Detailed Information on AAMCO Transmissions and Total Car Care’s Initial Franchise Fee, Royalty Fee + 24 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Deposit Under Deposit Agreement:  $20,000

• Before you sign a Franchise Agreement, you will sign the Deposit Agreement under which you will pay AAMCO an “Initial Deposit” along with submitting your completed franchise application. The Initial Deposit is $20,000 for a new applicant who does not own an existing AAMCO Center and intends to open a new location after signing the Franchise Agreement (a “New Franchisee”).

• AAMCO will refund 100% of your Initial Deposit if it rejects your franchise application outright. AAMCO will refund 25% of the total Initial Deposit you paid it (up to $5,000 for New Franchisees), and keep the remainder, if it conditionally approves your application but you later fail to satisfy the conditions of the Deposit Agreement (including failing to sign a Franchise Agreement).

• However, if later you are unable to sign a Franchise Agreement because you cannot obtain financing, and you demonstrate same to AAMCO according to the terms of the Deposit Agreement, then AAMCO will refund your entire Initial Deposit.

• When you sign a Franchise Agreement, AAMCO will credit the entire amount of your paid Initial Deposit towards: (a) fees due to AAMCO; and (b) costs (if applicable) AAMCO incurs relating to your transaction.

• Despite the above, no Initial Deposit will be due from an applicant seeking to purchase an existing AAMCO Center. Also, Existing Franchisees applying for an additional franchise, and applicants seeking to convert an existing automotive business to an AAMCO Center, may pay a different amount for the Initial Deposit.

2.  Initial License Fee:  $39,500

• You will pay AAMCO a one-time initial franchise license fee (“License Fee”, also sometimes called an initial franchise fee) when you sign each Franchise Agreement for an AAMCO franchise. AAMCO will credit toward the License Fee any amounts you have previously paid for the Initial Deposit discussed above. The total amount of AAMCO’s standard License Fee is $39,500 for a New Franchisee.

• The License Fee is payable in two installments: (a) the Initial Deposit due under the Deposit Agreement ($20,000 for New Franchisees); and (b) the remaining balance due when you sign your Franchise Agreement (balance of $19,500 for New Franchisees).

• Except as provided under the Deposit Agreement for some or all of the Initial Deposit, the License Fee is not refundable under any circumstances.

• AAMCO is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran Program (the “Vet Fran Program”), which provides a discount on initial franchise license fees to veterans of U.S. Armed Forces who are buying their first AAMCO Centers and otherwise meet the requirements of the program.

• For a qualified veteran participating in the Vet Fran Program and buying his or her first franchise, AAMCO will reduce the amount of the initial License Fee by $8,000 on the first Center from the amount otherwise due from a New Franchisee.

3.  Business Coach Fee:  $10,000

• AAMCO provides New Franchisees with an on-site business coach (“Business Coach”) to stand side-by-side with you and deliver intensive onsite training for up to 5 total weeks (whether consecutive or periodic) at your Center. This training by a Business Coach is in addition to any training that you or your personnel may receive at AAMCO University.

• New Franchisees pay a fee for the Business Coach program of $10,000, due and payable upon signing the Franchise Agreement. The Business Coach fee is not refundable.

4.  Grand Opening Advertising:  $3,000

• You must pay AAMCO a lump-sum, non-refundable $3,000 to be used for grand opening promotions for the Center before and around the Center’s opening (the “Grand Opening Advertising Program”). Payment for the Grand Opening Advertising Program is due when you sign the Franchise Agreement.

• AAMCO will coordinate with you to determine how these funds will be used, such as for online marketing, direct mail campaigns, or television or radio ad placement to promote the Center.

5.  Security Deposit:  $5,000

• You must pay AAMCO a $5,000 “Security Deposit” when you sign the Franchise Agreement. AAMCO uses the Security Deposit, as necessary, for customer claims and other sums that may accrue and become payable under the Franchise Agreement.

6.  New Center Opening Package – Purchases Required from AAMCO:  $11,000 to $22,500

• You must purchase certain required equipment, supplies, office furniture, signage, and Center design items (collectively, “Center Opening Package”) before you open and begin operating a new AAMCO Center.

• The following categories of items included in the Center Opening Package must be purchased from “AAMCO only” and total about $11,000 to $22,500 of required purchases from AAMCO: about $7,500 to $19,000 for required signage; about $2,950 for the prescribed point-of-sales system (“POS System”), including the initial license and first 3 months of support; and about $550 for required sales materials (including branded items) at the Center.

7.  Franchise Fee:  7% of Gross Receipts

• Due Date:  Weekly on Tuesdays for prior week.

• Gross Receipts are gross sales (cash receipts).

8.  National Creative Advertising Fund contribution:  $150 per month

• Due Date:  Due on the 1st day of each month.

• Amount determined by National Creative Committee.

9.  Local Advertising:  $200 to $876/week (average $550/week) for active Pools. If no Pool, greater of 4% of Gross Receipts or $400 (or 5% of Gross Receipts or $500 in top 20 markets).

• Due Date:  Established by Pool; expended on ongoing basis if no active Pool.

• Amount varies by Pool.

• Top 20 population markets are as determined by Nielsen Media Research.

10.  Internet Directories:  $23.10 per quarter for yp.com platinum ad

• Due Date:  Quarterly.

• Placed by a national yellow pages agency AAMCO authorizes.

11.  Web Page Fee(s):  annual cost of third-party URL provider, plus $35/year processing fee

• Due Date:  Annually, on or about the date AAMCO submits the order for the URL.

• Excludes site design or maintenance costs, which may vary by complexity required.

12.  1-800-GO-AAMCO:  $125 initial connection, plus $0.25/minute per call in the U.S. (or $0.55/minute in Canada)

• Due Date:  When billed.

13.  Remote Call Forwarding Telephone Numbers:  about $500/year for 5 numbers, plus adjustable usage fees at about $0.06/minute

• Due Date:  When billed.

14.  POS System Software – Initial License:  $2,499

• Due Date:  When billed.

• Paid to AAMCO.

15.  POS System Software – Support:  $149/month, plus tax

• Due Date:  When billed.

• Paid to AAMCO.

16.  Express Cash Processing Fee:  1.38% of central billed, national fleet account approved repair order amount (amount subject to prime rate and number of participating Centers)

• Due Date:  Fee deducted from payment.

• Enables participating Centers to receive payment within 5 business days.

17.  Recruiting Requisition Fee:  $250 per requisition

• Due Date:  As incurred.

• Payable if you request prospective job candidate(s) for you to independently evaluate and/or hire to work at your Center. You alone make all hiring decisions.

18.  Reputation Management Fee:  $50 per month

• Due Date:  As incurred.

• Payable to AAMCO for cost of your Center’s inclusion in chainwide online reputation monitoring program administered by third party.

19.  Intershop Warranty Work:  other Center’s costs incurred for warranty work (parts plus labor)

• Due Date:  Immediately to the other Center for honoring warranty.

20.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You will indemnify AAMCO against all losses arising from your violation of the Franchise Agreement or third-party claims concerning the Center’s operation.

21.  Unauthorized Telephone Number Transfer Charge:  $250 per day

• Due Date:  As incurred.

• Payable to AAMCO if you transfer, or attempt to transfer, Center’s phone number to another name or business after termination.

22.  Interest:  18% per year (1.5% per month)

• Due Date:  When billed.

• Payable on outstanding balances owed to AAMCO.

23.  Late Fees:  $10 per week per late report

• Due Date:  When billed.

• Payable on each report not timely received

24.  Bank Fee:  $65 per transaction

• Due Date:  When billed.

• Payable to AAMCO for incurred costs of your failed or returned EFT payment (e.g., for insufficient funds in your account).

25.  Audit:  costs of audit, plus 3 times amount of underpayment, plus interest on underpayment

• Due Date:  When billed.

• Payable if audit reveals understatement of at least 2% of Gross Receipts.

• Other amounts due arising from understatement are in addition to AAMCO’s other remedies.

26.  Transfer Fee:  $6,000

• Due Date:  Before Center transfer.

• Payable when you sell Center.

• No charge to add owners or transfer to entity you control (except to come current on all amounts due to AAMCO).