Detailed Information on Homewatch CareGivers’ Initial Franchise Fee, Royalty Fee + 29 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $49,500

• The base initial franchise fee (“Franchise Fee”) is $49,500 for franchise territories with a population between 25,000 and 35,000 persons age 65 or older (“Seniors”). For franchise territories with a population of more than 35,000 Seniors, your base Franchise Fee will be increased by $1.75 per Senior residing in the franchise territory.

• If you are an existing Homewatch CareGivers franchisee or a franchisee of one of Homewatch CareGivers’ affiliates, and you (i) meet Homewatch CareGivers’ qualifications for expansion, and (ii) are licensing an additional Territory from Homewatch CareGivers (for which you are signing a separate Franchise Agreement), Homewatch CareGivers will reduce the Franchise Fee and any applicable Additional Seniors Fee for the additional territory by 30%. This discount currently applies to the second and subsequent franchise purchased.

• Homewatch CareGivers is a member of the International Franchise Association (“IFA”) and it participates in the IFA’s VetFran Program, which provides special financial incentives to qualified veterans. Pursuant to this program, Homewatch CareGivers reduces the Franchise Fee and any applicable Additional Seniors Fee by 30% for all honorably discharged veterans of American and Canadian armed forces. This discount is for the first franchise only.

2.  Royalty Fee:  5% of Gross Revenue or the Minimum Royalty, whichever is greater. The Minimum Royalty is calculated as follows: Months 7-12: $250; Months 13-24: $900; Months 25-36: $1,750; Months 37-48: $2,500; Months 49-60: $3,250; Months 61 and thereafter: $4,250

• Due Date:  Monthly, unless Homewatch CareGivers designates a different period.

3.  Brand Fund Contribution:  currently, 2% of Gross Revenue

• Due Date:  Same as Royalty.

• Homewatch CareGivers may specify a different Brand Fund Contribution, not to exceed 3% of Gross Revenue, upon notice to you.

4.  Brand Fund Materials:  Homewatch CareGivers’ costs

• Due Date:  As invoiced.

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

5.  Local Marketing (“LM”) and/or Cooperative:  the greater of: (i) $1,500 a month; or (ii) 2% of your monthly Gross Revenue averaged over the past 12 months

• Due Date:  Monthly.

• Generally, you will pay vendors, media outlets, etc. directly for LM. However, Homewatch CareGivers may require you to pay the funds to it, and it will spend the funds on your behalf.

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

6.  Technology Fees:  Homewatch CareGivers’ current technology fees are: Email Service and Technical Assistance Fee: $160 per month. Homewatch CareGivers Care+ Monthly Software Fees: the then-current fee; monthly fees are established according to the number of service hours of care delivered, currently beginning at a minimum of $360 per month. Homewatch CareGivers University Fees: the then-current fee; currently, $2.50 per month per employee enrolled in any of Homewatch CareGivers’ online education courses.

• Due Date:  Monthly, unless Homewatch CareGivers designates a different period.

• You will pay ongoing fees for various technology services and apps. The specific services and apps and the applicable fees will vary over time.

• Fees may be payable to Homewatch CareGivers or directly to vendors.

7.  Additional Opening Support Fee:  a reasonable fee, plus the reasonable travel, meal, and lodging expenses of Homewatch CareGivers’ opening support personnel

• Due Date:  As invoiced.

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

8.  Training Fees – Pre-Opening:  none, unless you request and Homewatch CareGivers agrees to accept extra trainees. $1,000 per day per extra trainee plus Homewatch CareGivers’ 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.

9.  Training Fees – Remedial and Optional Training:  $1,000 per trainee

• Due Date:  Before training session begins.

• Homewatch CareGivers can charge a training fee: (a) if Homewatch CareGivers 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 Homewatch CareGivers makes optional for franchisees.

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

10.  Annual Conference:  currently, two complimentary registrations and a cost set by Homewatch CareGivers thereafter

• Due Date:  As invoiced.

• Applies only if Homewatch CareGivers schedules an annual conference for franchisees. Homewatch CareGivers reserves the right to change its attendance fee.

11.  Non-attendance Fee:  $2,000

• Due Date:  As invoiced.

• If the individuals required to attend Homewatch CareGivers’ annual conference fail to attend, you must pay Homewatch CareGivers’ then-current non-attendance fee.

• If the individuals required to attend Homewatch CareGivers’ annual conference fail to attend for 2 consecutive years, Homewatch CareGivers may opt to increase your Royalty Fee by 1% of Gross Revenue.

12.  Call Center Fee:  none currently

• Due Date:  Same as Royalty.

• All telephone calls to the Franchised Business must be answered by a “live” voice. Homewatch CareGivers 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 Homewatch CareGivers designates.

• While Homewatch CareGivers does not currently charge a Call Center Fee, it may opt to increase your Royalty Fee by 1% of Gross Revenue if you fail to comply with your “live” answering requirement.

13.  Service Deficiency Fee:  Homewatch CareGivers’ costs

• Due Date:  As invoiced.

• Payable if Homewatch CareGivers 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.

14.  Renewal Fee:  $5,000

• Due Date:  When you sign the successor Franchise Agreement.

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

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

• Due Date:  With request for approval of transfer.

• Payable if the franchisee or an owner proposes to sell the business assets of the Franchised Business or an ownership interest in the franchisee.

16.  Change of Ownership Fee:  currently, (a) the greater of $500 or Homewatch CareGivers’ external legal and administrative costs; plus (b) applicable training fees for the individuals Homewatch CareGivers requires to attend training.

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

• Payable if the franchisee or an owner proposes to modify ownership of the franchisee in a way that would not result in a change of control of the franchisee. Homewatch CareGivers may modify its change of ownership fee.

17.  Procurement of Insurance:  cost of insurance plus reasonable fee

• Due Date:  Upon demand.

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

18.  Vendor Review:  Homewatch CareGivers’ reasonable costs

• Due Date:  Within 30 days after invoice.

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

19.  Management Fee:  commercially reasonable fee

• Due Date:  Within 30 days after invoice.

• Payable only if: (a) the Key Person dies or is incapacitated and Homewatch CareGivers 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 Homewatch CareGivers takes over operation of the Franchised Business pending final disposition of the charges.

20.  Step In Fee:  up to $500 per day, plus Homewatch CareGivers’ costs and overhead

• Due Date:  As invoiced.

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

21.  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 Homewatch CareGivers on time.

22.  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.

• Homewatch CareGivers 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.

23.  Insufficient Funds Fee:  $50 or the amount the bank charges Homewatch CareGivers 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.

24.  Indemnity for Tax Withholding:  amount of any penalties, interest, and expenses Homewatch CareGivers incurs

• Due Date:  As invoiced.

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

25.  Audit Costs:  Homewatch CareGivers’ 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.

26.  Noncompliance Fee:  1% of Gross Revenue

• Due Date:  As invoiced.

• Homewatch CareGivers is entitled to increase your Royalty by 1% of Gross Revenue during any period of your noncompliance with the Franchise Agreement or the Brand Standards.

27.  Enforcement Costs:  will vary under circumstances

• Due Date:  As invoiced.

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

28.  Defense Costs:  Homewatch CareGivers’ actual costs and expenses

• Due Date:  As invoiced.

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

29.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Homewatch CareGivers 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.

30.  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 Homewatch CareGivers terminates the Franchise Agreement based on your default.

31.  De-identification Fee:  Homewatch CareGivers’ costs

• Due Date:  Upon demand.

• If you fall to de-identify your Franchised Business following the termination or expiration of the Franchise Agreement, Homewatch CareGivers may do so on your behalf. You are required to reimburse Homewatch CareGivers for any costs it incurs.