Detailed Information on The Junkluggers’ Initial Franchise Fee, Royalty Fee + 36 Other Fees (Items 5 and 6, 2023 FDD)

1.  Initial Franchise Fee:  $50,000

• The base initial franchise fee (“Franchise Fee”) is $50,000, which is for a franchise territory with a population of 400,000 individuals. While Junkluggers generally attempts to establish franchise territories that consist of a population of 400,000 individuals, several factors may alter the size of the franchise territory you receive.

• Junkluggers may allow you to purchase additional population for a cost of $0.12 per person (“Additional Population Fee”). You may purchase additional franchise territories at the time of the purchase of your initial territory by signing a separate Franchise Agreement for each territory, along with Junkluggers’ Multi-Territory Addendum to the Franchise Agreement, and paying Junkluggers the following discounted Franchise Fees:

Second Territory

• Baseline Population:  400,000
• Initial Franchise Fee:  $38,000
• Cumulative Franchise Fee:  $88,000

Third Territory

• Baseline Population:  400,000
• Initial Franchise Fee:  $32,000
• Cumulative Franchise Fee:  $120,000

• Junkluggers reduces the Franchise Fee and any applicable Additional Population Fee by 30% for all honorably discharged veterans of American and Canadian armed forces (“Veterans Discount”). In addition to the Veterans Discount, Junkluggers will reduce the Franchise Fee and any applicable Additional Population Fee by 30% for all personnel active in the American and Canadian armed forces (“Active-Duty Discount”).

2.  Initial Training Fee:  $5,000

• You must pay Junkluggers a non-refundable initial training fee of $5,000 when you sign the Franchise Agreement.

3.  Royalty Fee – Junk Removal Services:  7% of Gross Revenue from Junk Removal Services or the Annual Minimum Royalty Fee, whichever is greater. The “Annual Minimum Royalty Fee” is equal to the amount of Royalty Fees you would be required to pay to Junkluggers by achieving the applicable Minimum Performance Requirements for Junk Removal Services for that period.

• Due Date:  Weekly, unless Junkluggers designates a different period.

4.  Royalty Fee – Remix Services:  April 1, 2023 to December 31, 2023: 3% of Remix Services Gross Revenue; January 1, 2024 to December 31, 2024: 5% of Remix Services Gross Revenue; January 1, 2025 to Expiration Date: 7% of Remix Services Gross Revenue

• Due Date:  Weekly, unless Junkluggers designates a different period.

5.  Ongoing Contribution to Charity:  1% of Remix Services Gross Revenue

• Due Date:  Weekly, unless Junkluggers designates a different period.

• Payable to the approved charity on a recurring basis.

6.  Junk Removal Services Brand Fund Contribution:  currently, 2% of Gross Revenue from Junk Removal Services

• Due Date:  Same as Royalty Fees.

• The purpose of the Junk Removal Services Brand Fund is to support general development and recognition of the Junkluggers brand.

7.  Remix Services Brand Fund Contribution:  currently, 1% of Gross Revenue from Remix Services

• Due Date:  Same as Royalty Fees.

• The purpose of the Remix Brand Fund is to support general development and recognition of the Remix Market Brand.

• Junkluggers may specify a different Remix Services Brand Fund Contribution, not to exceed 2% of Gross Revenue, upon notice to you.

8.  Brand Fund Materials:  Junkluggers’ costs

• Due Date:  As invoiced.

• Payable only if Junkluggers reproduces or customizes Brand Fund materials for you.

9.  Local Marketing (“LM”) and/or Cooperative:  $6,000 for the first 3 months after the Original Opening Date, and then $4,000 per month on average for the remainder of the calendar year. Thereafter, $48,000 each calendar year (an average of $4,000 per month). Notwithstanding the above, as of the date of the 2023 disclosure document, the LM requirement is temporarily $2,000 per month. The LM requirement will increase to the amount above sometime in quarter 3 or quarter 4 of the 2023 calendar year.

• Due Date:  Monthly.

• As of the date of the 2023 disclosure document, franchisees generally pay the funds to vendors, media outlets, etc. directly for LM. However, Junkluggers may require you to pay the funds directly to it.

• If you participate in a Cooperative, the amount Junkluggers requires you to spend or contribute to the Cooperative will, at Junkluggers’ option, be credited to your LM and/or Brand Fund Contribution obligations.

• If you sign a Multi-Territory Addendum, the LM requirement will be phased in over time for the Related Territories.

• The LM requirement pertains to Junk Removal Services. Junkluggers reserves the right to establish a separate LM requirement for Remix Services.

10.  Key Account Programs:  will vary under circumstances and may be determined based on number of participating franchisees or other factors

• Due Date:  As incurred.

• Payable to Junkluggers or to vendor.

11.  Call Center Fee:  5% of Gross Revenue (currently not applicable to Remix Services Gross Revenue)

• Due Date:  Payable at the same time and in the same manner as the Royalty Fee.

• All telephone calls to the Franchised Business must be answered by a “live” voice. Junkluggers has the right to require that you use a designated call center (a “Call Center”) to provide “live” answering services for incoming calls. If it does so, you will have to pay a Call Center Fee in an amount that Junkluggers designates.

• Junkluggers can modify the Call Center Fee on 30 days’ notice.

• Junkluggers currently does not require use of a Call Center for Remix Services, but it reserves the right to require and charge for this.

12.  Junk Removal Services Technology Fee:  $350 per month

• Due Date:  Monthly.

• Junkluggers has the right to designate a different period.

• Junkluggers provides its franchisees with proprietary software (currently, Vonigo Software) and other technology platforms. This fee covers the costs of ongoing software support and maintenance.

• If Junkluggers develops additional or replacement technology-based programs or makes improvements to existing technology, then it may increase the Technology Fee.

13.  Remix Services Technology Fee:  none currently, but Junkluggers anticipates implementing a fee in 2023. The amount has not yet been determined.

• Due Date:  Same as Technology Fee.

• Junkluggers requires its franchisees to use the software systems designated in the Manuals.

14.  GPS Tracking Software:  currently, $35 per vehicle

• Due Date:  Monthly.

• This fee covers the Global Positioning System (“GPS”) tracking system which vehicles used in the operation of the Franchised Business are required to have.

• This fee is payable to Junkluggers or directly to the vendor. Junkluggers reserves the right to increase this fee upon notice to you.

15.  Additional Opening Support Fee:  a reasonable fee, up to $500 per day, plus the reasonable travel, meal, and lodging expenses of Junkluggers’ opening support personnel

• Due Date:  As invoiced.

• If you request opening support beyond what Junkluggers customarily furnishes to franchisees, and if Junkluggers agrees to furnish such additional support, then it will have the right to impose a fee, plus expenses, for providing the agreed additional support.

16.  Training Fees – Extra Trainees:  none, unless you request and Junkluggers agrees to accept extra trainees at $1,000 per day per extra trainee, plus Junkluggers’ trainers’ reasonable costs and expenses, when applicable

• Due Date:  Before training session begins.

• For all training, including initial training, you are responsible for all travel expenses, living expenses, wages, and other expenses incurred by your trainees.

17.  Training Fees – Remedial and Optional Training:  $500 per trainee

• Due Date:  Before training session begins.

• Junkluggers can charge a training fee: (a) if it requires remedial training as a result of your failure to comply with its Brand Standards; (b) for re-training persons who are repeating a Training Program, or their substitutes; and (c) for Training Programs that Junkluggers makes optional for franchisees.

• If Junkluggers conducts on-site training, you must also pay the travel, meals, and lodging expenses for its trainer(s).

18.  Annual Conference:  currently, one complimentary registration and a cost set by Junkluggers thereafter; Regional Conference: currently $600 registration fee per attendee to the regional conference

• Due Date:  As invoiced.

• Applies only if Junkluggers schedules an annual conference for franchisees.

• Travel, food, lodging, and any additional expenses incurred is excluded from the registration fee.

• Junkluggers reserves the right to change its attendance fee.

19.  Non-attendance Fee:  $2,000

• Due Date:  As invoiced.

• If the individuals required to attend Junkluggers’ annual conference fail to attend, you must pay the non-attendance fee. If the individuals required to attend Junkluggers’ annual conference fail to attend for 2 consecutive years, Junkluggers may opt to increase your Royalty Fee by 1% of Gross Revenue.

20.  Service Deficiency Fee:  Junkluggers’ costs

• Due Date:  As invoiced.

• Payable if Junkluggers receives a customer complaint about services you performed and it determines that it must either re-perform the services to the customer’s satisfaction or reimburse the customer.

21.  Renewal Fee:  $5,000

• Due Date:  When you sign successor Franchise Agreement.

• When your agreement term ends, you will have the option to continue the franchise relationship with Junkluggers, subject to certain conditions.

22.  Transfer Fee:  generally, $10,000. However, if the proposed transferee was referred by a third party (e.g., a broker) with whom Junkluggers has a referral arrangement, then you must pay Junkluggers an additional fee equal to the amount owed under that referral arrangement. If Junkluggers identifies the prospective purchaser, then in addition to the $10,000 fee, you must pay Junkluggers the greater of: (a) $15,000; (b) 3% of the total purchase price; or (c) Junkluggers’ actual costs to identify the prospective purchaser.

• Due Date:  With request for approval of transfer.

• Payable if you or an Owner proposes to sell the business assets of the Franchised Business or an ownership interest in the legal entity.

23.  Change of Ownership Fee:  currently, (a) the greater of $500 or Junkluggers’ external legal and administrative costs; plus (b) applicable training fee, currently $1,000 per day for each individual Junkluggers requires to attend training

• Due Date:  With request for approval of change of ownership.

• Payable if you or an Owner proposes to modify ownership of the legal entity in a way that would not result in a change of control of the legal entity.

• Junkluggers may modify its change of ownership fee.

24.  Procurement of Insurance:  cost of insurance, plus reasonable fee of up to 25% of total insurance premium cost

• Due Date:  Upon demand.

• Payable only if you fail to obtain required insurance and Junkluggers elects to obtain it on your behalf.

25.  Vendor Review:  Junkluggers’ reasonable costs, plus the reasonable travel, meal, and lodging expenses of its vendor review personnel

• Due Date:  Within 30 days after invoice.

• Payable only if you ask Junkluggers to evaluate a potential vendor; payable whether or not Junkluggers approves the vendor.

26.  Management Fee:  up to $500 per day, plus Junkluggers’ costs and overhead

• Due Date:  Within 30 days after invoice.

• Payable only if: (a) the Key Person dies or is incapacitated, and Junkluggers elects to manage the Franchised Business pending transfer of his or her interest; or (b) the Key Person is arrested for or formally charged with a serious criminal offense and Junkluggers takes over operation of the Franchised Business pending final disposition of the charges.

27.  Step In Fee:  up to $500 per day, plus Junkluggers’ costs and overhead

• Due Date:  As invoiced.

• If you are in default under your Franchise Agreement, Junkluggers has the right to step in and operate the Franchised Business until it determines the default has been cured. Junkluggers may charge you a fee for these services.

28.  Interest:  12% per annum or the maximum rate permitted by applicable law, whichever is less

• Due Date:  With payment of overdue amount.

• Applies only if you do not pay Junkluggers on time.

• Junkluggers calculates interest from the date the payment was due until paid in full.

29.  Late Fee:  $100 for second occurrence of payment more than 30 days past due; $200 for third occurrence; $300 for each subsequent occurrence

• Due Date:  With payment of overdue amount.

• Junkluggers can charge a late fee to compensate it for its administrative costs incurred in enforcing your obligation to pay it and submit required reports to it.

30.  Insufficient Funds Fee:  $50 or the amount the bank charges Junkluggers due to the insufficient funds, whichever is greater

• Due Date:  Upon demand.

• Payable if an electronic funds transfer payment request is returned due to insufficient funds.

31.  Indemnity for Tax Withholding:  amount of any penalties, interest, and expenses Junkluggers incurs

• Due Date:  As invoiced.

• Payable only if you are obligated by law to withhold taxes on any payments to Junkluggers, and you fail to do so.

32.  Audit Costs:  Junkluggers’ costs and expenses of conducting audit, including travel and lodging

• Due Date:  Upon demand.

• Payable only if: (a) you did not submit Gross Revenue statements; (b) you did not keep full books and records; or (c) the total Gross Revenue you reported for any three consecutive months is more than 2% below the audited Gross Revenue.

33.  Non-compliance Fee:  1% of Gross Revenue

• Due Date:  Same as Royalty Fee.

• Junkluggers is entitled to increase your Royalty Fee by 1% of Gross Revenue due to your non-compliance with the Franchise Agreement or the Brand Standards.

34.  Enforcement Costs:  will vary under circumstances

• Due Date:  As invoiced.

• You must reimburse Junkluggers for expenses it reasonably incurs (including reasonable attorneys’ fees) to enforce your obligations.

35.  Defense Costs:  Junkluggers’ actual costs and expenses

• Due Date:  As invoiced.

• Payable if you initiate a legal proceeding against Junkluggers and you do not prevail in obtaining the relief you were seeking.

36.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Junkluggers if it incurs any damages, losses or expenses, including reasonable attorneys’ fees and other costs, as a result of claims arising from the operation of your Franchised Business.

37.  Liquidated Damages:  the greater of: (i) two years of Royalty Fees (calculated as your average Royalty Fees per payment period in the year preceding the termination of your Franchise Agreement, multiplied by the number of payment periods occurring in a two-year period); or (ii) $100,000

• Due Date:  Upon demand.

• Payable only if Junkluggers terminates the Franchise Agreement based on your default.

38.  De-identification Fee:  Junkluggers’ costs

• Due Date:  Upon demand.

• If you fail to de-identify your Franchised Business following the termination or expiration of the Franchise Agreement, Junkluggers may do so on your behalf.

• You are required to reimburse Junkluggers for any costs it incurs.