Detailed Information on N-Hance’s Initial Franchise Fee, Royalty Fee + 38 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial License Fee: $3,000, plus $1,000 per 8,000 persons located in the Franchised Area

2.  Initial Supplies, Equipment, and Marketing Resource Packages (collectively, the “New Business Set”):  totaling $38,500, plus applicable sales tax

3.  Royalty – Traditional Franchise:  the greater of (1) 2% of your Gross Revenue or (2) the Minimum Monthly Royalty of $392.45 for months 1 to 6 and $785.51 thereafter

• Due Date:  10th day of the following month.

• For your first N-Hance Business, payment begins in the fourth month following completion of the New Buyer Training program.

• For additional franchise acquisition, payment generally begins the first month after you sign the Franchise Agreement.

• This fee must be paid via electronic funds transfer.

4.  Royalty – Small Market Franchise:  the greater of (1) 2% of your Gross Revenue or (2) the Minimum Monthly Royalty of $209.38 for months 1 to 6 and $418.77 thereafter

• Due Date:  10th day of the following month.

• For your first N-Hance Business, payment begins in the fourth month following completion of the New Buyer Training program.

• For additional franchise acquisition, payment generally begins the first month after you sign the Franchise Agreement.

• This fee must be paid via electronic funds transfer.

5.  Yearly Minimum Purchase Amount:  $4,000

• Due Date:  As incurred.

• You must purchase a minimum of $4,000 (subject to an annual CPI increase; updated amount published in Manual) of proprietary products from N-Hance or its parent company each calendar year for each Business you own.

6.  Customer Relationship Management Software Fee:  $80 to $160 per month; $200 data import fee

• Due Date:  As incurred.

• You are required to use N-Hance’s web-based customer management system in the operation of the Business.

• Existing franchisees must pay $200 to import their existing database.

7.  Non-Reporting Fee:  $300

• Due Date:  As incurred.

• Payable each month you do not provide the required reports in the manner prescribed by N-Hance; repeatedly not providing the required reports could result in further action.

8.  Brand Marketing Fund Contribution – Traditional Franchise:  up to $400 per month

• Due Date:  Monthly on the 25th of each month.

• Your contributions to the BMF will be due beginning the same month your first Franchise Royalty payment is due.

• Subject to change upon 30 days’ notice from N-Hance.

9.  Brand Marketing Fund Contribution – Small Market Franchise:  up to $200 per month

• Due Date:  Monthly on the 25th of each month.

• Your contributions to the BMF will be due beginning the same month your first Franchise Royalty payment is due.

• Subject to change upon 30 days’ notice from N-Hance.

10.  National Accounts Program Handling & Processing Fee:  currently 10% to 25% of invoice total

• Due Date:  As incurred.

• N-Hance or its parent company remits to you all the payments received from completed national accounts jobs minus this handling and processing fee.

• This fee can vary between National Accounts.

11.  Catalyst Out-of-Area Fee:  15% of Invoice Total

• Due Date:  As incurred.

• N-Hance collects this fee on any work you perform outside of your Franchised Area with N-Hance’s permission.

• N-Hance will contribute one-third of the Catalyst Out-of-Area Fee amount collected from each job to the BMF.

• Jobs performed outside of your Franchised Area without N-Hance’s prior written approval are subject to a fine or termination of the Franchise Agreement.

12.  Sub-Site (websites):  $35 per month per site

• Due Date:  10th day of month.

• Development, hosting, and maintenance fees for one franchisee local site.

• Does not include web marketing services.

• The first six months’ fees of one sub-site is included in the New Business Set.

13.  Fine for Improper Advertising:  $2,000 per violation, or termination of the Franchise Agreement

• Due Date:  As incurred.

• Payable if you use any advertising, promotional, or marketing materials not prepared or approved by N-Hance or inconsistent with N-Hance’s current marketing and advertising guidelines.

• Failing to correct issues involving improper advertising could result in the termination of your Franchise Agreement.

14.  Fine for Use and/or Possession of Unapproved Equipment or Products:  $5,000 per occurrence

• Due Date:  As incurred.

• Payable if you use or possess any equipment or product not approved by N-Hance.

• Failing to correct issues involving possession of unapproved equipment or products could result in the termination of your Franchise Agreement.

15.  Fine for Setting an Appointment, Providing a Written Estimate, or Accepting or Performing a Job Outside of Your Franchised Area:  $5,000 or ½ of the total job ticket/invoice amount, whichever is greater, per violation

• Due Date:  As incurred.

• Payable if you set an appointment, provide a written estimate, or accept or perform a job outside of your Franchised Area without N-Hance’s prior written approval.

• Multiple violations could result in the termination of your Franchise Agreement.

16.  Fine for Failure to Comply with Annual Training Requirements:  $500 per year

• Due Date:  As incurred.

• Payable if you do not attend at least one in-person training event each calendar year or otherwise fail to fulfill annual training requirements.

• Multiple violations could result in the termination of your Franchise Agreement.

17.  Failed Quality Control (“CQ”) Evaluation Fee:  will vary

• Due Date:  As incurred.

• If you fail a QC Evaluation, you may be required, at your own expense, to complete additional training, pay for the cost of the Evaluation and costs associated with the service provided, and to correct the quality of the service for the customer.

• Fee could range between $2,800 and $8,000, depending on the service provided.

18.  Transfer:  10% of the sales price, but no less than $3,000

• Due Date:  Upon filing of transfer request.

• Due if you: (i) transfer the Franchise Business or its assets or (ii) transfer any portion of the Franchise Business to a transferee who was introduced to you by N-Hance or was working with N-Hance in the past 18 months.

19.  Transfer Fee for Prospect Introduced to You by N-Hance or Its Affiliates or Working with N-Hance in the Past 18 Months:  10% of the sales price, but no less than $5,000

• Due Date:  When you request N-Hance’s approval of a transfer.

• Payable if you propose to transfer the Franchise Business or its assets, with N-Hance’s prior approval, to a prospect introduced to you by N-Hance or who had been working with N-Hance in past 18 months to buy an N-Hance franchise.

20.  Non-Controlling Interest Transfer or Transfer to Select Family Member:  $1,000

• Due Date:  Upon filing of transfer request.

• Due if you: (i) transfer a non-controlling interest in the Franchise Business or (ii) transfer Franchise Business to your spouse or adult child.

21.  Area Transfer:  $5,000, plus cost of additional population in requested territory based on N-Hance’s fee formula then in effect

• Due Date:  Due at the beginning of the area transfer process and prior to the issuance of the Franchise Agreement.

• Due if you propose to relocate your Business, with N-Hance’s approval, to a different Franchised Area.

22.  Successor (Renewal) Fee:  10% of the initial fee, not to exceed $2,500

• Due Date:  Prior to expiration of the initial term.

• Fee that is due at the end of the initial five-year term to acquire a successor Franchise Agreement.

23.  Month-to-Month Royalty Fee on Expired Franchise Agreement:  currently $1,571.02 for a Traditional Market Franchise or $837.54 for a Small Market Franchise; two times the then-current Minimum Monthly Royalty for either a Traditional or Small Market Franchise

• Due Date:  10th day of month.

• N-Hance reserves the right to charge a month-to-month royalty fee beginning the 10th of the month following the expiration of your Franchise Agreement and continues each month thereafter that you continue to operate the business, until you sign your successor Franchise Agreement or you cease operation of your Business.

• This fee must be paid via electronic transfer.

24.  Administrative Fee:  $200 per transaction

• Due Date:  As incurred.

• Due upon your request or when N-Hance is required, due to your actions or request, to amend the Franchise Agreement.

25.  Audit:  cost of inspection or audit

• Due Date:  As incurred.

• Due if you do not provide reports, supporting records, or other required information or understate royalties or any other contribution by more than 2%.

26.  Consolidated Office Agreement Fee:  $150

• Due Date:  As incurred.

• Payable when you request to have only one office for multiple Businesses.

27.  Late Fee and Interest:  $100 per late payment plus 1.5% per month, not to exceed highest rate allowed by law

• Due Date:  15 days after billing.

• Payable on all amounts overdue to N-Hance.

28.  Additional Training:  $100 to $2,500

• Due Date:  Prior to date of training.

• Includes cost to comply with annual training requirements, technician training for your employees, and any training and certification that may be required to participate in national account programs.

• Costs for such state certification and training provided by third parties will vary depending on the type and the location of the course.

• May include optional web-based training and attendance at the annual convention.

29.  Credit Card Processing Fee:  will vary

• Due Date:  As incurred.

• Payable on credit card transactions.

• Although N-Hance does not currently mandate a specific provider for this service, N-Hance reserves the right to do so in the future.

30.  Convention Fee:  $1,100 to $1,999

• Due Date:  Prior to convention.

• Registration fee and lodging (one hotel room) for two people to attend the first annual convention following the purchase of your initial N-Hance franchise is included in the New Business Set.

• For existing franchisees, cost can vary depending on when you register.

• You will be required to attend at least two conventions during the term of the Franchise Agreement with the first attendance occurring during the first three years of your Franchise Agreement.

31.  Enforcement Costs and Attorneys’ Fees:  will vary

• Due Date:  As incurred.

• Payable if N-Hance engages attorneys to enforce your Franchise Agreement.

32.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You indemnify and hold N-Hance harmless against claims arising from your N-Hance Business operations, including costs of investigation, defense, and resolution.

• Certain claims are covered by your insurance.

33.  Liquidated Damages:  will vary under circumstances

• Due Date:  As incurred.

• If your Franchise Agreement terminates before expiration, you will owe N-Hance the Monthly Franchise Fee and the BMF Contribution then in effect multiplied by the number of months remaining in the term of your franchise, plus all other loans and amounts accrued before termination.

34.  Minimum Monthly Marketing Spend by You:  the greater of (1) 5% of your Gross Revenue or (2) a fixed dollar amount

• Due Date:  Monthly.

• You must spend a minimum amount each month on advertising, marketing, and promotional programs for your N-Hance Business.

35.  Customer Complaint Resolution:  will vary

• Due Date:  As incurred.

• Payable by you to resolve customer complaints concerning your job performance.

• If N-Hance resolves a customer issue for you, you must reimburse N-Hance for amounts that it spends to resolve the complaint.

36.  Applicable Taxes:  will vary

• Due Date:  As incurred.

• You must pay all state and federal taxes for your Business when due and agree to reimburse N-Hance for any payments of tax, interest, and penalties it must make on your behalf.

• N-Hance’s fees are net of tax so it may “gross up” the amount you pay to cover any applicable taxes on its fees.

37.  Optional Local Email Account:  $50

• Due Date:  Annually.

• Annual fee for business email account using the proprietary nhancelocal service.

• The first year is included in the New Business Set.

38.  Optional Web Marketing Services:  $150 per set-up; $100-$550 per month per program

• Due Date:  10th day of month.

• Service provides ongoing editing and basic maintenance of digital advertising content on franchise websites for search engine optimization, pay per click, or social media management.

39.  Optional Video Customization:  $50 per video. If utilizing on YouTube, $150 initial set-up fee for new channel.

• Due Date:  As incurred.

• This service includes personalizing videos for your N-Hance business, embedding your video on your website, uploading the videos to your YouTube Channel, and adding descriptions, links, and tags.

• If you have a YouTube channel for your N-Hance Business, you do not have to pay the initial set-up fee.

40.  Optional Marketing Package:  $2,000 to $6,000

• Due Date:  As incurred.

• Optional service includes optimizing your directory listings, social media platforms, and website; PPC, social advertising, and partnerships with lead generation sources at an additional cost.

• You can also choose to add various marketing collateral, branded shirts, sample doors, vehicle graphics, and several other a la carte marketing items.