Detailed Information on ActionCOACH’s Initial Franchise Fee, Royalty Fee + 19 Other Fees (Items 5 and 6, 2022 FDD)

1.  Franchise Fee for the FIRM – Investor Level Team Builder Franchise:  $74,500

• For a FIRM franchise, you will pay ActionCOACH a franchise fee of $74,500 for a Designated Direct Marketing Area (DDMA) with a population of approximately 10,000 businesses. If you acquire more than 1 DDMA within a 30-day period, you will be entitled to the following reduced FIRM franchise fees:

• 1st DDMA:  $74,500
• 2nd DDMA:  $67,000
• 3rd DDMA and onwards:  $59,500 per DDMA

• The franchise fee is payable in a lump sum and is non-refundable.

• The franchise fees charged are uniform. However, ActionCOACH participates in the Veterans Transition Franchise Initiative (VetFran) program and offers a $5,000 discount on the 1st DDMA franchise fee to eligible military veterans.

2.  Training Fee for the FIRM:  franchisee training fee: currently, $28,500; Employee Business Coach (EBC) training fee: $5,000 for every EBC attending training

• You must also pay ActionCOACH a non-refundable franchisee training fee (currently, $28,500) for you (or your Nominated Business Coach or NBC) and 1 other Key Personnel to attend the 10-day training on the same training dates. The fee is due upon signing of the FIRM Business Coach Franchise Agreement.

• You must also pay ActionCOACH a non-refundable Employee Business Coach (EBC) training fee of $5,000 for every EBC attending the 5-day training at least 14 days before the start of the scheduled EBC training.

3.  Coaching Platform Subscription:  $456

• You must also purchase a coaching platform subscription from ActionCOACH or a 3rd party vendor as directed by ActionCOACH for an annual fee of $456 for you and per NBC/EBC/Key Personnel, due upon signing of the Franchise Agreement.

4.  Royalty Fee:  the monthly Royalty Fee is 10% of the Minimum Performance Requirement or 10% of Gross Revenues in the preceding month, whichever is higher but in no case less than $1,950

• Due Date:  Payment of $1,950 is due on the 1st day of each month, while payment for any balance is due on the 5th day of each month.

• The 10% Royalty starts immediately. The $1,950 starts the month immediately after you (or your NBC) complete the training program.

5.  Marketing and Advertising Fee:  5% of your Gross Revenues during the preceding month

• Due Date:  The 5th of each month.

• The Marketing and Advertising Fee may be capped at $2,000 per month, provided that the FIRM employs a full-time marketing manager who is approved by ActionCOACH.

6.  Conference and Technology Fee:  $165 per month, plus $135 per month per Business Coach/Key Personnel

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

• Paid to ActionCOACH; starts the month after you, your NBC, or EBC/Key Personnel attend training.

7.  Renewal Fee:  $5,000

• Due Date:  When you sign Renewal Franchise Agreement.

• Paid if you choose to renew at the end of the initial franchise term.

8.  Transfer Fee:  $5,000

• Due Date:  With submission of request for approval of transfer.

• Paid if you sell your franchise.

9.  Franchisee Training (before renewal):  $25,000 per trainee

• Due Date:  14 days before training session begins.

• Applies only if ActionCOACH requires you to remedy non-compliance by attending franchisee training before ActionCOACH will renew your franchise.

10.  Employee Business Coach and/or Key Personnel Training:  $5,000 per trainee, subject to change by ActionCOACH

• Due Date:  14 days before training session begins.

• Each EBC and Key Personnel (after you begin operating the FIRM) you appoint must complete ActionCOACH’s 5-day training program at the then-current fee.

• ActionCOACH will publish the current fee when the training session is announced. Fees do not cover travel, lodging, and the meals outside of the training sessions.

11.  Additional Training:  up to $1,000 per day

• Due Date:  14 days before training session begins.

• Payable only if ActionCOACH requires you to attend additional training at its offices based on your failure to meet the Minimum Performance Requirement.

12.  Mandatory Annual Regional Conferences:  approximately $2,500 per year for travel, meals, and accommodations

• Due Date:  Before conference begins.

• Conference Fee for Franchisee/NBC and his/her EBCs/Key Personnel are included in the Conference and Technology Fee.

• You are responsible for travel, accommodation, and meal costs.

• ActionCOACH may conduct interim conferences that are not mandatory.

13.  Coaching Platform Subscription Fee:  $456 per year per Business Coach

• Due Date:  Upon signing of the Franchise Agreement.

• You (or your NBC) and each of your EBCs must acquire this subscription on or before due date in order to have access to pre-training materials.

14.  Interest Charges:  1.5% per month or maximum legal rate

• Due Date:  With payment of underlying amount due.

• Payable only if you are late in payment.

15.  Inspection and Audit Costs:  actual cost of examination or audit by a Big-4 accounting firm, including travel expenses for the examiner or auditor

• Due Date:  Within 5 business days after your receipt of inspection or audit report.

• Payable only if the inspection or audit shows an understatement of 5% or more of the correct amount due.

16.  Insurance Reimbursement:  amount paid by ActionCOACH

• Due Date:  On demand for reimbursement.

• Payable only if you fail to obtain coverage and ActionCOACH purchases it on your behalf.

17.  Liquidated Damages Upon Your Default:  present value of Royalty Fee and Marketing and Advertising Fee stream for lesser of 2 years or remaining term, minus ActionCOACH’s expenses saved

• Due Date:  On termination of Franchise Agreement.

• Payable only if ActionCOACH terminates your agreement for default.

18.  Liquidated Damages Upon Your Breach of Obligations Relating to Marks or Confidential Information or Breach of Restrictive Covenants:  $250,000, plus enforcement costs if ActionCOACH prevails in any legal action

• Due Date:  Upon specified breaches of Section 15 or 16 of the Franchise Agreement.

• Payable only if you breach the Franchise Agreement obligations relating to the Marks or Confidential Information or the restrictive covenants contained in the Franchise Agreement.

19.  Enforcement Costs:  actual costs

• Due Date:  On demand for reimbursement.

• You must pay all of ActionCOACH’s investigation costs, collection costs, and attorneys’ fees resulting from your default under the Franchise Agreement, if ActionCOACH prevails in any legal action or arbitration.

• Costs for mediation will be shared equally between ActionCOACH and you.

20.  Indemnification Costs:  actual losses or expenses incurred by ActionCOACH

• Due Date:  On demand for reimbursement.

• You must indemnify ActionCOACH against all claims, expenses, and liabilities arising from the operation of your Business Coach franchise.

• Does not apply to liabilities that arise from gross negligence or willful acts by ActionCOACH or its affiliates.

21.  Amendment Fee:  ActionCOACH’s reasonable costs, estimated at $500 to $700

• Due Date:  On demand for reimbursement.

• If you request an amendment to the Franchise Agreement during the term of your agreement, you must reimburse ActionCOACH for the reasonable costs it incurs in connection with the amendment, including reasonable attorneys’ fees.