Detailed Information on Archadeck Outdoor Living’s Initial Franchise Fee, Royalty Fee + 24 Other Fees (Items 5 and 6, 2022 FDD)

1.  Franchise Fee:  $49,500 per Territory

• If you purchase a Construction Sales and Service Business franchise, you will pay Archadeck a lump sum franchise fee equal to $49,500 per Territory.

• If Archadeck terminates the Franchise Agreement because you have failed to obtain the applicable permits and licenses within 6 months after signing the Franchise Agreement, Archadeck will refund 50% of the initial franchise fee. The initial franchise fee is not otherwise refundable.

• Archadeck is a member of the International Franchise Association (“IFA”), and supports and participates in IFA’s VetFran Program. If you are an honorably discharged veteran who meets Archadeck’s qualifications for new Archadeck Outdoor Living franchises, Archadeck will discount the franchise fee by 15%.

• If you license two or more contiguous Territories from Archadeck at the same time (for which you are signing two or more separate Franchise Agreements), the Initial Franchise Fee under the second and subsequent Franchise Agreements will be reduced to $30,000.

2.  SoftPlan Software:  $2,000

• You also must pay Archadeck $2,000 to purchase the SoftPlan software that Archadeck requires you to use. This fee is not refundable.

3.  Additional Population Fee:  an amount equal to the population in your Territory in excess of 600,000 multiplied by $0.083

• If Archadeck permits you to purchase additional geographic areas for a specific Territory so that the Territory exceeds 600,000 people, then you must pay Archadeck an additional fee in an amount equal to the population in your Territory in excess of 600,000 multiplied by $0.083 (the “Additional Population Fee”).

• Archadeck does not anticipate granting a single Territory that exceeds 999,999 individuals.

4.  Guarantee Fund:  $5,000

• During the term of the Franchise Agreement, you will contribute to a guarantee fund (the “Guarantee Fund”) which provides a guarantee of project completion and post-completion warranty coverage. The Guarantee Fund is managed by National Guarantee Corporation, which is owned by participating franchisees and managed by its Board of Directors elected by participating franchisees (the “NGC”).

• Upon signing the Franchise Agreement, you must pay Archadeck $5,000 for contribution to the Guarantee Fund.

• In the event that the NGC no longer provides either its third-party guarantee of project completion or its post-completion warranty coverage, Archadeck will instead direct your contribution toward its reserve for brand protection costs and expenses.

• This contribution is not refundable.

5.  Royalty:  based on monthly Gross Sales equal to: $0 to $1,000,000: 6.5%; over $1,000,000 to $2,000,000: 5.5%; over $2,000,000 to $3,000,000: 4.5%; over $3,000,000: 3.5%. Beginning in the second full calendar year following the Operational Start Date (as defined in the Franchise Agreement), during the months of March through November, the Royalty must exceed $1,500 (“Minimum Royalty”).

• Due Date:  On or before the 10th day of each month for the previous month’s Gross Sales.

• In the event that the NGC no longer provides either its third-party guarantee of project completion or its post-completion warranty coverage, Archadeck reserves the right to increase each Royalty rate by up to 0.50% in order to create a reasonable reserve for brand protection costs and expenses.

6.  National Branding & Marketing Fee:  currently, 1.5% of Gross Sales

• Due Date:  On or before the 10th day of each month for the previous month’s Gross Sales.

• Your obligation to pay the National Branding & Marketing Fee begins on the 12-month anniversary of the Operational Start Date.

• You will not be required to pay Archadeck a National Branding & Marketing Fee that exceeds $22,500 in any calendar year.

• Archadeck may increase the National Branding & Marketing Fee up to 2.5% of Gross Sales upon 90 days’ prior written notice to you.

7.  Individual Advertising Investment:  a minimum of $45,000 per Territory each year. Minimum $75,000 per calendar year if you are granted two contiguous Territories, plus an additional $20,000 per calendar year for each additional contiguous Territory.

• Due Date:  As incurred.

• Paid to third-party suppliers.

• Your Individual Advertising Investment will be prorated during the first calendar year.

• Archadeck has the right, but not the obligation, to collect up to the minimum required Individual Advertising Investment from you, after you commence operations, and administer it on marketing and advertising investments in your Territory on your behalf.

8.  Digital Marketing Fee:  Archadeck’s then-current fee, currently $300 per month

• Due Date:  Monthly.

• Archadeck may increase this fee upon 30 days’ prior written notice to you.

9.  NGC Contribution:  0.25% of Gross Sales until your NGC account reaches $15,000, and then 0.10% of Gross Sales thereafter

• Due Date:  30 days after billing, every other month.

• Currently paid to NGC through Archadeck as Managing Agent for NGC.

10.  Technology Fee:  then-current fee, which is currently $220 per month

• Due Date:  Monthly.

• The Technology Fee covers one license for certain software.

• You must pay Archadeck or its designated third-party supplier the then-current per license monthly fee if you request additional licenses.

11.  Construction Drawing Services:  based on Archadeck’s then-current hourly rate for the services, which is currently $85 per hour

• Due Date:  As incurred.

• Archadeck may increase its hourly rate at any time upon 30 days’ written notice to you.

12.  Transfer Fee:  $10,000

• Due Date:  Before the transfer being completed.

• Paid when Franchise Agreement, assets, or interest in you is transferred.

13.  Late Payment and Interest Charges:  $100 per late payment, plus interest equal to 1.5% per month or the highest legal rate permitted by law, will be charged on any amounts past due

• Due Date:  Due immediately after the date past due amounts were originally due to Archadeck.

14.  Insufficient Funds Fee:  Archadeck’s then-current service charge (ranging from $10 to $50), plus any fees and expenses incurred by Archadeck

• Due Date:  As incurred.

• Due if there are insufficient funds in your account to collect amounts by a transfer of funds on the due date, or if a withdrawal is otherwise rejected for any reason.

15.  Cost of Enforcement or Defense:  all costs including accounting and attorneys’ fees, plus interest on such amounts

• Due Date:  Upon settlement or conclusion.

• You must reimburse Archadeck if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.

16.  Annual Conference Fee:  Archadeck’s then-current conference fee (if any)

• Due Date:  Monthly or as incurred.

• Archadeck may hold a mandatory annual conference at a location chosen by Archadeck. There is no minimum or maximum Annual Conference Fee.

• You are also responsible for the cost of all travel and living expenses incurred to attend. The estimated range of costs is $500 to $2,500, plus materials estimated at $50.

• Archadeck may collect the Annual Conference Fee in lump sums or on a monthly basis.

17.  Seminars, Meetings, and Additional Training:  varies (if any)

• Due Date:  30 days after billing.

• Attendance is optional but very strongly encouraged; you must pay the cost of all travel and living expenses incurred to attend.

18.  Audit:  cost of audit or inspection

• Due Date:  15 days after billing.

• Paid only if there is a deficiency in the amount of any Royalty, National Branding & Marketing Fee, or other amounts due by 2% or more than the amount you paid or reported to Archadeck.

19.  Indemnification:  varies based on circumstances

• Due Date:  As incurred.

• You must reimburse Archadeck if it is held liable for a claim resulting from the operation of the Business.

20.  Successor Franchise Fee:  10% of the then-current Initial Franchise Fee for the applicable Territory

• Due Date:  Before renewal.

21.  Insurance:  varies

• Due Date:  As incurred.

• If you fail to obtain and maintain insurance coverage as required by Archadeck, it may, but is not obligated to, purchase insurance on your behalf from an insurance carrier of its choice, and you must reimburse it for the full cost of such insurance, along with a reasonable service charge to compensate it for the time and effort expended to secure such insurance, within 5 days after the date it delivers an invoice detailing such costs and expenses to you.

22.  Supplier Approval:  varies

• Due Date:  As incurred.

• If you request Archadeck’s evaluation of an alternative supplier, Archadeck reserves the right to charge a fee in connection with such evaluation.

• As of the issuance date of the current disclosure document, Archadeck does not currently charge a fee. Archadeck has not established a maximum fee for supplier approval, but Archadeck anticipates that this fee will be based in part on its costs and expenses incurred in evaluating the alternative supplier.

23.  Additional Assistance:  Archadeck’s then-current fee, up to $500 per person per day, plus any related travel expenses

• Due Date:  As incurred.

• If Archadeck agrees to provide additional guidance, coaching, or assistance to you, it may charge you a reasonable fee for such additional services.

24.  Customer Service Fee:  varies

• Due Date:  As incurred.

• If Archadeck determines that you are unwilling or unable to provide Products or Services to a particular customer, it reserves the right to assign that customer to another Archadeck Outdoor Living franchisee, complete the job itself, or hire a third party to complete the job, and Archadeck may charge a fee for the services it, another franchisee, or the third party provides.

25.  Supplemental or Refresher Training:  then-current fee

• Due Date:  As incurred.

• Payable if Archdeck requires you to attend any additional or supplemental training programs.

• Archadeck does not pay any travel expenses, lodging, meals, ground transportation, or other personal expenses.

26.  Early Termination Fee:  an amount equal to 24 times the average monthly Royalty fees payable to Archadeck over (i) the last 12 months of the Franchised Business’s active operations, or (ii) the entire period the Franchised Business has been open for business, whichever is the shorter period

• Due Date:  Within 30 days of the early termination date.

• Archdeck may require you to pay it early termination fees in the event the Franchise Agreement is terminated prior to its natural expiration date.