Hear_Again_America 2025 Franchise FAQ - FDD Ninja

Question 1

In the context of Hear Again America, what does 'Net Sales' include?

Accepted Answer

- 3. "Net Sales" means the total revenues and receipts from the sale of all products and services, less returns, allowances, discounts, cancellations, and sales tax.
- 4. "Cost of Goods Sold" or "COGS" includes the purchase of supplies used in the sales of goods and performance of services to customers. COGS does not include labor costs attributable to the product or service sales, which are included in payroll expenses.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 49–51)

Question 2

For Hear Again America, what is excluded from the calculation of 'Net Sales'?

Accepted Answer

- 3. "Net Sales" means the total revenues and receipts from the sale of all products and services, less returns, allowances, discounts, cancellations, and sales tax.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 49–51)

Question 3

Do Company-Owned Outlets contribute to the Hear Again America Brand Fund?

Accepted Answer

Company-Owned Outlets will not contribute to the Brand Fund. In the 2024 fiscal year, we did not collect any Brand Fund Contributions.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)

Question 4

Is Hear Again America considered a fiduciary with respect to Brand Fund Contributions?

Accepted Answer

In no event will we be deemed a fiduciary with respect to any Brand Fund Contributions we receive or administer. We are not required to have an independent audit of the Brand Fund completed. We will prepare an unaudited statement of contributions and expenditures for the Brand Fund and make it available within 60 days after the close of our fiscal year to franchisees who make a written request for a copy.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)

Question 5

When can construction begin for a Hear Again America franchise?

Accepted Answer

You may not begin construction until we have given you written approval of the plans and we or the Project Manager has approved in writing your choice of general contractor.

We may require you to use only general contractors that we have pre-approved, provided that one is available in your Site Selection Area. (Franchise Agreement - Sections 4.5(c)).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)

Question 6

What ethical requirements are the auditors of Hear Again America required to meet, according to the Basis for Opinion?

Accepted Answer

*Basis for Opinion*

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Hear Again Franchising, LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)

Question 7

What is the royalty fee percentage of net sales that Hear Again America franchisees would pay, according to this financial performance representation?

Accepted Answer

(displayed in Tables 2 and 3). **Table 1: Aggregated Sales and Certain Expenses for Full-Time Company-Owned Outlets¹** | Full-Time Company-Owned Outlets | | |---|---| | | 16 Company- Owned Outlets | | Net Sales5 | $8,534,312 | | | | | COGS6 | $1,858,215 | | | | | Gross Profit7 | $6,676,098 | | Operating Expenses | | | Rent | $643,653 | | Payroll | $2,364,542 | | Advertising and Marketing | $867,522 | | Other Operating Expenses | $361,338 | | Franchise Fee Adjustments | | | Royalty Fee – 5% Net Sales | $426,716 | | Technology Fee | $96,000 | | | | | EBITDA (if franchised)8 | $1,820,327 | | Adjusted Margin9 | 21% |**Table 2: Aggregated Sales and Certain Expenses for Part-Time Company-Owned Outlets¹** | Part-Time Company-Owned Outlets | | |---|---| | | FY 20234 | | Net Sales5 | $2,244,657 | | | | | COGS6 | $410,373 | | | | | Gross Profit7 | $1,834,284 | | Operating Expenses | | | Rent | $275,308 | | Payroll | $715,445 | | Advertising and Marketing | $468,623 | | Other Operating Expenses | $117,118 | | Franchise Fee Adjustments | | | Royalty Fee Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 49–51)

Question 8

As stated in the audit report, what is the auditor's opinion regarding the presentation of Hear Again America's financial statements?

Accepted Answer

### **Independent Auditors' Report**

To the Board of Directors and Members Hear Again Franchising, LLC

#### **Report on the Audit of the Financial Statements**

# *Opinion*

We have audited the accompanying financial statements of Hear Again Franchising, LLC., which comprise the balance sheet as of December 31, 2024, and the related statements of operation and stockholder's equity, and cash flows for the years then ended, 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 Hear Again Franchising, LLC as of December 31, 2024, and the results of its operations and its cashflow for the years then ended in accordance with accounting principles generally accepted in the United States of America.

#### *Basis for Opinion*

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Hear Again Franchising, LLC and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)

Question 9

What was the total income from franchise fees for Hear Again America?

Accepted Answer

ing notes are an integral part of these financial statements.

# **HEAR AGAIN FRANCHISING, LLC. STATEMENT OF INCOME AND CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2024**

| Royalty                                 | \$ 19,796    |
|-----------------------------------------|-----------------|
| Franchise Fees                          | 22,100          |
| Other revenue                           | 22,688          |
| Total income                            | 64,584          |
| Expenses                                |                 |
| Operating expense                       | 434,813         |
| Total Operating Expenses                | 434,813         |
| NET LOSS                                | (370,229)       |
| Owners | (220,300) |
| Equity – |  |
| Beginning of Year |  |
| Contributions                           | 29,062

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)

Question 10

Under the Hear Again America Guaranty, is the liability of the undersigned direct and immediate?

Accepted Answer

The undersigned consents and agrees that:

- the undersigned's direct and immediate liability under this Guaranty shall be joint and several with all signatories to this and similar guaranties of Franchisee's obligations;
- the undersigned shall render any payment or performance required under the Franchise Agreement upon demand if Franchisee fails or refuses punctually to do so;
- this Guaranty shall apply to any claims Franchisor may have due to return of any payments or property Franchisor may have received from Franchisee as a preference, fraudulent transfer or conveyance or the like in any legal proceeding;
- such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Franchisee or any other person; and
- such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Franchisor may from time to time grant to Franchisee or any other person, including without limitation, the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which in any way modify or amend this Guaranty, which shall be continuing and irrevocable during and after the terms of the Franchise Documents,

as the same may be amended or renewed, until Franchisee's duties and obligations to Franchisor are fully discharged and satisfied.

Source: Item 22 — CONTRACTS (FDD page 54)

Question 11

Can Hear Again America use the Brand Fund for marketing franchises?

Accepted Answer

We will not use the Brand Fund for anything whose sole purpose is the marketing of franchises; however, the Hear Again America website, public relations activities, community involvement activities, and other activities supported by the Brand Fund may contain information about franchising opportunities.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)

Question 12

How many Hear Again America outlets were opened in Maryland during 2023?

Accepted Answer

2022 to 2024

|  |  | Outlets at |  | Reacquired |  |  |  |
|---|---|---|---|---|---|---|---|
|  |  |  | Outlets |  | Outlet | Outlets Sold | Outlets at |
| State | Year | Start of Year | Opened | by Franchisor | Closed | to Franchisees | End of Year |
|  |  |  |  |  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 51–53)

Question 13

What were the net sales for the 16 full-time company-owned Hear Again America outlets?

Accepted Answer

| Full-Time Company-Owned Outlets |  |
|---|---|
|  | 16 Company- Owned Outlets |
| Net Sales5 | $8,534,312 |
|  |  |
| COGS6 | $1,858,215 |
|  |  |
| Gross Profit7 | $6,676,098 |
| Operating Expenses |  |
| Rent | $643,653 |
| Payroll | $2,364,542 |
| Advertising and Marketing | $867,522 |
| Other Operating Expenses | $361,338 |
| Franchise Fee Adjustments |  |
| Royalty Fee – 5% Net Sales | $426,716 |
| Technology Fee | $96,000 |
|  |  |
| EBITDA (if franchised)8 | $1,820,327 |
| Adjusted Margin9 | 21% |

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATION (FDD pages 49–51)

Question 14

In which states does Hear Again America project zero new franchised outlets to be opened in the next fiscal year?

Accepted Answer

|  |  | Projected New Franchised | Projected New Company |
|---|---|---|---|
|  | Franchise Agreements |  |  |
| State | Signed but not Opened | Outlets to be Open in the Next Fiscal Year | Owned Outlets to be Opened in the Next Fiscal Year |
|  |  |  |  |
| Arizona | 0 | 1 | 0 |
| Colorado | 1 | 1 | 0 |
| Florida | 2 | 2 | 3 |
| Georgia | 0 | 2 | 0 |
| Indiana | 2 | 2 | 0 |
| North Carolina | 1 | 0 | 0 |
| New Jersey | 1 | 1 | 0 |
| South Carolina | 0 | 2 | 0 |
| Texas | 1 | 0 | 0 |
| Totals | 8 | 11 | 3 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 51–53)

Hear_Again_America 2025 FDD FAQ