Business Description

Action Duct cleaning Franchising, Inc is a California Corporation chartered on October 16, 2017 Our principal place of business is at 2333 Lincoln Avenue, Altadena, CA 91001 (Telephone Number 626-791-7870) We have one affiliate. Action Duct cleaning Company, Inc that operates multiple offices providing cleaning services similar to the one you will own The company was founded m 1978 by Dan and Betty Strafford who incorporated the business 1984 In 1987, they opened an office County, California and m 1989 they opened an office m Orange County We have no Predecessor and we do not have ,a Parent company Our agent for service of process m California is Dan Strafford, 2333 Lincoln Avenue, Altadena, CA 91001 Phone 626-791-7870 Refer to Exhibit C, the Schedule of State Agencies attached for information on the agent for service of process in other states where we may be registered

Prior Experience

We have been offering franchises since October 31, 2018 We have not offered franchises in any other lines of business We, or our affiliates, may, in the future, operate Action Duct Cleaning franchises in various markets that we do not currently service, but we will not encroach on the territory of a franchisee We currently operate the website www Action Duct com which promotes our franchises through the internet We will add new franchisees' contact information to this website when they are trained, equipped and prepared to open their businesses There are no federal regulations specific to the operation of an Action Duct Cleaning franchise but, like any business, you will be required to comply with numerous government regulations (both state, local and federal) affecting the operation of your franchise and your relationship with employees, including local zooming regulations, minimum wage requirements, overtime, working conditions and citizenship requirements Some states or municipalities require that the business providing certain services on the ductwork of HVAC units have state or local licenses There may be other laws applicable to your business and the services that you offer and we urge you to make further inquiries of your advisors and local government officials about such regulation You will compete with other businesses offering air duct, dryer duct, chimney and exhaust hood cleaning The market for the services we provide is competitive but the number of homes and businesses needing this type of cleaning is growing At the date of this Disclosure Document, research disclosed a very limited number of businesses offering our broad list of cleaning services

Business Offered

We grant you the right to provide a broad range of cleaning services to residential and commercial property owners Primary services include HVAC duct cleaning, dryer duct cleaning, kitchen exhaust cleaning, industrial oven cleaning, industrial silo cleaning, chimney cleaning, gutter cleaning, Aero seal duct sealing and related services All cleaning services are performed at the customers' building by a team of 1 to 3 technicians that have been trained by us and may hold certificates of advanced training from state or national organizations You will market and operate your business under the trade name “Action Duct cleaning,” which our affiliate has registered with the US Patent and Trademark Office Franchise owners don't need to have experience m the cleaning industry, as training will be provided to give owners sufficient knowledge to bid, sell, service and supervise staff m completing projects You may operate from a home office or a small office that we have approved that lies within your Protected Territory Our website identifies and promotes the services At are regularly offered to the public and to business property owners All franchisees will offer the same menu of services as described in our Operations Manuals We will teach you our methods for managing your business and assist you m implementing our system of marketing an Action Duct Cleaning franchise We will assist you m selecting a suitable territory and we will protect you from having another Action Duct cleaning franchisee providing services m your Protected Territory We will provide you with the list of software, computers and other equipment you need to run your business We will teach you procedures for marketing your business to homeowners and business owners, for recruiting, and for teaching your staff to complete the jobs you're contracted to complete

Initial Fees

All franchisees pay a uniform Initial Franchise Fee of $29,500 for a license to operate one Action Duct Cleaning franchise within a specific Protected Territory As an inducement to join our system, the Initial Franchise Fee for the first five franchisees to sign a Franchise Agreement will be reduced to $19,500 and for franchises six through ten, it will be $24,500 Payment must be made in a lump sum at the time you sign your Franchise Agreement Payments made are considered earned and nonrefundable at that time In certain areas there may be Action Duct Cleaning services being provided m local homes and businesses by our affiliate, Action Duct Cleaning Company, Inc These contracts will be assigned to a fi-franchisee purchasing that territory for no cost at the time the franchisee has completed training and IS ready to open During the term of your Franchise Agreement, you have the right to additional franchise licenses to operate other Action Duct cleaning territories, on an "as available" basis, only if you are m compliance with the terms of the franchise agreement, at a reduced price of Ninety Percent (90%) of the franchise fee being charged to new franchisees at the time application is made Any franchisee may only receive one reduced Franchise Fee or Discount per franchise purchased Each additional Franchise License includes the right to own and manage one Protected Territory from your home or a small office You will not pay us or our Affiliate any other fees or payments before your business opens

Financing

We generally do not offer financing or guarantees of any costs or leases associated with opening or operating your franchise However, we may offer partial or full financing of your Initial Franchise Fee if you have been an employee of us, or an affiliate, for more than 12 months or you have experience managing a business m a related industry m the past Additional qualifications for obtaining financing would include your credit score, your current net worth and the amount of debt you now owe others Loans made to franchise buyers will be payable monthly, incur a ten percent (10%) interest rate and extend for a maximum of 36 months A copy of our current Promissory Loan Agreement is included as Addendum J of our attached Franchise Agreement

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 m the disclosure document Financial performance information that differs from that included m 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 m this Item 19, for example, by providing information about possible performance at a particular location particular circumstances Except as set forth below, we do not furnish nor authorize our salespersons to furnish any oral or written information concerning the actual or potential sales, costs, income or profits of an Action Duct Cleaning franchise The information below is based upon the performance of our affiliate, Action Duct Cleaning Company, Inc which provides services similar to those offered to prospective franchisees through this Disclosure Document to residences and businesses commonly within Los Angeles, Orange, Riverside and San Bernardino Counties The first Action Duct Cleaning business opened for business m 1978 m Los Angeles, CA and, utilizing two branch managers, have provided services m multiple sites m multiple California counties in subsequent years Each branch manager operates from a home office and engages m establishing new accounts, recruiting, training and scheduling cleaning contracts Written substantiation for this Financial Performance Representation is available to you upon reasonable request. Some outlets have sold this amount. Your mdividual results may differ. There is no assurance that you'll earn as much.