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Business Description

We are a Missouri Limited Liability Company organized on August 30, 2001. Our principal place; of business is 12 Greenway Plaza, Suite 250, Houston, Texas 77Q46, We conduct business under our name, Benjamin Franklin Franchising, LLC, or under the trademark BENJAMIN FRANKLIN PLUMBING®. We do not conduct business under any other trademarks or trade names. Our agents: for service of process are disclosed in Exhibit BL Our Parent, Predecessors and Affiliates General We do not have any predecessor. One of our affiliates and our parent company is, Clockwork, Inc., a Delaware! Corporation, located at 12 Greenway Plaza, Suite 250, and Houston, Texas: 77046 (“Clockwork Services”). On July 1„ 2010,, our former parent. Clockwork Home Services; Inc. (“CHSI”), and Direct Energy (CW), Inc. (“DECW”), a Delaware corporation completed a corporate reorganization transaction through which DEC% acquired substantially all of the assets of CHSI. As a result of that transaction. Franchisor became wholly-owned subsidiary of DECW and, in connection with that transaction, DECW was renamed “Clockwork, Inc. Clockwork Services operates under the name “Clockwork Hoare Services” (as did CHSI). Clockwork Services, through its affiliate Clockwork IP, LLC, a Delaware limited liability company located at 12 Greenway Plaza, Suite'260, Houston, Texas 77046 (“Clockwork IP”) ovras the BENJAMIN FRANKLIN PLUMBING mark and other related marks and licenses them to: us. On April 30, 2019, RSG Holding Corp, (“Seller”) sold to, Hidden Gem Holdco, LLC, a Delaware; limited liability company (“Buyer”), all of the issued and outstanding equity interests of Clockwork Services pursuant to a Purchase and Sale Agreement dated February 15, 2019 (the “Acquisition”). Buyer is an affiliate of Apex Partners, L.P., a private equity firm based in London,, United Kingdom (“Apex”). As a result of the Acquisition, Clockwork Services became a direct wholly-owned subsidiary of Buyer, and we became an indirect wholly owned subsidiary of Buyer (and we continue to be; a direct Wholly-Owned subsidiary of Clockwork Services).

Prior Experience

We began offering franchises of the type described in this Disclosure Document in September 2001. We: were not previously engaged in the Plumbing Services business or sale of franchises. We began offering Area Development Agreements of the type described; in this Disclosure Document in April 2018.

Business Offered

We award franchises for plumbing maintenance, repair and replacement, and drain cleaning services (“Plumbing Services”) businesses to be operated under the trademark BENJAMIN FRANKLIN PLUMBING. We do not engage in other business activities and do not and have never offered franchises in any other line of business. If you sign a franchise agreement, the business you operate will use the trademarks, service marks, trade names, logos, and symbols we designate (which trademarks, service marks, trade names, logos, and symbols we will call the “Licensed Marks”):to provide Plumbing Services (the “Franchised Business”). The approved Plumbing Services currently include only residential and commercial services, including maintenance, repair and replacement (including drain cleaning) and do not include industrial, remodeling or new construction services. The Franchised Business will use the methods and procedures we have developed (the “system”), which includes standards and methods of operation, accounting, marketing, advertising and public relations, and the Standards for conducting a Franchised^ Business. The standards include responsibility for warranties and guarantees of customer service levels, including customer satisfaction and timeliness guarantees. The System for conducting a Franchised Business is described in our operations manual, which we call Ox Operational Excellence or Ox (the “Operations Manual”)^ or Otherwise in other writings designated by us as part of the standards for the System (collectively with the Operations Manual, “System Standards”). Our concept is to have a franchisee operate the Franchised Business from one approved location within the franchisee's territory. However, some of our franchisees may be awarded multiple franchises in contiguous or adjoining territories. In those circumstances, those franchisees may operate their multiple franchises from an approved location in only one of their franchised territories. Franchisees will be either converting their existing, plumbing business into a Franchised Business (a “Conversion Franchise”) or will develop and open a new Plumbing Services business (a ‘Start-Up Franchise”). We may pursue opportunities to convert similar businesses operating under different trader names to a Benjamin Franklin Plumbing Franchised Business. We may provide conversion incentives to those businesses (an “Incentive Program”): The terms of the Incentive Program Vary depending on factors such as the existing sales volume of the business, the size and location of the geographic area serviced, perceived competitive advantage of the business the skills and experience of the business leaders, physical condition and of the business and its assets, operating history, our then current conversion policy, the negotiations of the parties, and other factors determined b^ us in our sole and absolute discretion. We may negotiate these incentives when and as business circumstances warrant: Pursuant to a current Incentive Program,, we offer financial incentives for certain qualified large scale prospective conversion franchises pursuant to certain terms and conditions. We will notify you in advance and in Writing if we believe you may qualify for an Incentive Program. Unless you qualify for an Incentive Program and are notified by us in writing that you qualify, you will not be entitled to receive the benefits of any Incentive Program, Any Incentive Program we offer or may offer in the future may be modified, limited, expanded, initiated, extended or terminated at any time in our sole and absolute discretion and without advance notice or amendment Of this Disclosure Document., We: also offer qualified applicants the ability to enter into; an area development agreement ;(an “Area Development Agreement”) to develop multiple Franchised Businesses within a specifically described geographic area (the “Development Area”). Each Franchised Business developed pursuant to the Area Development. Agreement will operate within a defined territory in the Development Area. Our current form of Area Develop merit Agreement is attached to this Disclosure Document as Exhibit I. The size of the Development Area will vary depending On the local market conditions and the number of Franchised Businesses to be developed, but each territory within the Development Area will be based on total population blocks of approximately 100000. The Development: Area, and the territories within the Development Area, will be determined before you sign the Area, Development Agreement and will be described in the; Area Development Agreement or an attachment to it (“Development Schedule”). You must develop the number Of Franchised Businesses specified by the Area Development Agreement in the Development Area according to, and in a sequence described in, the' Development Schedule, though you may, in our sole and absolute discretion, develop more than one Franchised Business at a time. We reserve the right to refuse to enter into an Area Development Agreement with any franchisee or prospective franchise as determined in our sole and absolute discretion, In addition, we are not required to offer Or enter into an Area Development Agreement with franchisees that develop more than one Franchised Business; For each Franchised Business developed under the Area Development Agreement, you must sign our then-current Franchise Agreement and any required amendments and related agreements, including a general release. The forms of Franchise Agreement you sign pursuant to the Area Development Agreement may be different from the form included with this Disclosure Document and may contain different terms and conditions (including but not limited to different or increased fees and other financial terms). You must also meet certain eligibility requirements in order to develop Franchised Businesses pursuant to the Area Development Agreement, including that each of your Franchised Businesses maintain a minimum revenue of$500,b()0 per year. These eligibility requirements are discussed in greater detail in Item 12. You (and your Owners if you are a business entity) must agree to be individually bound by certain obligations and covenants in the Area Development Agreement and, unless we agree otherwise, must personally guarantee your performance under the Area Development Agreement

Initial Fees

The minimum initial fees (“Initial Fees”) for both conversion Franchises and Start-Up Franchises are $43,000 for a territory that has a minimum population of 100,000 plus, $430 for each 1000 of population above 100,000. The population in a territory is generally approximately 100000. We currently determine population by utilizing.an electronic database called MapPoint®, but reserve the fight to use such other software or database to determine population as we deem fit in our sole and absolute discretion. In the third quarter of 20L9, or other time we have determine in our sole and absolute discretion, we intend to start using another database called GbBIS, offered by Intelligent Direct; Inc., to determine population. GbBiS is expected to have the same or similar functionality as MapPoint; If we change our database from MapPoint to GbBIS (or another electronic database), it will not change have/ your Initial Fees are calculated. The electronic database ‘we: use. Shows population information by zip code; The Initial Fees must be paid in a lump sum or,, for qualifying franchisees, may be financed in installment payments. The Initial Fees will be fully earned by us upon your signing, of the Franchise Agreement and are not refundable under any circumstances'., Other Initial Fees Details Initial Fees paid may not be uniform. We may vary^ reduce, negotiation make an exception to our standard Initial Fees structure and/or payment terms in order to facilitate mergers, conversions or other large transactions, as well as to accommodate certain existing franchisees that acquire additional locations. For example, at the present time, we may,, In out sole and absolute discretion, offer opportunities, to purchase: a, franchise at a reduced fee to (i): qualified existing franchisees in good standing,, (ii) qualified prospective franchisees that are Converting existing companies to a Franchised Business,, or (lii) qualified veterans purchasing on the basis of the International Franchise Association's® VetFran® Program, We make no representations that these or any other Opportunities or variations to the: standard Initial Fees will continue to be; made available; and they may be discontinued without notice at any time: in our sole; and absolute discretion. We are a member of the International Franchise Association (“lEA®”) and participate: in the IFA's VetFran Program which provides special financial incentives, to qualified veterans. Pursuant to this program, we Offer a 1.0% discount on the initial franchise fee for all honorably discharged veterans of American and Canadian armed forces for your first franchise only. We shall determine, in our sole and absolute discretion, whether a prospective franchisee qualifies for this discount. In making this determination, we may be guided by the; definitions used by applicable United States or Canadian government offices, but the decision remains ours. The software package that we currently require for our franchises is the cloud-hosted model of SuccessWare2l, (“SuccessWare21”). The initial activation fee is waived by Success Ware for our franchisees, but SuceessWare21 Will cost you a monthly fee, which currently ranges from $325 to $525 per month. The first month's payment is usually paid before opening for business and the payment is non-refundable. You must, also pay for a required SuccessWare21 training class. The cost of the SuccessWare21 training class is $1,795 for up to two attendees. You may send up to two additional attendees for an additional $1,795. We estimate you will have to pay $1,795 to $3,590 for SuccessWare21 training classes, depending on the number of people that attend. This amount is paid to Success Ware-usually before opening for business, and the payment is; nonrefundable. If you are Converting a Plumbing Services business to a Franchised Business and you do not currently Use SuCCessWare2l, Success Ware may have to provide technical support to convert your Plumbing Services business, data so it can be imported into SuccessWare21 (SuccessWare21 may be referred to as“SUeeessWare21 (ASP ‘Option)” in other documents). If you qualify for and choose; to participate in the Incentive Program, the technical support provided by Success Ware to convert your data will the at no cost to you, If you do not qualify for the Incentive Program or choosemot to participate: in the IncentivePrograrh, the technical support provided.by Success Ware to convert your data will be paid by you at rates that will be established and updated at SuceessWare:'s sole and absolute discretion., Last year; new Conversion Franchisees that required technical support from Success Ware to convert data paid Success Ware $2,000 to $3,400 for this service. The amount you will have to pay will depend on the type, quality, and amount of data that Development: Fee When you sign an Area Development Agreement, you must pay us a lurnp-surn, nonrefundable development fee equal to ,$100000 multiplied by the number of Franchised Businesses to be developed pursuant to the Development Schedule (“Development: Fee”). The Initial Fees for each Franchised Business developed pursuant to the Development Schedule will be reduced to $2,000, and the; $2,000 Initial Fee will be owed at the time you sign each Franchise Agreement pursuant to the Development Schedule. The Development Fee may not be uniform for all area developers entering into an Area Development Agreement under this offering depending on, the geographic area and other factors. Unless otherwise provided by state law in your jurisdiction, the Development Fee will be fully earned by us upon your signing of the Area Development Agreement and is not refundable under any circumstances.

Financing

For qualified buyers that meet our credit standards, we may offer the option to pay Initial Fees with a promissory note, and for qualified buyers that meet our credit standards that are eligible to sign an Area Development Agreement, we may offer the option to pay the Development Fee with a prorhissory note. This option is available at bur sole and absolute discretion. We do not guarantee your note, lease or other obligations. The Initial Fees, if not paid in a lump sum. when the Franchise Agreement is signed, may be financed to the extent that you qualify for such financing, and to the extent permitted by law- If financed, the balance can be paid in up to 3:6 monthly installments at an interstate that is typically between 12% and 18% per annum or the highest; permissible fate allowed by law. Franchisees obtaining financing from us must pay a minimum of $5,000 or 20% of the Initial Fees, whichever is greater, when the Franchise Agreement is signed. The interstate is based, in part, on prevailing conditions, your individual credit history, and your personal financial condition, aid other underwriting factors. The Development Fee, if not paid in a lump sum when the Area Development Agreement is signed, may be financed to the extent that you qualify for such financing and to the extent permitted by law., if financed, the balance can be paid in up.to 3 6 monthly installments at an interest rate that is expected to be between 12%, and 18%b per annum or the highest permissible rate allowed by law. Area developers obtaining financing from us must pay a minimum of 20% of the Development Fee when the Development Agreement is signed, the interstate is based, in part, on prevailing conditions, your individual credit history, your personal financial condition, and other underwriting factors. A franchisee that finances the Initial Fees, and/or area developers that finance the Development Fee, must sign a promissory note and guaranty in the form of Exhibit C. (“Promissory Note and ©guaranty”) and, as security, its Owners must sign the Owner's Guaranty. If an Owner spouse' is also an Owner, then the Owner's spouse, must also sign the Owner's Guaranty. We currently do not take a security interest in the assets of your Franchised Business of your Owner's assets, but we reserve the right to do sq. You must make all payments to us by electronic funds transfer to an account designated by us or by such other method that we may designate from time to time. You will be required to complete an Automated Clearing House (ACH) agreement authorizing automatic withdrawals. You cam prepay the Promissory Note, and Guaranty at any time without penalty. If you are in default of the Promissory Note and Guaranty or the Franchise Agreement, we can declare the; outstanding principal balance and all unpaid accrued interest immediately due and payable. You will have to pay our reasonable attorney's fees arid other legal costs-we incur in enforcing payment and collection of the balance due. The Promissory Note and Guaranty provide that you and your guarantor will waive demand for payment, presentment for payment, protest, notice of non-payment of dishonor, and all other notices and demands. We, may assign the Promissory Note and Guaranty to a third party but we remain obligated to provide services according to the terms of the Franchise Agreement and/or the Development Agreement, as applicable., Any third party to whom the Promissory Note and Guarantee may be assigned does not assume any of our obligations under the Franchise Agreement and/or the Development: Agreement, as applicable, and under the uniform Commercial Code you may not assert against the third party any defenses you may have against us. We do not receive any consideration for referring you to any prospective lenders

Franchisee Revenue and Profit

The FTC'S Franchise Rule permits a franchisor to provide informatory: 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 Payment. Financial performance information that differs from that included in Item 19 may be given only for (1) a franchisor provides the actual records of an existing outlet you are epnsidering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. We are providing you with historical financial performance representations for Franchised Businesses that had Net Sales (as: defined below) during the entire two-year period indicated.. If a Franchised Business did not have Net Sales for-the entire two-year period indicated, we did not include its. Results in the financial performance representations.