Detailed Estimates of CMIT Solutions Franchise Costs Based on Item 7 (Estimated Initial Investment) of CMIT Solutions’ 2018 Franchise Disclosure Document

• All of the expenditures to be paid to CMIT are non-refundable. Whether any of the vendors to whom you make payments will refund those payments will depend on their terms of purchase.

• CMIT offers limited financing of a portion of the Initial Fee to qualified applicants who are converting an existing business to the CMIT Solutions System. If CMIT provides financing, you must sign a Note with a 2-year term at a variable interest rate that is Prime Rate plus 4 points. CMIT does not otherwise provide direct or indirect financing.

1.  Franchise Fee Tier One:  $49,950

• The Franchise Fee Tier One includes the Initial Training Program for you and 2 other persons for the length of the Franchise Agreement. An additional training fee will be charged for any additional person attending the Initial Training Program.

• The Franchise Fee is partially refundable under certain conditions, as discussed in Item 5.

2.  Franchise Fee Tier Two:  $54,950

• The Franchise Fee Tier Two includes the Initial Training Program for you and 2 other persons for the length of the Franchise Agreement. An additional training fee will be charged for any additional person attending the Initial Training Program.

• The Franchise Fee is partially refundable under certain conditions.

3.  Territory Fee:  up to $2,750

• The Territory Fee is $11 for each Small Business Establishment (SBE) in excess of 4,000 SBEs. The Territory size will not exceed 4,250 SBEs and the Territory Fee will not exceed $2,750.

4.  Business Licenses:  $550 to $1,500

5.  Travel, Food, and Lodging While Training:  $2,200 to $2,500

6.  Real Estate and Leasehold Improvements:  varies

• CMIT does not require you to obtain outside office space from which to operate your CMIT Solutions Franchise, although you will be required to acquire a virtual office address for use on your website and other materials so that CMIT can leverage on your business location for internet marketing.

• If you do lease or purchase the premises for your CMIT Solutions Franchise, it must be located within your Territory and CMIT will not negotiate your lease or purchase. The amount of rent will vary substantially, depending on the size, condition, and location of the premises.

• Leasehold improvements may be provided by the Landlord; but if not, these will be at your expense. These costs will vary greatly, depending on the condition of the premises and what improvements you require.

7.  Furniture and Equipment:  $0 to $2,500

• You may need other items of office equipment as described in the General Operating Policies and Procedures Manual.

• The high estimate assumes that you will purchase these items. The low estimate assumes that you already own these items.

• Both estimates assume that you currently own a vehicle that is suitable for use in operating the franchise.

8.  Marketing Commitment for First 6 Months:  $14,000

• You must begin marketing for your CMIT Solutions Franchise and be prepared to provide IT Professional Services within 30 days after successful completion of the Initial Training Program in Austin, Texas, unless CMIT extends this time period in writing.

• You are required to spend a minimum of $26,000 in the first year ($4,000 your first month and $2,000 each following month) and $24,000 a year for the next two years.

• You are also required to participate in the Sandler Sales Training Program which will be $1,500 down and $500 a month for the first nine months.

• Of the $4,000 spent your first month, up to $2,000 will be spent to acquire contacts from a dedicated provider authorized by CMIT Solutions within the first 30 days of operation.

• After your CMIT Solutions Franchise has been open for 3 years, it is recommended that you follow the General Operating Policies and Procedures Manual for annual marketing spending.

• The quoted range shows 6 months of the minimum expenditure, including $4,000 for the first month. Some of the first month’s marketing and Sandler training expenses will be incurred before attending training.

• The $500 per month for 10 months can be considered to be part of your $2,000 monthly spend on marketing.

9.  Technical Staffing:  $18,000 to $30,000 for 6 months (approximately $3,000 monthly minimum)

10.  Start-Up Business Package (including laptop):  $1,270 to $2,000

• You must have available for use in your CMIT Solutions Franchise a laptop computer system that is capable of running CMIT’s business systems.

• You will order this laptop through CMIT’s approved suppliers, and CMIT will prepare the laptop for your use in Initial Training.

11.  Additional Funds for 6 Months:  $40,000 to $60,000

• This estimates business working capital to cover your business expenses during the first 6 months of operation, and is based on the experience of CMIT’s business managers and the experience reported by CMIT Solutions Franchisees.

• These expenses include professional fees, bank fees, telephone line installation fees, cellular phone charges, internet service provider, insurance premiums, payroll processing, miscellaneous expenses, and working capital.

• These figures are estimates, and you may have additional expenses starting your business.

12. Total:  $125,970 to $170,200

• These figures are estimates only. You should review these figures carefully with a business advisor before making any decision to purchase the CMIT Solutions Franchise.