company.  The purpose of the Plan is to provide financial incentives for selected employees, advisors, consultants and directors of the Company, thereby promoting the long-term growth and financial success of the Company.

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The following table gives information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under the Company’s compensation plans as of December 31, 2013.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance
Equity compensationplans approved by security holders		50,000	(1)	$	1.50		1,119,816

(1) Consists of 50,000 options granted under the Plan.

Recent Sales of Unregistered Securities

All sales of unregistered equity securities that occurred during the period covered by this report, and through March 2, 2014, have been previously reported as required in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

On February 10, 2014, the Company issued 30,000 shares of its common stock at $0.50 per share as consideration for services to the Company.  The Company relied on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

On March 4, 2014, the Company commenced a private placement offering of up to 6,000,000 shares of its common stock at $0.50 per share for total gross proceeds of $3,000,000.  Sales totaling $275,000 have been made through March 14, 2014.  The Company relied on the exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended and Rule 506(b) promulgated thereunder.

Repurchases of Equity Securities

In July 2013, the Company repurchased 33,334 common shares owned by AMHC Managed Services, Inc. for $1.50 per share for a total price of $50,000.  These shares were cancelled by the Company in July 2013.

Item 6. SELECTED FINANCIAL DATA

Not applicable.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Management’s Discussion and Analysis, we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity and certain other factors that may affect our future results, including:

· Key events and recent developments within our Company;

· Our results of operations for the years ended 2013 and 2012;

· Our liquidity and capital resources;

· Any off balance sheet arrangements we utilize;

· Any contractual obligations to which we are committed;

· Our critical accounting estimates;

· The inflation and seasonality of our business; and

· New accounting standards that affect our company.

The review of Management’s Discussion and Analysis should be made in conjunction with our consolidated financial statements, related notes and other financial information included elsewhere in this annual report.

Overview

Bourbon Brothers Holding Corporation (“BBHC” or the “Company”) is a Colorado corporation that owns multiple subsidiaries including Bourbon Brothers Holding Company, LLC (“BBHCLLC”) and its related subsidiaries and Southern Hospitality Franchisee Holding Corporation (“SH”) and its related subsidiaries.  On January 22, 2014, the parties closed the BB Transaction and the Company issued 20,274,193 shares of common stock to BBHC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHC Class A Voting members. The Company, on January 22, 2014, with approval of a majority of the Company’s shareholders, changed its name from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.

SH entered into a franchise agreement and area development agreement with SH Franchising & Licensing LLC, dba Southern Hospitality BBQ (the “Franchisor”) in November 2011. In May 2012, SH formed Southern Hospitality Denver Holdings, LLC (“SHDH”), a wholly-owned subsidiary, and Southern Hospitality Denver, LLC (“SHD”). SHD was formed for the purpose of owning and operating the Company’s first franchised restaurant in Denver, Colorado. SHD is 51% owned by SHDH and 49% owned by non-controlling interest holders, of which a director of the Company is a 22% non-controlling interest holder.

On November 13, 2012, the Company, f/k/a Art Dimensions, Inc. (“ADI”), entered into an Agreement and Plan of Merger and Reorganization with SH whereby the Company acquired SH in a reverse triangular merger (the “SH Acquisition”). On November 13, 2012, the parties closed the SH Acquisition, and a Statement of Merger was filed and effective with the Colorado Secretary of State on that day. Upon closing the SH Acquisition, the Company issued a total number of common shares to the SH shareholders in exchange for all of their ownership interests in SH such that they owned approximately 89% of the Company on the date of the SH Acquisition. The shareholders of the Company prior to the SH Acquisition owned approximately 11% of the Company after the closing of the SH Acquisition. On November 13, 2012, the Company and SH closed the SH Acquisition, and the Company’s wholly owned subsidiary, ADI Merger Corp., was merged with and into SH. An aggregate of 5,259,029 Company shares were issued in the SH Acquisition.  The number of ADI common shares received by SH’s shareholder depended on the number of shares each held and that were outstanding at the closing of the SH Acquisition.  Additionally, upon the effective date of the SH Acquisition all outstanding SH warrants, options and outstanding promissory notes were exchanged for options, warrants and promissory notes to acquire ADI common stock on equivalent terms.  Pursuant to the SH Acquisition, on November 13, 2012, the Company changed its name from Art Dimensions, Inc. to Southern Hospitality Development Corporation.  The Company, on May 3, 2013, with approval of a majority of the Company’s shareholders, changed its name from Southern Hospitality Development Corporation to Smokin Concepts Development Corporation.

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BBHCLLC was formed on May 13, 2013, for the purpose of developing and managing all aspects and operating units related to a recently developed “Bourbon Brothers” brand. The subsidiaries of BBHCLLC were formed as Colorado LLCs in April 2013 and include Bourbon Brothers Restaurant Group, LLC (“BBRG”), Bourbon Brothers Franchise, LLC (“BBF”) and Bourbon Brothers Brand, LLC (“BBB”).   BBRG owns the corporate owned stores to encompass several Bourbon Brothers brands.  BBRG owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC (“BBSK”). BBSK is the first location sets the standard for the brand and will establish a premium location in the setting of a southern, farm-house estate accompanied by atraditional distillery.  This location opened for operations on January 27, 2014.  BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC (“BBSF”).  BBSF is in negotiations to sign a lease at a combined rental rate from a related party, Bourbon Brothers #14, LLC.  BBF serves as the franchisor for Bourbon Brothers to include franchise opportunities for Bourbon Brothers Southern Kitchen restaurants and Bourbon Brothers Seafood and Chophouse restaurants.  The suite of management and services that may be made available to franchisee investors include: real estate, restaurant management, and franchise royalties and services.  BBBmanages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit our core brand.  It is not anticipated that BBB will directly develop these products, but rather that it will establish joint ventures to leverage the brand in partnership with premium providers of the complementary products. BBB may establish marketing, e-commerce, catalog sales and distribution capabilities to provide for sale of the products through our stores and channels.

Results of Operations – Years ended December 31, 2013 and 2012

Revenues

The Company opened its first restaurant in Denver, Colorado on February 21, 2013.  The Company recognized $2,099,000, in revenue from February 21, 2013 through December 31, 2013.  The Company had no revenue generating activities through December 2012.

Operating Expenses

For the years ended December 31, 2013 and 2012, the Company’s operating expenses were $4,465,000 and $1,809,400, respectively. The operating expenses in 2013 were primarily for operating the SHD restaurant. The operating expenses in 2012 were primarily associated with the organization costs of SH and its subsidiaries and opening the SHD restaurant. The largest expense in 2013 was the SHD restaurant operating costs totaling approximately $2,321,800 for the restaurant opening on February 21, 2013.  The Company’s next largest operating expense during its 2013 and 2012 fiscal years were its general and administrative expenses totaling approximately $1,213,800 and $1,257,100, respectively. These expenses primarily included recurring corporate costs (such as payroll and related expenses), costs incurred related to the initiation and organization of the SH business component. General and administrative and selling and marketing expenses for the years ended December 31, 2013 and 2012, also included approximately $461,740 and $75,200 of (non-cash) stock-based compensation. Additionally, the Company incurred approximately $19,000 and $88,800, respectively, in selling and marketing expenses during the years ended December 31, 2013 and 2012. The Company expects to incur general and administrative expenses going forward as it grows its operations. The Company anticipates that the net loss may continue due to the overall expansion of the Company and its subsidiaries.

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Other Income (Expense)

For the years ended December 31, 2013and 2012, the Company recognized other expense of approximately $515,700 and $776,000. The decrease was primarily due to the reduction of interest expense from the discount on the promissory notes being converted to common stock in 2013 compared to 2012.

Liquidity and Capital Resources

As of December 31, 2013, the Company had working capital deficit of approximately $585,400 and had $13,600 of cash, which represents a $948,720 decrease in cash from December 31, 2012. The Company’s total assets and current assets also decreased as of December 31, 2013, when compared to December 31, 2012 due to the decrease in prepaid expenses, intangible assets and cash. As noted above, the Company had a net loss during the years ended December 31, 2013 and 2012. Further, as of December 31, 2013, the Company had an accumulated deficit of approximately $5,297,700. Although the Company believes its SHD revenues (which began in February 2013) will increase in 2014 and the addition of the BBSK revenues which began in January 2014, for at least the near term the Company expects to continue to in part rely on outside sources of capital to fund its current and planned operations.

The Company may continue to seek additional capital to help fund its operations in the near term. However, there can be no assurance that additional financing will be available to the Company on reasonable terms, if at all. The Company’s ability to continue to pursue its plan of operations is dependent upon its ability to increase revenues and/or raise the capital necessary to meet its financial requirements on a continuing basis.

The Company believes that the proceeds from the issuance of its securities and notes, coupled with its cash on hand and projected revenues, will be sufficient to cover its costs and expenses through 2014. However, estimates for expenses may change, in which case the Company’s capital would not be sufficient for this time period. As noted above, the Company may need to raise additional capital to fund its projected business expenditures and operations. There can be no assurance that additional financing will be available to the Company on reasonable terms, if at all.

During the years ended December 31, 2013 and 2012, the Company closed on $1,395,000 and $2,563,500 in debt offerings and private placement transactions through the sale of its equity securities. The Company will continue to seek additional capital to help fund its operations in the near term. However, there can be no assurance that additional financing will be available to the Company on reasonable terms, if at all. As a result of the Company’s losses from operations and limited capital resources, the Company’s independent registered public accounting firm’s report in the Company’s consolidated financial statements as of, and for the year ended, December 31, 2013, includes an explanatory paragraph discussing that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue to pursue its plan of operations is dependent upon its ability to increase revenues and/or raise the capital necessary to meet its financial requirements on a continuing basis.

Current Liabilities

The Company’s current liability for convertible notes payable and accrued interest as of December 31, 2013, is $60,000 compared to $55,800 as of December 31, 2012. This increase is due to the opening of the restaurant in February 2013 as the payments on the convertible notes are tied to the gross revenues of the restaurant as a portion is considered short-term in 2013 compared to long-term in 2012. Accounts payable as of December 31, 2013, is $81,000 compared to $453,800 as of December 31, 2012. This decrease is due to the liabilities for the construction of the Denver-based restaurant being paid prior to December 31, 2013.

Operating Activities

Net cash used in operating activities was approximately $1,689,200 in 2013, as compared to net cash used in operating activities of approximately $1,424,500 in 2012. The increase in net cash used in operating activities in 2013 (compared to 2012) was primarily due to: (i) the increase in net loss and impairment of franchise fees for the 2013 period, as compared to the 2012 period, and (ii) decreases in accounts payables, prepaid expenses, and increase in inventory as well as the expansion of the business and addition of operation segments, as compared to the 2012 period.

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Investing Activities

Net cash used in investing activities in 2013 was approximately $1,238,300, as compared to net cash used in investing activities of approximately $875,700 for the period of 2012. Net cash used in investing activities in 2013 and 2012 were primarily the result of cash used for purchases of property and equipment.

Financing Activities

Net cash provided by financing activities in 2013 was approximately $1,978,800, compared to approximately $3,235,000 in the period of 2012. Approximately $1,368,000 of cash provided by financing activities in 2013 was due from the issuance of common stock compared to 2012 for $2,446,300 for the issuance notes payable and common stock. The non-controlling interest holders contributed $225,980 in 2013 compared to $671,485 in 2012. 

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.

Critical Accounting Policies

The preparation of financial statements in conformity with U. S. generally accepted accounting principles requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements.

Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition. Our significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements included in this Form 10-K.  Our critical accounting policies are outlined below.

Intangible Assets

Intangible asset at December 31, 2013, represent franchise license costs for SHD. These costs are amortized over the ten-year term of the franchise agreement using the straight line method. The Company assesses potential impairment to intangible assets when there is evidence that events or changes in circumstances indicate that the recovery of the assets’ carrying value is not recoverable.

Non-controlling Interests

Non-controlling interests represent capital contributions, income and loss attributable to the owners of less than wholly-owned consolidated entities. As of December 31, 2013, the non-controlling members contributed $897,465 to SHD to date.

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Property and Equipment

Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management considers, or will consider, such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management bases this assessment upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge would be recorded to reduce the carrying value of the restaurant assets to their fair value.

Leasehold improvements, property and equipment are stated at cost. Internal costs directly associated with the acquisition, development and construction of a restaurant are capitalized. Expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Construction in process (leasehold improvements in process) and other property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings.

The estimated useful lives are as follows:

Leasehold improvements 3-10 years

Website development - 3 years

Equipment 3-7 years

Computers and hardware - 5 years

Property and equipment at December 31, 2013, had $247,000 of depreciation recorded through December 31, 2013.

Leases and Deferred Rent

The Company intends to lease substantially all of its restaurant properties, and in April 2012, the Company entered into a ten-year lease for SHD. For leases that contain rent escalation clauses, the Company records the total rent payable during the lease term and recognizes expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent is recorded as deferred rent. Additionally, contingent rent expense based on a percentage of revenue is accrued and recorded to the extent it is expected to exceed minimum base rent per the lease agreement based on estimates of probable levels of revenue during the contingency period. Deferred rent also includes tenant improvement allowances the Company may receive, which is amortized as a reduction of rent expense, also on a straight-line basis over the initial term of the lease.

Revenue Recognition

As of February 21, 2013, the Company began revenue generating activities through SHD. The Company began accounting for revenve pursuant to Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition, and applicable related guidance.

Revenue is derived from the sale of prepared food and beverage and select retail items. Revenue is recognized at the time of sale and is to be reported on the Company's consolidated statements of operations net of sales taxes collected. The amount of sales tax collected is to be included in accrued expenses until the taxes are remitted to the appropriate taxing authorities.

17

Stock-Based Compensation

The Company accounts for stock-based compensation under Accounting Standards Codification (“ASC”) 718, Share-Based Payment. ASC 718 requires the recognition of the cost of services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock-based compensation expense to be recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized. The Company determines its income tax expense in each of the jurisdictions in which it operates. The income tax expense includes an estimate of the current income tax expense, as well as deferred income tax expense, which results from the determination of temporary differences arising from the different treatment of items for book and tax purposes. The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. Many of the Company’s subsidiaries  are limited liability companies (“LLCs”) and treated for tax purposes as pass-through entities. As a result, any taxes are the responsibility of the respective members. The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying financial statements. The Company recognizes tax-related interest and penalties, if any, as a component of income tax expense. 

Recently Issued and Adopted Accounting Pronouncements

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company’s consolidated financial statements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Financial Statements following the signature page of this Form 10-K.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

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Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(e) under the Exchange Act, as of December 31, 2013, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that because of the material weakness in our internal control over financial reporting, described below, that our disclosure controls and procedures were not effective as of December 31, 2013.  A material weakness is a deficiency or a combination of deficiencies in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management Report on Internal Control Over Financial Reporting.

Management of the Company is also responsible for establishing internal control over financial reporting as defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act.

The Company’s internal controls over financial reporting are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal controls over financial reporting are expected to include those policies and procedures that management believes are necessary that:

(i)    pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii)    provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii)    provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

As of December 31, 2013, management assessed the effectiveness of the Company's internal control over financial reporting (ICFR) based on the criteria for effective ICFR established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting companies and non-accelerated filers.

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Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2013 and that material weaknesses in ICFR existed as more fully described below.

Management identified the following control deficiencies that represent material weaknesses as of December 31, 2013:

(1) Lack of an independent audit committee or audit committee financial expert, and no independent directors.  We have not identified an audit committee financial expert on our board of directors, and at the present time we have no independent directors.  These factors are counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management.

(2) Limited staffing within our accounting operations.  The relatively small number of personnel who are responsible for accounting functions prevents us from fully segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews which may result in a failure to detect errors in spreadsheets, calculations, or assumptions used to prepare the financial statements and related disclosures as filed with the SEC. Additionally, we did not maintain a sufficient number of financial and accounting staff with the appropriate level of knowledge and experience to ensure that accurate and reliable financial statements of the Company are prepared and reviewed timely in accordance with accounting principles generally accepted in the United States.

Our management determined that these deficiencies constituted material weaknesses.

Due to a lack of personnel resources, we likely will not take any immediate action to remediate these material weaknesses.  However, we expect to implement further controls as circumstances and working capital permit.  Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our consolidated financial statements contained in this Annual Report on Form 10-K for the fiscal year ended December 31, 2013, fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

We are committed to improving our financial organization. As part of this commitment, we will (when funds and/or additional resources are available to the Company) consider taking the following actions: (1) appoint outside directors to our Board of Directors and utilize an independent audit committee of the Board of Directors who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and will increase our personnel resources; and (3) hire independent third parties to perform expert advice.  We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to the permanent exemption from such requirement for smaller reporting companies.

Item 9B. OTHER INFORMATION

Not applicable.

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors and Executive Officers

The table below sets forth the names, titles, and ages of the members of the Company’s Board of Directors and its executive officers.   Executive officers of the Company are appointed by the Board of Directors and serve for a term of one year and until their successors have been elected and qualified or until their earlier resignation or removal by the Board of Directors. There are no family relationships among any of the directors and executive officers of the Company.  There was no agreement or understanding between the Company and any director or executive officer pursuant to which he was selected as an officer or director.

Name	Position	Age	Year Appointed as Officer or Director
Robert B. Mudd	Chief Executive Officer, President and Director	44	2013
JW Roth	Chairman of the Board and Director	50	2011
Heather Atkinson	Chief Financial Officer, Secretary and Treasurer	37	2014
Shawn Owen	Chief Operating Officer	33	2014
David Lavigne	Director, Former Secretary and Treasurer	52	2011
Richard Steward	Director	70	2014
Gary Tedder	Former President and Director	60	2011
Steve Cominsky	Former Chief Executive Officer and Director	43	2012

Robert B. Mudd, served as the Company’s interim Chief Executive Officer, interim Chief Financial Officer and interim Chairman of the Company’s Board of Directors from June 2013 through the BB Transaction. He now serves as the CEO, President and a Director of the Company.  Mr. Mudd tendered his resignation as CEO and President of the Company effective June 1, 2014 but will continue on as a Director of the Company.  Mr. Mudd holds outside business interests and has over 20 years of business management experience and has served in a number of executive roles, ranging from COO to CEO. His first 15 years were spent in the technology and telecommunications industry, where he was President of Correctional Billing Services, Executive Vice President of Operations at Securus Technologies, COO of Evercom Systems and COO of TDM, Inc. Most recently, he was the COO of Childrens HopeChest. He was the CEO of Accredited Members, Inc. from November 2012 through July 2013.  Mr. Mudd serves as the founder and CEO of the Story Company. He earned a Bachelor of Education from the University of Louisville.

J.W. Roth served as the Company’s Chairman of the Board until his resignation on May 17, 2013. He now serves as Chairman of the Board since the BB Transaction in January 2014.  Mr. Roth is also Co-Chairman and CEO of Accredited Members Acquisition Corporation and is a founding member of Accredited Members, Inc.  Mr. Roth has been actively involved in all phases of the Company’s development.  Mr. Roth served as a director of Disaboom, Inc. (OTC-Pink Sheets DSBO.PK) from its inception through May 2009.  Since 1997 Mr. Roth has served as the as the President of JW Roth & Company, Inc., a consulting company.  Prior to founding JW Roth & Company, Mr. Roth worked in the financial sales industry for American National Insurance Company and the Prudential Insurance Company.  Additionally, Mr. Roth has worked for, and been associated with, the business development of several companies such as Fear Creek Ranches, IMI Global, Inc., CattleNetwork, Inc., Front Porch Direct, and AspenBio Pharma, Inc.

Heather Atkinson is the CFO, Secretary and Treasurer as of the BB Transaction in January 2014.  Prior to her role with BBHC, Ms. Atkinson was the controller of Accredited Members Acquisition Corporation and subsidiaries and its predecessor, Accredited Members Holding Corporation.  Ms. Atkinson has over 15 years of accounting, finance and financial reporting experience in both public and private companies including consolidations, shareholder relations, SEC reporting, internal and external financial statement reporting, budgeting, cash forecasting, mergers and acquisitions, restructuring and international accounting while working closely with the outside audit and legal firms.  She is a licensed CPA and earned a Bachelor of Science in Accounting from Evangel University in 1998.

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Shawn Owen was appointed Chief Operating Officer for the Company on March 5, 2014. Mr. Owen served as the General Manager at Southern Hospitality Denver from August 2012 through February 2014. Mr. Owen has spent his entire career in restaurant operations and management, as manager of restaurant operations at The Walnut Brewery in Boulder, Colorado from 2011 to 2012, at the New Berlin Entertainment Center in New Berlin, Wisconsin, from 2010 to 2011, and at Stonefire Pizza Co. in New Berlin, Wisconsin from 2006 through 2010. 

David Lavigne was the Company’s Secretary/Treasurer through his resignation date of May 17, 2013. He now serves as a Director since March 2014.  He is currently an officer and director of Accredited Members, Inc. Mr. Lavigne was the founder of EdgeWater Research Partners LLC, the predecessor of Accredited Members, Inc. EdgeWater Research was started in 2002 and was a subscription based service providing micro-cap and small-cap research to institutions, brokers and individual investors. Mr. Lavigne formerly served as a director of Hangover Joe’s Holding Corp. f/k/a Accredited Members Holding Corp., which had securities registered pursuant to Section 12 of the Exchange Act. Mr. Lavigne has spent approximately 25 years in the financial and investment industry - primarily employed by small regional sell-side broker-dealers involved in the provisioning of both investment banking and research services with respect to microcap and small cap issuers. Mr. Lavigne’s experience includes creating research and analysis for retail and institutional clients, as well as research that augments the due diligence process of the corporate finance departments of his respective employers. His generalist research has encompassed several dozen public companies. Mr. Lavigne from the University of Idaho in 1984 with a Bachelors of Science degree in Finance.

Richard Steward was appointed a member of the Board of Directors of the Company on March 5, 2014.  In addition to being a Director of the Company, Mr. Steward currently sits on the boards of BCI Construction Inc., a privately-held corporation based in Colorado Springs, and Pikes Peak Range Rider Foundation, a Colorado non-profit corporation.  Mr. Steward has previously sat on the boards for the Colorado Springs Chamber of Commerce, Pikes Peak or Bust Rodeo (associated with the Pikes Peak Ranger Rider Foundation), Ride for the Brand Championship Ranch Rodeo based in Colorado Springs, and Sheet Metal Air Conditioning National Association (SMACNA).  In 1995, Mr. Steward served as the National President of SMACNA.  Mr. Steward was also a Trustee for the Sheet Metal Worker’s National Pension Fund from 1996 to 2001.  In 1971, Mr. Steward joined Heating and Plumbing Engineers Inc. and retired as its owner in 2004.  From 1965 to 1971, Mr. Steward worked at Alcoa Aluminum, where he helped develop aluminum beer cans and pull-tabs.  Mr. Steward graduated from Colorado School of Mines where he received a Bachelor of Science in Metallurgical Engineering in 1965.

Gary Tedder was the President, Secretary and Director of the Company from November 2012 through the BB Transaction in January 2014. Mr. Tedder worked from September 2009 to November 2011 at Accredited Members, Inc., and served as the Senior Vice President of that entity from January 2010. Since November 2011 he has devoted substantially all of his business time to Southern Hospitality Franchisee Holding Corp. For more than ten years prior to joining Accredited Members, Inc., Mr. Tedder was self-employed as a business consultant. Mr. Tedder has over 35 years of experience as an entrepreneur and business development director for various companies, from real estate to entertainment. Additionally, he has been instrumental in making strategic introductions throughout the nonprofit world and business community, through creatively deploying contact capital from his extensive network.

Steve Cominsky served as Chief Executive Officer, Chief Financial Officer and Director of the Company from November 2012 until June 2013. Mr. Cominsky served as CEO and a Director of Southern Hospitality Franchisee Holding Corp. from October 1, 2012, and COO of its subsidiaries from July 2012 resigning in June 2013. Mr. Cominsky is an established leader in people, sales, profit and process leadership in the hospitality industry. Mr. Cominsky has worked in the Brewery Group Division of Craftworks Restaurants and Breweries Inc. since 1996. He has served as the Regional Manager, overseeing six general managers and numerous other employees. Mr. Cominsky has won numerous awards for his leadership with Craftworks.

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Involvement in Certain Legal Proceedings

During the past ten years, none of the persons serving as executive officers and/or directors of the Company has been the subject matter of any of the following legal proceedings that are required to be disclosed pursuant to Item 401(f) of Regulation S-K including: (a) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) any criminal convictions; (c) any order, judgment, or decree permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (d) any finding by a court, the SEC or the CFTC to have violated a federal or state securities or commodities law, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud; or (e) any sanction or order of any self-regulatory organization or registered entity or equivalent exchange, association or entity.  Further, no such legal proceedings are believed to be contemplated by governmental authorities against any director or executive officer.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the 1934 Act requires the Company’s directors and officers and any persons who own more than ten percent of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC.  All directors, officers and greater than ten-percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports files.  Based solely on our review of the copies of Forms 3, 4 and any amendments thereto furnished to us during the fiscal year completed December 31, 2013, and subsequently, we believe that during the Company’s 2013 fiscal year Mr. Roth, Mr. Lavigne and Mr. Tedder filed late Forms 4 on September 4, 2013 and Mr. Mudd filed a late Form 3 on the same date.  Subsequently, Mr. Roth and Mr. Lavigne filed late Forms 4 on January 24, 2014 and Mr. Mudd filed a timely Form 4 on January 24, 2014.  On the same date, a Form 3 was timely filed for Ms. Atkinson.  Forms 4 were timely filed on March 4, 2014 for Mr. Roth, Mr. Lavigne, and Mr. Mudd. A Form 4 was filed timely on March 13, 2014 for Mr. Lavigne.  On the same date, Forms 3 were filed timely for Mr. Steward and Mr. Owen.

Code of Ethics

The Company adopted a code of ethics as of the BB Transaction date of January 22, 2014.

No Audit Committee

The Company does not have a separately designated audit committee.  Instead, the entire Board as a whole acts as the Company’s audit committee.  Consequently the Company does not currently have a designated audit committee financial expert.

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Item 11. EXECUTIVE COMPENSATION

The following table sets out the compensation received for the fiscal years December 31, 2013 and 2012 in respect to each of the individuals who served as the Company’s chief executive officer at any time during the last fiscal year, as well as the Company’s most highly compensated executive officers:

							(1)
						Option			All Other
Name and	Fiscal	Salary		Bonus		Awards			Compensation			Total
Principal Position	Year	($)		($)		($)			($)			($)
Gary Tedder,
President and Director (1)	2013	$	70,834	$	-	$	97,125	(7)	$	7,145		$	175,104
	2012	$	125,000	$	1,000	$	13,420	(7)	$	12,248		$	151,668
Robert B. Mudd,
Interim Chief Executive Officer, Chief Executive Officer and Director (2)	2013	$	-	$	-	$	-		$	-		$	-
	2012	$	-	$	-	$	-		$	-		$	-
Steve Cominsky,
Chief Executive Officer and Director (3)	2013	$	105,000	$	-	$	130,474	(6)	$	23,288		$	258,762
	2012	$	93,481	$	1,000	$	32,621	(6)	$	5,820		$	132,922
JW Roth,
Chairman of the Board (4) (8)	2013	$	-	$	-	$	97,125	(7)	$	-		$	97,125
	2012	$	-	$	-	$	13,420	(7)	$	-		$	13,420
David Lavigne,
Secretary and Treasurer (9)	2013	$	-	$	-	$	-		$	282,315	(8)	$	282,315
	2012	$	-	$	-	$	-		$	420,250	(8)	$	420,250
Gerard Lewis,
Chairman of the Board (5)	2013	$	-	$	-	$	-		$	-		$	-
	2012	$	-	$	-	$	-		$	39,000		$	39,000

(1)  Mr. Tedder served as the SH President and a Director since October 2011 through the BB Transaction on January 22, 2014.

(2) Mr. Mudd served as the Interim Chief Executive Officer, Interim Chief Financial Officer and Interim Chairman of the Board from June 20, 2013 through the BB Transaction. After the BB Transaction, he serves as the CEO, President and Director.

(3) Mr. Cominsky served as the SH Chief Operating Officer from June 15, 2012, through September 30, 2012. On October 1, 2012, he became the SH Chief Executive Officer and also began serving as a Director. On June 20, 2013, he resigned his positions as CEO and Director.

(4)  Mr. Roth is a founder of SH and served as the Company's Chairman from August 15, 2012, through his resignation date of May 17, 2013.  He had been a Director of SH since its inception in August 2011.  Since the BB Transaction, he serves as Chairman of the Board.

(5)  Mr. Lewis served as the Chairman of the Board of SH from December 15, 2011 through August 15, 2012.

(6)   Upon his appointment as the Company's Chief Executive Officer, Mr. Cominsky was granted an option to acquire 660,368 shares of Company common stock at $0.0150677 per share with 66,035 shares vesting immediately and the remaining shares vesting upon certain criteria.  Mr. Cominsky exercised 66,035 shares in March 2013.  In connection with his resignation on May 17, 2013, the Company agreed to accelerate the vesting of a portion of his options for 264,149 shares from March 2014 to June 2013.  He exercised these options in a cashless exercise and the resulting stock certificate of 261,087 common shares was held by the Company per a lock-up agreement through March 8, 2014.  

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(7) On December 14, 2012, the Company entered into an indemnification agreement with JW Roth and Gary Tedder, both directors of the Company, for their personal risk regarding personal guarantees in favor of Southern Hospitality Franchising & Licensing, LLC (the “Franchisor”), which are the subject of an Area Development Agreement between the Franchisor and Southern Hospitality Franchisee Holding Corporation, a wholly owned subsidiary of the Company. In addition to the indemnification agreements, the Company compensated Messrs. Roth and Tedder for their personal guarantees in the form of a warrant for 200,000 shares per director exercisable for ten years at $1.00 per share with the warrant vested immediately with a cashless exercise feature.

(8)

Mr. Roth and Mr. Lavigne are founders of AMCH Managed Services, Inc. ("AMMS").  Mr. Roth served as the CEO of AMMS through July 31, 2013, and continues to be a controlling shareholder.  Mr. Lavigne serves as AMMS’s CEO and CFO and is a controlling shareholder.  The fees paid by the Company to AMMS are shown under Mr. Lavigne for 2012 and 2013 in regards to AMMS for disclosure purposes.  Under these agreements for managed services, the Company paid $420,000 in cash in 2012 and granted AMMS warrants to exercise 627,034 shares.

(9)

Mr. Lavigne is a founder of SH and began serving as SH's Secretary and Treasurer from its inception in August 2011.  He resigned his positions as of May 17, 2013.  He now serves as a Company’s Director.

Compensation Committee Interlocks and Insider Participation

The Board of Directors acting in lieu of a compensation committee, is charged with reviewing and approving the terms and structure of the compensation of the Company’s executive officers.  To date, the Company has not retained an independent compensation to assist the Company review and analyze the structure and terms of the Company’s executive officers.  Moreover, throughout much of the Company’s fiscal year, the same persons serving on the Board also served as Company executive officers.

The Company considers various factors when evaluating and determining the compensation terms and structure of its executive officers, including the following:

1. The executive’s leadership and operational performance and potential to enhance long-term value to the Company’s shareholders;

2. The Company’s financial resources, results of operations, and financial projections;

3. Performance compared to the financial, operational and strategic goals established for the Company;

4. The nature, scope and level of the executive’s responsibilities;

5. Competitive market compensation paid by other companies for similar positions, experience and performance levels; and

6. The executive’s current salary, the appropriate balance between incentives for long-term and short-term performance.

Company management is responsible for reviewing the base salary, annual bonus and long-term compensation levels for other Company employees, and the Company expects this practice to continue going forward.  The entire Board of Directors remains responsible for significant changes to, or adoption, of new employee benefit plans.  The Company believes that as relatively new company its compensation structure is fair to its executive officers as it is intended to balance the Company’s need to minimize its overhead costs yet reward its executives for individual performance and company performance.

To date the Company has not entered into any employment agreements with any of the persons who serve (or served) as the Company’s executive officers.  Currently there are no contractual commitments in place that provide for severance payments to our executive officers or similar benefits upon a change of control transaction.

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The Company believes that the compensation environment for qualified professionals in the industry in which we operate is competitive.  In order to compete in this environment, the compensation of our executive officers is primarily comprised of the following components:

§ Base salary;

§ Stock option awards and/or equity based compensation;

§ Discretionary cash bonuses;

§ Commissions for sales of Company products and services; and

§ Other employment benefits.

Base Salary. Base salary, paid in cash, is the first element of compensation to our officers.In determining base salaries for our key executive officers, the Company aims to set base salaries at a level we believe enables us to hire and retain individuals in a competitive environment and to reward individual performance and contribution to our overall business goals. The Board of Directors believe that base salary should be relatively stable over time, providing the executive a dependable, minimum level of compensation, which is approximately equivalent to compensation that may be paid by competitors for persons of similar abilities.   The Board of Directors believes that base salaries for our executive officers are appropriate for persons serving as executive officers of public companies similar in size and complexity similar to the Company.

During the Company’s 2013 and 2012 fiscal years it paid its executive officers the following base salaries:

§ Gary Tedder was paid a base salary of $125,000 in 2013 and 2012.

§ Steve Cominsky was paid a base salary of $150,000 starting June 15, 2012 which was raised to $210,000 effective October 1, 2012.

Stock Option Plan Benefits –  The Company believes that equity based compensation helps align management and executives’ interests with the interests of our shareholders. Our equity incentives are also intended to reward the attainment of long-term corporate objectives by our executives. We also believe that grants of equity-based compensation are necessary to enable us to be competitive from a total remuneration standpoint.   At the present time, we have one equity incentive plan for our management and employees, the 2012 Stock Option Plan.

We have no set formula for granting awards to our executives or employees. In determining whether to grant awards and the amount of any awards, we take into consideration discretionary factors such as the individual’s current and expected future performance, level of responsibilities, retention considerations, and the total compensation package.  The Company has granted certain of its executive officers stock options.

Discretionary Annual Bonus.Discretionary cash bonuses are another prong of our compensation plan.  The Board of Directors believes that it is appropriate that executive officers and other employees have the potential to receive a portion of their annual cash compensation as a cash bonus to encourage performance to achieve key corporate objectives and to be competitive from a total remuneration standpoint.

We have no set bonus formula for determining or awarding discretionary cash bonuses to our other executives or employees. In determining whether to award bonuses and the amount of any bonuses, we have taken and expect to continue to take into consideration discretionary factors such as the individual’s current and expected future performance, level of responsibilities, retention considerations, and the total compensation package, as well as the Company’s overall performance including cash flow and other operational factors.

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During fiscal 2012, we paid discretionary cash bonuses to certain of the Company’s executive officers (being Messrs. Tedder and Cominsky).  In general, the bonuses paid to these executive officers were determined by the Board.

Other Compensation/Benefits.Another element of the overall compensation is through providing our executive officers are various employment benefits, such as the payment of a monthly allowance for health care insurance and other benefits costs.

Stock Option, Stock Awards and Equity Incentive Plans

In accordance with the Company’s 2012 Stock Option Plan, as amended, the Company granted certain of its executive officers stock options as set forth below.  There were no stock awards made during the Company’s fiscal year 2013.  As of December 31, 2013:

Outstanding Equity Awards at Fiscal Year End

Name and	Number of securities underlying unexercised options exercisable	Number of securities underlying unexercised options unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options		Option exercise price		Option expiration date
Principal Position	(#)	(#)		(#)		($)
Gary Tedder,
President(1)	200,000		--		--	$	1.00		11/19/2022
Robert B. Mudd,
Interim CEO & CFO	--		--		--	$	--		--
Steve Cominsky,
Chief Executive Officer(2)	--		--		--	$	--		--
JW Roth,
Chairman of the Board(1)	200,000		--		--	$	1.00		11/19/2022
David Lavigne,
Secretary and Treasurer	--		--		--	$	--		--

(1)

Includes personal guarantees for Mr. Roth and Mr. Tedder each in the forms of warrants for 200,000 shares exercisable for ten years at $1.00 per share with the warrants immediately vested with a cashless exercise feature.

(2)

During fiscal year 2013, in connection with Steve Cominsky’s resignation as CEO on May 17, 2013, the Company agreed to accelerate the vesting of a portion of his options for 264,149 shares from March 2014 to June 2013.  Mr. Cominsky subsequently exercised those options in a cashless exercise and the resulting stock certificate of 261,087 common shares is currently held by the Company per a lock-up agreement through March 8,  2014.

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Compensation of Directors

Other than as set forth in the Summary Compensation Table above, the Company has not provided any of the persons serving on its Board of Directors any separate or additional consideration for serving on the Board during fiscal year 2013.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.

Security Ownership of Directors and Management

The number of shares outstanding of the Company’s stock at March 14, 2014, was 43,841,249 common shares and 4,884,859 Series A preferred shares.  The following table sets forth the beneficial ownership of the Company’s common stock as of March 14, 2014, by each director and each executive officer of the Company and by all directors and executive officers as a group.  To the extent any of the named shareholders own derivative securities that are vested or otherwise exercisable into shares of our common stock these securities are included in the column regarding that shareholders’ common stock beneficial ownership (as required by Rule 13d-3(a)) and the material terms of such derivative securities are explained in the notes to the table.

Name and Address of Beneficial Owner	Position	Common Stock - Amount and Nature of Beneficial Ownership			Percent of Common Stock			Series A Preferred Stock-Amount and Nature of Beneficial Ownership			Percent of Series A Preferred Stock (4)
JW Roth 2 North Cascade Ave, Suite1400 Colorado Springs, CO 80903	Chairman of the Board		6,461,192	(1)		14.67	%		2,228,034	(2)		45.61	%
Robert B. Mudd 2 North Cascade Ave, Suite 1400 Colorado Springs, CO 80903	CEO, President & Director		1,331,131			3.04	%		–			*
David Lavigne
2 North Cascade Ave, Suite 1400
Colorado Springs, CO 80903	Director		3,495,667	(3)		7.97	%		1,000,000			20.47	%
Richard Steward
2 North Cascade Ave, Suite 1400
Colorado Springs, CO 80903	Director		1,412,657			3.22	%		–			*
Heather Atkinson
2 North Cascade Ave, Suite 1400
Colorado Springs, CO 80903	CFO, Secretary & Treasurer		364,854			*			–			*
Shawn Owen
2 North Cascade Ave, Suite 1400
Colorado Springs, CO 80903	COO		56,353			*			–			*
All current directors and executive officers as a group (six persons)			13,121,854			28.9	%		3,228,034			66.08	%

(1)	Includes Mr. Roth for his personal guarantee in the form of a warrant for 200,000 shares exercisable for ten years at $1.00 per share with the warrant vested immediately with a cashless exercise feature. Also, includes 156,521shares owned by his spouse, 4,530,178 owned by his spouse as trustee for the KMR Living Trust Dated Nov. 19, 2012 and 1,391,666 shares owned by Accredited Members Acquisition Corp., an entity controlled by Mr. Roth and Mr. Lavigne.
(2)	Includes 228,034 shares owned by his minor daughter and 2,000,000 shares owned by Mr. Roth as trustee for the JWR Living Trust Dated Nov. 19, 2012.
(3)	Includes 1,391,666 shares owned by Accredited Members Acquisition Corp., an entity controlled by Mr. Roth and Mr. Lavigne.  Also, includes 2,046,901 shares owned by his spouse.
(4)	Calculated based on one vote per common share and 25 votes per Series A preferred share.
*	Less than 1%.

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Security Ownership of Certain Beneficial Owners

The following table sets forth the persons who beneficially own of record, or was known to own beneficially, more than 5% of the Company’s common stock and/or Series A preferred voting stock as of March 14, 2014. To the extent any of the named shareholders own derivative securities that are vested or otherwise exercisable into shares of our common stock these securities are included in the column regarding that shareholders’ common stock beneficial ownership (as required by Rule 13d-3(a)) and the material terms of such derivative securities are explained in the notes to the table.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Common Stock	Amount and Nature of Beneficial Ownership of Series A Preferred Stock		Percent of Series A Preferred Stock	Voting Power(5)
JW Roth	6,416,192	(1)	14.67%	2,228,034	(2)	45.61%	37.53%
2 North Cascade Ave Suite 1400
Colorado Springs, CO 80903
David Lavigne	3,495,667	(3)	7.97%	1,000,000		20.47%	17.23%
2 North Cascade Ave Suite 1400
Colorado Springs, CO 80903
Stephen J. Cominsky	346,180	(4)	*	1,200,757		24.58%	18.36%
5935 Blue Sage Way
Littleton, CO 80123

(1)	Includes Mr. Roth for his personal guarantee in the form of a warrant for 200,000 shares exercisable for ten years at $1.00 per share with the warrant vested immediately with a cashless exercise feature. Also, includes 156,521shares owned by his spouse, 4,530,178 owned by his spouse as trustee for the KMR Living Trust Dated Nov. 19, 2012 and 1,391,666 shares owned by Accredited Members Acquisition Corp., an entity controlled by Mr. Roth and Mr. Lavigne.
(2)	Includes 228,034 shares owned by his minor daughter and 2,000,000 shares owned by Mr. Roth as trustee for the JWR Living Trust Dated Nov. 19, 2012.
(3)	Includes 1,391,666 shares owned by Accredited Members Acquisition Corp., an entity controlled by Mr. Roth and Mr. Lavigne.  Also, includes 2,046,901 shares owned by his spouse.
(4)	Includes 19,058 shares owned by Mr. Cominsky’s spouse.
(5)	Calculated based on one vote per common share and 25 votes per Series A preferred share.
*	Less than 1%.

Changes in Control

There are no arrangements known to the Company which may result in a change in control of the Company.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 5, above, for information regarding securities authorized for issuance under equity compensation plan in the form required by Item 201(d) of Regulation S-K.

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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

The Company’s Board of Directors as a whole is charged with reviewing and approving all related party transactions. There have not been any transactions, or proposed transactions, to which the Company was or is to be a party, in which any Company director, officer, or any member of the immediate family of the aforementioned persons had or is to have a direct or indirect material interest, except those outlined below.  The following disclosure is with respect to material transactions between the Company and related parties and with respect to material transactions.

1.  Effective September 1, 2011, the Company entered into a management agreement (the “Management Agreement”) with AMHC Managed Services, Inc. (“AMMS”), a subsidiary of Accredited Members Acquisition Corporation (“AMAC”). The Company’s Chairman of the Board of Directors and officers of the Company were also officers/board members of AMAC. The significant terms of the Management Agreement provide for monthly payments to AMMS in exchange for the ability of the Company to fully utilize the management expertise, financial and accounting expertise, support staff and location of AMMS,including the expertise of the position of AMMS’ Chief Financial Officer and necessary support for compliance under the securities laws with respect to any private or public reports or registration statements the Company may file. The Management Agreement term was 12 months, and required the Company to pay AMMS a monthly fee equal to $35,000 per month. Additionally, under the Management Agreement, the Company granted AMMS a warrant to purchase 330,184 shares of Company’s common stock exercisable at $0.0007 per share, exercisable for a three-year term. The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and was amortized over the one-year term of the Management Agreement as services are performed. AMMS exercised the warrant in full in July 2012. The Management Agreement was renewed in October 2012 for an additional one-year period with terms similar to those of the 2011 Management Agreement. In connection with the renewed Management Agreement, the Company issued an additional warrant in October 2012 to AMMS to purchase 330,184 shares of the Company’s common stock at $0.0007 per share for a three-year term. The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and is being amortized over the one-year term of the Management Agreement as services are performed, of which approximately $12,440 and $24,870 was expensed in the three and six months ended June 30, 2013. AMMS exercised the warrant in full in October 2012. On May 17, 2013, the Company amended its terms with AMMS that AMMS will not be the “Acting CFO” nor provide senior financial management services for the Company effective the same date. Further, on June 26, 2013, the Company notified AMMS that it terminated the Management Agreement effective July 31, 2013. These functions were handled by the Company’s interim CEO and interim CFO through the BB Transaction date of January 22, 2014.  

2.  The Company also paid rent and rent-related expenses to Accredited Members Acquisition Corporation (“AMAC”), a related party, on a month-to-month basis for office space at the AMAC corporate headquarters in Colorado Springs, Colorado. This arrangement began in October 2011 and terminated July 31, 2013, as the Management Service Agreement terminated. Base rental payments were approximately $3,500 per month. Related party rent expense was approximately $32,100 and $55,000 for the 2013 and 2012 calendar years.

3.  On November 3, 2011, AMAC subscribed to a convertible note offering for $25,000 with the Company. The promissory note carried a 5% interest rate, and was unsecured. In addition, AMAC received 25,000 shares of the Company. AMAC converted the note and accrued interest as of December 31, 2012, and received 18,715 common shares of the Company.

4. On August 1, 2013, the Company entered into an unsecured promissory note with BBHCLLC. The note is for $204,900 with a maturity date of February 1, 2014. The note includes a 5% annual interest rate and terms in case of default in which the loan maybe converted to common stock of the Company by the note holder at no less than $0.10 a share. The note and unpaid interest was extinguished on the date the Company and BBHCLLC successfully closed the BB Transaction

Independence of the Board of Directors

Our Board of Directors currently consists of Messrs. Roth, Mudd, Lavigne and Steward.  None of the directors are considered “independent” as that term defined by Section 803A of the NYSE MKT Company Guide inasmuch as each of the directors has had material relationships with the Company.  The Board considers all relevant facts and circumstances in its determination of independence of all members of the Board.

30

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

Our independent registered public accounting firm, GHP Horwath, P.C., (“GHP Horwath”) billed us aggregate fees in the amount of approximately $45,500 for the fiscal year ended December 31, 2013, and approximately $29,000 for the fiscal year ended December 31, 2012.  These amounts were billed for professional services that GHP Horwath provided for the audit of our annual financial statements, reviews of the interim consolidated financial statements included in our reports on Forms 10-Q and other services typically provided by an auditor in connection with statutory and regulatory filings or engagements for those fiscal years.

MaloneBailey, LLP served as Art Dimensions, Inc. independent registered public accounting firm for the period of January 1 through November 14, 2012 and for the period ended December 31, 2011. MaloneBailey billed us aggregate fees in the amount of approximately $8,750 for the period January 1 through November 14, 2012, and approximately $13,750 for the fiscal year ended December 31, 2011.

Tax Fees

GHP Horwath or MaloneBailey did not bill us for any tax fees for the fiscal years ended December 31, 2013 and 2012.

All Other Fees

GHP Horwath or Malone Bailey did not bill us for any other fees for the fiscal years ended December 31, 2013 and 2012.

Audit Committee’s Pre-Approval Practice

Inasmuch as the Company does not have an audit committee, the Company’s board of directors performs the functions of its audit committee.  Section 10A(i) of the 1934 Act prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the board of directors (in lieu of the audit committee) or unless the services meet certain de minimis standards.

The board of directors has adopted resolutions that provide that the board must:

Pre-approve all audit services that the auditor may provide to us or any subsidiary (including, without limitation, providing comfort letters in connection with securities underwritings or statutory audits) as required by §10A(i)(1)(A) of the 1934 Act.

Pre-approve all non-audit services (other than certain de minimis services described in §10A(i)(1)(B) of the 1934 Act that the auditors propose to provide to us or any of our subsidiaries.

The board of directors considers at each of its meetings whether to approve any audit services or non-audit services.  In some cases, management may present the request; in other cases, the auditors may present the request.  The board of directors approved GHP Horwath performing our audit for the 2013 fiscal year.

31

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit Number	Description
2.1.1	Agreement and Plan of Merger and Reorganization with Art Dimensions, Inc.(1)
3.1.1	Articles of Incorporation.(2)
3.1.2	Amendment to Articles of Incorporation.(1)
3.1.3	Amended and Restated Articles of Incorporation effective May 3, 2013.(3)
3.1.4	Amendment to Articles of Incorporation dated January 22, 2014.
3.2.1	Bylaws.(2)
3.2.2	Bylaws, as amended May 1, 2013.(3)
10.1	Area Development Agreement by and between SH Franchising & Licensing LLC and Southern Hospitality Franchisee Holding Corporation, dated November 4, 2011, as amended by the First Amendment dated November 4, 2011, and as amended by the Second Amendment dated November 9, 2012.
10.2	Franchise Agreement by and between SH Franchising & Licensing LLC and Southern Hospitality Franchisee Holding Corporation, dated November 4, 2011, as amended by the First Amendment dated November 4, 2011, as amended by the Second Amendment dated November 9, 2012, and as amended by the Third Amendment dated January 9, 2013.
10.3	Amendment and Release Agreement by and between SH Franchising & Licensing LLC, Southern Hospitality Franchisee Holding Corporation, and Southern Hospitality Denver, LLC, dated September 23, 2013(4)
10.4	Acquisition Agreement by and between Smokin Concepts Development Corporation, Bourbon Brothers Holding Company, LLC and JW Roth and Robert B. Mudd, dated September 30, 2013.(5)
10.5	First Amendment to Acquisition Agreement by and between Smokin Concepts Development Corporation, Bourbon Brothers Holding Company, LLC and JW Roth and Robert B. Mudd, dated November 8, 2013.(5)
10.6	Second Amendment to Acquisition Agreement by and between Smokin Concepts Development Corporation, Bourbon Brothers Holding Company, LLC and JW Roth and Robert B. Mudd, dated January 22, 2014.(6)
10.7	2012 Stock Option Plan, as amended on January 22, 2014.
10.8	Lease Agreement by and between Bourbon Brothers Southern Kitchen Colorado Springs, LLC and Bourbon Brothers, LLC, dated May 29, 2013.
10.9	License Agreement, as amended and restated, by and between Bourbon Brothers Holding Company, LLC and subsidiaries with Bourbon Brothers, LLC, dated April 18, 2013.
14.1	Code of Ethics as adopted by the Board of Directors on January 22, 2014.
21.1	Subsidiaries of Bourbon Brothers Holding Corporation.
31.1	Rule 13a-14(a)/15d-14(a) - Certification of Principal Executive Officer.  Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) - Certification of Principal Financial Officer.  Filed herewith.
32.1	Section 1350 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SARBANES-OXLEY ACT of 2002. Filed herewith.
32.2	Section 1350 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SARBANES-OXLEY ACT of 2002. Filed herewith.
101	Interactive data files. Filed herewith.

(1)   Incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and filed on March 8, 2013.

(2)   Incorporated by reference from the Company’s Registration Statement on Form S-1 filed on September 26, 2008.

(3)   Incorporated by reference from the Company’s Current Report on Form 8-K dated April 30, 2013, and filed on May 3, 2013.

(4)   Incorporated by reference from the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2013, and filed on November 14, 2013.

(5)   Incorporated by reference from the Company’s Current Report on Form 8-K dated November 8, 2013, and filed on January 17, 2014.

(6)   Incorporated by reference from the Company’s Current Report on Form 8-K dated January 22, 2014, and filed on January 27, 2014.

32

In accordance with the requirements of Section 13 or 15(d) Exchange Act, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

	BOURBON BROTHERS HOLDING CORPORATION
Date:  March 19, 2014	By:	/s/  Robert B. Mudd
		Robert B. Mudd, CEO, President and Director

Date:  March 19, 2014	By:	/s/ Heather Atkinson
		Heather Atkinson, CFO, Secretary and Treasurer

33

BOURBON BROTHERS HOLDING CORPORATION

(FORMERLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

YEARS ENDED DECEMBER 31, 2013 AND 2012

CONTENTS

	PAGE
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements:
Balance sheets as of December 31, 2013 and 2012	F-3
Statements of loss for the years ended December 31, 2013 and 2012	F-4
Statements of changes in equity for the years ended December 31, 2013 and 2012	F-5
Statements of cash flows for the years ended December 31, 2013 and 2012	F-6
Notes to financial statements	F-7 – F-22

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Bourbon Brothers Holding Corporation (formerly Smokin Concepts Development Corporation):

We have audited the accompanying consolidated balance sheets of Bourbon Brothers Holding Corporation (formerly Smokin Concepts Development Corporation) and its subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of loss, changes in equity, and cash flows for each of the years then ended  December 31, 2013 and 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a limited operating history, it has suffered recurring losses from operations, and has a working capital deficiency at December 31, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Notes 1 and 10 to the consolidated financial statements, in January 2014, the Company acquired all of the equity interests of Bourbon Brothers Holding Company, LLC.

/s/ GHP Horwath, P.C.

Denver, Colorado

March 19, 2014

F-2

BOURBON BROTHERS HOLDING CORPORATION

(FORMERLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2013			2012
Assets
Current assets:
Cash and cash equivalents	$	13,611		$	962,331
Prepaid expenses and other		5,459			242,807
Inventory		31,559			-
Total current assets		50,629			1,205,138
Deposit		18,034			18,034
Intangible asset, net		45,625			300,000
Property and equipment, net		2,443,575			1,451,659
Total assets	$	2,557,863		$	2,974,831
Liabilities and equity
Current liabilities:
Accounts payable	$	81,015		$	453,788
Related party payable		-			8,659
Accrued expenses		78,568			73,673
Related party note payable		204,877
Note payable and accrued interest		211,614			-
Convertible notes payable and accrued interest, current portion		60,000			55,795
Total current liabilities		636,074			591,915
Deferred rent		234,900			232,565
Convertible notes payable and accrued interest, net of current portion,
(net of $295,872 (2013) and $682,938 (2012) discount)		532,844			954,487
Total liabilities		1,403,818			1,778,967
Commitments and contingencies
Equity
Preferred stock, 1,000,000 shares authorized,
none issued or outstanding		-			-
Common stock - no par value;
Authorized shares - 50,000,000
Issued and outstanding shares - 9,629,220 (2013) and 6,980,270 (2012)		4,925,860			2,725,200
Additional paid-in capital		1,086,609			673,626
Accumulated deficit		(5,297,742	)		(2,734,895	)
Total Bourbon Brothers Holding Corporation ("BBHC") equity		714,727			663,931
Noncontrolling interest		439,318			531,933
Total equity		1,154,045			1,195,864
Total liabilities and equity	$	2,557,863		$	2,974,831

See notes to consolidated financial statements.

F-3

BOURBON BROTHERS HOLDING CORPORATION

(FORMERLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

CONSOLIDATED STATEMENTS OF LOSS

	Year ended
	December 31,
	2013			2012
Revenue	$	2,098,925		$	-
Operating expenses:
Restaurant operating costs (exclusive of depreciation and amortizaton below)		2,321,817			-
General and administrative		1,213,751			1,257,081
Related party management services		409,388			463,534
Selling and marketing		18,974			88,760
Depreciation and amortization		250,757			-
Impairment of intangible asset		250,000			-
Total operating expenses		4,464,687			1,809,375
Loss from operations		(2,365,762	)		(1,809,375	)
Other expense:
Interest expense		(515,680	)		(775,969	)
Net loss	$	(2,881,442	)	$	(2,585,344	)
Net loss attributable to noncontrolling interest	$	(318,595	)	$	(139,552	)
Net loss attributable to BBHC		(2,562,847	)		(2,445,792	)
Net loss	$	(2,881,442	)	$	(2,585,344	)
Basis and diluted net loss per share attributable to BBHC common shareholders	$	(0.29	)	$	(0.53	)
Weighted average number of common shares outstanding - basic and diluted		8,882,809			4,648,155

See notes to consolidated financial statements.

F-4

BOURBON BROTHERS HOLDING CORPORATION

(FORMERLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2013 AND 2012

	Common Stock						Additional paid-in		Accumulated			Non- Controlling
	Shares			Amount			capital		Deficit			Interest			Total
Balances December 31, 2011		4,317,150		$	83,625		$	49,753	$	(289,103	)	$	-		$	(155,725	)
Cancellation of common stock to founders		(1,485,788	)		-			-		-			-			-
Exercise of warrant for cash		330,184			250			-		-			-			250
Contribution of cash by non-controlling members to subsidiary		-			-			-		-			671,485			671,485
Issuance of common stock in connection with notes payable		1,683,203			1,040,601			283,500		-			-			1,324,101
Stock issued for services		18,160			6,589					-			-			6,589
Warrant issued for prepaid management services		-			-			49,752		-			-			49,752
Exercise of warrant for cash		330,184			250			-		-			-			250
Warrant issued for services and exercised		66,037			50			36,000		-			-			36,050
Acquisition of Art Dimensions, Inc.		650,000			-			-		-			-			-
Sale of common stock for cash		77,764			116,644			-		-			-			116,644
Conversion of notes payable to common stock		993,376			1,477,191			-		-			-			1,477,191
Warrants issued for guarantees		-			-			222,000		-			-			222,000
Stock-based compensation		-			-			32,621		-			-			32,621
Net loss		-			-			-		(2,445,792	)		(139,552	)		(2,585,344	)
Balances, December 31, 2012		6,980,270			2,725,200			673,626		(2,734,895	)		531,933			1,195,864
Issuance of common stock for cash		1,901,780			1,368,012			-		-			-			1,368,012
Conversion of notes payable to common shares		417,828			830,984			-		-			-			830,984
Stock issued for services		35,554			26,664			-		-			-			26,664
Warrant issued with a note payable		-			-			44,494		-			-			44,494
Contribution of cash by non-controlling members		-			-			-		-			225,980			225,980
Exercise of stock options		327,122			-			4,976		-			-			4,976
Stock-based compensation		-			-			263,513		-			-			263,513
Contributed services		-			-			100,000		-			-			100,000
Repurchase of shares for services		(33,334	)		(25,000	)		-		-			-			(25,000	)
Net loss		-			-			-		(2,562,847	)		(318,595	)		(2,881,442	)
Balances, December 31, 2013		9,629,220		$	4,925,860		$	1,086,609	$	(5,297,742	)	$	439,318		$	1,154,045

See notes to consolidated financial statements.

F-5

BOURBON BROTHERS HOLDING CORPORATION

(FORMERLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended
	December 31,
	2013			2012
Cash flows from operating activities
Net loss	$	(2,881,442	)	$	(2,585,344	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of prepaid management services and guarantees		194,280			71,284
Amortization of debt discount		387,067			719,918
Stock-based compensation		308,033			75,210
Interest attributed to converted debt		30,985			-
Contributed services by related party		100,000			-
Stock issued for services		26,664			-
Settlement of expenses for promissory note and common stock		-			102,500
Depreciation and amortization		250,757			-
Impairment of intangible asset		250,000			-
Changes in operating assets and liabilities:
Prepaid expenses		42,104			143
Deposit		-			(18,034	)
Inventory		(31,559	)		-
Accounts payable		(373,090	)		46,167
Related party payable		(8,659	)		(32,882	)
Accrued expenses and accrued interest		13,258			113,940
Deferred rent		2,335			82,565
Net cash used in operating activities		(1,689,267	)		(1,424,533	)
Cash flows from investing activities
Purchase of property and equipment		(1,238,298	)		(875,685	)
Net cash used in investing activities		(1,238,298	)		(875,685	)
Cash flows from financing activities
Proceeds from exercise of a stock options		4,976			-
Proceeds from exercise of warrants		-			550
Proceeds from issuance of notes payable and common stock		-			2,446,337
Contribution to subsidiary by non-controlling interest		225,980			671,485
Advances from related party		135,000			-
Advances repaid to related party		(135,000	)		-
Proceeds from issuance of related party promissory note		204,877			-
Sale of common stock		1,368,012			116,644
Repurchase of shares for services from related party		(25,000	)		-
Proceeds from issuance of promissory note and warrant		200,000			-
Net cash provided by financing activities		1,978,845			3,235,016
Net (decrease) increase in cash and cash equivalents		(948,720	)		934,798
Cash and cash equivalents, beginning		962,331			27,533
Cash and cash equivalents, ending	$	13,611		$	962,331
Supplemental disclosure of non-cash investing and financing activities:
Convertible notes and interest converted to common stock	$	830,984		$	1,477,191
Issuance of warrant for prepaid management services and guarantees	$	-		$	271,752
Property and equipment recorded in exchange for accounts payable	$	-		$	401,973
Leasehold improvements and deferred rent	$	-		$	150,000
Capitalized accrued interest	$	-		$	24,000
Cash paid for interest	$	21,600		$	-

See notes to consolidated financial statements.

F-6

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT’S PLANS

Organization

Bourbon Brothers Holding Corporation (“BBHC” or the “Company”) is a Colorado corporation. The Company, on January 22, 2014, with approval of a majority of the Company’s shareholders, changed its name from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.

The Company’s subsidiary, Southern Hospitality Franchisee Holding Corporation (“SH”) entered into a franchise agreement and area development agreement with SH Franchising & Licensing LLC, dba Southern Hospitality BBQ (the “Franchisor”) in November 2011. In May 2012, SH formed Southern Hospitality Denver Holdings, LLC (“SHDH”), a wholly-owned subsidiary, and Southern Hospitality Denver, LLC (“SHD”). SHD was formed for the purpose of owning and operating the Company’s first franchised restaurant in Denver, Colorado. As of December 31, 2013, SHD is 51% owned by SHDH and 49% owned by non-controlling interest holders, of which a director of the Company is a 22% non-controlling interest holder.

On November 13, 2012, the Company, f/k/a Art Dimensions, Inc. (“ADI”), entered into an Agreement and Plan of Merger and Reorganization with SH whereby the Company acquired SH in a reverse triangular merger (the “SH Acquisition”). On November 13, 2012, the parties closed the SH Acquisition, and a Statement of Merger was filed and effective with the Colorado Secretary of State on that day. Upon closing the SH Acquisition, the Company issued a total number of common shares to the SH shareholders in exchange for all of their ownership interests in SH such that they owned approximately 89% of the Company on the date of the SH Acquisition. The shareholders of the Company prior to the SH Acquisition owned approximately 11% of the Company after the closing of the SH Acquisition. On November 13, 2012, the Company and SH closed the SH Acquisition, and the Company’s wholly owned subsidiary, ADI Merger Corp., was merged with and into SH. An aggregate of 5,259,029 Company shares were issued in the SH Acquisition.  The number of ADI common shares received by SH’s shareholder depended on the number of shares each held and that were outstanding at the closing of the SH Acquisition.  Additionally, upon the effective date of the SH Acquisition all outstanding SH warrants, options and outstanding promissory notes were exchanged for options, warrants and promissory notes to acquire ADI common stock on equivalent terms.  Pursuant to the SH Acquisition, on November 13, 2012, the Company changed its name from Art Dimensions, Inc. to Southern Hospitality Development Corporation. The Registrant was a public shell company (as defined in Rule 12b-2 of the Exchange Act) at the date of the SH Acquisition. Therefore, the SH Acquisition was accounted for as a reverse acquisition and recapitalization. SH is the acquirer for accounting purposes and ADI is the acquired company. Accordingly, SH’s historical financial statements for periods prior to the SH Acquisition become those of ADI, retroactively restated for, and giving effect to the number of shares received in the SH Acquisition. The accumulated deficit of SH is carried forward after the SH Acquisition. Operations reported for periods prior to the SH Acquisition are those of SH. Earnings per share for the period prior to the SH Acquisition are restated to reflect the equivalent number of shares outstanding.

The Company, on May 3, 2013, with approval of a majority of the Company’s shareholders, changed its name from Southern Hospitality Development Corporation to Smokin Concepts Development Corporation.

On September 30, 2013, the Company entered into an Acquisition Agreement with Bourbon Brothers Holding Company, LLC (“BBHCLLC”) to acquire all of the equity interests in BBHCLLC (the “BB Transaction”) and its subsidiaries. BBHCLLC is a Colorado limited liability company (“LLC”) formed in May 2013, for the purpose of developing and managing all aspects of operating units related to a recently developed “Bourbon Brothers” brand.  The principles of BBHCLLC were also, at various times, on the board of directors of the Company, and therefore BBHCLLC is considered to be a related party.  As of December 31, 2013, BBHCLLC was a development stage company. BBHCLLC’s subsidiaries (all LLCs formed in April 2013) include Bourbon Brothers Restaurant Group, LLC (“BBRG”), Bourbon Brothers Franchise, LLC (“BBF”) and Bourbon Brothers Brand, LLC (“BBB”). BBRG owns the stores to encompass several Bourbon Brothers brands, and owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC (“BBSK”), which opened its first restaurant in January 2014. BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC (“BBSF”). BBB manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company’s core brand.

F-7

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

On November 8, 2013, the Company and BBHCLLC amended the Acquisition Agreement by entering into a First Amendment to the Acquisition Agreement.  On January 22, 2014, the parties entered into a Second Amendment to the Acquisition Agreement, identifying the final conversion ratio of 1.82427.  The Second Amendment identified the number of shares to be issued by the Company in the BB Transaction as 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHCLLC Class A Voting members.  These shares were issued at the closing of the BB Transaction.  All outstanding options and warrants to acquire BBHCLLC units were assumed by the Company, applying the conversion ratio to the number of units and strike price (Note 10).

Basis of Presentation

Since inception through February 20, 2013, the Company devoted substantially all of its efforts to establishing its business.  The Company’s planned principal operations commenced on February 21, 2013, with the opening of the Southern Hospitality Denver restaurant.  As a result, the Company is no longer considered to be a development stage enterprise as of February 21, 2013.

Management’s Plans

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of approximately $2.9 million and $2.6 million for the years ended December 31, 2013 and 2012, respectively, and has an accumulated deficit of approximately $5.3 million at December 31, 2013. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has devoted substantially all of its efforts to developing its business plan, raising capital, and opening and operating its first restaurant. Through 2013, the Company has been largely focused on its first Denver-based restaurant and working to obtain profitable operations.  The Company has also been focused on completing the BB Transaction with BBHCLLC, which occurred in January 2014.

The Company began revenue generating activities in late February 2013, and in January 2014, BBHCLLC’s restaurant, located in Colorado Springs, Colorado, opened and began generating revenues. The Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any assurance it will be able to enter into any such agreement in the future, or be able to raise funds through a future issuance of debt or equity (Note 10). The Company’s continued implementation of its business plan is dependent on its future profitability and engaging in strategic transactions, or on additional debt or equity financing, which may not be available in amounts or on terms acceptable to the Company or at all. As a consequence, if the Company is unable to achieve and maintain profitability through the current restaurant operations, enter into strategic transactions, or obtain additional financing in the near term, the Company may be required to delay its business plan implementation, which would have a material adverse impact on the Company.

F-8

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts, transactions, and profits are eliminated in consolidation.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Fair Value Measurements

The Company accounts for financial instruments pursuant to accounting guidance which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair measurements.  To increase consistency and comparability in fair value measurements, the accounting guidance established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 – quoted prices (unadjusted) in active markets of identical assets or liabilities;

Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 – assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions.  Unobservable inputs require significant management judgments or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.  There were no financial assets or liabilities measured at fair value, with the exception of cash and cash equivalents as of December 31, 2013.

The carrying amounts of accounts payable and notes payable approximate their fair values due to their interest rates and/or  short-term maturities.  The carrying amounts of related party payables are not practicable to estimate based on the related party nature of the underlying transaction.

F-9

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Non-controlling Interest

The non-controlling interest represents capital contributions, income and loss attributable to the owners of less than wholly-owned consolidated entities, and are reported in equity. From inception through December 31, 2013, in exchange for their interest in SHD, the non-controlling members contributed $897,465 in cash, of which $225,980 and $671,485 was contributed during the years ended December 31, 2013 and 2012, respectively.

Pre-opening Costs

Pre-opening costs, such as travel and employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Cash and Cash Equivalents

Cash equivalents include short-term highly liquid investments with an original a maturity of three months or less when purchased.  In addition, the majority of payments due from financial institutions for the settlement of debit card and credit card transactions process within two business days, and therefore these payments due are classified as cash and cash equivalents.

Inventory

Inventory consists of food and beverages and is stated at the lower of cost (first-in, first-out) or market.

Property and Equipment

In conjunction with the Company’s Denver-based restaurant, the Company began capitalizing certain leasehold improvements, as well as equipment the Company purchased in 2012 but did not place in service until February 2013. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management considers, or will consider, such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management bases this assessment upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge would be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are capitalized. Expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings.

F-10

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Capitalized Interest

Interest on funds used to finance the acquisition and construction of a restaurant to the date the asset is placed in service is capitalized.

Leases and Deferred Rent

The Company intends to lease substantially all of its restaurant properties, and in April 2012, the Company entered into a ten-year lease for the restaurant in Denver, Colorado. For leases that contain rent escalation clauses, the Company records the total rent payable during the lease term and recognizes expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent is recorded as deferred rent. Additionally, contingent rent expense based on a percentage of revenue is accrued and recorded to the extent it is expected to exceed minimum base rent per the lease agreement based on estimates of probable levels of revenue during the contingency period.  A long-term deposit on the Denver lease in the amount of $18,034 is recorded as of December 31, 2013.  Deferred rent also includes a tenant improvement allowance the Company received for $150,000, which is amortized as a reduction of rent expense, also on a straight-line basis over the initial term of the lease. 

Revenue Recognition

The Company began revenue-generating activities through the Denver restaurant on February 21, 2013. The Company began accounting for such revenues pursuant to SEC Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition, and applicable related guidance. Revenue is derived from the sale of prepared food and beverage and select retail items. Revenue is recognized at the time of sale and is reported on the Company's consolidated statements of income (loss) net of sales taxes collected. The amount of sales tax collected is included in accrued expenses until the taxes are remitted to the appropriate taxing authorities.

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $19,000 and $88,800, for the years ended December 31, 2013 and 2012, respectively.

F-11

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation

The Company accounts for stock-based compensation under Accounting Standards Codification (“ASC”) 718, Share-Based Payment. ASC 718 requires the recognition of the cost of services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock-based compensation expense to be recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

The Company determines its income tax expense in each of the jurisdictions in which it operates. The income tax expense includes an estimate of the current income tax expense, as well as deferred income tax expense, which results from the determination of temporary differences arising from the different treatment of items for book and tax purposes.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions.

Many of the Company’s subsidiaries are limited liability companies (“LLC’s”) and treated for tax purposes as pass-through entities. As a result, any taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. The Company recognizes tax related interest and penalties, if any, as a component of income tax expense.

F-12

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net loss per share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Common stock options, warrants and shares underlying convertible debt aggregating 8,882,809 and 1,922,171 for the years ended December 31, 2013 and 2012, respectively, have been excluded from the calculation of diluted net loss per common share.

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company’s consolidated financial statements.

NOTE 3 – INTANGIBLE ASSET

Franchise Agreements

In 2011, the Company paid $300,000 for the non-exclusive rights and license to use the Southern Hospitality system and Southern Hospitality licensed marks in connection with the operation of ten restaurants to be owned and operated by the Company under franchise and related area development agreements.  These costs were allocable to each planned restaurant.

In September 2013, the Company terminated the Area Developer Agreement (“ADA”) with the Franchisor. As a result of the termination of the ADA, the Company determined this event impaired the intangible asset, and a resulting impairment expense was recorded in the year ended December 31, 2013, of $250,000.  The intangible asset at December 31, 2013, represents franchise license costs for the Denver restaurant (net of accumulated amortization of $4,375).

Amortization began in February 2013 with the opening of the Company’s Denver-based restaurant, with amortization expense of $4,375 recorded for the year ended December 31, 2013. Amortization expense for the next five years is estimated to be as follows:

2014	$	5,000
2015		5,000
2016		5,000
2017		5,000
2018		5,000
Thereafter		20,625
	$	45,625

F-13

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 4 – PROPERTY AND EQUIPMENT

As of December 31, 2013 and 2012, property and equipment consists of the following:

	December 31,			December 31,
	2013			2012		Useful lives
Leasehold improvements	$	2,146,322		$	1,290,723	3-10 years
Website development		13,500			10,800	3 years
Equipment		478,194			133,091	3-7 years
Computers and hardware		52,742			17,045	5 years
		2,690,758			1,451,659
Less accumulated depreciation		(247,183	)		-
	$	2,443,575		$	1,451,659

The Company’s Denver-based restaurant opened in late February 2013, for which the Company began depreciating such assets.  Depreciation expense for the years ended December 31, 2013 and 2012, was $247,000 and $0, respectively.

NOTE 5 – NOTES PAYABLE

Convertible Notes:

Beginning in October 2011, the Company began selling 5% promissory notes (the “Notes”) along with shares of the Company’s common stock. Investors received one share of common stock for each one dollar of principal amount loaned to the Company. The Notes bear interest at 5% per annum, they are unsecured, and their maturity dates are seven years from their issue date. The Company sold $3,086,388 of notes from 2011 through November 2012. Quarterly payments are applied against accrued interest first, then principal. The minimum aggregate quarterly payment to Note holders is 2.5% of the Company’s portion of gross quarterly revenues from each restaurant. The first minimum quarterly payment of $7,297 was paid in May 2013 (45 days after the first calendar quarter in which the Denver restaurant opened which occurred on February 21, 2013).  Payments made in the years ended December 31, 2013 and 2012, were $21,600 and $0, respectively.

By their original terms, the Notes and accrued interest became convertible, at the option of the holder, upon the Company’s common stock becoming publicly traded on November 13, 2012. The conversion price is 80% of the 20-day average closing sales price on the date conversion is elected, but not less than $0.50 per share. The Company determined that there was a beneficial conversion feature associated with the Notes in the amount of $283,500 related to the intrinsic value of the conversion feature before the Company’s stock became public.  The Company recorded the beneficial conversion feature as a discount to the note and is amortizing the amount to interest over the term of the notes.  Approximately $82,273 and $7,900 has been amortized for the years ended December 31, 2013 and 2012, respectively. During the year ended December 31, 2013, there were and $830,984 of Notes and accrued interest converted into 417,828 common shares at conversion prices between $1.82 and $2.30 per share.  The unamortized debt discount and beneficial conversion feature that was expensed upon these conversions was $263,402 and $71,006, respectively.

F-14

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 5 – NOTES PAYABLE (CONTINUED)

Promissory Note:

During the year ended December 31, 2013, the Company issued a promissory note with an aggregate face amount of $200,000, along with a warrant to purchase 50,000 shares of the Company’s common stock. This note bears interest at 5% per annum, is unsecured, and has a maturity date which is concurrent with the date that the current common stock offering closes, which occurred in January 2014. The holder of the note received additional consideration in the form of a fully vested stock warrant for the purchase of 50,000 common shares at an exercise price of $0.50 per share exercisable for three years from the date of execution of the note.  The Company determined the relative fair value of the warrant to be approximately $44,000, which has been recorded as a discount to the note payable and was amortized over approximately three months (Note 8).

Related Party Promissory Note:

On August 1, 2013, the Company entered into an unsecured promissory note with BBHCLLC. The note is for $204,900 with a maturity date of February 1, 2014. The note includes a 5% annual interest rate and terms in case of default in which the loan maybe converted to common stock of the Company by the note holder at no less than $0.10 a share. The note and unpaid interest was extinguished on the date the Company and BBHCLLC successfully closed the BB Transaction (Note 10).

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Commitments:

Franchise agreement

The Company operates its Denver restaurant property under a franchise agreement with the Franchisor under an initial ten-year term, renewable for two additional five-year terms. Pursuant to the franchise agreement, the Company is to pay royalty fees based on a percentage of gross revenues (generally between 3% and 5% of gross sales, as defined), plus additional fees and costs for marketing, training, inventory and other franchisor costs. Two officers of the Company have personally guaranteed royalty payments to the Franchisor.

In September 2013, the Company amended the Franchise Agreement with the Franchisor. The amendment resulted in a reduction in the royalty fees for the Company’s Denver restaurant to be paid to the Franchisor beginning January 1, 2014. The reduced rate is 2.5% of gross sales, subject to a monthly floor of $5,000.

For the years ended December 31, 2013 and 2012, the Company incurred franchise royalty expense of $98,000 and $0, respectively.

Leases:

In April 2012, the Company entered into a ten-year, non-cancellable lease for the restaurant in Denver, Colorado. This lease provides for two, five-year renewal options. Rent payments are approximately $16,000 per month plus certain common area maintenance charges, as defined, and are subject to escalation provisions.  Lease expense was approximately $190,000 and $144,800 for the years ended December 31, 2013 and 2012, respectively.  In addition, BBHCLLC has entered into a ten-year, non-cancellable lease with a related party for the restaurant in Colorado Springs, Colorado.

F-15

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 6 – COMMITMENTS AND CONTINGENCIES (CONTINUED)

The future minimum lease payments are as follows:

	Third		Related
	Party		Party		Total
2014	$	194,120	$	367,039	$	561,159
2015		199,944		385,000		584,944
2016		205,942		385,000		590,942
2017		212,120		385,000		597,120
2018		218,484		385,000		603,484
Thereafter		857,884		2,135,461		2,993,345
	$	1,888,494	$	4,042,500	$	5,930,994

The Company also paid rent and rent-related expenses to Accredited Members Acquisition Corporation (“AMAC”), a related party (Note 9), on a month-to-month basis for office space at the AMAC corporate headquarters in Colorado Springs, Colorado. This arrangement began in October 2011 and terminated July 31, 2013, as the Management Service Agreement terminated. Base rental payments were approximately $3,500 per month. Related party rent expense was approximately $25,545 and $44,300 for the years ended December 31, 2013 and 2012, respectively.

During the year ended December 31, 2013, the Company and its general contractor were in a dispute regarding the final payment on the leasehold improvements on the restaurant. The general contractor recorded a lien against the premises. This lien caused the Company to be in default of its lease agreement. In July 2013, the Company and its landlord entered into an agreement to satisfy the dispute with the general contractor so the full lien will be released.  In turn, the entire lien was released on August 2, 2013.  The Company made payments totaling $144,000 in full for the year ended December 31, 2013.

Contingencies:

From time to time, the Company may become party to litigation and other claims in the ordinary course of business. To the extent that such claims and litigation arise, management provides for them if upon the advice of counsel, losses are determined to be both probable and estimable.

NOTE 7 – INCOME TAXES

At December 31, 2013, the Company has approximately $1,856,000 of net operating loss carry-forwards which expire between 2030 and 2033. The net operating loss carry-forwards may be subject to certain restrictions in the future, particularly in the event of a change in ownership under Internal Revenue Code Section 382.

Deferred tax assets and liabilities are recorded based on the difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are carried on the balance sheet with the presumption that they will be realizable in future periods when pre-tax income is generated. A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The net operating loss carry-forwards may be subject to certain restrictions in the future, particularly in the event of a change in ownership under Internal Revenue Code Section 382.

Deferred tax assets and liabilities represent the future impact of temporary differences between the financial statement and tax bases of assets and liabilities.  The Company’s net deferred tax assets have been fully reserved, effectively by a valuation allowance, because management does not believe realization of the deferred tax assets is sufficiently assured at the balance sheet date.

F-16

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 7 – INCOME TAXES (CONTINUED)

The deferred tax assets (liabilities) and associated valuation allowance at December 31, 2013 and 2012, are as follows:

	2013			2012
Current assets:
Stock based compensation	$	156,993		$	22,337
		156,993			22,337
Non-current assets:
Net operating loss carryforwards		778,782			685,774
		935,775			708,111
Valuation allowance		(935,775	)		(708,111	)
Net deferred tax assets	$	-		$	-

No income tax benefit was recognized for the years ended December 31, 2013 and 2012, as indicated below:

	2013			2012
Deferred tax benefit:
Federal	$	209,205		$	581,082
State		18,459			50,529
		227,664			631,611
Increase in valuation allowance		(227,664	)		(631,611	)
	$	-		$	-

A reconciliation of income tax computed at the U.S. statutory tax rate of 34% to the effective income tax rate is as follows:

	2013			2012
Statutory rate		34	%		34	%
State taxes		3			3
Permanent differences and other		(10	)		(12	)
Valuation allowance		(27	)		(25	)
Effective rate		-			-

F-17

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 8 –  EQUITY

Preferred stock:

The Company has authorized the issuance of up to 1,000,000 shares of preferred stock (increased to 18,242,700 shares in January 2014), none of which had been issued through December 31, 2013 (Note 10). The designations, preferences, limitations, restrictions, and relative rights of the preferred stock shall be established by the board of directors.

Common stock:

Notes payable and accrued interest of $830,984 were converted into 417,828 shares of common stock during the year ended December 31, 2013.

In connection with the Company’s 2012 private placement offering to raise $1,500,000 for 1,000,000 shares at $1.50 per share that began in December 2012, the Company changed the offering price to $0.75 per share on May 28, 2013.  The change in offering price and the subscriptions sold through December 31, 2013, resulted in a maximum of 2,000,000 shares available for issuance in which 1,979,544 shares have been issued for proceeds of $1,484,656 since December 2012.

In connection with services provided to the Company, the Company issued an additional 35,554 common shares valued at $26,664 ($0.75 per share) during the year ended December 31, 2013.

Stock options:

Effective November 13, 2012, the Company adopted the 2012 Stock Option Plan (the “Plan”). Under the Plan, the Company may grant stock options, restricted and other equity awards to any employee, consultant, independent contractor, director or officer of the Company. A total of 1.5 million shares of common stock may be issued under the Plan which increased to 3 million as of January 22, 2014 (which number is subject to adjustment as described in the Plan).

In 2012, the Company granted stock options to the Company’s CEO to purchase an aggregate of 660,368 shares of common stock.   The Company’s CEO  was granted a five-year term option to acquire 660,368 shares of Company common stock at approximately $0.015 per share with 66,035 options vesting immediately and the remaining shares vesting upon the achievement of the performance objectives determined by management, as defined.  During the three months ended March 31, 2013, the CEO exercised the vested options for $995. In March 2013, the board of directors modified the stock option agreement, revising the vesting conditions of the agreement from performance objectives to a service condition.  Under the revised agreement, 264,149 shares vest in March 2014, and the remaining 330,184 shares vest in March 2015. The Company valued the modified options at the modification date.  Based on the Black Scholes option pricing model, the fair value of the modified share option is $1.44 per share.  In June 2013, the Company’s CEO resigned his position. In connection with his resignation, the Company agreed to accelerate the vesting of a portion of his options for 264,149 shares from March 2014 to June 2013. The Company valued the modified options at the modification date which resulted in approximately $198,000 of stock option expense recorded during the year ended December 31, 2013.  The CEO exercised these options in a cashless exercise, and the stock certificate is being held by the Company per a lock-up provision until March 2014.

In March 2013, the Company granted certain members of the Denver-based restaurant management team stock options to purchase an aggregate of 90,000 shares of common stock.  These options were granted with a five-year term exercisable at approximately $1.50 per share with 45,000 options vesting immediately and the remaining shares to vest one year later in March 2014.  With the departure of two of these four employees in 2013, 40,000 stock options were forfeited and 50,000 stock options remained outstanding as of December 31, 2013, with 25,000 vested and the remaining 25,000 vesting in March 2014.  None of these options were exercised by December 31, 2013.

F-18

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 8 – EQUITY (CONTINUED)

The stock-based compensation cost related to options that have been included as a charge to general and administrative expense in the statements of operations was approximately $119,000 and $32,600 for the years ended December 31, 2013 and 2012, respectively.  As of December 31, 2013, there was approximately $5,900 of unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized over a weighted-average period of less than five years.

The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options.  The weighted-average fair value of options granted during the year ended December 31, 2013 and 2012 was $0.96 and $0.51 per share.  The assumptions utilized to determine the fair value of options granted during the years ended December 31, 2013 and 2012, are as follows:

	2013			2012
Risk free interest rate		0.79	%		0.62	%
Expected volatility		105	%		105	%
Expected term	2-5 years			5 years
Expected dividend yield		0			0

The expected term of stock options represents the period of time that the stock options granted are expected to be outstanding. The expected volatility is based on the historical price volatility of the common stock of similar companies. The risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the anticipated cash dividend over the expected term of the stock options.

The following tables set forth the activity in the Company's Plan for the year ended December 31, 2013 and 2012:

						Weighted
				Weighted		average
	Shares			average		remaining		Aggregate
	under			exercise		contractual		intrinsic
	option			price		life		value
Outstanding at January 1, 2013		660,368		$	-			$	-
Granted		90,000			1.50		-		-
Exercised		(327,122	)		0.02		-		-
Forfeited/cancelled		(373,246	)		0.02		-		-
Outstanding at December 31, 2013		50,000			1.50		4.24		-
Exercisable at December 31, 2013		25,000		$	1.50		4.24	$	-

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company’s common stock on December 31, 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on December 31, 2013.

F-19

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 8 – EQUITY (CONTINUED)

The following table summarizes the activity and value of non-vested options as of and for the years ended December 31, 2013:

				Weighted
				average
	Number of			grant date
	options			fair value
Non-vested options outstanding at January 1, 2013		594,333		$	0.51
Granted		90,000			0.96
Vested		(289,149	)		1.39
Forfeited/cancelled		(370,184	)		1.38
Non-vested options outstanding at December 31, 2013		25,000		$	0.96

Warrants:

In December 2012, the Company entered into an indemnification agreement with JW Roth and Gary Tedder, both directors of the Company, for their personal risk regarding personal guarantees in favor of the Franchisor, which were the subject of an Area Development Agreement between the Franchisor and SH. The personal guarantees are still in effect for the royalty payments due to the Franchisor. In addition to the indemnification agreements, the Company compensated Messrs. Roth and Tedder for their personal guarantees in the form of a warrant to purchase up to 200,000 shares, per director, exercisable for ten years at $1.00 per share with the warrant vested immediately with a cashless exercise feature.  The Company used the contractual term of the warrant, a risk free interest rate of 0.62% and a volatility of 105%. Approximately $194,250 and $28,000 has been recognized as stock-based compensation for the years ended December 31, 2013 and 2012, respectively.  There is no unrecognized expenses related to the warrants.

As of December 31, 2013, the Company had a promissory note with an aggregate face amount of $200,000 outstanding. By the original terms, the holder of the note received additional consideration in the form of an immediately vested stock warrant of 50,000 common shares at an exercise price of $0.50 per share exercisable for the three years from the date of execution of the note.  The Company used the Black Scholes pricing model to determine the fair value of the warrants.  The Company used the contractual term of the warrant, a risk free interest rate of 0.39% and a volatility of 105%. A relative fair value of approximately $44,000 was calculated based on the fair value of the warrant and note payable.

NOTE 9 – RELATED PARTY TRANSACTIONS

Related Party Management Agreement with AMHC Managed Services

Effective September 1, 2011, the Company entered into a management agreement (the “Management Agreement”) with AMHC Managed Services, Inc. (“AMMS”), a subsidiary of AMAC. The Company’s Chairman of the Board of Directors and officers of the Company are also officers/board members of AMAC. The significant terms of the Management Agreement provide for monthly payments to AMMS in exchange for the ability of the Company to fully utilize the management expertise, financial and accounting expertise, support staff and location of AMMS, including the expertise of the position of AMMS’ Chief Financial Officer and necessary support for compliance under the securities laws with respect to any private or public reports or registration statements the Company may file. The Management Agreement term was 12 months, and required the Company to pay AMMS a monthly fee equal to $35,000 per month. Additionally, under the Management Agreement, the Company granted AMMS a warrant to purchase 330,184 shares of Company’s common stock exercisable at $0.0007 per share, exercisable for a three-year term. The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and was amortized over the one-year term of the Management Agreement as services are performed. AMMS exercised the warrant in full in July 2012.

F-20

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

The Management Agreement was renewed in October 2012 for an additional one-year period with terms similar to those of the 2011 Management Agreement. In connection with the renewed Management Agreement, the Company issued an additional warrant in October 2012 to AMMS to purchase 330,184 shares of the Company’s common stock at $0.0007 per share for a three-year term.  The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and is being amortized over the one-year term of the Management Agreement as services are performed, of which approximately $39,400 and $10,300 was expensed in the years ended December 31, 2013 and 2012. AMMS exercised the warrant in full in October 2012. On May 17, 2013, the Company amended its terms with AMMS so that AMMS would no longer be the “Acting CFO” nor provide senior financial management services for the Company effective the same date.  Further, on June 26, 2013, the Company notified AMMS that it would terminate the Management Agreement effective July 31, 2013.  These functions were handled by the interim CEO and interim CFO for the remainder of 2013.

The Company also paid rent and rent-related expenses to Accredited Members Acquisition Corporation (“AMAC”), a related party, on a month-to-month basis for office space at the AMAC corporate headquarters in Colorado Springs, Colorado. This arrangement began in October 2011 and terminated July 31, 2013, as the Management Service Agreement terminated. Base rental payments were approximately $3,500 per month. Related party rent expense was approximately $25,500 and $44,300 for the years ended December 31, 2013 and 2012.

In addition to the management fee and the rent discussed above, the Company paid AMMS for reimbursable expenses and payments made to third parties on behalf of the Company.  During the years ended December 31, 2013 and 2012, the Company paid reimbursable expenses of $42,200 and $113,261, respectively.

In July 2013, the Company repurchased 33,334 common shares owned by AMMS for $1.50 per share for a total price of $50,000.    These shares were cancelled by the Company in July 2013.  The difference between the $1.50 per share and the fair value of the shares at the transaction date of $0.75 per share ($25,000) is recorded as an expense to related party management fees.

Related Party Services with Bourbon Brothers Holding Company, LLC (BBHCLLC)

On August 1, 2013, the Company entered into an unsecured promissory note with BBHCLLC (Note 5).  In addition, the Company recognized $20,000 of contributed services per month for August through December 2013 for services provided by BBHCLLC and recorded total expense of $100,000 in the statement of loss for the year ended December 31, 2013. No cash was exchanged by of either party in recognition.

NOTE 10 – SUBSEQUENT EVENTS

On January 22, 2014, the Company and BBHCLLC closed the BB Transaction, as described in Note 1, pursuant to which BBHCLLC is now a wholly-owned subsidiary of the Company.  The BB Transaction Agreement required the Company to issue 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHC Class A Voting members.  The Company also issued, in connection with the BB Transaction, an aggregate of 2,207,365 options pursuant to its 2012 Stock Option Plan as replacement options to the holders of BBHC unit options, and 1,094,561 common stock warrants as replacement warrants to the holders of warrants in BBHC units.

F-21

 

BOURBON BROTHERS HOLDING CORPORATION

(FORMALLY SMOKIN CONCEPTS DEVELOPMENT CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 10 – SUBSEQUENT EVENTS (CONTINUED)

On January 22, 2014, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation setting forth the designation of Series A Convertible Preferred Stock, and approved the BB Transaction in which the Company issued 20,274,193 shares of common stock to BBHC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHC Class A Voting members.  The rights of existing holders of common stock have been materially limited with respect to voting because each outstanding share of the Series A Convertible Preferred Stock is entitled to 25 votes per share, as compared to one vote per share for the common stock.  On the same date, pursuant to the closing of the BB Transaction and election of directors at the special meeting of shareholders on January 22, 2014 (the “Meeting”), the following persons were appointed as directors and officers of the Company: JW Roth, Chairman; Robert B. Mudd, President and Chief Executive Officer; Heather Atkinson, Chief Financial Officer, Secretary and Treasurer.  At the Meeting, the Company’s shareholders approved amendments to the Company’s Articles of Incorporation.  The Company filed each of the amendments to its Articles of Incorporation with the Colorado Secretary of State to effect such amendments.  The amendments accomplished the following:

· Increased the Company’s authorized capital to 100,000,000 shares of common stock and 18,242,700 shares of preferred stock.  This amendment was filed and effective January 22, 2014.

· Changed the name of the Company from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.  This amendment was filed and effective January 22, 2014.

· Amended the purpose of the Company, as described in the Proxy Statement.  This amendment was filed and effective January 22, 2014.

As of the date of the BB Transaction, the unsecured promissory note and unpaid interest totaling $258,217 between SCDC and BBHCLLC was extinguished.

On January 27, 2014, BBSK opened and is the Company’s first operating Southern Kitchen restaurant in Colorado Springs, Colorado.

On March 3, 2014, the Company commenced an offering of up to 6,000,000 shares of common stock of the Company at $0.50 per share.

F-22

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

PERIOD FROM INCEPTION (MAY 13, 2013)

THROUGH DECEMBER 31, 2013

TABLE OF CONTENTS

CONTENTS

Report of Independent Registered Public Accounting Firm	F-24
Balance sheet	F-25
Statement of operations	F-26
Statement of changes in members’ equity	F-27
Statement of cash flows	F-28
Notes to financial statements	F-29-F-36

F-23

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Members of Bourbon Brothers Holding Company, LLC:

We have audited the accompanying consolidated balance sheet of Bourbon Brothers Holding Company, LLC and its subsidiaries, a development stage company (the “Company”) as of December 31, 2013, and the related consolidated statements of operations, changes in members’ equity, and cash flows for the period from inception (May 13, 2013) through December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2013, and the results of its operations and its cash flows for the period from inception (May 13, 2013) through December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a limited operating history and has incurred a net loss and accumulated deficit since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 7 to the consolidated financial statements, in January 2014, the Company was acquired by Bourbon Brothers Holding Corporation, a publicly-traded company.

/s/ GHP Horwath, P.C.

Denver, Colorado

March 19, 2014

F-24

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

CONSOLIDATED BALANCE SHEET

	December 31,
	2013
Assets
Current assets:
Cash	$	821,073
Prepaid warrants		99,805
Total current assets		920,878
Security deposit and other		5,804
Property and equipment, net		632,531
Total assets	$	1,559,213
Liabilities and members' equity
Current liabilities:
Accounts payable	$	41,301
Accrued expenses		76,548
Total liabilities (all current)		117,849
Commitments and contingencies
Members' equity
Class A voting, 10,000,000 units issued		5,000
Class B non-voting, 9,847,600 units issued		2,635,844
Related party receivable		(204,877	)
Deficit accumulated during the development stage		(994,603	)
Total members' equity		1,441,364
Total liabilities and members' equity	$	1,559,213

See notes to accompanying consolidated financial statements.

F-25

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS

	Period from
	Inception
	(May 13, 2013)
	Through
	December 31,
	2013
Operating expenses:
General and administrative	$	(836,868	)
Selling and marketing		(55,181	)
Related party expenses		(100,000	)
Depreciation		(2,554	)
Total operating expenses		(994,603	)
Net loss	$	(994,603	)

See notes to accompanying consolidated financial statements.

F-26

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS' EQUITY

PERIOD FROM INCEPTION (MAY 13, 2013) THROUGH DECEMBER 31, 2013

								Deficit
								accumulated
					Related			during the
					party			development
	Class A		Class B		receivable			stage			Total
Issuance of units to founders for cash at inception on May 13, 2013	$	5,000	$	-	$	-		$	-		$	5,000
Issuance of units for cash between May and December 2013		-		2,266,900					-			2,266,900
Units issued for services by a related party in August 2013		-		100,000					-			100,000
Warrant issued for services in August 2013		-		149,708					-			149,708
Exercise of equity options between May and September 2013		-		190					-			190
Equity-based compensation between May and December 2013		-		119,046					-			119,046
Advances to related party		-		-		(204,877	)		-			(204,877	)
Net loss		-		-					(994,603	)		(994,603	)
Balances, December 31, 2013	$	5,000	$	2,635,844	$	(204,877	)	$	(994,603	)	$	1,441,364

See notes to accompanying consolidated financial statements.

F-27

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

	Period from
	Inception
	(May 13, 2013)
	Through
	December 31,
	2013
Cash flows from operating activities
Net loss	$	(994,603	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of prepaid services		49,903
Equity-based compensation		119,046
Equity units issued for services to related party		100,000
Changes in operating assets and liabilities:
Accounts payable		41,301
Security deposit and other		(5,804	)
Accrued expenses		76,548
Net cash used in operating activities		(613,609	)
Cash flows from investing activities
Contribution to related party		(204,877	)
Purchase of property and equipment		(632,531	)
Net cash used in investing activities		(837,408	)
Cash flows from financing activities
Proceeds from issuance of Class A member units to founders for cash		5,000
Proceeds from issuance of Class B member units for cash		2,266,900
Proceeds from exercise of equity options		190
Net cash provided by financing activities		2,272,090
Net increase in cash		821,073
Cash, beginning		-
Cash, ending	$	821,073
Supplemental disclosure of non-cash investing and financing activities:
Issuance of warrant for prepaid services	$	149,708

See notes to accompanying consolidated financial statements.

F-28

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

Organization

Bourbon Brothers Holding Company, LLC (“BBHCLLC”) is a Colorado, limited liability company (“LLC”) formed on May 13, 2013, for the purpose of developing and managing all aspects and operating units related to a recently developed “Bourbon Brothers” brand.  BBHCLLC intends to provide its service offerings through subsidiaries that have recently been formed, or are to be formed, and which are discussed below. As an LLC, profits and losses are allocated to each member in accordance with the operating agreement. Each member’s liability is limited to its respective capital contributions, except as otherwise required by law.

The following 100%-owned subsidiaries of BBHCLLC, (collectively referred to as the “Company”) were formed as Colorado LLCs in April 2013, and all have a December 31 fiscal year end:

Bourbon Brothers Holding Company, LLC(“BBHCLLC”) - The umbrella management company for all business units to encompass the executive management of all aspects of the brand.  All components of the brand were licensed from Bourbon Brothers, LLC (“BBLLC”), a separately owned entity from whom the licenses were contracted, with the exception of the architectural intellectual property of the restaurant concept.

Bourbon Brothers Restaurant Group, LLC(“BBRG”) – Owns the corporate owned stores to encompass several Bourbon Brothers brands.

BBRG owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC (“BBSK” f/k/a Bourbon Brothers Smokehouse and Tavern Colorado Springs, LLC). BBSK has signed a ten-year renewable lease for a restaurant location and building at a combined monthly rental rate of approximately $32,000 per month with BBLLC, whose founders are also the same founders of BBHCLLC.  This first location sets the standard for the brand and establishes a premium location in the setting of a southern, farm-house estate accompanied by atraditional distillery.

BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC (“BBSF”).  BBSF is in negotiations to sign a lease at a combined rental rate from a related party, Bourbon Brothers #14, LLC.

Bourbon Brothers Franchise, LLC(“BBF”) - Serves as the franchisor for Bourbon Brothers and is to provide franchise opportunities for Bourbon Brothers Southern Kitchen restaurants.  The suite of management and services that may be made available to franchisee investors include: real estate, restaurant management, and franchise royalties and services.

Bourbon Brothers Brand, LLC (“BBB”) - Manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company's core brand.  It is not anticipated that BBB will directly develop these products, but rather that it will establish joint ventures to leverage the brand in partnership with premium providers of the complementary products. BBB may establish marketing, e-commerce, catalog sales and distribution capabilities to provide for sale of the products through the Company's stores and channels.

All components of the brand have been licensed from BBLLC, a related party entity, with the exception of architectural intellectual property (Note 3). The founding members of BBLLC are also the founding members of BBHCLLC and were issued an aggregate of 10,000,000 Class A Voting Units in BBHCLLC per their pro-rata ownership in BBLLC (Note 6).

F-29

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS (CONTINUED)

Robert B. Mudd is the sole Manager of BBHCLLC and its subsidiaries.

Basis of Presentation

Since inception through December 31, 2013, the Company has devoted all of its efforts to establishing its business. As a result, the Company is considered to be a development stage enterprise.

Management's Plans

The Company reported a net loss of approximately $994,600 for the period from inception (May 13, 2013) through December 31, 2013.  The Company has a limited operating history, and the Company cannot provide any assurance it will be able to raise sufficient funds through future issuances of debt or equity to carry out its business plan.

In May 2013, the Company initiated an offering of Class B non-voting member units to accredited investors at $0.25 per unit, of which $2,438,400 was raised through January 17, 2014.  The Company opened its first restaurant location in Colorado Springs, Colorado, on January 27, 2014. The first location sets the standard for the brand, to be emulated by each of the extension subsidiaries.

In addition, on January 22, 2014, the Company was acquired by Bourbon Brothers Holding Corporation (“BBHC”)  (Note 7).

F-30

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts and transactions are eliminated in consolidation.

Accounting guidance provides a framework for determining whether an entity should be considered a variable interest entity (VIE), and if so, whether the Company’s involvement with the entity results in a variable interest in the entity. If the Company determines that it does have a variable interest in the entity, it must perform an analysis to determine whether it represents the primary beneficiary of the VIE. If the Company determines it is the primary beneficiary of the VIE, it is required to consolidate the assets, liabilities and results of operations and cash flows of the VIE into the consolidated financial statements of the Company.

A company is the primary beneficiary of a VIE if it has a controlling financial interest in the VIE. A company is deemed to have a controlling financial interest in a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company has concluded that there are no VIE’s subject to consolidation at December 31, 2013. While the Company believes its evaluation is appropriate, future changes in estimates, judgments and assumptions in the case of an evaluation triggered by a reconsideration event as defined in the accounting standard may affect the determination of primary beneficiary status and the resulting consolidation, or deconsolidation, of the assets, liabilities and results of operations of a VIE on the Company’s consolidated financial statements.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Fair Value Measurements

The carrying values of cash and accounts payable approximate fair value due to their short maturities.  The carrying amount of receivables from related parties are not practicable to estimate based on the related party nature of the underlying transactions.

Pre-opening Costs

Pre-opening costs, such as travel, employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Property and Equipment

In conjunction with the Company’s planned restaurants, the Company has capitalized certain leasehold improvements, as well as equipment the Company has purchased. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management will consider such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management will base this assessment

F-31

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment (Continued)

upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge will be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are to be stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are to be capitalized. Expenditures for minor replacements, maintenance and repairs are to be expensed as incurred. Depreciation is to be calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are to be amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts will be relieved of cost and accumulated depreciation and the related gain or loss will be reflected in earnings.

 Leases and Deferred Rent

The Company intends to lease some of its restaurant properties (Note 4), and on May 29, 2013, the Company entered into an agreement to lease a restaurant in Colorado Springs, Colorado. The lease terms became effective when the Company took possession of the restaurant property on January 11, 2014. For leases that contain rent escalation clauses, the Company will record the total rent payable during the lease term and recognize expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent will be recorded as deferred rent.

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $55,200 for the period from inception (May 13, 2013) through December 31, 2013.

Equity-Based Compensation

The Company recognizes the cost of services received in exchange for an award of equity instruments in the financial statements, which is measured based on the grant date fair value of the award. Equity-based compensation expense is recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each unit option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

The Company and its subsidiaries are limited liability companies (“LLC’s”). As an LLC, management believes that these companies are not subject to income taxes, and such taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements.

F-32

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company’s consolidated financial statements.

NOTE 3 – PROPERTY AND EQUIPMENT

As of December 31, 2013, property and equipment consists of the following:

				Useful lives
Leasehold improvements	$	27,728		3-10 years
Website development		1,500		3 years
Equipment		559,708		3-7 years
Computers and hardware		46,149		5 years
		635,085
Less accumulated depreciation		(2,554	)
	$	632,531

Depreciation expense for the period ended December 31, 2013 was $2,554, and was related soley to equipment placed in service.  The Company’s Colorado Springs-based restaurant opened in late January 2014, for which the Company began depreciating such assets at that time.

NOTE 4 – RELATED PARTY TRANSACTIONS

License agreement

The Company licenses the rights to the trademark “Bourbon Brothers” and certain intellectual property, as defined, from a related party, BBLLC, for the use in the Company’s business operations. BBLLC has granted an exclusive license to use and to sublicense the tradename and intellectual property for an initial ten year term. The agreement shall automatically renew for additional terms of ten-years each without any action required by either party. This license agreement does not require the payment of royalties or any other considerations.

Lease agreement 

On May 29, 2013, the Company entered into a 10-year lease with BBLLC for the real property in connection with the restaurant location in Colorado Springs.  The lease commenced upon taking possession of the premises, on January 11, 2014.  Initial monthly rent is approximately $32,000 per month for the first 60 months, and thereafter subject to adjustment every 60 months.  Any increase on a yearly basis will equal 11% of the construction costs in excess of $2,000,000.

On January 1, 2014, the Company assumed a lease from a related party for the corporate office in Colorado Springs.  The lease is for 78 months with an unaffiliated party.  Monthly rent is $5,800 per month escalting up to $6,000 per month in year 6.

Other

BBLLC provided a short-term non-interest bearing working capital loan of $50,000 to BBHCLLC on May 23, 2013, which was repaid in full in July 2013.

In connection with services provided to the Company, the Company issued 400,000 Class B non-voting member units valued at $100,000 ($0.25 per unit) during the period from inception (May 13, 2013) through December 31, 2013 to a related party, whose owners also hold Class A member units in the Company.

On August 1, 2013, the Company entered into an unsecured promissory note with BBHC for up to $200,000 with a maturity date of February 1, 2014, which was subsequently increased up to a $250,000 limit. BBHC received draws totaling $204,900 through December 31, 2013. The note has a 5% interest rate which compounds monthly and is due on the maturity date of the note. The note includes terms in case of default in which the loan maybe converted to common stock of BBHC by the note holder at no less than $0.10 a share. The note and unpaid interest was extinguished on the date the Company and BBHC successfully closed the BB Transaction on January 22, 2014. This balance has been represented as a component of members’ equity at December 31, 2013.

F-33

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 5 – COMMITMENTS

Supplier agreement

The Company has contracted with a supplier to design the kitchen and provide equipment for the restaurant in Colorado Springs, Colorado.  This contract was paid in full as the Company paid approximately $325,800 as of December 31, 2013, to complete the contract.

NOTE 6 – EQUITY

Member Units

At the date of organization (May 13, 2013), the Company authorized the issuance of up to 10,000,000 units of Class A voting member units. The founding members of BBHCLLC were issued an aggregate of 10,000,000 Class A voting member units in BBHCLLC per their pro-rata ownership in BBLLC.  Other than the distinction between Class A voting and Class B non-voting member units, all member units shall have identical rights.

In connection with the Company’s 2013 private placement offering for Class B non-voting member units at $0.25 per unit that began in May 2013, 9,067,600 units were issued at $0.25 per unit for cash of $2,266,900 during the period from inception (May 31, 2013) through December 31, 2013.  Subsequent to December 31, 2013, the Company has issued 696,000 units for cash proceeds of $174,000.

Equity Option Plan

The Company has adopted the 2013 Equity Option Plan (the “Plan”). Under the Plan, the Company may grant Class B non-voting membership interest units to any employees, managers, consultants, vendors and strategic partners of the Company. A total of one million Class B Units may be issued under the Plan (which number is subject to adjustment as described in the Plan). The purpose of the Plan is to provide financial incentives for selected employees, managers, consultants, vendors and strategic partners of the Company, thereby promoting the long-term growth and financial success of the Company. The Company estimates the fair value of the unit-based awards on the date of grant using the Black-Scholes option-pricing model.  Using the Black-Scholes model, the value of the award that is ultimately expected to vest is recognized over the requisite service period in the statement of operations.  Option forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.  The Company attributes compensation to expense using the straight-line single option method for all options granted.

The Company’s determination of the estimated fair value of unit-based payment awards on the date of grant is affected by the following variables and assumptions:

· Estimated option term-since there is no historical experience with existing option holders, the Company utilizes the simplified method of determining the option term by dividing the sum of the contractual term and vesting term by two;

· Estimated dividend rates-based on historical and anticipated dividends over the estimated life of the option;

· Risk-free interest rates-with maturities that approximate the expected life of the options granted; and

· Estimated unit price volatility-calculated over the expected life of the options granted, which is calculated based on the historical price volatility of publicly-traded companies that operate in a similar industry to that of the Company.

The Company utilized assumptions in the estimation of the fair value of unit options granted for the period from inception (May 13, 2013) through December 31, 2013 as follows: estimated option term of 3 to 5 years; estimated dividend rate of 0%; estimated risk-free interest rate of 0.79% to 1.75%; and estimated unit price volatility of 105%.

F-34

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 6 – EQUITY (CONTINUED)

Equity Option Plan (Continued)

The following is a summary of equity option activity:

						Weighted
				Weighted		Average
	Units			Average		Remaining
	Under			Exercise		Contractual
	Option			Price		Life
Outstanding at Inception		-		$	-		-
Granted		1,190,000			0.0005		4.5
Exercised		(380,000	)		0.0005		5
Terminated		-			-		-
Outstanding at December 31, 2013		810,000		$	0.0005		4.5

A summary of the status of the Company’s non-vested unit options for the period ended December 31, 2013, is as follows:

				Weighted
	Number			average
	of			grant date
	Options			fair value
Non-vested options outstanding at Inception		-		$	-
Granted		1,190,000			0.25
Vested		(380,000	)		0.25
Forfeited		-			-
Non-vested options outstanding at December 31, 2013		810,000		$	0.25

In May 2013, the Company granted certain employees of the Company equity options to purchase an aggregate of 130,000 Class B non-voting member units.  These units were granted with a five-year term exercisable at approximately $0.0005 per unit with 43,336 units vesting immediately and the remaining units to vest over two, one year tranches.  The Company amended the term of these options in July 2013 in which all units vested immediately.  All of the 130,000 options were exercised by September 6, 2013.  Unit option expenses of approximately $32,440 were recorded for the period ended December 31, 2013.

In June 2013, the Company retained an individual to construct and lead the Company’s advisory board. This individual was granted an aggregate of 50,000 Class B non-voting member units that will vest in June 2014. These units were granted with a two-year term exercisable at approximately $0.0005 per unit.  In order for the options to vest, this individual must remain as the Chairman of the BBHCLLC Advisory board whose placement in that role is at the sole discretion of the manager of the Company.

In August 2013, the Company granted certain members of the management team equity options to purchase an aggregate of 800,000 Class B non-voting member units.  These units were granted with a five-year term exercisable at approximately $0.0005 per unit with 200,000 units vesting immediately and the remaining units to vest evenly over the next four years.  Of these options, 200,000 units were exercised by December 31, 2013.

F-35

BOURBON BROTHERS HOLDING COMPANY, LLC

(A Development Stage Company)

Consolidated Financial Statements

Period from Inception (May 13, 2013) Through December 31, 2013

NOTE 6 – EQUITY (CONTINUED)

Unit Option Plan (Continued)

On September 1, 2013, the Company retained an individual to advertise and promote the Company.  This individual was granted an aggregate of 600,000 Class B non-voting warrants that vested immediately.  These units were granted with a three-year term exercisable at approximately $0.0005 per unit.  None of these warrants were exercised by December 31, 2013.  The Company used the contractual term of the warrant, a risk free interest rate of .79% and a volatility of 105%. Approximately $49,900 has been recognized as equity-based compensation for the period ended December 31, 2013.  The remaining prepaid balance of approximately $99,805 recorded at December 31, 2013, is to be expensed through the remaining eight months of the vesting period in 2014.

In September 2013, the Company granted 50,000 options to purchase 50,000 Class B non-voting member units. These units were granted with a five-year term exercisable at approximately $0.0005 per unit with all units vesting immediately. All options were exercised by December 31, 2013.

In October 2013, the Company retained an individual to lead the Colorado Springs restaurant location.  This individual was granted an aggregate of 150,000 Class B non-voting member units that vest evenly over three years beginning in October 2014.  These units were granted with a five year term exercisable at approximately $0.25 per unit.

Stock-based compensation expenses was $168,949 for the period ended December 31, 2013. The Company has unrecognized expenses relating to non-vesting options that are expected to vest of $177,887 which have a weighted average life of less than three years.


NOTE 7 – SUBSEQUENT EVENTS

On January 22, 2014, the Company was acquired by Bourbon Brothers Holding Corporation, formerly Smokin Concepts Development Corporation (BBHC). BBHC is a publicly-traded, Colorado corporation which owns and operates a Denver-based Southern Hospitality restaurant.  The principles of BBHCLLC were also, at various times, on the board of directors of the Company, and therefore BBHCLLC is considered to be a related party.

BBSK opened on January 27, 2014, and is the Company’s first operating Southern Kitchen restaurant.

The Company evaluated all other subsequent events through March 19, 2014, the date the consolidated financial statements were available to be issued.

F-36

BOURBON BROTHERS HOLDING CORPORATION

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The accompanying unaudited pro forma balance sheet as of December 31, 2013, gives effect to the BB Transaction as if it had been consummated on December 31, 2013. The unaudited pro forma statements of operations for the year ended December 31, 2013, gives effect to the transaction as if it had been consummated at the beginning of the periods presented.

The unaudited pro forma financial information should be read in conjunction with the historical financial statements of BBHC as well as those of BBHCLLC. The unaudited pro forma statement of operations does not purport to be indicative of the results of operations that would have actually been obtained had such transactions been completed as of the assumed dates and for the period presented, or which may be obtained in the future. The pro forma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that BBHC believes are reasonable.

F-37

BOURBON BROTHERS HOLDING CORPORATION

PROFORMA BALANCE SHEET

(UNAUDITED)

AS OF DECEMBER 31, 2013

	Bourbon Brothers			Bourbon Brothers						Proforma				Proforma
	Holding Corp.			Holding Co., LLC			Total			Adjustments				Total
	(Historical)			(Historical)
Assets
Current assets:
Cash and cash equivalents	$	13,611		$	821,073		$	834,684		$	-			$	834,684
Prepaid expenses and other		5,459			99,805			105,264			-				105,264
Inventory		31,559			-			31,559			-				31,559
Total current assets		50,629			920,878			971,507			-				971,507
Deposit		18,034			5,804			23,838			-				23,838
Intangible asset		45,625			-			45,625			-				45,625
Property and equipment, net		2,443,575			632,531			3,076,106			-				3,076,106
Total assets	$	2,557,863		$	1,559,213		$	4,117,076		$	-			$	4,117,076
Liabilities and equity
Current liabilities:
Accounts payable	$	81,015		$	41,301		$	122,316			-			$	122,316
Related party payable		-			-			-			-				-
Accrued expenses		78,568			76,548			155,116			-				155,116
Related party note payable		204,877						204,877			(204,877	)	B		-
Note payable and accrued interest		211,614			-			211,614			-				211,614
Convertible notes payable and accrued interest		60,000			-			60,000			-				60,000
Total current liabilities		636,074			117,849			753,923			(204,877	)			549,046
Deferred rent		234,900			-			234,900			(234,900	)	B		-
Convertible notes payable and accrued interest		532,844			-			532,844			-				532,844
Total liabilities		1,403,818			117,849			1,521,667			(439,777	)			1,081,890
Equity
Preferred stock		-			-			-			1,273,995				1,273,995
Common stock		4,925,860			-			4,925,860			(2,350,241	)	A		2,575,619
Additional paid-in capital		1,086,609			-			1,086,609			(1,086,609	)	A		-
Class A voting		-			5,000			5,000			(5,000	)	A		-
Class B non-voting		-			2,635,844			2,635,844			(2,635,844	)	A		-
Contribution to related party		-			(204,877	)		(204,877	)		204,877		B		-
Accumulated deficit		(5,297,742	)		(994,603	)		(6,292,345	)		5,038,598		A,B		(1,253,747	)
Total equity before non-controlling interest		714,727			1,441,364			2,156,091			439,777				2,595,864
Noncontrolling interest		439,318			-			439,318			-				439,318
Total equity		1,154,045			1,441,364			2,595,409			439,777				3,035,186
Total liabilities and equity	$	2,557,863		$	1,559,213		$	4,117,076			-			$	4,117,076

F-38

BOURBON BROTHERS HOLDING CORPORATION

PROFORMA STATEMENT OF OPERATIONS

(UNAUDITED)

				Inception
	Year			(May 13, 2013)
	Ended			Through
	December 31, 2013			December 31, 2013
	Bourbon Brothers Holding Corp.			Bourbon Brothers Holding Co., LLC			Total			Proforma Adjustments			Proforma Total
	(Historical)			(Historical)
Revenue	$	2,098,925		$	-		$	2,098,925		$	-		$	2,098,925
Operating expenses:
Restaurant operating costs		2,321,817			-			2,321,817			-			2,321,817
General and administrative		1,213,751			836,868			2,050,619			-			2,050,619
Related party expenses		409,388			100,000			509,388			-			509,388
Selling and marketing		18,974			55,181			74,155			-			74,155
Depreciation and amortization		250,757			2,554			253,311			-			253,311
Impairment of franchise fees		250,000			-			250,000			-			250,000
Total operating expenses		4,464,687			994,603			5,459,290			-			5,459,290
Loss from operations		(2,365,762	)		(994,603	)		(3,360,365	)		-			(3,360,365	)
Other income (expense):
Interest income		-			-			-			-			-
Interest expense		(515,680	)		-			(515,680	)		-			(515,680	)
Total other income (expense)		(515,680	)		-			(515,680	)		-			(515,680	)
Net loss	$	(2,881,442	)	$	(994,603	)	$	(3,876,045	)	$	-		$	(3,876,045	)
Net loss attributable to noncontrolling interest	$	(318,595	)	$	-		$	(318,595	)	$	-		$	(318,595	)
Net loss attributable to BBHC		(2,562,847	)		(994,603	)		(3,557,450	)		-			(3,557,450	)
Net loss	$	(2,881,442	)	$	(994,603	)	$	(3,876,045	)	$	-		$	(3,876,045	)
Net loss per share-basic and diluted	$	(0.29	)							$	-		$	(0.12	)
Weighted average number of common shares
outstanding - basic and diluted		8,882,809									20,274,193	A		29,157,002

F-39

BOURBON BROTHERS HOLDING CORPORATION

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following adjustments are made to the accompanying pro forma balance sheet and statement of operations:

(A)

This entry is to reflect that BBHC will issue common stock to BBHCLLC Class B Non-Voting members and Series A Convertible Preferred stock to the BBHCLLC Class A Voting members in exchange for all of their ownership interests in BBHCLLC. The number of shares issued in the accompanying pro forma financial statements of operations is calculated at the beginning of each of the periods presented to reflect that BBHCLLC members are to receive approximately 80% of the combined entity's shares. The actual number of shares issued, upon the closing of the BB Transaction, will be based on the number of BBHCLLC units outstanding at that date and will be different than the number of shares utilized in the pro forma calculations.

(B)

This entry is to reflect the accounting for a common control transaction in a manner similar to a pooling of interests.  The company will record deferred rent starting for the BB Transaction date in the post-transaction period based on the terms of the lease.

F-40

EX-3.1.4

Exhibit 3.1.4

Document must be filed electronically. Paper documents are not accepted. Fees & forms are subject to change. For more information or to print copies  of filed documents, visit www.sos.state.co.us E-Filed Colorado Secretary of State Date and Time: 01/22/2014 03:18 PM ID Number: 20081058152     Document number: 20141042156 Amount Paid: $25.00

ABOVE SPACE FOR OFFICE USE ONLY

Articles of Amendment

filed pursuant to §7-90-301, et seq. and §7-110-106 of the Colorado Revised Statutes (C.R.S.)

ID number:   20081058152

1.    Enity name:	Smokin Concepts Development Corporation
	(If changing the name of the corporation, indicate name BEFORE the name change)

2.  New Entity name:	Bourbon Brothers Holding Corporation
(if aplicable)

3.  Use of Restricted Words (if any of these
terms are contained in an entity name, true name of an entity, trade name or trademark stated in this document, mark the applicable box):	o   "bank" or "trust" or any derivative thereof  o   "credit union" o "savings and loan"  o   "insurance", casualty", "mutual", or "surety"

4.   Other amendments, if any, are attached.

5.   If the amendment provides for an exchange, reclassification or cancellation of issued shares, the attachment states the provisions for implementing the amendment.

6.  If the corporation's period of duration as amended is less than perpetual, state the date on which the period of duration expires:
	(mm/dd/yyyy)

OR

If the corporation's period of duration as amended is perpetual, mark this box:  þ

7.  (Optional) Delayed effective date:
	(mm/dd/yyyy)

Notice:

Causing this document to be delivered to the secretary of state for filing shall constitute the affirmation or acknowledgment of each individual causing such delivery, under penalties of perjury, that the document is the individual's act and deed, or that the individual in good faith believes the document is the act and deed of the person on whose behalf the individual is causing the document to be delivered for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S., the constituent documents, and the organic statutes, and that the individual in good faith believes the facts stated in the document are true and the document complies with the requirements of that Part, the constituent documents, and the organic statutes.

This perjury notice applies to each individual who causes this document to be delivered to the secretary of state, whether or not such individual is named in the document as one who has caused it to be delivered.

8. Name(s) and address(es) of the individual(s) causing the document to be delivered for filing:
	Bantz         Victoria
	(Last) (First) (Middle) (Suffix)
	Burns Figa & Will PC
	(Street name and number or Post Office information)
	6400 S. Fiddlers Green Circle, Suite 1000
	Greenwood Village CO 80111
	(City) (State) (Postal/Zip Code)
	United States
	(Province - if applicable) (Country - if not US)

(The document need not state the true name and address of more than one individual. However, if you wish to state the name and addressof any additional individuals causing the document to be delivered for filing, mark this box[ ]  and include an attachment stating the name and address of such individuals.)

Disclaimer:

This form, and any related instructions, are not intended to provide legal, business or tax advice, and are offered as a public service without representation or warranty. While this form is believed to satisfy minimum legal requirements as of its revision date, compliance with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form. Questions should be addressed to the user's attorney.

ARTICLES OF AMENDMENT TO THE

ARTICLES OF INCORPORATION OF

SMOKIN CONCEPTS DEVELOPMENT CORPORATION

These Articles of Amendment to the Articles of Incorporation were approved by the directors following the approval of certain amendments by the shareholders of Smokin Concepts Development Corporation (the “Corporation”). This attachment is incorporated into the foregoing Articles of Amendment.

1.   Article II of the Amended and Restated Certificate of Incorporation of the Corporation is hereby deleted and replaced in its entirety by the following:

“ARTICLE II

Authorized Shares

Section 1: Number. The aggregate number of shares which the Corporation shall have authority to issue is One Hundred Eighteen Million Two Hundred Forty-Two Thousand Seven Hundred (118,242,700), of which One Hundred Million (100,000,000) shall be designated as shares of Common Stock of one class with unlimited voting rights with no par value, and Eighteen Million Two Hundred Forty-Two Thousand Seven Hundred (18,242,700) shall be designated as shares of Preferred Stock, to have such par value, classes and preferences as the Board of Directors may determine from time to time.

Section 2: Dividends. Dividends in cash, property or shares of the Corporation may be paid upon the stock, as and when declared by the Board of Directors, out of funds of the Corporation to the extent and in the manner permitted by law.”

2.   Article VI of the Amended and Restated Certificate of Incorporation of the Corporation is hereby deleted and replaced in its entirety by the following:

“ARTICLEVI

Purposes

The purposes of the Corporation (through its subsidiaries) are:

1.   To develop, own, and operate restaurants and branding, such as Southern Hospitality and Bourbon Brothers, franchise Bourbon Brothers restaurants and extend the brand to product lines including but not limited to cigars, bourbon, pies, etc.; and

2.   To provide restaurant management services to other businesses.

For the purposes of the Corporation’s directors’ duties of loyalty, the investment and involvement by any directors and officers in any other business shall be considered outside the scope of the purposes of the Corporation, and not a corporate opportunity. Thus, directors and officers of the Corporation will not be deemed to have usurped a corporate opportunity by personally investing or being involved in other businesses, including real estate investments related to the Company. Similarly, the provision of management services to a restaurant by any officer or director shall not be deemed to be a usurpation of a corporate opportunity so long as the officer or director has a personal investment in such restaurant.”

CERTIFICATE OF DESIGNATION

of the

PREFERENCES, RIGHTS, LIMITATIONS, QUALIFICATIONS AND RESTRICTIONS

of the

SERIES A CONVERTIBLE PREFERRED STOCK

of

SMOKIN CONCEPTS DEVELOPMENT CORPORATION

SMOKIN CONCEPTS DEVELOPMENT CORPORATION (hereinafter the “Corporation”), a corporation organized and existing under the Colorado Business Corporation Act (the “CBCA”), hereby certifies that, pursuant to the authority conferred upon the Board of Directors of the Corporation (the “Board”) by its Articles of Incorporation and pursuant to the provisions of the CBCA, on January 22, 2014, the Board duly adopted the following resolution providing for the authorization of 18,242,700 shares of the Corporation’s Series A Convertible Preferred Stock (the “Series A Stock”):

RESOLVED, that pursuant to the authority vested in the Board by the Corporation’s Articles of Incorporation, the Board hereby establishes from the Corporation’s authorized class of preferred stock a new series to be known as “Series A Convertible Preferred Stock,” consisting of 18,242,700 shares, and hereby determines the designation, preferences, rights, qualifications, limitations and privileges of the Series A Stock to be as follows:

1.DesignationandAmount. All of the 18,242,700 shares of the Company’s authorized preferred stock, $0.001 par value per share are designated as “Series A Convertible Preferred Stock,” with the rights and preferences set forth below.

2.  Rank. The Series A Stock shall be paripassuto the Common Stock.

3.VotingRights. The holders of outstanding shares of Series A Stock shall be entitled to notice of any shareholders’ meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the holders of Common Stock. Each share of Series A Stock shall have 25 votes per share.

4.RestrictionsonTransfer.   Holders of Series A Stock are prohibited from selling, transferring, assigning, or in any way alienating their shares of Series A Stock of the Corporation (“transfer”), or any right or interest in the them, whether voluntarily or by operation of law, or by gift or otherwise, to any person except another holder of Series A Stock. The term “transfer” shall include any sale, transfer, assignment or involuntary transfer made by a holder of Series A Stock, including (without limitation) any transfer or disposition of shares of Series A Stock under judicial order, legal process, execution, attachment, as a result of death of the holder of Series A Stock, or upon enforcement of a pledge, trust, or other security interest or other beneficial interest in the shares of Series A Stock, however arising, and notwithstanding the fact that the pledge, trust, security interest, or other beneficial interest may have initially been granted voluntarily. An involuntary transfer does not include a mere inchoate interest (such as, but not limited to, a dower right or a spousal interest in the appreciation of property) as to which the involuntary transferee has not expressly asserted a right thereto. The term “transfer” does not include the negotiation or signing of an agreement to merge, consolidate, sell all or substantially all of the Corporation’s assets or a similar transaction to which the Corporation is a party, or the completion of such an agreement following shareholder approval thereof.

5.Dividends. When any dividend or distribution is declared or paid by the Corporation on Common Stock, whether payable in cash, property, securities or rights to acquire securities, the holders of the Series A Stock will be entitled to participate with the holders of Common Stock in such dividend or distribution. At the time such dividend or distribution is payable to the holders of Common Stock, the Corporation will pay to each holder of Series A Stock such holder’s share of such dividend or distribution in an amount equal to the dividend or distribution per share of Common Stock payable at such time multiplied by the number of shares of Common Stock then obtainable upon conversion of such holder’s Series A Stock.

6.LiquidationRights.   Upon any liquidation, dissolution or winding up of the Corporation, the holders of outstanding shares of Series A Stock will be entitled to be paid together with the holders of Common Stock on a pro rata basis with the Common Stock the net proceeds remaining from the liquidation of the Corporation and its assets, and the payment of all indebtedness and any liquidation preference on any securities that rank senior to the Common Stock, based on the number of shares of Common Stock into which the shares of Series A Stock is then convertible as set forth in Section 7 hereof.

7.  ConversionRights.

a.The holder of any shares of the Series A Stock, may convert such shares of Series A Stock in whole, upon written notice to the Corporation by February 15th of each calendar year with conversion to take place on March 1st of each calendar year, subject to the terms set forth below. The Series A Stock may, or shall, be converted into shares of the Corporation’s authorized but unissued Common Stock on the following bases:

i.   At the option of the holder, each share of Series A Stock shall be convertible into one share of the Corporation’s Common Stock (the “conversion ratio”).

ii.   No partial conversion of preferred shares shall take place. All shares of Series A Stock held by the shareholder shall be converted in whole with no partial conversions to take place.

iii.   Upon any conversions on March 1st of each calendar year, any Series A Stock that is converted will be cancelled and not be available for reissuance.

b.Mechanicsof Conversion. No fractional shares of Common Stock shall be issued upon the conversion of the Series A Stock. If the number of shares to be issued to the holders of the Series A Stock is not a whole number, then the number of the shares shall be rounded up to the nearest whole number. Before any holder of Series A Stock shall be entitled to convert the same into full shares of Common Stock, and to receive certificates therefor, he shall either (x) surrender the certificate or certificates therefor, duly endorsed, at the office the transfer agent or (y) notify the Corporation that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory  to  the  Corporation  to  indemnify  the  Corporation  from  any  loss  incurred  by  it  in connection with such certificates, and shall give written notice to the Corporation at such office that he elects to convert the same.

c.AdjustmentsforSubdivisionsorCombinationsofCommonStock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, the conversion ratio of the Series A Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately increased. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, the conversion ratio in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased.

d.OtherAdjustments.  If any event occurs of the type contemplated by the provisions of this Section 7 but not expressly provided for by such provisions (such as a stock dividend), then the Board of Directors of the Corporation will make an appropriate adjustment in the conversion ratio so as to protect the rights of the holders of Series A Stock.

e.MandatoryConversion. Any transfer of Series A Stock not in accordance with Section 4 hereto shall result in the automatic conversion of all shares of Series A Stock held by the transferring shareholder to shares of Common Stock pursuant to this Section 7 as of the effective date of the non-permitted transfer. The effective date of the non-permitted transfer due to the shareholder’s death is the shareholder’s date of death. This mandatory conversion shall apply regardless of whether the non-permitted transfer was for less than all of the shares held by the transferee shareholder.

8.Severability. If any right, preference or limitation of the Series A Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences and limitations set forth herein that can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

9.AmendmentandWaiver.  This Certificate of Designation shall not be amended, either directly or indirectly or through merger or consolidation with another entity, in any manner that would alter or change the powers, preferences or special rights of the holders of Series A Stock so as to affect them materially and adversely without the consent of a majority of the outstanding shares of Series A Stock. Subject to the preceding sentence, any amendment, modification or waiver of any of the terms or provisions of the Series A Stock shall be binding upon all holders of Series A Stock.

10.Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered Holder shall be satisfactory) of the ownership and the loss, theft, destruction, or mutilation of any certificate evidencing shares of Series A Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the Holder is a financial institution or other institutional investor its own agreement shall be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation, at its expense, shall execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such Series A Stock represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

11.Notices. Any notice required by the provisions of this Certificate of Designation shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt; or (v) when sent by electronic mail (with confirmation of transmission) if sent during normal business hours of the recipient; if not, then on the next business day. All notices to the Corporation shall be addressed to the Corporation’s President at the Corporation’s principal place of business on file with the Secretary of State of the State of Colorado. All notices to shareholders shall be addressed to each holder of record at the address of such holder appearing on the books of the Corporation.

* * * * *

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be executed by Robert B. Mudd, Interim CEO and CFO of the Corporation, this 22nd day of January 2014.

By:	/s/ Robert B. Mudd
Name:	Robert B. Mudd
Title:	Interim CEO & CFO

EX-10.1

Exhibit 10.1

SOUTHERN HOSPITALITY BBQ AREA DEVELOPMENT AGREEMENT

TABLE OF CONTENTS

SECTION 1. DEFINITIONS	1
SECTION 2. GRANT OF DEVELOPMENT RIGHTS	1
SECTION 3. DEVELOPMENT SCHEDULE	3
SECTION 4. DEVELOPMENT FEE	4
SECTION 5. DEVELOPMENT PROCEDURES	5
SECTION 6. COVENANTS	5
SECTION 7. DEFAULT AND TERMINATION	6
SECTION 8. ASSIGNMENT AND TRANSFER	7
SECTION 9. PERSONAL GUARANTY	11
SECTION 10. RELATIONSHIP OF PARTIES; INDEMNIFICATION	11
SECTION 11. DISPUTE RESOLUTION	12
SECTION 12. ACKNOWLEDGMENTS	12
SECTION 13. MISCELLANEOUS	13

SCHEDULES

Schedule A - Development Territory

Schedule B - Development Grant

Schedule C - Franchise Agreement

Schedule D - Addresses for Notice

Schedule E - Royalty and Advertising Fees

SOUTHERN  HOSPITALITY AREA DEVELOPMENT AGREEMENT

THIS AREA DEVELOPMENT AGREEMENT ("Agreement") is made this 4thday of November, 2011 ("Effective Date") by and between SH FRANCHISING & LICENSING LLC, a New York limited liability company ("Company") and SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION,  a Colorado corporation ("Developer").

RECITALS

A         Company owns a world-wide, perpetual license to operate, and grant sublicenses to third parties to operate full service restaurants  featuring  barbecue  dishes,  entrees, sandwiches, burgers, sides and salads, a full bar (featuring beer, wine, and cocktails), non­ alcoholic beverages, and custom Southern  Hospitality merchandise  (collectively  referred to as the "Southern Hospitality Restaurants") under the Southern Hospitality System and the Licensed Marks.

B.        Developer desires to obtain the exclusive right to develop Southern Hospitality Restaurants within the specified geographic areas and during the specified time period set forth in this Agreement.

NOW THEREFORE, the parties agree as follows:

SECTION   1. DEFINITIONS

Unless specifically defined in this Agreement, all capitalized terms in this Agreement have the same meaning assigned to them in the Franchise Agreement attached as ScheduleCexcept that, in this Agreement, any references in the definitions to Franchisee shall mean Developer.

SECTION  2. GRANT OF DEVELOPMENT RIGHTS

2.1.Company grants to Developer the exclusive right to develop the specific number of Southern Hospitality Restaurants specified on Schedule8hereto (the "Development  Quota") in the geographic area identified on ScheduleAhereto (the "Development Territory") subject to the terms and conditions of this Agreement.

2.2.The term of this Agreement (the "Development Term") shall begin on the Effective Date. Unless sooner terminated in accordance with the provisions of this Agreement, the Development Term shall expire automatically on the earlier to occur of (i) the date identified on Schedule8as the last Development Deadline, or (ii) the date on which the final Southern Hospitality Restaurant permitted to open under this Agreement actually opens for business to the public with Developer having satisfied all of the conditions to opening specified in the applicable Franchise Agreement for the final Southern Hospitality Restaurant.

2.3.If Developer satisfies the entire Development Quota by the last Development Deadline stated in this Agreement and is not in material default under any Franchise Agreement then in effect between the parties, Developer may, at its option, and subject to its compliance with the provisions of this Section 2.3, renew the Development Term for two (2) successive Terms of five (5) years each (each a "Renewal Development Term") subject to the following conditions, subject to the following conditions:

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(a)Developer must provide Licensor with written notice of its intent to exercise an option for each Renewal Development Term at least one (1) year before the expiration of the preceding Development Term or Renewal Development Term,  as applicable, but not earlier than eighteen (18) months before the expiration of the Development Term.

(b)    The parties will mutually establish the number of additional Restaurants to be developed during a Renewal Development Term along with the Development Deadlines for the additional Restaurants and will amend this Agreement to set forth the new Development Deadlines and Renewal Development Term. Upon execution of the amendment, Developer will pay a new Development Fee, which will be calculated based on the number of additional Restaurants in accordance with this Agreement. The Renewal Development Term will expire on the last day of the last Development Deadline agreed upon by the parties. For each additional Restaurant that Licensor approves, the parties will sign Licensor's then-current form of License Agreement, which Developer acknowledges may contain terms that differ materially from the form of Franchise Agreement attached hereto as Schedule C.

(c)If the parties cannot agree upon a new Development Schedule for a Renewal Development Term, Developer's exclusive rights in the Development Territory will terminate upon written notice from Licensor. Developer's failure to timely exercise an option for any Renewal Development Term, or the failure of the parties to reach agreement on the terms of development for any Renewal Development Term, will result in the immediate termination of any options Developer may have for additional Renewal Development Terms.

2.4.Subject to the terms and conditions of this Agreement, during the Development Term neither Company nor any Affiliate of Company shall (i) grant any other person the right to operate a Southern Hospitality Restaurant within the Development Territory, or (ii) operate a Southern Hospitality Restaurant in the Territory for its own account, except that the parties agree that the following activities are expressly permitted:

(a)Company, Company's Affiliate or any third party may operate a Southern Hospitality Restaurant that Company, Company's Affiliate or the third party acquires from Developer.

(b)     To the extent any of the following types of locations are within the geographic area identified on ScheduleA,the locations in their entirety, including appurtenant parking areas, are excluded from the Development Territory: any airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities, military bases, entertainment parks, casinos, universities or other types of schools. Accordingly, Company and Company's Affiliates may establish, or award others the right to establish, Southern Hospitality Restaurants in any type of format operating under Southern Hospitality Licensed Marks at excluded airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities, military bases, entertainment parks or casinos that are, or may be, located within the Development Territory.

(c)Company may open, operate and offer as franchises any locations that Company may acquire during the Development Term within the Development Territory as part of, and contemporaneous with, Company's acquisition of a chain of at least 3 or more restaurants regardless of their location (whether all 3 are within the Development Territory or 2 or more are outside of the Development Territory) if, at the time of Company's acquisition, all restaurants in the chain do business under a trade name other than Southern Hospitality Licensed Marks. Following the acquisition, Company may convert any of the locations that lie within the Development Territory to a Southern  Hospitality Restaurant and operate it directly, permit Company's Affiliate to operate it, or allow the then-current owner or any third party to operate it under any terms and conditions in Company's discretion under a franchise  license from Company.

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2.5.   Subject to Developer's right of first refusal described in this Section, the parties agree that after the Development Term expires or ends for any reason, Company shall have the complete and unrestricted right to award franchises  and licenses for the operation of Southern Hospitality Restaurants in the Development Territory and elsewhere, subject to the terms of any Franchise Agreements entered into by and between Company and Developer during the Development Term that continue in full force and effect after the Development Term expires or ends.

2.6.Company reserves all rights not expressly granted to Developer  by  this Agreement or any Franchise Agreement. Without limiting the foregoing, Company, on behalf of itself and its Affiliates, may directly or indirectly:

(a)Open and operate Southern Hospitality Restaurants at airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities,  military bases, entertainment parks, casinos, universities or other types of schools located in the Protected Area.

(b)Produce, license, distribute, market and sell products and services of any kind, including, without limitation, Proprietary Products, through other .retail and wholesale channels of distribution, including, without limitation, by means of electronic communication, the World Wide Web, mail order catalogues, direct mail advertising, and comparable methods that solicit business from customers by means not requiring a physical transaction at a retail or wholesale location;

(c)  Produce, license, distribute, market and sell products and services of any kind, including, without limitation, Proprietary Products, from  supermarkets,  health food stores and other wholesale and retail food stores owned by third parties that are not licensed to do business under the Licensed Marks; and

(d)    Operate other restaurants and other kinds of business under trade names that are dissimilar to the Licensed Marks that do not feature as the predominate menu item barbecue items.

2.7.Developer acknowledges that this Agreement does not constitute a franchise and does not grant Developer any right to use Southern Hospitality System or the Licensed Marks and that Developer's right to use Southern Hospitality System and the Licensed Marks are derived solely from each Franchise Agreement which may be entered into by the parties pursuant to this Agreement.

SECTION 3. DEVELOPMENT SCHEDULE

3.1     During the Development Term, Developer shall open each Southern Hospitality Restaurant in the Development Quota by no later than the date indicated on Schedule 8 (each deadline identified on Schedule 8 for fulfilling a Development Quota is referred to as a "Development Deadline").  A  Southern Hospitality Restaurant will  not  be  credited  as  being opened until Developer satisfies all of the conditions for opening specified in the Franchise Agreement.

3.2.If, during the Development Term, any one of Developer's Southern Hospitality Restaurants permanently closes for any reason after having been opened, and as a result of such closure Developer falls below the Development Quota applicable at the time of closure, Developer shall have 6 months from the closing date in which to open a substitute Southern Hospitality Restaurant within the Development Territory in its place.

3.3.If, during the Development Term, Developer's first Southern Hospitality Restaurant permanently closes for any reason after having been opened, and Developer fails to open an additional Southern Hospitality Restaurant within 6 months of the closure of Developer's first Southern Hospitality Restaurant, Developer shall lose its rights to develop the Territory.

3.4.If Developer does not satisfy a Development Quota by the applicable Development Deadline, or if Developer falls below the Development Quota due to the closure of a Southern Hospitality Restaurant, Company may terminate this Agreement upon written notice effective immediately unless Developer  agrees to pay Royalty Fees and Advertising Fees for each unopened Southern Hospitality Restaurant for which Developer is below the  then­ applicable Development Quota. The amount of Royalty Fees and Advertising Fees that Developer shall pay shall be equal to the average  Royalty  Fees  and Advertising  Fees then being collected by Company from all Southern Hospitality Restaurants wherever located, regardless of how long they have been open. The Royalty Fees and Advertising Fees shall be paid on the terms set forth in ScheduleE.Developer shall be required to pay Royalty Fees and Advertising Fees from the date of the missed Development Deadline, or closing date, for as long as Developer desires to retain the right to open the number of Southern Hospitality Restaurants in the Development Quota, until the Development Term expires (or sooner terminates). After the Development Term expires or terminates, the parties agree that: (i) Developer  shall  have  no right, or obligation, to open additional Southern Hospitality Restaurants  or replace a Southern Hospitality Restaurant in the Development Territory that permanently closes without applying to purchase a  new franchise; and (ii) Company shall have no obligation to offer Developer  any further area development or franchise rights so that Developer can open the number  of Southern Hospitality Restaurants equal to the Development Quota or replace a Southern Hospitality Restaurant in the Development Territory that permanently closes after  the Development Term expires or ends for any reason.

SECTION  4. DEVELOPMENT FEE

4.1.Upon execution of this Agreement, in consideration of the rights granted hereunder, Developer shall pay Company a non-refundable development fee (the "Development Fee") in an amount equal to the product of $25,000 times the number of Southern Hospitality Restaurants comprising the Development Quota, less the amount of the deposit (if any) previously paid by Developer upon application for  area  development  rights.  Each  time Developer executes a Franchise Agreement in the form attached hereto as ScheduleCfor a Southern Hospitality Restaurant in fulfillment of the Development Quota, Company shall credit the sum of $25,000 to the Initial Franchise Fee payable under the Franchise Agreement until the total amount of the credits equals the Development Fee.

4.2.If Developer does not fully satisfy the Development Quota for whatever reason or this Agreement  otherwise  terminates  based  upon Developer's  default  before expiration  of the Development Term, Developer shall have no right to recover from Company, directly or indirectly, any portion of the unused Development Fee, it being agreed that the execution of this Agreement  by Company and Company's agreement to forego other development  opportunities in the Development Territory while this  Agreement is in effect is adequate consideration for Developer's payment of the Development Fee, which is fully earned by Company upon the parties' execution of this Agreement.

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SECTION   5. DEVELOPMENT PROCEDURES

5.1.ConcurrentlyuponexecutionofthisAgreement,thepartiesshallsigntheFranchiseAgreementforthefirstSouthernHospitalityRestaurantintheDevelopmentQuotaintheformattachedheretoasScheduleC.

5.2       Company shall offer Developer a franchise for each additional Southern Hospitality Restaurant in the Development Quota when Company approves the site proposed by Developer within the Development Territory for Southern Hospitality Restaurant. Company's offer shall be made by presenting Developer with a Franchise Agreement for Developer's execution in the form attached hereto as Schedule C. Developer shall have 15 days after receipt of the Franchise Agreement in which to accept the offer by executing a copy of the Franchise Agreement and returning it to Company. If Developer does not comply with this requirement within that time period, Company shall be under no obligation to sell a franchise for the approved site to Developer, and Developer shall run the risk of failing to satisfy the Development Quota set forth on Schedule B.

5.3.Once the parties execute a Franchise Agreement for an approved site, their relationship, and the mutual rights and obligations of the parties,  as to the development, ownership, use, occupancy and operation of that site shall be exclusively governed by the Franchise Agreement that they execute for that location and any other agreements entered into as contemplated by, and pursuant to, the Franchise Agreement.

SECTION 6. COVENANTS

6.1.Nothing in this Agreement obligates Company to disclose Confidential Information to Developer. To the extent that Company elects to do so or Developer otherwise independently learns information that Developer knows, or should reasonably know, Company regards as its Confidential Information, Developer shall use due care to keep the information confidential and the following additional terms and conditions shall apply:

(a)Developer shall: (i) confine disclosure of Confidential Information to those of its employees and agents who require access in order to perform the functions for which they have been hired or retained in furtherance of Developer's obligations under this Agreement; and (ii) observe and implement reasonable procedures prescribed from time to time by Company to prevent the unauthorized or inadvertent use, publication or disclosure of Confidential Information including, without limitation, requiring that employees with access to Confidential Information sign a Confidentiality Agreement with Developer. Upon request from Company, Developer shall deliver to Company a copy of each executed Confidentiality Agreement for its records. Company may terminate this Agreement if Developer, or any person required by this Agreement to execute a Confidentiality Agreement with Company or Developer, breaches the Confidentiality  Agreement.

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(b)All agreements contained in this Agreement pertaining to Confidential Information shall survive the expiration, termination or Developer's assignment of this Agreement.

(c)The prov1s1ons concerning non-disclosure of Confidential Information shall not apply if disclosure of Confidential Information is legally compelled in a judicial or administrative proceeding if Developer has used its best efforts to provide Company a reasonable opportunity to obtain an appropriate protective order or other assurance satisfactory to Company of confidential treatment for the information required to be disclosed.

6.2.    Developer understands and agrees that Company and Company's Affiliates and their respective owners will suffer irreparable injury not capable of precise measurement in money damages if any Confidential Information is obtained by any individual or Business Entity and used to compete with Company or any Southern Hospitality franchisee or licensee or otherwise in a manner adverse to Company's interest. Accordingly, in the event a breach of any provision regarding use of Confidential Information, Developer shall be entitled to exercise all remedies available under Applicable Law, including, without limitation to Provisional Remedies without the requirement that Company post bond or comparable security.

SECTION 7. DEFAULT AND TERMINATION

7.1.Company may terminate this Agreement, in its discretion and election, effective immediately upon Company's delivery of written notice of termination to Developer based upon the occurrence of any of the following events which shall be specified in Company's written notice, and Developer shall have no opportunity to cure a termination based on any of the following events:

(a)Should Developer make any general arrangement or assignment for the benefit of creditors or become a debtor as that term is defined in 11 U.S.C.  §101  or  any successor statute, unless, in the  case where a petition is filed against Developer, Developer obtains an order dismissing the proceeding within 60 days after the petition is filed; or should a trustee or receiver be appointed to take possession of all, or substantially all, of Developer's assets, unless possession of the assets is restored to Developer within 30 days following the appointment; or should all, or substantially all, of Developer's assets be subject to an order of attachment, execution or other judicial seizure, unless the order or seizure is discharged within 30 days following issuance.

(b)Should Developer fail to satisfy a Development Quota by the applicable Development  Deadline.

(c)Should Developer, or any duly authorized representative of  Developer, make a material misrepresentation or omission in  obtaining the development rights granted hereunder, or should Developer, or any officer, director, shareholder, member, manager,  or general partner of Developer, be convicted of or plead no contest to a felony charge or engage in any conduct or practice that, in Company's  reasonable opinion,  reflects unfavorably  upon or is detrimental or harmful to the good name, goodwill or reputation of Company or  to  the business, reputation or goodwill of Southern Hospitality System or the Licensed Marks.

(d)Should Company terminate any Franchise Agreement between Developer and Company on account of a material breach thereof by Developer.

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(e)Should Developer make, or attempt to make, an unauthorized transfer in violation of this Agreement.

(f)Should an order be made or resolution passed for the winding-up or the liquidation of Developer (if Developer is a Business Entity) or should Developer adopt or take any action for its dissolution or liquidation.

(g)Should Developer fail to comply with Applicable Law within 10 days after being notified of non-compliance.

(h)Should Developer commit a material breach of any other provision of this Agreement, which breach remains uncured for a reasonable period (which need not exceed thirty (30) days) after written notice from Company to Developer.

7.2.Upon termination or expiration of this Agreement, each Franchise Agreement then in effect by and between Developer and Company pertaining to a Southern Hospitality Restaurant owned by Developer shall remain in full force and effect, unless, in the case of termination, the grounds upon which termination of this Agreement is predicated also constitute grounds permitting Company to terminate the Franchise Agreement and Company has duly terminated the Franchise Agreement in accordance with its terms.

7.3.Upon termination or expiration of this Agreement, Developer shall have no further right to develop additional Southern Hospitality Restaurants in the Development Territory,  nor shall Developer have any right to prevent Company, or others, from owning and operating, or granting franchises to others to own and operate, Southern Hospitality Restaurants in the Development Territory, subject, however, to the territorial rights, if any, granted to Developer under each Franchise Agreement then in effect between the parties pertaining to a Southern Hospitality  Restaurant owned by Developer.

7.4.In the event of a breach or a threatened or attempted breach of any of the provisions of this Agreement, Company shall be entitled to exercise all remedies available under Applicable Law in addition to the remedies set forth in this Agreement, including,  without limitation, to Provisional Remedies without the requirement that Company post bond or comparable  security.

SECTION  8. ASSIGNMENT AND TRANSFER

8.1.Developer acknowledges that Company maintains a staff to manage and operate the Southern Hospitality System and that staff members can change from time  to time. Developer represents that it has not signed this Agreement in reliance on any shareholder, director, officer, or employee remaining with Company in that capacity. Company is free to transfer and assign all of its rights under this Agreement to any person or Business Entity, provided the assignee agrees in writing to assume Company's obligations under this Agreement. Upon such assignment and assumption, Company shall have no further obligation to Developer.

8.2.Developer understands and agrees that the development rights awarded by this Agreement are personal and are awarded in reliance upon, among other considerations, the individual or collective character, skill, aptitude, attitude, experience, business ability and financial condition and capacity of Developer and, if Developer is a Business Entity, that of its officers,  directors,  shareholders,  LLC  managers  and  members,  trustees, partners  and guarantors.

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8.3.Without Company's prior written consent, Developer shall not, directly or indirectly, attempt or complete an Event of Transfer either voluntarily or by operation of law except in accordance with this Agreement. Company agrees not to withhold its consent unreasonably if Developer satisfies the conditions applicable to a transfer identified in this Agreement.

(a)Any Event of Transfer shall pertain only to Developer's then-unfulfilled Development Quota for which the Development Deadline has not yet expired as of the proposed date for the event of transfer. If Company consents to the proposed event of transfer, the proposed transferee shall acquire and assume all of Developer's remaining unfulfilled development rights, and all of Developer's obligations, under this Agreement.

(b)Any attempted or purported transfer which fails to comply with the requirements of this Agreement shall be null and void and shall constitute a material default of this Agreement.

(c)     Company's consent to an Event of Transfer is not a representation of the fairness of the terms of any contract between Developer and a proposed transferee, a guarantee of the Franchised Business' or proposed transferee's prospects for success, or a waiver of any claims that Company or Company's Affiliates may have against Developer or any personal guarantor.

8.4. Except with respect to Qualified Transfers, if Developer, or the person to whom an offer is directed (the "Individual Transferor"), receives a bona fide written offer ("Third Party Offer") to purchase or otherwise acquire an interest which will result in an Event of Transfer, Developer or the Individual Transferor, shall, within five (5) days after receiving the Third Party Offer and before accepting it, apply to Company in writing for  Company's consent to the proposed transfer. Additionally, the following conditions shall apply:

(a)Developer, or the Individual Transferor, shall attach to its application for consent to the transfer a complete copy of the Third Party Offer together with (i) information relating to the proposed transferee's experience and qualifications, (ii)a copy of the proposed transferee's current financial statement, and (iii)any other information material to the Third Party Offer, proposed transferee and proposed assignment or that Company reasonably requests.

(b)Company or its nominee shall have the right, exercisable by written notice ("Notice of Exercise") given to Developer or the Individual Transferor, within thirty (30) days following receipt of the Third Party Offer, all supporting information, and the application for consent, to notify Developer or the Individual Transferor that it will purchase or acquire the rights, assets, equity or interests proposed to be assigned on the same terms and conditions set forth in the Third Party Offer, except that Company may (i) substitute cash for any form of payment proposed in the offer discounted to present value based upon the rate of interest stated in the Third Party Offer, and (ii) deduct from the purchase price the amount of any commission or fee otherwise payable to any broker or agent in connection with the Third Party Offer and all amounts then due and owing from Developer to Company or Company's Affiliates under any Franchise Agreement then in effect between Developer, as Franchisee, and Company. If Company gives timely Notice of Exercise, the assets that Company purchases shall be free and clear of liens. If any asset is pledged as security for financing that is then unpaid, Company may further deduct from the purchase price the remaining amount payable under the terms of financing.

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(c)The closing shall take place at Company's home office at a  mutually agreed upon date and time, but not later than ninety (90) days following Company's receipt of the Third Party Offer, all supporting information, and the application for consent to transfer.

(d)At the closing, Developer or the Individual Transferor shall deliver to Company the same documents, affidavits, warranties, indemnities and instruments as would have been delivered by Developer or the Individual Transferor to the proposed transferee pursuant to the Third Party Offer. Additionally, Developer and the Individual Transferor shall deliver a general release, in form satisfactory to Company, of any and all claims against Company, Company's Affiliates and their respective officers, directors, shareholders, employees and agents.

(e)All costs, fees, document taxes and other expenses  incurred  in connection with the transfer shall be allocated between Developer and Company in accordance with the terms of the Third Party Offer, and any costs not allocated shall be paid by Developer or the Individual Transferor.

8.5.If Company does not exercise its right of first refusal, Developer may not complete the Event of Transfer without Company's prior written consent. An Event of Transfer, or attempt to complete an Event of Transfer, in violation of this provision is a material breach of this Agreement. The requirements of this Section do not apply to a Qualified Transfer. As a condition to Company's consent to an Event of Transfer, Developer must satisfy the following conditions:

(a)The proposed transferee must submit a completed application  to Company, and meet Company's then-current qualifications for area developers undertaking the remaining development commitment left in this Agreement, including qualifications pertaining to financial condition, credit rating, experience, moral character and  reputation.  Company's evaluation of the proposed transferee's financial condition shall take into account the proposed transferee's obligations to Developer for payments arising out of the Event of Transfer.

(b)As of the date consent is requested and through the date of closing of the proposed transfer and assignment, Developer must not be in default under this Agreement including, without limitation, due to a failure to satisfy a Development Quota by the applicable Development  Deadline.

(c)Developer and the proposed transferee shall execute a written assignment and assumption agreement whereby the proposed transferee shall assume Developer's remaining development obligations under this Agreement.

(d)Either Developer or the proposed transferee shall pay Developer shall pay a transfer fee equal to 25% of the Development Fee not to exceed $50,000.

(e)Developer must execute and deliver a general release, in  form satisfactory to Company, of any and all claims against Company, Company's Affiliates and their respective officers, directors, shareholders, employees and agents.

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(f)If the proposed transferee is a Business Entity, each person who at the time of the transfer, or later, owns or acquires, either legally or beneficially, 10% or more of the equity or voting interests of the proposed transferee must execute Company's then-current form of personal guaranty.

(g)Developer's right to receive the sales proceeds from the proposed transferee shall be subordinate to the proposed transferee's and Developer's duties owed to Company and Company's Affiliates under, or pursuant to, this Agreement or any Franchise Agreement then in effect between Developer and Company. All contracts by and between Developer and the proposed transferee shall expressly include a subordination provision permitting payment of the sales proceeds to Developer only after any outstanding obligations owed to Company and Company's Affiliates are fully satisfied.

(h)Neither Company's exercise of its right of first refusal, its consent to an Event of Transfer, nor Developer's consummati on of an Event of Transfer shall operate to release Developer of those obligations that expressly, or by their nature, survive the effective date of termination or expiration of this Agreement, including, without limitation, the provisions regarding non-disclosure of Confidential Information.

(i)Developer may only complete the Event of  Transfer  to  the  proposed transferee on the terms identified in the Third Party Offer or as otherwise stated in Developer's application for consent. If there is any material change in the terms of the Third Party Offer, Company shall have a new right of first refusal to accept the new terms subject to the conditions stated in this Section.

(j)      If  Company  consents  to the transfer  to a third party, the transfer  must close within sixty (60) days from the date the Third Party Offer is first submitted to Company unless Company grants an extension of time in writing; otherwise, it must again be offered to Company.

8.6.If Developer is a Business Entity, Developer shall furnish to Company, upon execution of this Agreement or at such other time as transfer to the Business Entity is permitted, a copy of its articles of incorporation, by-laws, operating agreement, partnership agreement or other governing agreement, and a list of all persons owning an interest in the equity or voting interests of the Business Entity. Additionally, Developer shall promptly provide Company with a copy of any amendments to, or changes in, the documents or other information during the Development Term. Developer shall maintain stop transfer instructions against the transfer on its records of any equity or ownership interests. Each certificate representing an ownership interest in Developer shall bear a legend, in the form stated in the Confidential Manuals, that it is held, and further assignment or transfer thereof is, subject to all restrictions imposed upon transfer set forth in this Agreement. Developer's Primary Owner shall deliver a certificate to Company annually, on or before February 15 of each year, which lists all owners of record and all beneficial owners of any interest in the equity or voting interests of Developer and identifies all transfers of equity or voting interests in Developer which have occurred during the period covered by the annual financial statement.

8.7      Before completing a Qualified Transfer, Developer must do all of the following:  (i)provide Company with written notice of its intent to complete a Qualified Transfer; (ii) when the Qualified Transfer is to a newly-formed Business Entity, deliver the documents which this Agreement  requires a Business Entity to deliver to Company; and (iii) pay a transfer fee of $1,500. The Qualified Transfer  shall not  be effective  unless  and until Developer  satisfies conditions (i), (ii) and (iii).Company shall not have a right of first refusal with respect to a Qualified Transfer, nor shall Company's prior written consent to a Qualified Transfer be necessary if Developer satisfies the conditions stated in this Section.

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8.8.    Neither Company's exercise of its right of first refusal nor its consent to a transfer to an approved third party shall operate to release Developer or the Individual Transferor from this Agreement or release any guarantor from any personal guaranty given to Company pursuant to this Agreement.

8.9.    Developer's right to transfer its interest in any Franchise Agreement shall be governed by the terms of the Franchise Agreement.

SECTION  9. PERSONAL GUARANTY.

If Developer is a Business Entity, each person who owns or at any time during the Development Term acquires, either legally or beneficially, 10% or more of the equity or voting interests of Developer shall furnish any financial information reasonably required by Company and execute Company's form of personal guaranty in the form attached to the  Franchise Agreement (ScheduleC) to guaranty Developer's performance under this Agreement. An event of default under this Agreement shall occur if any guarantor fails or refuses to deliver to Company, within 10 days after Company's written request: (i) evidence of the due execution of the personal guaranty, and (ii) current financial statements of guarantor as may from time to time be requested by Company.

SECTION 10. RELATIONSHIP OF PARTIES; INDEMNIFICATION.

10.1.This Agreement does not create a fiduciary relationship between the parties. Company and Developer  each are independent contractors. Nothing in this Agreement is intended to make either party a general or special agent, joint venturer, partner or employee of the other for any purpose.

10.2.Developer shall conduct its business using its own judgment and discretion, subject only to the provisions of this Agreement. Developer shall conspicuously identify itself in all dealings with third parties as the owner of this business operating under rights granted by Company. Developer shall not represent or imply to any person that this Agreement authorizes Developer to act as agent for Company.

10.3.Developer shall indemnify and hold Company, Company's Affiliates and their respective officers, directors, shareholders, LLC managers and members, employees, agents, successors and assigns, harmless from and against any and all costs, expenses, losses, liabilities, damages, causes of action, claims and demands whatsoever,  arising from or relating to Developer's exercise of the rights under this Agreement. Developer's obligation to indemnify Company shall extend, without limitation, to all claims for actual and consequential  damages, and Company's costs and expenses incurred in defending any third party claim covered by Developer's indemnification, including, without limitation, attorneys and other professional fees, court costs, and travel and living expenses. Company shall have the right to retain  its  own counsel to defend any third party claim asserted against it which is covered  by  this indemnification agreement. Company's  retention of interdependent  counsel shall, in no manner or form, diminish Developer's obligation to indemnify Company and to hold it harmless. Company shall not  be required or obligated to seek recovery from third parties or otherwise mitigate   its   losses   in  order   to   maintain   a   claim   against   Developer   under   Developer's indemnification agreement. If a decision rendered in any matter covered by Developer's indemnification is against Developer or Company, and Company desires to appeal the decision, Developer may notify Company within 10 days of the date of the decision of its intent to abide by the decision, in which event, Developer shall pay Company the amount required by this Section, and all future costs related to the appeal or settlement of the claim shall be Company's sole responsibility. Developer's indemnification obligation shall survive the expiration, termination or assignment of this Agreement for any reason.

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SECTION 11. DISPUTE RESOLUTION

11.1.    The parties hereby incorporate by reference the procedures, terms and conditions set forth in ScheduleCpertaining to dispute resolution and agree to be bound by those procedures, terms and conditions with respect to any dispute that may arise between them out of or pertaining to this Agreement, the relationship created by this Agreement or an alleged breach of this Agreement. The parties agreement to adopt the dispute resolution procedures, terms and conditions set forth in ScheduleCshall not operate to modify or cancel the provisions of this Agreement permitting Company to seek Provisional Remedies.

SECTION 12. ACKNOWLEDGMENTS

Developer understands and agrees and represents to Company, to induce Company to enter into this Agreement, that:

12.1.Developer has read this Agreement and Company's Disclosure Document and understands and accepts the terms, conditions and covenants contained in this Agreement;

12.2.Developer recognizes that Southern Hospitality System may evolve and change over time; that an investment in this franchise involves business risks; and that the success of the investment depends upon Developer's business ability and efforts;

12.3.Developer has not received or relied upon any promise or guaranty, express or implied, about the revenues, profits or success of the business venture contemplated by this Agreement;

12.4.None of the property or interests of Developer or its owners is subject to being blocked under, and Developer's and its owners are not otherwise in violation of any Applicable Law including (without limitation) any anti-terrorism laws.

12.5.No representations have been made by Company, Company's Affiliates or their respective officers, directors, shareholders, employees or agents, that are contrary to statements made in the Disclosure Document previously received by Developer or to the terms contained in this Agreement; and

12.6.Developer (if an individual) or each person executing a guaranty of Developer's obligations, is a United States citizen or a lawful resident alien of the United States; if Developer is a Business Entity, it shall remain duly organized and in good standing for as long as this Agreement is in effect and it owns the development rights; and all financial and other information provided to Company in connection with Developer's application is true and correct and no material information or fact has been omitted which is necessary in order to make the information disclosed not misleading.

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SECTION 13. MISCELLANEOUS

13.1.Notices. All communications required or permitted to be given to either party hereunder shall be in writing and shall be deemed duly given if properly addressed on the earlier of (i) the date when delivered by hand; (ii) the date when delivered by fax or e-mail if confirmation of transmission is received or can be established by the sender; (iii) one business day after delivery to a reputable national overnight delivery service; or (iv) 5 days after being placed in the United States Mail and sent by certified or registered mail, postage prepaid, return receipt requested. A "business day" means weekdays only, excluding Saturdays, Sundays and holidays. Notices shall be directed to the address shown in ScheduleDfor the party and its representative. Either party may change its address for receiving notices by giving appropriate written notice to the other. All communications required or permitted to be given by a party in writing may be given electronically to the party's designated e-mail address in ScheduleDor as subsequently changed by appropriate written notice.

13.2.Time ofthe Essence. Time is of the essence of this Agreement with respect to each and every provision of this Agreement in which time is a factor.

13.3.Company's  Prior Approval. Except where  this Agreement  expressly  requires Company to exercise its reasonable business judgment in deciding to grant or deny approval of any action or request by Developer, Company has the absolute right to refuse any  request by Developer or to withhold its approval of any action by Developer in Company's  discretion. Further, whenever the prior consent or approval of Company is required by this  Agreement, Company's consent or approval must be in writing unless this Agreement  expressly specifies otherwise.

13.4.Waiver. Any waiver granted by Company to Developer excusing or reducing any obligation or restriction imposed under this Agreement shall be in writing. The waiver  shall become effective when Company delivers the writing to Developer unless another effective date is specified in the writing. No waiver granted by Company,  and no action taken  by Company, with respect to any third party shall limit Company's discretion to take action of any kind, or not to take action, with respect to Developer. Any waiver granted by Company to Developer shall be without prejudice to any other rights Company may have. The rights and remedies granted to Company are cumulative. No delay by Company in exercising any right or remedy under this Agreement or Applicable Laws shall operate as a waiver, and no single or partial exercise by Company of any right or remedy shall preclude Company from fully exercising  the  right  or remedy at another time or from exercising any other right or remedy. Company's acceptance of any payment from Developer after Developer commits an event of default shall not operate as a waiver by Company of the default or of any term, covenant or condition of this Agreement.

13.5.Section Headings; Language. The paragraph headings used in this Agreement are inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants or conditions of this Agreement. The language used in this Agreement shall in all cases be construed simply according to its fair meaning and not strictly for or against Company or Developer. The term "Developer" as used herein is applicable to one or more persons or Business Entities if the interest of Developer is owned by more than one, and the singular usage includes the plural and the masculine and neuter usages include the other and the feminine. If 2 or more persons are at any time Developer hereunder, whether or not as partners or joint venturers, their obligations and liabilities to Company shall be joint and several. Nothing in this Agreement is intended, nor shall it be deemed, to confer any rights or Remedies upon any person or Business Entity not a party hereto.

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13.6.Binding on Successors. The  covenants, agreements, terms and conditions contained in this Agreement  shall  be binding  upon, and shall  inure to the  benefit of, the successors in interest, assigns, heirs and personal representatives of the parties hereto.

13.7.Severability.Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under Applicable Laws, but if any provision  of this Agreement is declared by a court of competent jurisdiction to be invalid or prohibited under Applicable Laws, such provision shall be ineffective only  to  the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. All provisions of this Agreement are severable. If the provisions of this Agreement provide for periods of notice less than those required by Applicable Laws, or provide for termination or cancellation other than in accordance with Applicable Laws, the parties agree that the provisions shall be deemed to be automatically amended to conform  them  to Applicable Laws.

13.8.Amendments. No amendment, change, modification or variance to or from the terms and conditions set forth in this Agreement shall be binding on any party unless it is set forth in writing and duly executed by each party.

13.9.CompleteAgreement. This Agreement, including  the  schedules,  which  are hereby incorporated into this Agreement by this reference, sets forth the  entire  agreement between the parties, fully superseding any and all prior agreements or understandings, whether oral or written, between them pertaining to the subject matter hereof. Nothing in this Agreement, including the schedules, is intended to disclaim the representations Company made in the franchise  disclosure  document.

13.10.AdviceofCounsel. Each party represents that before signing this Agreement, the party had the opportunity (and was strongly advised) to seek advice from an attorney of his, her or its own choosing, and that the party has read and understands all of the terms and provisions of this Agreement.

13.11.Company's  Business  Judgment. The  parties  recognize,  and  any  mediator  or judge is  affirmatively  advised  that  certain  provisions  of  this  Agreement  describe  the  right  of Company to take (or refrain from taking) certain actions in its discretion,  and other actions in the exercise of its reasonable  business judgment.  Where  this Agreement  expressly  requires that Company  make a decision  based upon Company's  reasonable  business judgment  Company is required to evaluate the overall best interests  of  all  Southern  Hospitality  Restaurants  and Company's  own business  interests.  If Company  makes a decision  based upon its reasonable business judgment, neither a mediator nor a judge  shall substitute his or her judgment for the judgment so exercised by Company. The fact that a mediator or judge  might reach a different decision  than  the  one  made  by Company  is not  a  basis for  finding  that Company made its decision without the exercise  of  reasonable  business judgment.  Company's  duty  to  exercise reasonable  business judgment  in making  certain decision  does  not restrict or  limit Company's right under this Agreement to make other decisions  based entirely on Company's discretion as permitted by this Agreement. Company's discretion means that Company may consider any set of facts or circumstances that it deems relevant in rendering a decision.

13.12.Covenant  andCondition. Each  provision  of  this  Agreement  performable  by Developer shall be construed to be both a covenant and a condition.

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13.13.     SubmissionofAgreement. The submission of this Agreement to Developer does not constitute an offer to Developer, and this Agreement shall become effective only upon execution by Company and Developer.

13.14.Anti-TerrorismRepresentations. Developer agrees to comply with and/or  to assist Company to the fullest extent possible in Company's efforts to comply with Anti-Terrorism Laws (as defined below). In connection with such compliance, Developer certifies, represents and warrants on behalf of itself and each Covered Person that none of their property or interests are subject to being "blocked" under any of the Anti-Terrori sm Laws and that Developer is not otherwise in violation of any of the Anti-Terrorism Laws. "Antl-Terrorlsm Laws" means Executive Order 13224issued by the President of the United States, the USA PATRIOT Act, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority addressing or in any way relating toterrorist acts and acts of war. Any violation of, or "blocking" of assets under, the Anti-Terrorism Laws shall constitute grounds for immediate termination of this Agreement and any other agreement Developer has entered into with Company or one of its affiliates, in accordance with the termination provisions of this Agreement.

INWITNESSWHEREOF,thepartieshaveexecutedthisAgreement asoftheEffectiveDate.

COMPANY: SH FRANCHISING & LICENSING LLC, a New York limited liability company		DEVELOPER: SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation
By:	/s/  Nelson Braff	By:	/s/ J.W. Roth
Name:	Nelson Braff	Name:	J.W. Roth
Its:	Preisdent	Its:	Chairman

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FIRST AMENDMENT TO THE

AREA  DEVELOPMENT AGREEMENT

This First Amendment to Area Development Agreement (the "First Amendment") is made as of November 4, 2011, by and between SH FRANCHISING & LICENSING LLC, a New York limited liability company ("Company") and SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation ("Developer").

WHEREAS, Company and Developer desire to amend the Area Development Agreement dated November 4, 2011 (referred to herein as the "ADA"). Unless otherwise defined in this First Amendment, all defined terms used in this First Amendment, as denoted by the use of initial capital letters, have the same meanings as in the ADA.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company and Developer agree as follows:

Section 3 of the ADA is hereby amended to include the following Section 3.5, which expressly controls over any contradictory of conflicting language in Section 2.3(a) of the ADA:

3.5RenewalDevelopmentTermsandRoyalty Fees.Developer may, at its option, and subject to its compliance with the provisions of this Section 3.5, renew the Development Term for two (2) successive Terms for the development of ten (10) additional Restaurants for each renewal development term (each a "Renewal Development Term") subject to the following conditions:

a.Developer must provide Company with written notice of its intent to exercise an option for each Renewal Development Term no later than 30 days after the opening to the public of the 10thRestaurant in any preceding Development Term or Renewal Development Term.

b.Developer must not be operating under any uncured written notice of default of the ADA or any individual Franchise Agreement  between Developer and Company at the time it exercises an option for a Renewal Development Term.

c.Company must not have previously terminated the ADA or any Franchise Agreement due to a breach by Developer.

The parties will mutually establish the Development Deadlines and the Development Territory for the additional ten (10) Restaurants for each Renewal Development Term and will amend this Agreement to set forth the new Development Deadlines and the Development Territory description. Upon execution of the amendment for each Renewal Development Term, Developer will pay Company a new Development Fee, which will be the sum of Two Hundred and Seventy Five Thousand Dollars ($275,000), which represents fifty percent (50%) of the Initial Franchise Fee for nine (9) of the ten (10) Restaurants in a Renewal Development Schedule plus 100% of the Initial Franchisee Fee for one (1) of the Restaurants in a Renewal Development Schedule. Developer will pay Company the balance of Twenty-Five Thousand Dollars ($25,000) of the Initial Franchise Fee for each the remaining nine (9) Restaurants in each Renewal Development Schedule at the time a site is determined for each individual Restaurant, as further set forth in each underlying Franchise Agreement. For each additional Restaurant that Company approves, the parties will sign Company's then-current form of Franchise Agreement, which Developer acknowledges may contain terms that differ materially from the form of Franchise

Agreement between Company and Developer for the preceding Development Term or Renewal Development Term, as the case may be. Provided, however, Company agrees that the Royalty Fee that Developer pays to Company from the Gross Sales of the Restaurants shall be as follows:

Restaurants	Royalty Fee Per Restaurant
Restaurants # 1-10	5% of Gross Sales
Restaurants # 11-20	4% of Gross Sales
Restaurants # 21-30	3% of Gross Sales

For the avoidance of doubt, it is expressly understood that the discounted Royalty Fees at the thresholds of development set forth above will only apply so long as there are the specified number of Restaurants opened and operating. By way of example, if Developer has opened and is operating 21 Restaurants, and a Restaurant closes, there will only be 20 Restaurants open and operating. Hence, the Restaurant paying the 3% Royalty Fee will promptly commence paying a 4% Royalty Fee, as it is now part of Restaurants #11-20.

d.If the parties cannot agree upon new Development Deadlines or a Development Territory for a Renewal Development Term, Developer's exclusive rights in the Development Territory will terminate upon written notice from Company. Developer's failure to timely exercise an option for any Renewal Development Term, or the failure of the parties to reach agreement on the terms of development for any Renewal Development Term, will result in the immediate termination of any options Developer may have for additional Renewal Development Terms.

Section 2.4 (b) of the ADA is amended to provide that Company and/or its affiliates will not open, or permit any third party to open, a Southern Hospitality BBQ restaurant in any hotel (with the exception of a casino hotel) that is within a 3 mile radius of any Restaurant owned by Developer or its affiliates.

Section 2.6(a) of the ADA is amended to provide that Developer and/or its affiliates may open a Restaurant in a hotel in its Development Territory with the prior written approval of Company, which may be withheld by Company in its sole discretion.

Section 4.1 of the ADA is amended to provide that, upon the Effective Date, Developer shall pay Company a non-refundable Development Fee of $300,000 which represents fifty percent (50%) of the Initial Franchise Fee for the last eight Southern Hospitality Restaurants comprising the Development Quota (8 x $25,000 =$200,000) plusone hundred percent (100%) of the Initial Franchise Fee for the first two Southern Hospitality Restaurants comprising the Development Quota (2 x $50,000=$100,000).

Sections 8.3 and 8.4 of the ADA are amended to provide that Developer may open each Restaurant under the Development Schedule under a separate legal entity so long as each entity is under majority ownership of Developer and Developer holds at least 51% of the voting rights of each entity and 51% of the positions on the board of directors of each entity.   In addition, for purposes of clarity, it is understood by the parties that  in no event will a Change in Control be deemed to occur with respect to changes in ownership of Southern Hospitality Franchisee Holding Corporation resulting from actions taken by it to become a publicly traded company, including but not limited to actions taken in connection with a reverse merger of it with a publicly traded company, where Southern Hospitality Franchisee Holding Corporation is not the surviving entity, so long as the Board members of Southern Hospital Franchisee Holding Corporation prior to the merger control at least 51% of the Board seats of the surviving entity.

Section 9 of the ADA is amended to provide that the personal guarantors shall be J.W. Roth and Gary Tedder (the "Guarantors"). The personal liability of the Guarantors may be extinguished at any time upon Developer providing to Company, upon commercially reasonable terms acceptable to Company: a) a substitute guarantor; b. a letter of credit; and/or c. an assignment of receivables of Developer or an affiliate. The personal liability of the Guarantors shall be expressly limited to any Royalties due and owing to Company from the Gross Sales from any

[Remainder of page intentionally blank

Restaurant. For example, If a Restaurant closes and fails to pay Company $10,000in Royalties owed atthe time of closure, Company may seek payment of the Royalties from the Guarantors.  Provided, however, the Guarantors will not be liable to Company for any other financial obligations of Developer and/or its affiliates.

Except as specifically amended or modified by the tenrms of this First Amendment, the ADA shall be read, interpreted and construed as written and executed by the parties. No further amendments or modifications of the ADA shall be made or implied unless they are contained in afurther writing executed by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Area Development Agreement as of the day and year first above written.

SH FRANCHISING &LICENSING LLC, a New York limited liability company By: SH FRANCHISE CORP., a New York corporation
By:	/s/ Nelson Braff
Name:	Nelson Braff
Title:	President

SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation
By:	/s/  J.W. Roth
Name:	J.W. Roth
Title:	Chairman

EX-10.2

Exhibit 10.2

SH FRANCHISING &LICENSING LLC FRANCHISE AGREEMENT

DATED: ________________________

FRANCHISEE: ________________________________

FRANCHISED LOCATION: ______________________________________

TABLE OF CONTENTS

I.	DEFINITIONS		1
II.	GRANT		7
	A.	Award of Rights	7
	B.	Limitations	7
	C.	Improvements; Duty to Conform to Modifications	8
	D.	Deviations from the Southern Hospitality System	9
	E.	Additional Franchises	9
	F.	Delegation of Duties	9
III.	FRANCHISE LOCATION: PROTECTED AREA		9
	A.	Selection of Franchise Location; Award Of Protected Area	9
	B.	Protected Area and Territorial Rights	11
	C.	Relocation	12
IV.	TERM AND RENEWAL		13
	A.	Term	13
	B.	Renewal Term	13
	C.	Ineffective Exercise of Renewal Option	14
	D.	Extension	14
	E.	Failure to Satisfy Renewal Conditions	15
V.	FRANCHISE LOCATION DEVELOPMENT AND OPENING DATE		15
	A.	Site Investigation and Execution of Lease and Addendum to Lease	15
	B.	Franchisee's Design Plans	15
	C.	Development of Franchise Location	16
	D.	Opening Date	17
VI.	TRAINING		18
	A.	Initial Training Program	18
	B.	Training Store Certification	19
	C.	Additional Training	20
	D.	Continuing Training	20
	E.	General Conditions re: Training	21
VII.	SOUTHERN HOSPITALITY INTELLECTUAL PROPERTY		21
	A.	Ownership	21
	B.	Use of Southern Hospitality System	21
	C.	Defense of the Southern Hospitality System	22
VIII.	CONFIDENTIAL MANUAL		23
	A.	Loan	23
	B.	Updating	24
	C.	Lost or Destroyed Confidential Manual	24
IX.	CONFIDENTIAL INFORMATION		24
	A.	Limitations on use of Confidential lnformation

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X.	ADVERTISING		25
	A.	Local Advertising	26
	B.	Southern Hospitality Promotional Fund	27
XI.	PAYMENTS		29
	A.	Initial Franchise Fee	29
	B.	Royalty Fee	29
	C.	Promotional Fund Fee	29
	D.	New Store Opening Module Fee	29
	E.	Late Opening	29
	F.	Late Payment	30
	G.	Application of Fees	30
	H.	Gross Receipts or Equivalent Taxes	30
XII..	ACCOUNTING AND RECORDS		30
	A.	Maintenance of Business Records	30
	B.	Reports	30
	C.	Recording of Transactions	31
	D.	Audit Rights	32
	E.	Electronic Payment Systems	32
XIII.	STANDARDS OF QUALITY AND PERFORMANCE		33
	A.	Strict and Punctual Performance	33
	B.	Proprietary Products	34
	C.	Non-Proprietary Products: Alternative Suppliers	34
	D.	Purchases from Company or Company's Affiliates	35
	E.	Changes to the Southern Hospitality System Generally	36
	F.	Standards of Service	36
	G.	Operating Expenses	38
	H.	Franchise Location and Tangible Property.	38
	I.	Compliance With Laws	39
	J.	Credit Cards: Gift Card and Other System-Wide Marketing Program	39
	K.	Complaints and Other Actions	40
	L.	Employees	40
XIV.	COMPANY'S OPERATIONS ASSISTANCE		41
	A.	Continuing Consultation and Advice	41
	B.	Inspections	41
	C.	Annual Meeting	42
XV.	INSURANCE		42
	A.	Minimum Coverage	42
	B.	Additional Insurance Specifications	43
XVI.	COVENANTS		44
	A.	Competition	44
	B.	Non-interference	45
	C.	Written Agreement	45
	D.	Survival.	45

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	E.	Savings Clause	45
	F	Enforcement	45
XVII.	DEFAULT AND TERMINATION		46
	A.	Termination by Franchisee	46
	B.	Termination By Company Without Opportunity to Cure	46
	C.	Termination by Company With Right to Cure	48
	D.	Effect of Termination or Expiration	48
	E.	Reasons for Termination	48
XVIII.	RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION		49
	A.	Franchisee's Obligations	49
	B.	Company's Right to Purchase Proprietary Products and Other Physical Assets of the Franchised Business	50
	C.	Survival of Obligations	51
	D.	Third Party Rights; Available Remedies	51
	E.	Liquidated Damages	51
XIX.	ASSIGNMENT AND TRANSFER		51
	A.	Assignment by Company	52
	B.	Assignment by Franchisee: In General	52
	C.	Company's Right of First Refusal.	52
	D.	Conditions of Assignment to Third Party	53
	E.	Business Entity Franchisee	55
	F.	Qualified Transfers	56
XX.	RELATIONSHIP OF PARTIES; INDEMNIFICATION; SECURITY INTEREST		56
	A.	Independent Contractor	56
	B.	Indemnification by Franchisee	56
	C.	Security lnterest.	57
XXI.	PERSONAL GUARANTY		57
	A.	Scope	57
	B.	Default.	57
	C.	Obligations Absolute	57
	D.	Waiver by Guarantor	58
XXII.	DISPUTE RESOLUTION		58
	A.	Agreement to Mediate Disputes	58
	B.	Exceptions to Duty to Mediate Disputes	59
	C.	Judicial Relief	60
	D.	WAIVER OF JURY TRIAL	60
	E.	Choice of Law	60
	F.	Limitations Period	60
	G.	Punitive or Exemplary Damages	61
	H.	Attorneys' Fees	61
	I.	Waiver of Collateral Estoppel.	61
XXIII.	ACKNOWLEDGMENTS		61
	A.	Acceptance of Conditions	61
	B.	Independent  lnvestigation	61

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	C.	Reliance	61
	D.	Compliance with Applicable Law	62
	E.	No Representations: Status of Franchisee	62
	F.	No Claims	62
XXIV.	MISCELLANEOUS		63
	A.	Notices	63
	B.	Time of the Essence	63
	C.	Withholding of Consent.	63
	D.	Waiver	64
	E.	Section Headings; Language	64
	F.	Binding on Successors	64
	G.	Validity; Conformity With Applicable Law	64
	H.	Amendments	65
	I.	Company's Business Judgment.	65
	J.	Complete Agreement.	65
	K.	Covenant and Condition	65
	L.	Submission of Agreement.	65
	M.	Risk; Success of Franchise Business	65
	N.	Anti-Terrorism Representations	65

SCHEDULES

Schedule A - Franchise Location and Protected Area Schedule B - Personal Guaranty

Schedule C - Addresses for Notice

Schedule D - Covered Persons as of the Effective Date

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FRANCHISE AGREEMENT

This Franchise Agreement (the "Agreement") is made and entered into on November 4, 2011 (the "Effective Date") by and between SH FRANCHISING &LICENSING LLC, a New York limited liability company  ("Company"), and SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation ("Franchisee") with reference to the following facts:

RECITALS

A.        Company owns a world-wi de, perpetual license to operate, and grant sublicenses to third parties to operate, full service restaurants featuring barbecue dishes, entrees, sandwiches, burgers,  sides and salads, a full bar (featuring beer, wine, and cocktails), non­ alcoholic beverages,  and custom Southern Hospitality merchandise under the Southern Hospitality System and the Licensed Marks (collectively "Southern Hospitality Restaurants" and individually a "Southern Hospitality Restaurant") under the Southern Hospitality System as defined in this Agreement.

B.     Franchisee desires to obtain a license to use the  Southern  Hospitality System and the Southern Hospitality Licensed Marks to operate aSouthern Hospitality Restaurant, and Company  is  willing  to  grant  a  license  to  Franchisee  on  the  terms  and  conditions  of  this Agreement.

NOW, THEREFORE, the parties agree as follows:

TERMS AND CONDITIONS

I.DEFINITIONS. In addition to definitions incorporated in the body of this Agreement, the following capitalized terms in this Agreement are defined as follows:

A."Accounting Period" means the specific time period that Company designates from time to time in the Confidential Manual or otherwise in writing for purposes of Franchisee's financial reporting or payment obligations described in this Agreement. For example, an Accounti ng Period may, in Company's sole discretion, be based on a seven-day week (e.g., Monday through Sunday), a Calendar Month, a quarterly financial calendar (which may, or may not be subdivided into blocks of weeks, e.g., 4 or 5 weeks, or a shorter or longer time period that Company selects in its sole discretion. Company· may designate different Accounti ng Periods for purposes of paying fees and for discharging reporting obligations under this Agreement.

B.    "Addendum to Lease" means the written agreement by and between Franchisee and the landlord of the Franchise Location that adds specific terms and conditions required by Company to the Lease and grants Company the right, but not the obligation, to accept an assignment of the Lease under stated conditions.

C."Affiliate" means an entity that controls, is controlled  by, or is under common control with, a party to this Agreement.

D.  "Applicable Law" means and includes applicable common law and all statutes, laws, rules, regulations, ordinances, policies and procedures established by any governmental authority with jurisdiction over the operation of the Franchised Business that are in effect on orafter the Effective Date, as they may be amended from time to time. Applicable Law includes, without limitation, those relating to building permits and zoning requirements applicable to the use, occupancy and development of the Franchise Location; business licensing requirements; hazardous waste; occupational hazards and health; alcoholic beverages; consumer protection; privacy; trade regulation; worker's compensation; unemployment insurance; withholding and payment of Federal and State income taxes and social security taxes; collection and reporting of sales taxes; and the American With Disabilities Act.

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E."Business  Entity"  means  a  corporation,  limited  liability  company,  partnership, limited liability partnership, trust or other type of legal entity which, under Applicable Law, may enter into contracts in its own name.

F.   "Calendar Month" means any one of the  12 Calendar Months of the Calendar Year starting on the first day of the Calendar Month.

G. "Calendar  Quarter"  means the 3-Calendar  Month period ending on March 31, June 30, September 30 or December 31 of each Calendar Year.

H."Calendar Year" means the 12-Calendar Month period starting on January 1 and ending on December 31.

I."Certified Manager'' identifies  each management-level employee  who  devotes full-time and attention to performing general management and supervisory responsibilities for one or more Southern Hospitality Restaurants. The Cer1ified Manager must meet Company's applicable criteria and must be approved by Company in writing before the Certified Manager may attend the initial training program. Company reserves the right to cease  training  the Certified Manager if Company determines that he or she does not meet Company's approved standards, and will then require Franchisee to hire a newly approved Certified Manager. Company maintains this right even after training is complete if the Certified Manager is incapable of managing Franchisee's Restaurant. Company also requires that the Certified Manager participate in a grand opening of another Restaurant in the System, other than Franchisee's Restaurant, prior to participating in the grand opening for Franchisee's Restaurant.

J.   "Change of Control" means a transaction or series of related transactions that result in the sale of all or substantially all of the assets of the Franchise Business. If Franchisee is a Business Entity, "Change of Control" also means: (i) a transaction or series of related transactions that would result in a transfer of 50% or more of the outstanding voting power of Franchisee or Franchisee Affiliate, whether voluntarily or by operation of law or due to a merger or consolidation, or (ii) the vesting of authority in any person to appoint, or cause to be appointed, a majority of the directors, officers or managers of the Business Entity.

K"Competitive Business" means any type 'ofrestaurant business regardless of format, whether quick service, fast casual, take-out, full-service, or otherwise, that: (i) sells as its predominant menu item barbecue products, or (ii) in its entirety so resembles the trade dress, service style and menu items that comprise the distinguishing features of the Southern Hospitality System so as to create a likelihood of consumer confusion or dilution of the Southern Hospitality Licensed Marks. This restriction shall not apply to ownership of not more than 5% of the voting securities of any publicly traded Business Entity if the person owning the shares does not have, either by reason of the stock ownership or otherwise, the power or ability to influence the decisions of the Business Entity.

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L.  "Collateral Logo Merchandise means collectively all merchandise that Company now or in the future authorizes Franchisee to offer for sale from the Franchise Location displaying any of Southern Hospitality Licensed Marks· including, without limitation, t-shirts, sweatshirts, caps and other promotional items.

M.  "Confidential Information" includes, without limitation, knowledge and information which Franchisee knows, or should reasonably know, Company regards as confidential concerning: (i) formulation, ingredients, raw materials, recipes, and food preparation processes for Proprietary Products, Non-Proprietary Products, Collateral Logo Merchandise or other items or services  that  Company  permits  Franchisee  to  sell  at  or  from  the  Franchised  Business; (ii) Company's supply relationships, inventory requirements and control procedures; (iii)pricing, sales, profit performance or other results of operations of any individual Southern Hospitality Restaurant, including the Franchised Business, or group of Southern Hospitality Restaurants or the entire chain; (iv) demographic data for determining sites and territories; (v) the  results of customer surveys and promotional programs; and (vi) in general, business methods, trade secrets, specifications, customer data, cost data, procedures, information systems and knowledge about the operation of Southern Hospitality Restaurants or the Southern Hospitality System, whether it is now known or exists or is acquired or created in the future, and whether or not the information is included in the Confidential Manual or Company expressly designates the information as confidential. Confidential Information does not include (x) information which Franchisee can demonstrate came to its attention independent of entering into this Agreement; and (y) information that Company agrees is, or has become, generally known in the public domain, except where public knowledge is the result of Franchisee's wrongful disclosure (whether or not deliberate or inadvertent).

N."Confidential Manual" refers collectively to  all  of  the  confidential  operating manuals, recipe manuals, operations guides and other instructions loaned or delivered to Franchisee in confidence during the Term, which may be memorialized in written or electronic format and modified periodically to reflect changes in Southern Hospitality System.

0. "Covered Area" means anywhere within a 10mile radius measured from: (i) the Franchise Location, and (ii)the franchise location  of  every  other  Southern  Hospitality Restaurant located anywhere in the world regardless of whether  Southern  Hospitality Restaurant is operating on the Effective Date or before or after the Effective Date of Termination or Expiration of this Agreement or is owned by Company, Company's Affiliate, or by another franchisee or licensee of Company.

P. "Covered Person" means: (i) the individual executing this Agreement as Franchisee; (ii)each officer, director, general partner or LLC manager of Franchisee and each Franchisee Affiliate if Franchisee is a Business Entity; and (iii) each Primary Owner of Franchisee. Franchisee represents that ScheduleDis a true and complete list of the Covered Persons as of the Signing Date.

Q."Disclosure Document" means the Disclosure Document that  Franchisee acknowledges that it received before executing this Agreement or paying any consideration to Company or Company's Affiliates for the award of franchise rights.

R.  "Effective Date" is the date indicated on page 1 of this Agreement.

S."Effective Date of Termination or Expiration of this Agreement" refers, as applicable, to the following dates:  (i) the  Effective  Date of Termination  is the date  on which Franchisee receives written notice of termination based on an event of default which this Agreement identifies as not being curable, or the last day of the applicable cure period based on an event of default for which this Agreement grants Franchisee the right to cure; and (ii) the Effective Date of Expiration of this Agreement is the last day of the Term.

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T."Event of Transfer" means a transaction or series of related transactions that, directly or indirectly, voluntarily or by operation of law: (i) r:esult in the sale, assignment, transfer, pledge, gift, encumbrance or alienation of any interest in this Agreement or the right to use Southern Hospitality System or any portion or components or any of Southern Hospitality Licensed Marks, (ii) involves the offer to sell securities of a Franchisee that is Business Entity pursuant to a transaction subject to registration under federal or state securities laws or by private placement pursuant to a written offering memorandum; (iii)results in a Change of Control. For purposes of illustration, an Event of Transfer includes, without limitation: (a) an order dissolving the marriage of a Franchisee that is an individual; (b) the issuance of additional equity or voting interests of a Business Entity resulting in a Change of Control; (c) a financial restructuring or recapitalization that is secured by a sufficient number of equity or voting interests of a Business Entity such that, if foreclosed upon, would result in a Change of Control; or (d) the death of Franchisee if an individual or any person owning enough equity or voting interests of a Business Entity to result in a Change of Control.

U."Force Majeure" includes, without limitation, any event caused by or resulting from conditions that are beyond the reasonable control of a party whose performance is affected and occurring without the party's fault or negligence. Events of Force Majeure shall include, without limitation, an act of God, labor strike or other industrial disturbance, materials shortage, failure of third party suppliers not under a party's control, transportation delay, war, insurrection, riot, epidemic, fire, hurricane, flood, earthquake or other natural disasters, and act of any government

V."Franchise Location" means the business premises approved by Company for the operation of the particular Southern Hospitality Restaurant that is the subject of this Agreement.

W."Franchised Business" means the particular Southern Hospitality Restaurant which Company authorizes Franchisee to operate under this Agreement at the Franchise Location.

X."Gross Sales" means the aggregate of all revenue and income from operating the Franchised Business, whether payment is in cash or by credit card, gift cards or other generally accepted form of payment. Gross Sales includes revenue and income from the sale of meals, services, products or merchandise of any kind. Without limiting the scope of the term Gross Sales, the parties agree that Gross Sales shall include without limitation: (a) revenue received from employees for meals furnished to employees at a discount; (b) proceeds from the sale of any Southern Hospitality authorized gift cards to  customers; (c) the proceeds from any business interruption insurance; and (d) the aggregate value of meals furnished to employees at no cost during the Accounting Period that exceeds 3% of Gross Sales. Gross Sales exclude the following: (i) sales taxes and other taxes separately stated, if any, collected from customers and paid to taxing authorities; (ii) refunds and credits made in good faith to arms' length customers; (iii) the amount of any checks dishonored or returned; (iv) the value of goods and services bought by customers by redeeming any Southern Hospitality authorized gift cards; (v) proceeds from isolated sales of trade fixtures not constituting Collateral Logo Merchandise and  having no material effect on ongoing operations; (vi) employee tips; (vii) the aggregate value of meals furnished to employees at no cost during the Accounting Period up to 3% of Gross Sales; and (viii) the amount of any proceeds paid to Franchisee on account of the sale of consigned artwork which Franchisee displays and sells in accordance with Company's consignment art program.

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Y."Initial Training Program" refers collectively to the multiple training modules presently consisting of (i) Owner Orientation; (ii) Management Training; and (iii) New Store Opening, and the different tracks of the Management Training module, that Company provides before and in connection with the opening of the Franchised Business, subject to Company's right to modify the Initial Training Program curriculum at any time in its sole discretion.

Z."Lease" means to the written agreement  by and between Franchisee and the owner of the business premises where the Franchise Location is situated that grants Franchisee the right to occupy and use the Franchise Location for the operation of a Southern Hospitality Restaurant.

AA. "Local Advertising" means, without limitation, all communications in all formats which Franchisee creates or adapts and intends to use, directly or indirectly, to advertise and promote the Franchised Business, Franchisee's status as an authorized franchisee, or which display the Southern Hospitality Licensed Marks. Local Advertising includes, without limitation: (i) written, printed and electronic communications; (ii) communications by website and equivalent electronic technology; (iii) communications by means of a recorded telephone message, spoken on radio, television or similar communication media; (iv) promotional items or promotional or publicity events; (v) listings in approved telephone or business directories; (vi) the use of the Southern Hospitality Licensed Marks on stationery, business cards, order forms, signs, merchandise, brochures, employee work wear, and other tangible personal property; and (vii) the use of Southern Hospitality Licensed Marks on the World Wide Web.

BB.   "MSA" means a Metropolitan Statistical Area as determined and designated by the federal Office of Management and Budget or successor agency.

CC."Multi-Unit Manager" refers to a Certified Manager whom Franchisee charges with responsibility for oversight of 3 or more Southern Hospitality Restaurants each owned and operated by Franchisee or Franchisee's Affiliate.

DD. "Non-Proprietary Products" refer collectively to any foods, ingredients, raw materials, condiments, alcoholic and non-alcoholic beverages, fixtures, furnishings, equipment, supplies, menus, packaging or other merchandise or property authorized by Company which Franchisee may, or must, use, offer, sell or promote in operating the Franchised Business that are not Proprietary Products.

EE. "Primary Owner'' refers to any person who now, or during the Term, owns or acquires 25% or more of the outstanding equity or voting interests of a Franchisee that is a Business Entity. Each Primary Owner shall be required jointly and severally to personally guaranty the Business Entity's obligations to Company on the terms of this Agreement.

FF.  "Proprietary Products" refer collectively to  any  ingredients,  dressings,  sauces, food products, syrups, beverages, supplies, apparel, equipment, and any other merchandise or property that Franchisee must use or sell to operate the Franchised Business in accordance with the Southern Hospitality System which either display the Southern Hospitality Licensed Marks or are specially configured, manufactured or produced by, or for, Company in accordance with Company's specifications. Without limiting this category, Proprietary Products include Collateral Logo Merchandise.

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GG."Protected Area" means the  geographic  area  identified  by  Company  in connection with site approval and described on ScheduleA.

HH. "Provisional Remedies" mean any form of interim relief,  including,  without limitation, requests for temporary restraining orders, preliminary injunctions, writs of attachment, appointment of a receiver, for claim and delivery, or any other orders which a court may issue when deemed necessary in its sole discretion to preserve the status quo or prevent irreparable injury, including the claim of either party for injunctive relief to preserve the status quo.

II. "Qualified Transfer" means (i) if Franchisee is an individual, the transfer  by Franchisee of all of his or her rights under this Agreement to a newly-formed Business Entity if all of the equity or voting interests of the new Business Entity will be owned by the person or persons identified as the Franchisee on the Effective Date; (ii) If  Franchisee  is a  Business Entity, the sale, assignment, transfer, pledge, donation, encumbrance or other alienation of equity or voting interests not resulting in a Change of Control; or (iii)an Event of Transfer where the purchaser is an existing Southern Hospitality franchisee with at least two years' experience owning and operating a Southern Hospitality Restaurant.

JJ.  "Term" is the 10 year period starting on the Effective Date and ending on the date that this Agreement terminates or expires, whichever occurs first.

KK. "Southern Hospitality Intellectual  Property"  refers,  collectively,  to  any  and  all rights currently existing or that may come into being which Company or Company's Affiliates now own or later acquire in Southern Hospitality Licensed Marks, Proprietary Products and/or Confidential Information arising under any patent, trade secret, copyright, trade dress, design protection, database protection, trademark, or similar laws of the United States or any other country in which Company or Company's Affiliates now or in the future operate, and expressly includes any and all improvements, modifications, derivations, renewals, extensions, or continuations of any of the foregoing.

LL "Southern Hospitality Licensed Marks" mean, collectively, all of the commercial trade names, trademarks, service marks and other commercial symbols, including associated logos, which Company now or hereafter uses to identify, advertise or promote Southern Hospitality Restaurants or particular goods or services sold at or from Southern Hospitality Restaurants, and authorizes or requires Franchisee to use as a condition of this Agreement

MM."Southern Hospitality System" means, collectively, all of the distinctive business methods, Proprietary Products, Confidential Information and the Southern Hospitality Intellectual Property which Company now or in the future authorizes or requires Franchisee to use as a condition of this Agreement, as Company may modify in its sole discretion at any time.

NN. "Training Store Certification" signifies that (i) the Franchised Business meets Company's minimum performance benchmarks, and (ii) Franchisee's General Manager, Assistant General Manager and Kitchen Manager each meet Company's experience and training qualifications to train Franchisee's other employees in specific job categories. Company shall publish the eligibility conditions for attaining Training Store Certification in the Confidential Manual, and may modify the conditions at any time effective upon notice to Franchisee.

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00. "World Wide Web" means that portion of the Internet used primarily as a commercial computer network by the general public, and any successor technology, whether now existing or developed after the Effective Date, that enables the general public to purchase goods or services from merchant-controlled World Wide Web sites or through other electronic means.

II.   GRANT.

A.     AwardofRights.

1.Company hereby awards to Franchisee, and Franchisee accepts, the non-exclusive right and license to use the Southern Hospitality System and  the Southern Hospitality Licensed Marks in connection with the operation of one Southern Hospitality Restaurant at the Franchise Location, subject to the terms and conditions of this Agreement. Franchisee may not relocate the Franchised Business except in accordance with this Agreement.

2.In accepting the award of rights, Franchisee agrees at all times to faithfully, honestly and diligently perform its obligations under this Agreement and to continuously exert its best efforts to promote and enhance the Franchised Business and the goodwill associated with the Southern Hospitality Licensed Marks and the Southern Hospitality System.

B.     Limitations.

1. Company grants Franchisee no rights  other  than  the  rights  expressly stated in this Agreement. Franchisee's use of the Southern Hospitality System or the Southern Hospitality Licensed Marks for any purpose, or in any manner, not permitted by this Agreement shall constitute a breach of this Agreement.

2.The franchise and license awarded to Franchisee apply to the Franchise Location, and to no other location.

3.Nothing in this Agreement gives Franchisee the right to sublicense  the use of Southern Hospitality Licensed Marks or the Southern Hospitality System, or any of its components, to others.

4.Nothing in this Agreement gives Franchisee an interest in Company or the right to participate in Company's business activities, investment or corporate opportunities.

5.Nothing in this Agreement gives Franchisee any rights in or to any Southern Hospitality Intellectual Property, other than the limited licenses expressly granted herein.

6.This Agreement authorizes Franchisee to engage only in the sale of authorized goods and services to customers at the Franchise Location. At this time, Franchisee may offer off-premises catering services and accept orders from customers over the telephone or communicated by email or otherwise through the World Wide Web for delivery to the customer's designated address in the Protected Area in accordance with the requirements and restrictions set forth  in the Confidential  Manual. Upon 60days written  notice, Company  may require  Franchisee  to  offer  delivery  services   within  the  Protected  Area  subject  to  the requirements and restrictions set forth in the Confidential Manual.

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7.Franchisee shall not engage in wholesale sales or distribution of goods or services of any kind. The term "wholesale sales or distribution" means the direct or indirect sale of goods or services to a third party for resale or further distribution through any trade method or trade channel. Except as provided in this section, Franchisee shall not advertise or sell authorized ingredients, foods, beverages or merchandise by mail order, catalog sales or comparable methods.

8.Franchisee shall not maintain its own World Wide Web site promoting the Franchised Business or otherwise maintain a presence or advertise the Franchised Business or use the Southern Hospitality Licensed Marks in any domain name or on any public computer network. Company shall identify the Franchised Business in its list of franchise locations on the Company's World Wide Web site and provide comparable information on its World Wide Web site about the Franchised Business as Company provides for other Southern Hospitality Restaurants.

C.    Improvements:DutytoConformtoModifications.

1.Any improvements, modifications or additions which Company makes to the Southern Hospitality System, or which become associated with Southern Hospitality System, including, without limitation, I deas suggested or initiated  by  Franchisee,  shall  inure to the benefit, and become the exclusive property, of Company. Franchisee hereby assigns to Company or its designee all intellectual property rights, including, without limitation, all copyrights, in and to any improvements or works which Franchisee may create,  acquire or obtain in operating the Franchised Business. Franchisee agrees that Company may use, and authorize others to use, improvements which Franchisee suggests, initiates or originates without compensation to Franchisee and without Franchisee's permission. Franchisee understands and agrees that nothing in this Agreement shall constitute or be construed as Company's consent or permission to Franchisee to modify the Southern Hospitality System. Any modification which Franchisee desires to propose or make to the Southern Hospitality System shall require Company's prior written consent.

2.Any goodwill resulting from Franchisee's use of the Southern Hospitality Licensed Marks or the Southern Hospitality System shall inure to the exclusive benefit of Company. This Agreement confers no goodwill or other interest in the Southern Hospitality Licensed Marks or the Southern Hospitality System upon Franchisee, except a license to use the Southern Hospitality Licensed Marks and the Southern Hospitality System during the Term subject to the terms and conditions stated in this Agreement.

3.Franchisee understands and agrees that Company may modify the Southern Hospitality System and the Southern Hospitality Licensed Marks from time to time in its sole discretion as often, and in the manner, that Company believes, in its sole discretion, is necessary to best promote the Southern Hospitality Restaurants, as a chain, to the public. Company shall give Franchisee written notice of all changes either by supplements to the Confidential Manual, in writing or electrically, or otherwise. Franchisee shall, at its own cost and expense, promptly adopt and use only those parts of the Southern Hospitality System specified by Company and shall promptly discontinue the use of those parts of the Southern Hospitality System which Company directs are to be discontinued. Franchisee shall not change, modify or alter the Southern Hospitality System in any way, except as Company directs.

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D.          Deviationsfrom the Southern Hospitality System. Company  may allow  other franchisees and licensees to deviate from the Southern Hospitality System in individual cases in the exercise of Company's  sole discretion.  Franchisee understands  and agrees that  it has no right to object to any variances that Company may allow to itself, Company's Affiliates  or other franchisees or licensees, and has no Claim against Company for not enforcing the standards of the Southern Hospitality System uniformly. Franchisee understands and agrees that Company has no obligation to waive, make any exceptions to, or permit Franchisee to deviate from, the uniform standards of the Southern Hospitality System. Any exception or deviation that Company does allow Franchisee must be stated in writing and executed by  Company  in order to  be enforceable against Company.

E.          AdditionalFranchises.Franchisee understands and agrees that this Agreement does not grant Franchisee any implied or preferential right of any kind to acquire an additional franchise to operate another Franchised Business.

F.           DelegationofDuties.Company has the absolute right to delegate performance of any portion or all of its obligations under this Agreement to any third-party designee of its own choosing, whether the designee is Company's Affiliate, agent or independent contractor. In the event of a delegation of duties, the third-party designee shall perform the delegated functions in compliance with this Agreement.

Ill.           FRANCHISELOCATION: PROTECTEDAREA.

A         Selection of Franchise Location; Award OfProtected Area.

1.If the parties have mutually agreed upon the Franchise Location on or before the Effective Date, they shall indicate the Franchise Location's street address and the boundaries of the Protected Area on ScheduleAwhich they shall execute at the same time they execute this Agreement, in which case the balance of this Section shall not apply to Franchisee.

2.If the parties have not identified the Franchise Location on or before the Effective Date, Franchisee shall be responsible for selecting the Franchise Location, subject to Company's approval, pursuant to the procedures stated in this Section. The fact that Company may, in its sole discretion, offer Franchisee advice, recommendations or site location services of any kind shall not constitute an admission on Company's part that it is responsible for identifying potential sites, and Franchisee understands that site selection shall be and remain Franchisee's sole responsibility, subject to Company's right to approve the site. Following Company's written approval of Franchisee's proposed site as the Franchise Location, the parties shall amend this Agreement to set forth the Franchise Location's street address and the boundaries of the Protected Area on ScheduleA.The parties' failure to execute ScheduleAshall not invalidate this Agreement, Company's site approval or the designation of the Protected Area.

a.In evaluating potential sites, Franchisee shall consider Company's current site selection criteria. If any, as set forth in the Confidential Manual as well as specifications for the design, appearance, trade dress elements, equipment layout and leasehold improvements of a typical Southern Hospitality Restaurant, which Company shall provide to Franchisee, without charge, following the parties' execution of this Agreement. Franchisee is solely responsible for investigating and complying with Applicable Law concerning development, occupancy and use of the Franchise Location and evaluating the suitability of a site as a Southern Hospitality Restaurant.

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b.To obtain Company's approval of a proposed site,  Franchisee shall submit a written site proposal to Company, in the form indicated in the Confidential Manual, which shall be accompanied by a letter of intent or copy of the proposed Lease setting forth all of the material terms and conditions for Franchisee's occupancy and use of  the proposed site as a Southern Hospitality Restaurant and the written agreement of the owner or master tenant of the proposed site to execute Company's-form Addendum to Lease. Franchisee shall be solely responsible for negotiating the terms of the Lease.  Presently, Company's policy is to only approve locations with interior seating for 150 people or more, exclusive of bar seating.  Company reserves the right to waive this requirement in its sole discretion.

c.Following receipt of Franchisee's written site proposal, Company may, in its sole discretion, make an on-site visit to the proposed site at Company's expense if Company reasonably believes that physical inspection of the demographic  conditions of the area, or the proposed site, is necessary or desirable to evaluate Franchisee's proposal. Franchisee understands and agrees that the on-site visit is at Company's option and not required by this Agreement. If Franchisee proposes more than one site and Company determines that it must make more than one site visit in connection with the site review process, Company may carge Franchisee a Site Review Fee of $1,000/day plus reimbursement of Company's reasonable travel expenses, including, without limitation, expenses for air and ground transportation, lodging, meals, and miscellaneous travel-related personal charges, which shall be payable within 15 days of invoice.

d.Company shall have 21  days following receipt of Franchisee's completed site proposal to complete any site visit that it chooses to make and approve or disapprove the proposed site by giving written notice to Franchisee (the "Site Approval Notice"). If Franchisee proposes more than one site, Company need only approve one site, or it may disapprove all proposed sites. Company's failure to give timely notice of approval shall constitute Company's disapproval of all sites proposed by Franchisee.

e.      Company's approval of a site signifies  only that the site meets Company's current site criteria and that the owner or master tenant of the proposed site will execute Company's form Addendum to Lease and permit Franchisee to occupy the site the purpose of operating a Southern Hospitality Restaurant on the terms of this Agreement. Company's approval of a site does not certify that Franchisee's development, use or occupancy of the site as a Southern Hospitality Restaurant will conform to Applicable  Law, or guaranty or warrant that operation of a Southern Hospitality Restaurant at the site will be successful or profitable. In approving the site, Company has no duty to investigate or inform Franchisee about the commercial building permits, availability of liquor license, zoning requirements and other building conditions applicable to developing the approved site as a Southern Hospitality Restaurant, which Franchisee is solely responsible for investigating.  The fact that Company may, in its sole discretion, offer Franchisee advice, recommendations or services in connection with site location, lease negotiation or building conditions shall not constitute an admission on Company's part that it is responsible for identifying potential sites, negotiating the Lease or investigating the feasibility of the site. Franchisee understands that site investigation, site selection and Lease negotiation are Franchisee's sole responsibility, subject to Company's right to approve the site on the terms of this Agreement. Franchisee understands that Company recommends that Franchisee retain the services of a professional site investigation company to help Franchisee evaluate the feasibility and costs of developing the site as a Southern Hospitality Restaurant.

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B.        ProtectedAreaandTerritorial Rights.

1.     If Company approves the proposed site, Company's Site Approval Notice shall identify the boundaries of the Protected Area that Company will assign to the proposed site, which the parties shall indicate when they execute Schedule A. The Protected Area shall be as follows:

a.If the proposed site is in an area that Company regards as a regional shopping mall, the Protected Area is the boundaries of the mall itself  including appurtenant parking areas.

b.For all other locations, Company shall draw the boundaries of the Protected Area to encompass an approximate 2 mile radius drawn from center or front door of the proposed site. Provided, however, for densely populated areas the Protected Area may be less than two miles, which will be set forth on Schedule A.

2. Company agrees not to open or operate, or grant others, including (without limitation) Company's Affiliates or unrelated persons, the right to open or operate, a Southern Hospitality Restaurant under the Southern Hospitality Licensed Marks anywhere in the Protected Area shown or described on Schedule A subject to Franchisee's compliance with this Agreement, the exclusions set forth in this Agreement and Company's reserved rights. Nothing in this Agreement gives Franchisee the right to object to Company's award of franchises to others for locations outside the Protected Area regardless of how close it may be located to the boundaries of the Protected Area. The rights and license awarded to Franchisee are nonexclusive.

3.The Protected Area excludes all of the following types of properties that now, or in the future, are in the Protected Area:                ·

a.Any airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities, military bases, entertainment parks, casinos, universities or other types of schools in the Protected Area. Accordingly, Company and Company's Affiliates may establish, or award others the right to establish, Southern Hospitality Restaurants in any type of format operating under Southern Hospitality Licensed Marks at excluded airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities, military bases, entertainment parks or .casinos that are, or may be, located within the in Protected Area.

b.Any restaurant properties in the Protected Area that Company acquires as part of, and contemporaneous with, the acquisition of a chain of at least 3 or more restaurants regardless of their location (whether within or outside of the Protected Area) if, at the time of the acquisition, all restaurants in the chain do business under a trade name other than the Southern Hospitality Licensed Marks. Following the acquisition, Company may convert any or all of the restaurant properties in the Protected Area to a Southern Hospitality Restaurant or permit any of Company's Affiliates, then-current owner" or any other third party to operate the restaurant properties as a Southern Hospitality Restaurant under a franchise license from Company.

4.Company furthermore reserves all other rights to engage  in activities in the Protected Area not specifically granted to Franchisee pursuant to this Agreement. Company's reserved rights extend to any retail or wholesale channel of distribution, whether the channel now exists or is developed in the future. Without limiting the foregoing, Company, on behalf of itself, Company's Affiliates and its or their other franchisees or licensees, may directly or indirectly, engage in any of the following activities. both within, and outside, the Protected Area without prior notice or compensation to, or consent of, Franchisee:

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a.Open and operate SouthernHospitality Restaurants at airport properties, mass transit stations, professional sports stadiums, hotels or other lodging facilities, military bases, entertainment parks, casinos, universities or other types of schools located in the Protected Area.

b.Produce, license, distribute, market and sell goods and services of any kind, including, without limitation, Proprietary Products, through other retail and wholesale channels of distribution, including, without limitation, by means of electronic communication, the World Wide Web, mail order catalogues, direct mail advertising, and comparable methods that solicit business from customers by means not requiring a physical transaction at a retail or wholesale location.

c.Produce, license, distribute, market and sell goods and services of any kind, including, without limitation, .Proprietary Products, from supermarkets, health food stores and other wholesale and retail food stores owned by third parties that are. not licensed to do business under Southern Hospitality Licensed Marks.

d.Operate other restaurants and other kinds of business under trade names that are dissimilar to Southern Hospitality Licensed Marks that do not feature as the predominate menu item barbecue products.

5.  The designation of a Protected Area  does  not  give  Franchisee  the exclusive or preferential right over Company, Company's Affiliates or other franchisees or licensees to (i) to sell authorized goods or services to persons who reside or work in the Protected Area, (ii) to market or advertise its Southern Hospitality Restaurant in media that circulates, broadcasts or otherwise is directed to or  accessible  by  persons  in the  Protected Area, or (iii) otherwise use Southern Hospitality Licensed Marks or the Southern Hospitality System in the Protected Area.

C.    Relocation.

1.If (i) the Lease expires or terminates for reasons other than Franchisee's breach; (ii) the Franchise Location or building in which the Franchised Business is located is destroyed, condemned or otherwise rendered unusable; or (iii) the parties' mutually believe that relocation will increase the business potential of the franchise, Franchisee shall relocate the Franchised Business, at Franchisee's sole expense, to a new location selected by Franchisee, and approved by Company, in accordance with Company's then-current site  selection procedures as specified in the Confidential Manual. Company shall indicate its approval of the new site by executing a new Site Approval Notice, which shall identify the boundaries of the new Protected Area which shall be awarded to the new site subject to the conditions, exclusions and reserved rights stated in this Agreement. The parties shall amend  ScheduleAto reflect the address of the new Franchise Location.

2.As part of the site approval process for the new location, Franchisee shall negotiate and submit to Company for Company's approval the proposed Lease for the new location. The owner or master tenant of the new location must agree to enter into Company's then-current Addendum to Lease form which Company requires new franchisees to execute.

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3.At Franchisee's sole expense, Franchisee shall construct and develop the new premises to conform to Company's then-current specifications for design,  appearance, trade dress elements, equipment plan and layout and leasehold improvements for new Southern Hospitality Restaurants, and remove any  signs, trade dress, equipment or similar property from the original Franchise Location which identified the original Franchise Location as belonging to the Southern Hospitality System. Development of the new location shall be subject to the terms and conditions of this Agreement applicable to development of the original Franchise Location.

4.Franchisee shall use its best efforts to complete relocation without any interruption in the continuous operation of the Franchised Business unless Company's prior written consent is obtained. As a condition to consenting to a disruption in operations, Company may impose a maximum time period during which Franchisee shall complete relocation, which shall be reasonable under the circumstances compelling relocation. If Company consents to a disruption in operations and such operations temporarily cease, then Franchisee agrees that, until operations resume at the new location: (x) the term of this Agreement shall not be abated, and (y) Franchisee shall remain liable to pay Royalty Fees and Promotional Fund Fees in an amount equal to the average amount paid by Franchisee during the four (4) complete Calendar Quarters immediately preceding the date that operations cease or the shorter period that Franchisee has been in business at the original Franchise Location. Upon Franchisee's written request, Company may, in its sole discretion, agree in writing to waive the requirement that Franchisee pay the foregoing fees during the period that the original Franchise Location closes if Franchisee demonstrates reasonable efforts and progress in its relocation efforts. Franchisee's failure to accept or abide by the relocation requirements shall constitute a material breach of this Agreement and grounds for termination.

IV.   TERMANDRENEWAL.

A.Term. This Agreement shall begin on the Effective Date and shall  expire without notice 10 years from the Effective Date, unless this Agreement is sooner terminated as provided  herein.

B.RenewalTerm. Franchisee shall have an option to renew the franchise for 2 successive terms, each for an additional 5 years (each 5 year period is a "Renewal Term" or and successively the "First Renewal Term" and "Second Renewal Term" and each option to renew is referred to as a "Renewal Option"). To exercise each Renewal Option, Franchisee must comply with the following conditions:

 1.Franchisee must give Company written notice of Franchisee's election to renew (the "Renewal Notice") at least 9 Calendar Months, but not more than 12 Calendar Months, before the end of the Term or the First Renewal Term, as applicable. The first Renewal Term shall begin on the day immediately following the expiration of the Term and the second Renewal Term shall begin on the day immediately following the expiration of the first Renewal Term The Renewal Option for the second Renewal Term shall be cancelled if Franchisee does not timely and effectively exercise the Renewal Option for the first Renewal Term.

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2.Company must be granting new franchises Southern Hospitality Restaurant in the United States at the time when Franchisee is permitted to exercise each Renewal Option.

3.Each Renewal Notice must each be accompanied by a non-refundable renewal fee equal to 25% of the Initial Franchise Fee that Company is then charging for a new franchise awarding the right to operate one Southern Hospitality Restaurant in the state in the United States where the Franchised Business is located.

4.Franchisee must not be in default under this Agreement or any successor Franchise Agreement at the time Franchisee gives the Renewal Notice or on the first day of the applicable Renewal Term. Further, Franchisee must not have received more than 3 notices of default during any 24-Calendar Month period during the Term or the first Renewal Term, as applicable, whether or not the notices relate to the same or to different defaults, and whether or not the defaults have each been timely cured by Franchisee.

5.To exercise each Renewal Option, Franchisee shall execute Company's then-current form of Franchise Agreement for a 5-year .term, which Franchise Agreement shall supersede this Agreement or any successor Franchise Agreement in all respects except as follows: (i) Franchisee shall have not have the renewal rights stated in the new Franchise Agreement,   but  shall   instead   have  the   Renewal   Options  set  forth   in  this  Agreement; (ii) Franchisee shall not be required to pay the Initial Franchise Fee stated in the new Franchise Agreement, but instead shall pay the renewal fee stated in this Agreement; and (iii) Franchisee shall not be required to participate in the Initial Training Program described in the new Franchise Agreement intended for new franchisees. Franchisee understands that each new Franchise Agreement may be materially different than this Agreement, including, without limitation, requiring payment of additional or different fees to Company.

6.Franchisee shall satisfy Company's then-current training requirements, if any, for renewing franchisees.

7.Franchisee shall satisfy Company's then-current appearance, trade dress elements, design standards, equipment and leasehold improvement specifications that apply to new Southern Hospitality Restaurants, including (without limitation) conforming the Franchised Business to Company's then-current design, appearance, trade dress elements and imaging requirements; signs; equipment, furnishings and fixtures; and accounting and recordkeepi ng systems.

8.Franchisee shall execute and deliver a general release, in  form satisfactory to Company, of any and all claims against Company, Company's Affiliates and their respective officers, directors, shareholders, employees and agents.

C.IneffectiveExerciseof Renewal Option.   Franchisee's  failure  to  deliver  the agreements and release required by this Section within 30 days after Company delivers them to Franchisee shall be deemed an election by Franchisee not to exercise the applicable Renewal Option.

D.Extension.  If Company is in the process of revising, amending or renewing its franchise disclosure documents or registration to setr franchises in the state where the Franchised Business is located, or, under Applicable Law, cannot lawfully offer Franchisee its then-current form of Franchise Agreement at the time Franchisee delivers a Renewal Notice, Company may, in its sole discretion, offer to extend the terms and conditions of this Agreement on a Calendar Month to Calendar Month basis following the expiration of the Term (or the first Renewal Term, as applicable) for as long as Company deems necessary so that Company may lawfully offer its then-current form of Franchise Agreement; provided, however, nothing in this Section shall require Company to extend this Agreement if, at the time Franchisee delivers the Renewal Notice (i) Company is not granting new franchises, or (ii) Franchisee is in default under this Agreement or a successor Franchise Agreement.

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E.           Failureto Satisfy Renewal Conditions.  If any renewal condition is not timely satisfied, this Agreement will expire on the last day of the Term (or the first Renewal Term, as applicable) without further  notice from Company;  provided, however, Franchisee  shall remain obligated to comply with all provisions of this Agreement which expressly, or by their nature, survive the expiration or termination of this Agreement.

V.    FRANCHISELOCATIONDEVELOPMENTANDOPENINGDATE.

A           SiteInvestigationandExecutionofLeaseandAddendumtoLease.  Franchisee is solely responsible at its expense for identifying all .commercial building permits, zoning requirements and other building conditions that may affect the cost of developing the approved site as a Southern Hospitality Restaurant and the feasibility of securing a beer and wine license for the approved site. Company shall recommend the name of at least one professional site investigation firm to assist Franchisee prepare this analysis, but Franchisee may utilize the services of any qualified professional site investigation firm of its own choosing. Company recommends that Franchisee complete the site analysis and a preliminary construction budget before signing the Lease and Addendum to Lease.

B.        Franchisee'sDesignPlans.

1.  Cmpany shall provide Franchisee with Company's specifications for the design, appearance, trade dress elements, equipment and leasehold improvements of Southern Hospitality Restaurant after the parties execute this Agreement, which Franchisee shall use to evaluate potential sites for the Franchise Location. Franchisee understands that Company's specifications may not reflect the requirements of Applicable Law governing public accommodations for persons with disabilities or similar rules, building codes, zoning restrictions, permit requirements or applicable Lease restrictions.

2.         At Franchisee's sole expense, Franchisee shall retain the services of the architectural and kitchen design companies to prepare detailed construction documents that adapt Company's specifications to the specific dimensions, square footage and conditions of the Franchise Location and to the requirements of the Lease and Applicable Laws ("Franchisee's Design Plans"). Franchisee's Design Plans shall address, without limitation, exterior signs, lighting, flooring, mechanical systems, electrical systems, plumbing, carpentry, wall coverings, ceiling treatments, exhaust/ventilation systems, restaurant dining, cooking and storage areas, general trade dress components and any other improvements that Company permits Franchisee to install and use in the Franchise Location, together with such other information as may be specified in the Confidential Manual. Franchisee shall enter into the services agreement with each designated company in the form attached to the Disclosure Document. The fact that Company may recommend the architectural and kitchen design companies that Franchisee uses to prepare Franchisee's Design Plans shall not (i) excuse Franchisee from the duty to obtain Company's approval of Franchisee's Design Plans, (ii) make Company responsible for repairing Franchisee's Design Plans; or (iii) make Company liable for design or construction work, delays or defects of any kind.

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3.  Fanchisee is solely responsible for investigating the requirements of Applicable Law governing public accommodations  for persons with disabilities or similar rules, building codes, permit requirements, zoning restrictions· or applicable Lease restrictions and conforming Franchisee's Design Plans to such requirements.

4.  Fanchisee shall submit Franchisee's Design Plans to Company for approval before Franchisee may begin permitting, construction or development of the Franchise Location. Company shall have 15 days to review Franchisee's Design Plans and notify Franchisee in writing of its rejection or approval of Franchisee's Design Plans or its approval subject to specified modifications. Company's failure to give Franchisee timely notice shall constitute Company's disapproval of Franchisee's Design Plans as submitted. Company's approval of Franchisee's Design Plans, with or without additional conditions, does not certify that Franchisee's development,  use or occupancy of the site as a Southern Hospitality Restaurant pursuant to Franchisee's Design Plans as approved will conform to Applicable Law or guaranty or warrant that operation of a Southern Hospitality Restaurant  at the site will be successful or profitable

C.        DevelopmentofFranchiseLocation.

1.Franchisee shall cause all construction and other development work to be carried out in compliance with the version of Franchisee's Design Plans that Company approves. Franchisee shall not make any material changes to the Franchisee's Design Plans without first submitting the changes in writing to Company for its approval.

2.Franchisee shall not begin construction until Franchisee delivers to Company a copy of the fully-executed Lease and Addendum to Lease.

3.Company recommends that Franchisee retain the services of a construction manager to handle bidding and construction administration. Company shall recommend at least one construction management firm. If Franchisee does not elect to hire the firm that Company recommends, Franchisee shall obtain Company's prior written approval of the firm before retaining the firm.

4.Franchisee shall cause all construction and development work to conform with the Lease and Applicable Law, including, without limitation, all government and utility permit requirements (such as, for example, zoning, sanitation, building, utility and sign permits). Franchisee shall complete development of the Franchise Location diligently, expeditiously and in a first-class manner at Franchisee's sole expense. Company shall have access to the Franchise Location to inspect the work and performance by Franchisee's construction personnel.

5.Franchisee is solely responsible for purchasing, leasing or licensing all of the equipment, fixtures, furniture, computer and software systems, trade dress elements, signs, supplies, materials and decorations required for development and operation of Southern Hospitality Restaurant meeting Company's specifications in the Confidential Manual from recommended, approved or required sources as directed by Company in the Confidential Manual and this Agreement. Company or Company's Affiliate may be included as a recommended supplier.

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6.Franchisee understands and agrees that it is solely responsible for selecting competent construction personnel and for supervising, and for the acts and omissions of, its construction personnel. Franchisee shall obtain all customary contractors' lien waivers for the work performed.

7.Company shall have no responsibility for any delays in development or opening of the Franchised Business or for any loss resulting from the design of the Franchise Location or approval of Franchisee's Design Plans. Company shall have access to the Franchise Location to inspect the work and performance by Franchisee's construction personnel, but is not obligated to inspect the project periodically during development or upon completion. Franchisee understands and agrees that if Company inspects the work and performance of Franchisee's construction personnel, the inspection is not for purposes of reviewing or certifying that development is in compliance with the Lease or Applicable Laws, but solely to evaluate that development conforms with the version of Franchisee's Design Plans that Company has approved and otherwise with Company's specifications for design, appearance, trade dress elements and leasehold improvements.

D.       OpeningDate.

1.      It shall be a material breach of this Franchisee for Franchisee to open, or attempt to open, the Franchise Location for business to the public under Southern Hospitality Licensed Marks before Company issues Franchisee a written completion certificate. The certificate shall signify that Company finds that (i) the Franchise Location, as built, substantially conforms to the version of Franchisee's Design Plans that Company has approved, and (ii) Franchisee has met all other pre-opening requirements including, without limitation, completing the Owner Orientation and Management Training modules of the Initial Training program offered before opening, qualifying at least one· person as a Certified Manager, and supplying Company with proof of all required insurance coverage all in accordance with the requirements of this Agreement and proof of the necessary licenses to serve the beer and wine selections that Company requires from time to time. The date after Company issues a written completion certificate on which the Franchised Business actually opens for business to the public is the opening date ("Opening Date").

2.Company may terminate this Agreement effective upon written notice to Franchisee if Franchisee fails to use its best efforts to complete construction and meet the other pre-opening requirements of this Agreement  by no later than 270 days after the Effective Date. If this Agreement terminates for the reasons stated in this Section, Franchisee shall not be entitled to a refund of any fees or other payments paid to Company or Company's Affiliates.

3. If Franchisee believes Company has failed to adequately provide any services which this Agreement requires Company to perform before or in connection with the Franchised Business' opening, whether  in regard to site selection, site development, the Initial Training Program, or any other matter affecting the establishment and opening of the Franchised Business, Franchisee shall notify Company in writing within 60 days following the Opening Date setting forth in its written notice the particular services which Franchisee believes Company has not adequately provided. Absent timely written notice to Company, Franchisee shall be deemed to acknowledge conclusively that all required services to beperformed by Company before or in connection with the Franchised Business' opening were provided adequately in Franchisee's judgment.

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VI.  TRAINING.

A.       Initial Training Program.

1.The parties shall mutually schedule the Owner Orientation module, and the General Manager, Assistant General Manager, Kitchen Manager and Kitchen Supervisor tracks of the Restaurant Management module, of the Initial Training Program so that persons who attend the modules and tracks complete them at least 60 days before the  expected Opening Date. The Owner Orientation and Restaurant Management modules shall take place at a location which Company designates. Company shall provide the New Store Opening module at the Franchise Location during the period before and after the Opening Date. Franchisee understands and acknowledges that all meals eaten at Franchisee's Restaurant by Company's representatives during the New Store Opening module shall be at Franchisee's sole cost and expense.

2.At a minimum, Company requires that the following individuals complete the following portions of the Initial Training Program: (i) Franchisee or at least one Primary Owner must complete the Owner Orientation module; (ii) at least 4 different individuals (any one or more of whom may be a different Primary Owner) must complete each one of the separate General Manager, Assistant General Manager, Kitchen Manager and Kitchen Supervisor tracks of the Restaurant Management module according to their job category; (iii) all opening employees must complete the New Store Opening Module.

3.Company shall limit enrollment in the Owner Orientation module to an individual who is the Franchisee or a Primary Owner of the Franchisee. Company shall also (i) limit enrollment  in the separate tracks of the Restaurant Management module according to the person's job category, and (ii) establish minimum experience criteria in order for an individual to qualify for the designation of General Manager, Assistant  General  Manager, Kitchen Manager or Kitchen Supervisor. Company shall identify its minimum experience criteria in the Confidential Manual, which Company may revise at any time, with the new criteria applying prospectively to persons whom Franchisee hires or retains after the date that the new criteria become effective. Franchisee understands and agrees that it may not designate an individual as a General Manager, Assistant General Manager, Kitchen Manager or Kitchen Supervisor of the Franchised Business unless the individual meets Company's minimum experience criteria and enrolls in, and completes, the appropriate track of the Restaurant Management module matching the job category or receives equivalent instruction from Franchisee if Franchisee has attained Training Store Certification.

4.     Subject to the Company's right to limit enrollment in the Owners Orientation and Restaurant Management modules of the Initial Training Program to persons wfllo meet Company's minimum experience criteria as provided in this Section, Franchisee may enroll a total of up to 4 individuals in the Owners Orientation and Restaurant Management modules (combined) of the Initial Training Program which Company provides before the Opening Date without  paying any tuition or training fee to Company. Franchisee may request permission to enroll more than 4 individuals in the Owners Orientation and Restaurant Management modules (combined) of the Initial Training Program which Company provides before the Opening Date subject to space availability and their meeting the appropriate qualifications for a training fee of $250/day/person.

5.     If Franchisee is executing this Agreement in connection with exercising the Renewal Option, in consideration of Franchisee's payment of a renewal fee, Franchisee shall be entitled to participate in any training program that Company then provides for renewing franchisees on the same basis as other franchisees renewing contemporaneously.

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6.      Franchisee understands and agrees that Company may modify the Initial Training Program at any time without prior notice to Franchisee. Although, the Initial Training Program, as of the Effective Date, consists of separate modules and tracks, Company's modifications may involve adding, deleting, shortening or lengthening modules or tracks, changing the location, duration, content or scope of the Initial Training Program, or changing instructors or mandatory training requirements.

7.       Franchisee  further  understands  and  acknowledges  that,  although Company may have approved one (1) or more of Franchisee's Managers prior to their attendance and Company's training program, Company reserves the right, in its sole discretion, to recommend or require Franchisee to replace any Manager if, during the course of the training program, Company determines that such Manager is not suitable to act as a Southern Hospitality Manager.

B. TrainingStoreCertification.

1.Any time after 3 months from the Opening Date, Franchisee may apply for Training Store Certification upon demonstrating to Company's satisfaction that  the Franchised Business meets Company's then-current minimum performance criteria published in the Confidential Manual. If Company accepts Franchisee's application, the parties shall schedule a mutually convenient time for Company to provide Company's "train-the-trainer" instructional course at the Franchise Location to Franchisee's General Manager, Assistant General Manager and Kitchen Manager. As a condition to attaining Training Store Certification, Company may require Franchisee to enroll at least three employees, one General Manager, Assistant General  Manager and Kitchen Manager, in the same "train-the-trainer'' instructional course. Upon Franchisee's General Manager, Assistant General Manager and Kitchen Manager successful completion of Company's "train-the-trainer'' instructional course, Company shall award Training Store Certification to Franchisee. Franchisee shall retain the designation for as long as (i) the Franchised Business continues to meet Company's then-current minimum performance criteria, which Company may modify at any time, and (ii)the management-level employees who successfully complete Company's "train-the-trainer'' instructional course remain responsible for training Franchisee's other employees ·in the subjects for which Company certifies them to teach. Company shall not charge any fee to provide the "train-the-trainer'' instructional course once during the Term, however, Franchisee shall reimburse Company for Company's reasonable travel expenses, including, without limitation, expenses for air  and ground transportation, lodging, meals, and miscellaneous travel-related personal charges in providing the "train-the-trainer'' instructional course at the Franchise Location.

2.      Company may modify the minimum requirements for maintaining Training Store Certification at any time upon not less than 30 days' notice, but will give Franchisee a reasonable amount of time to attain the new requirements. If Company revokes Franchisee's Training Store Certification, Franchisee may reapply for Training Store Certification by (i) demonstrating to Company's satisfaction that the Franchised Business meets Company's then-current minimum performance criteria published in the Confidential Manual, and (ii) paying Company's then-current training fee and re-enrolling Franchisee's then-current management team in the "train-the-trainer'' instructional course. Franchisee shall pay Company its then­ current Training Store Certification training fee even if the parties mutually agree to waive attendance by General Manager, Assistant General Manager or Kitchen Manager, or all of them, in the "train-the-trainer" instructional course based upon prior attendance and successful completion of the course.

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3.By mutual arrangement, Franchisee may seek to qualify later-hires or additional management-level employees who perform the duties of General Manager, Assistant General Manager or Kitchen Manager in Company's "train-the-trainer'' instructional course by paying Company's then-current training fee.

4.Franchisee understands that Company has no obligation to teach the "train-the-trainer" instructional course in the Franchise Location more than once during the Term. After providing the "train-the-trainer'' instructional course once in the Franchise Location, if Franchisee applies for recertification, Company shall designate the location of any additional "train-the-trainer'' instructional courses in which Franchisee may enroll its management-level employees.                                                                           ·

C.      AdditionalTraining.

1.     After the Opening Date, Franchisee may request permission to enroll additional persons in one or more of the tracks of the Restaurant Management module (or then­ current equivalent) or receive additional training and on-site assistance.

2.Franchisee understands and agree that all additional training shall be at mutually scheduled times, subject to space availability and Company's other training commitments, and that, as a condition to receiving additional training, Franchisee must pay Company's then-current per person training fees stated in the Confidential Manual. In connection with additional instruction provided at the Authorized Location, Franchisee shall also reimburse Company for Company's reasonable travel expenses, including, without limitation, expenses for air and ground transportation, lodging, meals, and miscellaneous travel-related personal charges.

D.       ContinuingTraining.

1.Company may periodically offer continuing training programs at one or more locations that it shall designate and require attendance by Franchisee, a Primary Owner of a Franchisee that is a Business Entity, a Certified Manager or a particular employee category, such as General Manager, Assistant General Manager, Kitchen Manager, Kitchen Supervisor or so forth; provided, however, Company shall not require that more than 2 persons designated by Company complete more than 3 days of continuing training during any 12 Calendar Month period. Company shall not charge a training fee for any mandatory continuing training classes. Franchisee shall be solely responsible for covering the· personal expenses of its employees attending continuing and additional training programs, including transportation, lodging, food, salary and other personal charges.

2.In connection with any Event of Transfer, the proposed transferee or its Primary Owner and its designated management and supervisory-level  employees  must complete Company's then-current  Initial Training Program to Company's satisfaction and qualify at least one management-level employee as a Certified Manager. The proposed transferee shall be solely responsible for all personal expenses that the .transferee and its employees incur in connection with such training, including transportation, lodging, food, salary and other personal charges. Franchisee shall remain responsible for operation and management of the Franchised Business until the proposed transferee's  employees  complete the then-current  Initial Training Program and Franchisee qualifies at least one person as a Certified Manager.

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E.     General Conditionsre:Training. Franchisee understands and agrees that (i) it is solely responsible for all personal expenses that it and  its employees  and  independent contractors incur to attend any of the training programs that Company offers whether before or after the Opening Date, including, without limitation, costs for air and  ground transportation, lodging, meals, personal expenses and salaries, and (ii) Company will not pay compensation for any services performed by trainees during any training program   provided   by  Company. Franchisee agrees to allow Company to train  persons unaffiliated to Franchisee at the Franchise Location at a time mutually convenient to  Franchisee and Company and without compensation or reimbursement to Franchisee, not to exceed 30 days in any Calendar Year.

VIII.  SOUTHERNHOSPITALITYINTELLECTUALPROPERTY.

A.     Ownership. Franchisee understands and agrees that, as between the parties, Company owns all rights in the Southern Hospitality System and its various components, and Franchisee owns no rights in the Southern Hospitality System except for the license granted by · this Agreement.  Franchisee agrees not to contest, or assist any other person to contest, the validity of Company's rights and interest in the Southern Hospitality System, or any component thereof, either during the Term or after this Agreement terminates or expires.

B.       UseofSouthern HospitalitySystem.

1.In operating the Franchised Business, Franchisee shall (i) use only the Southern Hospitality Licensed Marks and elements of Southern Hospitality System designated by Company and only in the manner authorized and permitted by Company; (ii) use Southern Hospitality Licensed Marks only in connection with the operation of the Franchised Business and not in connection with any other unrelated activities; (iii) display notices of trademark and service mark registrations in the exact manner that Company specifies; (iv) obtain fictitious or assumed name registrations as required by Applicable Law; and (v) prominently post notices to customers, suppliers and others with whom Franchisee deals informing them that Franchisee is the independent owner of the Franchised Business operating under a license from Company.

2.Franchisee shall not use any of the Southern Hospitality Licensed Marks or any part thereof: (i) in its corporate or legal name (if Franchisee is a Business Entity); (ii) with any prefix, suffix or other modifying words, terms, designs, colors or symbols; (iii) in  any modified form; (iv) in connection with the sale of any unauthorized goods or services; (v) in any manner not expressly authorized in writing by Company; or (vi) in any manner that may result in Company's liability for Franchisee's debts or obligations.

3.Franchisee shall not cover up, remove or alter any patent, copyright, trademark or other notices that Company requires Franchisee to use to signify Company's ownership of, or rights in, the Southern Hospitality Intellectual Property. ·

4.Company reserves the right to: (i) modify or discontinue licensing any of the Southern Hospitality Intellectual Property or other features of the Southern Hospitality System; (ii) add new names, marks, designs, logos or commercial symbols to Southern Hospitality Licensed Marks and require that Franchisee use them; (iii) modify or discontinue practices, components or requirements incorporated within the  scope  of  the  Southern Hospitality  System  as  of  the  Effective  Date;  and  (iv) require  that  Franchisee  introduce  or observe new practices as part of the Southern Hospitality System in operating the Franchised Business. Franchisee understands that Company at any time, without notice to Franchisee, may modify the Southern Hospitality System, in which case, Franchisee shall  comply,  at Franchisee's sole expense, with Company's directions regarding  changes in  Southern Hospitality System within a reasonable time after written notice from Company. Company shall have no liability to Franchisee for any cost, expense, loss or damage that Franchisee incurs in complying with Company's directions and conforming to required changes to the Southern Hospitality System.

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5.Franchisee understands and agrees that any unauthorized use of the Southern Hospitality Licensed Marks or the Southern Hospitality System or its components by Franchisee shall constitute both a breach of this Agreement and an infringement of Company's intellectual property rights.

C,   Defenseofthe SouthernHospitalitySystem.

1.Company shall have the sole right to handle disputes with third parties challenging Company's or Company's Affiliates' or their respective owners' rights in, or Franchisee's use of, the Southern Hospitality Licensed Marks or the Southern  Hospitality System or its components.

2.Franchisee shall immediately notify Company in writing if Franchisee receives notice, or is informed, of any: (i) improper use of any of the components of  the Southern Hospitality System; (ii) use by any third party of any mark, design, logo or commercial symbol which, in Franchisee's sole discretion, may be confusingly similar to any of the Southern Hospitality Licensed Marks; (iii) use by any third party of any business practice which, in Franchisee's sole discretion, unfairly simulates the Southern Hospitality System in a manner likely to confuse or deceive the public; or (iv) claim, challenge, suit or demand asserted against Franchisee based upon Franchisee's use of any of the components of the Southern Hospitality System. A legal proceeding, demand or threat encompassing the subject matters described in (i), (ii}, (iii) and (iv) is collectively referred to as a "Third Party Claim."

3.Company shall have sole discretion to take such action as it deems appropriate, including, without limitation, to take no action, and the sole right to control any legal proceeding or negotiation arising out of a Third Party Claim.

4.Franchisee shall not settle or compromise any Third Party Claim and agrees to be bound by Company's decisions over how to handle a Third Party Claim. Franchisee shall cooperate fully with Company and execute such documents and perform such actions as may, in Company's sole discretion, be necessary, appropriate or advisable in the defense of a Third Party Claim and to protect and maintain Company's or Company's Affiliates' or their respective owners' rights in, or Franchisee's use of, the Southern Hospitality System or any of its components.

5.Company's indemnity obligation set forth in this Section shall not extend to any Third Party Claim which is based, directly or indirectly, upon Franchisee's misuse of the Southern Hospitality System. In all other situations, Company agrees to defend Franchisee against the Third Party Claim,  provided Franchisee has notified Company immediately after learning of the Third Party Claim and fully cooperates in the defense of the Third Party Claim. Because Company will defend the third party claim, Franchisee is not entitled to be reimbursed for  legal or  other  professional fees  or costs  paid to  independent  legal counsel  or others  in connection with the matter. Notwithstanding Company's agreement to defend Franchisee under the conditions stated in this Section, Franchisee understands and agrees that Company is not liable to indemnify or reimburse Franchisee for any liability, costs, expenses, damages or losses that Franchisee may sustain as a result of the Third Party Claim, with the exception that Company shall (i) reimburse Franchisee for Franchisee's actual direct costs  to change  any signs, employee work wear or other materials that bear Southern Hospitality Licensed Marks or change any property incorporating any other feature of the Southern Hospitality System that is found to infringe the rights of a third party, and (ii) if a judgment is rendered against Franchisee, indemnify Franchisee for the amount of the judgment. Franchisee shall assign to Company any claims that it may have against the third party asserting the infringement claim. Franchisee, on behalf of itself and its Affiliates hereby waives any claim against Company, Company's Affiliates, and their respective officers, directors, shareholders, employees and agents for lost profits or consequential damages of any kind based on Third Party Claims involving the Southern Hospitality System.

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6.The rights granted to Franchisee under this Section shall be Franchisee's sole and exclusive remedy for any infringement by any part of the Southern Hospitality System.

VIII.  CONFIDENTIALMANUAL.

A.     Loan

1.Company will loan Franchisee one copy of its current Confidential Manual for as long as this Agreement is in effect. The Confidential Manual is, and at all times shall remain, Company's sole property and shall promptly be returned to Company upon expiration, termination or an assignment of this Agreement.

2.     Franchisee shall treat all information contained in the Confidential Manual as confidential, and shall use all reasonable efforts to keep the information secret. Franchisee shall not, without Company's prior written consent, copy, duplicate, record or otherwise reproduce the Confidential Manual, in whole or in part, or otherwise loan or make it available to any person not required to have access to its contents in  order to carry out his or her employment functions. To the extent that the Confidential Manual is furnished in a printed "hard" copy rather than electronically, Franchisee shall take adequate precautions to ensure that when the Confidential Manual is not in use by authorized personnel, Franchisee shall keep the Confidential Manual in a locked receptacle at the Franchise Location and shall only grant authorized personnel, as defined in the Confidential Manual, access to the key or lock combination of the receptacle. To the extent that the Confidential Manual is furnished in electronically or in an equivalent format, Franchisee shall only share the access password with authorized personnel.

3.The Confidential Manual contains both mandatory and recommended specifications, standards, procedures, rules and other information pertinent to the Southern Hospitality System and Franchisee's obligations under this Agreement. The Confidential Manual, as modified by Company from time to time, is an integral part of this Agreement and all provisions now or hereafter contained in the Confidential Manual or otherwise communicated to Franchisee in writing are expressly incorporated in this Agreement by this reference and made a part hereof. Franchisee shall fully comply with all mandatory requirements now or hereafter included in the Confidential Manual, and understands and agrees that a breach of any mandatory requirement shall constitute a breach of this Agreement and grounds for termination.

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B.Updating.Company reserves the right to modify the Confidential Manual from time to time to reflect changes that it may implement in the mandatory and recommended specifications, standards and operating procedures of the Southern Hospitality System. All revisions will be reflected in written or electronic supplements to the Confidential Manual or in other written or electronic communications delivered to Franchisee, and each supplement or communication shall become effective upon receipt or on the later date specified by Company. If updates are provided by "hard" copy (as opposed to electronically or in some comparable format), Franchisee shall insert any updated pages in its copy of the Confidential Manual upon receipt and remove superseded pages and return them to Company within 5 days following receipt. Franchisee shall immediately conform its operations to all revisions in mandatory specifications, standards, operating procedures and rules prescribed by Company.

C.LostorDestroyedConfidentialManual. Franchisee shall promptly notify Company if any volume or part of its copy of the Confidential Manual is lost or destroyed for any reason. Provided (i) the loss is not the result of Franchisee's breach of its duty to  keep the contents of the Confidential Manual confidential, and (ii)Franchisee is not otherwise in default under this Agreement, Company shall furnish Franchisee with the needed replacement copy or portion of the current Confidential Manual. Franchisee shall pay  Company a replacement Confidential Manual fee of $250, per volume, plus all shipping expenses, in full within 10 days following receipt of invoice. If either (i) or (ii) is not  satisfied, Company may terminate this Agreement on account of the loss or destruction of  th Confidential Manual or any portion thereof.

IX.  CONFIDENTIAL INFORMATION.

A.     Limitationson useof Confidential Information. Franchisee acknowledges  that Company will disclose Confidential  Information to Franchisee by loaning Franchisee a copy of Confidential Manual, providing other written instructions and bulletins, arranging for the supply of Proprietary Products, and otherwise through the performance of Company's  obligations and the exercise of  its  rights  under  this  Agreement.  Franchisee  shall  acquire  no interest  in Confidential  Information, other than a license to  utilize it in the  operation of  the  Franchised Business subject to the terms of this Agreement.

1.Franchisee's use, publication or duplication of Confidential Information for any purpose not authorized by this Agreement constitutes an unfair method of competition by Franchisee and, additionally, grounds for termination of this Agreement.

2.Pursuant to this Agreement, Franchisee shall deliver to Company a separate Confidentiality, Non-Disclosure and Non-Competition Agreement in the form required by Company, executed by Franchisee and by each person who is now, or during the Term becomes, a Covered Person.

3.Franchisee agrees to: (i) confine disclosure of Confidential Information to those of its management-level employees and agents who require access in order to perform the functions for which they have been hired or retained; and (ii) observe and implement reasonable procedures prescribed from time to time by Company to prevent the unauthorized or inadvertent use, publication or disclosure of Confidential Information including, without limitation, requiring that any employee with access to Confidential Information, who are not otherwise required to sign a Confidentiality, Non-Disclosure and Non-Competition Agreement, execute Company's current form of Confidentiality Agreement with Franchisee. Upon request from Company, Franchisee shall deliver to Company a copy of each executed Confidentiality, Non- Disclosure and Non-Competition Agreement for its records. Company may terminate this Agreement if Franchisee, or any person required by this Agreement to execute Company's form of Confidentiality, Non-Disclosure and Non-Competition Agreement, or Company's form of Confidentiality Agreement, with Company or Franchisee, breaches that Agreement. All agreements contained in this Agreement pertaining to Confidential Information shall survive the expiration, termination or Franchisee's assignment of this Agreement.

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4.The provisions concerning non-disclosure of Confidential Information shall not apply if disclosure of Confidential Information is legally compelled in a judicial or administrative proceeding if Franchisee has used its best efforts to provide Company a reasonable opportunity to obtain an appropriate protective order or other assurance satisfactory to Company of confidential treatment for the information required to be disclosed.

B.     AssignmentofCopyrights.

1.     Franchisee and Company acknowledge that, during the Term, Company may authorize Franchisee to use certain works in operating the Franchised Business for which Company owns a copyright, or owns a license to use a copyrighted work granted by a third party (collectively referred to as the "Copyrighted Works"). Any Copyrighted Works which Company permits Franchisee to use pursuant to this Agreement are, and shall remain, part of the Southern Hospitality Intellectual Property and Franchisee shall acquire no interest in the Copyrighted Works, other than a license to use those Copyrighted Works that Company designates in the operation of the Franchised Business subject to the terms of this Agreement.

2.      Franchisee understands and agrees that the Copyrighted Works may include, without limitation, the Confidential Manual, advertising and promotional materials supplied by Company, any proprietary software that may Company may license to Franchisee, and other categories of works eligible for protection under federal trademark, patent or copyright laws that are created by, or for, Company and are designated by Company for use in connection with operating a Southern Hospitality Restaurant.

3.To the extent Franchisee creates, or arranges to have created for Franchisee's benefit, any improvement or work eligible for protection under federal trademark, patent or copyright laws, Franchisee shall execute, or have the creator execute, all documents necessary to assign all intellectual property and ownership rights in the improvement or work to Company. Franchisee understands and agrees that the consideration for the assignment is the grant of the franchise to Franchisee.

4.Franchisee understands and agrees that nothing in this Agreement shall constitute or be construed as Company's consent to Franchisee modifying, or creating any derivative work based upon, any of the Copyrighted Works. Franchisee must obtain Company's prior written consent before modifying or creating, directly or indirectly, any type of derivative work based on any Copyrighted Works.                               ·

X. ADVERTISING.     Recognizing` the value of advertising   and   the importance of standardizing advertising to maximize goodwill in the Southern Hospitality Licensed Marks, enhance general consumer awareness of Southern Hospitality Restaurants, and promote the Franchised Business, Franchisee agrees as follows:

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A.   LocalAdvertising.

1. Starting with the Opening Date and continuing for the remainder of the Term, Franchisee shall spend, without offset, credit or deduction of any nature, an amount equal to 1% of Franchisee's Gross Sales each Calendar Month on advertising and promotion in Franchisee's market to publicize the Franchised Business ("Local Advertising Expenditure"). Franchisee shall substantiate its Local Advertising expenditures upon request using Company's forms.

a.If at the end of any given Calendar Year, Franchisee has not spent in the aggregate a total of 1% of Franchisee's Gross Sales for the Calendar Year on Local Advertising  Expenditures, then Franchisee shall promptly pay the difference, plus an amount equal to 25% of the difference, to Company, which· funds shall be deposited into the Promotional Fund. Amounts spent on grand opening advertising shall not be counted toward satisfaction of the Local Advertising Expenditure requirement.

b.Company shall credit Franchisee's payments for approved electronic and print directory listings towards the Local Advertising Expenditure. However, amounts that Franchisee spends on grand opening advertising or pays as Promotional Fund Fees shall not be credited toward the Local Advertising Expenditure.

2. Franchisee shall comply with the written guidelines for Local Advertising set forth in the Confidential Manual. Franchisee understands that Company's written guidelines for Local Advertising may include  (without limitation) the requirement that Local Advertising contain notices of Company's website domain name or similar information indicating the availability of Southern Hospitality Restaurant franchises from Company in the manner that Company designates. All Local Advertising must be clear, factual and not misleading and conform to both the highest standards of ethical advertising and marketing and Company's written guidelines and other marketing policies that Company prescribes from time to time.

3.Franchisee shall not use, disseminate, broadcast or publish any Local Advertising without first obtaining Company's written approval of the copy, proposed media, method of distribution and marketing plan for the proposed Local Advertising. To apply for Company's approval of a proposed Local Advertising, Franchisee shall submit a true and correct copy, sample or transcript of the proposed Local Advertising, together with a written business plan which explains the proposed media plan, promotional event or other intended use of the proposed Local Advertising. Company shall have 20 days from the date of receipt in which to approve or disapprove of the submitted materials. If written approval is not received by the end of 20 days, Company shall be deemed to have rejected the proposed Local Advertising. If written approval is given on or before the end of 20 days, Franchisee may use the proposed Local Advertising, but only in the exact form submitted to Company.

4.Franchisee shall have the right to  determine the prices at which Franchisee sells all authorized goods and services. Submission of a proposed Local Advertising to Company for approval shall not be for purposes of allowing Company to approve Franchisee's prices, over which Company shall have no control. At Company's request, Franchisee shall display in the Franchise Location any. promotional  materials related to any Company chain-wide advertising campaigns  or advertising the availability of franchises; provided, however, that nothing herein shall require Franchisee to participate in any price-point campaign promoted by Company, it being understood that Franchisee shall at all times be free to establish its own prices.

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5.At a minimum, Franchisee shall maintain a white page listing for the Franchised Business in the form approved by Company, in one or more print and/or online telephone directories which Company designates, the cost of which shall be credited to the minimum Local Advertising Expenditure for the Calendar Month in which payment is made. All telephone directory advertising that Franchisee chooses to engage in shall be considered Local Advertising subject to Company's prior approval, but only the cost of the designated electronic directory listings shall be credited to the minimum Local Advertising  Expenditure.

6.At Franchisee's expense, Franchisee shall immediately remove  from circulation and cease using any previously approved Local Advertising if Company determines, in its sole  discretion, that continued circulation or use may, or will, damage the integrity or reputation of Southern Hospitality Licensed Marks, is otherwise necessary to protect the goodwill of Southern Hospitality System and Company's and Company's Affiliates' reasonable business interests, or otherwise violates this Agreement.

B.    SouthernHospitalityPromotionalFund.

1.Company may develop the Southern Hospitality Promotional Fund ("Promotional Fund") for the purpose of underwriting expenses associated with the creation, development and publication of advertising and promotional programs designed  to enhance consumer awareness and identity of the Southern Hospitality Licensed Marks and the Southern Hospitality Restaurants generally for the benefit of all Southern Hospitality Restaurants. If the Promotional Fund is formed, Company will maintain the Promotional Fund in a separate bank account segregated from the Company's other funds. Franchisee understands and agrees that the Promotional Fund is not a trust and Company does. not owe Franchisee a fiduciary duty based on Company's authority to administer the Promotional Fund or for any other reason.

2.Franchisee shall pay to Company, without  offset, credit or deduction of any nature, a Promotional Fund Fee at a rate equal to 1%of Franchisee's Gross Sales.

3.     Company shall deposit the Promotional Fund Fee into the Promotional Fund, which shall be maintained in a separate bank account segregated from the Company's other funds. Company shall use the Promotional Fund to pay  costs to maintain, administer, create and prepare advertising, marketing and public relations content and programs and conduct market research. Company will not be restricted with respect to what, where and how the Promotional Fund will be applied for these purposes. Company will retain complete sole discretion over the form, content, time, location, market and choice of media and markets for all advertising and promotion paid for from the Promotional Fund proceeds. Without limiting the scope of Company's general authority and sole discretion, Company may use the Promotional Fund to pay for the cost to (i) create, prepare and produce creative materials in all formats, media and applications including, without  limitation,  point of  sale materials, advertising slicks and copy, promotional graphics, brochures, mailers, music in CD and other media formats, artwork for display in Southern Hospitality Restaurants,· and authorized gift cards; (ii) create, prepare and produce Collateral Logo Merchandise; (iii) administer local, regional and national advertising programs, including buying media -space or time, outdoor advertising art and space, direct mail lists, and electronic listings in print and  electronic  directories;  (iv) maintain Company's World Wide Web site; (v) employ advertising, public relations and media buying agencies; (vi) support public relations, market and consumer research; and (vii) pay expenses directly associated with  maintaining and administering the Promotional Fund, including, without limitation, rent and salaries in proportion to time devoted to Promotional Fund matters, the cost to prepare annual accountings, expenses  to  collect  Promotional Fund Fees from delinquent franchisees, and the cost of conducting the Annual Meeting ifCompany elects to hold one.

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4.Company makes no representation that any amount of the Promotional Fund will be spent in any given geographic region or area, that monies will be spent on advertising or promotion which is national in scope, or that monies will be spent in Franchisee's market area in proportion to Franchisee's contributions to the Promotional Fund.

5.Company may (i) collect rebates, credits or other  payments  from suppliers based on purchases or sales by Franchisee, and (ii) condition its approval  of  a supplier on the supplier's willingness to agree to make such payments to Company or Company's Affiliates on account of Franchisee's purchases. Company shall have sole discretion to refund the supplier payments to Franchisee, contribute the supplier payments to the Promotional Fund, or retain the supplier payments for Company's own use, regardless of any designation given to the payments by the supplier. If Company elects to contribute a supplier payment to the Promotional Fund, the contribution shall not reduce Franchisee's obligation for Promotional Fund Fees.

6.As long as Franchisee is not in default under this Agreement, Company shall make marketing, advertising and promotional formats and sample materials created by the Promotional Fund available to Franchisee with, or without, additional reasonable charge, in Company's sole discretion, on the same terms which Company offers other Southern Hospitality Restaurant owners and franchisees. Franchisee shall be solely responsible for all costs to reproduce the formats and materials for its own use and distribution. In connection with reproduction and use of formats and materials created by the Promotional Fund, Franchisee shall observe Company's requirements with respect to protecting Company's rights in the Southern Hospitality Intellectual Property.

7.Company shall prepare an annual accounting of the Promotional Fund, and will furnish a copy of it to Franchisee upon request. While Company will attempt to expend Promotional Fund collections on a current basis,  it may recover over-expenditures from subsequent years and may carry forward under-expenditures. Company may reimburse itself for internal expenses that it and its Affiliate incur directly associated with maintaining and administering the Promotional Fund including, without limitation, expenses to collect contributions and general operating expenses (such as for rent and salaries in proportion to time devoted to Promotional Fund matters) and for attorneys fees and other costs related to claims by, or against, the Promotional Fund.

8.Company may, but is not obligated to, loan money to the Promotional Fund in the event desired expenditures for any Accounting Period exceed the balance in the Promotional Fund. Any funds loaned to the Promotional Fund will be repayable upon demand when funds are available and bear interest at no more than two (2) points over the prime lending rate of Bank of America, its successor, or, if no longer in operation, another national banking institution with home office in the United States.

9.Although Company intends the Promotional Fund to be of perpetual duration, Company reserves the right to terminate the Promotional Fund at any time. If there is a balance in the Promotional Fund after payment of final expenses when Company terminates the Promotional Fund, Company shall refund part of the balance to all Southern Hospitality Restaurant owners and franchisees who paid Promotional Fund Fees for the Accounti ng Period before Company announced the Promotional Fund's termination in proportion to the amount of each operator's payment. Company shall determine the allocation of any refund in its sole discretion. Company may reinstate the Promotional Fund on the terms and conditions stated in this Agreement effective upon no less than 30 days written notice to Franchisee.

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10.For each Southern Hospitality Restaurant that Company or Company's Affiliates own, Company or Company's Affiliates shall contribute to the Promotional Fund on the terms and in an amount equal to the then-current rate of contribution set forth in Company's then-current Disclosure Document for the sale of new franchisees. During any time when Company does not have a current Disclosure Document and administers the Promotional Fund, Company shall make contributions to the Promotional Fund on the terms and at the rate in Company's last Disclosure Document.

XI.  PAYMENTS.

A.InitialFranchise Fee.In consideration of the franchise and license awarded to Franchisee pursuant to this Agreement, Franchisee shall pay to Company in full upon execution of this Agreement an initial franchise fee (the "Initial Franchise Fee") of $50,000,less any credit for  Development Fees paid by Franchisee under the terms of any Area   Development Agreement entered into by parties before, or simultaneously with, this Agreement. The Initial Franchise Fee shall be fully earned when paid and no portion of it is  refundable under any circumstance.

B.RoyaltyFee.In consideration of the franchise and license awarded to Franchisee, Franchisee shall pay to Company, beginning on the Opening Date and for the remainder of the Term, without offset, credit or deduction. of any nature, a Royalty Fee equal to five percent (5%) of Gross Sales. The Royalty Fee shall be due and payable monthly for the Accounting Period specified in the Confidential Manual based upon the Franchised Business' aggregate Gross Sales during the specified Accounting Period just ended, or on amore frequently schedule as Company may direct upon not less than 10days prior written notice. Franchisee shall pay the Royalty Fee by automatic bank debit in accordance with Company's current electronic funds transfer  procedures described in this Agreement  and the Confidential Manual.

C.PromotionalFundFee.Beginning on the Opening Date and for the remainder of the Term, Franchisee shall pay to Company, without offset, credit or deduction of any nature, the Promotional Fund Fee described in this Agreement at the same time, for the same period and in the same manner as the Royalty Fee.

D.NewStore Opening ModuleFee. In connection with the New Store Opening module of the training program to be provided by Company, Franchisee shall pay to Company, at least 1Odays prior to the commencement  of the New Store Opening module,  the sum of $10,000. In addition, within 15Calendar Days after invoice from Company, Franchisee shall pay to Company the actual travel and lodging expenses incurred by Company in connection with sending its employees to provide the New Store Opening module.

E.LateOpening.Upon written notice from Company, before the Opening Date, Company may require Franchisee to pay weekly Royalty Fees and Promotional Fund Fees in the amounts of $2,900and $480respectively beginning on the earlier of either (i) one year from the Effective Date of this Agreement, or (ii)after the completion of 12weeks from the date that Franchisee takes possession of the Franchise Location, unless the delay in construction or the opening of the Franchised Business is due to an event of Force Majeure.

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F.LatePayment.If Franchisee fails to pay any amount due to Company under this Agreement by the date payment is due, Franchisee shall additionally be obligated to pay, as a late charge, the sum of (i) $250, and (ii) the product of the total amount past due multiplied by 1.5% per Calendar Month (but not to exceed the maximum legal rate of interest then permitted under Applicabl e Law) calculated starting on the date payment was due and continuing until the entire sum and late charge is paid in full. Franchisee understands and agrees that the late charges do not constitute an agreement by Company to accept any payment after the date payment is due or a commitment by Company to extend credit to, or otherwise finance, the Franchised Business, and that Franchisee's failure to pay all amounts when due shall constitute grounds for termination of this Agreement notwithstanding Franchisee's obligation to pay a late charge.

G.Application of Fees. Notwithstanding any designation  given to a payment  by Franchisee, Company shall have the sole discretion to apply any payments from Franchisee to any past due indebtedness owed to Company  or Company's Affiliates in the amounts and  in such order as Company shall determine.

H.Gross Receipts or EquivalentTaxes. Franchisee shall  pay to Company  the amount of any State or local sales, use, gross receipts, or similar tax that Company may  be required to pay on  payments which  Franchisee  makes to  Company  under this  Agreement, regardless of whether the State or local tax is imposed directly on Company, is required to be withheld by Franchisee from amounts due to Company under this Agreement,  or is otherwise required to be  collected  by  Franchisee  from  Company.  Franchisee's  obligation under this Section shall not be reduced or offset by any type of claim, credit or deduction of any kind. This provision shall not apply to income taxes or comparable taxes  measured by income to which Company may be subject.

XIII.  ACCOUNTING AND RECORDS.

A.Maintenanceof Business Records.During the Term, Franchisee shall maintain full,  complete  and accurate business records in accordance with the standards  stated in the Confidential Manual or otherwise prescribed by Company in writing. Franchisee  shall keep all business records and required business equipment and business software systems together at the  place  where  notices  to  Franchisee  are  required  to  be  sent,· unless Company grants Franchisee permission to keep its business records elsewhere. All  business records that this Agreement requires Franchisee to maintain shall be retained by Franchisee for a minimum of 7 years during, and following, the expiration, termination, or  Franchisee's  assignment,  of this Agreement.

B.      Reports.

1.After the Opening Date,  Franchisee shall submit to Company financial and operational reports and information as Company may require to (i) provide Franchisee with consultation and advice in accordance with this  Agreement;  (ii) monitor  Franchisee's compliance with the obligations to pay fees on actual Gross Sales of the Franchised Business; (iii)monitor performance under this Agreement generally and Franchisee's purchases, revenue, operating costs, expenses and profitability; (iv) develop chain-wide statistics; (v) develop new operating procedures; (vi) develop new Proprietary Products, remove unsuccessful authorized products, including unsuccessful Proprietary Products, and improve and enhance Proprietary Products; and (vii) implement changes in Southern Hospitality System to respond to competitive and  marketplace  changes.  Without  limiting the types  of  reports that  Company  may  require, Franchisee shall prepare and submit the following financial reports in accordance with the accounting, recordkeeping and bookkeeping procedures and in the format prescribed in the Confidential  Manual:

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a.Franchisee shall report Franchisee's Gross Sales to Company daily following the close of business following the procedures in the Confidential Manual. Additionally, Franchisee shall provide a summary report of actual Gross Sales covering the same period and submitted with payment of Royalty Fees and Promotional Fund Fees.

b.Within 1Odays after the end of each Accounting Period following the Opening Date, Franchisee shall submit a profit and loss statement and balance sheet showing the results of operation during the Accounting Period just ended and cumulative information for the Calendar Year-to-date, together with such additional information as Company may request.

c.On or before February 15 of each Calendar Year during the Term, a profit and loss statement and balance sheet as of the last day of the Calendar Year.

2.Nothing herein shall prevent Company from electronically polling Franchisee's point of sale cash collection system and other financial records daily,  or more frequently, by electronic or other remote means and Franchisee hereby grants Company authority to do so. Franchisee shall observe the mandatory requirements set forth in the Manual to enable Company's continuous remote access to Franchisee's bank and operating records.

3.Franchisee shall promptly comply with Company's requests for additional information. This obligation includes, without limitation, (i) supplying Company  with  an exact copy of all sales and income tax returns relating to the Franchised Business at the time Franchisee files them with governmental authorities or within 10 days after Company requests a copy, and (ii)complying with Company's inventory control procedures to enable Company to evaluate food and beverage costs and other operating costs.

4.All reports submitted to Company pursuant to this Agreement shall be executed by Franchisee or a duly authorized representative of Franchisee, certifying that the information is true and correct and that no material fact has been omitted which is necessary in order to make the information disclosed not misleading.

C.Recording of Transactions. Franchisee shall track and record all sales and transactions with customers of the Franchised Business utilizing the computer and point-of-sale cash control systems prescribed by Company in the Confidential Manual. Franchisee shall utilize designated non-proprietary and proprietary software programs to record business activities, sales and inventories and prepare operating and financial reports and records in accordance with the requirements of the Confidential Manual. All of the foregoing equipment and software shall be purchased or licensed and maintained by Franchisee at its sole expense and shall at all times conform to Company's specifications, which Company may modify in its sole discretion from time to time. If Company requires Franchisee to use proprietary software in operating the Franchised Business, Franchisee shall execute Company's form of separate software license agreement within 1O days after its delivery by Company.

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D.       AuditRights.

1.Company and its representatives shall have full access to examine, audit and copy Franchisee's business records relating to ·the Franchised Business, including Franchisee's federal and state income tax returns and sales tax returns, bank statements (including deposit slips and canceled checks), data stored on Franchisee's computer terminal, point-of-sale systems or on disk, and any other documents and information that Company reasonably requests in order to verify Gross Sales and the other business activities of the Franchised Business required to be reported to Company.

2.Company may conduct its examination and audit  in  Franchisee's business office where the records are kept or request that copies of documents be made by Franchisee and sent to Company or to its representatives for examination and  audit  at  a location that Company specifies. Franchisee understands and agrees that Company or its representatives may also access Franchisee's business records kept on disk or stored on Franchisee's computers at any time, without notice, by  remote electronic means and shall cooperate with the examination by enabling electronic and remote connections.

3.Additionally, Company may, at its expense, have an audit made at any time of Franchisee's business records by an independent certified public accountant chosen by Company. Company may terminate this Agreement if Company discovers that Franchisee has reported false information about the Franchised Business to Company. If any examination or audit conducted by Company reveals an understatement in the Gross Sales or other information reported by Franchisee to Company, then Franchisee shall, within 10 days after notice from Company, pay to Company any additional Royalty Fees and Promotional Fund Fees which are owed, together with interest and late charges as provided in this Agreement. Additionally, Company may require that, until further notice from Company, all future reports and financial statements submitted by Franchisee pursuant to this Agreement be prepared by an independent certified public accountant, or such other independent accountant acceptable to Company.

4.     If Company discovers that Franchisee has underreported Gross Sales for the applicable Accounting Period by any amount, Franchisee shall also pay and reimburse Company for all expenses that Company incurs connected with Company's examination and audit, including, but not limited to, Company's accounting and legal fees and travel expenses. Additionally, if 2 or more audits or examinations of Franchisee's business records conducted within any 24 Calendar Month period disclose that Franchisee has underreported Gross Sales by an amount which is 2% or more of the actual Gross Sales for the Accounting Period in question, then the second understatement shall be conclusively presumed to have been intentional for purposes of this Agreement. In addition to the consequences identified in this Agreement arising because of the understatement, Company may terminate this Agreement upon discovery of the second understatement based upon Franchisee's intentional underreporting of Gross Sales.

E.       ElectronicPaymentSystems.

1.All required payments to Company and any of Company's Affiliates must be made through a designated payment system using pre-authorized transfers from Franchisee's designated operating account through the use of electronic fund transfers, or, if Company requests, by special checks or other equivalent payment system that Company designates in the Confidential Manual or otherwise in writing. Franchisee shall give its financial institution instructions in a form provided or approved by Company and obtain the financial institution's agreement to follow the instructions to effectuate the electronic payment system meeting Company's requirements. Without Company's prior written consent, the financial institution's agreement may not  be withdrawn, modified or cancelled. Franchisee must also execute any other documents or agreements relating to establishing or maintaining an electronic payment system as Company or the financial institution may reasonably request from time to time. Franchisee understands that Company may modify the electronic payment system at any time upon written notice and agrees to promptly conform to the changes at its sole expense, which may require changes to the financial institution's agreement.

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2.Franchisee shall deposit all revenue and income from the Franchised Business into the operating account accessed by the electronic payment system by no later than the close of business on the day after receipt. Franchisee shall maintain sufficient funds in the designated operating account to ensure full payment of payment of continuing Royalty Fees, Promotional Fund Fees, late charges, interest and all other obligations payable to Company, Company's Affiliates and third parties when due. In the event a payment cannot be made due to insufficient funds in Franchisee's operating account, Company may, in its sole discretion or election, declare a breach of this Agreement or require that Franchisee direct its financial institution to send Company a monthly or periodic statement showing all account activity at the same time that it sends such statements to Franchisee or give Company electronic access to Franchisee's account activity if the financial institution makes electronic access available to its account holders.

3. Franchisee understands and agrees that its failure to report Gross Sales for any Accounting Period is a material breach of this Agreement and may prevent Company from debiting Franchisee's operating account with the appropriate amount due to Company. If Franchisee fails to report Gross Sales on time, Franchisee hereby authorizes Company to debit its operating account on the date that payment is due by an amount equal to 120% of Franchisee's last payment of Royalty Fees and Promotional Fund Fees together with  late charges as permitted by this Agreement. Franchisee accepts that the amount which Company debits from Franchisee's operating account is non-refundable and Franchisee may not challenge the amount which Company debits at a later date even if Franchisee discovers an overpayment. However, if Company discovers that the amount which Company debits is less than the amount actually due to Company based on the  Franchised Business' actual Gross Sales for the relevant Accounting Period, Company may immediately debit Franchisee's operating account for the balance. Nothing in this Section is intended to excuse Franchisee's obligation to report Gross Sales for any Accounting Period in a timely and accurate manner or waive Company's right to terminate this Agreement  based upon Franchisee's material breach.

4. Franchisee shall bear all costs to establish and maintain the required electronic payment system meeting Company's requirements and all fees and charges resulting from insufficient funds being in Franchisee's bank accounts at the time funds are withdrawn to pay obligations owed to Company or Company's Affiliates. The duty to maintain an electronic payment system shall not change the date on which payments are due under this Agreement.

XIII.         STANDARDSOFQUALITYANDPERFORMANCE.

A.StrictandPunctualPerformance. Franchisee understands and agrees that its strict and punctual performance of all obligations set forth in this Agreement, the  Confidential Manual  or  otherwise  communicated to  Franchisee  in writing  is  a  condition  of  the  franchise granted to Franchisee. Without Company's  prior written consent,  Franchisee shall not offer for sale or  transfer at public  or  private  auction  any  of  the  individual  assets  of the  Franchised Business. Without limiting the scope of Franchisee's duties, Franchisee's failure to abide by Company's standards of quality and performance shall not only constitute a breach of this Agreement, but infringement of the Southern Hospitality Licensed Marks.

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B.      ProprietaryProducts.

1.      Company may, from time to time throughout the Term, in its sole discretion, require that Franchisee purchase, use, offer, sell and promote, and maintain in stock at the Franchise Location in quantities needed to meet reasonably anticipated consumer demand, certain proprietary food items, raw materials, equipment, furniture, signage and other consumable and non-consumable merchandise constituting Proprietary Products. Company shall not be obligated to reveal the specifications, formulas, recipes or supply arrangements of Proprietary Products, which information Franchisee understands and agrees constitutes Confidential Information. Franchisee understands and  agrees that Company may, in its discretion, as frequently as it deems necessary, change the identity, specifications, formulas, recipes, inventory requirements and designations, and add new products and delete existing products, from the items that it designates as Proprietary Products. Franchisee shall conform to all changes immediately upon written notice from Company unless Company's written notice specifies a later implementation date.

2.Franchisee shall purchase Proprietary Products only from Company's designated suppliers, which may include the Company or an Affiliate of Company. Franchisee understands and agrees that Company shall not be liable to Franchisee for delays or shortages in the supply of Proprietary Products or for any defect in the Proprietary Products purchased, and that Franchisee's sole remedy in any of the foregoing events shall be against the manufacturer or supplier of the Proprietary Products. Franchisee understands that the Company's intent to establish relationships with vendors of Proprietary Products is to offer the best products at the lowest price; that notwithstanding, Franchisee also understands and agrees that Company, and any Affiliate of Company, may receive a profit from the sale of Proprietary Products to Franchisee.

C.    Non-ProprietaryProducts:AlternativeSuppliers.

1.Company shall designate all Non-Proprietary Products which Franchisee may, or must, use, offer, sell or promote in operating the Franchised Business.

2.To the extent any Non-Proprietary Products constitute inventory sold to the public, or ingredients or raw materials used to prepare foods or beverages sold to the public, Franchisee shall maintain sufficient quantities of the Non-Proprietary Products in stock at the Franchise Location in order to meet reasonably anticipated consumer demand.

3.Franchisee shall purchase Non-Proprietary Products only from suppliers included on Company's then-current list of approved suppliers, which Company may revise in its discretion as frequently as it deems necessary. All changes in the specifications for Non­ Proprietary Products, or to the list of approved suppliers, shall be communicated to Franchisee by written supplements to the Manual or otherwise in writing. Franchisee shall not place a new order for any Non-Proprietary Products with a supplier after receiving written notice of changes in the Non-Proprietary Products' specifications or that Company's approval of the supplier has been withdrawn or revoked.

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4.If Franchisee desires to offer for sale or use at the Franchised Business any item which does not, at that time, meet Company's specifications for Non-Proprietary Products, or desires to purchase Non-Proprietary Products from a supplier not on Company's approved supplier list, Franchisee shall submit a written request to Company identifying the proposed item or supplier, together with (i) samples of the item for examination and/or testing so that Company may evaluate if the item meets its specifications and quality standards, and/or (ii)information supporting the proposed - supplier's financial capability, business reputation, delivery performance and credit rating. Company currently charges a testing fee to cover its direct costs to approve an alternative product, service or supplier. Franchisee's payment of the testing fee shall be a condition to Franchisor's review of such item or supplier not previously approved by Company. The testing fee is either (i) Company's actual cost of conducting the testing or (ii) $250, whichever is greater.

a.Company will notify Franchisee in writing within thirty (30) days after all requested information is received and inspection or testing is completed if it approves the proposed item and/or supplier. Company's failure to timely respond shall constitute its disapproval. Each supplier designated or approved by Company must comply with Company's usual and customary requirements regarding insurance, indemnification and non-disclosure. Company reserves the right to disapprove of any proposed supplier in its sole and ·absolute discretion.

b.Franchisee understands and agrees that it is generally advantageous to Southern Hospitality System to limit the number of suppliers of certain Non­ Proprietary Products in any given market area and that, among the factors Company may consider in deciding whether to approve a proposed supplier, is the effect its approval may have on the ability of Company and its franchisees to obtain the lowest prices and on the quality and uniformity of Non-Proprietary Products used or sold under the Licensed Marks.

c.At any time, Company may re-inspect an item or the facilities of an approved supplier and revoke its approval of a supplier or item if Company, in the exercise of reasonable business judgment, determines doing so is in the best interests of Company or Southern Hospitality System. Revocation shall be effective upon written notice to Franchisee. Following receipt of Company's notice, Franchisee shall not place any new orders for the item or with the supplier.                                                                  ·

d.Franchisee understands and agrees that Company's recommendation or approval of a supplier does not constitute a representation or warranty of the supplier's ability to meet Franchisee's purchasing requirements nor of the fitness or merchantability of the Non-Proprietary Products sold by the supplier. Franchisee understands and agrees that its sole remedy in the event of any shortages, delays or defects in the Non­ Proprietary Products purchased shall be against the manufacturer or supplier of  the Non­ Proprietary Products.

D.Purchasesfrom CompanyorCompany's Affiliates. From  time  to   time, Company or Company's Affiliates may be a designated supplier of specific Proprietary Products and Non-Proprietary Products, in which case the following terms shall apply:

 1.Franchisee understands and agrees that Company or any Affiliate of Company, as supplier, shall have sole discretion to establish and change prices and other terms of sale, shipment and delivery, which shall bestated on the invoice or purchase order form or in the Manual or by other means of communication; provided, however, the prices that Franchisee shall pay shall be the same as the prices charged to similarly situated franchisees.

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2.Neither Company nor Company's Affiliates shall be liable to Franchisee for delays or shortages in any Proprietary Products or Non-Proprietary Products that they elect to sell to Franchisee due to causes beyond their control.

3.At any time, Company or Company's Affiliates, as supplier, may discontinue the sale of any Proprietary Products or Non-Proprietary Products for any reason without notice.

4.Neither Company nor Company's Affiliates shall be obligated to fill or ship any orders to Franchisee if Franchisee is in breach of any obligation under this Agreement, or after the Effective Date of Termination or Expiration of this Agreement.

E.Changes tothe Southern Hospitalitv SystemGenerally.  Franchisee understands that Company may from time to time change the Proprietary Products, Non­ Proprietary Products, mandatory menu items, entertainment services and other mandatory features of the Southern Hospitality System, including (without limitation) the use and display of certain equipment, music, artwork and computer software. These changes may require Franchisee to make significant capital expenditures in amounts that Company cannot forecast. Company has no ability to identify with specificity the nature of these future changes or their expected cost and accepts the risk that changes may be imposed that will require expenditures in amounts unknown on the Effective Date. Franchisee agrees to adopt all material changes that Company's may impose during the Term in the specifications for mandatory features of the Southern Hospitality System at Franchisee's sole expense reasonably promptly after receiving written notice of the change.

F.Standards of Service.   Franchisee  shall. (i) offer  for  sale, and sell, only thespecific foods, beverages,  Proprietary  Products,  Non-Proprietary  Products,  Collateral  Logo Merchandise and other goods  and services designated by Company;  (ii) label and  identify all items offered for sale by the specific name designation given to them by Company; (iii) use only the equipment, supplies, utensils, materials, signs, menu boards, art work, music and packaging prescribed by Company or which conform to Company's current specifications and standards; (iv) adhere to Company's business operating methods and instructions for storing, handling, preparing, serving and delivering foods and beverages, Local Advertising, and reproducing the Southern Hospitality Licensed Marks; (v) adhere to Company's instructions regarding signs, awnings, lighting and public safety and security; (vi) utilize the specific point of sale cash collection system specified in the Confidential Manual or otherwise by Company in writing; (vii)conform to Company's music and artwork programs including playing the specific music selections designated by Company, offering music as Collateral Logo Merchandise, and displaying in the Franchised Location and offering for sale the artwork that Company specifies; and (viii) operate the Franchised Business in accordance with Company's inventory, restocking, pricing strategies, and customer service standards and specifications. All specifications shall be set forth in the Confidential Manual or otherwise communicated to Franchisee and may be revised by Company as frequently as Company deems necessary in its sole discretion to promote the Southern Hospitality System and respond to competitive and marketplace changes.

1.All foods, beverages, Proprietary Products, Non-Proprietary Products, Collateral Logo Merchandise and other goods and services sold by Franchisee shall be of the highest quality and sold only in containers and with packaging and other materials approved by Company. Franchisee shall not use or sell any foods or beverages that are outdated or unsafe for human consumption.

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2.Franchisee understands and agrees that (i) Company's authorized menu and menu formats may include, in Company's sole discretion, requirements concerning organization, graphics, use of brand names and other menu or product descriptions, illustrations and other design and content features; (ii) Company may vary the menu, menu format, descriptions and other designations depending on market size, geographic region, restaurant size and other factors in Company's sole discretion; and (iii) Company may implement changes in (among other things) the menu, menu formats, order taking and delivery systems, entertainment systems and services and authorize tests and special promotions of new foods, beverages, entertainment services and Collateral Logo Merchandise at selected Southern Hospitality Restaurants or within selected regions, all in Company's sole discretion. Company may, from time to time, authorize Franchisee to test new menu items, recipes, goods or other services and Franchisee agrees to cooperate in any test marketing programs in compliance with Company's guidelines without reimbursement or compensation of any kind.

3.     Franchisee shall, at its sole expense, conform to all changes implemented by Company to Company's standards of service immediately upon written notice from Company unless Company's written notice specifies a later implementation date. Company shall allow Franchisee a reasonable time to sell off its inventory of discontinued Collateral Logo Merchandise. Franchisee shall not offer for sale or sell any other kind of products, merchandise or services, or otherwise deviate from Company's current operating standards or specifications for services, products or merchandise, except with Company's prior written consent.

4.Franchisee shall conform to Company's prescribed inventory control procedures, including, without limitation, using prescribed proprietary systems to document inventory sold, remaining inventory levels and other information pertinent to inventory and restocking. Such information shall be conveyed to Company electronically and, upon request, in writing.

5.Franchisee shall operate the Franchised Business on all of the days and during the hours prescribed in the Confidential Manual, unless Company's prior written approval of different days or hours is obtained or unless prohibited by the Lease. Before the Opening Date, Franchisee shall advise Company of the Franchised Business' operating hours and promptly notify Company of any changes in its operating hours required by the Lease. Franchisee shall prominently disclose its operating hours to the public in the manner required by the Confidential Manual, and shall be open and fully prepared to· conduct business during all posted operating hours.

6.Franchisee shall not install or maintain on the Franchise Location any newspaper racks, pay-to-play video games, ATM machines, juke boxes, other  gaming machines, vending machines rides or other similar devices. Franchisee shall conform to Company's requirements for music, artwork and other visual displays in the Franchised Business. Franchisee shall not display any "for-sale" signs or other words indicating or implying that the Franchise Business is for sale or that Franchisee is seeking or desires any form or type of Event of Transfer.

7.Franchisee shall forbid customers of the Franchised Business to smoke within the Franchise Location regardless of whether local law permits smoking in restaurants. Franchisee  shall  post conspicuous  notices  in the format  which  Company  requires  informing customers of the smoking ban and actively enforce the smoking ban.

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8.Franchisee shall, at its sole expense, continuously maintain (i) an active e-mail account and e-mail address with an established internet service provider, keep Company informed of its current e-mail address and manage its e-mail account so that it does not become full or otherwise incapable of accepting new messages, and (ii) an electronic data exchange service designated by Company to enable Company to remotely retrieve sales, inventory and other operating data for the Franchised Business as frequently as Company deems necessary. Franchisee, on behalf of itself and, as applicable, its directors, officers, managers, employees, consultants, representatives and agents, hereby waives any claim that Company's retrieval of data from Franchisee's electronic records violates any person's rights of privacy.

9.As and when requested by Company, Franchisee shall cooperate with Company's reasonable requests to allow Company to conduct training of new franchisees in the Franchise Location so that they can experience a live, working environment without compensation from Company as long as the training does not interfere with Franchisee's operations or the experience of Franchisee's customers.

10.If Company develops a catering and delivery program and requires that all Southern Hospitality Restaurants offer delivery and off-premises catering services, Company shall specify in the Confidential Manual the type of delivery vehicle that Franchisee must use and the standards of service. Company may confine Franchisee's delivery and off-premises catering services to locations within Franchisee's Protected Area.

11.     Reasonably promptly following Company's request, Franchisee shall install and thereafter maintain, at its own expense, the specific network camera monitoring system that Company specifies giving Company remote monitoring access at any time  to observe activities from different vantage points at the Franchise Location.

G.           OperatingExpenses.Franchisee shall pay all of the operating expenses of the Franchised Business in a timely manner and understands and agrees that its failure to do so could materially harm the reputation of Southern Hospitality Licensed Marks and the ability of Company and other franchisees to obtain the same favorable purchase, lease or finance terms. If Franchisee has a bona fide dispute with any supplier or vendor which Franchisee believes justifies non-payment or partial payment, Franchisee must promptly notify the supplier or vendor of the particulars of its claim and diligently pursue res9lution of the claim or prosecution of appropriate legal action. Any trade debt which remains unpaid for more than 30 days after the date it is due shall constitute a breach of this Agreement unless, before the end of the 30-day period (i) Franchisee  and the  supplier  or vendor  agree to  alternative  payment  terms;  or (ii) Franchisee initiates appropriate legal action to contest the trade debt. Company shall have no liability for Franchisee's debts or obligations to third parties.

H.         FranchiseLocationandTangibleProperty.

1.Franchisee shall, at its sole expense, maintain the condition and appearance of the Franchise Location and all tangible property used to operate the Franchised Business in the highest degree of cleanliness, orderliness and repair, consistent with the standards, specifications and requirements of the Southern Hospitality System and as Company may from time to time direct. Franchisee shall promptly replace any tangible property used to operate  the  Franchised  Business  which  becomes  worn,  damaged  and  non-repairable,  or mechanically impaired to the extent that it no longer adequately performs the function for which it was originally intended. All replacement items shall be of the same type, model and quality then specified in the Confidential Manual at the time replacement is required.

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2. Franchisee understands and agrees that its failure to repair or maintain the Franchise Location and the tangible property of the Franchised Business in accordance with Company's standards shall constitute a breach of this Agreement. Without waiving its right to terminate this Agreement for such reason, Company may notify Franchisee in writing specifying the action to be taken by Franchisee to correct the deficiency. If Franchisee fails or refuses to initiate a bona fide program to complete any required repair, maintenance or corrective work within 30 days after receiving Company's written notice, Company shall have the right,  in addition to all other remedies, to enter the Franchise Location and complete the required repair, maintenance or corrective work on Franchisee's behalf. Company shall have no liability to Franchisee for any work performed. If Company elects to perform required repair, maintenance or corrective work, or to replace non-conforming property. with conforming property, Franchisee shall be invoiced for labor and materials, plus a 25% service charge and an amount sufficient to reimburse Company for Company's actual direct costs to supervise, perform and inspect the work and procure any replacement items, including (without limitation) labor, materials, transportation, lodging, meals, contractor fees and other direct expenses, all of which shall be due and payable upon receipt of invoice.

3. Franchisee shall not alter or modify the Franchise Location or any of the tangible property used to operate the Franchised Business in a manner contrary to Company's then-current standards.

4.In addition to maintaining the Franchise Location and tangible property in continuous good condition and repair in accordance with this Agreement, Franchisee shall, at its sole expense, periodically make reasonable capital expenditures to remodel, modernize and redecorate the Franchise Location so that the Franchised Business at all times reflects the then­ current image of the Southern Hospitality System. All remodeling, modernization or redecoration of the Franchise Location must be done in accordance with the standards and specifications that Company prescribes, subject to Company's right to modify those standards and specifications reasonably in its sole discretion.                 ·

I.Compliance WithLaws. Franchisee shall at all times operate the  Franchised Business  in strict compliance with all Applicable Laws.  At Franchisee's sole expense, Franchisee shall secure and maintain in good standing all necessary licenses, permits, deposits and certificates required to operate the Franchised Business  lawfully,   including (without limitation) beer/wine or full liquor licenses, and shall provide Company with proof of compliance promptly following Company's request.

J.       CreditCards: GiftCard and OtherSystem-Wide MarketingProgram.  Franchisee shall honor all credit cards designated by Company and enter into and maintain, at Franchisee's sole expense, all necessary credit card agreements with the issuers of designated cards. Franchisee shall participate in, and abide by, the Southern Hospitality gift card program on terms set forth in the Confidential Manual, as Company may revise it from  time to time. Franchisee shall additionally participate in system-wide. marketing programs   identified by Company,  including, without  limitation,  customer  and marketing surveys,  direct marketing programs and designated e-commerce programs and conform to Company's  pricing strategies; provided, however, nothing herein shall limit Franchisee's right to establish the specific resale price of goods and services offered for sale at the Franchised Business.

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K.Complaints and Other Actions.  Franchisee shall promptly report to  Company any incidents involving personal injury by customers of the Franchised Business sustained at the Franchise Location. Franchisee shall submit to Company promptly upon receipt copies of all customer complaints and notices and communications received from any government agency relating to alleged violations of Applicable Laws and hereby authorizes the government agency to provide the same information directly to Company upon Company's  request. Additionally, Franchisee shall promptly notify Company of any written threat, or the actual commencement, of any action,  suit or  proceeding  against Franchisee,  any  person  who  is  a  Primary  Owner  or involving  the  Franchise  Location  or  the  business  assets  which might adversely affect  the operation or financial condition of the Franchised Business,  and provide Company with a copy of all relevant documents.

I.     Employees.

1.      Franchisee shall employ a sufficient number of competent employees and cause each of them to receive appropriate training to perform their job in accordance with the standards and specifications of the Southern Hospitality System as Company may require. All employees whose duties include customer service shall have sufficient literacy and fluency in the English language, in Company's judgment, to serve the public. All employees, while working in the Franchised Business, shall present a neat and clean appearance and wear the apparel that Company designates for their jobs, in the color, style and design then specified by Company.

2.At all times on and after the Opening Date, the Franchised Business must be under the direct supervision of at least one Certified Manager. Company may change the Certified Manager qualification  criteria at any time effective upon notice to Franchisee. Company's notice shall specify any additional training or other requirements applicable to new Certified Managers which an existing Certified Manager must complete in order to maintain his or her designation as a Certified Manager. Company shall allow each existing then-current Certified Manager no less than 90 days after the new criteria become effective in which to satisfy the additional training and other requirements without suffering a lapse in their designation as a Certified Manager. The award of a Certified Manager designation does not constitute a warranty, guaranty or endorsement by Company or its Affiliates of the person's skills, performance ability or business acumen. Neither Company nor its Affiliates shall have any responsibility for the operating results of the Franchised Business or the performance of Franchisee's employees or agents.

3.At all times on and after the Opening Date, in addition to the Certified Manager, Franchisee must employ at least 3 other individuals, each one of whom has successfully completed a different track of the Restaurant Management Module (i.e., General Manager or Assistant General Manager, Kitchen Manager and Kitchen Supervisor) or received equivalent training from Franchisee if Franchisee attains Training Store Certification before assuming the duties assigned to the particular job category.

4.       Upon request, Franchisee shall notify Company in writing of the names of its management-l evel employees and independent contractors so that Company can verify Franchisee's compliance with Company's minimum experience and training requirements.

5.If Franchisee owns 3 or more Southern Hospitality Restaurants, Company will require that Franchisee qualify a second Certified Manager and designate one of  its Certified Managers to perform the additional supervisory duties of a Multi-Unit Manager as set forth in the Confidential Manual and as Company may instruct from time to time.

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6.Franchisee is solely responsible for hiring, firing and establishing employment policies applicable to its employees, and understands and agrees that this Agreement does not impose any controls, or otherwise impinge, on Franchisee's sole discretion to make all employment-related decisions. Franchisee is solely responsible for the acts. and omissions of its employees and agents, including, without limitation, its Certified Manager.

7.Franchisee shall be strictly prohibited from soliciting any employees or Managers of either the Company or any other franchisee in the System.

XIV.COMPANY'SOPERATIONS ASSISTANCE.  In addition to obligations stated elsewhere in this Agreement, and provided Franchisee is not in default under the terms of this Agreement, Company shall provide the following services:

A.Continuing Consultationand  Advice.As   and   to   the   extent   required   in Company's   sole   discretion,   Company   shall   provide   regular   consultation   and.  advice   to Franchisee in response to  Franchisee's  inquiries about  specific  administrative  and  operating issues that Franchisee brings to Company's attention. Company shall have sole  discretion to determine the method for communicating the consultation or advice, which may differ from the methods used for other Southern Hospitality franchisees. For example and without  limitation, consultation and advice may be provided by telephone, in writing (in which case Company may furnish the written information electronically), on-site in person, or by other means. Additionally, upon Franchisee's request during the Term, Company may agree to  provide additional on-site instruction and assistance  after completion of the  New Store  Opening module of the Initial Training Program at a mutually-scheduled time, provided  Franchisee pays Company its then­ current fees set forth in the Confidential Manual and  reimburses Company  for  Company's reasonable  travel  expenses,  including,  without   limitation, expenses for air and ground transportation, lodging, meals, and miscellaneous travel-related personal charges.

B. Inspections. In addition to Company's audit rights described in this Agreement, Franchisee expressly authorizes Company and its representatives, at any reasonable time, and without prior notice to Franchisee, to enter the premises of the Franchise Location and conduct regular inspections of the Franchised Business and Franchisee's methods of  operation, including, without limitation, using digital and other monitoring services, including (without limitation) secret shoppers, to observe and conduct discussions with Franchisee's employees, observe customer interaction and services, and review Franchisee's books and records (including, without limitation, data stored on Franchisee's business computers and point-of-sale systems) in order to verify compliance with this Agreement and the Confidential Manual. In order to enable Company and its representatives to conduct inspections, Franchisee shall provide free of charge reasonable quantities of ingredients, foods, beverages, inventory, equipment, advertising and other samples for inspection and evaluation purposes to make certain that the items conform with Company's then-current standards.

1.At Franchisee's sole expense, Franchisee shall install the monitoring service that Company designates that enables Company to monitor and record activities in the Franchise Location and conduct inspections through remote access. Franchisee is solely responsible for all costs associated with the remote monitoring service including (without limitation) for the cost to purchase and install equipment.  ·

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2.Franchisee shall comply with Company's secret shopper program and pay Company's then-current continuing secret shopper. fee together with, and for the same period as, the Royalty Fee or for such other period as Company may designate.

3.Franchisee shall cooperate fully with Company's  inspections  and promptly cure all deviations from Company's standards, specifications  and  operating procedures of which Franchisee is notified either orally or in writing. Franchisee, on behalf of itself and, as applicable, its directors, officers, managers, employees, consultants, representatives, agents and customers hereby waives any claim that Company's inspections or recordings violate any person's rights of privacy and shall post appropriate notices in the Franchise Location to alert customers and others who enter the premises that their activities may be monitored.

C.AnnualMeeting.  In addition to additional training, Company may conduct an annual meeting at a location that Company selects (the "Annual Meeting") to address recently­ implemented changes in the Southern Hospitality System and other topics of common interest to franchisees, including, without limitation, new merchandising approaches, changes in Proprietary Products and Non-Proprietary Products, changes in the point-of-sale system, industry trends, customer relations, personnel administration, local advertising and promotional strategies, and competitive changes. If Company chooses to conduct an Annual Meeting, Company will determine the content, location and length of  the Annual Meeting; provided, however, the Annual Meeting shall not exceed three (3) days in any 12 Calendar Month period. Company may require the attendance of Franchisee's Certified Manager, Primary Owner or other designated personnel at one or more Annual Meetings, provided, however, Company shall not require that more than 2 persons designated by Company complete more than 3 days of continuing training during any 12 Calendar Month period. Company will not impose a fee to attend the Annual Meeting, but Franchisee must pay the transportation, lodging, personal expenses and salary for each employee who attends an Annual Meeting.

XV.  INSURANCE.

A.MinimumCoverage.  Before the Opening Date, Franchisee shall procure, at its own expense, and maintain in full force and effect during the Term policies of insurance in accordance with the requirements of this Agreement, including insurance policies meeting the following minimum requirements or the higher amounts applicable on the Effective Date:

TYPEOFINSURANCEANDREQUIRED COVERAGE	MINIMUMLIMITSOFCOVERAGE
Comprehensive general liability insurance including broad form contractual liability, products and completed operations liability, personal and advertising injury, motor vehicle liability, bodily and personal injury/death, and property damage liability	$4,000,000 (Aggregate) $2,000,000 (Per Occurrence)
Fire/Tenant Liability insuring against actions by the landlord due to tenant's negligence (any one fire)	$	150,000
Liquor Liability	$	2,000,000
Food Borne Illness Liability	$	100,000
Contamination Shutdown Liability	$	50,000
Employment Practices Liability Insurance with Franchisor Defense coverage	$	1,000,000

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TYPEOFINSURANCEANDREQUIRED COVERAGE	MINIMUMLIMITSOFCOVERAGE
All "Risks" or "Special" form general property insurance, including fire and extended coverage, vandalism and malicious mischief insurance covering the premises, any vehicle that you use in your business and their contents	Full replacement value
Non-owned automobile liability insurance	$	1,000,000
Workers' Compensation and Employer's Liability Insurance	As required by Applicable Law

1.Comprehensive general liability insurance shall insure Company and Franchisee against all claims, suits, obligations, liabilities and damages, including attorneys' fees, based upon or arising out of actual or alleged personal injuries or property  damage resulting from, or occurring in the course of, or otherwise relating to the Franchised Business or the activities of Franchisee's employees. Franchisee's duty to maintain comprehensive general liability insurance shall not be limited in any way by reason of any insurance which Company maintains.

2.All "Risks" or "Special" form general property insurance shall, without limitation, insure against the specific perils that Company identifies, including, without limitation, flood and earthquake coverage, that may apply to the area where the Franchised Business is located. Replacement value means the value of property meeting Company's current specifications at the time replacement is required.

3.Any person that Franchisee hires as a general contractor or to perform comparable services at the Franchise Location shall maintain general liability and builder's risk insurance with comprehensive automobile liability coverage and worker's compensation insurance in the minimum amount of $1,000,000 plus additional insurance that protects against damage to the premises and structure and other course of construction hazards.

4. Franchisee understands and agrees that it must obtain and maintain any additional types of insurance or higher coverage levels as may be required by the Lease, including coverage for all parties that the Lease requires be named as additional insureds.

B.   AdditionalInsuranceSpecifications.

1.Company shall specify the deductible limits for each required insurance policy and may, from time to time, increase the minimum insurance requirements, establish and change deductible limits, require that Franchisee procure and maintain additional forms of insurance, and otherwise modify the insurance requirements contained in this Agreement based upon inflation, general industry standards, Company's experience with claims, or for other commercially reasonable reasons. Franchisee shall comply with any change imposed by Company within 30 days after written notice from Company  and shall submit written proof of compliance to Company upon request.

2.Each insurance policy required by this Agreement shall be written by insurance companies of recognized responsibility meeting the standards stated in the Manual. Before the Opening Date, or the earlier date specified in the Lease, and then not less than annually thereafter  on or before January  1 of each Calendar  Year  after the  Opening Date, Franchisee shall submit to Company certificates of insurance showing compliance with Company's insurance requirements. Franchisee shall not begin any work or installation of equipment in the Franchise Location pursuant to Franchisee's Design Plans until Franchisee submits proof of its general contractor's insurance required by this Agreement. All certificates of insurance shall state that the policy will not be canceled or altered without at least 30 days prior written notice to Company.  Maintenance of required insurance shall not relieve Franchisee of liability under the indemnity provisions set forth in this Agreement.

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3.Company and any Affiliates that Company designates shall each be named as an additional insured on all required insurance. Franchisee shall additionally cause each policy of insurance required by this Agreement to include a waiver of subrogation, which shall provide that Franchisee, on the one hand, and Company, on the other hand, each releases and relieves the other, and each waives its entire right to recover damages, in contract, tort and otherwise, against the other for any loss or damage occurring to Franchisee's property arising out of or resulting from any of the perils required to be insured against under this Agreement. The effect of these releases and waivers shall not be limited by the amount of insurance carried by Franchisee or as otherwise required by this Agreement or by any deductible applicable thereto.

4.Should Franchisee not procure or maintain the insurance required by this Agreement, Company may, without waiving its right to declare a breach of this Agreement based on the default, procure the required insurance coverage at Franchisee's expense, although Company has no obligation to do so. Franchisee shall pay Company an amount equal to the premiums and related costs for the required insurance in full upon receipt of invoice, plus a 25% service charge and an amount sufficient to reimburse Company for its actual direct costs in obtaining the required insurance.

5.Franchisee understands and agrees that the minimum insurance requirements set forth in this Agreement do not constitute a representation or warranty by Company that the minimum coverage and specified types of insurance will be sufficient for the Franchised Business. Franchisee understands and agrees that it is solely responsible for determining if the Franchised Business requires higher coverage limits or other types of insurance protection.

XVI.  COVENANTS.

A.Competition.

1.During the Term, it shall bea breach of this Agreement for Franchisee, Franchisee's Affiliate or any Covered Person, directly or indirectly, to own (either beneficially or of record), engage in or render services to, whether as an investor, partner, lender, director, officer, manager (employee, consultant, representative or agent, any Competitive Business located anywhere in the world. This restriction shall not apply to any Covered Person after 24 Calendar Months from the date the Covered Person ceases to be an officer, director, shareholder, member, manager, trustee, owner, general partner, employee or otherwise associated in any capacity with Franchisee.

2.For 24 Calendar Months from the Effective Date of Termination or Expiration of this Agreement, or consummation of an Event of Transfer, whichever occurs first, it shall be a breach of this Agreement for Franchisee, Franchisee's Affiliate or any Covered Person, directly or indirectly, to own, engage in or render any services to, whether as an investor, partner, lender, director, officer, manager, employee, consultant, representative or agent, any Competitive Business within the Covered Area. This restriction shall not apply to any Covered Person after 24 Calendar Months from the date that the Covered Person ceases to be an officer, director, shareholder, member, manager, trustee, owner, general partner, employee or otherwise associated in any capacity with Franchisee.

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3.This Agreement does not prohibit Franchisee, Franchisee's Affiliate  or any Covered Person from owning 5% or less of the voting stock of a Competitive Business that is a Business Entity whose shares are publicly traded on a national or foreign stock exchange.'

4.The restrictions against competition do not apply to the rights expressly granted to Franchisee, Franchisee's Affiliate or any Covered Person under another Franchise Agreement entered into with Company granting the right to use the Southern Hospitality System or the Southern Hospitality Licensed Marks.

B.Non-Interference.  Franchisee shall not, · directly or indirectly, for itself or  on behalf of any other person: (i) divert, or attempt to divert, any business or customer of the Franchised Business to any competitor  by direct or indirect inducement or perform any act which directly or indirectly could, or may, injure or prejudice the goodwill and reputation of the Southern Hospitality Licensed Marks or the Southern Hospitality System; or {ii) employ or seek to employ any person who is at that time employed by Company, Company's Affiliates or another franchisee of Company or otherwise directly or indirectly induce or seek to induce the person to leave his or her employment.

C.WrittenAgreement. As a condition of this Agreement, Franchisee shall cause each Covered Person to execute Company's form of Confidentiality, Non-Disclosure and Non­ Competition Agreement with Company containing restrictions substantively identical to the provisions of this Section.

D.Survival. The covenants stated in this Article shall survive termination, expiration or the transfer of this Agreement.

E.SavingsClause. The parties acknowledge that the covenants set forth in this Article are independent of the other covenants and provisions of this Agreement. If any provision in this Article is void or unenforceable under New York law, but would be enforceable as written or as modified under the laws of the state in which the Franchise Location is located (the "Local Laws"), the parties agree that the Local Laws shall govern any dispute concerning or involving the construction, interpretation, validity or enforcement of the provisions of this Agreement with respect to the subjects covered in this Article, but only with respect to those subjects. Franchisee expressly authorizes Company to conform the scope of any void or unenforceable covenant in order to conform it to the LocI Laws. Franchisee expressly agrees, on behalf of itself and each Covered Person, to be bound by any modified covenant conforming to the Local Laws as if originally stated in this Agreement.

F.Enforcement. Franchisee understands and agrees that Company will suffer irreparable injury not capable of precise measurement in money damages if Franchisee or any Covered Person breaches the covenants set forth in this Article. Accordingly,  if a breach occurs or is threatened, Company shall be entitled to Provisional Remedies without the requirement that Company post bond or comparable security as being reasonable and necessary for the protection of Company's goodwill in the Southern Hospitality Licensed Marks or the Southern Hospitality System.

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XVII.      DEFAULTANDTERMINATION.

A.   TerminationbyFranchisee.

1.Franchisee may terminate this Agreement by written notice to Company for any reason constituting good cause, provided (i)Franchisee is not in default of any obligation under this Agreement when it serves written notice of default on Company, and (ii) termination is accomplished in accordance with the requirements of this Agreement. Any attempt by Franchisee to terminate this agreement except on the grounds, or according to the procedures, stated in this Agreement shall be void.

2. Good cause means that Company has committed a material and substantial breach of this Agreement that it has not cured within the period allowed by this Agreement. Franchisee's written notice must specify with particularity the matters cited to be in default and provide Company with a minimum of 30 days in which to cure the default. Additional time to cure must be provided as is reasonable under the circumstances if a default cannot reasonably be cured within the minimum 30-day period. Franchisee's written notice of termination of this Agreement for good cause shall not entitle it to a refund of any monies that Franchisee has paid to Company or Company's Affiliates pursuant to this Agreement.

B.   TerminationByCompanyWithout OpportunitytoCure.

1.Company may terminate this Agreement, in its sole discretion and election, effective immediately upon Company's delivery of written notice of termination to Franchisee based upon the occurrence of any of the following events which shall be specified in Company's written notice, and Franchisee shall have no opportunity to cure a termination based on any of the following events:

a.Should Franchisee fail to· use  its best efforts to open the Franchised Business to the public on or before the Opening Date as specified in this Agreement taking into account delays due to events beyond Franchisee's reasonable control;

b.Should Franchisee fail or refuse to pay, on or before the date payment is due, any fees or other amounts payable to Company, Company's Affiliates or the Promotional Fund, and should the default continue for a period of 10days after written notice of default is given by Company to Franchisee;

c.Should Franchisee fail or refuse to submit any report or financial statement on or before the date due, and should the default continue for a period of 1Odays after written notice of default is given by Company to Franchisee;

d.Should any person who is required by this Agreement to personally guaranty Franchisee's obligations to Company fail or refuse to execute and delivery Company's form of personal guaranty or deliver the financial statements required by this Agreement for a period of 10days after written notice of default is given by Company to Franchisee;

e.Should Franchisee lose the right to possession of the Franchise Location due to Franchisee's breach of the Lease which either cannot be cured or which Franchisee has failed to cure within the allowed time period;

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f.Should Franchisee commit an event of default under any other agreement by and between Franchisee and Company pertaining to the Franchised Business and franchise awarded by this Agreement which, by its terms, cannot be cured or which Franchisee fails to cure within the allowed time period;

g.Should Franchisee make any general arrangement or assignment for the benefit of creditors or become a debtor as that term is defined in 11 U.S.C. §1101 or any successor statute, unless, in the case where a petition is filed against Franchisee, Franchisee obtains an order dismissing the proceeding within 60 days after the petition is filed; or should a trustee or receiver be appointed to take possession of all, or substantially all, of the assets of the Franchised Business, unless possession of the assets  is restored to Franchisee within 30 days following the appointment; or should all, or substantially all, of the assets of the Franchised Business or the franchise rights be subject to an order of attachment, execution or other judici al seizure, unless the order or seizure is discharged within 30 days following issuance;

h.Should Franchisee, or any duly authorized representative of Franchisee, make a material misrepresentation or omission in obtaining the franchise rights granted hereunder, or should Franchisee, or any officer, director, shareholder, member, manager, or general partner of Franchisee, be convicted of or plead no contest to a felony charge or engage in any conduct or practice that, in Company's reasonable opinion, reflects unfavorably upon or is detrimental or harmful to the  good name, goodwill or reputation of Company or to the business, reputation or goodwill of the Southern Hospitality System or the Southern Hospitality Licensed Marks;

i.Should Franchisee fail to comply with the conditions governing the transfer of rights under this Agreement in connection with an Event of Transfer;

j.If Franchisee is a Business Entity, should an order be made or resolution passed for the winding-up or the liquidation of Franchisee or should Franchisee adopt or take any action for its dissolution or liquidation;

k.Should Franchisee have r:eceived from Company, during any consecutive 24-Calendar Month period, 3 or more notices of default whether or not the notices relate to the same or to different defaults and whether or not each default is timely cured by Franchisee;

I.Should Franchisee make any unauthorized use, publication, duplication or disclosure of any Confidential Information or any portion of the  Confidential Manual, or should any person required by this Agreement to execute a Confidentiality, Non­ Disclosure and Non-Competition Agreement with Company or Franchisee breach the Confidentiality, Non-Disclosure and Non-Competition Agreement;

m.  Should Franchisee abandon or fail or refuse to actively  operate the Franchised Business for any period such that Company may reasonably conclude that Franchisee does not intend to continue operating it, unless Franchisee  obtains  Company's written consent to close the Franchised Business for a specified period of time before Franchisee ceases regular activities. For purposes of this Section, the parties agree that Franchisee shall be deemed to  have abandoned the Franchised Business if,  during any 12 Calendar Month period during the Term, Franchisee is prohibited for any reason from selling the beer and wine selections that Company designates from the Franchise Location for more than 30 days because of a violation of Applicable Law;

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n.Should Franchisee materially misuse or  make  an  unauthorized use of any of the components of the Southern Hospitality System or commit any other act which does, or can reasonably be expected to, materially impair the goodwill or reputation associated with any aspect of the Southern Hospitality System;

o.Should Franchisee intentionally underreport Gross Sales under the criteria established in this Agreement; or

p.Should Franchisee fail to comply with any violation  of  federal, state or local law within 1O days after being notified of non-compliance.

q.Should Company make a reasonable determination that Franchisee's continued operation of the Franchised Business will result in imminent danger to public health or safety.

C.TerminationbyCompanyWithRighttoCure.

1.Should Franchisee breach, or refuse to fulfill or perform, any obligation arising under this Agreement not identified in Subsection -B above, or fail or refuse to adhere to any mandatory operating procedure, specification or standard prescribed by Company in the Confidential Manual or otherwise communicated to Franchisee, Company may terminate this Agreement, in its sole discretion and election, effective at the close of business 30 days after giving written notice of default to Franchisee which specifies the grounds of default, if Franchisee fails to cure the default cited in the notice by the end of the 30-day cure period. Company may indicate its decision to terminate by written notice given to Franchisee any time before, or after, the end of the 30-day cure period including in the original notice of default.

2. If a default cannot reasonably be cured within 30 days, Franchisee may apply to Company for additional time to complete the cure. The length of the additional cure period, if any, allowed by Company shall be stated in writing signed by Company. If Company grants an extension and if Franchisee does not complete the required cure within the extended cure period, termination of this Agreement shall be effective at the close of business on the last day of the extended cure period without further notice from Company.

D.    Effect of Terminationor Expiration. The  termination  or  expiration  of  this Agreement shall result in the concurrent, and automatic, termination of all agreements  between the parties pertaining to the Franchised Business or the franchise granted by this Agreement and shall also permit Company to enforce any Personal Guaranty of Franchisee's  obligations given to Company as required by this Agreement.  Notwithstanding the termination or expiration of  this  Agreement,  the  parties  agree  that  any  other  Franchise  Agreements  then  in  effect between the parties concerning other Southern  Hospitality  Restaurants owned  by Franchisee shall remain in full force and effect, unless the grounds which Company has  relied upon to terminate   this   Agreement   also   constitute   grounds   for   terminating  the   other Franchise Agreements and Company has satisfied  all  requirements  to  terminate the  other  Franchise Agreements.

E.ReasonsforTermination. In any proceeding in which the validity of termination of this Agreement is at issue, Company shall not be limited to the reasons set forth in any notice of termination or default given to Franchisee.                                   ·

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XVIII.   RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION.

A.Franchisee'sObligations.  On and after the  Effective  Date of Termination or Expiration of this Agreement, Franchisee must comply with the following duties:

1.Within 1Odays following the Effective Date of Termination or Expiration of this Agreement, Franchisee shall pay all fees and other amounts owed to Company, including, without limitation, late charges and interest on any late payments. Royalty Fees  and Promotional Fund Fees imposed pursuant to this Agreement shall continue to be due and payable (and late charges and interest thereon assessed) after the Effective Date of Termination or Expiration of this Agreement until the date that Franchisee completes all post­ termination obligations required by  this Agreement. When termination is based  upon Franchisee's default, Franchisee shall also pay to Company all damages, costs and expenses and reimburse Company for its reasonable fees to retain attorneys, accountants  or  other experts which it incurs to enforce its rights under this Agreement in the event of a default and/or termination whether or not mediation or judicial action is commenced. Franchisee's payments shall be accompanied by all reports required by Company regarding business transactions and the results of operations through the Effective Date of Termination or Expiration of this Agreement or until the date that Franchisee completes all post-termination or expiration obligations required by this Agreement, whichever occurs later.

2.Franchisee shall permanently cease using, in any manner whatsoever, all rights and property incorporated within or associated with the Southern Hospitality System in a manner that suggests or indicates that Franchisee is, or was, an authorized Southern Hospitality franchisee or continues to remain associated with the Southern Hospitality System. Franchisee shall cancel all Local Advertising and other promotional activities which associate Franchisee with the Southern Hospitality System. Franchisee shall cancel all fictitious or assumed name or equivalent registrations relating to its use of the Southern Hospitality Licensed Marks. Continued use by Franchisee of rights or other property incorporated within or associated with  the Southern Hospitality System shall constitute willful trademark infringement  and  unfair competition by Franchisee.

3.Franchisee shall cease using all telephone numbers and business directory listings used in operating the Franchised Business and take all steps necessary to remove all print and electronic telephone and other business directory listings that display any of the Southern Hospitality Licensed Marks. Franchisee shall furnish Company with evidence satisfactory to Company demonstrating Franchisee's compliance with this obligation within 1Odays after the Effective Date of Termination or Expiration of this Agreement. Company shall have the right to demand an assignment of the telephone numbers and listings, in which case Franchisee hereby consents to the assignment, without compensation, as of the Effective Date of Termination or Expiration.

4.Franchisee shall immediately cease using and, within 48 hours after the Effective Date of Termination or Expiration of this Agreement, deliver to Company all copies of the Confidential Manual and all other confidential or proprietary materials that Company has provided to Franchisee pursuant to this Agreement; including, without limitation, any proprietary software, and shall retain no copy or record of any of the foregoing. Franchisee shall immediately stop selling and using any Proprietary Products and shall resell its inventory of Proprietary Products in useable or salable condition to Company at Franchisee's actual cost. Franchisee shall disable or remove any proprietary software from its computers and retain no copy or record of the same.

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5.With respect to the Franchise LOC!3tion, Company may, pursuant to the Addendum to Lease, accept an assignment of the Lease, in which case, upon written notice from Company, Franchisee shall forthwith vacate the Franchise Location, leaving it in good condition and repair with all fixtures and equipment not capable of being removed without damage to the Franchise Location, or which the Lease forbids to be removed, left in good working order. Company shall give Franchisee written notice of its election to accept an assignment of the Lease within 10 days after the Effective Date of Termination or Expiration. Company's failure to timely notify Franchisee shall signify its decision not to accept an assignment of the Lease. If Company does not accept an assignment of the Lease, Franchisee shall, at its sole cost and expense, within twenty (20) days after the Effective Date of Termination or Expiration, remove all signs and other physical  and  structural  features  that readily identify the site as a Southern Hospitality Restaurant, in a manner acceptable to Company, so that the former Franchise Location no longer suggests or indicates a connection with the Southern Hospitality System. Company's right to accept an assignment of the Lease is independent of Company's.right to acquire the physical assets in the Franchise Location on the terms of this Agreement.

6.Franchisee shall execute and deliver a general release, in form satisfactory to Company, of any and all claims against Company and its officers, directors, shareholders, employees and agents.

7.Franchisee shall comply, and cause all Covered Persons to comply, with the covenants set forth in this Agreement regarding competition, non-interference and Confidential  Information.

8.Franchisee shall keep and maintain all business records pertaining to the business conducted at the Franchised Business for 7 years after the Effective Date of Termination or Expiration of this Agreement. During this period, Franchisee shall permit Company to inspect such business records as frequently as Company deems necessary.

B.Company's Rightto Purchase ProprietaryProductsandOther PhysicalAssetsoftheFranchisedBusiness.

1.Company shall have the right but not the obligation to purchase from Franchisee, and Franchisee shall sell to Company, all non-perishable Proprietary Products in resalable condition at Franchisee's actual depreciated cost.

2.Additionally, Company shall have the right, but not the obligation, to purchase all, or any, of Franchisee's physical assets relating to the Franchised Business that are not treated by the Lease as fixtures of the Franchise Location or that have not become part of the realty, at Franchisee's original cost less depreciation, based upon the depreciation schedule which Company or Company's Affiliates use for like or comparable property, less the remaining balance, if any, of any financing that Franchisee owes to third parties for which the physical asset is pledged as security. Company may exercise this option by giving Franchisee written notice within 10 days after the Effective Date of Termination or Expiration of this Agreement, specifying in the notice the specific physical assets that it desires to purchase. Within 1Odays following receipt of Company's written notice, Franchisee shall furnish Company with documentation substantiating the original cost of each item identified by Company and depreciation taken as reported by Franchisee in its federal and state income tax returns. Within 10 days following receipt of Franchisee's documentation, Company shall notify Franchisee of the  particular  assets  it  will  purchase  and  calculate the  purchase  price for  the  items  in accordance with this Section, and within 10 days after giving the notice, Company will pay Franchisee the purchase price, less permitted set-offs. Franchisee shall deliver possession of the Proprietary Products and physical assets to Company upon Company's payment of the net purchase price free and clear of all  liens and encumbrances not approved by Company in writing. Company's failure to serve written notice of its election within 1O days after the Effective Date of Termination or Expiration of this Agreement shall signify its decision not to purchase any remaining physical assets of Franchisee.

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3.With respect to the Proprietary Products and physical assets that Company purchases, Company shall have the absolute right to set off from the purchase price all sums then owed by Franchisee, Franchisee's Affiliates or the Promotional Fund to Company under this Agreement, including damages, costs and expenses and reasonable attorneys' fees in enforcing the default and termination. The right to set off shall not limit Company's remedies under this Agreement or Applicable Law.                           ·

C.SurvivalofObligations. All obligations of the parties that expressly, or by their nature, survive the Effective Date of Termination or Expiration of this Agreement shall continue in full force and effect subsequent to the Effective Date of Termination or Expiration of this Agreement until they are satisfied in full. Franchisee shall remain fully liable for any and all obligations of the Franchised Business, whether incurred before, or after, the Effective Date of Termination or Expiration of this Agreement, including, without limitation, obligations arising under this Agreement, the Lease, and all obligations owed to Company's Affiliates and other third parties including, without limitation, obligations for Proprietary Products, other inventory, services, equipment, supplies, materials, payments to independent contractors, salaries to employees, and taxes.

D.       Third Party Rights: Available Remedies. No person acting for the benefit of Franchisee's creditors or any receiver, trustee in bankruptcy, sheriff or any other officer of a court or other person in possession of Franchisee's assets or business shall have the right to assume Franchisee's obligations under this Agreement without Company's prior consent. Company's right to terminate this Agreement shall not be its exclusive remedy in the event of Franchisee's default, and Company shall be entitled, in its sole discretion and election, alternatively or cumulatively, to affirm this Agreement in the event of Franchisee's default and obtain damages arising from the default, injunctive relief to compel Franchisee to perform its obligations under this Agreement or to prevent Franchisee from breaching this Agreement, and any other remedy available under Applicable Law.

E.       LiquidatedDamages.Upon termination of this Agreement according to its terms and conditions, Franchisee agrees to pay to Franchisor within fifteen (15) days after the effective date of this Agreement's termination, in addition to the amounts owed hereunder, liquidated damages equal to  the average monthly Royalty Fees Franchisee paid during the twelve (12) months of operation preceding the effective date of termination multiplied  by (a) twenty-four (24) (being the number of months in two (2) full years), or (b) the number of months remaining in the Agreement had it not been terminated, whichever is higher.

The parties hereto acknowledge and agree that it would be impracticable to determine precisely the damages Franchisor would incur from this Agreement's termination and the loss of cash flow from Royalty Fees due to, among other things, the complications of determining what costs, if any, Franchisor might have saved and how much the Royalty Fees would have grown over what would have been this Agreement's remaining term. The parties hereto consider this liquidated damages provision to be a ·reasonable, good faith pre-estimate of those damages.

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The liquidated damages provision only covers Franchisor's damages from the loss of cash flow from the Royalty Fees. It does not cover any other damages, including damages to Franchisor's reputation with the public and landlords and damages arising from a violation of any provision of this Agreement other than the Royalty Fee section. Franchisee and each of its Owners agree that the liquidated damages provision does not give Franchisor an adequate remedy at law for any default under, or for the enforcement of, any provision of this Agreement other than the Royalty Fee section.

XIX.  ASSIGNMENTANDTRANSFER.

A.AssignmentbyCompany.Franchisee acknowledges that Company maintains a staff to manage and operate the Southern Hospitality System and that staff members can change from time to time. Franchisee represents that it has not  signed  this Agreement  in reliance on any shareholder, director, officer, or  employee remaining with  Company in that capacity. Company is free to transfer and assign all of its rights under this Agreement to any person or Business Entity, provided the assignee agrees in writing to assume Company's obligations under this Agreement. Upon such assignment and assumption, Company shall have no further obligation to Franchisee.

B.AssignmentbyFranchisee:InGeneral. Franchisee understands and agrees that the franchise rights awarded by this Agreement are personal and are awarded in reliance upon, among other considerations, the individual or collective character, skill, aptitude, attitude, experience, business ability and financial condition and capacity of Franchisee and, if Franchisee is a Business Entity, that of its officers, directors; shareholders, LLC managers and members, trustees, partners and guarantors

1.Without Company's prior written consent, Franchisee shall not, directly or indirectly, attempt or complete an Event of Transfer either voluntarily  or by operation of law except in accordance with this Agreement. Company agrees not to withhold its consent unreasonably if Franchisee satisfies the conditions applicable to a transfer identified in this Agreement. Any attempted or purported transfer which fails to comply with the requirements of this Agreement shall be null and void and shall constitute a material default of this Agreement.

2.Company's consent to an Event of Transfer is not a representation of the fairness of the terms of any contract between Franchisee and a transferee, a guarantee of the Franchised Business' or transferee's prospects for success, or a waiver of any claims that Company or Company's Affiliates may have against Franchisee or any personal guarantor.

C.   Company'sRightofFirstRefusal.

1.Except with respect to Qualified Transfers, if Franchisee, or the person to whom an offer is directed (the "Individual Transferor"), receives a bona fide written offer ("Third Party Offer'') to purchase or otherwise acquire an interest which will result in an  Event of Transfer, Franchisee or the Individual Transferor, shall, within 5 days after receiving the Third Party Offer and before accepting it, apply to Company in writing for Company's consent to the proposed transfer. Additionally, the following conditions shall apply:

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a.Franchisee, or the Individual Transferor, shall attach to its application for consent to the transfer a complete copy of the Third Party Offer together with (i) information relating to the transferee's experience and qualifications, (ii)a copy of the transferee's current financial statement, and (iii)any other information material to the Third Party Offer, transferee and proposed assignment or that Company requests.

b.Company or its nominee shall have the right, exercisable by written notice ("Notice of Exercise") given to Franchisee or the Individual Transferor, within 30 days following receipt of the Third Party Offer, all supporting information, and the application for consent, to notify Franchisee or the Individual Transferor that it will purchase or acquire the rights, assets, equity or interests proposed to be assigned on the same terms and conditions set forth in the Third Party Offer, except that Company may (i) substitute cash for any form of payment proposed in the offer discounted to present value based upon the rate of interest stated in the Third Party Offer, and (ii) deduct from the purchase price the amount of any commission or fee otherwise payable to any broker or agent in connection with the Third Party Offer and all amounts then due and owing from Franchisee to Company, Company's Affiliates or the Promotional Fund under this Agreement or otherwise. All assets so purchased shall be free and clear of liens. If any asset is pledged as security for financing that is then unpaid, Company may further deduct from the purchase price the remaining amount payable under the terms of financing.

c.The closing shall take place at Company's home office at a mutually agreed upon date and time, but not later than ninety (90)days following Company's receipt of the Third Party Offer, all supporting information, and the application for consent to transfer.

d.At the closing, Franchisee or the Individual Transferor shall deliver to Company the same documents, affidavits, warranties, indemnities and instruments as would have been delivered by Franchisee or the Individual Transferor to the transferee pursuant to the Third Party Offer. Additionally, Franchisee and the Individual Transferor shall deliver a general release, in form satisfactory to Company, of any and all claims against Company, Company's Affiliates and their respective officers, directors, shareholders, employees and agents.

e.All costs, fees, document taxes  and other expenses  incurred in connection with the transfer shall be allocated between Franchisee and Company in accordance with the terms of the Third Party Offer, and any costs not allocated shall be paid by Franchisee or the Individual Transferor.

D.   ConditionsofAssignmenttoThirdParty.

1.If Company does not exercise its right of first refusal, Franchisee may not complete the Event of Transfer without Company's prior written consent. An Event of Transfer, or attempt to complete an Event of Transfer, in violation of this provision is a material breach of this Agreement. The requirements of this Section do not apply to a Qualified Transfer. As a condition to Company's consent to an Event of Transfer, the following conditions must be satisfied:

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a.The transferee must submit a completed franchise application to Company, and meet Company's then-current qualifications for new Southern Hospitality franchisees, including qualifications pertaining to financial condition; credit rating, experience, moral character  and reputation.  Company's  evaluation of the transferee's  financial  condition shall take into account the transferee's obligations to Franchisee for payments arising out of the Event of Transfer. Neither the transferee nor any person in the transferee's organization that would be classified as a Covered Person may, directly or indirectly, own any interest in or perform services in any capacity for a Competitive Business in violation of the restrictions set forth in Company's then-current Franchise Agreement. Company shall have no obligation to approve any new transferee.

b.As of the date consent is requested and through the date of closing of the proposed transfer and assignment, Franchisee must not be in default under this Agreement, the Lease, or any other agreements with Company, and must be current with all monetary obligations owed to third parties, including (without limitation) Company's Affiliates.

c.The transferee must sign Company's then-current form of Franchise Agreement, the terms of which may differ materially from this Agreement; provided, however: (i) in lieu of paying a new Initial Franchise Fee, the transferee or Franchisee shall pay Company a transfer fee of $12,500; and (ii) the term of the new Franchise Agreement shall be equal to the remaining Term under this Agreement and the Renewal Term if the time to exercise the Renewal Option has not expired when Franchisee requests consent to complete the Event of transfer.                                                                        ·

(1)Alternatively, if Company is not offering new Southern Hospitality franchises in the state where the Franchise Business is located when Franchisee requests consent to complete the Event of Transfer, the transferee must (x) agree in writing to assume all of Franchisee's obligations under this Agreement and succeed to Franchisee's rights under this Agreement; and (y) pay a transfer fee of $12,500 per Event of Transfer.

(2)If Franchisee owns and transfers more than one franchise simultaneously as part of the same transaction and Event of Transfer to the same transferee, Franchisee understands that it is liable for a separate transfer  fee for each of the separate franchises being transferred in the same transaction.

(3)If the Event of Transfer involves a Public or Private Offering, the transfer fee shall be an amount not to exceed $20,000 based upon the additional time which Company will require to review Franchisee's offering memorandum, registration statement or comparable documents. Franchisee understands and  agrees that in reviewing Franchisee's offering memorandum, registration statement or comparable documents, Franchisee does not certify that the statements in Franchisee's offering memorandum, registration statement or comparable documents are true, correct or not misleading or that Franchisee's offering memorandum, registration statement or comparable documents comply with Applicable Laws, but is for the purpose of reviewing Franchisee's statements about Company, Southern Hospitality Restaurants, and the Southern Hospitality System.

d.Franchisee must simultaneously transfer its rights under the Lease and all other contracts whose continuation is necessary for operation of the Franchise Business to the same transferee and satisfy any separate conditions to obtain any third party consents required to accomplish the transfers, including, without limitation, the consent of the landlord of the Franchise Location.

e.Franchisee must execute and deliver a general release, in form satisfactory to Company, of any and all claims against Company, Company's Affiliates and their respective officers, directors, shareholders, employees and agents.

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f.The transferee must execute all other documents and agreements required by Company to  consummate the transfer of this Agreement. If the transferee is a Business Entity, each person who at the time of the transfer, or later, owns or acquires, either legally or beneficially, 25% or more of the equity or voting interests of the transferee must execute Company's then-current form of personal guaranty.

g.Franchisee's right to receive the sales proceeds from  the transferee shall be subordinate to the transferee's and Franchisee's duties owed to Company and Company's Affiliates under, or pursuant to, this Agreement or any other agreement. All contracts by and between Franchisee and the transferee shall expressly include a subordination provision permitting payment of the sales proceeds to Franchisee only after any outstanding obligations owed to Company and Company's Affiliates are fully satisfied.

h.     Until the proposed transferee and its management and supervisory-level employees satisfy Company's then-current minimum training  requirements, Franchisee shall remain responsible for day-to-day management of the Franchised Business. At a minimum, (i) the proposed transferee or its Primary Owner must complete the next available Owner Orientation module (or equivalent); (ii) at least one management-level employee must qualify as a Certified Manager; and (iii) the proposed transferee's General Manager, Assistant General Manager, Kitchen Manager and Kitchen Supervisor must complete the next available Restaurant Management module (or equivalent) tracks of Company's then-current Initial Training Program appropriate to their intended job duties or receive training from Franchisee if Franchisee has a Training Store Certification at that -time. Franchisee and the proposed transferee must arrange for the Franchised Business to remain under the direct supervision of a previously-qualified Certified Manager during the period following the closing date during which the proposed transferee and its employees complete the foregoing training programs.

i.Within a reasonable period of time following the closing date, the transferee shall conform the Franchised Business to Company's then-current appearance and design standards and equipment specifications then applicable to new Southern Hospitality Franchised Businesses.

j.       Neither Company's exercise of its right of first refusal, its consent to an Event of Transfer, nor Franchisee's consummation of a transfer shall operate to release Franchisee of those obligations that expressly, or by their nature, survive the effective date of termination or expiration of this Agreement, including, without limitation, the provisions regarding non-disclosure of Confidential Information and those applicable to Franchisee and Covered Persons regarding competition.

2.Franchisee may only complete the Event of Transfer to the transferee on the terms identified in the Third Party Offer or as otherwise stated in Franchisee's application for consent. If there is any material change in the terms of the Third Party Offer, Company has a right of first refusal to accept the new terms subject to the conditions stated in this Section.

3.If Company consents to the transfer to a third party, the transfer must close within 60 days from the date the Third Party Offer is first submitted to Company unless Company grants an extension of time in writing; otherwise, it must again be offered to Company.

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E.BusinessEntity Franchisee.If  Franchisee  is  a  Business  Entity,  Franchisee shall furnish to Company, upon execution of this Agreement or at such other time as transfer to the Business Entity is permitted, a copy of its articles of incorporation, by-laws, operating agreement, partnership agreement or other governing agreement, and a list of all persons owning an interest in the equity or voting interests of the Business Entity. Additionally, Franchisee shall promptly provide Company with a copy of any amendments to, or changes in, the documents or other information during the Term. Franchisee shall maintain stop transfer instructions against the transfer on its records of any equity or ownership interests. Each certificate representing an ownership interest in Franchisee shall bear a legend, in the form stated in the Confidential Manuals, that it is held, and further assignment or transfer thereof is, subject to all restrictions imposed upon transfer set forth in this Agreement. Franchisee's Primary Owner shall deliver a certificate to Company annually, when Franchisee's annual financial statements are delivered, which lists all owners ·of record and all beneficial owners of any interest in the equity or voting interests of Franchisee and identifies all transfers of equity or voting interests in Franchisee which have occurred during the period covered by the annual financial statement. If Franchisee engages in a Public or Private Offering, in which case Franchisee or the proposed transferee shall pay Company a transfer fee equal to $20,000 per Public or Private Offering reflecting the additional time which Company will require to review Developer's offering memorandum, registration statement or comparable documents.

F.QualifiedTransfers.  Before completing a Qualified Transfer, Franchisee must do all of the following: (i) provide Company with written notice of its intent  to complete a Qualified Transfer; (ii)when the Qualified Transfer is to a newly-formed Business Entity, deliver the documents which this Agreement requires be delivered  by a Business Entity that is the Franchisee; and (iii) pay a transfer fee of $1,500. The Qualified Transfer shall not be effective unless and until Franchisee satisfies conditions (i), (ii) and (iii). Company shall not have a right of first refusal with respect to a Qualified Transfer, nor shall Company's prior written consent to a Qualified Transfer be necessary if Franchisee satisfies the conditions stated in this Section.

XX.   RELATIONSHI P OF PARTIES; INDEMNIFICATION; SECURITY INTEREST.

A.Independent Contractor. This Agreement  does not create a fiduciary relationship between the parties, nor does it make either party a general or special agent, joint venturer, partner or employee of the other for any purpose. With respect to all matters, Franchisee relationship to Company is as an independent contractor. Franchisee understands and agrees that it is the independent owner of the Franchised Business and in sole control of all aspects of its operation, and shall conduct its business using its own judgment and sole discretion, subject only to the provisions of this Agreement. Franchisee shall conspicuously identify itself in all advertising and all dealings with customers, suppliers and other third parties as the owner of the Franchised Business operating under a license from Company.

B.IndemnificationbyFranchisee. Franchisee shall indemnify and hold Company, Company's Affiliates and their respective officers, directors, shareholders, employees, agents, successors and assigns, harmless from and against any and all costs, expenses, losses, liabilities, damages, causes of action claims and demands whatsoever, arising from or relating to the Franchised Business or Franchisee's occupancy of the Franchise Location, whether or not arising from bodily injury, personal injury or property damage, infringement, or any other violation of the rights of others, or in any other way. Franchisee's obligation to  indemnify Company shall extend, without limitation, to all claims for actual and consequential damages, and to Company's costs and expenses incurred in defending any claim brought or threatened by a third party that is within the scope of Franchisee's indemnification including, without limitation attorneys and other professional fees, court costs, and travel and living expenses. Company shall have the right to retain its own counsel to defend any third party claim asserted against it which is covered by this indemnification agreement. Franchisee's indemnification and defense obligations shall survive the expiration, termination or assignment of this Agreement for any reason.

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C.SecurityInterest. To secure Franchisee's performance under this Agreement, Franchisee hereby grants to Company a security interest in and to all of Franchisee's tangible and intangible property used to operate the Franchised Business. Company shall record appropriate financing statements to protect and perfect Company's rights as a secured party under Applicable Law. Except with Company's prior written consent, it shall be a breach of this Agreement for Franchisee to grant another person a security interest in Franchisee's tangible or intangible assets of the Franchised Business even if subordinate to Company's security interest. Company shall subordinate its security interest to a legitimate third party financing source.

XXI.        PERSONALGUARANTY.

A.    Scope. If Franchisee is a Business Entity, each person who owns or at any time during the Term acquires, either legally or beneficially, 25% or more of the equity or voting interests of Franchisee shall furnish any financial information reasonably required by Company and execute Company's form of personal guaranty in the form attached to this Agreement as ScheduleB.

B.     Default. An event of default under this Agreement shall occur if any guarantor fails or refuses to deliver to Company, within 10 days after Company's written request: (i) evidence of the due execution of the personal guaranty, and (ii) current financial statements of guarantor as may from time to time be requested by Company.

C.       ObligationsAbsolute.

1.The obligations and liabilities of Guarantor  under the  Personal Guaranty (i) are primary obligations of Guarantor, (ii) are continuing, absolute, and unconditional, (iii) shall not be subject to any counterclaim, recoupment, set-off, reduction, or defense based upon any claim that Guarantor may have against Franchisee, (iv) are independent of any other guaranty or guaranties at any time in effect with respect to all or any part of the Indebtedness (as defined in the Personal Guaranty), and (v) may be enforced regardless of the existence of such other guaranty or guaranties.

2.The obligations and liabilities of Guarantor under the Personal Guaranty shall not be affected, impaired, lessened, modified, waived or released by the invalidity or unenforceability of the Indebtedness or any ancillary or related document, or by the bankruptcy, reorganization, dissolution, liquidation or similar proceedings affecting Franchisee or the sale or other disposition of all or substantially all of the assets of Franchisee.

3.Guarantor hereby consents that at any time and from time to time, Company may, without in any manner affecting, impairing, lessening, modifying, waiving or releasing Guarantor's obligations or liabilities under this Agreement, do any one or more of the following, all without notice to, or further consent of, Guarantor:

a.renew, extend or otherwise change the time or terms for payment of the principal of, or interest on, any of the Indebtedness or any renewals or extensions thereof;

b.     extend or change the time or terms for performance by Franchisee of any other obligations, covenants or agreements;

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c.amend, compromise, release, terminate, waive, surrender, or otherwise deal with: (i) any or all of the provisions of the Indebtedness, (ii) any or all of the obligations and liabilities of Franchisee or Guarantor, or (iii) any or all property or other security given at any time as collateral by Guarantor or Franchisee;

d.sell, assign, collect, substitute, exchange or release any or all property or other security now or hereafter serving as collateral for any or all of the Indebtedness;

e.       all of the Indebtedness; receive additional property or other security as collateral for any or

f.fail or delay to enforce, assert or exercise any right, power, privilege or remedy conferred upon Company under the provisions of  any Indebtedness  or under applicable laws;

g.grant consents or indulgences or take action or omit to take action under, or in respect of, the Indebtedness; and

h.apply any payment received from Franchisee or from any source, other than Guarantor, to the Indebtedness in whatever order and manner Company may elect, and any payment received, Guarantor for or on account of this Agreement may be applied by Company to any of the Indebtedness in whatever order and manner Company may elect.

D.     WaiverbyGuarantor. Guarantor unconditionally waives, to the extent permitted by applicable laws:·

a.notice of acceptance of and reliance on this Agreement or of the creation of the Indebtedness;

b.presentment, demand, dishonor, protest, notice of non-payment and notice of dishonor of the Indebtedness;

c.      notice of transfer or assignment of the Indebtedness and this Agreement; and

d.all notices required by statute or otherwise to preserve any rights against Guarantor hereunder, including, without limitation, any demand, proof, or notice of non­ payment of any of the Indebtedness by Franchisee and notice of any failure or default on the part of Franchisee to perform or comply with any term of the Indebtedness.

XXll.    DISPUTERESOLUTION.

A.Agreement toMediate Disputes. Except  as  otherwise  provided  in  this Agreement, neither party to this Agreement shall bring an action or proceeding to enforce or interpret any  provision of this Agreement, or seeking any legal remedy based  upon the relationship created by this Agreement or an alleged breach of this Agreement, until the dispute has been submitted to mediation conducted in accordance with the procedures  stated in this Agreement.

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1.The mediation shall be conducted pursuant to the rules of the National Franchise Mediation Program, a dispute resolution program for franchising administered under the auspices of the CPR Institute for Dispute Resolution ("the Mediation Service"). Either party may initiate the mediation (the "Initiating Party") by notifying the Mediation Service in writing, with a copy to the other party (the "Responding Party"). The notice shall describe with specificity the nature of the dispute and the Initiating Party's claim for relief. Thereupon, both parties will be obligated to engage in the mediation, which shall be conducted in accordance with the Mediation Service's then-current rules, except to the extent the rules conflict with this Agreement, in which case this Agreement shall control.

2.The mediator must be either a practicing attorney with experience in business format franchising or a retired judge.

3.Except as otherwise provided in this Agreement: (i) the fees and expenses of the Mediation Service, including (without limitation) the mediator's fee and expenses, shall be shared equally by the parties, and (ii) each party shall bear its own attorney's fees and other costs incurred in connection with the mediation irrespective of the outcome of the mediation or the mediator's evaluation of each party's case.

4.The mediation conference shall begin as soon as possible with the goal of beginning the mediation within 30 days after selection of the mediator. Regardless of whether Company or Franchisee is the Initiating Party, the mediation shall be conducted at Company's home office, unless the parties agree upon a mutually acceptable alternative location.

5.The parties shall participate in good faith in the entire mediation, including the mediation conference, with the intention of resolving the dispute, if at all  possible. The parties shall each send at least one representative to the mediation conference who  has authority to enter into a binding contract on that party's behalf and on behalf of all principals of that party who are required by the terms of the parties' settlement to be personally bound by it. The parties recognize and agree, however, that the mediator's recommendations and decision shall not be binding on the parties.

6.If one party breaches this Agreement by refusing to participate in the mediation or not complying with the requirements for conducting the mediation, the non­ breaching party may immediately file suit and take such other action to enforce its rights as permitted by law and the breaching party shall be obligated to pay: (i) the mediator's fees and costs, (ii) the non-breaching party's reasonable attorneys' fees and costs incurred in connection with the mediation, and (iii)to the extent permitted by law, the non-breaching party's reasonable attorneys' fees and costs incurred in any suit arising out of the same dispute, regardless of whether the non-breaching party is the prevailing party. Additionally, in connection with (iii), the breaching party shall forfeit any right to recover its attorneys' fees and costs should it prevail in the suit. The parties agree that the foregoing conditions are necessary in order to encourage meaningful mediation as a means for efficiently resolving any disputes that may arise.

B.Exceptions toDuty toMediateDisputes. The obligation to  mediate shall  not apply to  any  disputes,  controversies or  claims (i) where the  monetary  relief sought  is  under $10,000; (ii) in which a party seeks or applies for any kind of Provisional Remedies; or (iii)in which Company or the holder of rights under any lease or sublease seeks to enforce rights of unlawful detainer or similar remedies available to a landlord or for the enforcement of Company's other rights under any Addendum to Lease with Debtor. The party that is awarded Provisional  Remedies shall  not be required to  post  bond or  comparable security.  Once Provisional Remedies are obtained, the parties agree to submit the dispute to, or continue, the mediation or action in accordance with this Agreement.

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C.     JudicialRelief.

1.The parties agree that (i) all disputes arising out of or relating to this Agreement which are not resolved by negotiation or mediation, and (ii) all claims which this Agreement expressly excludes from mediation, shall be brought in the Supreme Court of New York located closest to Company's home office, unless the subject matter of the dispute arises exclusively under federal law, in which event the dispute shall be submitted to the United States District Court located closest to Company's home office. ·As of the date of this Agreement, the parties acknowledge that the Supreme Court of New York, and the United States District Court of the Southern District of New York are, respectively, the state and federal courts that are located closest to . Company's home office; however, the parties further acknowledge that Company may relocate its home office in its sole discretion at any time without notice to the undersigned party. The parties agree to submit to the jurisdiction of the courts mutually selected by them pursuant to this Section and mutually acknowledge that selecting a forum in which to resolve disputes arising between them is important to promote stability in their relationship.

2.To the fullest extent that it may effectively do so under Applicable Laws, Franchisee waives the defense of an inconvenient forum to the maintenance of an action in the courts identified in this Section and agrees not to commence any action of any kind against Company, Company's Affiliates and their respective officers, directors, shareholders, LLC managers and members, employees and agents or property arising out of or relating to this Agreement  except in the courts identified in this Section.

D.WAIVER OF JURY TRIAL. COMPANY AND FRANCHISEE EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAI M OR CROSS-COMPLAI NT IN ANY ACTION, PROCEEDI NG AND/OR HEARING BROUGHT BY EITHER COMPANY OR FRANCHISEE ON ANY MATTER WHATSOEVER ARISI NG OUT OF, OR IN ANY WAY CONNECTED WITH, THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, THE USE OF THE PROPRIETARY MARKS OR SOUTHERN HOSPITALITY SYSTEM, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW.

E.ChoiceofLaw.  Except as otherwise provided in this Agreement with respect to the possible application of Local Laws, the parties agree that New York law shall govern the construction, interpretation, validity and enforcement of this Agreement and shall be applied in any mediation or judicial proceeding to resolve all disputes between them, except to the extent the subject matter of the dispute arises exclusively under federal law, in which event the federal Jaw shall govern.

F.     Limitations Period.To the extent permitted by Applicable Laws, any legal action of any kind arising out of or relating to this Agreement or its breach, including without limitation, any claim that this Agreement or any of its parts is invalid, illegal or otherwise voidable or void, must be commenced by no later than one year after the act, event, occurrence or transaction which constituted or gave rise to the alleged violation or liability; provided, however, the applicable limitations period shall be tolled during the course of any mediation which is initiated before the last day of the limitations period with the tolling beginning on the date that the Responding Party receives the Initiating Party's demand for mediation and continuing until the date the mediation is concluded.

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G.Punitiveor ExemplaryDamages.  Company and Franchisee, on behalf  of themselves and their respective Affiliates, directors, officers, shareholders, members, managers, guarantors employees and agents, as applicable, each hereby waive to the fullest extent permitted by law, any right to, or claim for, punitive or exemplary damages  against the other and agree that, in the event of a dispute between them, each is limited to recovering only the actual damages proven to have been sustained by it.

H.Attorneys'Fees.  Except as expressly provided in this Agreement, in any action or proceeding brought to enforce any provision of this Agreement or arising out of or in connection with the relationship of the parties hereunder, the prevailing party shall be entitled to recover against the other its reasonable attorneys' fees and court costs in addition to any other relief awarded by the court. As used in this Agreement, the "prevailing party" is the party who recovers greater relief in the action.

I.WaiverofCollateralEstoppel.  The parties agree they should each be able to settle, mediate, litigate or compromise disputes in which they may be, or become, involved with third parties without having the dispute affect their rights and obligations to each other under this Agreement. Company and Franchisee therefore each agree that a decision of an arbitrator or judge in any proceeding or action in which either Company or Franchisee, but not both of them, is a party shall not prevent the party to the proceeding or action from making the same or similar arguments, or taking the same or similar positions, iiiany proceeding or  action between Company and Franchisee. Company and Franchisee therefore waive the  right to assert that principles of collateral estoppel prevent either of them from raising any  claim or defense in an action or proceeding between them even if they lost a similar claim or defense in another action or proceeding with a third party.

XXlll.     ACKNOWLEDGMENTS.

Franchisee  makes  the  following  representations. and  agreements  in order  to  induce Company to enter into this Agreement.

A.     Acceptance of Conditions.    Franchisee has read this Agreement and Company's Disclosure Document and understands and accepts the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain Company's standards of service and quality and the uniformity of those standards at all Southern Hospitality Franchised Business in order to protect and preserve Company's rights in the Southern Hospitality System and the goodwill of the Southern Hospitality Licensed Marks.

B.    Independent  Investigation.    Franchisee has conducted an  independent investigation of the business contemplated by this Agreement. Franchisee recognizes that Southern Hospitality System may evolve and change over time; that an investment in this franchise involves business risks; and that the success of the investment depends upon Franchisee's business ability and efforts.

C.Reliance.  Franchisee has not received or relied upon any promise or guaranty, express or implied, about the revenues, profits or success. of the business venture contemplated by this Agreement.

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D.Compliance withApplicableLaw.  None  of  the   property   or   interests   of Franchisee or its owners is subject to being blocked under, and Franchisee's and its owners are not otherwise in violation of any Applicable Law including (without limitation) any anti-terrorism laws.

E.No  Representations:  Status ofFranchisee.  No  representations  have  been made by Company, Company's Affiliates or their respective officers, directors,  shareholders, employees  or  agents,  that  are  contrary  to  statements  made  in  the  Disclosure Document previously received by Franchisee or to the terms contained in this Agreement. Franchisee, if an individual, or each person who executes a guaranty of the  obligations a Franchisee that is a Business Entity, is a United  States citizen or a lawful  resident alien of the United States; if Franchisee is a Business Entity, it shall remain duly organized and in good standing for as long as this Agreement is in effect and it owns the  franchise  rights;  and  all financial  and  other information provided to Company in connection with Franchisee's application is true and correct and no material information or fact has been omitted which is necessary  in order to make the information disclosed not misleading.

F.NoClaims. By signing this Agreement, Franchisee, for itself, himself or herself (collectively "Releaser"), and, depending on whether Franchisee is a Business Entity or an individual, for Releasor's Affiliates, if any, and for each of their respective officers, directors, shareholders, members, managers, trustees, partners, employees, attorneys, heirs and successors (Releaser, Releaser's Affiliates and the foregoing individuals are  collectively referred to as the "Releasing Parties"), hereby release and forever discharge Company, Company's Affiliates, and their  respective officers,  directors,  members,  managers, shareholders, agents, employees, representatives, attorneys, successors and assigns (collectively the "Released Parties"), and each of them, from any and all claims, demands, obligations, liabilities, actions, causes of action, suits, proceedings, controversies, disputes, agreements, promises, allegations, costs and expenses; at law or in equity, of every nature, character or description whatsoever, whether known or unknown, suspected or unsuspected or anticipated or unanticipated, which any of the Releasing Parties ever had, now has, or may, shall or can hereafter have or acquire arising out of or resulting from the conduct of any of the Released Parties before the Effective Date (collectively referred to as "Claims"). This Release includes, but is not limited to, all Claims arising out of, concerning, pertaining to or connected with any agreement, tort, statutory violation, representation, nondisclosure, act, omission to act, fact, matter or thing whatsoever, occurring before the Effective Date so that after the Effective Date none of the Releasing Parties shall have any claim of any kind or nature whatsoever against the Released Parties, directly or indirectly, or by reason of any matter, cause, action, transaction or thing whatsoever done, said or omitted to have been done or said at any time before the Effective Date.

1.This Release is intended by Releaser to be a full and unconditional general release, as that phrase is used and commonly interpreted, and to constitute a full, unconditional and final accord and satisfaction, extending to all claims of any nature, whether or not known, expected or anticipated to exist in favor of Releaser or any of the other Releasing Parties against the Released Parties regardless of whether any unknown, unsuspected or unanticipated claim would materially affect any matter mentioned herein.

2.Releaser, for itself, himself or herself, for each of the other Releasing Parties hereby expressly, voluntarily and knowingly waives, relinquishes and abandons each and every right, protection and benefit to which Releaser or any of the Releasing Parties would be entitled, now or at any time hereafter under Section 1542 of the Civil Code of the State of California, as well as under any other statutes or common law principles of similar effect to Section 1542, whether in force now or adopted after the Effective Date. Releasor, for itself, himself or herself, for each of the other Releasing Parties, acknowledges that Section 1542 of the Civil Code of the State of California provides as follows:

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"A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially effected his or her settlement with the debtor."

3.      In making this voluntary express waiver, Releaser acknowledges that claims or facts in addition to or different from those which are now known or believed to exist with respect to the matters mentioned herein may later be discovered and that it is Releaser's intention to hereby fully and forever release any and all matters regardless of the possibility of later discovered claims or facts. This Release is and shall be and remain a full, complete and unconditional general release. Releaser acknowledges and agrees that the foregoing waiver of Section 1542 is an essential, integral and material term of this Agreement and that it, he or she is entering into this Release on the advice of independent counsel.

XXIV.  MISCELLANEOUS.

A.Notices.

1.All communications required or permitted to be given to either  party hereunder shall be in writing and shall be deemed duly given if property addressed on the earlier of (i) the date when delivered by hand; (ii) the date when delivered by fax or e-mail if confirmation of transmission is received or can be established by the sender; (iii) one business day after delivery to a reputable national overnight delivery service; or (iv) 5 days after being placed in the United States Mail and sent by certified or registered mail, postage prepaid, return receipt requested. A "business day" means weekdays only, excluding Saturdays, Sundays and holidays. Notices shall be directed to the address shown in ScheduleCfor the party and its representative. Either party may change its address for receiving notices by giving appropriate written notice to the other. All communications required or permitted to be given by a party in writing may be given electronically to the party's designated e-mail address in ScheduleCor as subsequently changed by appropriate written notice.

2.All payments and reports required to be delivered to Company shall be directed to Company at the above address or to an electronic address or account otherwise designated by Company. Notwithstanding the parties' agreement regarding when notices shall be deemed to be given, any required payment or report not actually received by Company on the date it is due shall be deemed delinquent.                     ·

B.TimeoftheEssence.Time is of the essence of this Agreement with respect to each and every provision of this Agreement in which time is a factor.

C.Withholding  of  Consent.  Except  where  this  Agreement   expressly   requires Company to exercise its reasonable business judgment in deciding to grant or deny approval of any action or request by Franchisee, Company has the absolute right to refuse any request by Franchisee or to withhold its approval of any action by Franchisee in Company's sole discretion. Further, whenever the prior consent or approval of Company is required by this Agreement, Company's  consent  or  approval  must  be  in  evidence  by  a  writing  unless  this  Agreement expressly states otherwise.

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D.Waiver.  Any waiver granted by Company to Franchisee excusing or reducing any obligation or restriction imposed under this Agreement shall be in writing and shall be effective upon delivery of such writing by Company to Franchisee or upon such other effective date as specified in the writing, and only to the extent specifically allowed in such writing. No waiver granted by Company, and no action taken by Company, with respect to any third party shall limit Company's sole discretion to take action of any kind, or not to take action, with respect to Franchisee. Any waiver granted by Company to Franchisee shall bewithout prejudice to any other rights Company may have. The rights and remedies granted to Company are cumulative. No delay on the part of Company in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by Company of any right or remedy shall preclude Company from fully exercising such right or remedy or any other right or remedy. Company's acceptance of any payments made by Franchisee after a breach of this Agreement shall not be, nor be construed as, a waiver by Company of any breach by Franchisee of any term, covenant or condition of this Agreement

E.        Section Headings: Language. The Section headings used in this Agreement are inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, covenants or conditions of this Agreement. The language used in this Agreement shall in all cases be construed simply according to its fair meaning and not strictly for or against Company or Franchisee. The term "Franchisee" as used herein is applicable to one or more persons or Business Entities if the interest of Franchisee is owned by more than one, and the singular usage includes the plural and the masculine and neuter usages include the other and the feminine. If two or more persons are at any time the Franchisee hereunder, whether or not as partners or joint venturers, their obligations and liabilities to Company shall be joint and several. Nothing in this Agreement is intended, nor shall it be deemed, to confer any rights or remedies upon any person or Business Entity not a party hereto.

F. Binding on Successors. The covenants, agreements, terms and conditions contained in this Agreement shall be binding upon, and shall inure to the benefit of, the successors, assigns, heirs and personal representatives of the parties hereto.

G.Validity:ConformityWithApplicableLaw. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under Applicable Law, but if any provision of this Agreement shall be invalid or prohibited under Applicable Law,  such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. If the provisions of this Agreement provide for periods of notice less than those required by Applicable Law, or provide for termination, cancellation, non-renewal or the like other than in accordance with Applicable Law, such provisions shall be deemed to be automatically amended to conform them to the provisions of such Applicable Law. If any provision of this Agreement is deemed unenforceable by virtue of its scope in terms of geographic area, business activity prohibited or length of time, but could be enforceable by reducing any or all thereof: the parties agree that the provision shall be enforced to the fullest extent permissible under the laws of the jurisdiction in which enforcement is sought.

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H.Amendments. No amendment, change, modification or variance to or from the terms and conditions set forth in this Agreement shall be binding on any party unless it is set forth in writing and duly executed by Company and Franchisee.

I.Company'sBusinessJudgment. The parties recognize, and any mediator  or judge is affirmatively advised that certain provisions of - this Agreement describe the right  of Company to take (or refrain from taking) certain actions in its sole discretion, and other actions in the exercise of its reasonable business judgment. Where this Agreement expressly  requires that Company make a decision based upon Company's reasonable business  judgment, Company is required to evaluate the overall best interests of all Southern   Hospitality Restaurants and Company's own business interests. If Company makes a decision based upon its reasonable business judgment, neither a mediator nor a judge shall  substitute his or her judgment for the judgment so exercised by Company. The fact that a mediator or judge might reach a different decision than the one made by Company is not  a basis for finding that Company made its decision without the exercise of reasonable business judgment. Company's duty to exercise reasonable business judgment in making certain decision does not restrict or limit Company's right under this Agreement to make  other decisions based entirely on Company's sole discretion as permitted by this Agreement. Company's sole discretion means that Company may consider any set of facts  or circumstances that it deems relevant in rendering a decision.

J.      CompleteAgreement. This Agreement, including all schedules attached hereto, and all agreements or documents which by the provisions of this Agreement are expressly incorporated herein or made a part hereof, sets forth the entire agreement between the parties, fully superseding any and all prior agreements or understandings between them pertaining to the subject matter hereof. Nothing in this Agreement, including all schedules attached hereto, and all agreements or documents which by the provisions of this Agreement are expressly incorporated herein or made a part hereof is intended to disclaim the representations Company made in the franchise disclosure document.

K.    Covenantand Condition. Each  provision  of  this  Agreement  performable  by Franchisee shall be construed to be both a covenant and a condition.

L.Submissionof Agreement. The  submission  of  this Agreement  to  Franchisee does not constitute an offer to Franchisee, and this Agreement shall become effective only upon execution by Company and Franchisee.

M.Risk:Success of Franchise Business.   By executing this Agreement, Franchisee represents and warrants that no person acting on Company's behalf has made any representations or promises to Franchisee that are not contained in this Agreement, including, without limitation, representations or promises about actual or potential sales, earnings, gross profits or net profits, and Franchisee is not relying on any representations or promises except those representations set forth in this Agreement. Franchisee understands and agrees that owning the Franchised Business involves business risks and the success of the Franchise Business will depend primarily on Franchisee's investment of time, capital and personnel, the desirability of the Franchise Location in Franchisee's local market, and factors beyond Company's or Franchisee's control including, without limitation, local competition, consumer preferences, inflation, labor costs, the terms of the Lease terms, and market conditions, which may be difficult to anticipate.

65

N.     Anti-Terrorism Representations.  Franchisee agrees to comply with and/or to assist Company to the fullest extent possible in Company's efforts to comply with Anti-Terrorism Laws (as defined below). In connection with such compliance, Franchisee certifies, represents and warrants on behalf of itself and each Covered Person that none of their property or interests are subject to being "blocked" under any of the Anti-Terrorism Laws and that Franchisee is not otherwise in violation of any of the Anti-Terrorism Laws. "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the USA PATRIOT Act, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority addressing or in any way relating to terrorist acts and acts of war. Any violation of, or "blocking" of assets under, the Anti-Terrorism Laws shall constitute grounds for immediate termination of this Agreement and any other agreement Franchisee has  entered into with Company or one of ·its affiliates, in accordance with the termination provisions of this Agreement.

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INWITNESSWHEREOF,thepartieshaveexecuted this Agreement onthedate stated

SHFRANCHISING &LICENSINGLLC,a NewYorklimitedliabilitycompany	SOUTHERN HOSPITALITY FRANCHISEE HOLDINGS CORPORATION, a Colorado corporation
/s/ Nelson Braff	/s/ J.W. Roth
Name:  Nelson Braff	Name:  J.W. Roth
Title: President	Title:  Chairman

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FIRST AMENDMENT TO THE

FRANCHISE AGREEMENT

 This First Amendment to Franchise Agreement (the "First Amendment") is made as of November 4, 2011 by and between SH FRANCHISING & LICENSING LLC, a New York limited liability company ("Company") and SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION,  a Colorado corporation ("Franchisee").

 WHEREAS, Company and Franchisee desire to amend the Franchise Agreement dated November 4, 2011 (referred to herein as the "FA"). Unless otherwise defined  in this First Amendment, all defined terms used in this First Amendment, as denoted by the use of initial capital letters, have the same meanings as in the FA.

NOW, THEREFORE,  for good and valuable consideration, the receipt and adequacy  of which are hereby acknowledged, Company and Franchisee agree as follows:

Section l.J. of the FA is amended and restated as follows:

"Change of Control" means a transaction or series of related transactions that result in the sale of all or substantially all of the assets of the Franchise Business "Change of Control" also means: (i) a transaction or series of related transactions that would result in an ownership interest or voting power in Franchisee of less than 51%by Southern Hospitality Franchisee Holding Corporation. In addition, for purposes of clarity, it is understood by the parties that in no event will a Change in Control be deemed to occur with respect to changes in ownership of Southern Hospitality Franchisee Holding  Corporation resulting from actions  taken by it to become a publicly traded company, including but not limited to actions taken in connection with a reverse merger of it with a publicly traded company, where Southern Hospitality Franchisee Holding Corporation is not the surviving entity, so long as the Board members of Southern Hospital Franchisee Holding Corporation prior to the merger control at least 51% of the Board seats of the surviving entity.

Section l.T of the FA is amended and restated as follows:

"Event of Transfer" means a transaction or series of related transactions that, directly or indirectly, voluntarily or by operation of law that results in a Change of Control.

Section I. EE is amended and restated as follows:

"Primary Owner'' refers to any person who now, or during the Term, owns or acquires 50% or more of the outstanding equity or voting interests of a Franchisee that is a Business Entity.

Section I.II is amended and restated as follows:

"Qualified Transfer" means (i) the sale, assignment, transfer, pledge, donation, encumbrance or other alienation of equity or voting interests not resulting in a Change of Control; or (iii) an Event of Transfer where the purchaser is an existing

Southern Hospitality franchise with at least two years' experience owning and operating a Southern Hospitality Restaurant.

Section 11.B.8 is clarified to provide that Franchisee may maintain its own website which shall be linked through Company's primary website. Company will have approval rights over the content of Franchisee's website at all times.

Section 111.B.1 (a) & (b) and 111.B.2 are amended to provide that the radius protection for the Restaurant will be determined on a case by case basis based on good faith negotiation between the parties.

 Section 111.B.3 is amended to provide that Company or its affiliates will not open or grant any third party the right to operate a Southern Hospitality BBQ restaurant in any hotel (with the exception of any casino hotels) within a three (3) mile radius of the Restaurant.

 Section IV.B.2 is deleted in its entirety. Section VII B.4 is amended to provide that:

•   Company will not require Franchisee to make material expenditures on modifying and/or replacing any signage for a period of five (5) years from the date that the Restaurant opens for business to the public.

•   If Franchisee is required to modify or replace the signage to a trademark dispute involving a third party with the SOUTHERN HOSPITALITY BBQ trademark, Company will pay the reasonable cost of modifying or replacing said signage.

 Section XII D.4 is amended to provide that Franchisee will have thirty (30) days to cure any reporting default issues that it can reasonably demonstrate are related to the non­ performance or malfunction of the Breadcrumbs point of sale system.

 Section XVIII D is amended to provide that the personal guarantors shall be J.W. Roth and Gary Tedder (the "Guarantors"). The personal liability of the Guarantors shall be expressly limited to any Royalties due and owing to Company from the Gross Sales from the Restaurant. For example, if the Restaurant closes and fails to pay Company $10,000 in Royalties owed at the time of closure, Company may seek payment of the Royalties from the Guarantors. Provided, however, the Guarantors will not be liable to Company for any other financial obligations of Franchisee. The personal liability of the Guarantors may be extinguished at any time upon Developer providing to Company, upon commercially reasonable terms acceptable to Company: a) a substitute guarantor; b. a letter of credit; and/or c. an assignment of receivables of Developer or an affiliate.

 Section XIX.D of is amended to expressly include the new definitions for Event of Transfer and Qualified Transfers as set forth in this Amendment.

 Section XX.C is amended to provide that Franchisee will not be prohibited from taking on reasonable debt in connection with the financing and operation of the Restaurant.

 Section XXl.A is amended to reflect that the liability of the Guarantors is expressly as set forth in this Amendment.

 Except as specifically amended or modified by the terms of this First Amendment, the FA shall be read, interpreted and construed as written and executed by the parties. No further amendments or modifications of the FA shall be made or implied unless they are contained in a further writing executed by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Franchise Agreement as of the day and year first above written.

SH FRANCHISING &LICENSING LLC, a New York limited liability company
By:	SH FRANCHISE CORP., a New York corporation
By:	/s/ Nelson Braff
Name:	Nelson Braff
Title:	President

SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation
By:	/s/ J.W. Roth
Name:	J.W. Roth
Title:	Chairman

SECOND AMENDMENT TO THE

FRANCHISE AGREEMENT

This  Second  Amendment to Franchise Agreement  (the  "Second Amendment")  is made as of  November      1   ,2012, by and  between SH FRANCHISING & LICENSING LLC.  a  New York limited liability company ("Company") and SOUTHERN HOSPITLITY FRANCHISEE HOLDING CORPORATION, a Colorado corporation ("Franchisee')

WHEREAS, Company and Franchisee desire to amend the Franchise Agreement dated November 4, 2011, as amended bythe First Amendment dated November 4, 2011 (collectively referred as the "Fi\"), and which is the subject of the Assignment of Franchise Agreement attached as Exhibit A. Unless otherwise defined in this Second Amenendment, all defined terms used in this Second Amendment, as denoted by the use of initial capital letters, have the same meanings as in the FA.

NOW, THEREFORE, for good and valuable consideration, the receipt   and adequacy of which are hereby acknowledged, Company and Franchisee agree as follows:

1.  Section 111.A.2.c of the FA is amended and restated as follows:

Following receipt of Franchisee's written site proposal, Company may, in its sole discretion, make an on-site visit to the proposed site at Company's expense if Company reasonably believes that physical inspection of the demographic conditions of the area, or the proposed site, is necessary or desirable to evaluate Franchisee's proposal. Franchisee understands and agrees that the on-site visit is at Company's option and not required by the Agreement. If Franchisee proposes more than one site and Company determines that itmust make more than one site visit in connection with the site review process, Company may charge Franchisee for reimbursement of Company's reasonable travel expenses, including, without limitation, expenses for air and ground transportation, lodging, meals, and miscellaneous travel-related personal charges, which shall be payable within 15 days of invoice.

2.  Section XI.D is amended as follows:

D.New Store Opening Module Fee. In connection with the New Store Opening module of the raining program to be provided by Company.   Franchisee shall pay to Company, at least 10 days prior to the commencement of the first New Store Opening module located in Denver, the sum of $5,000. In addition, within 15 Calendar Days after invoice from Company, Franchisee shall pay to Company the actual travel and lodging expenses incurred by connection with sending its employees to provide the Next Store Opening module

3.  Section Xll.C. (Recording of Transactions) is amended to provide that Company will not require Franchisee to use the Breadcrumb point of sale system for the Denver, Colorado restaurant location, and agrees that Franchisee may use the Aloha point of sale system instead at this location only.

4. Section XIV.B.1 (Inspections using video monitoring) shall not apply to the Denver, Colorado restaurant location.

5.  Sections XVI.A. 1 (Covenants regarding Competition) is amended follows:

1.During the Term and for 24 Calendar Months from the Effective Date of Termination. Expiration of this Agreement, or consummation of an Event of Transfer, whichever occurs first. it shall be a breach of this Agreement for Franchisee. Franchisee's Affiliate   or any Covered Person, directly or indirectly, to own (either beneficially or of record), engage in or render services to, whether as an investor, partner, lender, director, officer, manager, employee, consultant, representative or agent. any Competitive Business located within a 2.5 mile radius in a major metropolitan area or within a 5 mile radius in any area other than  a major metropolitan area of any restaurant operating under the Southern Hospitality License  Marks. This restriction shall not apply to any Covered Person after 24 Calendar Months from the date the Covered Person ceases to be an officer, director, shareholder, member,, manage  trustee, owner, general partner, employee or otherwise associated in any capacity with   franchisee. For purposes of this section XVI.A. 1, "Competitive Business" means a Southern style/themed restaurant or a BBQ restaurant

6.  Section XVl.A.2 (Covenant regarding Competition) is deleted in its entirely

7.  Section XVlll.D. is amended toprovide that following the Assignment of the Franchise Agreement. J.W. Roth and Gary Tedder will remain the personal guarantors (the "Guarantors"), sub1ect to the same terms and conditions set forth in the Personal Guarantee byJ.W. Roth in favor of Company, dated November 4, 2011, and the Personal Guarantee by Gary Tedder in favor of Company, dated November 4, 2011.

8.  Company and Franchisee, on their own behalf and on behalf of their principals, partners, investors, advisors, consultants, representatives, members, managers, stockholders, affiliates, and promoters, do hereby irrevocably, uncondif1onally, and forever release and discharge under any applicable law, the other party and its principals, partners, investors, advisors, consultants, representatives, members, managers, stockholders, affiliates,, and promoters, of and from any and all manner of a action, causes of action, counterclaims, third party actions, controversies, losses, damage, claims and demands whatsoever (whether known or unknown, fixed or contingent) exiting or arising at (or at any time prior to and including) the date of this Second Amendment, in law, in equity or otherwise arising under or relating in any way to the dealings between Company and Franchisee, or may ever have, upon or by reason of any dealings occurring on or prior to date of this Second Amendment.

Except as specifically amended or modified by the terms of this Second Amendment, the FA shall be read, interpreted and construed as written and executed  by the parties.  No amendments or modifications of the FA shall be made or implied unless they are contained in a further writing executed by the parties.

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IN WITNESS WHEREOF, the parties hereto have executed this Second  Amendment to the Franchise Agreement as of the day and year first above written.

SH FRANCHISING &LICENSING LLC
By:	/s/ Nelson Braff
Name:	Nelson Braff
Title:	President

SOUTHERN HOSPITALITY FRANCHISEE HOLDING CORPORATION
By:	/s/ J.W. Roth
Name:	J.W. Roth
Title:	Chairman

THIRD AMENDMENT TO THE

FRANCHISE AGREEMENT

This Third Amendment to Franchise Agreement (the "Third Amendment") is made as of January _9_, 2013 , by and between SH FRANCHISING & LICENSING LLC, a New York limited liability company ("Company") and SOUTHERN HOSPITALITY DENVER, LLC, a Colorado limited liability company ("Franchisee").

WHEREAS, Company and Franchisee desire to amend the Franchise Agreement dated November 4, 2011, as amended by the First Amendment dated November 4, 2011 and the Second Amendment dated November 9, 2012, (collectively referred as the "FA"). Unless otherwise defined in this Third Amendment, all defined terms used in this Third Amendment, as denoted by the use of initial capital letters, have the same meanings as in the FA.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Company and Franchisee agree as follows:

1.  Section XXIV. of the FA is amended by adding a new subsection O to read as follows:

O. Notwithstanding any provision of this FA, nothing shall prevent the undersigned from engaging in any Competitive Business so long as such Competitive Business is outside of the geographic area described in Section XVI.A. of the FA as amended.

Except as specifically amended or modified by the terms of this Third Amendment, the FA shall be read, interpreted and construed as written and executed by the parties. No further amendments or modifications of the FA shall be made or implied unless they are contained in a further writing executed by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to the Franchise Agreement as of the day and year first above written.

SH FRANCHISING &LICENSING LLC
By:	/s/ Nelson Braff
Name:	Nelson Braff
Title:	Member

SOUTHERN HOSPITALITY DENVER LLC
By:	/s/ Gray Tedder
Name:	Gary Tedder
Title:	Manager

EX-10.7

Exhibit 10.7

SOUTHERN HOSPITALITY DEVELOPMENT CORP

2012 STOCK OPTION PLAN

A.    1.        PurposesofandBenefitsUnderthePlan. This 2012 Stock Option Plan (the “Plan”) is intended to encourage stock ownership by employees, consultants and directors of Southern Hospitality Development Corp and its controlled, affiliated and subsidiary entities (collectively, the “Corporation”), so that they may acquire or increase their proprietary interest in the Corporation, and is intended to facilitate the Corporation’s efforts to: (i) induce qualified persons to become employees, officers and directors (whether or not they are employees) and consultants to the Corporation; (ii) compensate employees, officers, directors and consultants for services to the Corporation; and (iii) encourage such persons to remain in the employ of or associated with the Corporation and to put forth maximum efforts for the success of the Corporation. It is further intended that options granted by the Committee pursuant to Section 6 of this Plan shall constitute “incentive stock options” (“Incentive Stock Options”) within the meaning of Section 422 of the Internal Revenue Code, and the regulations issued thereunder, and options granted by the Committee pursuant to Section 7 of this Plan shall constitute “non- qualified stock options” (“Non-qualified Stock Options”).

2.        Definitions. As used in this Plan, the following words and phrases shall have the meanings indicated:

(a)“Board” shall mean the Board of Directors of the Corporation.

(b) “Bonus” means any Common Stock bonus issued pursuant to the provisions of this Plan.

(c)“Committee” shall mean any Committee appointed by the Board to administer this Plan, if one has been appointed. If no Committee has been appointed, the term “Committee” shall mean the Board.

(d)“Common Stock” shall mean common shares, no par value in the capital of the Corporation.

(e)“Disability” shall mean a Recipient’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. If the Recipient has a disability insurance policy, the term “Disability” shall be as defined therein.

(f)“Fair Market Value” per share as of a particular date shall mean the last sale price of the Corporation’s Common Stock as reported on a national securities exchange or by NASDAQ, or if the quotation for the last sale reported is not available for the Corporation’s Common Stock, the average of the closing bid and asked prices of the Corporation’s Common Stock as so reported or, if such quotations are unavailable, the value determined by the Committee in accordance with its discretion in making a bona fide, good faith determination of fair market value. Fair Market Value shall be determined without regard to any restriction other than a restriction which, by its terms, never will lapse. In the case of Options and Bonuses granted at a time when the Corporation does not have a registration statement in effect relating to the shares issuable hereunder, the value at which the Bonus shares are issued may be determined by the Committee at a reasonable discount from Fair Market Value to reflect the restricted nature of the shares to be issued and the inability of the Recipient to sell those shares promptly.

(g)“Options” means  options  granted pursuant to the provisions of this Plan, including Incentive Stock Options and Non-qualified Stock Options.

(h)  “Recipient” means any person granted an Option or awarded a Bonus hereunder.

(i)“Internal Revenue Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to time (codified as Title 26 of the United States Code) and any successor legislation.

3.     Administration.

(a)The Plan shall be administered by the Committee. The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically conferred under the Plan or necessary or advisable in the administration of the Plan, including the authority: to grant Options and Bonuses; to determine the vesting schedule and other restrictions, if any, relating to Options and Bonuses; to determine the purchase price of the shares of Common Stock covered by each Option (the “Option Price”); to determine the persons to whom, and the time or times at which, Options and Bonuses shall be granted; to determine the number of shares to be covered by each Option or Bonus; to determine Fair Market Value per share; to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Option agreements (which need not be identical) entered into in connection with Options granted under the Plan; and to make all other determinations deemed necessary or advisable for the administration of the Plan. The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan.

(b)Options and Bonuses granted under the Plan shall be evidenced by duly adopted resolutions of the Committee included in the minutes of the meeting at which they are adopted or in a unanimous written consent.

(c)The Committee shall endeavor to administer the Plan and grant Options and Bonuses hereunder in a manner that is compatible with the obligations of persons subject to Section 16 of the U.S. Securities Exchange Act of 1934 (the “1934 Act”), although compliance with Section 16 is the obligation of the Recipient, not the Corporation.  Neither the Committee, the Board nor the Corporation can assume any legal responsibility for a Recipient’s compliance with his obligations under Section 16 of the 1934 Act.

(d)No member of the Committee or the Board shall be liable for any action taken or determination made in good faith with respect to the Plan or any Option or Bonus granted hereunder.

4.     Eligibility.

(a)Subject to certain limitations hereinafter set forth, Options and Bonuses may be granted to employees (including officers) consultants and directors (whether or not they are employees) of the Corporation or its present or future divisions, affiliates and subsidiaries. In determining the persons to whom Options or Bonuses shall be granted and the number of shares to be covered by each Option or Bonus, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Corporation, and such other factors as the Committee shall deem relevant to accomplish the purposes of the Plan.

(b)A Recipient shall be eligible to receive more than one grant of an Option or Bonus during the term of the Plan, on the terms and subject to the restrictions herein set forth.

5.    Stock Reserved.

(a)The stock subject to Options or Bonuses hereunder shall be shares of Common Stock. Such shares, in whole or in part, may be authorized but unissued shares or shares that shall have been or that may be reacquired by the Corporation. The aggregate number of shares of Common Stock as to which Options and Bonuses may be granted from time to time under the Plan shall not exceed 1,500,000, subject to adjustment as provided in Section 8(i) hereof.

(b)If any Option outstanding under the Plan for any reason expires or is terminated without having been exercised in full, or if any Bonus granted is forfeited because of vesting or other restrictions imposed at the time of grant, the shares of Common Stock allocable to the unexercised portion of such Option or the forfeited portion of the Bonus shall become available for subsequent grants of Options and Bonuses under the Plan.

6.     Incentive Stock Options.

(a)Options granted pursuant to this Section 6 are intended to constitute Incentive Stock Options and shall be subject to the following special terms and conditions, in addition to the general terms and conditions specified in Section 8 hereof. Only employees of the Corporation shall be entitled to receive Incentive Stock Options.

(b)The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options granted under this and any other plan of the Corporation or any parent or subsidiary of the Corporation are exercisable for the first time by a Recipient during any calendar year may not exceed the amount set forth in Section 422(d) of the Internal Revenue Code.

(c)Incentive Stock Options granted under this Plan are intended to satisfy all requirements for incentive stock options under Section 422 of the Internal Revenue Code and the Treasury Regulations promulgated thereunder and, notwithstanding any other provision of this Plan, the Plan and all Incentive Stock Options granted under it shall be so construed, and all contrary provisions shall be so limited in scope and effect and, to the extent they cannot be so limited, they shall be void.

7.   Non-qualifiedStockOptions. Options granted pursuant to this Section 7 are intended to constitute Non-qualified Stock Options and shall be subject only to the general terms and conditions specified in Section 8 hereof.

8.   TermsandConditionsofOptions. Each Option granted pursuant to the Plan shall be evidenced by a written Option agreement between the Corporation and the Recipient, which agreement shall be substantially in the form of Exhibit A hereto as modified from time to time by the Committee in its discretion, and which shall comply with and be subject to the following terms and conditions:

(a)NumberofShares. Each Option agreement shall state the number of shares of Common Stock covered by the Option.

(b)Typeof Option. Each Option Agreement shall specifically identify the portion, if any, of the Option which constitutes an Incentive Stock Option and the portion, if any, which constitutes a Non-qualified Stock Option.

(c)OptionPrice. Subject to adjustment as provided in Section 8 (i) hereof, each Option agreement shall state the Option Price, which shall be determined by the Committee subject only to the following restrictions:

(1)Each Option Agreement shall state the Option Price, which (except as otherwise set forth in paragraphs 8(c)(2) and (3) hereof) shall not be less than 100% of the Fair Market Value per share on the date of grant of the Option.

(2)Any Incentive Stock Option granted under the Plan to a person owning more than ten percent of the total combined voting power of the Common Stock shall be at a price of no less than 110% of the Fair Market Value per share on the date of grant of the Incentive Stock Option.

(3)Any Non-qualified Stock Option granted under the Plan shall be at a price no less than 100% of the Fair Market Value per share on the date of grant of the Non- qualified Stock Option.

(4)The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted, unless a future date is specified in the resolution.

(d)TermofOption.    Each Option agreement shall state the period during and times at which the Option shall be exercisable, in accordance with the following limitations:

(1)The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted, unless a future date is specified in the resolution, although any such grant shall not be effective until the Recipient has executed an Option agreement with respect to such Option.

(2)The exercise period of any Option shall not exceed ten years from the date of grant of the Option.

(3)Incentive Stock Options granted to a person owning more than ten percent of the total combined voting power of the Common Stock of the Corporation shall be for no more than five years.

(4)The Committee shall have the authority to accelerate or extend the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. In any event, no exercise period may be so extended to increase the term of the Option beyond ten years from the date of the grant.

(5)The exercise period shall be subject to earlier termination as provided in Sections 8(f) and 8(g) hereof, and, furthermore, shall be terminated upon surrender of the Option by the holder thereof if such surrender has been authorized in advance by the Committee.

(e)   Method of ExerciseandMedium and Timeof Payment.

(1)An Option may be exercised as to any or all whole shares of Common Stock as to which it then is exercisable, provided, however, that no Option may be exercised as to less than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100).

(2)Each exercise of an Option granted hereunder, whether in whole or in part, shall be effected by written notice to the Secretary of the Corporation designating the number of shares as to which the Option is being exercised, and shall be accompanied by payment in full of the Option Price for the number of shares so designated, together with any written statements required by, or deemed by the Corporation’s counsel to be advisable pursuant to, any applicable securities laws.

(3)The Option Price shall be paid in cash, or in shares of Common Stock having a Fair Market Value equal to such Option Price, or in property or in a combination of cash, shares and property and, subject to approval of the Committee, may be effected in whole or in part with funds received from the Corporation at the time of exercise as a compensatory cash payment.

(4)The Committee shall have the sole and absolute discretion to determine whether or not property other than cash or Common Stock may be used to purchase the shares of Common Stock hereunder and, if so, to determine the value of the property received.

(5)The Recipient shall make provision for the withholding of taxes as required by Section 10 hereof.

(f)     Termination.

(1)Unless otherwise provided in the Option Agreement by and between the Corporation and the Recipient, if the Recipient ceases to be an employee, officer, director or consultant of the Corporation (other than by reason of death, Disability or retirement), all Options theretofore granted to such Recipient but not theretofore exercised shall terminate three months following the date the Recipient ceased to be an employee, officer, director or consultant of the Corporation, and shall terminate upon the date of termination of employment or other relationship if discharged for cause.

(2)Nothing in the Plan or in any Option or Bonus granted hereunder shall confer upon an individual any right to continue in the employ of or other relationship with the Corporation or interfere in any way with the right of the Corporation to terminate such employment or other relationship between the individual and the Corporation.

(g)Death,DisabilityorRetirementofRecipient. Unless otherwise provided in the Option Agreement by and between the Corporation and the Recipient, if a Recipient shall die while an employee, officer, director or consultant of the Corporation, or within ninety days after the termination of such Recipient as an employee, officer, director or consultant, other than termination for cause, or if the Recipient’s relationship with the Corporation shall terminate by reason of Disability or retirement, all Options theretofore granted to such Recipient (whether or not otherwise exercisable) unless earlier terminated in accordance with their terms, may be exercised by the Recipient or by the Recipient’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by reason of the death or Disability of the Recipient, at any time within one year after the date of death, Disability or retirement of the Recipient; provided, however, that in the case of Incentive Stock Options such one-year period shall be limited to three months in the case of retirement.

(h)      TransferabilityRestriction.

(1)Options granted under the Plan shall not be transferable other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code or Title I of the Employee Retirement Income Security Act of 1974, or the rules thereunder. Options may be exercised during the lifetime of the Recipient only by the Recipient and thereafter only by his legal representative.

(2)Any attempted sale, pledge, assignment, hypothecation or other transfer of an Option contrary to the provisions hereof and/or the levy of any execution, attachment or similar process upon an Option, shall be null and void and without force or effect and shall result in a termination of the Option.

(3)(A) As a condition to the transfer of any shares of Common Stock issued upon exercise of an Option granted under this Plan, the Corporation may require an opinion of counsel, satisfactory to the Corporation, to the effect that such transfer will not be in violation of the U.S. Securities Act of 1933, as amended (the “1933 Act”) or any other applicable securities laws or that such transfer has been registered under federal and all applicable state securities laws. (B) Further, the Corporation shall be authorized to refrain from delivering or transferring shares of Common Stock issued under this Plan until the Committee determines that such delivery or transfer will not violate applicable securities laws and the Recipient  has tendered to the Corporation any federal, state or local tax owed by the Recipient as a result of exercising the Option or disposing of any Common Stock when the Corporation has a legal liability to satisfy such tax. (C) The Corporation shall not be liable for damages due to delay in the delivery or issuance of any stock certificate for any reason whatsoever, including, but not limited to, a delay caused by listing requirements of any securities exchange or any registration requirements under the 1933 Act, the 1934 Act, or under any other state, federal or provincial law, rule or regulation. (D) The Corporation is under no obligation to take any action or incur any expense in order to register or qualify the delivery or transfer of shares of Common Stock under applicable securities laws or to perfect any exemption from such registration or qualification. (E) Furthermore, the Corporation will not be liable to any Recipient for failure to deliver or transfer shares of Common Stock if such failure is based upon the provisions of this paragraph.

(i)       EffectofCertain Changes.

(1)If there is any change in the number of shares of outstanding Common Stock through the declaration of stock dividends, or through a recapitalization resulting in stock splits or combinations or exchanges of such shares, the number of shares of Common Stock available for Options and the number of such shares covered by outstanding Options, and the exercise price per share of the outstanding Options, shall be proportionately adjusted by the Committee to reflect any increase or decrease in the number of issued shares of Common Stock; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.

(2)In the event of the proposed dissolution or liquidation of the Corporation, or any corporate separation or division, including, but not limited to, split-up, split- off or spin-off, or a merger or consolidation of the Corporation with another corporation, the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option (at its then current Option Price) solely for the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such dissolution, liquidation, corporate separation or division, or merger or consolidation by a holder of the number of shares of Common Stock for which such Option might have been exercised immediately prior to such dissolution, liquidation, corporate separation or division, or merger or consolidation; or, in the alternative the Committee may provide that each Option granted under the Plan shall terminate as of a date fixed by the Committee; provided, however, that not less than 30 days’ written notice of the date so fixed shall be given to each Recipient, who shall have the right, during the period of 30 days preceding such termination, to exercise the Option as to all or any part of the shares of Common Stock covered thereby, including shares as to which such Option would not otherwise be exercisable.

(3)Paragraph 2 of this Section 8 (i) shall not apply to a merger or consolidation in which the Corporation is the surviving corporation and shares of Common Stock are not converted into or exchanged for stock, securities of any other corporation, cash or any other thing of value. Notwithstanding the preceding sentence, in case of any consolidation or merger of another corporation into the Corporation in which the Corporation is the surviving corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock (excluding a change in par value, or from no par value to par value, or any change as a result of a subdivision or combination, but including any change in such shares into two or more classes or series of shares), the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option solely for the kind and amount of shares of stock and other securities (including those of any new direct or indirect parent of the Corporation), property, cash or any combination thereof receivable upon such reclassification, change, consolidation or merger by the holder of the number of shares of Common Stock for which such Option might have been exercised.

(4)In the event of a change in the Common Stock of the Corporation as presently constituted into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be the Common Stock of the Corporation within the meaning of the Plan.

(5)To the extent that the foregoing adjustments relate to stock or securities of the Corporation, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive, provided that each Incentive Stock Option granted pursuant to this Plan shall not be adjusted in a manner that causes such option to fail to continue to qualify as an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code.

(6)     Except as expressly provided in this Section 8(i), the Recipient shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, or by reason of any dissolution, liquidation, merger, or consolidation or spin- off of assets or stock of another corporation; and any issue by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structures, or to merge or consolidate, or to dissolve, liquidate, or sell or transfer all or any part of its business or assets.

(j)       No Rights as Shareholder - Non-DistributiveIntent.

(1)Neither a Recipient of an Option nor such Recipient’s legal representative, heir, legatee or distributee, shall be deemed to be the holder of, or to have any rights of a holder with respect to, any shares subject to such Option until after the Option is exercised and the shares are issued.

(2)No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 8(i) hereof.

(3)Upon exercise of an Option at a time when there is no registration statement in effect under the 1933 Act relating to the shares issuable upon exercise, shares may be issued to the Recipient only if the Recipient represents and warrants in writing to the Corporation that the shares purchased are being acquired for investment and not with a view to the distribution thereof and provides the Corporation with sufficient information to establish an exemption from the registration requirements of the 1933 Act. A form of subscription agreement containing representations and warranties deemed sufficient as of the date of adoption of this Plan is attached hereto as ExhibitB.

(4)No shares shall be issued upon the exercise of an Option unless and until there shall have been compliance with any then applicable requirements of the U.S. Securities and Exchange Commission or any other regulatory agencies having jurisdiction over the Corporation.

(k)OtherProvisions. Option Agreements authorized under the Plan may contain such other provisions, including, without limitation, (i) the imposition of restrictions upon the exercise, and (ii) in the case of an Incentive Stock Option, the inclusion of any condition not inconsistent with such Option qualifying as an Incentive Stock Option, as the Committee shall deem advisable.

9.     GrantofStockBonuses.  In addition to, or in lieu of, the grant of an Option, the Committee may grant Bonuses.

(a)At the time of grant of a Bonus, the Committee may impose a vesting period of up to ten years, and such other restrictions which it deems appropriate. Unless otherwise directed by the Committee at the time of grant of a Bonus, the Recipient shall be considered a shareholder of the Corporation as to the Bonus shares which have vested in the grantee at any time regardless of any forfeiture provisions which have not yet arisen.

(b)The grant of a Bonus and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the 1934 Act, other applicable securities laws, rules and regulations, and the requirements of any stock exchanges upon which the Common Stock then may be listed. Any certificates prepared to evidence Common Stock issued pursuant to a Bonus grant shall bear legends as the Corporation’s counsel may seem necessary or advisable. Included among the foregoing requirements, but without limitation, any Recipient of a Bonus at a time when a registration statement relating thereto is not effective under the 1933 Act shall execute a Subscription Agreement substantially in the form of Exhibit B.

10.  AgreementbyRecipientRegardingWithholdingTaxes. Each Recipient agrees that the Corporation, to the extent permitted or required by law, shall deduct a sufficient number of shares due to the Recipient upon exercise of the Option or the grant of a Bonus to allow the Corporation to pay federal, provincial, state and local taxes of any kind required by law to be withheld upon the exercise of such Option or payment of such Bonus from any payment of any kind otherwise due to the Recipient. The Corporation shall not be obligated to advise any Recipient of the existence of any tax or the amount which the Corporation will be so required to withhold.

11. TermofPlan. Options and Bonuses may be granted under this Plan from time to time within a period of ten years from the date the Plan is adopted by the Board.

12.       AmendmentandTermination ofthe Plan.

(a)(1) Subject to the policies, rules and regulations of  any  lawful authority having jurisdiction (including any exchange with which the shares of the Corporation are listed for trading), the Board of Directors may at any time, without further action by the shareholders, amend the Plan or any Option granted hereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure that Options granted hereunder will comply with any provisions respecting stock options in the income tax and other laws in force in any country or jurisdiction of which any Option holders may from time to time be a resident or citizen, or it may at any time without action by shareholders terminate the Plan.

(2)provided, however, that any amendment that  would:  (A) materially increase the number of securities issuable under the Plan to persons who are subject to Section 16(a) of the 1934 Act; or (B) grant eligibility to a class of persons who are subject to Section 16(a) of the 1934 Act and are not included within the terms of the Plan prior to the amendment; or (C) materially increase the benefits accruing to persons who are subject to Section 16(a) of the 1934 Act under the Plan; or (D) require shareholder approval under applicable state law, the rules and regulations of any national securities exchange on which the Corporation’s securities then may be listed, the Internal Revenue Code or any other applicable law, shall be subject to the approval of the shareholders of the Corporation as provided in Section 13 hereof.

(3)provided further that any such increase or modification that may result from adjustments authorized by Section 8(i) hereof or which are required for compliance with the 1934 Act, the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, their rules or other laws or judicial order, shall not require such approval of the shareholders.

(b)Except as provided in Section 8 hereof, no suspension, termination, modification or amendment of the Plan may adversely affect any Option previously granted, unless the written consent of the Recipient is obtained.

13 .Terminationof RightofAction.  Every right of action arising out of or in connection with the Plan by or on behalf of the Corporation or any of its subsidiaries, or by any shareholder of the Corporation or any of its subsidiaries against any past, present or future member of the Board, or against any employee, or by an employee (past, present or future) against the Corporation or any of its subsidiaries, will, irrespective of the place where an action may be brought and irrespective of the place of residence of any such shareholder, director or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action is alleged to have risen.

14 .TaxLitigation. The Corporation shall have the right, but not the obligation, to contest, at its expense, any tax ruling or decision, administrative or judicial, on any issue which is related to the Plan and which the Board believes to be important to holders of Options issued under the Plan and to conduct any such contest or any litigation arising therefrom to a final decision.

15.      Adoption.

(a)This  Plan  was  approved  by  resolution  of  the  Board  of  Directors  of  the Corporation on November 14, 2012.

(b)If this Plan is not approved by the shareholders of the Corporation within 12 months of the date the Plan was approved by the Board as required by Section 422(b)(1) of the Internal Revenue Code, this Plan and any Options granted hereunder to Recipients shall be and remain effective, but the reference to Incentive Stock Options herein shall be deleted and all Options granted hereunder shall be Non-qualified Stock Options pursuant to Section 7 hereof.

[End of Plan]

Exhibit A

FORM OFSTOCK OPTIONAGREEMENT

This  STOCK  OPTION  AGREEMENT  made  as  of  this   ______  day  of  __________________________ ,  by  and  between  Southern  Hospitality  Development  Corp  (the  “Corporation”),  and ______________________________________________    (the “Recipient”).

In accordance with the Corporation’s 2012 Stock Option Plan (the “Plan”), the provisions of which are incorporated herein by reference, the Corporation desires, in connection with the services of the Recipient, to provide the Recipient with an opportunity to acquire common shares with no par value in the capital of the Corporation (“Common Stock”) on favorable terms and thereby increase the Recipient’s proprietary interest in the Corporation and incentive to put forth maximum efforts for the success of the business of the Corporation. Capitalized terms used but not defined herein are used as defined in the Plan.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein set forth and other good and valuable consideration, the Corporation and the Recipient agree as follows:

1.   Confirmation of Grant ofOption. Pursuant to a determination of the Committee or, in the  absence  of  a  Committee,  by  the  Board  of  Directors  of  the  Corporation  made __________________, _______  on  (the “Date of Grant”), the Corporation, subject to the terms of the Plan and of this Agreement, confirms that the Recipient has been irrevocably granted on the Date of Grant, as a matter of separate inducement and agreement, and in addition to and not in lieu of salary or other compensation for services, a Stock Option (the “Option”) exercisable to purchase an aggregate ofshares of Common Stock on the terms and conditions herein set forth, subject to adjustment as provided in Paragraph 8 hereof.

2.    OptionPrice. The Option Price of shares of Common Stock covered by the Option will be $___________  per share (the “Option Price”) subject to adjustment as provided in Paragraph 8 hereof.

3.    Vesting and Exercise of Option. (a) Except as otherwise provided herein or in Section 8 of the Plan, the Option [shall vest and become exercisable as follows: (insert vesting schedule), provided, however, that no option shall vest or become exercisable unless the Recipient is an employee of the Corporation on such vesting date/or may be exercised in whole or in part at any time during the term of the Option.] (b) The Option may not be exercised at any one time as to fewer than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100). (c) The Option may be exercised by written notice to the Secretary of the Corporation accompanied by payment in full of the Option Price as provided in Section 8 of the Plan.

4.TermofOption.  The term of the Option will be through ______________ ,______  , subject to earlier termination or cancellation as provided in this Agreement. The holder of the Option will not have any rights to dividends or any other rights of a shareholder with respect to any shares of Common Stock subject to the Option until such shares shall have been issued (as evidenced by the appropriate transfer agent of the Corporation) upon purchase of such shares through exercise of the Option.

5.TransferabilityRestriction. The Option may not be assigned, transferred or otherwise disposed of, or pledged or hypothecated in any way (whether by operation of law or otherwise) except in strict compliance with Section 8 of the Plan. Any assignment, transfer, pledge, hypothecation or other disposition of the Option or any attempt to make any levy of execution, attachment or other process will cause the Option to terminate immediately upon the happening of any such event; provided, however, that any such termination of the Option under the provisions of this Paragraph 5 will not prejudice any rights or remedies which the Corporation may have under this Agreement or otherwise.

6.      ExerciseUponTermination. The Recipient’s rights to exercise this Option upon termination of employment or cessation of service as an officer, director or consultant shall be as set forth in Section 8(f) of the Plan.

7.Death,DisabilityorRetirementofRecipient. The exercisability of this Option upon the death, Disability or retirement of the Recipient shall be as set forth in Section 8(g) of the Plan.

8.Adjustments.   The Option shall be subject to adjustment upon the occurrence of certain events as set forth in Section 8(i) of the Plan.

9.No RegistrationObligation.    The Recipient understands that the Option is not registered under the 1933 Act and, unless by separate written agreement, the Corporation has no obligation to so register the Option or any of the shares of Common Stock subject to and issuable upon the exercise of the Option, although it may from time to time register under the 1933 Act the shares issuable upon exercise of Options granted pursuant to the Plan. The Recipient represents that the Option is being acquired for the Recipient’s own account and that unless registered by the Corporation, the shares of Common Stock issued on exercise of the Option will be acquired by the Recipient for investment. The Recipient understands that the Option is, and the underlying securities may be, issued to the Recipient in reliance upon exemptions from the 1933 Act, and acknowledges and agrees that all certificates for the shares issued upon exercise of the Option may bear the following legend unless such shares are registered under the 1933 Act prior to their issuance:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”), AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

The Recipient further understands and agrees that the Option may be exercised only if at the time of such exercise the underlying shares are registered and/or the Recipient and the Corporation are able to establish the existence of an exemption from registration under the 1933 Act and applicable state or other laws.

10.Notices. Each notice relating to this Agreement will be in writing and delivered in person or by certified mail to the proper address. Notices to the Corporation shall be addressed to the Corporation, attention: President, Southern Hospitality Development Corp, ________________________ , ___________ , CO ___________  , or at such other address as may constitute the Corporation’s principal place of business at the time, with a copy to: Theresa M. Mehringer, Esq., Burns, Figa & Will, P.C., 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111. Notices to the Recipient or other person or persons then entitled to exercise the Option shall be addressed to the Recipient or such other person or persons at the Recipient’s address below specified. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect given pursuant to this Paragraph 10.

11.ApprovalofCounsel. The exercise of the Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended, applicable state and other securities laws, the rules and regulations thereunder, and the requirements of any national securities exchange(s) upon which the Common Stock then may be listed.

12.BenefitsofAgreement. This Agreement will inure to the benefit of and be binding upon each successor and assignee of the Corporation. All obligations imposed upon the Recipient and all rights granted to the Corporation under this Agreement will be binding upon the Recipient’s heirs, legal representatives and successors.

13.EffectofGovernmentalandOtherRegulations. The exercise of the Option and the Corporation’s obligation to sell and deliver shares upon the exercise of the Option are subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency which may, in the opinion of counsel for the Corporation, be required.

14.     PlanGoverns.  In the event that any provision in this Agreement conflicts with a provision in the Plan, the provision of the Plan shall govern.

Executed in the name and on behalf of the Corporation by one of its duly authorized officers and by the Recipient all as of the date first above written.

SOUTHERN HOSPITALITY DEVELOPMENT CORP

Date ____________________, ______________	By:  ______________________________________________
	[NAME]. President

The undersigned Recipient has read and understands the terms of this Option Agreement and the attached Plan and hereby agrees to comply therewith.

Date ____________________, ______________	_________________________________________________
	Signature of Recipient

Exhibit B

SUBSCRIPTIONAGREEMENT

THE SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF SUCH LAWS. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK SUBSCRIPTION AGREEMENT AND APPLICABLE SECURITIES LAWS.

This Subscription Agreement is entered for the purpose of the undersigned acquiring ______________   shares of common stock no par value (the “Securities”) of Southern Hospitality Development Corp (the “Corporation”) from the Corporation as a Bonus or pursuant to exercise of an Option granted pursuant to the Corporation's 2012 Stock Option Plan (the “Plan”). All capitalized terms not otherwise defined herein shall be as defined in the Plan.

It is understood that no grant of any Bonus or exercise of any Option at a time when no registration statement relating thereto is effective under the U.S. Securities Act of 1933, as amended (the “1933 Act”) can be completed until the undersigned executes this Subscription Agreement and delivers it to the Corporation, and that such grant or exercise is effective only in accordance with the terms of the Plan and this Subscription Agreement.

In connection with the undersigned’s acquisition of the Securities, the undersigned represents and warrants to the Corporation as follows:

1.     The undersigned has been provided with, and has reviewed the Plan, and such other information as the undersigned may have requested of the Corporation regarding its business, operations, management, and financial condition (all of which is referred to herein as the “Available Information”).

2.The Corporation has given the undersigned the opportunity to ask questions of and to receive answers from persons acting on the Corporation’s behalf concerning the terms and conditions of this transaction and the opportunity to obtain any additional information regarding the Corporation, its business and financial condition or to verify the accuracy of the Available Information which the Corporation possesses or can acquire without unreasonable effort or expense.

3.The Securities are being acquired by the undersigned for the undersigned’s own account and not on behalf of any other person or entity.

4.The undersigned understands that the Securities being acquired hereby have not been registered under the 1933 Act or any state or foreign securities laws, and are, and unless registered will continue to be, restricted securities within the meaning of Rule 144 of the General Rules and Regulations under the 1933 Act and other statutes, and the undersigned consents to the placement of appropriate restrictive legends on any certificates evidencing the Securities and any certificates issued in replacement or exchange therefor and acknowledges that the Corporation will cause its stock transfer records to note such restrictions.

5.By the undersigned’s execution below, it is acknowledged and understood that the Corporation is relying upon the accuracy and completeness hereof in complying with certain obligations under applicable securities laws.

6.This Agreement binds and inures to the benefit of the representatives, successors and permitted assigns of the respective parties hereto.

7.The undersigned acknowledges that the grant of any Bonus or Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to prior approval by the Corporation’s counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act and other applicable securities laws, the rules and regulations thereunder, and the requirements of any national securities exchange(s) upon which the Common Stock then may be listed.

8.      The undersigned acknowledges and agrees that the Corporation has withheld shares for the payment of taxes as a result of the grant of the Bonus or the exercise of an Option.

9.The Plan is incorporated herein by reference. In the event that any provision in this Agreement conflicts with ANY provision in the Plan, the provisions of the Plan shall govern.

		_______________________________________________________
Date	______________, ____________	Signature of Recipient
		Tax ID Number: ___________________________________________
		Address:  ________________________________________________
		________________________________________________________

EX-10.8

Exhibit 10.8

LEASE AGREEMENT

THIS LEASE AGREEMENT ("Lease") is made and entered into this 29th day of May, 2013 between Bourbon Brothers, LLC, a Colorado limited liability company whose address is 2 N. Cascade Ave., Ste. 1400, Colorado Springs, Co 80903, herein designated as the "Landlord," and Bourbon Brothers Smokehouse and Tavern Colorado Springs, LLC, a Colorado limited liability partnership whose address is 2 N. Cascade Ave., Ste. 1400, Colorado Springs, CO 80903, herein designated as the "Tenant."

WITNESSETH:

In consideration of the rent to be paid and the covenants to be performed by Tenant hereunder, Landlord does hereby lease and demise to Tenant, and Tenant does hereby lease and take from Landlord, the Premises described below, upon the following terms and conditions:

1.   PREMISES.Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the following described Real Property:

See Exhibit "A", attached hereto and incorporated herein by reference,

and land, a building and parking lot generally described in Exhibit A, attached hereto and incorporated herein by reference, to be constructed by Landlord pursuant to the terms of this Lease in accordance with the design plans attached hereto (the "Improvements"), to be constructed on the lot located at 13021 Bass Pro Drive, Colorado Springs, 80921, equaling approximately 1.5 acres, all liens, encumbrances, easements, restrictions, agreements, covenants, rights of way, and any other matters or documents of record, including any document placed of record by Landlord, zoning laws and regulations affecting or governing the Premises and general and special taxes. The Real Property and the Improvements collectively are referred to herein as the "Premises."

2.   TERMOFLEASE.The term of this Lease shall commence on the date on which Tenant takes possession of the Premises, referred to herein as the "Rent Commencement Date," and shall expire at midnight on the date ten years from the Rent Commencement Date, unless terminated sooner as provided in this Lease. Tenant, at its option, may extend this Lease for one additional ten-year term by providing written notice of its intent to do so at least 120 days before the Lease expires.

3.   RENTAL.  Tenant hereby covenants and agrees to pay to Landlord annual Base Rent of $385,000.00 for the first sixty 60 months of the Lease term, payable in monthly installments of $32,083.33.   This Base Rent assumes the building cost does not exceed $2,000,000. Any building costs in excess of $2,000,000 will result in the Base Rent being adjusted by 11% of the difference between $2,000,000 and the actual cost, per year.  The first month and the last month installment of rent shall be due upon the Rent Commencement Date. Subsequent monthly installments shall be due on the 1st day of each month thereafter during the term hereof.   Monthly Base Rent for any partial month shall be prorated at the rate of 1/30th of the monthly rent per day.  All Base Rent paid by Tenant under this Lease to Landlord shall be by normally accepted business methods payable in advance and without notice and shall be paid to Landlord at Landlord’s address set forth above, or at such other place as Landlord may from time to time direct in writing.

4.   RENTADJUSTMENTS.Every 60 months from the Rent Commencement Date, the annual rental rate shall be increased by the greater of: (a) ten percent; or (b) the percent change in the average annual Consumer Price Index, for all urban consumers in the Denver­ Boulder-Greeley, Colorado metropolitan area for all items, from the calendar year in which the prior 60-month Lease period commenced to the most recent calendar year prior to the rent adjustment.

5.   ADDITIONAL  RENT.

(a)   During the term of the Lease, Tenant shall pay all general and special  real  and personal property taxes and assessments relating to the Premises or Tenant's personal property located on or used in connection with the Premises, all premiums for insurance maintained on the Premises by Landlord, and all  dues  and  assessments levied or charged against the Premises or its owner by Northgate Business Properties or pursuant to any covenants, which shall be Additional Rent payable to Landlord. Tenant shall pay, with each monthly rental payment, an Additional Rent Deposit, representing 1/12 of Landlord's estimate of taxes, assessments and premiums for the Lease year. As soon as feasible (but in no event later than 90 days) after the commencement of each Lease year, Landlord will furnish Tenant a statement ("Landlords Statement") showing the following:

(i)   The amount of Additional Rent due Landlord for the previous Lease year, less credit for Additional Rent Deposits paid, if any;

(ii)   Estimated real property taxes and assessments for the new Lease year;

(iii)   Estimated insurance premiums for the new Lease year;

(iv)   Estimated assessments by Northgate Business Properties or pursuant to other covenants for the new Lease year;

(v)   Estimates for any other costs Landlord is entitled to as Additional Rent; and

(vi)   The Additional Rent Deposit due monthly in the then current Lease year, including the amount or revised amount due for months prior to the rendition of the statement.

(b)   Tenant shall pay to Landlord within thirty (30) days after receipt of such statement any amounts for Additional Rent then due in accordance with Landlord's Statement. Any amounts due from Landlord to Tenant pursuant to this Section shall be credited to the Additional Rent Deposit next coming due, or refunded to Tenant if the Term has already expired (which obligation shall survive such expiration) provided Tenant is not  in default hereunder.  No interest or penalties shall accrue on any amounts which Landlord

is obligated to credit to Tenant by reason of this Section. Landlord's failure to deliver Landlord's Statement or in computing the amount of the Additional Rent shall not constitute a waiver by Landlord of its right to deliver such items nor constitute a release of Tenant's obligations to pay such amounts. The Additional Rent Deposit shall be credited against Additional Rent due for the applicable Lease year. During the last complete calendar year or during any partial calendar year in which the Lease terminates, Landlord may include in the Additional Rent Deposit its estimate of Additional Rent that may not be finally determined until after the termination of this Lease. Tenants's obligation to pay Additional Rent (and Landlord's obligation to reimburse Tenant for any excess estimated payments made by Tenant) survives the expiration or termination of the Lease. Tenant will remit all taxes and insurance due as detailed in section 5(a) directly to Landlord and Landlord will pay directly to the taxing authorities and insurance provider.

(c)   Landlord shall maintain books and records showing real estate taxes and assessments, insurance premiums and dues and assessments paid pursuant to any covenants. The Tenant or its representative shall have the right, for a period of one hundred fifty (150) days following the date upon which Landlord's Statement is delivered  to Tenant, to examine the Landlord's books and records with respect to the items in Landlord's Statement during normal business hours, upon written notice, delivered at least three (3) business days in advance. IfTenant does not object in writing to Landlord's Statement within one year of Tenant's receipt thereof, specifying the nature of the item in dispute and the reasons therefor, then Landlord's Statement shall be considered final and accepted by Tenant. Landlord shall promptly repay Tenant for any overpayments which Tenant or its auditors identify, together with interest thereon at the Interest Rate from the date paid by Tenant until refunded in full.

6.   LATE PAYMENTS.

(a)   IfTenant shall neglect or fail to pay, when the same is due and payable, any Base Rent or Additional Rent, or any other amount required to be paid under this Lease, Tenant shall pay to Landlord, in addition to such unpaid amounts, interest upon such unpaid amounts from the due date thereof to the date of payment at the rate of 12% per annum.

(b)   Ifany installment of Base Rent or Additional Rent is not received by Landlord  from Tenant by the 10'" day of the month for which such installment is due, Tenant shall immediately pay to Landlord, in addition to any interest on delinquent  amounts, a late charge equal to 1% of such installment. Landlord and Tenant agree that this late charge represents a reasonable estimate of costs and expenses related to the late payment and is fair compensation  to Landlord for its loss suffered by such nonpayment by Tenant. The interest and late charge provisions contained herein are in addition to and do not diminish or represent a substitute for any or all of Landlord's rights contained in this Lease.

7. DELIVERYANDCONDITIONOFPREMISES.  Landlord shall construct the Improvements on the Real Property and shall deliver the Premises toTenant when the Improvements have been completed to the specifications contained in Exhibit A, attached

hereto. Landlord represents, warrants, and covenants that upon delive1y to Tenant, except for any condition owing to the act or negligence of Tenant, the Premises will conform to all applicable laws, orders, ordnances and regulations, and all parts thereof will be in good repair and in good working condition Upon delive1y to Tenant, Tenant shall have and is entitled to exclusive possession of the Premises as set forth in this Lease.

8.   IMPROVEMENTSBYTENANT.Tenant shall complete the final finish of the Improvements, as described in Exhibit B. No other alterations, additions or improvements may be made and no climate regulating, air conditioning, cooling, heating or sprinkler systems, television or radio antennas, heavy equipment apparatus and fixtures, shall be installed in or attached to the Premises, without the written consent of Landlord. Unless otherwise provided herein, all such alterations, additions or improvements and systems, when made, installed in or attached to the Premises, including improvements as described in Exhibit B, shall belong to and become the property of the Landlord upon expiration or earlier termination of  the Lease and shall be surrendered with the Premises without hindrance, molestation or injury.

9.   UTITILIESANDSERVICES.Utilities and services, including, without limitation, electric, water, sewer, telephone, gas, television, satelite services, Internet, garbage collection, lawn and landscaping care, shall be Tenant's sole responsibility and all accounts and invoicing for utilities and services shall be in Tenant's sole name. Tenant shall during the Term of this Lease (a) contract with a service company for the servicing and maintenance of all fire extinguishing systems and all mechanical exhaust devices, including, but not  limited  to, hoods, fans and air flues on a monthly, or more frequent if needed, basis; and (b) provide grease interceptors in compliance with all laws and regulations and service and maintain such grease interceptors on a scheduled basis

10.   REPAIRSANDCARE.Tenant shall (i) maintain the Premises in as good condition as at the Rent Commencement Date, ordinary wear and tear and other matters set forth in this Lease excepted, and shall keep the Premises free of trash and debris; (ii) shall be responsible for all nonstructural repairs and all maintenance of the Premises, including, but not limited to, plumbing, sewer, window replacement or repair, or electrical repair; (iii)be responsible for maintenance  and repair of stairways, elevators, halls, sidewalks and parking areas, if any; (iv) conform to all laws, orders and regulations of the federal, state or local governments, including special districts, or of any of their departments, applicable to the Premises; (v) repair at or before the end of the term, all injury to the Premises; and (vi) at the end of the term, surrender the Premises in as good condition as at the beginning of the term, except for those matters set forth in this Section.

11.   SIGNS.The Tenant shall not place, nor allow to be placed, any signs of any kind whatsoever, upon, in or about the Premises or any part thereof, except of a design and structure and in or at such places as may be indicated and consented to by Landlord in writing. Landlord or the Landlord's agents, employees or representatives may remove any such signs in order to paint or make any repairs, alterations or improvements in or upon the Premises or any part thereof, but such signs shall be replaced at the Landlord's expense upon completion of such painting, repairs, alterations or improvements. Any signs shall at all times conform to all laws and covenants applicable thereto.

12.   COMPLIANCE WITHLAWS,ETC.     Tenant  shall obtain  any  and all government

approvals required for Tenant's intended use and occupancy of the Premises, including, but not limited to any Certificate of Occupancy and/or Certificate of Use, Site Plan Approval or Site Plan Waiver, and to  promptly comply with all laws, ordinances, rules, regulations, requirements, orders, and directives of the federal, state, or local governments, including special districts, and of all their departments, agencies, bureaus and subdivisions, applicable to and affecting the use and occupancy of the Premises. Tenant shall correct and abate all nuisances, violations or other grievances in, upon or connected with the Premises and shall promptly comply with all orders, regulations, requirements and directives issued by the Board of Fire Underwriters or similar authority and of any insurance companies that have issued or are about to issue policies of insurance covering the Premises and its contents at the Tenant's own cost and expense. Ifany federal, state or local governmental authority, including special districts, having jurisdiction over the subject property, requires any improvements be made to the Premises as a result of Tenant's use of the subject property, Tenant shall be solely responsible for same.

13.   LIABILITYINSURANCE.At the Tenant's sole expense, the Tenant shall obtain and maintain, during the Term, public liability insurance naming the Landlord, its agents and the Tenant as insureds against any and all claims for injury to or death of persons or loss or damage to property occurring upon, in or about the Premises. Such insurance shall afford minimum protection of $1,000,000.00with respect to bodily injury to or death of any one person, $1,000,000.00with respect to bodily injury or death in any one occurrence or accident, and $1,000,000.00for property damage. The Tenant waives all rights of recove1y against the Landlord or Landlords' agents, employees or other representatives for any loss, damages or injury of any nature whatsoever to property or persons for which the Tenant is insured. The Tenant shall obtain from Tenant's insurance carriers and will deliver to the Landlord, waivers of the subrogation rights under the respective policies.

14.   INDEMNIFICATION.The Tenant also agrees to and shall save, hold and keep harmless and indemnify the Landlord, its  officers, directors, members, shareholders, partners, lenders, agents and employees from and for any and all demands, losses, damages, claims, suits, actions, judgments, fines, penalties, payments, expenses, costs, attorney fees and investigation costs wholly or partially resulting from any acts or omissions by the Tenant or the Tenant's agents, employees, guests, licensees, invitees, contractors, subtenants, assignees or successors, or for any cause or reason whatsoever arising out of or by reason of the occupancy by the Tenant or the conduct of the Tenant's business. Ifany action or proceeding is brought against Landlord, its officers, directors, members, shareholders, partners, lenders, employees or agents, by reason of any such claim, Tenant, upon notice from Landlord, shall defend the claim at  Tenant's expense with counsel reasonably satisfacto1y to Landlord.

15.   ASSIGNMENT.The Tenant shall not, without the written consent of the Landlord, assign, mortgage or hypothecate this lease, nor sublet or sublease the Premises or any part thereof.

16.   USEANDPOSSESSIONOFPREMISES. Tenant, its successors or assigns may use the Premises for operation of a restaurant. Any other use shall be permitted only with the written consent of the Landlord, subject to any covenants restricting use of the Premises. The Tenant shall not occupy or use the Premises or any part thereof, nor permit or suffer the same to be occupied or used for any purposes other than as herein limited, nor for any purpose deemed unlawful, disreputable, or extra hazardous, on account of fire or other casualty. Tenant shall not use, store, manufacture or in any manner bring upon the

Premises any hazardous wastes, hazardous chemicals, hazardous substances or petroleum products, except to the extent reasonable and common for the operation of a restaurant.

17. SUBORDINATION.This Lease and Tenant's rights under this Lease are subject and subordinate to any first mortgage, first deed of trust, or other first lien encumbrance or indenture, together with any renewals, extensions, modifications, consolidations, and replacements thereof that now or at any subsequent time affects the Premises or any interest of Landlord in the Premises or Landlord's interest in this Lease and the estate created by this Lease. Tenant agrees to execute, acknowledge and deliver to Landlord, at any time and from time to time, upon demand by Landlord, documents requested by Landlord, any mortgage or any holder of a deed of trust or other instrument described in this section, to confirm or effect the subordination provided herein. Any refusal by Tenant to execute and deliver such documents shall be a material breach of this Lease.

18.   ESTOPPELCERTIFICATE.Landlord and Tenant agree at any time and from time to time, upon not less than 20 days' prior written request by either of them to the other, to execute, acknowledge and deliver to the requesting party a statement in writing ce1iifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified, and stating the modifications), and the date to which the rental and other charges have been paid in advance, if any, it being intended that any such statement delivered pursuant to this section may be relied upon by any prospective purchaser of the fee, or mortgagee or assignee of any mortgage upon the fee or leasehold interest in the Premises, or by any assignee of the Tenant.

19.   CONDEMNATION.Ifthe Premises, or the land or property of which the Premises are a part, or any po1iion thereof, is taken under eminent domain or condemnation proceedings, or is sold or conveyed in lieu of any formal eminent domain or condemnation proceedings or actions, then this Lease shall terminate, and the term thereof shall end as of the date possession is taken. Tenant shall have no claim or right to claim or be entitled to any portion of any amount that may be awarded as damages or paid as the result of such taking or sale; and all rights of the Tenant to damages, if any, are hereby assigned to the Landlord.

20.   FIREANDOTHERCASUALTY.Tenant shall immediately notify Landlord of any fire or other casualty at the Premises. Ifthe Premises is damaged by fire or other casualty, but not so as to render the Premises untenantable, the Landlord shall repair the same as speedily as practicable, but the Tenant's obligation to pay the rent hereunder shall not cease. If,in the opinion of the Landlord, the Premises be so extensively and substantially damaged as to render it untenantable, then the rent shall cease until such time as the Premises shall be made tenantable by the Landlord. However, if, in the opinion of the Landlord, the Premises be totally destroyed or so extensively and substantially damaged as to require practically a rebuilding thereof, then Landlord shall either: (a) notify Tenant that the Lease is terminated; or (b) notify Tenant that Landlord intends to rebuild the Premises, in which case, rent shall be abated from the date of the fire or other casualty until issuance of a certificate of occupancy for the Premises, during which time Tenant may terminate this Lease by written notice to Landlord. In no event however, shall the provisions of this clause become effective or be applicable, if the fire or other casualty results from the carelessness, negligence or improper conduct of the Tenant or the Tenant's agents, employees, guests, contractors, licensees, invitees, subtenants, assignees or successors. In such case, the Tenant's liability for the payment of the rent and the performance  of all the covenants,

conditions and terms hereof on the Tenant's part to be performed shall continue and the Tenant shall be liable to the Landlord for the damage and loss suffered by the Landlord. Tenant shall repair all damages caused to the Premises by vandalism or burglary.

21.   REIMBURSEMENTOFLANDLORD.Ifthe Tenant shall fail or refuse to comply with and perform any conditions and covenants of this Lease, the Landlord may if the Landlord so ·elects, carryout and perform such conditions and covenants, at the cost and expense of the Tenant. All costs and expenses incurred by Landlord pursuant to this section shall be Additional Rent and shall be due and payable within 15 days after written demand from Landlord to Tenant. This remedy shall be in addition to any other remedies the Landlord may have upon Tenant's breach of any of the covenants and conditions in this Lease.

22.   INSPECTIONANDREPAIR.Landlord, its agents, employees or other representatives, may enter into and upon the Premises, or any pmt thereof, at all reasonable hours, for the purpose of examining the same or making such repairs or alterations therein as may be necessary for the safety and preservation thereof. This clause shall not be deemed to be a covenant by the Landlord nor be construed to create an obligation on the part of the Landlord to make such inspection or repairs.

23. RIGHTTOEXHIBIT.Landlord, its agents,  employees  or  other  representatives,  may enter into and upon the Premises, or any part thereof, at all reasonable hours, to show the premises to persons wishing to rent or purchase the same. Beginning 90 days prior to the expiration of this Lease, the Landlord , its agents, employees or other representatives, shall have the right to place notices on the front of the Premises or any part thereof, offering the Premises for rent or for sale; and the Tenant hereby agrees to permit the same to remain thereon without hindrance or molestation.

24.   INCREASEOFINSURANCERATES. Iffor any reason it shall be impossible to obtain fire and other hazard insurance on the buildings and improvements of which it is a part, in an amount and form and with insurance companies acceptable to the Landlord, the Landlord may, if the Landlord so elects at any time thereafter, terminate this Lease, upon giving the Tenant fifteen days notice in writing of such termination.

25.   LANDLORD'S REMEDIES ON DEFAULT.

(a)   The failure of Tenant to perform each covenant made under this Lease, including any abandonment of the Premises by Tenant, shall constitute a default hereunder. However, Landlord shall not commence any action to terminate Tenant's right of possession as a consequence of a default until the period of grace with respect thereto, if any, has  elapsed.

(i)   Tenant shall have a period of three (3) days from the date of written notice from Landlord within which to cure any default in the payment of any monetary obligations of Tenant under this Lease.

(ii)   Tenant shall have a period of fifteen (15) days from the date of written notice from Landlord within which to cure any other default under this Lease which is capable  of being  cured; provided,  however, that with

respect  to  any  curable  default  which  cannot  reasonably  be  cured within fifteen (15) days, the default shall not be deemed to be uncured if Tenant commences to cure within fifteen (15) days from Landlord's notice and thereafter prosecutes diligently and continuously  to  completion  all acts required to cure the default.

(b)   IfTenant fails to cure a default, Landlord shall have the following rights and remedies in addition to any other rights and remedies available to Landlord at law or in equity:

(i)   The right to continue this Lease in effect and to enforce all of Landlord's rights and remedies under this Lease, including the right  to  recover rent as it becomes due, for so long as Landlord does not terminate Tenant's right to possession. Acts of maintenance or preservation, eff01is to relet the Premises, or the exparteappointment of a receiver upon Landlord's initiative to protect its interest under this  Lease shall not constitute a termination of Tenant's right to possession;

(ii)   The right to terminate this Lease by giving notice to Tenant in accordance with applicable law. Tenant shall be entitled to retain possession of the Premises for a period of one hundred twenty (120) days following service of such notice;

(iii)   IfTenant has vacated the Premises, the right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant. Landlord may from time to time sublet the Premises or any part thereof for such term or terms (which may extend beyond the Term of this Lease) and at such rent and such other terms as Landlord in its discretion may deem advisable, with the right to make alterations  and repairs to the Premises. Rents received from such subletting shall be applied first, to payment of any indebtedness other than rent due hereunder, from Tenant to Landlord; second, to payment of any costs of such subletting and of such alterations and repairs; third, to payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future  rent  as  the  same  becomes due hereunder. Such deficiency shall be calculated and paid monthly. No taking possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of such intention is given to Tenant. Notwithstanding any such subletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach; and

26.  REMOVALOFTENANT'SPROPERTY.Any equipment, fixtures, goods or other prope1iy of the Tenant not removed by the Tenant upon the termination of this Lease, or upon any quitting, vacating or abandonment of the Premises by the Tenant, or upon the Tenant's eviction, shall be considered as abandoned and the Landlord shall have the right, without any notice to the Tenant, to sell or otherwise dispose of the same, at the expense of the Tenant, and shall not be accountable to the Tenant for any part of the proceeds for such, sale, if any.

27. NON-LIABILITYOFLANDLORD.The Landlord shall not be liable for, and Tenant hereby releases and waives any claim against Landlord arising out of, any damage or injury which may be sustained by the Tenant or any other person, as a consequence of the failure, breakage, leakage or obstruction of water, plumbing, steam, sewer, waste or soil pipes, roof, drains, leaders, gutters, valleys, downspouts or the like or of the electrical, gas, power, conveyor, refrigeration, sprinkler, air conditioning or heating systems, elevators, or hoisting equipment or by reason of the elements; or attributable to any interference with, interruption of or failure beyond the control of the Landlord, of any services to be furnished or supplied by the Landlord.

28.   NON-WAIVEROFLANDLORD.The various rights, remedies, options and elections of the Landlord, expressed herein, are cumulative, and the failure of the Landlord to enforce strict performance by the Tenant of the conditions and covenants of this Lease or to exercise any election or option or to resort or have recourse to any remedy herein confirmed or the acceptance by the Landlord of any installment of rent after any breach by the Tenant, in any one or more instances, shall not be construed and deemed to be a waiver or a relinquishment for the future by the Landlord of any such conditions and covenants, options, elections or remedies, but the same shall continue in full force and effect.

29.   NON-PERFORMANCE BYLANDLORD. This lease and the obligation of the Tenant to pay the rent hereunder and to comply with the covenants and conditions hereof, shall not be affected, curtailed, impaired or excused because of the Landlord's inability to supply any service or material called for herein, by reason of any rule, order, regulation or preemption by any governmental entity, authority, department, agency or subdivision or for any delay which may arise by reason of negotiations for the adjustment of any fire or other casualty loss or because of strikes or other labor trouble or for any cause beyond the control of the Landlord.

30.   SEVERABILITY.The terms, conditions, covenants and provisions of this Lease shall be deemed to be severable. Ifany clause or provision herein contained shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision herein, but such other clauses or provisions shall remain in full force and effect.

31.   NOTICES.All notices required under the terms of this Lease shall be given and shall be completed by hand-delivery or mailing such notices by certified or registered mail, return receipt requested, to the address of the parties as shown at the head of this Lease or to such other address as may be designated in writing, which notice of change of address shall be given in the same manner.

32.   TITLEANDQUIETENJOYMENT.The Landlord covenants and represents that the Landlord is the owner of the Premises and has the right and authority to enter into, execute and delivery this Lease and does further covenant that the Tenant, on paying the rent and performing the conditions and covenants herein contained, shall and may peaceably and quietly have, hold and enjoy the Premises for the term of the Lease.

33. TERMINATION  BASED  ON PURCHASE  AGREEMENT.   The Landlord possesses limited rights to compel the prior owner of the Real Estate to purchase the Real Estate back from Landlord. Landlord shall provide Tenant written notice of Landlord's exercise of the right to compel repurchase within 10 days after exercise of such right and this Lease shall terminate upon delivery of such notice.

34.   ENTIRECONTRACT.This Lease contains the entire contract between  the  parties relating to the subject matter of this Lease. No additions, changes or modifications, renewals or extensions hereof shall be binding unless reduced to writing and signed by the Landlord and the Tenant.

35.   MECHANICSLIENS.No one shall have any lien or claim against the Landlord or Landlord's interest in the Premises for work done or materials supplied at the insistence of Tenant. Ifany mechanics' or other liens are created or filed against the Premises, or the land upon which it is located, by reason of labor performed or materials furnished for the Tenant in the erection, construction, completion, alteration, repair or addition to any building or improvement, the Tenant shall upon demand, at the Tenant's own cost and expense, cause such lien or liens to be satisfied and discharged of record together with any Notices of intent that may have been filed.

36.   SECURITY. The Tenant has this day deposited with the Landlord the sum of $32,083.33,representing one (1)month of rent as security payment of the rent hereunder and the full and faithful performance by the Tenant of the covenants and conditions herein. Said sum shall be returned to the Tenant, without interest, after the expiration of the term hereof, provided that the Tenant has fully and faithfully performed all such covenants and conditions and is not in arrears in rent. During the term hereof, the Landlord may, if the Landlord so elects, have recourse to such security, to make good any default by the Tenant, in which event the Tenant shall, on demand, promptly restore said security to its original amount. Liability to repay said security to the Tenant shall run with the reversion and title to the Premises, whether any change in ownership thereof be by voluntary alienation or as the result if judicial sale, foreclosure or other proceedings, or the exercise of a right of taking or entry by any mortgagee. The Landlord shall assign or transfer said security, for the benefit of the Tenant, to any subsequent owner or holder of the reversion or title to the Premises, in which case the assignee shall become liable for the repayment  thereof  as herein provided, and the assignor shall be deemed to be released by the Tenant from all liability to return such security. This provision shall be applicable to eve1y alienation or change in titled and shall in no wise be deemed to permit the Landlord to retain the security after termination of the Landlord's ownership of the reversion or title. The Tenant shall not mortgage, encumber or assign the security without the written consent of the Landlord.

37.   HOLDOVER.Any rule of law to the contrary notwithstanding, in the event the Tenant remains in possession of the Premises or any part thereof subsequent to the expiration of the term hereof and such holding over shall be with the  consent of the Landlord, itshall be conclusively deemed that such possession and occupancy shall be for a tenancy from month-to-month, subject to all of the other terms and conditions of this Lease, including, without limitation, Rent Adjustments.

38.   BROKERS.Neither Landlord nor Tenant has not dealt with any broker or finder with regard to the Premises  or this Lease.  Tenant  will  indemnify  Landlord  against  any  loss, liability and expense (including attorneys' fees and court costs) arising out of claim fees or commissions from anyone with whom Tenant has dealt in regard to the Premises or this Lease. Landlord will indemnify Tenant against any loss, liability and expense (including attomeys' fees and court costs) arising out of claims for fees or commissions from anyone with whom Landlord has dealt in regard to the Premises or this Lease.

39.   RECORDATION.Tenant shall not file this Lease in the real property records of any county clerk and recorder.

40.   INTERPRETATION.This Lease is the product of negotiations between the Parties, therefore, the rule of construction which provides that ambiguities in a contract shall be construed against the drafter shall not apply to this Lease and all Parties waive any such defense to the terms of this Lease. In all references herein to any parties, persons, entities or corporations the use of any particular gender or the plural or singular number is intended to include the appropriate gender or number as the text of the within instrument may require.

41.   BINDINGEFFECT;BENEFIT.All the terms covenants and conditions herein contained shall be for and shall inure to the benefit of and shall bind the respective patties hereto, and their heirs, executors, administrators,  personal or legal representatives, successors and assigns.

42.   APPLICABLELAW.This Lease is made and entered into, and shall be governed by and construed in accordance with, the laws of the State of Colorado. Any suits, proceedings, arbitrations, or other actions relating to, arising out of or in connection with this Lease shall be submitted to the jurisdiction of the comts located exclusively in the State of Colorado, City of Colorado Springs.

43.   ATTORNEYS'FEESANDCOSTS.In the event an arbitration, suit or action is brought by any Party to this Agreement to enforce any terms of this Agreement, or in any appeal therefrom, it is agreed that the prevailing Party shall be awarded its costs and expenses incurred in the proceeding, including without limitation, reasonable attorney fees, expert witness fees, filing fees, arbitrator fees and interest, to be fixed by the arbitrator, trial court, and/or appellate comt.

 IN WITNESS WHEREOF, the patties have hereunto set their hands and seals, the day and year written herein below:

LANDLORD: BourbonBrothers, LLC	TENANT: BourbonBrothersSmokehouseandTavern Colorado Springs, LLC
/s/ J.W. Roth	/s/ Robert B. Mudd
Title:  Manager Cathedral Peaks Capital, LLC (the acting manager of Bourbon brothers, LLC)	Title:  Manager Bourbon Brothers Smokehouse and Tavern LLC
Date:  5-29-13	Date:  5-29-13

/

EX-10.9

Exhibit  10.9

AMENDED AND RESTATED LICENSE AGREEMENT

THIS AGREEMENT is made effective as of April 18, 2013, although it is being signed at a later date, by and between BOURBON BROTHERS, LLC, a Colorado limited liability company with an address of 2 N. Cascade Ave., Suite 1400, Colorado Springs, CO 80903 ("Licensor"), and BOURBON BROTHERS HOLDING COMPANY, LLC, a Colorado limited liability company, BOURBON BROTHERS BRAND, LLC, a Colorado limited liability company, BOURBON BROTHERS FRANCHISE, LLC, a Colorado limited liability company, BOURBON BROTHERS RESTAURANT GROUP, LLC, a Colorado limited liability company, and BOURBON BROTHERS SMOKEHOUSE AND TAVERN COLORADO SPRINGS, LLC, a Colorado limited liability company, each with an address of 2 Cascade Ave., Suite 1400, Colorado Springs, CO 80903 (hereinafter, each is a "Licensee" and together they are referred to as "Licensees"). Licensees and Licensor may be collectively referred to herein as "Parties."

WHEREAS,Licensoristheownerofandintendstousetheservicemark"BourbonBrothers"USPTOSerialNumber85,858,267,applicationfiled onFebruary23,2013,("ServiceMark") and related Intellectual Property, defined below, in connection with the development of restaurants featuring southern-style food and beverages ("Bourbon Brothers Restaurants");

WHEREAS,Bourbon Brothers Holding Company, LLC ("BourbonBrothersHolding"),a Licensee, is the parent company of the other Licensees and the other Licensees are each wholly-owned subsidiaries of Bourbon Brothers Holding;

WHEREAS,BourbonBrothersFranchise,LLC("BourbonBrothersFranchise"),aLicensee,desirestoofferfranchisesforBourbonBrothersRestaurantspursuanttothetermsoffranchiseagreementsbetweenBourbon BrothersFranchiseandthird-partyfranchisees("Franchisees");

WHEREAS,Licensor is affiliated with Licensees through common ownership and Licensor is willing to grant an exclusive license to Licensees to use and to sub-license the use of the Marks and Intellectual Property, defined below, under the terms and conditions provided herein;

WHEREAS, the Parties previously entered into a License Agreement dated April 18, 2013 (the "FirstLicenseAgreement"),whereby Licensor granted the Licensees limited rights to use the Service Mark;

WHEREAS,Bourbon Brothers Holding Corporation, the predecessor of Bourbon Brothers Holding Company, LLC, signed the First License Agreement and since that time, has assigned all of its assets and liabilities to Bourbon Brothers Holding Company, LLC, its successor in interest; and

WHEREAS,the Parties desire to amend, supplement, and clarify certain terms of the License Agreement;

1

NOW,THEREFORE,in consideration of the mutual covenants and restrictions herein and the payment by Licensees to Licensor of $10.00, the Parties agree as follows:

1.GRANT.    Licensor hereby grants to Licensees the exclusive rights ("Rights"), subject to Licensor's continuing right to use the Marks in any manner, to use the Service Mark and associated trademarks, trade names, service marks, logos, brands, slogans, domain names, and identifying features, owned by Licensor or which hereafter are created and owned by Licensor (collectively, the "Marks")and certain Intellectual Property, defined below, throughout the United States in c01mection with the operation of and offer and sale of franchises for Bourbon Brothers Restaurants, the sublicensing of the Marks and Intellectual Property to Franchisees to operate Bourbon Brothers Restaurants, and to themselves use the Marks and Intellectual Property to develop and operate Bourbon Brothers Restaurants throughout the United States ("LicensedTerritory").Bourbon Brothers Franchise shall use its best efforts to promote and sell franchises for Bourbon Brothers Restaurants in the Licensed Territory. The Licensed Territory may not be expanded to include any areas outside of the United States without the express prior written consent of Licensor. Licensor agrees that no other individuals or entities, except Licensor, shall have the privilege of using the Rights in the Licensed Territory during the term of this Agreement. All Rights not specifically granted to Licensee hereunder are specifically reserved to Licensor subject to the terms and conditions as stated herein.

2.INTELLECTUAL PROPERTY.   The term "IntellectualProperty," as used in this Agreement is defined as: (i) all manuals, designs, plans, blueprints, layouts, adve1iising and marketing materials, and methods, training programs, and all computer software, including source code, object code, firmware, development tools, files and records, and operating systems and other works, including any copyrights therein; (ii) all patents, design patents and other inventions (whether patentable or not) and improvements thereto, and all registrations associated with the foregoing; and (iii) proprietary business methods, processes and operating systems, and distinctive business formats, trade dress, trade secrets, proprietary information and know-how, customer lists, recipes, and all documentation relating to the development, operation, and offer of franchises of Bourbon Brothers Restaurants.

3.TERM AND RENEWAL. This Agreement shall c01mnence on the date first written above and shall continue for an initial term of 10 years unless sooner terminated as provided in this Agreement. This Agreement shall automatically renew for additional terms of 10 years each without any action required to be taken by either party, unless sooner terminated as provided in this Agreement.

4.SUPERVISION.Licensor shall have the right to supervise the use of the Marks for the purpose of protecting and maintaining the standards of quality associated with the Marks as decided by Licensor in Licensor's sole discretion. Licensees shall use, display, sub-license and franchise the Marks only in strict compliance with any standards that may be periodically mandated by Licensor. Licensees shall take no action which would impair Licensor's right, title and interest in and to the Marks. IfLicensor, at any time, finds that the use of the Marks by a Licensee or its sublicensee is deficient in the quality and standards determined by Licensor for the use of said Marks, or is misleading in any manner, or is otherwise in violation of this Agreement, then Licensor may notify the Licensees in writing of such deficiency and the Licensees shall take such corrective measures as are necessary so that the Licensees and their sublicensees' use of the Marks is not deficient.

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5.EQUAL STANDARDS. Licensor shall maintain and exercise adequate control and supervision over the use of the Marks at each location where Licensor uses the Marks in order to maintain the high standards of quality associated with the Marks.

6.NON-INTERFERENCE.    Itis the express intention of the Parties to enable Licensor, on the one hand, and Licensees, on the other hand, to own, operate, license and/or franchise Bourbon Brothers Restaurants associated with the Marks without interference from the other Parties (except to the extent necessary to maintain and enhance the quality of service and good will associated with the Marks), each within their respective areas of authorized use. In furtherance of the foregoing, neither Party shall restrict nor otherwise attempt to limit the business or activities of the other Party except for such business or activity directly associated with the Marks and only as described herein.

7.INDEMNIFICATION.Each Licensee shall indemnify, defend and hold Licensor harmless from any claims, demands, liabilities, obligations or lawsuits against the Licensee arising out of acts or omissions related to the Licensee's use or licensing of the Marks or Intellectual Property, including, but not limited to, claims for personal injury or property damage, claims related to contracts entered into between the Licensee and Franchisees and other third parties, taxes of any kind owed by the Licensee or any other tort, contract claim, or public liability claim against the Licensee.

8.DISCLAIMER OFPARTNERSHIP.  Nothing herein shall be construed in any way to create a partnership or a subsidiary relationship between Licensees and Licensor, and Licensees shall not have any right, title or interest in Licensor's business except the right to use the Marks and the Intellectual Properly in c01mection with the activities of the Licensees described herein.

9.WARRANTY OF TITLE.   Licensor represents and warrants that to its actual knowledge, it owns all right, title and interest in and to the Marks and Intellectual Property. In addition, Licensor represents and warrants that there are no agreements currently in effect which limit the rights of Licensor to use or license the use of the Marks and there are no infringing uses actually known to Licensor that can materially affect Licensees' use and sub-license thereof. Except as expressly stated, Licensor makes no warranty, express or implied, with respect to the ownership of any rights relating to the Marks or Intellectual Property described herein. The Parties understand that local rights to the Marks may exist prior to the date of this Agreement over which the Parties have no control and/or about which the Parties currently have no knowledge.

10.COMPLIANCE WITHAPPLICABLE LAWS. Each Licensee agrees to comply with all municipal, local, county, state or federal regulations and laws and to reasonably supervise any Franchisees who are granted sub-licenses to use the Marks and the Intellectual Property.

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11.LICENSOR'SRIGHTSUPONLICENSEE'S DEFAULT.    Licensor shall have the right to terminate this Agreement as it relates to a defaulting Licensee upon the occurrence of any one or more of the following events of default:

a.   Licensee's failure to comply with the terms and conditions of this Agreement within 30 days of receiving written notice from Licensor that Licensee is in default of this Agreement; provided, however, that if the default is of such a nature that it cannot be reasonably cured within 30 days, the cure period shall be extended for such period as Licensee is diligently pursuing a cure to completion.

b.   Licensee's insolvency, which shall be defined as: (i) Licensee's failure to pay its debts as they come due; or (ii) when the fair market value of Licensee's assets are less than the value of Licensee's accrued liabilities.

c.   Licensee's assignment for the benefit of its creditors or any other unapproved assignment or transfer of Licensee's rights under this Agreement.

d.   The placement of Licensee's assets in the hands of a trustee or receiver.

Licensor may exercise its right of termination by giving the defaulting Licensee, its trustees, receivers, or assigns 30 days written notice of Licensor's election to terminate, after which this Agreement will terminate. Upon termination of this Agreement for any reason, the Licensee shall be deemed to have assigned or transferred its right, title and interest in and to any franchise or license agreement between Licensee and any Franchisee to Licensor or to any assignee that Licensor shall designate at the time of such deemed assignment or transfer and Licensee shall execute any documents reasonably required by Licensor to effectuate such assignment or transfer. Upon termination of this Agreement for any reason, Licensee shall immediately discontinue the use of the Marks and the Intellectual Property and cease to identify itself as having any relationship with Licensor or any right to use the Marks and the Intellectual Property.

In addition to Licensor's right to terminate this Agreement as described above, if Licensee commits a breach of any express or implied term herein, Licensor may bring an action for injunctive relief, including ex parte relief, or bring a claim for damages. All remedies shall be cumulative.

12.LICENSEE'SRIGHTTOTERMINATE.Each Licensee shall have the right to terminate this Agreement for any reason upon 30 days prior written notice to Licensor.

13.SEVERABILITY.In the event that any of the terms and conditions herein are held invalid, the remaining parts and conditions and obligations of this Agreement shall remain in full force and effect.

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14.ASSIGNMENT ANDTRANSFER. No Party may assign or transfer any of its rights hereunder without the prior written consent of the other Parties, and such consent shall not be unreasonably withheld, delayed or conditioned. A transfer by Licensor includes the transfer of any federal, state, or common law rights that Licensor has to the Marks and the Intellectual Property. Upon assignment or transfer, this Agreement shall inure to the benefit of the parties' respective assignees or other legal successors in interest.

15.  MISCELLANEOUS.

a.   Singular-Plural.   Wherever the singular or plural are used, this Agreement shall be deemed amended to reflect the appropriate form.

b.   Attorney Fees.      Ifa Part commits a breach of this Agreement, the non­ defaulting Parties shall be entitled to reasonable attorneys' fees and costs, including costs of depositions taken and litigation incurred in the enforcement of any term herein or in the collection of any damages incurred as a result of such breach.

c.   Integration;Modification. This Agreement contains the entire understanding of the Parties with respect to the subject matter herein contained and shall supersede and replace the First License Agreement in its entirety. The Parties may, from time to time modify, vary, or alter any of the provisions of this Agreement, but only by a written agreement duly executed by all Parties.

d.   Notices. All notices, reports or other documents and communications that are required or permitted to be given to the Parties under this Agreement shall be sufficient if given in writing and delivered in person, by overnight courier, or by registered or certified mail, postage prepaid, return receipt requested, to the receiving Party at the address listed on the first page of this Agreement or to such other address as such Party may have given to the other by written notice pursuant to this Section. Notice shall be deemed given on the date of delive1y, in the case of personal delivery, or on the delivery or refusal date, as specified on the return receipt, in the case of overnight courier or registered or certified mail.

e.   GoverningLaw. Except to the extent governed by the Lanham Act or other federal law, this Agreement shall be governed by the laws of the State of Colorado, irrespective of the choice of law rules of any jurisdiction. The Parties agree that venue and jurisdiction for any litigation arising from this Agreement shall only be proper in the state or federal court located in Denver County, Colorado. The Parties hereby consent to the personal and subject matter jurisdiction of the federal and state courts of the State of Colorado for any and all disputes arising out of this Agreement.

f.   Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement except by written instruments signed by the Party charged with the waiver or estoppel. No waiver shall be deemed a continuing waiver unless specifically stated therein, and the written waiver shall operate only as to the specific term or condition waived, and not for the future or as to any act other than that specifically waived.

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g.   Bankruptcy of Licensor. The Parties intend that the license and right under this Agreement shall constitute a license of "intellectual property rights" within the meaning of Section 365(n) of the U.S. Bankruptcy Code and, as such, this Agreement may remain in full force and effect under such law if Licensor is insolvent, makes an assignment for the benefit of its creditors, is subject to any voluntary  or involuntary  bankruptcy  proceeding and such proceeding is not dismissed within thirty (30) days of commencement, or otherwise ceases to do business.

h.   Counterparts. This Agreement may be executed in any number of counterparts and by any number of counterpart signature pages, each of which shall be an original with the san1e effect as if each of the signatures were affixed to the same instrument. Signatures may be electronic and signature pages may be transmitted electronically, and such signatures and signature pages shall be deemed original signature pages for all purposes.

INWITNESSWHEREOF,the Parties have executed this Agreement as of the date first set forth above.

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LICENSEE: BOURBON BROTHERS HOLDING COMPANY, LLC	LICENSOR: BOURBON BROTHERS, LLC
/s/ Robert B. Mudd	/s/ J.W. Roth
Its:  Manager

LICENSEE:

BOURBON BROTHERS BRAND, LLC

/s/ Robert B. Mudd

Its: Manager

LICENSEE:

BOURBON BROTHERS FRANCHISEE, LLC

/s/ Robert B. Mudd

Its: Manager

LICENSEE:

BOURBON BROTHERS RESTAURANT GROUP, LLC

/s/ Robert B. Mudd

Its: Manager

LICENSEE:

BOURBON BROTHERS SMOKEHOUSE AND TAVERNS COLORADO SPRINGS, LLC

/s/ Robert B. Mudd

Its: Manager

LICENSEE:

BOURBON BROTHERS HOLDING COMPANY, LLC

/s/ Robert B. Mudd

Its: Manager

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LICENSE AGREEMENT

This License Agreement (hereinafter, "Agreement") is entered into as of the 18th day of April 2013 ("Effective Date"), by and between Bourbon Brothers Holding Corporation, a Colorado corporation, Bourbon Brothers Brand, LLC, a Colorado limited liability company, Bourbon Brothers Franchise, LLC, a Colorado limited liability company, Bourbon Brothers Restaurant Group, LLC, a Colorado limited liability company, and Bourbon Brothers Smokehouse and Tavern Colorado Springs, LLC a Colorado limited liability company, each with an address at 2 North Cascade Avenue, Suite 1400 Colorado Springs, CO 80903 (hereinafter, each is a "Licensee" and together they are the Licensees) and Bourbon Brothers, LLC, a Colorado limited liability company with an address at 2 North Cascade Avenue, Suite 1400, Colorado Springs, CO 80903 (hereinafter, "Licensor"). Licensees and Licensor may each be referred to as a "Party" or together as the "Parties".

RECITALS

WHEREAS, Licensor owns the Trademark defined below.

WHEREAS, Licensees desire to acquire a royalty-free, non-exclusive license to the Trademark.

AGREEMENT

NOW THEREFORE, for the foregoing reasons, and in consideration of the conditions, covenants and agreements set fotih below, the receipt and sufficiency of which are hereby acknowledged, the Patties agree as follows:

Definitions. In addition to terms defined elsewhere in this Agreement, the following terms shall have the meanings set fotih below:

"Licensed Product(s)" shall mean all products that incorporate, utilize or are made with the use of the Trademark.

"Trademark" shall mean the trademark "Bourbon Brothers," federal serial number 85858267 with an application filing date of February 23, 2013.

License.Licensor hereby grants to each Licensee, a fully paid-up, nonexclusive, world­ wide, perpetual, irrevocable and royalty free license to make, have made for Licensee, use, offer to sell, sell, distribute, export or import Licensed Products and further for the use of the Trademark in the restaurant and bar industry. Use of license outside of the restaurant and bar industry shall be approved by Licensor on a case-by-case basis and an addendum to this agreement would document approval.

Each Licensee shall have the right to sublicense the Trademark so long as Licensee has obtained Licensor's prior written consent. Licensee shall be responsible for its sublicensee's compliance with the terms of its sublicense. The sublicense shall be no less stringent than, and shall not conflict with the tem1s of this Agreement; however, the sublicense shall not be perpetual and shall be revocable in the event the sublicensee materially breaches the terms of the sublicense.

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Licensee acknowledges that the Trademarks are unique and original to Licensor and that Licensor is the owner thereof. Licensee shall not, at any time during or after the term of this Agreement, dispute or contest, directly or indirectly, Licensor's ownership and title to the Trademark or the validity thereof.

Consideration.In exchange for the license of the Trademark, Licensee shall pay Licensor an aggregate amount of $1.00 ("Payment") on the Effective Date.

1.           Modification of Trademark.  Licensee shall not make any modifications to the Trademark. Itis understood and agreed that Licensor shall retain all ownership and title in any modifications or improvements made to the Trademark, but Licensee shall have a license to use any such modifications or improvements as set forth above in Section 2.

Limited Rights with Respect to the Trademark. Licensee acknowledges and agrees that Licensor is the exclusive owner of all right, title and interest in the Trademark and that Licensee has only the limited rights expressly set forth in this Agreement. Licensee shall not represent in any manner that it owns the Trademark. Licensee shall not take any action that may impair, impede or diminish any rights Licensor has in or to the Trademark.  Licensee's use of the Trademark, and any goodwill created thereby, shall inure to the benefit of Licensor. Licensee shall not, at any time during the term of this Agreement or after its termination or expiration, contest the validity or ownership of the Trademark or assist any other person in contesting the validity or ownership of the Trademark.

Limitations on Use. Licensee shall not use the Trademark or portion thereof as part of any business entity name or trade name, with any prefix, suffix or other modifying words, terms, designs or symbols or in any modified form, without the prior written consent of Licensor. The following entity names are hereby consented to by Licensor: (a) Bourbon Brothers Holding Company, (b) Bourbon Brothers Brand, LLC, (c) Bourbon Brothers  Franchise, LLC, (d) Bourbon Brothers Restaurant Group, LLC, (e) Bourbon Brothers Smokehouse and Tavern Colorado Springs, LLC, and (f) Bourbon Brothers Investment,  LLC. Bourbon Brothers Investment, LLC is licensed to use the entity name of the Licensor and has no other rights to use the Trademark. Licensee shall not register or seek to register the Trademark with the United States Patent and Trademark Office or any state or foreign country. Licensee shall not use, register or seek to register as a trademark or service mark, either with the United States Patent and Trademark Office or any state or foreign country, any trademark or service mark that is confusingly similar to the Trademark.

Indemnification of Use of Trademark. Either Party shall immediately notify the other Party in writing of any apparent infringement of or challenge to Licensor's or Licensees' use of the Trademark of which it becomes aware. Licensor may, at its option, control the defense of any action or proceeding; however Licensee shall pay for all expenses incurred by Licensor and Licensees in any trademark or similar proceeding disputing Licensor's or Licensee's rights to or use of the Trademark. This indemnification shall not apply to litigation between Licensor and Licensee wherein Licensees' use of the Trademark is disputed or challenged by Licensor.

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Right to Inspect. To preserve the quality and integrity of the Trademark, Licensor and its designees have the right to enter and inspect each Licensee's business or sublicensee's businesses at all reasonable times. Licensor also has the right to inspect all materials and manner in which the Trademark is used. In the event the Trademark is not used in a manner that maintains the quality and integrity of the Trademark, as determined by Licensor, Licensor has the right to suspend the license under this Agreement until such Licensee or its sublicensees have remedied the issue.

Representations andWarranties byLicensee. Licensee represents and warrants that (a) it is free to enter into this Agreement; and (b) it has not, and will not, enter into any other agreement that would conflict with the terms of this Agreement.

Representations and Warranties byLicensor.  Licensor represents and warrants that (a) it owns all right, title, and interest in and to the Trademark on file as of the Effective Date; (b) it is free to enter into this Agreement; and (c) it has not, and will not, enter into any other agreement that would conflict with the terms of this Agreement.

Term: Termination. This Agreement will continue perpetually. Provided, however, in the event of a material breach, the Licensee shall cure, or cause the breach to be cured within 30 days of receiving written notice of the breach. Ifthe breach is not cured during the 30-day period, Licensor may terminate this Agreement as to that Licensee notwithstanding that the license granted in Section 2 would otherwise be perpetual and irrevocable.

Notices. All notices, reports or other documents and communications that are required or permitted to be given to the Patties under this Agreement shall be sufficient if given in writing and delivered in person, by email, by overnight courier, or by registered or ce1tified mail, postage prepaid, return receipt requested, to the receiving Party at the address listed on the first page of this Agreement or to such other address as such Patty may have given to the other by written notice pursuant to this Section. Notice shall be deemed given on the date of delivery, in the case of personal delivery or confirmed receipt email, or on the delivery or refusal date, as specified on the return receipt, in the case of overnight courier or registered or certified mail.

GoverningLaw. This Agreement shall be governed by the laws of the State of Colorado, irrespective of the choice of law rules of any jurisdiction. The Parties agree that venue and jurisdiction for any litigation arising from this Agreement shall only be proper in the State of Colorado, Denver County and that no other court shall have jurisdiction over such matters. The Patties hereby consent to the personal and subject matter jurisdiction of the federal and state courts of the State of Colorado for any and all disputes arising out of this Agreement.

Entire Agreement. This Agreement contains the final, entire and complete understanding between the Patties as to the subject matter of this Agreement, and supersedes all prior discussions between them and/or their respective counsel. This Agreement may not be modified or terminated orally, and no claimed amendment, rescission or waiver shall be binding on a Party unless in a writing signed by a duly authorized representative of such Patty.

Modification. This Agreement shall not be modified except in a written instrument signed by a duly authorized representative for each Patty.

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Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement except by written instruments signed by the Party charged with the waiver or estoppel. No waiver shall be deemed a continuing waiver unless specifically stated therein, and the written waiver shall operate only as to the specific term or condition waived, and not for the future or as to any act other than that specifically waived.

NoJointVenture. Nothing herein contained shall be construed to place the Parties in the relationship of partners or joint ventures or agents. Neither Party shall represent to any third party that it has the authority to create any binding obligation upon the other Party.

SurvivalofTermsandConditions. Except as otherwise specifically provided for in this Agreement, the terms and conditions of this Agreement shall survive the expiration  or termination of this Agreement to the full extent necessary for their enforcement and for the protection of the Party in whose favor they operate.

CumulativeRemedies.Each Party shall have all remedies available at law or in equity for breach of this Agreement, including, without limitation, termination of this Agreement, all of which remedies shall be cumulative.

Bankruptcy  of Licensor.  The Parties intend that the license and right under this Agreement shall constitute a license of "intellectual prope1iy rights" within the meaning of Section 365(n) of the U.S. Bankruptcy Code and, as such, this Agreement may remain in full force and effect under such law if Licensor is insolvent, makes an assignment for the benefit of its creditors, is subject to any voluntary or involuntary bankruptcy proceeding and such proceeding is not dismissed within thirty (30) days of commencement, or otherwise ceases to do business.

LegalConsultation. Each Party represents and warrants that it consulted with an attorney prior to signing this Agreement and that it was given sufficient time to do so.

Counterparts. This Agreement may be executed in any number of counterparts and by any number of counterpart signature pages, each of which shall be an original with the same effect as if each of the signatures were affixed to the same instrument. Signatures may be electronic and signature pages may be transmitted electronically, and such signatures and signature pages shall be deemed original signature pages for all purposes.

NoThird-PartyBeneficiaryRights. No provision of this Agreement is intended nor shall be interpreted to provide or create any third party beneficiary rights and all provisions hereof shall be personal solely between the Parties hereto.

No Assigmnent.     This Agreement will not be assignable or transferable by either Licensee without the express written consent of the Licensor.

FurtherAssurances. Each Party agrees that it will take whatever action or actions as are deemed by the Parties' respective counsel to be reasonably necessary or desirable from time to time to effectuate the provisions or intent of this Agreement, and to that end, each Party agrees that it will execute, acknowledge, seal, and deliver any further instruments or documents which

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may be necessary to give full force and effect to this Agreement or any of the provisions hereof, or to carry out the intent of this Agreement.

[Signature Page Follows]

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IN WITNESS THEREOF, this License aud Assignment Agreement has been executed as of the date stated above.

Licensor: BOURBON BROTHERS, LLC	Licensees: BOURBON BROTHERS HOLDING COMPANY, LLC
/s/ J.W. Roth	/s/ David Lavigne
Name:  J.W. Roth	Name:  David Lavigne

BOURBON BROTHERS BRAND, LLC

/s/ Robert B. Mudd

 Robert B. Mudd, Manager

BOURBON BROTHERS FRANCHISE, LLC

/s/ Robert B. Mudd

Robert B. Mudd, Manager

BOURBON BROTHERS RESTAURANT GROUP, LLC

/s/ Robert B. Mudd

Robert B. Mudd, Manager

BOURBON BROTHERS SMOKEHOUSE AND TAVERN COLORADO SPRINGS, LLC

/s/ Robert B. Mudd

Robert B. Mudd, Manager

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EX-14.1

Exhibit 14.1

BOURBON BROTHERS HOLDING CORPORATION

Code of Ethics

Introduction

In keeping with our commitment to honest business practices, Bourbon Brothers Holding Corporation (“BBHC” or the “Company”) has adopted this company-wide Code of Ethics to assist our directors, officers, consultants and employees in complying with both our corporate policies and with the law.

Although this Code of Ethics covers many different business practices and procedures, it does not cover every issue that may arise.  Instead, our Code sets forth the clear principles and standards that our directors, officers, and employees are accustomed to following.  This Code also explains how we enforce our Code.  At BBHC, our goal is to conduct ourselves in a manner that avoids even the appearance of impropriety.

This Code should be read in conjunction with our other corporate policies.  If a law conflicts with a policy in this Code, you must comply with the law.  If you have questions about this Code, other BBHC policies, or how to comply with the law in a certain situation, it is important that you immediately bring your questions to one of BBHC’s officers.  If you are in or observe a situation that you believe may violate or lead to a violation of this Code, you should refer to section D of our Code for guidance on how to report questionable behavior.

Anyone who violates the standards of this Code will be subject to disciplinary action.  Such action may include termination of employment.

A. Compliance with All Laws, Rules and Regulations

BBHC requires that all its directors, officers, consultants and employees strictly adhere to local, state, and federal laws, as well as the laws of the other countries in which we conduct business.  If you have questions about what laws we are subject to, or about how to comply with certain laws, it is important that you alert an officer of BBHC to your question.  We rely on you not only to act ethically, but also to assist your fellow employees and management in following the law.

When appropriate, BBHC will provide information and training to promote compliance with laws, rules, and regulations, including insider-trading laws.

B. Ethical Conduct and Conflicts of Interest

BBHC’s employees, consultants, officers, and directors are expected to make or participate in business decisions and actions based on the best interests of BBHC as a whole, and not based on personal relationships or personal gain.  As we define it, a “conflict of interest” exists when a person’s private interest interferes in any way with the interest of the Company, or creates an appearance of impropriety.  A conflict situation can arise when you have interests that make it difficult for you to perform your work objectively, or when a director, officer, consultant or employee receives improper personal benefits as a result of his or her position with the Company.

It is almost always a conflict of interest for a Company employee to work simultaneously for a competitor, customer, or supplier.  You should avoid any relationship that would cause a conflict of interest with your duties and responsibilities at BBHC.  All directors, officers, consultants and employees are expected to disclose to management any situations that may involve inappropriate or improper conflicts of interest affecting them personally or affecting other employees or those with whom we conduct business.

Members of our Board of Directors have a special responsibility to our Company and to our shareholders.  To avoid conflicts of interest, Directors are required to disclose to their fellow directors any personal interest they may have in a transaction being considered by the Board and, when appropriate, to recuse themselves from any decision involving a conflict of interest.  Waivers of a conflict of interest or this Code involving executive officers and directors require approval by the Board of Directors.

Per the Articles of Incorporation as stated as follows:

“The purposes of the Corporation (through its subsidiaries) are:

1.    To develop, own and operate restaurant and branding, such as Southern Hospitality and Bourbon Brothers, franchise bourbon Brothers restaurants and extend the brand to product lines including but not limited to cigars, bourbon, pies, etc.; and

2.   To provide restaurant management services to other businesses.

For the purposes of the Corporation’s directors’ duties or loyalty, the investment and involvement by any directors and officers in any other business shall be considered outside the scope of the purposes of the Corporation, and not a corporate opportunity.  Thus, directors and officers of the Corporation will not be deemed to have usurped a corporate opportunity by personally investing or being involved in other businesses, including real estate investments related to the Company.  Similarly, the provision of management services to a restaurant by any officer or director shall not be deemed to be a usurpation of a corporate opportunity so long as the officer or director has a personal investment in such a restaurant.”

Any discovery of a potential or existing conflict of interest should be immediately disclosed to management in accordance with the procedures set forth in Section D of our Code.

C. Our Commitment to Full, Fair, Accurate, Timely and Plain English Disclosure

As a respected public company, it is critical that BBHC’s filings with the Securities and Exchange Commission be complete, timely and accurate in all material respects.  At BBHC, all our employees, consultants, officers and directors are charged with the responsibility of providing management with accurate and complete information to assure we are complying with our public disclosure requirements and our commitment to our shareholders.

Commensurate with these special duties, all members of Senior Financial Management and other employees each agree that he or she will:

1.   Act honestly and ethically in the performance of their duties at BBHC, avoiding actual or apparent conflicts of interest in personal and professional relationships.

2.   Provide information that is accurate, complete, objective, relevant, timely and understandable to ensure full, fair, accurate, timely, and understandable disclosure in reports and documents filed with or submitted to the SEC or used in other public communications by the Company.

3.   Comply with rules and regulations of federal, state, provincial, local and overseas governments, as well as those of other appropriate private and public regulatory agencies that affect the conduct of the Company’s business and the Company’s financial reporting.

4.   Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

5.   Respect the confidentiality of information acquired in the course of one’s work, except when authorized or otherwise legally obligated to disclose such information.  Further, confidential information acquired in the course of performing one’s duties for BBHC will not be used for personal advantage.

6.   Share knowledge and maintain skills relevant to carrying out the member’s duties within the Company.

7.   Proactively promote and set an example of ethical behavior as a responsible partner among peers and colleagues in the work environment and community.

8.   Achieve responsible use of and control over all assets and resources of the Company to which they are entrusted.

9.   Promptly bring to the attention of  the Chief Executive Officer, any information concerning (a) any conduct believed to be a violation of law or business ethics, or this Code, including any transaction or relationship that reasonably could be expected to give rise to such a conflict, (b) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or (c) any fraud, whether or not material, that involves management or other employees who have a significant role in BBHC’s financial reporting, disclosures, or internal controls.

D. Reporting and Treatment of Violations

Persons who become aware of suspected violations of this Code should report such suspected violations promptly to any member of the Company’s Board of Directors.  To assist in the response to or investigation of the alleged violation, the report should contain as much specific information as possible to allow for proper assessment of the nature, extent and urgency of the alleged violation.  Without limiting the foregoing, the report should, to the extent possible, contain the following information:

· the alleged event, matter or issue that is the subject of the alleged violation;

· the name of each person involved;

· if the alleged violation involves a specific event or events, the approximate date and location of each event; and

· any additional information, documentation or other evidence available relating to the alleged violation.

The Board of Directors has the power to monitor, investigate, make determinations and take action with respect to violations of this Code.  In determining whether a violation of this Code has occurred, the Board of Directors may take into account:

· the nature and severity of the violation;

· whether the violation was a single occurrence or involved repeated occurrences;

· whether the violation appears to have been intentional or inadvertent;

· whether the person in question had been advised prior to the violation as to the proper course of action;

· whether the person in question had committed other violations in the past; and

· such other facts and circumstances as the Board of Directors shall deem advisable in the context of the alleged violation.

Acknowledgement.  Each employee, consultant, officer, and director of BBHC must acknowledge that he or she has received a copy of this Code of Ethics and has reviewed this Code of Ethics.  This acknowledgement will be maintained in your employee files.

Acknowledged:

[name and title] Date

EX-21.1

Exhibit 21.1

Subsidiaries of Bourbon Brothers Holding Corporation

1.   Bourbon Brothers Holding Company, LLC, a Colorado limited liability company

2.   Bourbon Brothers Restaurant Group, LLC, a Colorado limited liability company

3.   Bourbon Brothers Franchise, LLC, a Colorado limited liability company

4.   Bourbon Brothers Brand, LLC, a Colorado limited liability company

5.   Bourbon Brothers Southern Kitchen Colorado Springs, LLC, a Colorado limited liability company (owned 49% by Bourbon Brothers Investors, LLC)

6.   Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC, a Colorado limited liability company

7.   Southern Hospitality Franchisee Holding Corporation, a Colorado corporation

8.   Southern Hospitality Denver Holdings, LLC, a Colorado limited liability company

9.   Southern Hospitality Denver, LLC, a Colorado limited liability company (owned 49% by Southern Hospitality Denver Investment, LLC)

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Robert Mudd, certify that:

1. I have reviewed this annual report on Form 10-K of Bourbon Brothers Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

March 19, 2014
	/s/ Robert Mudd
	Robert Mudd
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Heather Atkinson, certify that:

1. I have reviewed this annual report on Form 10-K of Bourbon Brothers Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

March 19, 2019	/s/ Heather Atkinson
	Heather Atkinson
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

OF BOURBON BROTHERS HOLDING CORPORATION

PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to 18 U.S.C. Section 1350 and in connection with the accompanying report on Form 10-K for the year ended December 31, 2013 that is being filed concurrently with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of Bourbon Brothers Development Corporation (the "Company") hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 19, 2014
	/s/ Robert Mudd
	Robert Mudd
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

OF BOURBON BROTHERS HOLDING CORPORATION

PURSUANT TO 18 U.S.C. SECTION 1350

Pursuant to 18 U.S.C. Section 1350 and in connection with the accompanying report on Form 10-K for the year ended December 31, 2013 that is being filed concurrently with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of Bourbon Brothers Development Corporation (the "Company") hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 19, 2019	/s/ Heather Atkinson
	Heather Atkinson
	Chief Financial Officer

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RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended					12 Months Ended						8 Months Ended			1 Months Ended		5 Months Ended	8 Months Ended		1 Months Ended
	Aug. 31, 2013	Jul. 31, 2013	Dec. 31, 2012	Oct. 31, 2012	Sep. 30, 2011	Dec. 31, 2013	Dec. 31, 2012	Aug. 01, 2013	Jun. 30, 2013	Sep. 01, 2011	Mar. 03, 2014 Subsequent Event [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Aug. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Aug. 01, 2013 Bourbon Brothers Holding Company LLC [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 14, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Jan. 31, 2014 Bourbon Brothers Holding Company LLC [Member] Subsequent Event [Member]	Jan. 01, 2014 Bourbon Brothers Holding Company LLC [Member] Subsequent Event [Member] Class B [Member]
RELATED PARTY TRANSACTIONS [Abstract]
Management agreement, term					12 months
Management agreement, monthly payment					$ 35,000
Warrants issued for management services				330,184	330,184
Exercise Price			1.00	0.0007		0.50	1.00			0.0007					0.0005		0.0005
Warrants issued, term				3 years	3 years										5 years
Value of warrants issued for management services				49,700	49,700		49,752
Warrants issued, expense recognized						39,400	10,300
Rent expenses						25,500	44,300
Reimbursable expenses						42,200	113,261
Shares repurchased and cancelled		33,334
Value of shares repurchased and cancelled		50,000
Price per share of shares repurchased and cancelled		$ 1.50
Share price		$ 0.75							$ 0.75		$ 0.50
Expense recognized over fair value of shares repurchased and cancelled		25,000				25,000
Contributed services	20,000					100,000
Statement [Line Items]
Lease term												10 years								78 months
Monthly rent												32,000								5,800
Esclating monthly rent payment after year 6																				6,000
The minimum value of construction costs that will trigger an increase in monthly rent payments												2,000,000
Percentage of increase if construction costs exceeded												11.00%
Working capital loan												50,000
Debt instrument, face amount						200,000		204,900				204,900	250,000	200,000
Maturity date						Feb. 01, 2014						Feb. 01, 2014
Stated interest rate						5.00%		5.00%						5.00%
Conversion price								$ 0.10						$ 0.10
Common units issued															400,000		400,000		9,067,600		696,000
Equity issuance, price per share			$ 1.50				$ 0.75								$ 0.0005	$ 0.25	$ 0.25	$ 0.25
Total raised through units offering															$ 100,000	$ 2,438,400	$ 100,000

XML

INCOME TAXES (Schedule of Income Tax Benefit) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Deferred tax benefit:
Federal	$ 209,205	$ 581,082
State	18,459	50,529
Deferred tax benefit	227,664	631,611
Increase in valuation allowance	(227,664)	(631,611)
Income tax benefit

XML

SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	12 Months Ended		28 Months Ended	8 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]
Contribution of cash by non-controlling members to subsidiary	$ 225,980	$ 671,485	$ 897,465
Deposit	18,034	18,034	18,034	5,804
Deferred rent, tenant improvement allowance	150,000
Advertising expenses	$ 19,000	$ 88,000		$ 55,200
Anti-dilutive securities	8,882,809	1,922,171
Lease term				10 years

XML

EQUITY (Schedule of Stock Option Activity) (Details) (USD $)	1 Months Ended		12 Months Ended		8 Months Ended
	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]
Shares under options
Outstanding, beginning balance			660,368
Granted		90,000	90,000	660,368	1,190,000
Exercised			(327,122)		(380,000)
Forfeited/cancelled			(373,246)
Outstanding, ending balance			50,000	660,368	810,000
Exercisable			25,000
Weighted average exercise price
Outstanding, beginning balance
Granted	$ 1.44	$ 1.50	$ 1.50	$ 0.015	$ 0.0005
Exercised			$ 0.02		$ 0.0005
Forfeited/cancelled			$ 0.02
Outstanding, ending balance			$ 1.50		$ 0.0005
Exercisable			$ 1.50
Aggregate intrinsic value
Outstanding, beginning balance
Granted
Exercised
Forfeited/cancelled
Outstanding, ending balance
Exercisable
Weighted average remaining contractual life, outstanding			4 years 2 months 26 days		4 years 6 months
Weighted average remaining contractual life, exercisable			4 years 2 months 26 days		5 years

XML

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts, transactions, and profits are eliminated in consolidation.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Fair Value Measurements

The Company accounts for financial instruments pursuant to accounting guidance which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair measurements.  To increase consistency and comparability in fair value measurements, the accounting guidance established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 - quoted prices (unadjusted) in active markets of identical assets or liabilities;

Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 - assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company's market assumptions.  Unobservable inputs require significant management judgments or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.  There were no financial assets or liabilities measured at fair value, with the exception of cash and cash equivalents as of December 31, 2013.

The carrying amounts of accounts payable and notes payable approximate their fair values due to their interest rates and/or  short-term maturities.  The carrying amounts of related party payables are not practicable to estimate based on the related party nature of the underlying transaction.

Non-controlling Interest

The non-controlling interest represents capital contributions, income and loss attributable to the owners of less than wholly-owned consolidated entities, and are reported in equity. From inception through December 31, 2013, in exchange for their interest in SHD, the non-controlling members contributed $897,465 in cash, of which $225,980 and $671,485 was contributed during the years ended December 31, 2013 and 2012, respectively.

Pre-opening Costs

Pre-opening costs, such as travel and employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Cash and Cash Equivalents

Cash equivalents include short-term highly liquid investments with an original a maturity of three months or less when purchased.  In addition, the majority of payments due from financial institutions for the settlement of debit card and credit card transactions process within two business days, and therefore these payments due are classified as cash and cash equivalents.

Inventory

Inventory consists of food and beverages and is stated at the lower of cost (first-in, first-out) or market.

Property and Equipment

In conjunction with the Company's Denver-based restaurant, the Company began capitalizing certain leasehold improvements, as well as equipment the Company purchased in 2012 but did not place in service until February 2013. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management considers, or will consider, such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management bases this assessment upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge would be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are capitalized. Expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings.

Capitalized Interest

Interest on funds used to finance the acquisition and construction of a restaurant to the date the asset is placed in service is capitalized.

Leases and Deferred Rent

The Company intends to lease substantially all of its restaurant properties, and in April 2012, the Company entered into a ten-year lease for the restaurant in Denver, Colorado. For leases that contain rent escalation clauses, the Company records the total rent payable during the lease term and recognizes expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent is recorded as deferred rent. Additionally, contingent rent expense based on a percentage of revenue is accrued and recorded to the extent it is expected to exceed minimum base rent per the lease agreement based on estimates of probable levels of revenue during the contingency period.  A long-term deposit on the Denver lease in the amount of $18,034 is recorded as of December 31, 2013.  Deferred rent also includes a tenant improvement allowance the Company received for $150,000, which is amortized as a reduction of rent expense, also on a straight-line basis over the initial term of the lease. 

Revenue Recognition

The Company began revenue-generating activities through the Denver restaurant on February 21, 2013. The Company began accounting for such revenues pursuant to SEC Staff Accounting Bulletin ("SAB") No. 104, Revenue Recognition, and applicable related guidance. Revenue is derived from the sale of prepared food and beverage and select retail items. Revenue is recognized at the time of sale and is reported on the Company's consolidated statements of income (loss) net of sales taxes collected. The amount of sales tax collected is included in accrued expenses until the taxes are remitted to the appropriate taxing authorities.

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $19,000 and $88,800, for the years ended December 31, 2013 and 2012, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation under Accounting Standards Codification ("ASC") 718, Share-Based Payment. ASC 718 requires the recognition of the cost of services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock-based compensation expense to be recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

The Company determines its income tax expense in each of the jurisdictions in which it operates. The income tax expense includes an estimate of the current income tax expense, as well as deferred income tax expense, which results from the determination of temporary differences arising from the different treatment of items for book and tax purposes.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions.

Many of the Company's subsidiaries are limited liability companies ("LLC's") and treated for tax purposes as pass-through entities. As a result, any taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. The Company recognizes tax related interest and penalties, if any, as a component of income tax expense.

Net loss per share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Common stock options, warrants and shares underlying convertible debt aggregating 8,882,809 and 1,922,171 for the years ended December 31, 2013 and 2012, respectively, have been excluded from the calculation of diluted net loss per common share.

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company's consolidated financial statements.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts and transactions are eliminated in consolidation.

Accounting guidance provides a framework for determining whether an entity should be considered a variable interest entity (VIE), and if so, whether the Company's involvement with the entity results in a variable interest in the entity. If the Company determines that it does have a variable interest in the entity, it must perform an analysis to determine whether it represents the primary beneficiary of the VIE. If the Company determines it is the primary beneficiary of the VIE, it is required to consolidate the assets, liabilities and results of operations and cash flows of the VIE into the consolidated financial statements of the Company.

A company is the primary beneficiary of a VIE if it has a controlling financial interest in the VIE. A company is deemed to have a controlling financial interest in a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company has concluded that there are no VIE's subject to consolidation at December 31, 2013. While the Company believes its evaluation is appropriate, future changes in estimates, judgments and assumptions in the case of an evaluation triggered by a reconsideration event as defined in the accounting standard may affect the determination of primary beneficiary status and the resulting consolidation, or deconsolidation, of the assets, liabilities and results of operations of a VIE on the Company's consolidated financial statements.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Fair Value Measurements

The carrying values of cash and accounts payable approximate fair value due to their short maturities.  The carrying amount of receivables from related parties are not practicable to estimate based on the related party nature of the underlying transactions.

Pre-opening Costs

Pre-opening costs, such as travel, employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Property and Equipment

In conjunction with the Company's planned restaurants, the Company has capitalized certain leasehold improvements, as well as equipment the Company has purchased. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management will consider such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management will base this assessment

upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge will be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are to be stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are to be capitalized. Expenditures for minor replacements, maintenance and repairs are to be expensed as incurred. Depreciation is to be calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are to be amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts will be relieved of cost and accumulated depreciation and the related gain or loss will be reflected in earnings.

  Leases and Deferred Rent

The Company intends to lease some of its restaurant properties (Note 4), and on May 29, 2013, the Company entered into an agreement to lease a restaurant in Colorado Springs, Colorado. The lease terms became effective when the Company took possession of the restaurant property on January 11, 2014. For leases that contain rent escalation clauses, the Company will record the total rent payable during the lease term and recognize expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent will be recorded as deferred rent.

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $55,200 for the period from inception (May 13, 2013) through December 31, 2013.

Equity-Based Compensation

The Company recognizes the cost of services received in exchange for an award of equity instruments in the financial statements, which is measured based on the grant date fair value of the award. Equity-based compensation expense is recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each unit option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

The Company and its subsidiaries are limited liability companies ("LLC's"). As an LLC, management believes that these companies are not subject to income taxes, and such taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements.

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company's consolidated financial statements.

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	12 Months Ended			8 Months Ended	1 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Jan. 01, 2014	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Apr. 30, 2012 Restaurant [Member]	Dec. 31, 2013 Restaurant [Member]	Dec. 31, 2012 Restaurant [Member]	Dec. 31, 2013 Corporate Headquarters [Member]	Dec. 31, 2012 Corporate Headquarters [Member]
COMMITMENTS AND CONTINGENCIES [Abstract]
Franchisor agreement, term	10 years
Franchisor agreement, renewal term	5 years
Royalty percentage, minimum	3.00%
Royalty percentage, maximum	5.00%
Royalty expense	$ 98,000
Royalty percentage			2.50%
Monthly royalty floor			5,000
Property, Plant and Equipment [Line Items]
Lease Term				10 years	10 years
Lease renewal term					5 years
Monthly rent				32,000	16,000			3,500
Rent expenses	25,500	44,300				190,000	144,800	25,545	44,300
Payments for leasehold improvements	144,000
Statement [Line Items]
Amount paid to supplier to design kitchen and provide equipment for the restaurant in Colorado Springs, Colorado				$ 325,800

XML

NOTES PAYABLE (Details) (USD $)	1 Months Ended			12 Months Ended		14 Months Ended
	Dec. 31, 2013	Oct. 31, 2012	Sep. 30, 2011	Dec. 31, 2013	Dec. 31, 2012	Nov. 30, 2012	Aug. 01, 2013	Sep. 01, 2011
NOTES PAYABLE [Abstract]
Debt instrument, face amount	$ 200,000			$ 200,000			$ 204,900
Proceeds from issuance of related party promissory note				135,000
Repayments of Convertible Debt				21,600
Shares issued for services	35,554
Warrants issued for services				26,664	6,589
Additional paid in capital, conversion feature				82,273	7,900
Proceeds from issuance of promissory note and warrant				200,000		3,086,388
Convertible notes payable and accrued interest, discount	295,872			295,872	682,938
Stated interest rate	5.00%			5.00%			5.00%
Quarterly payment, percentage of quarterly revenue				2.50%
Quarterly payments				7,297
Beneficial conversion feature				283,500
Conversion expense				263,402	71,006
Amortization of debt discount				387,067	719,918
Debt conversion, original debt, amount				830,984
Conversion of notes payable to common stock, shares	417,828
Warrants, number of shares called by warrant	50,000			50,000	200,000
Warrants, exercise price per share	0.50	0.0007		0.50	1.00			0.0007
Warrants issued, term		3 years	3 years
Fair value of warrants	$ 44,000			$ 44,000
Maturity date				Feb. 01, 2014
Debt Conversion [Line Items]
Conversion price							$ 0.10
Minimum [Member]
Debt Conversion [Line Items]
Conversion price	$ 1.82			$ 1.82
Maximum [Member]
Debt Conversion [Line Items]
Conversion price	$ 2.30			$ 2.30

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COMMITMENTS AND CONTINGENCIES (Schedule of Future Minimum Payments) (Details) (USD $)	Dec. 31, 2013
Operating Lease [Line Items]
2014	$ 561,159
2015	584,944
2016	590,942
2017	597,120
2018	603,484
Thereafter	2,993,345
Total future minimum lease payments	5,930,994
Third Party [Member]
Operating Lease [Line Items]
2014	194,120
2015	199,944
2016	205,942
2017	212,120
2018	218,484
Thereafter	857,884
Total future minimum lease payments	1,888,494
Related Party [Member]
Operating Lease [Line Items]
2014	367,039
2015	385,000
2016	385,000
2017	385,000
2018	385,000
Thereafter	2,135,461
Total future minimum lease payments	$ 4,042,500

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INCOME TAXES (Schedule of Deferred Tax Assets (Liabilities) (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
INCOME TAXES [Abstract]
Stock based compensation	$ 156,993	$ 22,337
Compensation and Benefits, Total	156,993	22,337
Net operating loss carryforwards	778,782	685,774
Deferred tax assets (liabilities)	935,775	708,111
Valuation Allowance	(935,775)	(708,111)
Net deferred tax assets

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ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

Organization

Bourbon Brothers Holding Corporation ("BBHC" or the "Company") is a Colorado corporation. The Company, on January 22, 2014, with approval of a majority of the Company's shareholders, changed its name from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.

The Company's subsidiary, Southern Hospitality Franchisee Holding Corporation ("SH") entered into a franchise agreement and area development agreement with SH Franchising & Licensing LLC, dba Southern Hospitality BBQ (the "Franchisor") in November 2011. In May 2012, SH formed Southern Hospitality Denver Holdings, LLC ("SHDH"), a wholly-owned subsidiary, and Southern Hospitality Denver, LLC ("SHD"). SHD was formed for the purpose of owning and operating the Company's first franchised restaurant in Denver, Colorado. As of December 31, 2013, SHD is 51% owned by SHDH and 49% owned by non-controlling interest holders, of which a director of the Company is a 22% non-controlling interest holder.

On November 13, 2012, the Company, f/k/a Art Dimensions, Inc. ("ADI"), entered into an Agreement and Plan of Merger and Reorganization with SH whereby the Company acquired SH in a reverse triangular merger (the "SH Acquisition"). On November 13, 2012, the parties closed the SH Acquisition, and a Statement of Merger was filed and effective with the Colorado Secretary of State on that day. Upon closing the SH Acquisition, the Company issued a total number of common shares to the SH shareholders in exchange for all of their ownership interests in SH such that they owned approximately 89% of the Company on the date of the SH Acquisition. The shareholders of the Company prior to the SH Acquisition owned approximately 11% of the Company after the closing of the SH Acquisition. On November 13, 2012, the Company and SH closed the SH Acquisition, and the Company's wholly owned subsidiary, ADI Merger Corp., was merged with and into SH. An aggregate of 5,259,029 Company shares were issued in the SH Acquisition.  The number of ADI common shares received by SH's shareholder depended on the number of shares each held and that were outstanding at the closing of the SH Acquisition.  Additionally, upon the effective date of the SH Acquisition all outstanding SH warrants, options and outstanding promissory notes were exchanged for options, warrants and promissory notes to acquire ADI common stock on equivalent terms.  Pursuant to the SH Acquisition, on November 13, 2012, the Company changed its name from Art Dimensions, Inc. to Southern Hospitality Development Corporation. The Registrant was a public shell company (as defined in Rule 12b-2 of the Exchange Act) at the date of the SH Acquisition. Therefore, the SH Acquisition was accounted for as a reverse acquisition and recapitalization. SH is the acquirer for accounting purposes and ADI is the acquired company. Accordingly, SH's historical financial statements for periods prior to the SH Acquisition become those of ADI, retroactively restated for, and giving effect to the number of shares received in the SH Acquisition. The accumulated deficit of SH is carried forward after the SH Acquisition. Operations reported for periods prior to the SH Acquisition are those of SH. Earnings per share for the period prior to the SH Acquisition are restated to reflect the equivalent number of shares outstanding.

The Company, on May 3, 2013, with approval of a majority of the Company's shareholders, changed its name from Southern Hospitality Development Corporation to Smokin Concepts Development Corporation.

On September 30, 2013, the Company entered into an Acquisition Agreement with Bourbon Brothers Holding Company, LLC ("BBHCLLC") to acquire all of the equity interests in BBHCLLC (the "BB Transaction") and its subsidiaries. BBHCLLC is a Colorado limited liability company ("LLC") formed in May 2013, for the purpose of developing and managing all aspects of operating units related to a recently developed "Bourbon Brothers" brand.  The principles of BBHCLLC were also, at various times, on the board of directors of the Company, and therefore BBHCLLC is considered to be a related party.  As of December 31, 2013, BBHCLLC was a development stage company. BBHCLLC's subsidiaries (all LLCs formed in April 2013) include Bourbon Brothers Restaurant Group, LLC ("BBRG"), Bourbon Brothers Franchise, LLC ("BBF") and Bourbon Brothers Brand, LLC ("BBB"). BBRG owns the stores to encompass several Bourbon Brothers brands, and owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC ("BBSK"), which opened its first restaurant in January 2014. BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC ("BBSF"). BBB manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company's core brand.

On November 8, 2013, the Company and BBHCLLC amended the Acquisition Agreement by entering into a First Amendment to the Acquisition Agreement.  On January 22, 2014, the parties entered into a Second Amendment to the Acquisition Agreement, identifying the final conversion ratio of 1.82427.  The Second Amendment identified the number of shares to be issued by the Company in the BB Transaction as 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHCLLC Class A Voting members.  These shares were issued at the closing of the BB Transaction.  All outstanding options and warrants to acquire BBHCLLC units were assumed by the Company, applying the conversion ratio to the number of units and strike price (Note 10).

Basis of Presentation

Since inception through February 20, 2013, the Company devoted substantially all of its efforts to establishing its business.  The Company's planned principal operations commenced on February 21, 2013, with the opening of the Southern Hospitality Denver restaurant.  As a result, the Company is no longer considered to be a development stage enterprise as of February 21, 2013.

Management's Plans

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of approximately $2.9 million and $2.6 million for the years ended December 31, 2013 and 2012, respectively, and has an accumulated deficit of approximately $5.3 million at December 31, 2013. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has devoted substantially all of its efforts to developing its business plan, raising capital, and opening and operating its first restaurant. Through 2013, the Company has been largely focused on its first Denver-based restaurant and working to obtain profitable operations.  The Company has also been focused on completing the BB Transaction with BBHCLLC, which occurred in January 2014.

The Company began revenue generating activities in late February 2013, and in January 2014, BBHCLLC's restaurant, located in Colorado Springs, Colorado, opened and began generating revenues. The Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any assurance it will be able to enter into any such agreement in the future, or be able to raise funds through a future issuance of debt or equity (Note 10). The Company's continued implementation of its business plan is dependent on its future profitability and engaging in strategic transactions, or on additional debt or equity financing, which may not be available in amounts or on terms acceptable to the Company or at all. As a consequence, if the Company is unable to achieve and maintain profitability through the current restaurant operations, enter into strategic transactions, or obtain additional financing in the near term, the Company may be required to delay its business plan implementation, which would have a material adverse impact on the Company.

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

Organization

Bourbon Brothers Holding Company, LLC ("BBHCLLC") is a Colorado, limited liability company ("LLC") formed on May 13, 2013, for the purpose of developing and managing all aspects and operating units related to a recently developed "Bourbon Brothers" brand.  BBHCLLC intends to provide its service offerings through subsidiaries that have recently been formed, or are to be formed, and which are discussed below. As an LLC, profits and losses are allocated to each member in accordance with the operating agreement. Each member's liability is limited to its respective capital contributions, except as otherwise required by law.

The following 100%-owned subsidiaries of BBHCLLC, (collectively referred to as the "Company") were formed as Colorado LLCs in April 2013, and all have a December 31 fiscal year end:

Bourbon Brothers Holding Company, LLC ("BBHCLLC") - The umbrella management company for all business units to encompass the executive management of all aspects of the brand.  All components of the brand were licensed from Bourbon Brothers, LLC ("BBLLC"), a separately owned entity from whom the licenses were contracted, with the exception of the architectural intellectual property of the restaurant concept.

Bourbon Brothers Restaurant Group, LLC ("BBRG") - Owns the corporate owned stores to encompass several Bourbon Brothers brands.

BBRG owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC ("BBSK" f/k/a Bourbon Brothers Smokehouse and Tavern Colorado Springs, LLC). BBSK has signed a ten-year renewable lease for a restaurant location and building at a combined monthly rental rate of approximately $32,000 per month with BBLLC, whose founders are also the same founders of BBHCLLC.  This first location sets the standard for the brand and establishes a premium location in the setting of a southern, farm-house estate accompanied by a traditional distillery.

BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC ("BBSF").  BBSF is in negotiations to sign a lease at a combined rental rate from a related party, Bourbon Brothers #14, LLC.

Bourbon Brothers Franchise, LLC ("BBF") - Serves as the franchisor for Bourbon Brothers and is to provide franchise opportunities for Bourbon Brothers Southern Kitchen restaurants.  The suite of management and services that may be made available to franchisee investors include: real estate, restaurant management, and franchise royalties and services.

Bourbon Brothers Brand, LLC ("BBB") - Manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company's core brand.  It is not anticipated that BBB will directly develop these products, but rather that it will establish joint ventures to leverage the brand in partnership with premium providers of the complementary products. BBB may establish marketing, e-commerce, catalog sales and distribution capabilities to provide for sale of the products through the Company's stores and channels.

All components of the brand have been licensed from BBLLC, a related party entity, with the exception of architectural intellectual property (Note 3). The founding members of BBLLC are also the founding members of BBHCLLC and were issued an aggregate of 10,000,000 Class A Voting Units in BBHCLLC per their pro-rata ownership in BBLLC (Note 6).

Robert B. Mudd is the sole Manager of BBHCLLC and its subsidiaries.

Basis of Presentation

Since inception through December 31, 2013, the Company has devoted all of its efforts to establishing its business. As a result, the Company is considered to be a development stage enterprise.

Management's Plans

The Company reported a net loss of approximately $994,600 for the period from inception (May 13, 2013) through December 31, 2013.  The Company has a limited operating history, and the Company cannot provide any assurance it will be able to raise sufficient funds through future issuances of debt or equity to carry out its business plan.

In May 2013, the Company initiated an offering of Class B non-voting member units to accredited investors at $0.25 per unit, of which $2,438,400 was raised through January 17, 2014.  The Company opened its first restaurant location in Colorado Springs, Colorado, on January 27, 2014. The first location sets the standard for the brand, to be emulated by each of the extension subsidiaries.

In addition, on January 22, 2014, the Company was acquired by Bourbon Brothers Holding Corporation ("BBHC")  (Note 7).

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INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Federal Income Tax [Line Items]
Net operating loss carryforwards	$ 1,856,000
Minimum [Member]
Federal Income Tax [Line Items]
Net operating loss carryforward expiration date	Dec. 31, 2030
Maximum [Member]
Federal Income Tax [Line Items]
Net operating loss carryforward expiration date	Dec. 31, 2033

XML

SUBSEQUENT EVENTS (Details) (USD $)	1 Months Ended	12 Months Ended							1 Months Ended			1 Months Ended				1 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Aug. 01, 2013	Jul. 31, 2013	Jun. 30, 2013	Dec. 31, 2012	Jan. 22, 2014 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]	Mar. 31, 2014 Subsequent Event [Member]	Mar. 03, 2014 Subsequent Event [Member]	Jan. 22, 2014 Subsequent Event [Member]	Jan. 31, 2014 Subsequent Event [Member] Employee Stock Option [Member]	Jan. 31, 2014 Subsequent Event [Member] Warrant [Member]	Jan. 22, 2014 Common Stock [Member]	Jan. 22, 2014 Preferred Stock [Member]	Jan. 31, 2014 Bourbon Brothers Holding Class B Non Voting [Member] Common Stock [Member] Subsequent Event [Member]	Jan. 31, 2014 Bourbon Brothers Holding Class A Voting [Member] Series A Preferred Stock [Member] Subsequent Event [Member]
Franchisor Disclosure [Line Items]
Shares issued in business acquisition												2,207,365	1,094,561			20,274,193	18,242,687
Convertible notes payable and accrued interest, discount	$ 295,872	$ 295,872				$ 682,938					$ 258,217
Stock option plan, shares authorized						1,500,000	3,000,000	1,500,000						100,000,000	18,242,700
Sale of common stock for cash, shares	1,979,544								6,000,000
Share price				$ 0.75	$ 0.75					$ 0.50
Debt instrument, face amount	$ 200,000	$ 200,000	$ 204,900
Maturity date		Feb. 01, 2014
Stated interest rate	5.00%	5.00%	5.00%
Conversion price			$ 0.10

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class A [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]
Current assets:
Cash and cash equivalents	$ 13,611	$ 962,331	$ 821,073
Prepaid warrants			99,805
Prepaid expenses and other	5,459	242,807
Inventory	31,559
Total current assets	50,629	1,205,138	920,878
Deposit	18,034	18,034	5,804
Intangible asset, net	45,625	300,000
Property and equipment, net	2,443,575	1,451,659	632,531
Total assets	2,557,863	2,974,831	1,559,213
Current liabilities:
Accounts payable	81,015	453,788	41,301
Related party payable		8,659
Accrued expenses	78,568	73,673	76,548
Related party note payable	204,877
Note payable and accrued interest	211,614
Convertible notes payable and accrued interest, current portion	60,000	55,795
Total current liabilities	636,074	591,915	117,849
Deferred rent	234,900	232,565
Convertible notes payable and accrued interest, net of current portion, (net of $295,872 (2013) and $682,938 (2012) discount)	532,844	954,487
Total liabilities	1,403,818	1,778,967
Commitments and contingencies
Equity
Preferred stock, 1,000,000 shares authorized, none issued or outstanding
Common stock - no par value; Authorized shares - 50,000,000 Issued and outstanding shares - 9,629,220 (2013) and 6,980,270 (2012)	4,925,860	2,725,200
Members capital				5,000	2,635,844
Related party receivable			(204,877)
Additional paid-in capital	1,086,609	673,626
Accumulated deficit	(5,297,742)	(2,734,895)	(994,603)
Total members' equity			1,441,364
Total Bourbon Brothers Holding Corporation ("BBHC") equity	714,727	663,931
Noncontrolling interest	439,318	531,933
Total equity	1,154,045	1,195,864
Total liabilities and equity	$ 2,557,863	$ 2,974,831	$ 1,559,213

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CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS' EQUITY (USD $)	Total	Bourbon Brothers Holding Company Llc [Member]	Class A [Member] Bourbon Brothers Holding Company Llc [Member]	Class B [Member] Bourbon Brothers Holding Company Llc [Member]	Related party receivable [Member] Bourbon Brothers Holding Company Llc [Member]	Deficit accumulated during the development stage[Member]	Deficit accumulated during the development stage[Member] Bourbon Brothers Holding Company Llc [Member]
Balance, beginning at May. 12, 2013
Issuance of units to founders for cash at inception		5,000	5,000
Issuance of units for cash between May and December 2013		2,266,900		2,266,900
Units issued for services to related party		100,000		100,000
Warrants issued for services		149,708		149,708
Exercise of equity options		190		190
Equity-based compensation		119,046		119,046
Advances to related party		204,877			(204,877)
Net loss		(994,603)					(994,603)
Balance, ending at Dec. 31, 2013		$ 1,441,364

XML

EQUITY (Narrative) (Details) (USD $)	1 Months Ended							3 Months Ended	12 Months Ended						1 Months Ended			8 Months Ended			1 Months Ended						5 Months Ended	8 Months Ended		1 Months Ended		1 Months Ended	12 Months Ended			12 Months Ended
	Dec. 31, 2013	Jul. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Oct. 31, 2012	Sep. 30, 2011	Mar. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2015	Mar. 31, 2014	Aug. 01, 2013	Sep. 01, 2011	Mar. 31, 2014 Subsequent Event [Member]	Mar. 03, 2014 Subsequent Event [Member]	Jan. 01, 2014 Subsequent Event [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Aug. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Aug. 01, 2013 Bourbon Brothers Holding Company LLC [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Oct. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Aug. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Jun. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 14, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Jan. 31, 2014 Bourbon Brothers Holding Company LLC [Member] Class B [Member] Subsequent Event [Member]	Jan. 01, 2014 Bourbon Brothers Holding Company LLC [Member] Class B [Member] Subsequent Event [Member]	Mar. 31, 2013 Stock Options [Member]	Dec. 31, 2013 Stock Options [Member]	Dec. 31, 2012 Stock Options [Member]	Jan. 22, 2014 Stock Options [Member]	Dec. 31, 2013 Warrant [Member]	Dec. 31, 2012 Warrant [Member]
EQUITY [Abstract]
Preferred stock, shares authorized	1,000,000				1,000,000				1,000,000	1,000,000
Private placement offering					$ 1,500,000
Private placement offering, shares					1,000,000				2,000,000
Sale of common stock for cash, shares	1,979,544														6,000,000
Sale of common stock for cash	1,484,656
Shares issued for services	35,554
Warrants issued for services									26,664	6,589								149,708										149,708
Debt conversion, original debt, amount									830,984
Conversion of notes payable to common stock, shares	417,828
Remaining vested shares												25,000
Weighted average grant fair vaue									$ 0.96	$ 0.51								$ 0.25
Shares repurchased and cancelled		33,334
Value of shares repurchased and cancelled		50,000
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation			198,000																														119,000	32,600		194,250	28,000
Unrecognized share-based compensation expense																																	5,900
Unrecognized compensation cost, recognition period																																	5 years
Vested or expected to vest	50,000		264,149	45,000	66,035			45,000	50,000	66,035	330,184	264,149																				50,000
Forfeited or expired									373,246																							40,000
Stock option plan, shares authorized					1,500,000					1,500,000																							1,500,000		3,000,000
Proceeds from exercise of a stock option								995	4,976									190
Share price		$ 0.75	$ 0.75													$ 0.50
Debt instrument, face amount	200,000								200,000				204,900					204,900	250,000	200,000
Fair value of warrants	44,000								44,000
Statement [Line Items]
Common units authorized																										1,300,000			10,000,000
Common units issued																							400,000				400,000		9,067,600		696,000
Proceeds from issuance common units									1,368,012	116,644																		2,266,900		174,000
Equity issuance, price per share					$ 1.50					$ 0.75													$ 0.0005			$ 0.25	$ 0.25	$ 0.25
Award term				5 years						5 years												5 years		5 years	2 years	5 years
Exercise price			$ 1.44	$ 1.50					$ 1.50	$ 0.015								$ 0.0005				$ 0.25		$ 0.0005	$ 0.0005	$ 0.0005
Granted				90,000					90,000	660,368								1,190,000				150,000	50,000	800,000	50,000
Exercised									327,122									380,000			200,000		130,000
Vested									(289,149)									(380,000)						200,000		43,336
Stock-based compensation									308,033	75,210								119,046							32,400
Warrants, number of shares called by warrant	50,000				200,000				50,000	200,000													600,000				600,000
Warrants, exercise price per share	0.50				1.00	0.0007			0.50	1.00				0.0007									0.0005				0.0005
Warrants, estimated future expense																		177,887										49,900
Warrants, expense recognized																		$ 168,949										$ 99,805
Fair value assumption, risk-free interest rate					0.62%				0.39%														79.00%
Fair value assumption, expected volatility					105.00%				105.00%														105.00%
Preferred stock, shares issued																	18,242,700
Warrants issued, term						3 years	3 years																5 years

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

Schedule of Deferred Tax Assets (Liabilities)

The deferred tax assets (liabilities) and associated valuation allowance at December 31, 2013 and 2012, are as follows:

	2013			2012
Current assets:
Stock based compensation	$	156,993		$	22,337
		156,993			22,337
Non-current assets:
Net operating loss carryforwards		778,782			685,774
		935,775			708,111
Valuation allowance		(935,775	)		(708,111	)
Net deferred tax assets	$	-		$	-

Schedule of Income Tax Benefit

No income tax benefit was recognized for the years ended December 31, 2013 and 2012, as indicated below:

	2013			2012
Deferred tax benefit:
Federal	$	209,205		$	581,082
State		18,459			50,529
		227,664			631,611
Increase in valuation allowance		(227,664	)		(631,611	)
	$	-		$	-

Schedule of the Reconciliation of Income Taxes

A reconciliation of income tax computed at the U.S. statutory tax rate of 34% to the effective income tax rate is as follows:

	2013			2012
Statutory rate		34	%		34	%
State taxes		3			3
Permanent differences and other		(10	)		(12	)
Valuation allowance		(27	)		(25	)
Effective rate		-			-

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EQUITY (Schedule of Valuation Assumptions) (Details) (USD $)	12 Months Ended		8 Months Ended	12 Months Ended	8 Months Ended	12 Months Ended	8 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Minimum [Member] Bourbon Brothers Holding Company LLC [Member]	Dec. 31, 2013 Maximum [Member]	Dec. 31, 2013 Maximum [Member] Bourbon Brothers Holding Company LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	0.79%	0.62%			0.79%		1.75%
Expected volatility	105.00%	105.00%	105.00%
Expected term		5 years		2 years		5 years
Expected dividend yield	0.00%	0.00%	0.00%
Granted	$ 0.96	$ 0.51	$ 0.25

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ORGANIZATION, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS (Details) (USD $)	1 Months Ended		12 Months Ended			12 Months Ended		8 Months Ended	1 Months Ended			5 Months Ended	8 Months Ended		1 Months Ended		1 Months Ended
	Nov. 30, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Southern Hospitality Denver Holdings [Member]	Dec. 31, 2013 Non-controlling Interest [Member]	Dec. 31, 2013 Southern Hospitality Franchisee Holding Corporation [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]	May 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class A [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Sep. 30, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	May 14, 2013 Bourbon Brothers Holding Company LLC [Member] Class B [Member]	Jan. 31, 2014 Bourbon Brothers Holding Company LLC [Member] Subsequent Event [Member]	Jan. 01, 2014 Bourbon Brothers Holding Company LLC [Member] Subsequent Event [Member] Class B [Member]	Jan. 31, 2014 Bourbon Brothers Holding Class A Voting [Member] Subsequent Event [Member] Convertible Series A preferred stock [Member]	Jan. 31, 2014 Bourbon Brothers Holding Class B Non Voting [Member] Subsequent Event [Member] Common stock [Member]
Franchisor Disclosure [Line Items]
Ownership percentage in SHD					51.00%	49.00%
Shares issued in business acquisition							5,259,029		10,000,000								18,242,687	20,274,193
Non-controlling interest held by board member						22.00%
Ownership percentage in Company						11.00%	89.00%
Net loss			$ (2,881,442)	$ (2,585,344)				$ (994,603)
Accumulated deficit		(2,734,895)	(5,297,742)	(2,734,895)				(994,603)
Amendment to acquisition agreement conversion ratio	1.82427
Monthly rent								32,000							5,800
Common units issued										400,000		400,000		9,067,600		696,000
Total raised through units offering										$ 100,000	$ 2,438,400	$ 100,000
Price per share, units offered		$ 1.50		$ 0.75						$ 0.0005	$ 0.25	$ 0.25	$ 0.25

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended		8 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]
Cash flows from operating activities
Net loss	$ (2,881,442)	$ (2,585,344)	$ (994,603)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of prepaid management services and guarantees	194,280	71,284	49,903
Amortization of debt discount	387,067	719,918
Stock-based compensation	308,033	75,210	119,046
Interest attributed to converted debt	30,985
Contributed services by related party	100,000
Stock issued for services	26,664		100,000
Settlement of expenses for promissory note and common stock		102,500
Depreciation and amortization	250,757
Impairment of intangible asset	250,000
Changes in operating assets and liabilities:
Prepaid expenses	42,104	143
Deposit		(18,034)	(5,804)
Inventory	(31,559)
Accounts payable	(373,090)	46,167	41,301
Related party payable	(8,659)	(32,882)
Accrued expenses and accrued interest	13,258	113,940	76,548
Deferred rent	2,335	82,565
Net cash used in operating activities	(1,689,267)	(1,424,533)	(613,609)
Cash flows from investing activities
Contributions To Related Party			(204,877)
Purchase of property and equipment	(1,238,298)	(875,685)	(632,531)
Net cash used in investing activities	(1,238,298)	(875,685)	(837,408)
Cash flows from financing activities
Proceeds from issuance of Class A member units to founders for cash			5,000
Proceeds from issuance of Class B member units for cash			2,266,900
Proceeds from exercise of a stock option	4,976		190
Proceeds from exercise of warrants		550
Proceeds from issuance of notes payable and common stock		2,446,337
Contribution of cash by non-controlling members to subsidiary	225,980	671,485
Advances from related party	135,000
Advances repaid to related party	(135,000)
Proceeds from issuance of related party promissory note	204,877
Sale of common stock	1,368,012	116,644
Repurchase of shares for services from related party	(25,000)
Proceeds from issuance of promissory note and warrant	200,000
Net cash provided by financing activities	1,978,845	3,235,016	2,272,090
Net (decrease) increase in cash and cash equivalents	(948,720)	934,798	821,073
Cash and cash equivalents, beginning	962,331	27,533
Cash and cash equivalents, ending	13,611	962,331	821,073
Supplemental disclosure of non-cash investing and financing activities:
Convertible notes and interest converted to common stock	830,984	1,477,191
Issuance of warrant for prepaid management services and guarantees		271,752	149,708
Property and equipment recorded in exchange for accounts payable		401,973
Leasehold improvements and deferred rent		150,000
Capitalized accrued interest		24,000
Cash paid for interest	$ 21,600

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Convertible notes payable and accrued interest, discount	$ 295,872	$ 682,938
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	9,629,220	6,980,270
Common stock, shares outstanding	9,629,220	6,980,270
Bourbon Brothers Holding Company LLC [Member] | Class A [Member]
Common units issued	10,000,000
Bourbon Brothers Holding Company LLC [Member] | Class B [Member]
Common units issued	9,847,600

XML

SUBSEQUENT EVENTS

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

On January 22, 2014, the Company and BBHCLLC closed the BB Transaction, as described in Note 1, pursuant to which BBHCLLC is now a wholly-owned subsidiary of the Company.  The BB Transaction Agreement required the Company to issue 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHC Class A Voting members.  The Company also issued, in connection with the BB Transaction, an aggregate of 2,207,365 options pursuant to its 2012 Stock Option Plan as replacement options to the holders of BBHC unit options, and 1,094,561 common stock warrants as replacement warrants to the holders of warrants in BBHC units.

On January 22, 2014, the Company's shareholders approved an amendment to the Company's Articles of Incorporation setting forth the designation of Series A Convertible Preferred Stock, and approved the BB Transaction in which the Company issued 20,274,193 shares of common stock to BBHC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHC Class A Voting members.  The rights of existing holders of common stock have been materially limited with respect to voting because each outstanding share of the Series A Convertible Preferred Stock is entitled to 25 votes per share, as compared to one vote per share for the common stock.  On the same date, pursuant to the closing of the BB Transaction and election of directors at the special meeting of shareholders on January 22, 2014 (the "Meeting"), the following persons were appointed as directors and officers of the Company: JW Roth, Chairman; Robert B. Mudd, President and Chief Executive Officer; Heather Atkinson, Chief Financial Officer, Secretary and Treasurer.  At the Meeting, the Company's shareholders approved amendments to the Company's Articles of Incorporation.  The Company filed each of the amendments to its Articles of Incorporation with the Colorado Secretary of State to effect such amendments.  The amendments accomplished the following:

· Increased the Company's authorized capital to 100,000,000 shares of common stock and 18,242,700 shares of preferred stock.  This amendment was filed and effective January 22, 2014.

· Changed the name of the Company from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.  This amendment was filed and effective January 22, 2014.

· Amended the purpose of the Company, as described in the Proxy Statement.  This amendment was filed and effective January 22, 2014.

As of the date of the BB Transaction, the unsecured promissory note and unpaid interest totaling $258,217 between SCDC and BBHCLLC was extinguished.

On January 27, 2014, BBSK opened and is the Company's first operating Southern Kitchen restaurant in Colorado Springs, Colorado.

On March 3, 2014, the Company commenced an offering of up to 6,000,000 shares of common stock of the Company at $0.50 per share.

NOTE 7 - SUBSEQUENT EVENTS

On January 22, 2014, the Company was acquired by Bourbon Brothers Holding Corporation, formerly Smokin Concepts Development Corporation (BBHC). BBHC is a publicly-traded, Colorado corporation which owns and operates a Denver-based Southern Hospitality restaurant.  The principles of BBHCLLC were also, at various times, on the board of directors of the Company, and therefore BBHCLLC is considered to e a related party.

BBSK opened on January 27, 2014, and is the Company's first operating Southern Kitchen restaurant.

The Company evaluated all other subsequent events through March 19, 2014, the date the consolidated financial statements were available to be issued.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 19, 2014	Jun. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Bourbon Brothers Holding Corp
Entity Central Index Key	0001445918
Amendment Flag	false
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2013
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 14,286,000
Entity Common Stock, Shares Outstanding		43,841,241

XML

SIGNIFICANT ACCOUNTING POLICIES (Policy)

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts, transactions, and profits are eliminated in consolidation.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries.  All material intercompany accounts and transactions are eliminated in consolidation.

Accounting guidance provides a framework for determining whether an entity should be considered a variable interest entity (VIE), and if so, whether the Company's involvement with the entity results in a variable interest in the entity. If the Company determines that it does have a variable interest in the entity, it must perform an analysis to determine whether it represents the primary beneficiary of the VIE. If the Company determines it is the primary beneficiary of the VIE, it is required to consolidate the assets, liabilities and results of operations and cash flows of the VIE into the consolidated financial statements of the Company.

A company is the primary beneficiary of a VIE if it has a controlling financial interest in the VIE. A company is deemed to have a controlling financial interest in a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (ii) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company has concluded that there are no VIE's subject to consolidation at December 31, 2013. While the Company believes its evaluation is appropriate, future changes in estimates, judgments and assumptions in the case of an evaluation triggered by a reconsideration event as defined in the accounting standard may affect the determination of primary beneficiary status and the resulting consolidation, or deconsolidation, of the assets, liabilities and results of operations of a VIE on the Company's consolidated financial statements.

Use of Estimates

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues, costs and expenses during the reporting period. Actual results could differ from the estimates. Changes in estimates are recorded in the period of change.

Fair Value Measurements

Fair Value Measurements

The Company accounts for financial instruments pursuant to accounting guidance which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair measurements.  To increase consistency and comparability in fair value measurements, the accounting guidance established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 - quoted prices (unadjusted) in active markets of identical assets or liabilities;

Level 2 - observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 - assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company's market assumptions.  Unobservable inputs require significant management judgments or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.  There were no financial assets or liabilities measured at fair value, with the exception of cash and cash equivalents as of December 31, 2013.

The carrying amounts of accounts payable and notes payable approximate their fair values due to their interest rates and/or  short-term maturities.  The carrying amounts of related party payables are not practicable to estimate based on the related party nature of the underlying transaction.

Fair Value Measurements

The carrying values of cash and accounts payable approximate fair value due to their short maturities.  The carrying amount of receivables from related parties are not practicable to estimate based on the related party nature of the underlying transactions.

Non-controlling Interest

Non-controlling Interest

The non-controlling interest represents capital contributions, income and loss attributable to the owners of less than wholly-owned consolidated entities, and are reported in equity. From inception through December 31, 2013, in exchange for their interest in SHD, the non-controlling members contributed $897,465 in cash, of which $225,980 and $671,485 was contributed during the years ended December 31, 2013 and 2012, respectively.

Pre-opening Costs

Pre-opening Costs

Pre-opening costs, such as travel and employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Pre-opening Costs

Pre-opening costs, such as travel, employee payroll and related training costs are expensed as incurred and include direct and incremental costs incurred in connection with the opening of each restaurant. Pre-opening costs also may include non-cash rental costs under operating leases incurred during a construction period.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents include short-term highly liquid investments with an original a maturity of three months or less when purchased.  In addition, the majority of payments due from financial institutions for the settlement of debit card and credit card transactions process within two business days, and therefore these payments due are classified as cash and cash equivalents.

Inventory

Inventory

Inventory consists of food and beverages and is stated at the lower of cost (first-in, first-out) or market.

Property and Equipment

Property and Equipment

In conjunction with the Company's Denver-based restaurant, the Company began capitalizing certain leasehold improvements, as well as equipment the Company purchased in 2012 but did not place in service until February 2013. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management considers, or will consider, such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management bases this assessment upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge would be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are capitalized. Expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings.

Property and Equipment

In conjunction with the Company's planned restaurants, the Company has capitalized certain leasehold improvements, as well as equipment the Company has purchased. Management reviews property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. The Company's management will consider such factors as the Company's history of losses and the disruptions in the overall economy in preparing an analysis of its property, including leasehold improvements, to determine if events or circumstances have caused these assets to be impaired. Management will base this assessment

upon the carrying value versus the fair value of the asset and whether or not that difference is recoverable. Such assessment is to be performed on a restaurant-by-restaurant basis and is to include other relevant facts and circumstances including the physical condition of the asset. If management determines the carrying value of the restaurant assets exceeds the projected future undiscounted cash flows, an impairment charge will be recorded to reduce the carrying value of the restaurant assets to their fair value. 

Leasehold improvements are to be stated at cost. Property and equipment costs directly associated with the acquisition, development and construction of a restaurant are to be capitalized. Expenditures for minor replacements, maintenance and repairs are to be expensed as incurred. Depreciation is to be calculated using the straight-line method over the estimated useful lives of the assets, and leasehold improvements are to be amortized over the shorter of the lease term or the estimated useful lives of the assets. Property and equipment are not depreciated/amortized until placed in service. Upon retirement or disposal of assets, the accounts will be relieved of cost and accumulated depreciation and the related gain or loss will be reflected in earnings.

Capitalized Interest

Capitalized Interest

Interest on funds used to finance the acquisition and construction of a restaurant to the date the asset is placed in service is capitalized.

Leases and Deferred Rent

Leases and Deferred Rent

The Company intends to lease substantially all of its restaurant properties, and in April 2012, the Company entered into a ten-year lease for the restaurant in Denver, Colorado. For leases that contain rent escalation clauses, the Company records the total rent payable during the lease term and recognizes expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent is recorded as deferred rent. Additionally, contingent rent expense based on a percentage of revenue is accrued and recorded to the extent it is expected to exceed minimum base rent per the lease agreement based on estimates of probable levels of revenue during the contingency period.  A long-term deposit on the Denver lease in the amount of $18,034 is recorded as of December 31, 2013.  Deferred rent also includes a tenant improvement allowance the Company received for $150,000, which is amortized as a reduction of rent expense, also on a straight-line basis over the initial term of the lease. 

Leases and Deferred Rent

The Company intends to lease some of its restaurant properties (Note 4), and on May 29, 2013, the Company entered into an agreement to lease a restaurant in Colorado Springs, Colorado. The lease terms became effective when the Company took possession of the restaurant property on January 11, 2014. For leases that contain rent escalation clauses, the Company will record the total rent payable during the lease term and recognize expense on a straight-line basis over the initial lease term, including the "build-out" or "rent-holiday" period where no rent payments are typically due under the terms of the lease. Any difference between minimum rent and straight-line rent will be recorded as deferred rent.

Revenue Recognition

Revenue Recognition

The Company began revenue-generating activities through the Denver restaurant on February 21, 2013. The Company began accounting for such revenues pursuant to SEC Staff Accounting Bulletin ("SAB") No. 104, Revenue Recognition, and applicable related guidance. Revenue is derived from the sale of prepared food and beverage and select retail items. Revenue is recognized at the time of sale and is reported on the Company's consolidated statements of income (loss) net of sales taxes collected. The amount of sales tax collected is included in accrued expenses until the taxes are remitted to the appropriate taxing authorities.

Advertising Expenses

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $19,000 and $88,800, for the years ended December 31, 2013 and 2012, respectively.

Advertising Expenses

Advertising costs are expensed as incurred. Total advertising expenses were approximately $55,200 for the period from inception (May 13, 2013) through December 31, 2013.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation under Accounting Standards Codification ("ASC") 718, Share-Based Payment. ASC 718 requires the recognition of the cost of services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock-based compensation expense to be recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each stock option at the grant date by using an option pricing model, typically the Black-Scholes model.

Equity-Based Compensation

The Company recognizes the cost of services received in exchange for an award of equity instruments in the financial statements, which is measured based on the grant date fair value of the award. Equity-based compensation expense is recognized over the period of service in exchange for the award (generally the vesting period). The Company estimates the fair value of each unit option at the grant date by using an option pricing model, typically the Black-Scholes model.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for tax loss and credit carry-forwards. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.

The Company determines its income tax expense in each of the jurisdictions in which it operates. The income tax expense includes an estimate of the current income tax expense, as well as deferred income tax expense, which results from the determination of temporary differences arising from the different treatment of items for book and tax purposes.

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions.

Many of the Company's subsidiaries are limited liability companies ("LLC's") and treated for tax purposes as pass-through entities. As a result, any taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. Management does not believe that there are any uncertain tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements. The Company recognizes tax related interest and penalties, if any, as a component of income tax expense.

Income Taxes

The Company and its subsidiaries are limited liability companies ("LLC's"). As an LLC, management believes that these companies are not subject to income taxes, and such taxes are the responsibility of the respective members.

The Company assesses the likelihood of the financial statement effect of a tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date.  All tax years remain open and subject to U.S. Federal tax examination.  Management does not believe that there are any current tax positions that would result in an asset or liability for taxes being recognized in the accompanying consolidated financial statements.

Net loss per share

Net loss per share

Basic net loss per share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if dilutive securities were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect of such inclusion would reduce a loss or increase earnings per share. For each of the periods presented in the accompanying consolidated financial statements, the effect of the inclusion of dilutive shares would have resulted in a decrease in loss per share. Common stock options, warrants and shares underlying convertible debt aggregating 8,882,809 and 1,922,171 for the years ended December 31, 2013 and 2012, respectively, have been excluded from the calculation of diluted net loss per common share.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company's consolidated financial statements.

Recently Issued Accounting Standards

The Company reviews new accounting standards as issued.  Management has not identified any recently issued accounting standards that it believes will have a significant impact on the Company's consolidated financial statements.

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CONSOLIDATED STATEMENTS OF LOSS (USD $)	12 Months Ended		8 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]
Revenue	$ 2,098,925
Operating expenses:
Restaurant operating costs (exclusive of depreciation and amortization below)	2,321,817
General and administrative	1,213,751	1,257,081	(836,868)
Related party management services	409,388	463,534
Selling and marketing	18,974	88,760	(55,181)
Related party expenses			(100,000)
Depreciation and amortization	250,757
Depreciation			(2,554)
Impairment of intangible asset	250,000
Total operating expenses	4,464,687	1,809,375	(994,603)
Loss from operations	(2,365,762)	(1,809,375)
Other expense:
Interest expense	(515,680)	(775,969)
Net loss	(2,881,442)	(2,585,344)	(994,603)
Net loss attributable to noncontrolling interest	(318,595)	(139,552)
Net loss attributable to BBHC	(2,562,847)	(2,445,792)
Net loss	$ (2,881,442)	$ (2,585,344)
Basic and diluted net loss per share attributable to BBHC common shareholders	$ (0.29)	$ (0.53)
Weighted average number of common shares outstanding - basic and diluted	8,882,809	4,648,155

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NOTES PAYABLE

12 Months Ended

Dec. 31, 2013

NOTES PAYABLE [Abstract]

NOTES PAYABLE

NOTE 5 - NOTES PAYABLE

Convertible Notes:

Beginning in October 2011, the Company began selling 5% promissory notes (the "Notes") along with shares of the Company's common stock. Investors received one share of common stock for each one dollar of principal amount loaned to the Company. The Notes bear interest at 5% per annum, they are unsecured, and their maturity dates are seven years from their issue date. The Company sold $3,086,388 of notes from 2011 through November 2012. Quarterly payments are applied against accrued interest first, then principal. The minimum aggregate quarterly payment to Note holders is 2.5% of the Company's portion of gross quarterly revenues from each restaurant. The first minimum quarterly payment of $7,297 was paid in May 2013 (45 days after the first calendar quarter in which the Denver restaurant opened which occurred on February 21, 2013).  Payments made in the years ended December 31, 2013 and 2012, were $21,600 and $0, respectively.

By their original terms, the Notes and accrued interest became convertible, at the option of the holder, upon the Company's common stock becoming publicly traded on November 13, 2012. The conversion price is 80% of the 20-day average closing sales price on the date conversion is elected, but not less than $0.50 per share. The Company determined that there was a beneficial conversion feature associated with the Notes in the amount of $283,500 related to the intrinsic value of the conversion feature before the Company's stock became public.  The Company recorded the beneficial conversion feature as a discount to the note and is amortizing the amount to interest over the term of the notes.  Approximately $82,273 and $7,900 has been amortized for the years ended December 31, 2013 and 2012, respectively. During the year ended December 31, 2013, there were and $830,984 of Notes and accrued interest converted into 417,828 common shares at conversion prices between $1.82 and $2.30 per share.  The unamortized debt discount and beneficial conversion feature that was expensed upon these conversions was $263,402 and $71,006, respectively.

Promissory Note:

During the year ended December 31, 2013, the Company issued a promissory note with an aggregate face amount of $200,000, along with a warrant to purchase 50,000 shares of the Company's common stock. This note bears interest at 5% per annum, is unsecured, and has a maturity date which is concurrent with the date that the current common stock offering closes, which occurred in January 2014. The holder of the note received additional consideration in the form of a fully vested stock warrant for the purchase of 50,000 common shares at an exercise price of $0.50 per share exercisable for three years from the date of execution of the note.  The Company determined the relative fair value of the warrant to be approximately $44,000, which has been recorded as a discount to the note payable and was amortized over approximately three months (Note 8).

Related Party Promissory Note:

On August 1, 2013, the Company entered into an unsecured promissory note with BBHCLLC. The note is for $204,900 with a maturity date of February 1, 2014. The note includes a 5% annual interest rate and terms in case of default in which the loan maybe converted to common stock of the Company by the note holder at no less than $0.10 a share. The note and unpaid interest was extinguished on the date the Company and BBHCLLC successfully closed the BB Transaction (Note 10).

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PROPERTY AND EQUIPMENT

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

PROPERTY AND EQUIPMENT

NOTE 4 - PROPERTY AND EQUIPMENT

As of December 31, 2013 and 2012, property and equipment consists of the following:

	December 31,			December 31,
	2013			2012		Useful lives
Leasehold improvements	$	2,146,322		$	1,290,723	3-10 years
Website development		13,500			10,800	3 years
Equipment		478,194			133,091	3-7 years
Computers and hardware		52,742			17,045	5 years
		2,690,758			1,451,659
Less accumulated depreciation		(247,183	)		-
	$	2,443,575		$	1,451,659

The Company's Denver-based restaurant opened in late February 2013, for which the Company began depreciating such assets.  Depreciation expense for the years ended December 31, 2013 and 2012, was $247,000 and $0, respectively.

NOTE 3 - PROPERTY AND EQUIPMENT

As of December 31, 2013, property and equipment consists of the following:

				Useful lives
Leasehold improvements	$	27,728		3-10 years
Website development		1,500		3 years
Equipment		559,708		3-7 years
Computers and hardware		46,149		5 years
		635,085
Less accumulated depreciation		(2,554	)
	$	632,531

Depreciation expense for the period ended December 31, 2013 was $2,554, and was related soley to equipment placed in service.  The Company's Colorado Springs-based restaurant opened in late January 2014, for which the Company began depreciating such assets at that time.

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EQUITY (Tables)

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

Schedule of Fair Value Assumptions

The assumptions utilized to determine the fair value of options granted during the years ended December 31, 2013 and 2012, are as follows:

	2013			2012
Risk free interest rate		0.79	%		0.62	%
Expected volatility		105	%		105	%
Expected term	2-5 years			5 years
Expected dividend yield		0			0

Schedule of Stock Option Activity

The following tables set forth the activity in the Company's Plan for the year ended December 31, 2013 and 2012:

						Weighted
				Weighted		average
	Shares			average		remaining		Aggregate
	under			exercise		contractual		intrinsic
	option			price		life		value
Outstanding at January 1, 2013		660,368		$	-			$	-
Granted		90,000			1.50		-		-
Exercised		(327,122	)		0.02		-		-
Forfeited/cancelled		(373,246	)		0.02		-		-
Outstanding at December 31, 2013		50,000			1.50		4.24		-
Exercisable at December 31, 2013		25,000		$	1.50		4.24	$	-

The following is a summary of equity option activity:

						Weighted
				Weighted		Average
	Units			Average		Remaining
	Under			Exercise		Contractual
	Option			Price		Life
Outstanding at Inception		-		$	-		-
Granted		1,190,000			0.0005		4.5
Exercised		(380,000	)		0.0005		5
Terminated		-			-		-
Outstanding at December 31, 2013		810,000		$	0.0005		4.5

Schedule of Nonvested Share Activity

The following table summarizes the activity and value of non-vested options as of and for the years ended December 31, 2013:

				Weighted
				average
	Number of			grant date
	options			fair value
Non-vested options outstanding at January 1, 2013		594,333		$	0.51
Granted		90,000			0.96
Vested		(289,149	)		1.39
Forfeited/cancelled		(370,184	)		1.38
Non-vested options outstanding at December 31, 2013		25,000		$	0.96

A summary of the status of the Company's non-vested unit options for the period ended December 31, 2013, is as follows:

				Weighted
	Number			average
	of			grant date
	Options			fair value
Non-vested options outstanding at Inception		-		$	-
Granted		1,190,000			0.25
Vested		(380,000	)		0.25
Forfeited		-			-
Non-vested options outstanding at December 31, 2013		810,000		$	0.25

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INTANGIBLE ASSET (Tables)

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSET [Abstract]

Schedule of Estimated Future Amortization Expense

Amortization expense for the next five years is estimated to be as follows:

2014	$	5,000
2015		5,000
2016		5,000
2017		5,000
2018		5,000
Thereafter		20,625
	$	45,625

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EQUITY

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

EQUITY

NOTE 8 -  EQUITY

Preferred stock:

The Company has authorized the issuance of up to 1,000,000 shares of preferred stock (increased to 18,242,700 shares in January 2014), none of which had been issued through December 31, 2013 (Note 10). The designations, preferences, limitations, restrictions, and relative rights of the preferred stock shall be established by the board of directors.

Common stock:

Notes payable and accrued interest of $830,984 were converted into 417,828 shares of common stock during the year ended December 31, 2013.

In connection with the Company's 2012 private placement offering to raise $1,500,000 for 1,000,000 shares at $1.50 per share that began in December 2012, the Company changed the offering price to $0.75 per share on May 28, 2013.  The change in offering price and the subscriptions sold through December 31, 2013, resulted in a maximum of 2,000,000 shares available for issuance in which 1,979,544 shares have been issued for proceeds of $1,484,656 since December 2012.

In connection with services provided to the Company, the Company issued an additional 35,554 common shares valued at $26,664 ($0.75 per share) during the year ended December 31, 2013.

Stock options:

Effective November 13, 2012, the Company adopted the 2012 Stock Option Plan (the "Plan"). Under the Plan, the Company may grant stock options, restricted and other equity awards to any employee, consultant, independent contractor, director or officer of the Company. A total of 1.5 million shares of common stock may be issued under the Plan which increased to 3 million as of January 22, 2014 (which number is subject to adjustment as described in the Plan).

In 2012, the Company granted stock options to the Company's CEO to purchase an aggregate of 660,368 shares of common stock.   The Company's CEO  was granted a five-year term option to acquire 660,368 shares of Company common stock at approximately $0.015 per share with 66,035 options vesting immediately and the remaining shares vesting upon the achievement of the performance objectives determined by management, as defined.  During the three months ended March 31, 2013, the CEO exercised the vested options for $995. In March 2013, the board of directors modified the stock option agreement, revising the vesting conditions of the agreement from performance objectives to a service condition.  Under the revised agreement, 264,149 shares vest in March 2014, and the remaining 330,184 shares vest in March 2015. The Company valued the modified options at the modification date.  Based on the Black Scholes option pricing model, the fair value of the modified share option is $1.44 per share.  In June 2013, the Company's CEO resigned his position. In connection with his resignation, the Company agreed to accelerate the vesting of a portion of his options for 264,149 shares from March 2014 to June 2013. The Company valued the modified options at the modification date which resulted in approximately $198,000 of stock option expense recorded during the year ended December 31, 2013.  The CEO exercised these options in a cashless exercise, and the stock certificate is being held by the Company per a lock-up provision until March 2014.

In March 2013, the Company granted certain members of the Denver-based restaurant management team stock options to purchase an aggregate of 90,000 shares of common stock.  These options were granted with a five-year term exercisable at approximately $1.50 per share with 45,000 options vesting immediately and the remaining shares to vest one year later in March 2014.  With the departure of two of these four employees in 2013, 40,000 stock options were forfeited and 50,000 stock options remained outstanding as of December 31, 2013, with 25,000 vested and the remaining 25,000 vesting in March 2014.  None of these options were exercised by December 31, 2013.

The stock-based compensation cost related to options that have been included as a charge to general and administrative expense in the statements of operations was approximately $119,000 and $32,600 for the years ended December 31, 2013 and 2012, respectively.  As of December 31, 2013, there was approximately $5,900 of unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized over a weighted-average period of less than five years.

The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options.  The weighted-average fair value of options granted during the year ended December 31, 2013 and 2012 was $0.96 and $0.51 per share.  The assumptions utilized to determine the fair value of options granted during the years ended December 31, 2013 and 2012, are as follows:

	2013			2012
Risk free interest rate		0.79	%		0.62	%
Expected volatility		105	%		105	%
Expected term	2-5 years			5 years
Expected dividend yield		0			0

The expected term of stock options represents the period of time that the stock options granted are expected to be outstanding. The expected volatility is based on the historical price volatility of the common stock of similar companies. The risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the anticipated cash dividend over the expected term of the stock options.

The following tables set forth the activity in the Company's Plan for the year ended December 31, 2013 and 2012:

						Weighted
				Weighted		average
	Shares			average		remaining		Aggregate
	under			exercise		contractual		intrinsic
	option			price		life		value
Outstanding at January 1, 2013		660,368		$	-			$	-
Granted		90,000			1.50		-		-
Exercised		(327,122	)		0.02		-		-
Forfeited/cancelled		(373,246	)		0.02		-		-
Outstanding at December 31, 2013		50,000			1.50		4.24		-
Exercisable at December 31, 2013		25,000		$	1.50		4.24	$	-

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company's common stock on December 31, 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on December 31, 2013.

The following table summarizes the activity and value of non-vested options as of and for the years ended December 31, 2013:

				Weighted
				average
	Number of			grant date
	options			fair value
Non-vested options outstanding at January 1, 2013		594,333		$	0.51
Granted		90,000			0.96
Vested		(289,149	)		1.39
Forfeited/cancelled		(370,184	)		1.38
Non-vested options outstanding at December 31, 2013		25,000		$	0.96

Warrants:

In December 2012, the Company entered into an indemnification agreement with JW Roth and Gary Tedder, both directors of the Company, for their personal risk regarding personal guarantees in favor of the Franchisor, which were the subject of an Area Development Agreement between the Franchisor and SH. The personal guarantees are still in effect for the royalty payments due to the Franchisor. In addition to the indemnification agreements, the Company compensated Messrs. Roth and Tedder for their personal guarantees in the form of a warrant to purchase up to 200,000 shares, per director, exercisable for ten years at $1.00 per share with the warrant vested immediately with a cashless exercise feature.  The Company used the contractual term of the warrant, a risk free interest rate of 0.62% and a volatility of 105%. Approximately $194,250 and $28,000 has been recognized as stock-based compensation for the years ended December 31, 2013 and 2012, respectively.  There is no unrecognized expenses related to the warrants.

As of December 31, 2013, the Company had a promissory note with an aggregate face amount of $200,000 outstanding. By the original terms, the holder of the note received additional consideration in the form of an immediately vested stock warrant of 50,000 common shares at an exercise price of $0.50 per share exercisable for the three years from the date of execution of the note.  The Company used the Black Scholes pricing model to determine the fair value of the warrants.  The Company used the contractual term of the warrant, a risk free interest rate of 0.39% and a volatility of 105%. A relative fair value of approximately $44,000 was calculated based on the fair value of the warrant and note payable.

NOTE 6 - EQUITY

Member Units

At the date of organization (May 13, 2013), the Company authorized the issuance of up to 10,000,000 units of Class A voting member units. The founding members of BBHCLLC were issued an aggregate of 10,000,000 Class A voting member units in BBHCLLC per their pro-rata ownership in BBLLC.  Other than the distinction between Class A and Class B non-voting member units, all member units shall have identical rights.

In connection with the Company's 2013 private placement offering for Class B non-voting member units at $0.25 per unit that began in May 2013, 9,067,600 units were issued at $0.25 per unit for cash of $2,266,900 during the period from inception (May 31, 2013) through December 31, 2013.  Subsequent to December 31, 2013, the Company has issued 696,000 units for cash proceeds of $174,000.

Equity Option Plan

The Company has adopted the 2013 Equity Option Plan (the "Plan"). Under the Plan, the Company may grant Class B non-voting membership interest units to any employees, managers, consultants, vendors and strategic partners of the Company. A total of one million Class B Units may be issued under the Plan (which number is subject to adjustment as described in the Plan). The purpose of the Plan is to provide financial incentives for selected employees, managers, consultants, vendors and strategic partners of the Company, thereby promoting the long-term growth and financial success of the Company. The Company estimates the fair value of the unit-based awards on the date of grant using the Black-Scholes option-pricing model.  Using the Black-Scholes model, the value of the award that is ultimately expected to vest is recognized over the requisite service period in the statement of operations.  Option forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.  The Company attributes compensation to expense using the straight-line single option method for all options granted.

The Company's determination of the estimated fair value of unit-based payment awards on the date of grant is affected by the following variables and assumptions:

· Estimated option term-since there is no historical experience with existing option holders, the Company utilizes the simplified method of determining the option term by dividing the sum of the contractual term and vesting term by two;

· Estimated dividend rates-based on historical and anticipated dividends over the estimated life of the option;

· Risk-free interest rates-with maturities that approximate the expected life of the options granted; and

· Estimated unit price volatility-calculated over the expected life of the options granted, which is calculated based on the historical price volatility of publicly-traded companies that operate in a similar industry to that of the Company.

The Company utilized assumptions in the estimation of the fair value of unit options granted for the period from inception (May 13, 2013) through December 31, 2013 as follows: estimated option term of 3 to 5 years; estimated dividend rate of 0%; estimated risk-free interest rate of 0.79% to 1.75%; and estimated unit price volatility of 105%.

The following is a summary of equity option activity:

						Weighted
				Weighted		Average
	Units			Average		Remaining
	Under			Exercise		Contractual
	Option			Price		Life
Outstanding at Inception		-		$	-		-
Granted		1,190,000			0.0005		4.5
Exercised		(380,000	)		0.0005		5
Terminated		-			-		-
Outstanding at December 31, 2013		810,000		$	0.0005		4.5

A summary of the status of the Company's non-vested unit options for the period ended December 31, 2013, is as follows:

				Weighted
	Number			average
	of			grant date
	Options			fair value
Non-vested options outstanding at Inception		-		$	-
Granted		1,190,000			0.25
Vested		(380,000	)		0.25
Forfeited		-			-
Non-vested options outstanding at December 31, 2013		810,000		$	0.25

In May 2013, the Company granted certain employees of the Company equity options to purchase an aggregate of 130,000 Class B non-voting member units.  These units were granted with a five-year term exercisable at approximately $0.0005 per unit with 43,336 units vesting immediately and the remaining units to vest over two, one year tranches.  The Company amended the term of these options in July 2013 in which all units vested immediately.  All of the 130,000 options were exercised by September 6, 2013.  Unit option expenses of approximately $32,440 were recorded for the period ended December 31, 2013.

In June 2013, the Company retained an individual to construct and lead the Company's advisory board. This individual was granted an aggregate of 50,000 Class B non-voting member units that will vest in June 2014. These units were granted with a two-year term exercisable at approximately $0.0005 per unit.  In order for the options to vest, this individual must remain as the Chairman of the BBHCLLC Advisory board whose placement in that role is at the sole discretion of the manager of the Company.

In August 2013, the Company granted certain members of the management team equity options to purchase an aggregate of 800,000 Class B non-voting member units.  These units were granted with a five-year term exercisable at approximately $0.0005 per unit with 200,000 units vesting immediately and the remaining units to vest evenly over the next four years.  Of these options, 200,000 units were exercised by December 31, 2013.

On September 1, 2013, the Company retained an individual to advertise and promote the Company.  This individual was granted an aggregate of 600,000 Class B non-voting warrants that vested immediately.  These units were granted with a three-year term exercisable at approximately $0.0005 per unit.  None of these warrants were exercised by December 31, 2013.   The Company used the contractual term of the warrant, a risk free interest rate of .79% and a volatility of 105%. Approximately $49,900 has been recognized as equity-based compensation for the period ended December 31, 2013.  The remaining prepaid balance of approximately $99,805 recorded at December 31, 2013, is to be expensed through the remaining eight months of the vesting period in 2014.

In September 2013, the Company granted 50,000 options to purchase 50,000 Class B non-voting member units. These units were granted with a five-year term exercisable at approximately $0.0005 per unit with all units vesting immediately. All options were exercised by December 31, 2013.

In October 2013, the Company retained an individual to lead the Colorado Springs restaurant location.  This individual was granted an aggregate of 150,000 Class B non-voting member units that vest evenly over three years beginning in October 2014.  These units were granted with a five year term exercisable at approximately $0.25 per unit.

Stock-based compensation expenses was $168,949 for the period ended December 31, 2013. The Company has unrecognized expenses relating to non-vesting options that are expected to vest of $177,887 which have a weighted average life of less than three years.


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COMMITMENTS AND CONTINGENCIES

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

COMMITMENTS AND CONTINGENCIES

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Commitments:

Franchise agreement

The Company operates its Denver restaurant property under a franchise agreement with the Franchisor under an initial ten-year term, renewable for two additional five-year terms. Pursuant to the franchise agreement, the Company is to pay royalty fees based on a percentage of gross revenues (generally between 3% and 5% of gross sales, as defined), plus additional fees and costs for marketing, training, inventory and other franchisor costs. Two officers of the Company have personally guaranteed royalty payments to the Franchisor.

In September 2013, the Company amended the Franchise Agreement with the Franchisor. The amendment resulted in a reduction in the royalty fees for the Company's Denver restaurant to be paid to the Franchisor beginning January 1, 2014. The reduced rate is 2.5% of gross sales, subject to a monthly floor of $5,000.

For the years ended December 31, 2013 and 2012, the Company incurred franchise royalty expense of $98,000 and $0, respectively.

Leases:

In April 2012, the Company entered into a ten-year, non-cancellable lease for the restaurant in Denver, Colorado. This lease provides for two, five-year renewal options. Rent payments are approximately $16,000 per month plus certain common area maintenance charges, as defined, and are subject to escalation provisions.  Lease expense was approximately $190,000 and $144,800 for the years ended December 31, 2013 and 2012, respectively.  In addition, BBHCLLC has entered into a ten-year, non-cancellable lease with a related party for the restaurant in Colorado Springs, Colorado.

The future minimum lease payments are as follows:

	Third		Related
	Party		Party		Total
2014	$	194,120	$	367,039	$	561,159
2015		199,944		385,000		584,944
2016		205,942		385,000		590,942
2017		212,120		385,000		597,120
2018		218,484		385,000		603,484
Thereafter		857,884		2,135,461		2,993,345
	$	1,888,494	$	4,042,500	$	5,930,994

The Company also paid rent and rent-related expenses to Accredited Members Acquisition Corporation ("AMAC"), a related party (Note 9), on a month-to-month basis for office space at the AMAC corporate headquarters in Colorado Springs, Colorado. This arrangement began in October 2011 and terminated July 31, 2013, as the Management Service Agreement terminated. Base rental payments were approximately $3,500 per month. Related party rent expense was approximately $25,545 and $44,300 for the years ended December 31, 2013 and 2012, respectively.

During the year ended December 31, 2013, the Company and its general contractor were in a dispute regarding the final payment on the leasehold improvements on the restaurant. The general contractor recorded a lien against the premises. This lien caused the Company to be in default of its lease agreement. In July 2013, the Company and its landlord entered into an agreement to satisfy the dispute with the general contractor so the full lien will be released.  In turn, the entire lien was released on August 2, 2013.  The Company made payments totaling $144,000 in full for the year ended December 31, 2013.

Contingencies:

From time to time, the Company may become party to litigation and other claims in the ordinary course of business. To the extent that such claims and litigation arise, management provides for them if upon the advice of counsel, losses are determined to be both probable and estimable.

NOTE 5 - COMMITMENTS

Supplier agreement

The Company has contracted with a supplier to design the kitchen and provide equipment for the restaurant in Colorado Springs, Colorado.  This contract was paid in full as the Company paid approximately $325,800 as of December 31, 2013, to complete the contract.

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INCOME TAXES

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 7 - INCOME TAXES

At December 31, 2013, the Company has approximately $1,856,000 of net operating loss carry-forwards which expire between 2030 and 2033. The net operating loss carry-forwards may be subject to certain restrictions in the future, particularly in the event of a change in ownership under Internal Revenue Code Section 382.

Deferred tax assets and liabilities are recorded based on the difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, as measured by the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are carried on the balance sheet with the presumption that they will be realizable in future periods when pre-tax income is generated. A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The net operating loss carry-forwards may be subject to certain restrictions in the future, particularly in the event of a change in ownership under Internal Revenue Code Section 382.

Deferred tax assets and liabilities represent the future impact of temporary differences between the financial statement and tax bases of assets and liabilities.  The Company's net deferred tax assets have been fully reserved, effectively by a valuation allowance, because management does not believe realization of the deferred tax assets is sufficiently assured at the balance sheet date.

The deferred tax assets (liabilities) and associated valuation allowance at December 31, 2013 and 2012, are as follows:

	2013			2012
Current assets:
Stock based compensation	$	156,993		$	22,337
		156,993			22,337
Non-current assets:
Net operating loss carryforwards		778,782			685,774
		935,775			708,111
Valuation allowance		(935,775	)		(708,111	)
Net deferred tax assets	$	-		$	-

No income tax benefit was recognized for the years ended December 31, 2013 and 2012, as indicated below:

	2013			2012
Deferred tax benefit:
Federal	$	209,205		$	581,082
State		18,459			50,529
		227,664			631,611
Increase in valuation allowance		(227,664	)		(631,611	)
	$	-		$	-

A reconciliation of income tax computed at the U.S. statutory tax rate of 34% to the effective income tax rate is as follows:

	2013			2012
Statutory rate		34	%		34	%
State taxes		3			3
Permanent differences and other		(10	)		(12	)
Valuation allowance		(27	)		(25	)
Effective rate		-			-

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RELATED PARTY TRANSACTIONS

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

RELATED PARTY TRANSACTIONS

NOTE 9 - RELATED PARTY TRANSACTIONS

Related Party Management Agreement with AMHC Managed Services

Effective September 1, 2011, the Company entered into a management agreement (the "Management Agreement") with AMHC Managed Services, Inc. ("AMMS"), a subsidiary of AMAC. The Company's Chairman of the Board of Directors and officers of the Company are also officers/board members of AMAC. The significant terms of the Management Agreement provide for monthly payments to AMMS in exchange for the ability of the Company to fully utilize the management expertise, financial and accounting expertise, support staff and location of AMMS, including the expertise of the position of AMMS' Chief Financial Officer and necessary support for compliance under the securities laws with respect to any private or public reports or registration statements the Company may file. The Management Agreement term was 12 months, and required the Company to pay AMMS a monthly fee equal to $35,000 per month. Additionally, under the Management Agreement, the Company granted AMMS a warrant to purchase 330,184 shares of Company's common stock exercisable at $0.0007 per share, exercisable for a three-year term. The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and was amortized over the one-year term of the Management Agreement as services are performed. AMMS exercised the warrant in full in July 2012.

The Management Agreement was renewed in October 2012 for an additional one-year period with terms similar to those of the 2011 Management Agreement. In connection with the renewed Management Agreement, the Company issued an additional warrant in October 2012 to AMMS to purchase 330,184 shares of the Company's common stock at $0.0007 per share for a three-year term.  The value of the warrant was determined to be approximately $49,700. The amount was recorded as a prepaid asset and is being amortized over the one-year term of the Management Agreement as services are performed, of which approximately $39,400 and $10,300 was expensed in the years ended December 31, 2013 and 2012. AMMS exercised the warrant in full in October 2012. On May 17, 2013, the Company amended its terms with AMMS so that AMMS would no longer be the "Acting CFO" nor provide senior financial management services for the Company effective the same date.  Further, on June 26, 2013, the Company notified AMMS that it would terminate the Management Agreement effective July 31, 2013.  These functions were handled by the interim CEO and interim CFO for the remainder of 2013.

The Company also paid rent and rent-related expenses to Accredited Members Acquisition Corporation ("AMAC"), a related party, on a month-to-month basis for office space at the AMAC corporate headquarters in Colorado Springs, Colorado. This arrangement began in October 2011 and terminated July 31, 2013, as the Management Service Agreement terminated. Base rental payments were approximately $3,500 per month. Related party rent expense was approximately $25,500 and $44,300 for the years ended December 31, 2013 and 2012.

In addition to the management fee and the rent discussed above, the Company paid AMMS for reimbursable expenses and payments made to third parties on behalf of the Company.  During the years ended December 31, 2013 and 2012, the Company paid reimbursable expenses of $42,200 and $113,261, respectively.

In July 2013, the Company repurchased 33,334 common shares owned by AMMS for $1.50 per share for a total price of $50,000.    These shares were cancelled by the Company in July 2013.  The difference between the $1.50 per share and the fair value of the shares at the transaction date of $0.75 per share ($25,000) is recorded as an expense to related party management fees.

Related Party Services with Bourbon Brothers Holding Company, LLC (BBHCLLC)

On August 1, 2013, the Company entered into an unsecured promissory note with BBHCLLC (Note 5).  In addition, the Company recognized $20,000 of contributed services per month for August through December 2013 for services provided by BBHCLLC and recorded total expense of $100,000 in the statement of loss for the year ended December 31, 2013. No cash was exchanged by of either party in recognition.

NOTE 4 - RELATED PARTY TRANSACTIONS

License agreement

The Company licenses the rights to the trademark "Bourbon Brothers" and certain intellectual property, as defined, from a related party, BBLLC, for the use in the Company's business operations. BBLLC has granted an exclusive license to use and to sublicense the tradename and intellectual property for an initial ten year term. The agreement shall automatically renew for additional terms of ten-years each without any action required by either party. This license agreement does not require the payment of royalties or any other considerations.

Lease agreement 

On May 29, 2013, the Company entered into a 10-year lease with BBLLC for the real property in connection with the restaurant location in Colorado Springs.  The lease commenced upon taking possession of the premises, on January 11, 2014.  Initial monthly rent is approximately $32,000 per month for the first 60 months, and thereafter subject to adjustment every 60 months.  Any increase on a yearly basis will equal 11% of the construction costs in excess of $2,000,000.

On January 1, 2014, the Company assumed a lease from a related party for the corporate office in Colorado Springs.  The lease is for 78 months with an unaffiliated party.  Monthly rent is $5,800 per month escalting up to $6,000 per month in year 6.

Other

BBLLC provided a short-term non-interest bearing working capital loan of $50,000 to BBHCLLC on May 23, 2013, which was repaid in full in July 2013.

In connection with services provided to the Company, the Company issued 400,000 Class B non-voting member units valued at $100,000 ($0.25 per unit) during the period from inception (May 13, 2013) through December 31, 2013 to a related party, whose owners also hold Class A member units in the Company.

On August 1, 2013, the Company entered into an unsecured promissory note with BBHC for up to $200,000 with a maturity date of February 1, 2014, which was subsequently increased up to a $250,000 limit. BBHC received draws totaling $204,900 through December 31, 2013. The note has a 5% interest rate which compounds monthly and is due on the maturity date of the note. The note includes terms in case of default in which the loan maybe converted to common stock of BBHC by the note holder at no less than $0.10 a share. The note and unpaid interest was extinguished on the date the Company and BBHC successfully closed the BB Transaction on January 22, 2014. This balance has been represented as a component of members' equity at December 31, 2013.

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INCOME TAXES (Schedule of Income Tax Reconciliation) (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
INCOME TAXES [Abstract]
Statutory rate	34.00%	34.00%
State taxes	3.00%	3.00%
Permanent difference	(10.00%)	(12.00%)
Valuation allowance	(27.00%)	(25.00%)
Effective rate

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

Schedule of Future Minimum Payments

The future minimum lease payments are as follows:

	Third		Related
	Party		Party		Total
2014	$	194,120	$	367,039	$	561,159
2015		199,944		385,000		584,944
2016		205,942		385,000		590,942
2017		212,120		385,000		597,120
2018		218,484		385,000		603,484
Thereafter		857,884		2,135,461		2,993,345
	$	1,888,494	$	4,042,500	$	5,930,994

XML

INTANGIBLE ASSET (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
INTANGIBLE ASSET [Abstract]
Cost of license rights			$ 300,000
Impairment of intangible asset	250,000
Amortization expense	4,375
Estimated future amortization expense:
2014	5,000
2015	5,000
2016	5,000
2017	5,000
2018	5,000
Thereafter	20,625
Total	$ 45,625

XML

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit during Development Stage [Member]	Non-controlling Interest [Member]
Balances at Dec. 31, 2011	$ (155,725)	$ 83,625	$ 49,753	$ (289,103)
Balances, shares at Dec. 31, 2011		4,317,150
Cancellation of common stock to founders, shares		(1,485,788)
Exercise of warrant for cash, transaction one	250	250
Exercise of warrant for cash, transaction one, shares		330,184
Exercise of warrant for cash, transaction two	250	250
Exercise of warrant for cash, transaction two, shares		330,184
Contribution of cash by non-controlling members to subsidiary	671,485				671,485
Issuance of common stock in connection with notes payable	1,324,101	1,040,601	283,500
Issuance of common stock in connection with notes payable for cash, shares		1,683,203
Stock issued for services	6,589	6,589
Stock issued for services, shares		18,160
Warrant issued for prepaid management services	49,752		49,752
Warrant issued for services and exercised	36,050	50	36,000
Warrant issued for services and exercised, shares		66,037
Acquisition of Art Dimensions, Inc., shares		650,000
Conversion of notes payable to common stock	1,477,191	1,477,191
Conversion of notes payable to common stock, shares		993,376
Sale of common stock for cash	116,644	77,764
Sale of common stock for cash, shares		116,644
Warrants issued for guarantees	222,000		222,000
Stock-based compensation	32,621		32,621
Net loss	(2,585,344)			(2,445,792)	(139,552)
Balances at Dec. 31, 2012	1,195,864	2,725,200	673,626	(2,734,895)	531,933
Balance, shares at Dec. 31, 2012		6,980,270
Contribution of cash by non-controlling members to subsidiary	225,980				225,980
Stock issued for services	26,664	26,664
Stock issued for services, shares		35,554
Conversion of notes payable to common stock	830,984	830,984
Conversion of notes payable to common stock, shares		417,828
Sale of common stock for cash	1,368,012	1,368,012
Sale of common stock for cash, shares		1,901,780
Stock-based compensation	263,513		263,513
Warrant issued with a note payable	44,494		44,494
Exercise of stock options	4,976		4,976
Exercise of stock options, shares	327,122	327,122
Contributed services	100,000		100,000
Repurchase of shares for service	(25,000)	(25,000)
Repurchase of shares for service, shares		(33,334)
Net loss	(2,881,442)			(2,562,847)	(318,595)
Balances at Dec. 31, 2013	$ 1,154,045	$ 4,925,860	$ 1,086,609	$ (5,297,742)	$ 439,318
Balance, shares at Dec. 31, 2013		9,629,220

XML

INTANGIBLE ASSET

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSET [Abstract]

INTANGIBLE ASSET

NOTE 3 - INTANGIBLE ASSET

Franchise Agreements

In 2011, the Company paid $300,000 for the non-exclusive rights and license to use the Southern Hospitality system and Southern Hospitality licensed marks in connection with the operation of ten restaurants to be owned and operated by the Company under franchise and related area development agreements.  These costs were allocable to each planned restaurant.

In September 2013, the Company terminated the Area Developer Agreement ("ADA") with the Franchisor. As a result of the termination of the ADA, the Company determined this event impaired the intangible asset, and a resulting impairment expense was recorded in the year ended December 31, 2013, of $250,000.  The intangible asset at December 31, 2013, represents franchise license costs for the Denver restaurant (net of accumulated amortization of $4,375).

Amortization began in February 2013 with the opening of the Company's Denver-based restaurant, with amortization expense of $4,375 recorded for the year ended December 31, 2013. Amortization expense for the next five years is estimated to be as follows:

2014	$	5,000
2015		5,000
2016		5,000
2017		5,000
2018		5,000
Thereafter		20,625
	$	45,625

XML

PROPERTY AND EQUIPMENT (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,690,758	$ 1,451,659
Less accumulated depreciation	(247,183)
Property and equipment, net	2,443,575	1,451,659
Depreciation expense	247,000
Bourbon Brothers Holding Company LLC [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	635,085
Less accumulated depreciation	(2,554)
Property and equipment, net	632,531
Depreciation expense	2,554
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	2,146,322	1,290,723
Leasehold improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Leasehold improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Leasehold improvements [Member] | Bourbon Brothers Holding Company LLC [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	27,728
Leasehold improvements [Member] | Bourbon Brothers Holding Company LLC [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Leasehold improvements [Member] | Bourbon Brothers Holding Company LLC [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Website development [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	13,500	10,800
Estimated useful lives	3 years
Website development [Member] | Bourbon Brothers Holding Company LLC [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	1,500
Estimated useful lives	3 years
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	478,194	133,091
Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years
Equipment [Member] | Bourbon Brothers Holding Company LLC [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	559,708
Equipment [Member] | Bourbon Brothers Holding Company LLC [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Equipment [Member] | Bourbon Brothers Holding Company LLC [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years
Computer and hardware [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	52,742	17,045
Estimated useful lives	5 years
Computer and hardware [Member] | Bourbon Brothers Holding Company LLC [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 46,149
Estimated useful lives	5 years

XML

EQUITY (Schedule of Stock Option Activity- Non-Vested) (Details) (USD $)	1 Months Ended	12 Months Ended		8 Months Ended
	Mar. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Bourbon Brothers Holding Company LLC [Member]
Non-vested Stock Option Activity
Outstanding, beginning balance		594,333
Granted	90,000	90,000	660,368	1,190,000
Vested		(289,149)		(380,000)
Forfeited/cancelled		(370,184)
Outstanding, ending balance		25,000	594,333	810,000
Weighted average exercise price
Outstanding, beginning balance		$ 0.51
Granted		$ 0.96	$ 0.51	$ 0.25
Vested		$ 1.39		$ 0.25
Forfeited/cancelled		$ 1.38
Outstanding, ending balance		$ 0.96	$ 0.51	$ 0.25

XML

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

8 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Bourbon Brothers Holding Company LLC [Member]

Schedule of Property and Equipment

As of December 31, 2013 and 2012, property and equipment consists of the following:

	December 31,			December 31,
	2013			2012		Useful lives
Leasehold improvements	$	2,146,322		$	1,290,723	3-10 years
Website development		13,500			10,800	3 years
Equipment		478,194			133,091	3-7 years
Computers and hardware		52,742			17,045	5 years
		2,690,758			1,451,659
Less accumulated depreciation		(247,183	)		-
	$	2,443,575		$	1,451,659

As of December 31, 2013, property and equipment consists of the following:

				Useful lives
Leasehold improvements	$	27,728		3-10 years
Website development		1,500		3 years
Equipment		559,708		3-7 years
Computers and hardware		46,149		5 years
		635,085
Less accumulated depreciation		(2,554	)
	$	632,531