What items in the Aerus Disclosure Document provide information regarding pre-opening purchases/leases?

Except as listed below, we are not required to provide you with any assistance.

Pre-Opening Obligations: Before you open your Franchised Business:

• 1. We will provide to you a copy of the Manuals prior to the Opening Date during the initial training. (Franchise Agreement Section 1).
• 1. We will identify any modifications or improvements to the premises of any Approved Location, if any, which you must make at your expense. (Franchise Agreement Section 1).
• 1. Upon receipt of your order, we will provide you an initial inventory of Consigned Products, parts, accessories and supplies in the amounts that you request, when you place and order and pay the requisite Security Deposit. You are responsible for payment of all shipping and handling charges incurred in connection with the shipment. (Franchise Agreement Section 10).
• 1. We, or one of our affiliates, will sell to you certain assets (if you are purchasing an existing Aerus Business) to be used in connection with the Franchised Business. (Franchise Agreement Section 1).
• 1. We, or one of our affiliates, will sublease the premises or assign the Premises Lease of an Approved Location to you (if you are purchasing an existing Aerus Business). (Franchise Agreement Section 1).

Site Selection and Opening

You must obtain, via purchase or lease, a retail space to serve as an Approved Location of your Franchised Business. If you are purchasing the assets of an existing Aerus Business, you will sublease the premises of the Aerus Business or will take an assignment of the premises lease from us or one of our affiliates. If you are opening a new location, you will select a proposed site and submit such proposal to us for approval. We will approve or disapprove any proposed site within 30 days of receiving all of the requested information regarding the proposed site. If we do not agree on a proposed site, we have the right to terminate the Franchise Agreement.

We estimate the cost of purchasing the required computer system, hardware and software will range from $1,200 to $2,200. In addition, you will need to pay the Administration and Technical Support Fee as described in Item 6 of this Disclosure Document.

Note 6. Opening inventory of products and supplies will vary based on your expected volume of business, the size of your premises, and the size of any storage areas on the premises. You will order an initial inventory of Consigned Products. The estimate above includes your Security

Deposit for an initial supply of Consigned Products, which Security Deposit is fully earned and payable according to the Manuals at the time of signing of the Franchise Agreement. Also included in the estimate is the cost of an initial supply of parts and supplies. See Item 8 of this Disclosure Document for more information about your purchase requirements.

Note 7. This amount represents our estimate of transportation and living expenses for two trainees attending our initial training program in Dallas, Texas. You will be responsible for paying these expenses. The high end of our estimate includes the extra week of initial training required if you sign a Beyond Addendum. Please see Item 11.

Note 8. The estimated cost of annual premiums for the insurance policies required by the Franchise Agreement will vary significantly based on your location, and the claims experience of commercial businesses in the area, as well as your claims experience in other businesses you operate.

Note 9. You must purchase or lease a retail location for your Franchised Business. We recommend that you lease a space with approximately 1,500 to 2,000 square feet, depending on the type of Franchised Business you choose to operate. The leased space should preferably be located in a strip shopping center. This estimate presumes you will lease a space, and includes the cost of rent, security deposits, and other charges during the first three months of operations. The cost of purchasing or leasing space will vary, depending on location and other factors, and cannot be accurately projected by us. You should consult with a real estate broker and/or other professional in your area to assess the typical leasing costs for your target market area.

You must purchase or lease an Approved Location from which to operate your Franchised Business. You must obtain our approval of your proposed location before you sign a purchase or lease agreement. Under your Franchise Agreement, if you lease a location for your Franchised Business, we may require you and your landlord to sign a lease rider, through which your landlord will grant us the right to assume your rights and obligations under the lease if you breach the lease agreement or your Franchise Agreement. A sample lease rider is attached as Exhibit 1 to each Franchise Agreement.

Source: Item 9 — Franchisee's Obligations (FDD pages 33–34)