Which items in the Counselor Realty Disclosure Document relate to franchisee fees?

subsidiary of Counselor Holding, Inc.

The franchise agreement includes the following:

• The Company agrees to grant franchisees the use of its Systems and Marks to operate a real estate brokerage business.
• The franchisee agrees to pay an initial fee, monthly franchise fees and metro advertising fees when applicable.
• The Company agrees to provide an initial training program and may offer additional training programs from time to time.

There were no new franchises sold in 2024, 2023, or 2022. There were no franchise renewals in 2024, 2023 or 2022. No franchise renewal fees are required. There were five franchised outlets as of December 31, 2024 and 2023. There were seven franchise outlets as of December 31, 2022. One franchise agreement expired in March 2023 and was not renewed. One franchise agreement expired in December 2022 and was not renewed. Initial franchise fees are typically $7,500 to $15,000 per franchise, as determined by the population of the franchise territory. The franchisee agrees to pay a base monthly fee covering up to five licensed agents and additional monthly fees per licensed agent above five operating from or through their office. The monthly franchise fee revenue was $57,634, $63,751 and $73,235 for the years ended December 31, 2024, 2023 and 2022, respectively. If the franchisee is located within the 11-county metropolitan area of the Twin Cities, there is a monthly metro advertising fee per licensed agent. The agreement term is five years beginning on the date the office opens.

Cash

The Company maintains its cash in financial institutions. The balance, at times, may exceed federally insured limits.

Certificate of Deposit

The Company has two certificates of deposit with an original maturity date of greater than three months from the date they were acquired, hence they are not considered cash equivalents.

Notes to Financial Statements December 31, 2024, 2023 and 2022

Accounts Receivable

The Company recognizes an allowance for credit losses for trade and other receivables to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the life of the asset which includes consideration of past events and historical loss experience, current events and also future events based on our expectation as of the balance sheet date. Receivables are written off when the Company determines that such receivables are deemed uncollectible. The Company pools its receivables based on similar risk characteristics in estimating its expected credit losses. In situations where a receivable does not share the same risk characteristics with other receivables, the Company measures those receivables individually. The Company also continuously evaluates such pooling decisions and adjusts as needed from period to period as risk characteristics change.

The Company utilizes the aging method in determining its lifetime expected credit losses on its receivables. This method is used for calculating an estimate of losses based primarily on the Company's historical loss experience. In determining its loss rates, the Company evaluates information related to its historical losses, adjusted for current conditions and further adjusted for the period of time that can be reasonably forecasted. Qualitative and quantitative adjustments related to current conditions and the reasonable and supportable forecast period consider all the following: past due receivables, the customer creditworthiness, changes in the terms of receivables, effect of other external forces such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing receivables.

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 16–17)