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Business Description

The Franchisor is Aqua Chill Development, LLC, a Nevada limited liability company, doing business as “Aqua Chill Drinking Water Systems®”. For ease of reference, Aqua Chill Development, LLC will be referred to as “we”, “us”, “our”, “ACD” or “Franchisor” in this Disclosure Document. We will refer to the person or entity who buys the Franchise as ‘you,' ‘your,' and ‘Franchisee,' throughout this Disclosure Document. If you are a corporation or limited liability company or other entity, certain provisions of the Franchise Agreement also apply to your shareholders, members or owners and will be noted. Any such entity may be referred to as an “Entity” and those who won the Entity may be referred to as “Owners”. We are a Nevada limited liability company, incorporated on August 16, 2013 and our name is “Aqua Chill Development, LLC” and may also use the names “Aqua Chill” or “Aqua Chill Drinking Water Systems®”. Our principal business address is 3626 N. Rancho Drive, Las Vegas, NV 89130. We operate and sell franchises for the operation of a business known as “Aqua Chill Drinking Water Systems®” (the “Business”, “Franchise” or “Franchised Business”). We offer a Franchise for the development and operation of a home-based water purification business. This is the first time ACD has offered franchises of the type described in this Disclosure Document and ACD has never offered franchises in any other line of business. Our agents for service of process are disclosed in Exhibit B. Our Predecessors and Affiliates: There are twenty-six operating businesses that offer similar services to an Aqua Chill Drinking Water Systems® Franchise which are operated by our affiliates as described below. The following is a list of ACD's predecessors and affiliates including principal addresses and number of locations for each. Our affiliate, Aqua Chill, Inc. owned by Donna Jepson, began operations on October 4, 1983 as a Nevada corporation (“AC”). AC shares the same physical address as us and operates two company-owned outlets Aqua Chill of Las Vegas, and Aqua Chill Green Valley both located at 3676 N. Rancho Drive, Suite 101, Las Vegas, NV 89130, which began operations on February 10, 1998. Both locations are businesses substantially similar to the Franchise Business being offered for sale by us. AC will be providing franchisees with all equipment, products and supplies as an approved vendor. From September 2005 through May 2013 AC granted independent dealers (“Dealers”) the right to offer services under the name Aqua Chill under a dealer agreement (“Dealer Agreement”). We and AC are independent entities and AC does not assume any of our legal or other obligations, or us of theirs. As of December 31, 2018, there were eleven Dealers offering services, equipment and products similar to an Aqua Chill Drinking Water Systems® business under Dealer Agreements and two Trademark Licenses. Dealers will be offered the opportunity to terminate his or her Dealer Agreement and become an Aqua Chill Drinking Water Systems® franchisee, but they are not required to do so. All Dealers and Licensees are listed in Exhibit H attached to this Disclosure Document. AC no longer offers Dealer Agreement or grants any rights to Dealers to operate additional Aqua Chill Drinking Water Systems® businesses, provided some dealers, when their contract expires, may become a licensee of just the trademark Aqua Chill Drinking Water Systems®, with no initial fees or royalties and no marketing assistance. Any reference to the term “Dealer” shall include our Licensees. Our affiliate, Aqua Chill of Cave Creek, Inc. (“ACCC”) owned by Mark Jepson, was formed on April 1, 1994 as a Nevada corporation. ACCC's physical address is 1320 S. Priest Drive, Tempe, AZ 85281and ACCC 2 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACCC are independent entities and ACCC does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Phoenix, LLC (ACP) owned by Mark Jepson, was formed on April 1, 1994 as a Nevada corporation. ACP's physical address is 1320 South Priest, Suite 106, Tempe, AZ 85281 and ACP operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACP are independent entities and ACP does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Golden, Inc. (“ACG”) owned by Ed Heitschel, was formed on June 30, 1997 as a Nevada corporation. ACG's physical address is 12215 Quartzville Road, Franktown, CO 80116 and ACG operates a business substantially similar to the Franchise Business being offered for sale by us. In April of 2015 ACG's assets were sold to another Dealer. Our affiliate, Aqua Chill of Green Valley, Inc. (“ACGV”) owned by Mark Jepson, was formed on February 10, 1998 as a Nevada corporation. ACGV's physical address is 3626 N Rancho Drive, Las Vegas, NV 89130 and ACGV operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACGV are independent entities and ACGV does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Las Vegas, LLC owned by Robert Scott Jepson, was formed on February 10, 1998 as a Nevada corporation. Aqua Chill of Las Vegas' physical address is 3626 N. Rancho Drive, Suite 101, Las Vegas, NV 89130 and Aqua Chill of Las Vegas operates a business substantially similar to the Franchise Business being offered for sale by us. We and Aqua Chill of Las Vegas are independent entities and Aqua Chill of Las Vegas does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Houston, Inc. (“ACH”) owned by Donna Jepson, was formed on November 22, 2002 as a Nevada corporation. ACH's physical address is 1312 S. Loop West, Houston, TX 77054 and ACH operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACH are independent entities and ACH does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Tampa, Inc. (“ACT”) owned by Mark Jepson, was formed on November 22, 2002 as a Nevada corporation and later converted the corporation into Aqua Chill of Tampa, Inc. a Florida corporation on February 6, 2003 (into which the Nevada corporation was transferred into the Florida corporation). ACT's physical address is 333 N. Falkenburg, Suite A-129, Tampa, FL 33619 and ACT operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACT are independent entities and ACT does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Scottsdale, Inc. (“ACS”) owned by Mark Jepson, was formed on November 22, 2002 as a Nevada corporation and later converted the corporation into Aqua Chill of Scottsdale, Inc. an Arizona corporation on February 25 ,2003 (into which the Nevada corporation was transferred into the Arizona corporation). ACS's physical address is 1320 S. Priest Drive, Tempe, AZ 85281and ACS operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACS are independent entities and ACS does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Chicago, LLC (“ACC”) owned by Mark Jepson, was formed on October 23, 2006 as an Illinois limited liability company. ACC's physical address is 468 Park Ave. #3, Lake Villa, IL 60046 and ACC operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACC 3 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 are independent entities and ACC does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Atlanta, LLC (“ACA”) owned by Donna Jepson, was formed on April 26, 2017 as a Georgia limited liability company. ACA's physical address is 289 Jonesboro Road #566, McDonogh, GA 30253 and ACA operated a business substantially similar to Franchise Business being offered for sale by us. We and ACA are independent entities and ACA does not assume any of our legal or other obligations, or us of theirs. Our affiliate, Aqua Chill of Orlando, LLC (“ACO”) owned by Donna Jepson, was formed on August 23, 2013 as a Florida limited liability company. ACF's physical address is 333 N. Falkenburg Road, Suite A-129, Tampa, FL 33619 and ACO operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACO are independent entities and ACO does not assume any of our legal or other obligations, or us of theirs. Our affiliate Aqua Chill of San Antonio, LLC ("ACS") owned by Mark Jepson was formed on February 15, 2018 as a Texas Limited Liability company. ACS's Physical address is 9207 Marbach Road, Suite 205, San Antonio, TX 78245.ACS operates a business substantially similar to the Franchise Business being offered for sale by us. We and ACS are independent entities and ACS does not assume any legal or other obligations, or us of theirs.

Prior Experience

President: Mark Jepson. Mark has been serving as President since our inception on August 16, 2013. From April 1994 to present Mark has been serving as President for our affiliate, Aqua Chill of Cave Creek, Inc., based out of Tempe, AZ. Secretary & Treasurer: Donna Jepson. Donna has been serving as Secretary and Treasurer since our inception on August 16, 2013. From October 4, 1983 to present Donna has been Secretary & Treasurer of Aqua Chill, Inc., based out of Las Vegas, NV. Director of Training: David Treloar. David has been serving as our Director of Training since our inception on August 2013. From January 1997 to present he has been a Training Manager for our affiliate Aqua Chill of Houston, Inc. based out of our Houston, Texas location. Director of Information Technology: Crystal Goodwin. Crystal has been serving as our Director of Information Technology since our inception on August 2013. From July 1999 to present she has been a Computer Director for our affiliate Aqua Chill of Phoenix, based out of our Tempe, Arizona location. Director of Administration: Anne Hollinger: Anne has been serving as Director of Administration since our inception August 2013. From May 2003 to present she has been an Administrative Assistant for our affiliate Aqua Chill, Inc. based out of Las Vegas, Nevada.

Business Offered

The Aqua Chill Drinking Water Systems® business has been developed to provide an environmentally friendly and less expensive way for businesses of all kinds to produce and use purified water onsite for their operations and drinking water. An Aqua Chill Drinking Water Systems® Business uses a purification system along with our proprietary equipment to remove contaminants found in tap water and produce purified water. The Aqua Chill Drinking Water Systems® water purification system equipment is installed to meet all codes by skilled technicians who have gone through our extensive training program. This is a home-based business that operates year-round serving businesses that either need purified water to run their operation (such as: dental offices, medical offices, hospitals, laboratories, food processors, etc.) and/or provide purified drinking water to their employees and customers. Each Aqua Chill Drinking Water Systems® Business will offer a variety of products and services that include, but are not limited to: carbon filter systems, reverse osmosis systems, ultraviolet systems, deionized systems, upright coolers, under counter coolers and heaters, countertop coolers, industrial fill station systems, parts and supplies (such as valves, faucets, filters, membranes, etc.), rental programs, installation services, regularly scheduled maintenance programs and other products and services approved by us. We may authorize you to offer additional services and products such as: residential water purification services, distilled water treatment systems, brackish water treatment systems and any other type of water purification or water treatment-related service and/or product. Competition includes national and/or local water purification companies operated by national chains, local chains, independent operators and to some extent water conditioning companies, retail stores and/or bottled water delivery businesses offering similar services, equipment and products to those found in an Aqua Chill Drinking Water Systems® business. The water purification industry is competitive throughout the United States as the market is constantly changing and evolving. Generally, there is no seasonality to this business. We plan controlled expansion into areas that we determine can support an Aqua Chill Drinking Water Systems® business to improve name recognition and our reputation through Franchised Businesses. We believe that our competitive position will be improved based on that expansion and the unique combination of services, proprietary equipment and products we offer, which is enhanced by our efficient operational format and highly trained technicians, places our Aqua Chill Drinking Water Systems® businesses in a unique class of their own. 4 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 The Aqua Chill Drinking Water Systems® Business is a water purification business that is characterized by a uniform business format that is simple and efficient offering our proprietary equipment combined with our unique sales, installation and maintenance programs, distinctive sales and rental programs, our guarantee program, our skilled technicians, specific operational procedures to enhance efficiencies; vehicle specifications and appearance standards; quality and uniformity of services, equipment and products offered; a regional Franchise website housed within our national website; relationship with vendors and suppliers, procedures for purchasing, technician training programs and ongoing operational assistance; telemarketing programs, proprietary sales, marketing and promotional programs; cost controls, management and financial controls; the Aqua Chill Drinking Water Systems® confidential operations manual (“Operations Manual”) and other manuals which are made available either in hard copy or electronically; all of which may be changed, improved and further developed by us periodically (collectively, the “System”). The System is identified by means of certain trade names, service marks, trademarks, slogans, logos, emblems, and indicia of origin, including the design plus service mark “Aqua Chill Drinking Water Systems” which is registered as of October 6, 2015 on the principal register of the United States Patent and Trademark Office, bearing the registration number 4,824,693. You will be licensed to use not only these marks and designs, but also all other service marks, trademarks, slogans, logos and emblems as we may designate for use in connection with the System (collectively, the “Marks” and each a “Mark”). Your own efforts and skills are necessary, but not a guarantee, for you to succeed. There can be no guarantee of your success, as there exist both typical and special business risk factors. These include: changing market conditions, competition, cost of equipment, supplies, real estate market, zoning restraints, capital, labor, your own health, continuity of your management, continuation of sources of supply, availability of financing, recession or depression locally or nationally, wars, strikes, acts of terrorism, emergencies whether natural or manmade, litigation, liability and casualty losses. Other risks that may affect your business include but are not limited to: industry developments, pricing policies of your competitors, state licensing requirements, supply and demand. Another risk to mention is your dependence on key personnel, the loss of whom could have an adverse effect on your Business. The purchase of an Aqua Chill Drinking Water Systems® (or any other) franchise is speculative, and a significant investment beyond that outlined in this Disclosure Document may be required to succeed. The most important factors in the success of any Aqua Chill Drinking Water Systems® Franchise, including yours, are your personal business, marketing, management, judgment and other skills and your willingness to work hard and diligently to follow our System.

Initial Fees

The Initial Franchise Fee for a single Franchise (the “Initial Franchise Fee”) is $60,000 and you can service clients located anywhere as described in Item 12. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you as set forth in the Franchise Agreement and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. The Franchise Fee also includes the development of a custom local affiliate website for your franchise housed within our national website, a web server for your website that will include access to franchise portals online for ongoing news bulletins and templates for print and advertising materials to support your business; a comprehensive training program including a Pre-Opening Manual, Operations Manual, our 15-day franchise training program at corporate headquarters; and a startup kit (that includes a computer, basic tools, promotional and marketing items as described in Item 7). You must purchase specific equipment, products and supplies from us, our affiliates or approved vendors and/or suppliers and the costs for these items may not be refundable (see Item 7 and Item 8). You will be provided with a written list of our approved equipment, products, vendors and/or suppliers during training. At the time you sign your Franchise Agreement you may purchase additional franchises for $15,000 each if we offer additional franchises to you. For the Initial Franchise Fee, half is due ($30,000) upon the signing of the Franchise Agreement and the other half ($30,000) is due after your Business is open for operation. Your Business is deemed open for operation immediately after the initial training is completed. The Initial Franchise Fee is deemed fully earned and nonrefundable upon payment per the terms of the Franchise Agreement. If during the initial training program, we believe that you are not qualified to operate an Aqua Chill Drinking Water Systems® business, then we will terminate your Franchise and refund that portion (50% of total) of your Franchise Fee that you paid, without interest. In certain states, as required by state authorities based on a review of our financial statements, we defer our receipt of the entire Initial Franchise Fee and all other initial payments or deposit them into escrow until we have met our initial obligations to you; see state addenda in Exhibit D. We have established an employee program for our employees or employees of our affiliates or franchisees to receive a discount of up to $60,000 off the Initial Franchise Fee when purchasing a franchise. This program would give an employee a credit of $5,000 for each year they have been employed up to $60,000 as such credits may be applied to the Initial Franchise Fee reducing it accordingly. This program does not apply to additional franchises. We retain the right in our sole discretion to modify or terminate this employee program at any time upon a 10-day written notice to franchisees. 7 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 We may also decide to offer a program in the future whereby Franchisees can receive a flat referral fee of $5,000 in cash, services or product credit for referring a third-party franchise prospect to us, who ultimately becomes an Aqua Chill Drinking Water Systems® franchisee. You are authorized only to present a prospect with our informational brochure and to identify the prospect to our company franchise sales staff. You are not authorized to act as our agent or franchise broker and are not instructed to provide any information, or financial performance representations, to prospects other than our information brochure. If you receive a referral fee, notice will be given to the prospective franchisee who you referred to us and who was given the Disclosure Document additional information consisting of the same type of information reported in Item 2 and Item 3 of this Disclosure Document about Franchisee. We retain the right in our sole discretion to modify or terminate this referral program at any time with or without notice. The factors concerning our decision to start, modify, or terminate the referral program include the number of franchises that we sell, the number of referrals that we receive from current franchisees, and the quality of referrals that we receive from current franchisees.

Financing

Except as stated below, we do not, directly or indirectly, offer you financing or guarantee any of your obligations. We and our affiliates do not receive payment or other consideration for the placing of financing or do not guaranty any note or obligation you enter into for your Aqua Chill Drinking Water Systems® business. We may offer financing to qualified prospective franchisees for up to 90% of the Initial Franchise Fee (Initial Franchise Fee is described in Item 5). Financing is not offered for any other purpose other than in connection with the establishment of an Aqua Chill Drinking Water Systems® business. We do not have any past or present practice or intent to sell, assign or discount to a third party, in whole or in part, any note, contract or other instrument that you execute, however, we reserve the right to do so in the future. If you qualify and accept financing from us, you must sign the Promissory Note Agreement attached as Exhibit F to this Disclosure Document. The general terms of the Promissory Note are summarized below: Interest: The interest rate will be zero percent (0%) for the first 60 months after executing the Franchise Agreement and no later than the beginning of your 61st month after the Franchise Agreement is executed, then you amount you owe will be due in full. If the amount you owe is not paid in full by the beginning of your 61st month, then you will be provided with a 30-day written notice to pay any unpaid balance and will be assessed a late payment penalty of $2,500. Payment Terms: There is no pre-payment penalty. There is no minimum payment due each month. You are only required to have the amount you owe paid in full no later than the beginning of your 61st month after the execution of the Franchise Agreement. Default: Upon default, we may accelerate the loan and adjust the interest rate (if any) on any accrued and unpaid interest to the default rate. Default is defined to include your default 22 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 of the Franchise Agreement with us, or any agreement between you and us or our affiliates. We may recover all fees and expenses relating to the enforcement of your obligations under the Promissory Note. The default rate of interest shall be 2.5% over the Prime Rate for Bank of America and shall commence when the loan is due and not paid or after any cure period or when it is accelerated to be all due and payable. Upon default the Franchisor reserves the right to terminate the Franchise Agreement. Administrative: There are no administrative fees charged. Guaranty: The obligation to pay the Promissory Note is included in the Guaranty attached as Schedule 4 to the Franchise Agreement. You or, if you are an entity, all entity owners will be personally liable for payment of the Promissory Note. Except as provided below, the Promissory Note does not provide for the waiver of any legal rights or prevent you from asserting any defenses it may have against us. 1. We may accelerate the maturity of the Promissory Note upon default without notice of any kind; and 2. You waive presentment for payment, demand, protest, notice of demand and nonpayment. You are required to grant us a security interest in the assets of your Business as collateral to secure the payment for the note.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits 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 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. 42 Aqua Chill Drinking Water Systems® Disclosure Document- 2019 We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Mark Jepson, 3626 N. Rancho Drive, Las Vegas, Nevada 89130 (702) 437-4558, or the Federal Trade Commission, and the appropriate state regulatory agencies.