Detailed Information on Storm Guard Roofing and Construction’s Initial Franchise Fee, Royalty Fee + 25 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial Franchise Fee:  $65,000

• Upon signing a Franchise Agreement, you must pay Storm Guard a nonrefundable initial franchise fee (“Initial Franchise Fee”) in the amount of $65,000 for a Franchised Area that consists of one Standard Territory.

• Each “Standard Territory” is a geographic area containing at least 100,000 owner-occupied single-family homes and/or duplexes as determined by Storm Guard in its sole discretion.

• If you are a retired or honorably discharged veteran of the United States military, you will receive a $6,500 discount on the Initial Franchise Fee.

2.  Opening Package:  $21,000 to $32,000

• Before opening, you must obtain from Storm Guard your initial sales promotion, print materials, and certain materials for conducting your Business (“Opening Package”). The Opening Package includes Storm Guard signs, clothing, banners, door hangers, brochures, letterhead, business cards, Storm Guard tarping equipment, vehicle wrap, and some technology set-up and service fees.

• The price of the Opening Package will range from $21,000 to $32,000, including shipping and handling.

3.  Royalty Fee:  6.25% of your Gross Sales, subject to the minimum revenue and royalty requirements

• Due Date:  Once per week (currently Monday of each week).

• Payable via electronic funds transfer.

• (1) During your first full calendar year of operation you must achieve at least $1,000,000 in Gross Sales and if you fail to do so, your royalty payments for that year must equal 6.25% of $1,000,000; (2) during your second full calendar year of operation you must achieve at least $1,500,000 in Gross Sales and if you fail to do so, your royalty payments for that year must equal 6.25% of $1,500,000; and (3) during your third full calendar year of operation and each subsequent year you must achieve at least $2,000,000 in Gross Sales and if you fail to do so, your royalty payments for that year must equal 6.25% of $2,000,000.

4.  Emergency Tarping Roll:  currently, Storm Guard charges $1,250 per tarp roll (plus shipping costs)

• Due Date:  As incurred.

• Before opening your Business, you must purchase from the franchisor a Storm Guard branded tarp for emergency tarping of homeowner’s damaged roofing or siding, the first of which is included in the Opening Package.

• This tarp must be the only tarp used for tarping damaged property.

• Storm Guard currently charges $1,250 per tarp roll (plus shipping costs), and each roll has approximately 6,000 square feet of tarp.

5.  Promotional Materials:  you must obtain certain promotional materials from Storm Guard, which may include, among other things, clothing and home show materials, etc.

• Due Date:  As incurred.

6.  Interest Charges:  1.5% per month or maximum rate provided by law

• Due Date:  As incurred.

7.  Late Payment Service Charges:  $100 for each delinquent payment

• Due Date:  As incurred.

8.  Late Reporting Fee:  $100 for each delinquent report

• Due Date:  Payable when the delinquent report is due, and continuing for each period that the report remains delinquent.

9.  Tax Indemnification and Reimbursement:  you must indemnify and reimburse Storm Guard for all income, capital, gross receipts, sales, and other taxes that the state in which the Business is located imposes as a result of your operation of the Business or the license of any of your intangible property in the jurisdiction in which the Business is located

• Due Date:  Payable at the same time as the Royalty Fee, or as Storm Guard otherwise prescribes.

• If more than one franchisee is located in the jurisdiction in which the Business is located, they will share the liability in proportion to their Gross Sales from the franchised business, except in the case of sales taxes and gross receipts taxes, which will be divided in proportion to taxable sales to the franchisees.

10.  Brand Development Fee:  0.75% of Gross Sales

• Due Date:  Payable by electronic funds transfer at the same time as Royalty Fee.

11.  Local Advertising and Cooperatives:  you must spend at least $2,500 per month total on approved promotional activities during your first year of operations, $5,000 per month total during your second year of operations, and $7,500 per month during all subsequent years of operations

• Due Date:  Minimum amount must be spent during each month.

12.  Audits of Franchisees:  cost of audit plus interest charges, as described above

• Due Date:  Immediately upon receipt of bill.

13.  Transfer Fee:  $12,500, plus any applicable broker fees that Storm Guard incurs, for transfers to new franchisees; $2,500 for transfers to current Storm Guard franchisees

• Due Date:  Upon completion of transfer.

14.  Management Fees:  will vary under the circumstances, depending on the extent and duration of the management services your Business will require during any transitions. Currently, Storm Guard plans to charge a Management Fee of 5% of Gross Sales in the event it must manage your Business.

• Due Date:  When incurred by Storm Guard.

• Upon death or disability of your Primary Owner, Storm Guard or its designee may manage the Business during a transition period to a new Primary Owner. Storm Guard or its designee may charge you a fee for any management services.

15.  Additional or Ongoing Training:  then-current fee; currently $300 per person per day

• Due Date:  30 days prior to training.

16.  Annual Meeting or Convention:  Storm Guard charges a fee for attendance at its annual meetings and conventions. Currently, the fee is $1,000 per franchisee (up to 2 people) to attend the meeting or convention.

• Due Date:  Before annual meeting or convention.

• Does not include the cost of travel, lodging, or meals, and may be increased at Storm Guard’s discretion.

17.  Technology Fee and e-mail Fees:  the Technology Fee is currently up to $100 per month per franchised territory. In addition, Storm Guard will charge you $10 per month for each Storm Guard e-mail address.

• Due Date:  Payable by electronic funds transfer at the same time as Royalty Fee payments.

18.  Sales App Fee:  $24 per month per user

• Due Date:  Payable monthly.

• This product helps track sales and sales calls in the field.

19.  Proprietary Software Licensing or User Fee:  will vary under the circumstances, depending on the cost of the software and the number of users in your Business

• Due Date:  As incurred.

• Due to Storm Guard or suppliers.

20.  Aerial Measurement Services:  Storm Guard estimates the fee will range from $20 to $60 per residential unit and $200 to $1,000 per commercial unit, depending on your location

• Due Date:  As incurred.

• Due to Storm Guard or suppliers.

21.  Xactimate Estimation Software:  Storm Guard estimates the fee will range from $100 to $150 per month per user, depending on your location

• Due Date:  Payable monthly or annually, as billed.

• Due to Storm Guard or suppliers.

22.  Costs and Attorneys’ Fees:  will vary under the circumstances, depending on the nature and extent of any enforcement action or other proceedings, and will include all costs associated with the enforcement action and attorneys’ fees

• Due Date:  As incurred.

23.  Alternative Supplier Review:  currently, Storm Guard does not charge to review alternative suppliers, but reserves the right to charge in the future

• Due Date:  As incurred.

24.  Post Termination and Associated Expenses:  you must pay for all costs associated with ceasing to be Storm Guard’s franchisee or the de-identification of your Business office and vehicle(s)

• Due Date:  As incurred.

25.  Indemnification:  will vary under the circumstances and will cover all costs associated with Storm Guard’s defense, depending on the costs of attorneys’ fees or other related costs Storm Guard incurs

• Due Date:  As incurred.

26.  Insurance:  cost of insurance

• Due Date:  Payable before opening.

• If you fail to obtain and maintain required insurance, Storm Guard may obtain insurance on your behalf, and you must immediately reimburse Storm Guard for that insurance and its expenses.

27.  Work Expense Fee:  an amount equal to Storm Guard’s costs and expenses incurred in completing work for your client or the amount refunded to your client by Storm Guard

• Due Date:  As incurred.

• If you fail to complete work for one of your clients or refund the funds allocable to the incomplete work within 10 days after notice from Storm Guard that you have failed to timely complete a client project, Storm Guard may, in its sole discretion: (a) complete the work, (b) refund the funds allocable to the incomplete work to the party that advanced such funds to you, (c) take other related actions as it deems appropriate under the circumstances, or (d) take no action.