Counselor_Realty 2025 Franchise FAQ - FDD Ninja

Question 1

According to the table, what is the projected total number of new Counselor Realty outlets (franchised and company-owned) to be opened in the next fiscal year?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 2

What is the auditor's overall opinion of the Counselor Realty Franchising, Inc. financial statements?

Accepted Answer

To Counselor Realty Franchising, Inc.

#### **Opinion**

We have audited the financial statements of Counselor Realty Franchising, Inc. (the Company), which comprise the balance sheets as of December 31, 2024 and 2023, and the related statements of operations, stockholder's equity and cash flows for the years ended December 31, 2024, 2023 and 2022 and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for the years ended December 31, 2024, 2023 and 2022 in accordance with accounting principles generally accepted in the United States of America (GAAP).

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)

Question 3

What is the Continuing Agent Fee structure for Counselor Realty based on the number of licensed agents operating through the franchisee's Office(s)?

Accepted Answer

. You must pay a monthly Continuing Agent Fee to Counselor based upon the number of licensed agents operating through your Office (including any Additional Offices and Extension Offices) at any time during the month as follows: \$53 per licensed agent for the sixth through 15th licensed agent operating through your Office(s); \$37 per licensed agent for the 16th through 35th licensed agent operating through your Office(s); and \$32 per licensed agent for the 36th and each additional licensed agent operating through your Office(s). For purposes of clarity, if you have 50 licensed agents operating through your Office(s) for a certain month, your Continuing Agent Fee for that month would be \$1,750 (\$53 multiplied by 10, plus \$37 multiplied by 20, plus \$32 multiplied by 15). For purposes of calculating the Continuing Agent Fee, the number of agents operating through your Office(s) for any given month shall be the number of licensed agents listed as operating through your Office(s) with the Minnesota Department of Commerce on the first day of the applicable month. If Counselor has consented to any Additional Office locations or Extension Office locations, any licensed agents operating from any such Additional Office locations or Extension Office locations will be counted in the number of agents operating through your Office for purposes of the Continuing Agent Fee. You must notify Counselor immediately in writing each time a licensed agent begins operating through your Office(s) (including any Additional Offices or Extension Offices

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 4

What is the fee structure for agents operating through a Counselor Realty office?

Accepted Answer

provided in Section 1.2, the Initial Franchise Fee is nonrefundable.
- 5.2 Base Monthly Fee. You must pay us a Base Monthly Fee of \$371. At the beginning of each month, we will send you an invoice for the Base Monthly Fee, and you must pay us that fee on or before the 20th day of such month.

- 5.3 Continuing Agent Fees. The Base Monthly Fee above includes the first 5 agents operating through your Office. You must pay us a monthly Continuing Agent Fee in an amount equal to \$53 per licensed agent for the sixth through 15th licensed agent operating through your Office; \$37 per licensed agent for the 16th through 35th licensed agent operating through your Office; and \$32 per licensed agent for the 36th and each additional licensed agent operating through your Office. For purposes of clarity, if you have 50 licensed agents operating through your Office for a certain month, your Continuing Agent Fee for that month would be \$1,750 (\$53 multiplied by 10, plus \$37 multiplied by 20, plus \$32 multiplied by 15). For purposes of calculating the Continuing Agent Fee pursuant to this Section 5.3, the number of agents operating through your Office for any given month shall be the number of licensed agents listed as operating through your Office with the Minnesota Department of Commerce on the first day of the applicable month. At the beginning of each month, we will send you an invoice for the amount of the Continuing Agent Fee you owe us for the current month, and you must pay us the amount of such Continuing Agent Fee on or before the 20th day of such month. If Counselor has consented to any Additional Office locations or Extension Office locations, any licensed agents operating from any such Additional Office locations or Extension Office locations will be counted in the number of agents operating through your Office for purposes of this Section 5.3.
- 5.4 Advertising Fees. If your Office (or any Additional Office or Extension Office) is located within the 11-county metropolitan area of the Twin Cities of Minneapolis and St. Paul, Minnesota (including the Counties of Scott, Wright, Isanti, Dakota, Anoka, Hennepin, Washington, Carver, Ramsey, Sherburne and Chisago), you must pay to Counselor an Advertising Fee equal to \$60 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such metropolitan area, as a contribution towards the general costs of marketing activities conducted by Counselor. The amount of this Advertising Fee may be increased during the term of this Agreement by Counselor from time to time in its sole discretion. We reserve the right to establish and organize a "Regional Advertising Group" if your Office (or any Additional Office or Extension Office) is located outside the Twin Cities. If your Office (or any Additional Office or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such geographical area. The amount of your Advertising Fees for the Regional Advertising Group may be increased during the term of this Agreement by a majority vote of the "Regional Advertising Committee" that manages your Regional Advertising Group. Advertising Fees will be due and payable by the 20th day of each month.

# 5.5 Website Fees.

- (a) You must pay us an initial Website Set Up Fee, in an amount equal to the costs incurred by us in setting up a webpage for your Office on Counselor Realty, Inc.'s website. If we have consented to any Additional Office locations, you may request to have us set up a separate webpage or subdomain for any such Additional Office on Counselor Realty, Inc.'s website and, if elected, you must pay us a Website Set Up Fee for such webpage, in an amount equal to the costs incurred by us in setting up any such webpage. If we have consented to any Extension Office locations, you must pay us a Website Set Up Fee, in an amount equal to the costs incurred by us in setting up a webpage for each such Extension Office on Counselor Realty, Inc.'s website. Any agents operating out of an Additional Office location may be listed on the webpage for such Additional Office location and your other Office locations for no additional charge.
- (b) You must pay us a monthly Website Fee in an amount equal to \$75 for each Office location (including each Additional Office and Extension Office), plus \$25 for

each licensed agent choosing to have an optional agent website provided by Counselor.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 5

How many total company-owned Counselor Realty outlets were closed during 2022?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlet Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Minnesota | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |
| Totals | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 6

How many total company-owned Counselor Realty outlets were opened in all locations during 2023?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlet Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Minnesota | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |
| Totals | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 7

How many total company-owned Counselor Realty outlets were reacquired from franchisees during 2024?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlet Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Minnesota | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |
| Totals | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 8

How many total company-owned Counselor Realty outlets were sold to franchisees during 2023?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlet Opened | Outlets Reacquired from Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|
| Minnesota | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |
| Totals | 2022 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 6 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 9

What is the monthly website fee for each Counselor Realty office, including additional and extension offices?

Accepted Answer

ce location and your other Office locations for no additional charge.
- (b) You must pay us a monthly Website Fee in an amount equal to \$75 for each Office location (including each Additional Office and Extension Office), plus \$25 for

each licensed agent choosing to have an optional agent website provided by Counselor. For purposes of clarity, if you have 10 agents who choose to have the optional agent website, your Website Fee would be \$325 (\$75 plus \$25 multiplied by 10). The amount of the Website Fee may be increased during the term of this Agreement by Counselor from time to time in its sole discretion. At the beginning of each month, we will send you an invoice for the amount of the Website Fee you owe us for the current month, and you must pay us the amount of such Continuing Agent Fee on or before the 20th day of such month. The monthly Website Fee will apply to any agents operating out of any Additional Office locations or Extension

Source: Item 22 — CONTRACTS (FDD page 32)

Question 10

What are the payment obligations related to website fees for Counselor Realty franchisees?

Accepted Answer

vertising Fees will be due and payable by the 20th day of each month.

# 5.5 Website Fees.

- (a) You must pay us an initial Website Set Up Fee, in an amount equal to the costs incurred by us in setting up a webpage for your Office on Counselor Realty, Inc.'s website. If we have consented to any Additional Office locations, you may request to have us set up a separate webpage or subdomain for any such Additional Office on Counselor Realty, Inc.'s website and, if elected, you must pay us a Website Set Up Fee for such webpage, in an amount equal to the costs incurred by us in setting up any such webpage. If we have consented to any Extension Office locations, you must pay us a Website Set Up Fee, in an amount equal to the costs incurred by us in setting up a webpage for each such Extension Office on Counselor Realty, Inc.'s website. Any agents operating out of an Additional Office location may be listed on the webpage for such Additional Office location and your other Office locations for no additional charge.
- (b) You must pay us a monthly Website Fee in an amount equal to \$75 for each Office location (including each Additional Office and Extension Office), plus \$25 for

each licensed agent choosing to have an optional agent website provided by Counselor. For purposes of clarity, if you have 10 agents who choose to have the optional agent website, your Website Fee would be \$325 (\$75 plus \$25 multiplied by 10). The amount of the Website Fee may be increased during the term of this Agreement by Counselor from time to time in its sole discretion. At the beginning of each month, we will send you an invoice for the amount of the Website Fee you owe us for the current month, and you must pay us the amount of such Continuing Agent Fee on or before the 20th day of such month. The monthly Website Fee will apply to any agents operating out of any Additional Office locations or Extension

Source: Item 22 — CONTRACTS (FDD page 32)

Question 11

What subjects are covered in the Counselor Realty training materials?

Accepted Answer

| Subject Matter                    | Number of     |
|-----------------------------------|---------------|
|  | Pages Devoted to Subject Matter |
| Affiliation: Broker and Associate | 6 |
| Office Policies | 17 |
| Advertising | 3 |
| Compensation | 2 |
| Subject Matter | Number of Pages Devoted to Subject Matter |
|---|---|
| Affiliation: Broker and Associate | 6 |
| Office Policies | 17 |
| Advertising | 3 |
| Compensation | 2 |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 17–21)

Question 12

What is the total estimated initial investment range for a Counselor Realty franchise?

Accepted Answer

| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Fee (see Item 5) | $7,500 to $15,000 | Lump sum | When you sign Franchise Agreement | Counselor |
| Real Estate Lease and ImprovementsA | $600 to $12,500 | (See Note A) | (See Note A) | (See Note A) |
| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
| Fixtures and | $1,000 to | As incurred | Before | Vendors |
| FurnishingsB | $15,000 |  | opening |  |
| Opening Inventory of SuppliesC | $500 to $1,000 | Lump sum | Before opening | Vendors |
| InsuranceD | $1,500 to | Lump sum | Before | Insurance |
|  | $6,000 |  | opening | Carriers |
| Training Costs (see Item 6) | $0 to $6,200 | As incurred | As billed (for those paid to Counselor); otherwise, as incurred | Counselor, Vendors |
| Internet | $750 to $4,000 | As incurred | As billed | Vendors |
| DevelopmentE |  |  |  |  |
| SignageF | $1,000 to | As incurred | Before | Approved |
|  | $10,000 |  | opening | Vendors |
| Professional | $0 to $6,000 | As incurred | Before | Attorneys, |
| FeesG |  |  | opening | Accountants |
| Additional Funds (for three months' operations)H | $10,000 to $30,000 | As incurred | As incurred | Counselor, Vendor, Employees, Suppliers, Utilities |
| Total | $22,850 to $105,700I |  |  |  |

Source: Item 7 — INITIAL INVESTMENT (FDD pages 13–15)

Question 13

What is the total monthly Website Fee for a Counselor Realty office, including the base fee and the additional fee?

Accepted Answer

ce location and your other Office locations for no additional charge.
- (b) You must pay us a monthly Website Fee in an amount equal to \$75 for each Office location (including each Additional Office and Extension Office), plus \$25 for

each licensed agent choosing to have an optional agent website provided by Counselor. For purposes of clarity, if you have 10 agents who choose to have the optional agent website, your Website Fee would be \$325 (\$75 plus \$25 multiplied by 10). The amount of the Website Fee may be increased during the term of this Agreement by Counselor from time to time in its sole discretion. At the beginning of each month, we will send you an invoice for the amount of the Website Fee you owe us for the current month, and you must pay us the amount of such Continuing Agent Fee on or before the 20th day of such month. The monthly Website Fee will apply to any agents operating out of any Additional Office locations or Extension

Source: Item 22 — CONTRACTS (FDD page 32)

Question 14

What was the total number of company-owned Counselor Realty outlets at the end of 2022?

Accepted Answer

ST THREE YEARS**

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 5

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 15

What was the total number of company-owned Counselor Realty outlets at the start of 2024?

Accepted Answer

ST THREE YEARS**

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 5 | -2 |
|  | 2024 | 5 | 5 | 0 |
| Company- | 2022 | 6

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 16

What is the total number of Counselor Realty franchise agreements signed, but the outlet not yet opened, across all states?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 17

What is the total number of Counselor Realty franchise agreements signed, but the outlet was not opened as of the last day of the last fiscal year?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 18

What was the total number of Counselor Realty outlets at the end of 2024?

Accepted Answer

ST THREE YEARS**

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 5 | -2 |
|  | 2024 | 5 | 5 | 0 |
| Company- | 2022 | 6 | 6 | 0 |
| Owned |  |  |  |  |
|  | 2023 | 6 | 6 | 0 |
|  | 2024 | 6 | 6 | 0 |
| Total Outlets | 2022 | 13 | 13 | 0 |
|  | 2023 | 13 | 11 | -2 |
|  | 2024 | 11 | 11 | 0 |
The name, business address, and business telephone number of each current franchisee on January 1, 2025, and the name, last known home address and telephone number of every franchisee who has had a franchise terminated, cancelled, not renewed, or otherwise voluntarily or involuntarily ceased to do business under the Franchise Agreement during the most recently completed fiscal year or has not communicated

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 19

What was the total number of Counselor Realty outlets at the start of 2022?

Accepted Answer

ST THREE YEARS**

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 5 | -2 |
|  | 2024 | 5 | 5 | 0 |
| Company- | 2022 | 6 | 6 | 0 |
| Owned |  |  |  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 20

What is the total number of pages dedicated to training on Affiliation, Office Policies, Advertising, and Compensation in the Counselor Realty program?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]

| Subject Matter                    | Number of     |
|-----------------------------------|---------------|
|  | Pages Devoted to Subject Matter |
| Affiliation: Broker and Associate | 6 |
| Office Policies | 17 |
| Advertising | 3 |
| Compensation | 2 |
| Subject Matter | Number of Pages Devoted to Subject Matter |
|---|---|
| Affiliation: Broker and Associate | 6 |
| Office Policies | 17 |
| Advertising | 3 |
| Compensation | 2 |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 17–21)

Question 21

What is the total projected number of new company-owned Counselor Realty outlets to open in the next fiscal year?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 22

What is the total projected number of new company-owned Counselor Realty outlets to be opened in the next fiscal year across all states?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 23

What is the total projected number of new franchised Counselor Realty outlets to open in the next fiscal year?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 24

What is the total projected number of new franchised Counselor Realty outlets to be opened in the next fiscal year across all states?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlet in the Next Fiscal Year | Projected New Company-Owned Outlet in the Next Fiscal Year |
|---|---|---|---|
| Minnesota | 0 | 1 | 0 |
| Totals | 0 | 1 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 25

What is the trend in Counselor Realty franchise transfers based on the data provided for 2022, 2023, and 2024?

Accepted Answer

| State | Year | Number of Transfers |
|---|---|---|
| All States | 2022 | 0 |
|  | 2023 | 0 |
|  | 2024 | 0 |
| Totals | 2022 | 0 |
|  | 2023 | 0 |
|  | 2024 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 30–31)

Question 26

What is the difference between an 'Additional Office' and an 'Extension Office' for a Counselor Realty franchise?

Accepted Answer

ve.

You may apply to open one or more additional offices within your designated Territory (an "Additional Office") by submitting a request to Counselor describing the location of such proposed Additional Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Additional Office location (the "Additional Office Application Materials"). After Counselor's receipt of such Additional Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Additional Office Application Materials and proposed Additional Office location and notify you whether or not Counselor consents to your opening of such Additional Office location. Any Additional Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standards.

You may apply to open one or more additional offices outside of your designated Territory (an "Extension Office") by submitting a request to Counselor describing the location of such proposed Extension Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Extension Office location (the "Extension Office Application Materials"). After Counselor's receipt of such Extension Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Extension Office Application Materials and proposed Extension Office location and notify you whether or not Counselor consents to your opening of such Extension Office location. Counselor's consent to any Extension Office location will be contingent on you and Counselor reaching a mutual agreement as to the minimum number of sales agents that will operate from the Extension Office. Any Extension Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standards.

Before you sign the Franchise Agreement, you and Counselor will negotiate a schedule for the minimum number of real estate sales agents who must operate from your Office. If you fail to satisfy the agreed-upon schedule, or to maintain the minimum required number of agents in the Office on an ongoing basis, you may lose the exclusive right to operate a "Counselor" office in the Territory, your Territory may be altered (as determined by Counselor in its sole discretion), or Counselor may terminate the Franchise Agreement. See below and Item 17.

You will not receive an exclusive territory. You may face competition from other franchisees or Franchisor-owned outlets, or from other channels of distribution. During the term of the Franchise Agreement, Counselor will not itself establish or operate a "Counselor" office, or license another to establish or operate a "Counselor" office within the Territory. However, both Counselor and other "Counselor" franchisees are free to enter into, and to provide residential and commercial real estate brokerage services within, your Territory, and you are free to provide real estate brokerage services in territories in which other franchisees' "Counselor" offices are located. Continuation of your rights in the Territory is contingent on your achieving and maintaining the minimum sales agent schedule agreed upon by you and Counselor, and on your payment of continuing agent fees based on that schedule. See Item 6. Counselor is engaged in the real estate brokerage business and reserves the right to establish and conduct this business at any location except as described above.

If Counselor has consented to any Additional Office locations, any sales agents operating out of any such Additional Office locations will be counted as part of the number of sales agents operating from your Office for purposes of Section 1.3(a). If Counselor has consented to any Extension Office locations, you must maintain the mutually agreed-upon minimum number of

sales agents operating from such Extension Office (which must be agreed to before Counselor consents to any Extension Office location). One of these sales agents must be a supervising broker. The minimum number of sales agents required to be operating in any such Extension Office is separate from and in addition to the minimum number of sales agents that are required to operate from any of your other Office locations (including any Additional Offices). If you fail to satisfy and maintain the minimum required number of sales agents in the Extension Office on an ongoing basis, Counselor may (in its sole discretion) elect to have you close the Extension Office or terminate the Franchise Agreement. If Counselor has consented to any Extension Office, you will not receive any territorial protections with respect to such Extension Office. Both Counselor and other "Counselor" licensees may provide residential and commercial real estate brokerage services anywhere near such Extension Office. In addition, Counselor may itself establish or operate a "Counselor" office, or license another to establish or operate a "Counselor" office, anywhere near such Extension Office;

Source: Item 12 — TERRITORY (FDD pages 21–23)

Question 27

What is the earliest year any of the listed individuals began their association with Counselor Realty?

Accepted Answer

Mr. Engel has served as a member of the Board of Directors since January 2023. He has served as the current Broker of Record for Counselor Realty, Inc. since 2019. He also has served as Vice President from 2019 to 2021. Tom has been the current manager of the Maple Grove office since 1997. He has served on various committees and the Board of Directors. He has held his brokers license since 1977, and has been licensed with Counselor Realty, Inc. since 1985.

# 3. LITIGATION

No litigation is required to be disclosed in this Franchise Disclosure Document.

# 4. BANKRUPTCY

Neither Counselor, nor any person previously identified in Item 1 or 2 of this Franchise Disclosure Document, has been involved as a debtor in proceedings under the U.S. Bankruptcy Code required to be disclosed in this Item.

# 5. INITIAL FEES

Before you pay anything to Counselor, you must submit a confidential franchise application, containing all information required by Counselor. If Counselor approves your application, you must open the Office for business within 12 months after the date of the Franchise Agreement (subject to extension at Counselor's sole discretion).

When you sign the Franchise Agreement, you must pay Counselor an Initial Fee in an amount of: \$7,500 if the population in your Territory is less than 10,000, or \$15,000 if the population in your Territory is 10,000 or more. See Item 12.

You are responsible to select a site for your Office. After you notify Counselor of a proposed site, Counselor has 30 days to review the site and to notify you whether or not it consents to your operation of the Business at that site. If Counselor rejects the site you propose, you will have an additional 60 days to locate a site that is acceptable to Counselor.

Source: Item 2 — BUSINESS EXPERIENCE (FDD page 8)

Question 28

Which entity, Baker Tilly Advisory Group, LP or Baker Tilly US, LLP, provides assurance services to Counselor Realty's clients?

Accepted Answer

Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)

Question 29

Are the fees charged by Counselor Realty for a Territory Opportunity the same as the initial franchise fee?

Accepted Answer

- (i) we will provide you with written notice of a Territory Opportunity, and you will have 30 days to advise us in writing that you wish to participate in the Territory Opportunity;
- (ii) if you do not notify us within such period, then we may pursue such Territory Opportunity and/or grant any other person or entity the right to participate in such Territory Opportunity without any liability to you; and
- (iii) if you timely notify us in writing that you wish to participate in the Territory Opportunity, then we may condition your participation on compliance with such terms and conditions as we consider appropriate to the particular Territory Opportunity, including: (i) execution of such franchise agreement and related agreements as are then generally used by us in connection with the award of the applicable Territory Opportunity; (ii) timely payment of all initial fees and any other fees charged by us or our affiliate in connection with the award or grant of the applicable Territory Opportunity; and (iii) meeting our then-current eligibility requirements applied by us to candidates for such Territory Opportunity.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 30

What are all the fees that a Counselor Realty franchisee might pay, combining the initial fees from Item 5 and the other fees from Item 6?

Accepted Answer

When you sign the Franchise Agreement, you must pay Counselor an Initial Fee in an amount of: \$7,500 if the population in your Territory is less than 10,000, or \$15,000 if the population in your Territory is 10,000 or more. See Item 12.

You are responsible to select a site for your Office. After you notify Counselor of a proposed site, Counselor has 30 days to review the site and to notify you whether or not it consents to your operation of the Business at that site. If Counselor rejects the site you propose, you will have an additional 60 days to locate a site that is acceptable to Counselor. If you fail to do so, the Franchise Agreement will terminate and Counselor will refund your Initial Fee, less Counselor's expenses associated with reviewing the proposed site(s). See Item 12. Except as described in this paragraph, Initial Fees are nonrefundable.

At your request, Counselor will provide you and up to two of your key personnel initial training (the amount of such initial training shall be as determined by Counselor). See Item 11. You must pay Counselor a fee for training in the amount of \$175 per trainer per hour. In addition, you must pay all travel, living and incidental expenses you and your employees, and our trainers, incur in connection with training, which Counselor estimates could range from \$0 (if you and our trainers do not have to travel to attend training) to \$750 per person per day. Training fees are not refundable.

See Item 7 for more detailed information regarding your initial investment.

# 6. OTHER FEES

# **OTHER FEES**

| (1) Name of Fee | (2) Amount | (3) Due Date | (4) Remarks |
|---|---|---|---|
| Base Monthly Fee | $371 per month | Payable monthly by the 20th day of the month | See Note A |
| Continuing Agent Fee | $32 to $53 per licensed agent operating from or through your Office | Payable monthly by the 20th day of the month | See Note B |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | $175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | \$175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
Notes to Item 6, above:

- A. You must pay us a Base Monthly Fee of \$371. This fee includes the first 5 licensed agents operating through your Office.
- B. You must pay a monthly Continuing Agent Fee to Counselor based upon the number of licensed agents operating through your Office (including any Additional Offices and Extension Offices) at any time during the month as follows: \$53 per licensed agent for the sixth through 15th licensed agent operating through your Office(s); \$37 per licensed agent for the 16th through 35th licensed agent operating through your Office(s);

Question 31

What is the financial impact of adding an agent to a Counselor Realty office, considering both Base Monthly Fee and Continuing Agent Fees?

Accepted Answer

provided in Section 1.2, the Initial Franchise Fee is nonrefundable.
- 5.2 Base Monthly Fee. You must pay us a Base Monthly Fee of \$371. At the beginning of each month, we will send you an invoice for the Base Monthly Fee, and you must pay us that fee on or before the 20th day of such month.

- 5.3 Continuing Agent Fees. The Base Monthly Fee above includes the first 5 agents operating through your Office. You must pay us a monthly Continuing Agent Fee in an amount equal to \$53 per licensed agent for the sixth through 15th licensed agent operating through your Office; \$37 per licensed agent for the 16th through 35th licensed agent operating through your Office; and \$32 per licensed agent for the 36th and each additional licensed agent operating through your Office. For purposes of clarity, if you have 50 licensed agents operating through your Office for a certain month, your Continuing Agent Fee for that month would be \$1,750 (\$53 multiplied by 10, plus \$37 multiplied by 20, plus \$32 multiplied by 15). For purposes of calculating the Continuing Agent Fee pursuant to this Section 5.3, the number of agents operating through your Office for any given month shall be the number of licensed agents listed as operating through your Office with the Minnesota Department of Commerce on the first day of the applicable month.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 32

If a Counselor Realty franchisee wants to open an additional office, does the location need to be within their Territory?

Accepted Answer

going and the undertakings herein, the parties agree:

# 1. FRANCHISE.

# 1.1 Grant.

- (a) We grant you a non-exclusive license to use the System and the Marks to operate one real estate brokerage business (the "Business") at a single site you select, and to which we consent (the "Office"), within the geographic territory designated in Exhibit A to this Franchise Agreement (the "Territory"). You must obtain Counselor's written consent prior to opening or operating any additional Office locations.
- (b) You may apply to open one or more additional offices within your designated Territory (an "Additional Office") by submitting a request to Counselor describing the location of such proposed Additional Office as well as any additional information Counselor may require or request, along with one-time fee of \$750 for each Additional Office location (the "Additional Office Application Materials"). After Counselor's receipt of such Additional Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Additional Office Application Materials and proposed Additional Office location and notify you whether or not Counselor consents to your opening of such Additional Office location. Any Additional Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standards.
- (c) You may apply to open one or more additional offices outside of your designated Territory (an "Extension Office") by submitting a request to Counselor describing the location of such proposed Extension Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Extension Office location (the "Extension Office Application Materials"). After Counselor's receipt of such Extension Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Extension Office Application Materials and proposed Extension Office location and notify you whether or not Counselor consents to your opening of such Extension Office location. Counselor's consent to any Extension Office location will be contingent on you and Counselor reaching a mutual agreement as to the minimum number of sales agents that will operate from the Extension Office. Any Extension Office we consent to must comply with all requ

Source: Item 22 — CONTRACTS (FDD page 32)

Question 33

How does the initial fee for a Counselor Realty franchise in Item 5 relate to the estimated initial investment in Item 7?

Accepted Answer

| (1) Type of Expenditure | (2) Amount | (3) Method of Payment | (4) When Due | (5) To Whom Payment is to be Made |
|---|---|---|---|---|
| Initial Fee (see Item 5) | $7,500 to $15,000 | Lump sum | When you sign Franchise Agreement | Counselor |

Question 34

How does the initial fee for a Counselor Realty franchise in Item 5 relate to the territory size and population requirements outlined in Item 12?

Accepted Answer

When you sign the Franchise Agreement, you must pay Counselor an Initial Fee in an amount of: \$7,500 if the population in your Territory is less than 10,000, or \$15,000 if the population in your Territory is 10,000 or more. See Item 12.

You are responsible to select a site for your Office. After you notify Counselor of a proposed site, Counselor has 30 days to review the site and to notify you whether or not it consents to your operation of the Business at that site. If Counselor rejects the site you propose, you will have an additional 60 days to locate a site that is acceptable to Counselor. If you fail to do so, the Franchise Agreement will terminate and Counselor will refund your Initial Fee, less Counselor's expenses associated with reviewing the proposed site(s). See Item 12. Except as described in this paragraph, Initial Fees are nonrefundable.

At your request, Counselor will provide you and up to two of your key personnel initial training (the amount of such initial training shall be as determined by Counselor). See Item 11. You must pay Counselor a fee for training in the amount of \$175 per trainer per hour. In addition, you must pay all travel, living and incidental expenses you and your employees, and our trainers, incur in connection with training, which Counselor estimates could range from \$0 (if you and our trainers do not have to travel to attend training) to \$750 per person per day. Training fees are not refundable.

Question 35

Are Counselor Realty owned and operated offices required to pay the same Advertising Fee to the Regional Advertising Fund as franchisee-owned offices?

Accepted Answer

es. If your Office (including any Additional Officer or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such geographical area. "Counselor" offices owned and operated by Counselor contribute toward the general costs of marketing activities conducted by Counselor under a different formula, and will not be required to pay the specific Advertising Fee described above to the Regional Advertising F

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 17–21)

Question 36

What is the most recent year any of the listed individuals began their association with Counselor Realty?

Accepted Answer

Mrs. Miller has served as the CEO of Counselor, Counselor Holdings, and Counselor Realty since April 2023 and as Chief Financial Officer since March 2023. Mrs. Miller has served as the Treasurer and as a Director since April 2022. She also served as Treasurer from April 2015 to April 2017, and as Vice President from April 2013 to April 2015. She has served as co-manager of the Coon Rapids office location since 2004. She has served as Chairperson since 2025. She has also served on various committees over the years. She has been a licensed agent with Counselor Realty in Coon Rapids since 2002.

# Director: Caroline Dixon

Ms. Dixon has been on the Board of Directors since April 2017. She has been a licensed agent with Counselor Realty since January 2004. She has served on the Relocation Committee of Counselor Realty and presently serves as chair. She served as an alternate for the Board of Directors from December 2015 to April 2017.

# Director: Rick Theisen

Mr. Theisen has served as a member of the Board of Directors of Counselor since April 2018, and as a member of the Board of Directors for Counselor Holding and Counselor Realty since April 2005. He has been a licensed real estate agent with Counselor Realty in Maple Grove, Minnesota since January 1999.

# Director: Thomas Engel

Mr. Engel has served as a member of the Board of Directors since January 2023. He has served as the current Broker of Record for Counselor Realty, Inc. since 2019. He also has served as Vice President from 2019 to 2021. Tom has been the current manager of the Maple Grove office since 1997. He has served on various committees and the Board of Directors. He has held his brokers license since 1977, and has been licensed with Counselor Realty, Inc. since 1985.

Source: Item 2 — BUSINESS EXPERIENCE (FDD page 8)

Question 37

What is the relationship between the initial fee for a Counselor Realty franchise as described in Item 5 and the population requirements for the territory as described in Item 12?

Accepted Answer

When you sign the Franchise Agreement, you must pay Counselor an Initial Fee in an amount of: \$7,500 if the population in your Territory is less than 10,000, or \$15,000 if the population in your Territory is 10,000 or more. See Item 12.

You are responsible to select a site for your Office. After you notify Counselor of a proposed site, Counselor has 30 days to review the site and to notify you whether or not it consents to your operation of the Business at that site.

Question 38

Is there a difference in the allowance for credit losses between 2023 and 2024 for Counselor Realty?

Accepted Answer

t rates and interest rates, amongst others.

Accounts receivable consists of franchise related fees. Accounts receivable are unsecured and the Company charges 8% interest on past due accounts. Accounts receivable are considered past due if not paid within the terms established. Accounts receivable are written off when they are determined to be uncollectible. The allowance for credit losses was \$1,574 and \$3,724 as

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)

Question 39

Are there any other fees besides those listed for a Counselor Realty franchise?

Accepted Answer

. Counselor may provide you with or require you to utilize such technology related tools (including, but not limited to, mobile applications and other internet or software-based applications) and services relating to the Business as its determines from time to time in its sole discretion. See Item 11. You will be obligated to pay Counselor fees associated with such technology related tools and services that Counselor may decide to provide in

such amounts, and at such times, as Counselor shall determine from time to time in its sole discretion. Counselor may provide you with or require you to utilize such nontechnology related tools and services relating to the Business as it determines from time to time in its sole discretion. See Item 11. You will be obligated to pay Counselor fees associated with such non-technology related tools and services that Counselor may decide to provide in such amounts, and at such times, as Counselor shall determine from time to time in its sole discretion.

- H. Counselor will charge you interest on any amount due to Counselor not paid when due, from the date due until paid, at a rate of the lower of eight percent (8%) per year or the maximum contract rate of interest allowed by law in the state where your Business is operated. If Counselor commences suit to collect amounts due, it is entitled to recover its costs, including reasonable attorneys' fees, in addition to its other recoveries. Interest and late payments are not refundable. Your failure to pay amounts owing constitutes good cause for Counselor to terminate the Franchise Agreement. See Item 17.
- I. If any of your payments to Counselor are returned for any reason, you will pay us an additional fee for the amount charged by Counselor's bank.
- J. At your request, Counselor will provide you and up to two of your key personnel initial training (the amount of such initial training shall be as determined by Counselor) at a "Counselor" office or other location designated by Counselor, at any mutually convenient time. At your request, Counselor will provide supplemental initial and/or ongoing training for you and/or your key personnel at a "Counselor" office or other location designated by Counselor, at any mutually convenient time. You must pay Counselor a fee for training (including initial training) in the amount of \$175 per trainer per hour. In addition, you must pay all travel, living and incidental expenses you and your employees, and our trainers, incur in connection with training, which Counselor estimates could range from \$0 (if you and our trainers do not have to travel to attend training) to \$750 per person per day. The exact amount of the fees and costs are unknown and may vary depending upon factors, such as third-party vendors selected. You and your employees will not be paid by Counselor during training.
- K. The prevailing party in any arbitration regarding the Franchise Agreement is entitled to recover its costs including its reasonable attorneys' fee

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 40

For Counselor Realty, what is the Advertising Fee per agent per month for offices located outside the Twin Cities if a Regional Advertising Group has not been established?

Accepted Answer

. If your Office (or any Additional Office or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out

of the Office, Additional Office or Extension Office located in such geographical area. The amount of Advertising Fees for the Regional Advertising Group may be increased during the term of the franchise by a majority vote of the "Regional Advertising Committee" that manages your Regional Advertising Group. See Item 11 for additional information regarding Advertising Fees and Regional Advertising Groups. Advertising Fees are nonrefundable and are uniformly imposed among franchisee-owned "Counselor" offices. "Counselor" offices owned and operated by Counselor contribute toward the general costs of marketing activities conducted by Counselor under a different formula, and are not required to pay the specific Advertising Fees described abov

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 41

If the Counselor Realty franchisee is a partnership, corporation or other entity, must all partners, shareholders or owners execute the guaranty from time to time?

Accepted Answer

If Franchisee is a partnership, corporation or other entity, all of its partners, shareholders or owners from time to time shall execute the guaranty at the foot of this Agreement.

Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 24–25)

Question 42

What is the maximum interest rate Counselor Realty charges on overdue amounts if state law dictates a lower rate?

Accepted Answer

- H. Counselor will charge you interest on any amount due to Counselor not paid when due, from the date due until paid, at a rate of the lower of eight percent (8%) per year or the maximum contract rate of interest allowed by law in the state where your Business is operated. If Counselor commences suit to collect amounts due, it is entitled to recover its costs, including reasonable attorneys' fees, in addition to its other recoveries. Interest and late payments are not refundable. Your failure to pay amounts owing constitutes good cause for Counselor to terminate the Franchise Agreement. See Item 17.

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 43

Does the $2,000 transfer fee apply to a transfer of ownership interest in the Counselor Realty franchisee entity?

Accepted Answer

ement or policies of such person or entity, by contract or otherwise.
- 9.2 Other Conditions to Transfer. You must apply for our consent by submitting written notice of the pending transfer, with a complete application, signed by you and by the proposed transferee, and payment of the transfer fee, at least 60 days before the proposed transfer date. The transfer fee is \$2,000 and applies to all transfers (excluding transfers described in, and in accordance with, the second to last sentence of Section 9.1). We may specifically withhold consent if: (i) you do not pay all amounts you owe to Counselor or its affiliates or to your suppliers; (ii) you (or the transferee) do not complete the repair, maintenance or upgrade of the Business' facility, fixtures, equipment, and signage to then-current System standards; or (iii) all shareholders or owners of the transferee do not execute the guaranty of the new Agreement.
- 9.3 Franchisee Death or Disability. Your death, disability or incapacity (or of a principal officer, director or partner of Franchisee) is also a "transfer." Your executor, heir or legal representative (or the corporation or partnership, if an entity) must apply within 60 days of the death or incapacity for our consent to transfer this Agreement and satisfy the other conditions above.
- 9.4 Transfer by Franchisor. We may transfer our interest in this Agreement at our discretion.
- 9.5 Relocation. You may relocate with the prior written consent of Counselor, to a suitable site within the Territory. The replacement Office must open within 120 days after the prior facility closes. The replacement Office must comply with the requirements of this Agreement and then-current System standards.

9.6 Right of First Refusal. If you (or any subsequent Franchisee) propose a transfer governed by this Article 9, in whole or in part, to any third party in response to a bona fide offer from such third party, you shall first offer to sell to Counselor your said interest as provided herein. You shall obtain from the third party offeror and deliver to us a statement in writing, signed by the offeror and by you of all of the terms of the offer. Counselor has 30 days from its receipt of the statement to accept the offer by delivering written notice of acceptance to you.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 44

Is the $750 fee for a Counselor Realty Additional Office application refundable if the application is denied?

Accepted Answer

ve.

You may apply to open one or more additional offices within your designated Territory (an "Additional Office") by submitting a request to Counselor describing the location of such proposed Additional Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Additional Office location (the "Additional Office Application Materials"). After Counselor's receipt of such Additional Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Additional Office Application Materials and proposed Additional Office location and notify you whether or not Counselor consents to your opening of such Additional Office location. Any Additional Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standa

Source: Item 12 — TERRITORY (FDD pages 21–23)

Question 45

Is the $750 fee for a Counselor Realty Extension Office application refundable if the application is denied?

Accepted Answer

ds.

You may apply to open one or more additional offices outside of your designated Territory (an "Extension Office") by submitting a request to Counselor describing the location of such proposed Extension Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Extension Office location (the "Extension Office Application Materials"). After Counselor's receipt of such Extension Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Extension Office Application Materials and proposed Extension Office location and notify you whether or not Counselor consents to your opening of such Extension Office location. Counselor's consent to any Extension Office location will be contingent on you and Counselor reaching a mutual agreement as to the minimum number of sales agents that will operate from the Extension Office. Any Extension Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standa

Source: Item 12 — TERRITORY (FDD pages 21–23)

Question 46

According to the FTC's Franchise Rule, under what condition is a franchisor permitted to disclose information about potential financial performance for Counselor Realty?

Accepted Answer

The FTC's Franchise Rule permits a franchisor to disclose information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.

This Franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the Franchisor's management by contacting Gayle Miller, 3200 NW Main Street, Suite 110, Coon Rapids, Minnesota 55448; (612) 405-8404, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–30)

Question 47

According to the FTC's Franchise Rule, under what condition is a franchisor permitted to disclose information about actual financial performance for Counselor Realty?

Accepted Answer

The FTC's Franchise Rule permits a franchisor to disclose information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.

This Franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the Franchisor's management by contacting Gayle Miller, 3200 NW Main Street, Suite 110, Coon Rapids, Minnesota 55448; (612) 405-8404, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–30)

Question 48

Does Counselor Realty allow financial performance information that differs from Item 19 to be given?

Accepted Answer

The FTC's Franchise Rule permits a franchisor to disclose information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances.

This Franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the Franchisor's management by contacting Gayle Miller, 3200 NW Main Street, Suite 110, Coon Rapids, Minnesota 55448; (612) 405-8404, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–30)

Question 49

Is the amount of the Insufficient Funds/Return Fees for Counselor Realty determined by Counselor's bank?

Accepted Answer

**

| (1) Name of Fee | (2) Amount | (3) Due Date | (4) Remarks |
|---|---|---|---|
| Base Monthly Fee | $371 per month | Payable monthly by the 20th day of the month | See Note A |
| Continuing Agent Fee | $32 to $53 per licensed agent operating from or through your Office | Payable monthly by the 20th day of the month | See Note B |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | $175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | \$175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
Notes to Item 6, above:

- A. You must pay us a Base Monthly Fee of \$371. This fee includes the first 5 licensed agents operating through your Office.
- B.

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 50

Can the amount of monthly Advertising Fees for the Regional Advertising Group be increased for Counselor Realty franchisees?

Accepted Answer

on.

We reserve the right to establish and organize a "Regional Advertising Group" if your Office (including any Additional Officer or Extension Office) is located outside the Twin Cities. If your Office (including any Additional Officer or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such geographical area. "Counselor" offices owned and operated by Counselor contribute toward the general costs of marketing activities conducted by Counselor under a different formula, and will not be required to pay the specific Advertising Fee described above to the Regional Advertising Fund. Activities of the Regional Advertising Group will be coordinated, and the Regional Advertising Fund will be administered by the Regional Advertising Committee, which will consist of one representative from each franchisee-owned "Counselor" office outside the Twin Cities, and three representatives of Counselor. The amount of monthly Advertising Fees for the Regional Advertising Group may be increased during the term of the franchise by a majority vote of that Regional Advertising Commit

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 17–21)

Question 51

Does Counselor Realty have to approve an Additional Office if the location meets all the requirements?

Accepted Answer

ve.

You may apply to open one or more additional offices within your designated Territory (an "Additional Office") by submitting a request to Counselor describing the location of such proposed Additional Office as well as any additional information Counselor may require or request, along with a one-time fee of \$750 for each Additional Office location (the "Additional Office Application Materials"). After Counselor's receipt of such Additional Office Application Materials (including the one-time fee), Counselor will have 30 days to review the Additional Office Application Materials and proposed Additional Office location and notify you whether or not Counselor consents to your opening of such Additional Office location. Any Additional Office we consent to must comply with all requirements of the Franchise Agreement and then-current System standards.

Source: Item 12 — TERRITORY (FDD pages 21–23)

Question 52

Does Article 9 of the Counselor Realty franchise agreement place any restrictions on who a franchisee can transfer their franchise to?

Accepted Answer

proximate consequences of our negligence.

# 9. TRANSFER OF FRANCHISE.

- 9.1 Transfer Standards. You agree not to change or allow a change, directly or indirectly, in the ownership or Control of (i) your interest in this Agreement, (ii) the Office, any Additional Office, any Extension Office or Business, (iii) a majority of the assets of the Office, any Additional Office, any Extension Office or Business, or (iv) if Franchisee is an entity, any ownership interest in, or Control of, Franchisee or any direct or indirect owner of Franchisee (each, a "transfer"), without having first tendered to us the right of first refusal to acquire this Agreement, such assets or such interests in accordance with Section 9.6 and, if we do not exercise such right, without our consent and without satisfaction of the conditions stated below. You and your transferee must follow the procedures set forth in Section 9.2, below, and the transferee must sign the then-current form of Counselor Franchise Agreement for the unexpired term, unless the Franchisee is an entity and the transfer is a transfer of an ownership interest in Franchisee or any owner of Franchisee. We will consent to a transfer if the conditions specified in this Agreement in our opinion are satisfied and the transferee in our opinion is qualified to operate the Business in compliance with that Agreement. Notwithstanding anything contained herein to the contrary, Counselor's consent will not be required for, and the right of first refusal set forth in Section 9.6 will not apply to, a transfer described in clause (iv) of the first sentence of this Section 9.1 if (x) such transfer (in a single transaction or series of related transactions) will not result in a change in Control of Franchisee or such direct or indirect owner of Franchisee, (y) you provide Counselor with written notice of such transfer, together with such other information concerning such transfer and transferee as we may require, at least thirty (30) days prior to the consummation of such transfer, and (z) if such transfer is a transfer of an ownership interest in Franchisee, such transferee executes the guaranty attached to this Agreement and delivers such guaranty to Counselor within ten (10) days of such transfer. For purposes of this Article 9, "Control" means, with respect to the applicable person or entity, ownership or control, directly or indirectly, of a majority of the voting ownership of such person or entity or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person or entity, by contract or otherwise.
- 9.2 Other Conditions to Transfer. You must apply for our consent by submitting written notice of the pending transfer, with a complete application, signed by you and by the proposed transferee, and payment of the transfer fee, at least 60 days before the proposed transfer date. The transfer fee is \$2,000 and applies to all transfers (excluding transfers described in, and in accordance with, the second to last sentence of Section 9.1). We may specifically withhold consent if: (i) you do not pay all amounts you owe to Counselor or its affiliates or to your suppliers; (ii) you (or the transferee) do not complete the repair, maintenance or upgrade of the Business' facility, fixtures, equipment, and signage to then-current System standards; or (iii) all shareholders or owners of the transferee do not execute the guaranty of the new Agreement.
- 9.3 Franchisee Death or Disability.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 53

Does the Base Monthly Fee for Counselor Realty increase if the franchisee adds Additional Offices or Extension Offices?

Accepted Answer

**

| (1) Name of Fee | (2) Amount | (3) Due Date | (4) Remarks |
|---|---|---|---|
| Base Monthly Fee | $371 per month | Payable monthly by the 20th day of the month | See Note A |
| Continuing Agent Fee | $32 to $53 per licensed agent operating from or through your Office | Payable monthly by the 20th day of the month | See Note B |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | $175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
| (1) | (2) | (3) | (4) |
| Name of Fee | Amount | Due Date | Remarks |
| Late Charges | Lesser of 8% per year or maximum contract rate of interest allowed by law | Payable when billed | See Note H |
| Insufficient Funds/ Return Fees | Amount of the insufficient funds or return fee charged by Counselor's bank | Payable when billed | See Note I |
| Training Fees | \$175 per hour, plus all travel, living and incidental expenses | Payable when billed | See Note J |
| Legal Fees | As incurred | Payable when billed | See Note K |
Notes to Item 6, above:

- A. You must pay us a Base Monthly Fee of \$371. This fee includes the first 5 licensed agents operating through your Office.
- B. You must pay a monthly Continuing Agent Fee to Counselor based upon the number of licensed agents operating through your Office (including any Additional Offices and Extension Offices) at any time during the month as follows: \$53 per licensed agent for the sixth through 15th licensed agent operating through your Office(s); \$37 per licensed agent for the 16th through 35th licensed agent operating through your Office(s);

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 54

Besides Counselor Realty, to whom else should a prospective franchisee report unauthorized financial performance information?

Accepted Answer

This Franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the Franchisor's management by contacting Gayle Miller, 3200 NW Main Street, Suite 110, Coon Rapids, Minnesota 55448; (612) 405-8404, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–30)

Question 55

Besides the Federal Trade Commission, which other regulatory agencies should a prospective Counselor Realty franchisee report unauthorized financial performance information to?

Accepted Answer

This Franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the Franchisor's management by contacting Gayle Miller, 3200 NW Main Street, Suite 110, Coon Rapids, Minnesota 55448; (612) 405-8404, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–30)

Question 56

Besides Minnesota and Wisconsin, what other types of laws might require registration, filing, or exemption of a Counselor Realty franchise?

Accepted Answer

Other states may require registration, filing, or exemption of a franchise under other laws, such as those that regulate the offer and sale of business opportunities or seller-assisted marketing plans.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 57

Can Counselor Realty change the fees for non-technology related tools and services at any time?

Accepted Answer

Counselor may provide you with or require you to utilize such nontechnology related tools and services relating to the Business as it determines from time to time in its sole discretion. See Item 11. You will be obligated to pay Counselor fees associated with such non-technology related tools and services that Counselor may decide to provide in such amounts, and at such times, as Counselor shall determine from time to time in its sole discretion.

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 58

Can Counselor Realty change the structure of the Continuing Agent Fee during the term of the franchise agreement?

Accepted Answer

You will be obligated to pay Counselor fees associated with such technology related tools and services that Counselor may decide to provide in

such amounts, and at such times, as Counselor shall determine from time to time in its sole discretion. Counselor may provide you with or require you to utilize such nontechnology related tools and services relating to the Business as it determines from time to time in its sole discretion. See Item 11. You will be obligated to pay Counselor fees associated with such non-technology related tools and services that Counselor may decide to provide in such amounts, and at such times, as Counselor shall determine from time to time in its sole discretion.

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 59

Can Counselor Realty change the terms and conditions for a Territory Opportunity after a franchisee expresses interest?

Accepted Answer

- (i) we will provide you with written notice of a Territory Opportunity, and you will have 30 days to advise us in writing that you wish to participate in the Territory Opportunity; 
- (ii) if you do not notify us within such period, then we may pursue such Territory Opportunity and/or grant any other person or entity the right to participate in such Territory Opportunity without any liability to you; and
- (iii) if you timely notify us in writing that you wish to participate in the Territory Opportunity, then we may condition your participation on compliance with such terms and conditions as we consider appropriate to the particular Territory Opportunity, including: (i) execution of such franchise agreement and related agreements as are then generally used by us in connection with the award of the applicable Territory Opportunity; (ii) timely payment of all initial fees and any other fees charged by us or our affiliate in connection with the award or grant of the applicable Territory Opportunity; and (iii) meeting our then-current eligibility requirements applied by us to candidates for such Territory Opportunity.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 60

Does Counselor Realty charge a late fee if it is less than 8% per year?

Accepted Answer

**

| (1) Name of Fee | (2) Amount | (3) Due Date | (4) Remarks |
|---|---|---|---|
| Base Monthly Fee | $371 per month | Payable monthly by the 20th day of the month | See Note A |
| Continuing Agent Fee | $32 to $53 per licen

Source: Item 6 — OTHER FEES (FDD pages 9–13)

Question 61

What is the condition that triggers the requirement to pay the higher Advertising Fee for Counselor Realty?

Accepted Answer

your Office for purposes of this Section 5.3.
- 5.4 Advertising Fees. If your Office (or any Additional Office or Extension Office) is located within the 11-county metropolitan area of the Twin Cities of Minneapolis and St. Paul, Minnesota (including the Counties of Scott, Wright, Isanti, Dakota, Anoka, Hennepin, Washington, Carver, Ramsey, Sherburne and Chisago), you must pay to Counselor an Advertising Fee equal to \$60 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such metropolitan area, as a contribution towards the general costs of marketing activities conducted by Counselor. The amount of this Advertising Fee may be increased during the term of this Agreement by Counselor from time to time in its sole discretion. We reserve the right to establish and organize a "Regional Advertising Group" if your Office (or any Additional Office or Extension Office) is located outside the Twin Cities. If your Office (or any Additional Office or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such geographical area. The amount of your Advertising Fees for the Regional Advertising Group may be increased during the term of this Agreement by a majority vote of the "Regiona

Source: Item 22 — CONTRACTS (FDD page 32)

Question 62

What is the condition that triggers the requirement to pay the lower Advertising Fee for Counselor Realty?

Accepted Answer

. If your Office (or any Additional Office or Extension Office) is located within the 11-county metropolitan area of the Twin Cities of Minneapolis and St. Paul, Minnesota, you must pay Counselor an Advertising Fee equal to \$60 per agent per month for each agent operating out of the Office, Additional Office or Extension Office located in such metropolitan area. The amount of this Advertising Fee may be increased during the term of the franchise by Counselor from time to time in its sole discretion. We reserve the right to establish and organize a "Regional Advertising Group" if your Office (or any Additional Office or Extension Office) is located outside the Twin Cities. If your Office (or any Additional Office or Extension Office) is located outside the Twin Cities, you must be a member of the "Regional Advertising Group" (once established) and pay to the "Regional Advertising Fund" an Advertising Fee equal to \$25 per agent per month for each agent operating out

of the Office, Additional Office or Extension Office located in such geographical area.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 63

What is the consequence of failing to open the Counselor Realty business within the specified timeframe after site approval?

Accepted Answer

After we consent to an Office site you propose (if at all), you must open your Business at that site within six months. If you fail to do so, this Agreement will automatically terminate and your Initial Franchise Fee will not be refunded. We may, in our sole discretion, grant extensions of the deadlines described above. Our consent to a site is not a guarantee or assurance as to the availability, suitability or prospects of an Office or Business.

Source: Item 22 — CONTRACTS (FDD page 32)

Question 64

What is the consequence if Counselor Realty does not deliver the Franchise Disclosure Document on time?

Accepted Answer

IF COUNSELOR DOES NOT DELIVER THIS DISCLOSURE DOCUMENT ON TIME OR IF IT CONTAINS A FALSE OR MISLEADING STATEMENT, OR A MATERIAL OMISSION, A VIOLATION OF FEDERAL AND STATE LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE COMMISSION, WASHINGTON, D.C. 20580 AND THE WISCONSIN COMMISSIONER OF SECURITIES, 345 WEST WASHINGTON AVENUE, 4TH FLOOR, MADISON, WISCONSIN 53703

Source: Item 22 — CONTRACTS (FDD page 32)

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