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Business Description

We were incorporated under the laws of the State oTNorth Carolina on December 8,2001; Our principal business address is 621-B Stallings Road, Matthews, North Carolina 28105; the telephone number is (866) 239-8707'. We conduct business under the name “Surface Specialists.” The Surface Specialists® franchise, program originated in 1982, Our predecessor. Surface Specialists Systems, Inc. (“SSSI-Missouri), was 1ncorpora:ted and acquired, in 1996, substantially all of the assets of its predecessor. Surface Specialists Systems; Inci„ a Minnesota corporation (“SSSI-Minnesdta”)i SSSI-Missouri offered franchises for “Surface Specialists” businesses from January 1996 to June 2002. In July 2002, we purchased substantially alTof the assets of SSSI-Missouri. SSSI-Missouri hassnotoffered franchises for any other line of business. We have no parents or affiliates required to be disclosed in this Item 1.

Prior Experience

We have offered “Surface Specialists” franchises since July 2002. We have not offered franchises in any other line of business. We do not directly operate any Surface Specialists Businesses.

Business Offered

We franchise the right to own and operate “Surface Specialists” surface repaiir and refinishing businesses (sometimes referred to as a “Surface Specialists Business”) under the terms of the Franchise Agreement in the form included ih this disclosure document as, Exhibit C (the “Franchise Agreement”)., A Surface Specialists Business offers high quality repair and refmishing/resurfacing of kitchen and bathroom surfaces including bathtubs, shpwers, sinks, vanities, ceramic tile, countertops, fiberglass, cultured marble, acrylic, PVC/ABS and porcelain fixtures, wood, appliances and metal,surfaces, pools and spas. A Surface Specialists Business also offers whirlpool conversions, plumbing/mechanieal repair to whirlpool systems, safety conversions, acrylic tub liner and wall system installation, tub protection services, glass polishing services, granite and marble repair and polishing, stfippable cOaiting services, and vinyl repair services, door sill overlay and step through insert installation services. We have developed a surface repair and refinishing systehi that emphasizes value and high quality, and an operations system designed to maintain high quality standards in services offered through Surface Specialists Businesses. We have developed all Of these as part of the business system (the “Business System”), which you will receive the right to use during the term of the Franchise Agreemerit. We use and license certain service marks and trademarks, logos, trade dress and other commercial symbols, including the service mark “Surface Specialists” (collectively, the “Trademarks'). We may, in the future, modify or enhance the Trademarks as well as add new trademarks, service marks, logos, trade dress and other commercial symbols. Ihe purchase of a “Surface Specialists” franchise permits you: (i): to use our recognized Trademarks; (ii) to obtain access to the operational and management attributes of the “Surface Specialists” Business System, including confidential manuals describing guideliiies for the operation of a Surface Specialists Business (the “Operations Manuals”); and (iii) to receive the benefits of association with a franchise system, including various forms of training and operational assistance from us.

Initial Fees

You must pay to us an “Initial Franchise Fee” to cover the cost of services and an initial supply of proprietary products and other materials and equipment that we provide to you before your Surface Specialists Business opens. The total amount for your Initial Franchise Fee is $36,000. If you are an existing Surface Specialist franchisee wishing to expand your business into another Designated Territory by purchasing an additional franchise and signing an additional Franchise Agreement, we charge a discounted Initial Franchise Fbe of $0.01 per person in the hew Designated Territory. This discounted Initial Franchise Fee does not include any initial supply of proprietary products or other materials or equipment. To reserve a Surface Specialists franchise for a designated territory, you must pay us a deposit Of $5,OOO approximately 30 days before any scheduled training. Your deposit will be applied to the Initial Franchise Fee if you purchase a Surface Specialists Business, The deposit is not refundable. A sample of the Deposit Receipt is, included in this disclosure document as Exhibit E. Unless you finance a portion of the Initial Franchise Fee (ds, described in Item lO below), you must pay the entire Initial Franchise Fee (less credit for the deposit of $5,000) when you sign the Franchise Agreement. For veterans. We Offer a 10% discount off the cost Of oUr Initial Franchise Fee for the following, service members and their family: >Honorably Discharged Veterans >Current members of the National Guard or reserves >Spouses of active-duty or veteran service; members >Chi Idren of active-duty or veteran service members Due to the nature of our franchise business, we are not able to offer ffanehises tQ active duty service members in the regular military and therefore no discounts are available to active duty service members. The following restrictions apply to this discount: >It is only available for a franchisee opening his or her first franchise >Must have honorable discharge > Veteran, reservist or dependent must have majority ownership The Initial Franchise Fee is fully earned when paid and is not refundable.

Financing

We may, at your requesti finance up to $7,000 of the Initial Franchise Fee., If vve agree to do so, we will require the payment, of a minimum of $29,O00 of the initial Franchise Fee when you sign the Franchise Agreement (including credit for any deposit; paid), and will require that you sign a secured promissory note, in the form included in this disclosure document as Exhibit; D (the “Promissory Note”), for the balance of the Initial Franchise Fee. We will finance this portion of the Initial Franchise Fee over up to a 36-month period at an annual percentage rate of interest (“APR”) of up to 10%, The first payment will come due under the Promissory Note during the first foil calendar month that begins 90 days following the date you sign the Franchise Agreement. We will require that you or all owners of your franchisee entity personallyiguarantee the Promissory Note. We also require that the Promissory Note be secured by any Business equipinent,,supplies, inventory and other tangible Business assets. We may place the Promissory Note in default, accelerate all payments due and take possession of the collateral if you fail to make; a loan payment, are placed in default under the foanchise Agreement, file; for bankruptcy or become insolvent or admit your inability to pay debts when they become due. The Promissory Note can be prepaid without penalty at any time during its term. If you do not make a payment on time, we can demand payment of the balance of the entire principal amount^ interest on that amount, and costs of collection (including our reasonable attorney's fees). Yoii agree to waive demand, notice and protest of amounts due, presentment of the Promissory Note and notice of dishonor (see Promissory Note, page 2). We have not, in the past, sold, assigned or discounted to arty third-party any letter of credit or other instrument executed by its franchisees; Further, we do not currently, dr in the future, intend to, sell, assi^ or discount to any third p^y any letter of credit or other instrument executed by its franchisees. Other than described above, we do not offer direct or indirect financing. We do not guarantee your note, leases or obligations.

Franchisee Revenue and Profit

The FTC's Franchise Rule pennits a franchisor to provide information about the actual Or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document; Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a fr^chisor supplements the information provided in this Item 19, for example^ by providing information about possible performance at a particular location or Under particular circumstances. FPR #1- Average Gross Sales Below is a statement of average gross sales of Surface Specialists Businesses for the 12- month period from January 1, 2018, to December 31, 2018 (“Reporting Periodn- The average gross sales figure is based on reports by 37 Surface Specialists franchisees (“Reporting Franchisees”) who submitted specific information to us on gross sales during the Reporting Period: As of December 31,2018,.there were 46 operational franchisees,44 of which had been in operation for at least a full year, and 37 of which reported varying amounts of data to us (“Reporting Franchisees'^. We allow RCpiorting Franchisees who own more than, one franchise and who are parties to more than one Franchise Agreement to report their gross sales to us on one report. As a result, some Reporting Franchisees own more than 1 Designated Territory. Five Reporting Franchisees operate in.2 Designated Territories, 1 Reporting Franchisee operates in 4 Designated Territories and the remaining Reporting Franchisees operate in 1 Designated Territory. Average Gross Sales (1) Median Gross Sales $313,959.92 $115,160.00 (1) “Gross Sales” (Gross Receipts) means the total revenues received from the sale of goods and services at or through the Surface Specialists Business, less sales or similar taxes.or refunds, YOur individual results will depend upon many factors including the amount of time you have been operatirig the business, the geographical region where you are operating, the Size of your designated territory, the amount of competition you have, how closely you follow the system, and other factors. Of the 37 Reporting Franchisees who reported gross sales information for the Reporting Period and are included in this statement, 9 of the 37 franchisees (24.4 %) attained Or exceeded the average grOss sales of $313,959.92, and the median gross sales was $115,160.00. The total gross sales of the 37 Reporting Franchisees ranged from a low of $27,083.80 (operating in 1 Designated.Area with a population of3,700,016 people) to a high of $3,014,699.80 (operating in 1 Designated Territory with a population of 2,000,759 people). The size and population of each Surface Specialists Business' Designated Territory can Vary significantly. The average population of the Designated Territories of the Reporting Franchisees was 1,694,945 people per Reporting Franehisee and the population of the Designated Territories of the Reporting Franchisees ranges from 370,568 to 4,923,068 per Reporting Franchisee. Some franchisees haye sold this much. Your individual results may differ. There is no assurance that you will sell as much.