Mr_Sandless 2025 Franchise FAQ - FDD Ninja

Question 1

What was the total number of Mr. Sandless franchise transfers in the USA during 2022?

Accepted Answer

|  | State | Year | Number of Transfers |
|---|---|---|---|
| USA |  |  |  |
| Colorado | 2022 2023 2024 | 1 1 0 |  |
| Illinois | 2022 2023 2024 | 1 0 0 |  |
| Massachusetts | 2022 2023 2024 | 1 0 0 |  |
| Michigan | 2022 2023 2024 | 0 2 0 |  |
| New York | 2022 2023 2024 | 0 1 0 |  |
| North Carolina | 2022 2023 2024 | 0 4 0 |  |
| Texas | 2022 2023 2024 | 0 0 3 |  |
| USA Total | 2022 2023 2024 | 3 7 3 |  |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–41)

Question 2

What was the total number of Mr. Sandless outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 155 | 164 | 9 |
|  | 2023 | 164 | 189 | 25 |
|  | 2024 | 189 | 198 | 9 |
| Affiliate-Owned | 2022 | 9 | 9 | 0 |
|  | 2023 | 9 | 0 | -9 |
|  | 2024 | 0 | 0 | 0 |
| Grand Total | 2022 | 164 | 173 | 9 |
|  | 2023 | 172 | 189 | 16 |
|  | 2024 | 189 | 198 | 9 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–41)

Question 3

What is the total number of Mr. Sandless units across all locations?

Accepted Answer

#### Wisconsin

Mr. Sandless of Northeast WI

Kent Zaretzke 241 4th St. Neenah, Wisconsin 54956 (920) 558-9663 Year Opened: 2012

Total Units Owned = 2

Mr. Sandless Madison La Crosse

Steve Anderson 3114 So. Pleasant Dr Holmen, Wisconsin 54636 (608) 519-2442

Year Opened: 2008 Total Units Owned = 3

#### Total Units = 187

#### **Franchise Agreements Signed but Outlet Not Open as of December 31, 2024**

#### **Former Franchisees**

Franchisees that had an outlet terminated, canceled, 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 with the franchisor within the 10 weeks preceding the Issuance Date of this Disclosure Document:

Source: Item 23 — RECEIPTS (FDD pages 42–167)

Question 4

What is the total projected number of new franchised Mr. Sandless outlets planned for the next fiscal year across all states listed?

Accepted Answer

| State | Franchise Agreements Signed but Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---|---|---|---|
| CA | 0 | 4 | 0 |
| FL | 0 | 1 | 0 |
| KC | 0 | 2 | 0 |
| KY | 0 | 1 | 0 |
| NC | 0 | 3 | 0 |
| NE | 0 | 2 | 0 |
| NY | 0 | 2 | 0 |
| OH | 0 | 3 | 0 |
| OR | 0 | 2 | 0 |
| PA | 0 | 1 | 0 |
| SC | 0 | 3 | 0 |
| SD | 0 | 1 | 0 |
| TX | 0 | 3 | 0 |
| VA | 0 | 2 | 0 |
| WA | 0 | 1 | 0 |
| DC | 0 | 1 | 0 |
| Total | 0 | 32 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–41)

Question 5

Besides the Franchisee's Designated Territory, what other geographic areas are considered when determining territory restrictions for a Mr. Sandless franchise?

Accepted Answer

You may not offer or sell any products or services offered by the Business to customers located outside of the Designated Territory. However, you may offer or sell products or services to customers located outside of and adjacent to your Designated Territory if the customer is located in an area that is not serviced by another System franchisee, and you have received prior written approval from us, which approval may be granted or denied at our sole discretion.

with the Franchise and for a continuous uninterrupted period commencing upon the cessation or termination

of my position with Franchisee, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for myself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, own, maintain, operate, engage in, act as a consultant for, perform services for, or have any interest in any business offering wood floor refinishing, wood free care, wood floor cleaning, and floor maintenance, outdoor wood refinishing, wood care, wood cleaning, wood maintenance, concrete cleaning and sealing, and other forms of outdoor refinishing, cleaning and maintenance, or any selling any product or products which are the same as, or substantially similar to, any of the products or services offered by a Mr. Sandless Business, except at a Mr. Sandless Business, which is or is intended to be, located within:

- 7.1 the Franchisee's Designated Territory as defined in the Franchise Agreement;
- 7.2 Fifty (50) miles of Franchisee's Designated Territory; or
- 7.3 Fifty (50) miles of any Business operating under the System and the Proprietary Marks.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 6

Besides sanding, what other types of services do Mr. Sandless competitors offer?

Accepted Answer

You will compete with businesses, including national, regional and local businesses, offering services similar to those offered by your Mr. Sandless. The Business may be seasonal and if you live in a colder climate, you may experience fewer sales in the winter months.

The general market for the services you will offer is well-developed and competitive. Competitors include local contractors who offer full sanding, light sanding, or "dustless" sanding, and other types of sandless refinishing and local contractors who offer various types of wood refinishing services, as well as general and painting contractors who also offer these services.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 7

How does the initial franchise fee for Mr. Sandless (Item 5) compare to the other fees listed in Item 6?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of approximately 500,000 population.

The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable.

#### **Pre-Opening Purchases**

Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is \$10,000. Payment for this purchase is not refundable.

Question 8

How does the Mr. Sandless initial franchise fee (Item 5) compare to the ongoing fees listed in Item 6?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of appro

Question 9

How does the Mr. Sandless initial franchise fee (Item 5) compare to the potential for building a legacy business within the designated territory (Item 12)?

Accepted Answer

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as $15,000 for the first territory of approximately 200,000 population and $5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is $15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is $30,000 for a 4-territory purchase of approximately 500,000 population.

The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable.

Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is $10,000. Payment for this purchase is not refundable.

The Franchise Agreement grants you the right to operate your Business only within the designated territory containing a population of approximately 200,000 and identified in Attachment 2 to the Franchise Agreement (the "Designated Territory"). The Designated Territory will be described by contiguous zip codes or depicted on a map. We obtain the population count through the United States Census bureau. If you meet our qualifications, you may purchase up to 3 additional territories under the Franchise Agreement. Each additional territory will have an estimated population of 100,000. If you purchase multiple territories, you will have multiple Designated Territories. The maximum population under an one Franchise Agreement is approximately 500,000. You may not solicit or perform work outside of your Designated Territory(ies) unless you have received our prior written permission, and only if the customer is located in an area that is not serviced by another System franchisee. You may not relocate your Business without our prior written consent, and we have the right to require that your relocated site be within your Designated Territory(ies). You may not establish additional offices within your Designated Territory(ies) without our express written consent, which will not be unreasonably withheld.

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

To keep your rights to your Designated Territory(ies), you must comply with the terms of the Franchise Agreement and satisfy the performance criteria described in Section 2.1.2 of the Franchise Agreement. For a Mr. Sandless Business, beginning six months after the Grand Opening of your Business, you must consistently perform eight floor jobs per month. Your rights to the Designated Territory(ies), and your Franchise Agreement, may be terminated if you do not achieve the performance criteria or if you otherwise breach the terms of the Franchise Agreement.

If you are in compliance with your Franchise Agreement, we will not establish and operate or license anyone else to establish or operate another Business under the Mr. Sandless trademarks within your Designated Territory(ies). We retain the right to establish, or to grant to others the right to establish, Businesses under the the Mr. Sandless trademarks outside of your Designated Territory(ies) and on any terms that we deem advisable. We will not offer you a right of first refusal to purchase from us other business opportunities we offer under other brands and trademarks, and we have the right to sell business opportunities under other brands and trademarks, to others in your Designated Territory(ies).

We also have the right to distribute products (including proprietary products) using the Proprietary Marks or using other marks or private labeling both inside and outside your Designated Territory(ies) in the manner and through alternative channels of distribution as we determine in our sole discretion, and without compensation to you.

The initial term of this franchise shall begin on the Effective Date set forth on the Data Sheet by us and shall expire at midnight on the tenth (10th) anniversary of the Effective Date.

At the end of the initial term, you have the right to enter into a new franchise agreement and other agreements and legal instruments and documents customarily employed by us and in the form then generally being offered to prospective franchisees in the state in which your Business is located (the "Successor Franchise Agreement"), if you meet the following conditions:

Question 10

How does the Mr. Sandless initial franchise fee (Item 5) compare to the potential for generating passive income within the designated territory (Item 12)?

Accepted Answer

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as $15,000 for the first territory of approximately 200,000 population and $5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is $15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is $30,000 for a 4-territory purchase of approximately 500,000 population.

Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is $10,000. Payment for this purchase is not refundable.

The Franchise Agreement grants you the right to operate your Business only within the designated territory containing a population of approximately 200,000 and identified in Attachment 2 to the Franchise Agreement (the "Designated Territory"). The Designated Territory will be described by contiguous zip codes or depicted on a map. We obtain the population count through the United States Census bureau. If you meet our qualifications, you may purchase up to 3 additional territories under the Franchise Agreement. Each additional territory will have an estimated population of 100,000. If you purchase multiple territories, you will have multiple Designated Territories. The maximum population under an one Franchise Agreement is approximately 500,000. You may not solicit or perform work outside of your Designated Territory(ies) unless you have received our prior written permission, and only if the customer is located in an area that is not serviced by another System franchisee. You may not relocate your Business without our prior written consent, and we have the right to require that your relocated site be within your Designated Territory(ies). You may not establish additional offices within your Designated Territory(ies) without our express written consent, which will not be unreasonably withheld.

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

To keep your rights to your Designated Territory(ies), you must comply with the terms of the Franchise Agreement and satisfy the performance criteria described in Section 2.1.2 of the Franchise Agreement. For a Mr. Sandless Business, beginning six months after the Grand Opening of your Business, you must consistently perform eight floor jobs per month. Your rights to the Designated Territory(ies), and your Franchise Agreement, may be terminated if you do not achieve the performance criteria or if you otherwise breach the terms of the Franchise Agreement.

The Bottom Tier (42 locations) reported median monthly earnings were $4,756 or $57,072 gross earnings for the year. The reported average monthly income was $4,787 or $57,444 gross earnings for the year. Twenty (or 48%) surpassed the average and twenty-two under the average. The top reported earnings in this tier were $102,152 with forty-one locations reporting under that amount, and the lowest reported earnings was $7,172 with forty-one locations reporting over that amount.

Twenty-three of the forty-two Bottom Tier locations reporting operated under a single unit, reporting a median monthly earnings of $4,410 or $52,920 gross earnings for the year. Single unit locations in this tier reported average monthly income was $4,404 or $52,848 gross earnings for the year. Eleven (or 48%) surpassed the average and fourteen under the average. The top reported earnings of the single territory locations were $99,826 with twenty-two reporting under that, and the lowest reported earnings was $7,121 with twenty-two reporting higher than that.

Mr. Sandless Average Customer Price: $2,399 (calculated as total earning $13,244,783 divided by total number of jobs 5521)

Question 11

How does the Mr. Sandless initial franchise fee (Item 5) compare to the potential long-term earnings within the designated territory (Item 12)?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of approximately 500,000 population.

The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable.

#### **Pre-Opening Purchases**

Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is \$10,000. Payment for this purchase is not refundable.

There are no other payments to or purchases from us or any affiliate that you must make before your Business opens.

#### **ITEM 6 OTHER FEES**

| Type of Fee                                                               | Amount                                                                                                          | Due Date                                                                                                                                                  | Remarks                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Royalty Fee – Mr. Sandless Business | 6% of Gross Sales or \$600, whichever is greater | No Royalty Fee for the first 3 months after opening, transfers not included. Then monthly, not later than the 15th day of each month | Royalties are payable on your Gross Sales for the previous calendar month. If the 15th day of any month is not a business day, then payment is due on the next business day. See Note 1.

Question 12

How does the Mr. Sandless initial franchise fee (Item 5) compare to the potential revenue generated within the designated territory (Item 12)?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of approximately 500,000 population.

The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable.

#### **Pre-Opening Purchases**

Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is \$10,000. Payment for this purchase is not refundable.

Question 13

How does the Mr. Sandless initial franchise fee (Item 5) compare to the total estimated initial investment (Item 7)?

Accepted Answer

#### YOUR ESTIMATED INITIAL INVESTMENT

| Type of expenditure                       | Amount   |          | Method of Payment | When due                                  | To Whom Payment Is To Be Made |
|-------------------------------------------|----------|----------|----------------------|-------------------------------------------|-------------------------------------|
| Initial Franchise | \$15,000 | \$24,000 | Lump sum | Upon execution of the Franchise Agreeme

Question 14

How does the initial franchise fee for Mr. Sandless (Item 5) relate to the estimated initial investment range (Item 7)?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT] | Type of expenditure | Amount | | Method of Payment | When due | To Whom Payment Is To Be Made | |-------------------------------------------|----------|----------|----------------------|-------------------------------------------|-------------------------------------| | Initial Franchise | $15,000 | $24,000 | Lump sum | Upon execution of the Franchise Agreement | Us | | Fee ¹ | | | | | | | Grand Opening | $1,500 | $1,500 | As negotiated | First month of operation | Suppliers | | Advertising ² | | | | | | Note 1 – Initial Franchise Fee. The initial franchise fee is discussed in detail in Item 5. [Item 5: INITIAL FEES] # **ITEM 5 INITIAL FEES** #### **Initial Franchise Fee** You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as $15,000 for the first territory of approximately 200,000 population and $5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is $15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is $30,000 for a 4-territory purchase of approximately 500,000 population. The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable.

Question 15

What kind of sanding services do Mr. Sandless competitors offer?

Accepted Answer

The general market for the services you will offer is well-developed and competitive. Competitors include local contractors who offer full sanding, light sanding, or "dustless" sanding, and other types of sandless refinishing and local contractors who offer various types of wood refinishing services, as well as general and painting contractors who also offer these services.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 16

What is the minimum initial investment for a Mr. Sandless franchise (Item 7) and how does it relate to the initial franchise fee (Item 5)?

Accepted Answer

[Item 5: INITIAL FEES] # **ITEM 5 INITIAL FEES** #### **Initial Franchise Fee** You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as $15,000 for the first territory of approximately 200,000 population and $5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is $15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is $30,000 for a 4-territory purchase of approximately 500,000 population. The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon payment and is nonrefundable. #### **Pre-Opening Purchases** Before your Mr. Sandless Business opens, you must purchase from us our Franchise Starter Kit. The Franchise Starter Kit includes: One of our specialized floor machines, all the hard equipment you will use in the system, enough liquids to cover your opening month including 70 gallons of solutions for real wood to concrete and everything in between, six Mr. Sandless uniform shirts in your choice of large, extra-large or double X, two vehicle magnets, one hundred sales cards, one hundred business cards, one hundred aftercare packs, one hundred door knob hangers, two road signs, and includes shipping of the Franchise Starter Kit to your door. The total cost of the Kit including shipping is $10,000. Payment for this purchase is not refundable. There are no other payments to or purchases from us or any affiliate that you must make before your Business opens. [Item 7: ESTIMATED INITIAL INVESTMENT] --- In general, none of the expenses listed in the above chart are refundable, except any security deposits you must make may be refundable. Note 1 – Initial Franchise Fee. The initial franchise fee is discussed in detail in Item 5. Note 2 – Grand Opening Advertising. During the 7 days immediately before the scheduled grand opening of your Business and through the first month of operation, you must expend at least $1,500 on grand opening advertising and promotion within your territory. Your grand opening advertising program must be approved by us in advance.

Question 17

What is the relationship between the Mr. Sandless initial franchise fee (Item 5) and the territory size (Item 12)?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of appro

Question 18

How does Mr. Sandless's territory definition in Item 12 relate to the initial franchise fee structure in Item 5?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of appro

Question 19

How does the Mr. Sandless territory size (Item 12) relate to the initial franchise fee structure (Item 5) for multiple territories?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of appro

Question 20

What is the total cost of opening a Mr. Sandless franchise, considering the initial franchise fee (Item 5) and the estimated initial investment (Item 7)?

Accepted Answer

#### YOUR ESTIMATED INITIAL INVESTMENT | Type of expenditure | Amount | | Method of Payment | When due | To Whom Payment Is To Be Made | |-------------------------------------------|----------|----------|----------------------|-------------------------------------------|-------------------------------------| | Initial Franchise | \$15,000 | \$24,000 | Lump sum | Upon execution of the Franchise Agreement | Us | | Fee ¹ | | | | | | | Grand Opening | \$1,500 | \$1,500 | As negotiated | First month of operation | Suppliers

Question 21

What is the total estimated initial investment for a Mr. Sandless franchise (Item 7), considering the initial franchise fee (Item 5)?

Accepted Answer

#### YOUR ESTIMATED INITIAL INVESTMENT | Type of expenditure | Amount | | Method of Payment | When due | To Whom Payment Is To Be Made | |-------------------------------------------|----------|----------|----------------------|-------------------------------------------|-------------------------------------| | Initial Franchise | \$15,000 | \$24,000 | Lump sum | Upon execution of the Franchise Agreement | Us | | Fee ¹ | | | | | | | Grand Opening | \$1,500 | \$1,500 | As negotiated | First month of operation | Suppliers

Question 22

What types of businesses will a Mr. Sandless franchise compete with?

Accepted Answer

You will be offering products and services to primarily homeowners, business owners, apartment managers, property managers, and retail stores. You will compete with businesses, including national, regional and local businesses, offering services similar to those offered by your Mr. Sandless. The Business may be seasonal and if you live in a colder climate, you may experience fewer sales in the winter months.

The general market for the services you will offer is well-developed and competitive. Competitors include local contractors who offer full sanding, light sanding, or "dustless" sanding, and other types of sandless refinishing and local contractors who offer various types of wood refinishing services, as well as general and painting contractors who also offer these services.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 23

When is the initial franchise fee due for a Mr. Sandless franchise, and is it refundable?

Accepted Answer

### **Initial Franchise Fee**

You will pay us an Initial Franchise Fee when you sign the Franchise Agreement. The amount of the Initial Franchise Fee will depend on the number of territories you purchase and is calculated as \$15,000 for the first territory of approximately 200,000 population and \$5,000 for each additional territory of approximately 100,000 population. The minimum initial franchise fee is \$15,000 for a single territory purchase of approximately 200,000 population. The maximum initial franchise fee is \$30,000 for a 4-territory purchase of approximately 500,000 population.

The initial franchise fee is due in a lump sum at the time the Franchise Agreement is signed, is deemed fully earned upon p

Source: Item 5 — INITIAL FEES (FDD page 9)

Question 24

According to the Mr. Sandless franchise agreement, what happens if all partners, shareholders, members, and managers do not execute the Guaranty Agreement concurrently?

Accepted Answer

You acknowledge that all partners in a limited partnership, shareholders in a corporate franchisee, or members and managers in a limited liability company franchisee are obligated to execute a Guaranty
Agreement whereunder each agrees to personally abide by all of the terms and conditions of this Agreement, and guarantees to us your performance of this Agreement and your financial obligations. Unless all such partners, shareholders, or members and managers execute such Guaranty Agreement concurrently herewith, this Agreement shall, at our option, become null and void and confer no rights upon you nor any partner, shareholder, member or manager. All guarantors shall be jointly and severally liable for the performance of all of the terms, covenants and conditions hereof.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 25

What action should a Mr. Sandless franchisee take if they have knowledge of representations contrary to the Franchise Agreement?

Accepted Answer

Acknowledgement of the truthfulness of the statements below are an inducement for the Franchisor to enter into a Franchise Agreement. Notify Franchisor immediately, prior to acknowledgment, if any statement below is incomplete or incorrect.

Source: Item 23 — RECEIPTS (FDD pages 42–167)

Question 26

Does Mr. Sandless approve the site for the business, and under what condition?

Accepted Answer

We anticipate that you will use your home as a base of operation for your Business. However, if you choose to maintain a commercial office space, you must maintain your office at a location approved by us. Our criteria for approval are that the site must not be too large or costly for your needs. We have the right to review, evaluate and approve proposed leases for any commercial office space before execution. You must deliver to us an executed copy of the lease within 15 calendar days after it is signed.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)

Question 27

Is attendance at the initial Mr. Sandless training program a condition for managerial employment?

Accepted Answer

The instructional material we use in the training program is our Operations Manual. We may require you or your employees to attend further training programs if we determine that this is necessary. (Franchise Agreement, Section 4.2). We also have the right to require any subsequent or additional Designated Managers or Technical Managers to attend the initial training program as a condition for managerial employment. (Franchise Agreement, Section 4.1). You must pay for all personal expenses incurred by you and your employees during training.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)

Question 28

Is the Mr. Sandless business affected by seasonal changes?

Accepted Answer

The Business may be seasonal and if you live in a colder climate, you may experience fewer sales in the winter months.

Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–8)

Question 29

Is the choice of forum for Mr. Sandless franchise disputes subject to state law?

Accepted Answer

| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |

The following amends Item 17 and is required to be included within the Disclosure Document and shall be deemed to supersede the language in the Disclosure Document itself:

Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that:

"A provision in a franchise agreement restricting jurisdiction or venue to a forum outside of this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

- 4. Under Indiana Code 23-2-2.7-1 (10), jurisdiction and venue must be in Indiana if the franchisee so requests. This amends Article 24 of the Franchise Agreement.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 30

Is the choice of law for the Mr. Sandless Franchise Agreement subject to state law?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 31

For Mr. Sandless, what is the condition that determines whether 24 months or the remaining months in the agreement are used to calculate liquidated damages?

Accepted Answer

Upon breach, early termination or upon termination of this Agreement according to its terms and conditions, you agree to pay to us within fifteen (15) days after the effective date of this Agreement's termination, in addition to reasonable attorney's fees and the amounts owed hereunder, liquidated damages equal to the average monthly Royalty Fees you paid during the twelve (12) months of operation preceding the effective date of termination multiplied by (a) twenty-four (24) (being the number of months in two (2) full years), or (b) the number of months remaining in the Agreement had it not been terminated, whichever is higher.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 32

What conditions must a Mr. Sandless franchisee meet to get franchisor approval for a transfer?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|---|
| l. | Franchisor approval of transfer by franchisee | 21.3 | You may not transfer any of your rights or obligations under the Franchise Agreement without having first received our written approval. |
| m. | Conditions for franchisor approval of transfer | 21.3 | Conditions include: you must have met all of your monetary and non-monetary obligations to us and our affiliates; buyer qualifies; buyer upgrades the Business to conform with our then-current requirements; you provide us with a copy of the signed agreement of sale; the buyer satisfactorily completes all required training; you provide the buyer with required documents related to your Business; you sign release; buyer signs Franchise Agreement and required guaranties; payment to us of the required transfer fee; buyer obtains required permits and licenses; transfer is made in compliance with all applicable laws; purchase price and terms are not overly burdensome on the buyer; we have provided the buyer with our then-current disclosure document |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 33

What are the conditions for Mr. Sandless franchisor approval of a transfer by a franchisee?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|---|
| l. | Franchisor approval of transfer by franchisee | 21.3 | You may not transfer any of your rights or obligations under the Franchise Agreement without having first received our written approval. |
| m. | Conditions for franchisor approval of transfer | 21.3 | Conditions include: you must have met all of your monetary and non-monetary obligations to us and our affiliates; buyer qualifies; buyer upgrades the Business to conform with our then-current requirements; you provide us with a copy of the signed agreement of sale; the buyer satisfactorily completes all required training; you provide the buyer with required documents related to your Business; you sign release; buyer signs Franchise Agreement and required guaranties; payment to us of the required transfer fee; buyer obtains required permits and licenses; transfer is made in compliance with all applicable laws; purchase price and terms are not overly burdensome on the buyer; we have provided the buyer with our then-current disclosure document |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 34

What is the criteria for a Mr. Sandless franchisee's survey results to fall below System established minimum standards?

Accepted Answer

- 13.5.2 We may periodically assist franchises to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys").

The cost of such programs will be borne by the Advertising Fund.

The cost of these programs may be charged directly to you if your results of a Survey fall below System established minimum standards for such Surveys.

Any such fees charged will be contributed to the Advertising Fund.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 35

What is the dependency between Article 21 and the termination conditions for a Mr. Sandless franchise?

Accepted Answer

#### **22.6 Our Right to Discontinue Services to You**

If you are in breach of any obligation under this Agreement, and we deliver to you a notice of termination pursuant to this Article 22, we have the right to suspend our performance of any of our obligations under this Agreement including, without limitation, the sale or supply of any services or products for which we are an approved supplier to you and/or suspension of your web page on our Website, until such time as you correct the breach.

#### **22.7 Amendment Pursuant to Applicable Law**

Notwithstanding anything to the contrary contained in this Article, if any valid, applicable law or regulation of a competent governmental authority having jurisdiction over this franchise and the parties hereto shall limit our rights of termination under this Agreement or shall require longer notice periods than those set forth above, this Agreement is deemed amended to satisfy the minimum notice periods or restrictions upon such termination required by such laws and regulations; provided, however, that such constructive amendment shall not be deemed a concession by us that the grounds for termination set forth in this Agreement do not constitute "good cause" for termination within the meaning ascribed to that term

by any applicable law or regulation. We shall not be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or proceeding relating to this Agreement or the termination of this Agreement.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 36

What is the dependency between Article 7 and the termination conditions for a Mr. Sandless franchise?

Accepted Answer

with the Franchise and for a continuous uninterrupted period commencing upon the cessation or termination

of my position with Franchisee, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for myself, or through, on behalf of, or in conjunction with any person, persons, partnership, or corporation, own, maintain, operate, engage in, act as a consultant for, perform services for, or have any interest in any business offering wood floor refinishing, wood free care, wood floor cleaning, and floor maintenance, outdoor wood refinishing, wood care, wood cleaning, wood maintenance, concrete cleaning and sealing, and other forms of outdoor refinishing, cleaning and maintenance, or any selling any product or products which are the same as, or substantially similar to, any of the products or services offered by a Mr. Sandless Business, except at a Mr. Sandless Business, which is or is intended to be, located within:

- 7.1 the Franchisee's Designated Territory as defined in the Franchise Agreement;
- 7.2 Fifty (50) miles of Franchisee's Designated Territory; or
- 7.3 Fifty (50) miles of any Business operating under the System and the Proprietary Marks.

The prohibitions in this Paragraph 7 do not apply to my interests in or activities performed in connection with a Franchised Business. This restriction does not apply to my ownership of less than a five percent (5%) beneficial interest in the outstanding securities of any publicly held corporation.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 37

What is the dependency between the execution of the Mr. Sandless agreement and the release of claims?

Accepted Answer

HIBIT E**

#### **GENERAL RELEASE**

| THIS AGREEMENT ("Agreement") is made and entered into this day of, 20                                          |  |
|----------------------------------------------------------------------------------------------------------------|--|
| by and between Mr. Sandless Franchise LLC, a Pennsylvania limited liability company having its principal place |  |
| of business located at 2970 Concord Rd, Aston, PA 19014 (the "Franchisor"), and, a                             |  |
| with an address at (hereinafter referred to as "Releasor"), wherein                                            |  |
| the parties hereto, in exchange for good and valuable consideration, the sufficiency and receipt of which is   |  |
| hereby acknowledged, and in reliance upon the representations, warranties, and comments herein are set forth,  |  |
| do agree as follows:                                                                                           |  |

#### 1. **Release by Releasor**:

Releasor does for itself, its successors and assigns, hereby release and forever discharge generally the Franchisor and any affiliate, wholly owned or controlled corporation, subsidiary, successor or assign thereof and any shareholder, officer, director, employee, or agent of any of them, from any and all claims, demands, damages, injuries, agreements and contracts, indebtedness, accounts of every kind or nature, whether presently known or unknown, suspected or unsuspected, disclosed or undisclosed, actual or potential, which Releasor may now have, or may hereafter claim to have or to have acquired against them of whatever source or origin, arising out of or related to any and all transactions of any kind or character at any time prior to and including the date hereof, including generally any and all claims at law or in equity, those arising under the common law or state or federal statutes, rules or regulations such as, by way of example only, franchising, securities and anti-trust statutes, rules or regulations, in any way arising out of or connected with the Agreement, and further promises never from this day forward, directly or indirectly, to institute, prosecute, commence, join in, or generally attempt to assert or maintain any action thereon against the Franchisor, any affiliate, successor, assign

Source: Item 23 — RECEIPTS (FDD pages 42–167)

Question 38

What is the dependency for a Mr. Sandless franchisee to purchase additional territories?

Accepted Answer

tantial compliance with the terms and conditions of this Agreement, we will not establish or locate, or grant any third party the right to establish or locate, another Mr. Sandless Business using the System and Proprietary Marks within the Designated Territory, except as set forth in Section 2.2 below. This Agreement does not grant you any other territorial rights. Notwithstanding the foregoing, if y

Source: Item 22 — CONTRACTS (FDD page 42)

Question 39

What is the dependency between Section 9.2 and the termination conditions for a Mr. Sandless franchise?

Accepted Answer

You must consistently perform not less than eight (8) floor jobs a month within six (6) months of the Grand Opening of your Business. If you own multiple Mr. Sandless Businesses, then notwithstanding this Section 9.2, you must consistently perform, on a monthly basis, not less than eight (8) floor jobs plus an additional two (2) floor jobs for each territory you own and operate. Your failure to comply with this minimum performance criteria will be a material default of this Agreement and we will have the right, among others, to reduce the size of or your rights in the Designated Territory or to terminate this Agreement.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 40

How does Mr. Sandless determine which products and services a franchisee must offer?

Accepted Answer

You must offer the services and products we specify and/or approve. You may not sell any goods or provide any services that we have not previously approved or required for a Mr. Sandless Business. We may change the products and services which your Business must offer, there is no contractual limitation on our right to change the types of authorized goods and services that you must offer, and we anticipate that the types of goods and services offered by System franchisees may also be modified, among other ways, in accordance with industry changes. You must comply with any changes we require in the products and services that your Business will offer and sell. You will conduct the Business in accordance with our specifications and procedures, and otherwise comply with the requirements in the Operations Manual. You may not conduct another business in conjunction with the Business without our prior written approval, which we are not required to provide.

Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 30)

Question 41

Is entering into the Internet Advertising, Social Media, Software and Telephone Listing Agreement a condition for a Franchisee to obtain a Mr. Sandless Franchise Agreement?

Accepted Answer

**WHEREAS**, Franchisor would not enter into the Franchise Agreement without Franchisee's agreement to enter into, comply with, and be bound by all the terms and provisions of this Agreement;

Source: Item 22 — CONTRACTS (FDD page 42)

Question 42

Is the Mr. Sandless Franchise Agreement subject to state law?

Accepted Answer

[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]

#### **STATE ADDENDUM REQUIRED BY THE STATE OF INDIANA**

1. To be added to Item 3 of the Disclosure Document, is the following statement:

There are presently no arbitration proceedings to which the Franchisor is a party.

- 2. Item 17 of the Disclosure Document is amended to reflect the requirement under Indiana Code 23-2-2.7-1 (9), which states that any post term non-compete covenant must not extend beyond the franchisee's designated territory.
  - 3. Item 17 is amended to state that this is subject to Indiana Code 23-2-2.7-1 (10).
- 4. Under Indiana Code 23-2-2.7-1 (10), jurisdiction and venue must be in Indiana if the franchisee so requests. This amends Article 24 of the Franchise Agreement.
  - 5. Under Indiana Code 23-2-2.7-1 (10), franchisee may not agree to waive any claims or rights.

#### **STATE ADDENDUM REQUIRED BY THE STATE OF MARYLAND**

This will serve as the State Addendum for Mr. Sandless Franchise LLC for the State of Maryland for the Mr. Sandless Franchise Disclosure Document and for its Franchise Agreement. The amendments to the Franchise Agreement included in this addendum have been agreed to by the parties.

- 1.

The provision contained in the termination sections of the Franchise Agreement may not be enforceable under federal bankruptcy law (11 U.S.C.

Section 101 et seq.).

- 2.

Item 11 of the Franchise Disclosure Document shall be amended to state that a franchisee may obtain an accounting of the advertising fund as required by COMAR 02.02.08.04B(2), by requesting same in a written request to Franchisor.

- 3.

According to COMAR 02.02.08.16L, Item 17 of the Franchise Disclosure Document shall be amended at the sections dealing with the issuance of general releases to the effect that the general release required as a condition of renewal and/or assignment/transfer are not intended to nor shall they act as a release, estoppel or waiver of any liability under the Maryland Franchise Registration and Disclosure Law.

[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]

The following amends Item 17 and is required to be included within the Disclosure Document and shall be deemed to supersede the language in the Disclosure Document itself:

Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that:

"A provision in a franchise agreement restricting jurisdiction or venue to a forum outside of this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act."

#### **STATE SPECIFIC ADDENDUM FOR THE COMMONWEALTH OF VIRGINIA**

In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Mr. Sandless Franchise LLC for use in the Commonwealth of Virginia shall be amended as follows:

The following statement is added to Item 5:

The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre- opening obligations under the franchise agreement.

Additional Disclosure: The following statements are added to Item 17.h:

Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any grounds for default or termination stated in the franchise agreement and development agreement does not constitute "reasonable cause," as that the term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, the provision may not be enforceable.

Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to use undue influence to induce a franchisee to surrender any right given to him under the franchise. If any provision of the Franchise Agreement involves the use of undue influence by the franchisor to induce a franchisee to surrender any rights given to him under the franchise, that provision may not be enforceable.

[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]

However, pursuant to Section 14-216(c)(25) of the Maryland Franchise Registration and Disclosure Law, a franchisee is permitted to enter into litigation with the Franchisor in the State of Maryland, regardless of the language in the Franchise Agreement.

- 7.

The franchise agreement is hereby amended to provide that the acknowledgements or representations of the franchisee which disclaim the occurrence and/or acknowledge the non-occurrence of acts that would constitute a violation of the Franchise Law are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.

- 8.

The first sentence of paragarph "E" beginning with "You acknowledge..", under the section titled "Background" of the Franchise Agreement, is hereby deleted in its entirety.

- 9. Sections 27.1 through 27.5 of the Franchise Agreement are hereby deleted.
- 10. To the extent of any inconsistencies, Item 5 and Section 10.1 of the Franchise Agreement are hereby amended to further state:

"Based upon Franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, Franchisor will defer collection of the Initial Franchise Fee and other initial fees payable to Franchisor until Franchisor has fulfilled its initial pre-opening obligations."

No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

MR. SANDLESS FRANCHISE LLC By: Name: Title: FRANCHISEE:
#### **DISCLOSURE REQUIRED BY THE STATE OF MICHIGAN**

**THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU:**

- (a) A prohibition on the right of a franchisee to join an association of franchises.

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 43

For a Mr. Sandless franchise, what happens if the franchisee fails to cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless"?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured) |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations; and sign any documents necessary to effectuate the termination.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 44

For a Mr. Sandless franchise, what happens if the franchisee fails to pay all monies due?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations; and sign any documents necessary to effectuate the termination. |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 45

For a Mr. Sandless franchise, what happens if the franchisee fails to stop using the Proprietary Marks?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY
|---|---|---|---
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations; and sign any documents necessary to effectuate the termination.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 46

For a Mr. Sandless franchise, what happens if the requirements for transfer upon death or disability are not complied with?

Accepted Answer

|    | PROVISION                                                                       | SECTION IN FRANCHISE AGREEMENT | SUMMARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|----|---------------------------------------------------------------------------------|--------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| n. | Franchisor's right of first refusal to acquire franchisee's business | 21.5 | If you intend to sell or transfer the franchised business, we have a right of first refusal to purchase your business on the same terms and conditions as any bona fide purchaser. |
| o. | Franchisor's option to purchase franchisee's business | 23.3 | We have an option to purchase personal property used in connection with your Business upon termination or expiration of the Franchise Agreement. |
| p. | Death or disability of franchisee | 21.4 | If you die or become disabled or incapacitated, your executor, heir or legal representative may obtain approval to continue as the franchisee if our approval is sought within 90 days of the date of death or disability and that person has successfully completed training. If these requirements are not met, we have the right to step in and manage the business until our requirements are met, or we may terminate the Franchise Agreement |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 47

For a Mr. Sandless franchise, what happens if there is abandonment of your Business?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured) |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 48

For a Mr. Sandless franchise, what happens if there is a failure to conduct grand opening advertising when required?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY
|---|---|---|---
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured)

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 49

For a Mr. Sandless franchise, what happens if there is a failure to protect confidential information or copyrights?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured)

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 50

For a Mr. Sandless franchise, what happens if there is a loss of lease?

Accepted Answer

| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY
|---|---|---|---
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured)
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations; and sign any documents necessary to effectuate the termination.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 51

For a Mr. Sandless franchise, what happens if there are repeated violations of the Franchise Agreement?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured) |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 52

For a Mr. Sandless franchise, what happens if there is a violation of non-competition covenant?

Accepted Answer

| PROVISION |  | SECTION IN | SUMMARY |
|---|---|---|---|
|  |  | FRANCHISE AGREEMENT |  |
| a. Length of the | 3.1 |  | 10 years |
| franchise term |  |  |  |
| b. Renewal or extension of the term | 3.2 |  | If you have complied with the Franchise Agreement and certain conditions, you may enter into a successor franchise agreement for the franchise for 2 consecutive additional 5-year terms. |
| c. Requirements for | 3.2 |  | You must be in compliance with the Franchise |
| franchisee to renew or |  |  | Agreement; must have satisfied all monetary |
| extend |  |  | obligations owed to us and our affiliates; must be in |
| PROVISION |  | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
| t. Integration/merger clause | 25.1 |  | Only the terms of the Franchise Agreement are binding (subject to applicable federal and/or state law). Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. Nothing in the agreement or in any related agreement is intended to disclaim the representations made in the Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | 24.2, 24.3 |  | You must bring any dispute or claim to our President first for discussion before you may bring the dispute to a third party. At our option, all claims or disputes relating to the Franchise Agreement must be submitted first to mediation in Delaware County, Pennsylvania under the National Franchise Mediation Program (“NFMP”) in accordance with the NFMP’s mediation rules then in effect.(subject to state law) |
| v. Choice of forum | 24.6 |  | Subject to state law, for any dispute not subject to or not resolved by mediation, the parties agree to litigate only in a court of general jurisdiction in Delaware County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania. |
| w. Choice of law | 24.1 |  | Agreement is governed by the laws of Pennsylvania. (subject to state law) |
|  | PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY information or copyrights; failure to conduct grand opening advertising when required; abandonment of your Business; loss of lease; our requirements for transfer upon death or disability are not complied with; violation of non-competition covenant; failure to meet minimum performance criteria (if you own a Mr. Sandless Business); repeated violations of the Franchise Agreement (whether or not cured) |
| i. | Franchisee's obligations on termination/ non renewal | 23 | You must pay all monies due; stop using the Proprietary Marks; cancel and/or transfer all registrations and phone numbers under the name "Mr. Sandless" return the Operations Manual and all Confidential Information; maintain your books and records for at least one year; provide us with list of employees and employee files; comply with your non-competition and confidentiality obligations;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 30–34)

Question 53

Does the Mr. Sandless franchisee grant the power of attorney to Mr. Sandless for benefits beyond those outlined in the Franchise Agreement?

Accepted Answer

[Item 22: CONTRACTS]

#### **19. INDEPENDENT LICENSEE; INDEMNIFICATION**

#### **19.1 Independent Licensee**

You are and shall be an independent licensee under this Agreement, and no partnership shall exist between you and the us. This Agreement does not constitute you as an agent, legal representative, or employee of ours for any purpose whatsoever, and you are not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisors. You agrees not to incur or contract any debt or obligation on behalf of us or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other franchisees of Franchisor. We does not assume any liability, and will not be considered liable, for any agreements, representations, or warranties made by you which are not expressly authorized under this Agreement. We will not be obligated for any damages to any person or property which directly or indirectly arise from or relate to your operations of the Franchised Business. Pursuant to the above, you agree to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs, or judgments against Franchisor arising out of any allegation of an agent, partner, or employment relationship.

[Item 22: CONTRACTS]

Attachment 5 – Internet Advertising, Social Media, Software and Telephone Listing Agreement

[Item 22: CONTRACTS]

- 2.3 Transfer.

On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:

Source: Item 22 — CONTRACTS (FDD page 42)

Question 54

Can a Mr. Sandless franchisee operate another Mr. Sandless business under a separate franchise agreement?

Accepted Answer

We hereby grant to you, and you hereby accept, a nonexclusive franchise to establish and operate one (1) Franchised Business pursuant to the terms of this Agreement. This Agreement does not give you the right to establish additional Franchised Businesses.

Notwithstanding the foregoing, if you meet our qualifications, you may purchase one or more additional territories of approximately 100,000 population each, not to exceed a total of four (4) territories under this Agreement. You shall pay an additional territory fee of Five Thousand Dollars ($5,000.00) for each additional territory purchased. Upon such additional purchase, we will amend Attachment 2.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 55

How does a Mr. Sandless franchisee receive the Advertising Fund statement?

Accepted Answer

13.4.1 Within ten (10) business days of Franchisor's request, Franchisee shall provide a quarterly expenditure report accurately reflecting Franchisee's expenditures in the Territory for the preceding quarterly period. The following costs and expenditures incurred by Franchisee shall *not* be included in Franchisee's expenditures on Local Advertising for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; (iv) charitable, political or other contributions or donations.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 56

Does the Mr. Sandless franchisee have to take other actions regarding Electronic Advertising if directed by the franchisor?

Accepted Answer

- 23.1.5 If directed by us, promptly make such changes and modifications in your business methods, business facility, and otherwise as we direct so as to effectively distinguish your business from any appearance as a Mr.

Sandless Business;

Source: Item 22 — CONTRACTS (FDD page 42)

Question 57

Does the Mr. Sandless franchisee have to take other actions regarding Telephone Listings if directed by the franchisor?

Accepted Answer

- 2.3 Transfer.

On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:

- 2.3.1 direct all telephone companies, telephone directory publishers, and telephone directory listing agencies (collectively, the "Telephone Companies") with which Franchisee has Telephone Listings: (i) to transfer all Franchisee's interest in such Telephone Listings to Franchisor; and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer.

In the event Franchisor does not desire to accept any or all such Telephone Listings, Franchisee will immediately direct the Telephone Companies to terminate such Telephone Listings or will take such other actions with respect to the Telephone Listings as Franchisor directs.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 58

What must Mr. Sandless franchisees do if they become aware of a conflict between the franchisor's privacy policies and applicable law?

Accepted Answer

You shall operate your Business in strict compliance with all applicable laws, regulations and ordinances including, without limitations, laws and regulations applicable to or affecting health and safety.

You and your principals agree to comply, and to assist us to the fullest extent possible in our efforts to comply, with Anti-Terrorism Laws, as described in Section 9.18 below.

Source: Item 22 — CONTRACTS (FDD page 42)

Question 59

Does the Mr. Sandless franchisee's obligation to transfer Electronic Advertising apply even if the acquisition of that advertising was a violation of the Franchise Agreement?

Accepted Answer

- 2.1 Interest in Websites, Social Media, and Software Accounts and Other Electronic Listings. Franchisee may acquire (whether in accordance with or in violation of the Franchise Agreement) during the term of Franchise Agreement, certain right, title, or interest in and to certain domain names, social media accounts, software accounts, hypertext markup language, uniform resource locator addresses, access to corresponding internet websites, and the right to hyperlink to certain websites and listings on various internet search engines (collectively, "Electronic Advertising") related to the Franchised Business or the Marks.
- 2.2 Interest in Telephone Numbers and Listings. Franchisee has or will acquire during the term of the Franchise Agreement, certain right, title, and interest in and to those certain telephone numbers and regular, classified, internet page, and other telephone directory listings (collectively, the "Telephone Listings") related to the Franchised Business or the Marks.

- 2.3 Transfer.

On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:

Source: Item 22 — CONTRACTS (FDD page 42)

Question 60

Does the Mr. Sandless franchisee's obligation to transfer Telephone Listings apply even if the acquisition of those listings was a violation of the Franchise Agreement?

Accepted Answer

- 2.1 Interest in Websites, Social Media, and Software Accounts and Other Electronic Listings. Franchisee may acquire (whether in accordance with or in violation of the Franchise Agreement) during the term of Franchise Agreement, certain right, title, or interest in and to certain domain names, social media accounts, software accounts, hypertext markup language, uniform resource locator addresses, access to corresponding internet websites, and the right to hyperlink to certain websites and listings on various internet search engines (collectively, "Electronic Advertising") related to the Franchised Business or the Marks.
- 2.2 Interest in Telephone Numbers and Listings. Franchisee has or will acquire during the term of the Franchise Agreement, certain right, title, and interest in and to those certain telephone numbers and regular, classified, internet page, and other telephone directory listings (collectively, the "Telephone Listings") related to the Franchised Business or the Marks.

- 2.3 Transfer.

On Termination of the Franchise Agreement, or on periodic request of Franchisor, Franchisee will immediately:

Source: Item 22 — CONTRACTS (FDD page 42)

Question 61

Are Mr. Sandless franchisees required to participate in customer surveys?

Accepted Answer

We may periodically assist franchises to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys"). The cost of these programs will be paid by the Advertising Fund; however, the cost of these programs may be charged directly to you if your results of a Survey fall below System established minimum standards for Surveys. Any fees charged to and paid by you will be contributed to the Advertising Fund.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)

Question 62

Is the Mr. Sandless Guaranty Agreement required for all franchisees?

Accepted Answer

- 21.6.4 All shareholders of the corporation, or all members and managers of the limited liability company, must sign our Guaranty Agreement, personally agreeing to be bound by the terms of this Agreement, and guaranteeing performance of all of the franchisee's obligations under this Agreement;

Source: Item 22 — CONTRACTS (FDD page 42)

Question 63

Is the Guaranty Agreement required for all Mr. Sandless franchisees?

Accepted Answer

- 21.6.4 All shareholders of the corporation, or all members and managers of the limited liability company, must sign our Guaranty Agreement, personally agreeing to be bound by the terms of this Agreement, and guaranteeing performance of all of the franchisee's obligations under this Agreement;

Source: Item 22 — CONTRACTS (FDD page 42)

Question 64

What happens to fees charged to a Mr. Sandless franchisee for surveys if their results fall below system standards?

Accepted Answer

We may periodically assist franchises to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys"). The cost of these programs will be paid by the Advertising Fund; however, the cost of these programs may be charged directly to you if your results of a Survey fall below System established minimum standards for Surveys. Any fees charged to and paid by you will be contributed to the Advertising Fund.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–25)

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