What is the initial franchise fee for a Clear Pest Pros franchise?

[Item 5: INITIAL FEES]

ITEM 5: INITIAL FEES

5.1. Initial Fees for Franchises

Upon signing the Franchise Agreement, you must pay an initial franchise fee of $35,000 (the "Initial Franchise Fee"). The Initial Franchise Fee is due when you sign the franchise agreement and is non-refundable. Payment of the Initial Franchise Fee grants you a Territory that will encompass 350,000 to 450,000 people ("Standard Territory"). You may purchase an extension of your Territory, up to a maximum of 500,000 people, for an additional $0.20 per person.

The Initial Franchise Fee and the Initial Package Fee Fee are paid to us, are non-refundable, and deemed fully earned upon payment.

If you wish to purchase multiple Standard Territories at the time you sign your first Franchise Agreement with us, then we will discount the Initial Franchise Fee for the additional Franchise Agreement(s) by $10,000. We allow the purchase of up to two (2) additional Territories at the time you purchase the first. The discount is only applicable at the time you purchase the first Standard Franchise, cannot be combined with any other discount, and will not be granted toward any future Territory expansions. If you purchase multiple territories, you will be required to sign individual franchise agreements for each Standard Territory.

You must also obtain, from us, an initial package ("Initial Package") for a fee of $38,000 (the "Initial Package Fee"), and is not refundable. The Initial Package includes a tablet, backpack sprayer, software set-up fees, consumables, branded materials, a convention allowance, as well as four (4) months of targeted digital marketing in your Territory. The Initial Package contents will vary depending on the services most requested in your area. The Convention Allowance covers the registration fee for one person to attend the first Clear Pest Pro convention that is scheduled following your successful completion of Initial Training and cannot used to offset any other expenses associated with your Business.

From time to time, we may offer incentives of cash grants, equipment, product, or other items as an inducement to prospective franchisees when business circumstances warrant and in states where such incentives can be offered without restrictions. We reserve the right to change or cancel any offer at any time.

We are a member of the International Franchise Association (IFA) and participate in the IFA's VetFran Program. We provide a 20% discount on the Initial Franchise Fee for the first Territory to veterans of U.S. Armed Forces who have been honorably discharged or otherwise meet the requirements of the VetFran program. We reserve the right to require proof that the applicant qualifies for this discount.

We also offer a $2,500 discount on the Initial Franchise Fee on the first Territory to first responders, which include sworn police officers, paid and volunteer firefighters, and paid and volunteer emergency medical technicians and paramedics. This discount may not be used in conjunction with the VetFran discount. We reserve the right to require proof that the applicant qualifies for this discount.

We also offer a discount of 10% of the Initial Franchise Fee to qualified individuals that have (1) a minimum of two years of experience in the industry and (2) secured applicable state licensing ("Experience Discount"). These discounts may not be combined or used in conjunction with any other discount. We reserve the right to require proof that the applicant qualifies for these discounts.

We also offer additional financing to those franchisees purchasing Standard Territories that meet our credit standards. Our financing is described in more detail in Item 10.

5.2 Related Franchisee Package

If you are currently a franchisee in good standing, as determined by us, with one of our franchising affiliates (a "Related Franchisee"), then you may qualify to purchase a Clear Pest Pros Business with discounted initial fees. The initial fees for a Related Franchisee will be 25% off of the then-current Initial Franchise Fee, and such discounted fee is limited to up to two (2) Franchises, which must be purchased at the same time. You must also obtain, from us, the Initial Package which is described above. A Related Franchisee cannot use any other discounts, and the Initial Franchise Fee is non-refundable.

5.3 Initial Fees for Conversion Franchises

If you are an existing pest control business that has grossed at least $100,000 in annual sales in your two (2) most recent fiscal years, then you may qualify to purchase a Clear Pest Pros Business as a conversion franchise ("Conversion Franchise"). To be eligible to purchase a Conversion Franchise, you must provide two (2) years' worth of tax returns (Form 1040 with schedule C, E, or F, Form 1065, Form 1120S, or Form 1120) and any additional information that we reasonably request. The Initial Fee for a Conversion Franchise purchasing a Standard Territory is $25,000. If you wish to purchase multiple Standard Territories at the time you sign your first Franchise Agreement with us, then we will discount the Initial Franchise Fee for the additional Franchise Agreement(s) by $5,000. We allow the purchase of up to two (2) additional Territories at the time you purchase the first. The discount is only applicable at the time you purchase the first Standard Franchise, cannot be combined with any other discount, and will not be granted toward any future Territory expansions. If you are eligible to purchase a Conversion Franchise, then you may also be eligible to receive a one-time re-branding credit ("Re-Branding Credit") that will be applied toward the cost of vehicle graphics, signage, logo wear, other branded items and items from us, our vendors, or our affiliate(s) that must be used within six (6) months

after signing the Franchise Agreement. The Re-Branding Credit is $5,000 for one Standard Territory and $10,000 if you purchase two (2), or more, Standard Territories at the same time.

If you also qualify for our financing, as described in detail in Item 10, then you may only pay 25% of the Initial Franchise Fee upon signing the Franchise Agreement, such that the initial payment for your Initial Franchise Fee is equal to $6,250.

You will be required to purchase the Initial Package. Conversion Franchises are not eligible for any other discounts to the Initial Fee. The Initial Franchise Fee and Initial Package Fee are paid to us, are non-refundable, and deemed fully earned upon payment.

Source: Item 5 — INITIAL FEES (FDD pages 18–20)