American Family Care’s Initial Franchise Fee, Royalty Fee + 17 Other Fees

Detailed Information on American Family Care’s Initial Franchise Fee, Royalty Fee + 17 Other Fees (Items 5 and 6, 2021 FDD)

1.  Standard Initial Franchise Fee:  $60,000

• You must pay American Family Care an initial franchise fee of $60,000 and is payable in a lump sum when you sign the Franchise Agreement. The initial franchise fee is uniform to all new franchisees, is fully earned by American Family Care, and is non-refundable.

2.  Conversion Initial Franchise Fee:  $45,000

• If you will become a Conversion Franchisee, you must pay American Family Care an initial franchise fee of $45,000. The initial franchise fee is due when you sign the Franchise Agreement. The initial franchisee is uniform to all new conversion franchisees, is fully earned by American Family Care, and is non-refundable.

3.  Area Development Fee:  $60,000 for the first franchise and a non-refundable deposit of $10,000 for each additional franchise to be developed under the Area Development Agreement (“ADA”)

• If you sign an ADA, you must pay American Family Care an initial development fee of $60,000 for the first franchise and a non-refundable deposit of $10,000 for each additional franchise to be developed under the ADA.

• The number of units for an Area Development Agreement will be negotiated between you and American Family Care but will be no less than 2.

• The initial franchise fee for subsequent franchises under the ADA is $45,000. The remaining fee of $35,000 is paid to American Family Care when each Franchise Agreement is signed.

• The ADA fee is calculated on a uniform basis for all new developers and is non-refundable.

4.  Initial Medical Supplies and Equipment:  $130,000 to $150,000

• All new franchisees must purchase from American Family Care’s affiliate, AFCP, the initial medical supplies and equipment for the Center they will be managing. American Family Care estimates the total cost of these purchases to be approximately $130,000 to $150,000 depending upon your location and economic factors.

5.  Continuing Service and Royalty:  6% of Net Payments for the preceding week

• Due Date:  On the Wednesday immediately following the previous week.

• The Royalty is payable to American Family Care by an automatic, electronic debit of funds.

6.  Marketing Fund:  1% of Net Payments

• Due Date:  On the Wednesday immediately following the previous week.

• Marketing Fund may make materials available for purchase.

7.  Local Advertising Requirement:  $2,000 per month minimum, beginning 3 months after your Grand Opening

• Due Date:  Monthly.

• You are required to spend this fee in your local market.

• American Family Care will conduct audits of your advertising expenditures, averaging them over a 6-month period. If American Family Care finds you have not spent $2,000 per month average, it reserves the right to have you pay this amount directly to the Marketing Fund in addition to the required 1% of your Net Payments.

8.  On-Going Training:  reasonable registration or similar fees. Re-training fee or new Center Administrator training fee: $1,500 each, plus travel, lodging, and meals

• Due Date:  As incurred.

• If American Family Care initiates new programs or if the Center is not performing as well as other Centers, American Family Care may require you (or your Operating Principal), your Center Administrator, your Marketing Representative, and/or other previously trained and experienced managers to attend and satisfactorily complete various training courses that American Family Care periodically chooses to provide at the times and locations that it designates, as well as periodic conventions, regional meetings, and conferences that it specifies.

• American Family Care may charge a fee for any replacement or substitute Center Administrator, or persons who must attend re-training.

• In 2020, the convention or annual conference fee was $400. American Family Care does not charge a fee for regional conferences, but you must pay your own out-of-pocket expenses.

9.  Renewal:  none

• Due Date:  Not applicable.

10.  Transfer of Franchise Agreement – in operation:  50% of American Family Care’s then-current initial franchise fee

• Due Date:  At time of transfer.

• The transfer fee will be waived if the transferee: (a) is an entity controlled by you, or (b) has obtained the Franchised Business as a result of your death or disability.

11.  Offering:  $7,500

• Due Date:  When you notify American Family Care of the potential offering.

• Payable to American Family Care for reviewing a proposed offering of equity interests in your company.

12.  Interest on Overdue Amounts:  1.5% per month or the highest commercial contract interest rate permitted by law

• Due Date:  Upon demand.

• American Family Care may debit your bank account automatically for late fees and interest. This should not be interpreted as American Family Care’s commitment to extend credit to, or otherwise finance your operation of, the Franchised Business.

13.  Audit Costs:  costs of the examination

• Due Date:  Upon demand.

• Payable only if an examination is necessary due to your failure to furnish reports, supporting records, or other information as required; or to furnish them on a timely basis; or if American Family Care’s examination reveals an understatement of Net Payments exceeding 5% of the amount that you actually reported to American Family Care for the period examined.

14.  Indemnification:  varies

• Due Date:  Upon demand.

• You will indemnify American Family Care against any costs arising out of the Franchised Business’ operation, the business you conduct under the Franchise Agreement, or your breach of the Franchise Agreement.

15.  Costs and Attorneys’ Fees:  varies

• Due Date:  Upon demand.

• Reimbursement to American Family Care for all of the costs and expenses that it incurs due to your failure to pay amounts owed to it, to submit any reports, information, or supporting records, or otherwise to comply with the Franchise Agreement.

16.  Insurance Costs:  varies

• Due Date:  Upon demand.

• If you fail or refuse to obtain and maintain the insurance American Family Care specifies, it may obtain the insurance for you and the Franchised Business on your behalf, you must reimburse it for all premiums, costs and expenses it incurs in obtaining and maintaining the insurance, plus a reasonable fee for its time incurred in obtaining the insurance.

17.  Data Extraction Fee:  $3,500

• Due Date:  On demand.

• To reimburse American Family Care for payments to the EMS EMR services provider.

18.  Annual Training Fee:  $2,000

• Due Date:  On demand.

• To provide you updated training.

19.  Electronic Medical Records Fee:  $2,850

• Due Date:  Monthly by the 10th.

• Per location. A reduced fee of $2,000 will be applicable for the first 6 months of a new Center’s operation.