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Business Description

TSC is a California corporation, incorporated in July 1984. We operate under the name The Screenmobile Corporation, Screen mobile, and no other name. Our principal business address is 72050A Corporate Way, Thousand Palms, and California 92276. We began offering franchises for Screenmobile Businesses in 1984. We operate, and have operated, a business similar to a Screenmobile Business since 1982. We have not offered franchises in any other line of business. We do not conduct any other business other than franchising Screenmobile Businesses. We have no predecessor or parent entities or affiliates. Our agent for service of process in California is Monty L. Walker, 72050A Corporate Way, Thousand Palms, and CA 92276. Our agents for service of process for other states are identified by state in Exhibit A. If a state is not listed, we have not appointed an agent for service of process in that state in connection with the requirements of franchise laws. There may be states in addition to those listed above in which we have appointed an agent for service of process. There may also be additional agents appointed in some of the states listed.

Prior Experience

We began offering franchises for Screenmobile Businesses in 1984. We operate, and have operated, a business similar to a Screenmobile Business since 1982. We have not offered franchises in any other line of business. We do not conduct any other business other than franchising Screenmobile Businesses. We have no predecessor or parent entities or affiliates.

Business Offered

We offer franchises (“Screenmobile Franchise(s)” or “Franchise(s)”) for the use of our “SCREENMOBILE” trademarks, trade names, service marks, and logos (“Marks”) for the operation of Screenmobile Businesses. Screenmobile Businesses are operated under our proprietary Screenmobile system (“System”). The System may be changed or modified by us throughout your ownership of the Franchise. Screenmobile Businesses provide residential and commercial window, patio, and door screens—from repairs to new screens—and other related services. You will operate your Screenmobile Business as a mobile business from a truck or van. Most franchisees operate the Screenmobile Business out of their home, but you may choose to rent a self-storage facility, executive suite office, or other commercial space. You must sign our standard franchise agreement attached to this Franchise Disclosure Document as Exhibit B (“Franchise Agreement”). You may operate one Screenmobile Business for each Franchise Agreement you sign.

Initial Fees

You must pay us an initial franchise fee (“Initial Franchise Fee”) of $39,500 for your first Franchise. The Initial Franchise Fee is payment for all of our pre-opening assistance that we provide to allow you to open your Screenmobile Business and also offsets some of our franchisee recruitment expenses. You can reserve a particular geographic territory, subject to our approval, for a period of 90 days by paying us a non-refundable territory reservation fee (“Territory Reservation Fee”) of $5,000 (which will be applied toward the Initial Franchise Fee) before you sign a Franchise Agreement. You cannot pay the Territory Reservation Fee until you have waited any federal and state franchise law waiting periods. The Initial Franchise Fee will be due upon signing of the Franchise Agreement (less the Territory Reservation Fee if you have reserved a territory). If you decide to purchase a second Franchise, the Initial Franchise Fee for the second Franchise is 50% of the then-current Initial Franchise Fee. You will still be required to pay all remaining fees for the second Franchise. The Initial Franchise Fee is due at the time of signing the Franchise Agreement, deemed fully earned by us once paid and is non-refundable. The Initial Franchise Fee is uniform. We offer a $2,500 discount on the Initial Franchise Fee for the purchase of the first Screenmobile Franchise to honorably-discharged veterans of the United States Armed Forces, and their spouses. In certain situations, we may offer financing for up to $20,000 of the Initial Franchise Fee based on the qualifications of the franchisee and their credit rating (See Item 10 for more information). During our last fiscal year which ended June 30, 2019, we collected Initial Franchise Fees of $39,500. Initial Territory Fee In addition to the Initial Franchise Fee, you must pay us a nonrecurring and non-refundable initial territory fee of $0.15 per household based on the latest U.S. Census data in the territory of the Franchise (“Initial Territory Fee”). The cost will be between $7,500 and $41,250, depending on the number of households defined by zip codes. The Initial Territory Fee grants you the exclusive right to operate a Screenmobile Business within a particular geographical territory containing approximately 50,000 to 275,000 households (See Item 12). If you purchase a second Screenmobile Franchise, you will pay an Initial Territory Fee of $.10 per household based on the latest U.S. Census data in the territory of the second Franchise. The cost will be between $5,000 and $27,500, depending on the number of households defined by zip codes. The Initial Territory Fee is uniform and payable in a lump sum upon the signing of the Franchise Agreement, and is not refundable under any circumstances. During our last fiscal year which ended June 30, 2019, we received Initial Territory Fees ranging from $0 to $30,235.80 per Franchise. Additional Required Purchases You must purchase a start-up package from us that contains the equipment and items we specify for each Screenmobile Business (“Start-Up Package”). Item 7 lists the items and equipment in the Startup Package. The Start-Up Package fee is $38,300 for a single territory that has up to 150,000 households and $68,300 if the territory has more than 150,000 households (“Large Territory”). If you have a Large Territory, you will be required to have an additional truck or van and may be required to hire additional personnel. The Start-Up Package for a Large Territory includes an additional trailer, vehicle wrap, and tool package. You may receive a $2,800 discount if you, or if you are an entity, one of your owners, or one of your employees is a certified public accountant and you elect to perform your own bookkeeping services during the first year. The fees for the Start-Up Package are uniform, payable in a lump sum at the time of signing the Franchise Agreement, and are not refundable under any circumstances.

Financing

We do not regularly offer financing to our Franchisees. However, in certain situations, we may extend financing for up to $20,000 of the Initial Franchise Fee based on the qualifications of the franchisee and their credit rating. The terms of repayment by a franchisee, such as number of monthly payments to be made, are negotiated on a case-by-case basis depending on the circumstances of the purchase, credit score, and the total amount to be financed by us. Typically, you would sign a Promissory Note (“Note”) for the amount financed. You would be required to sign a security agreement which would require the pledge of security in the Franchise and all assets of the Screenmobile Business, including your Vehicle and Trailer. The interest rate will vary based on credit scores and the principal and interest payments would be due by the 5th day of each month. The interest rate cannot exceed 10% in California. You will make monthly payments for up to a period of one to three years, depending on the agreement, following the date of the Franchise Agreement until the Note is paid in full. Should you fail to pay the Note in full within the specified term, the remaining balance plus interest will be immediately due and payable. Also, should you fail to make any monthly payment on time, we may accelerate the entire remaining principal amount plus interest, and require immediate repayment. The Note will not include a penalty for prepayment. The Note must be signed by you and personally guaranteed by your spouse (if applicable) and your owners and your owners' spouses. A default under the Note would be a default under the Franchise Agreement, and may result in the termination of your Franchise Agreement. You must also pay all costs of collecting the amount due under the Note, including attorney fees. Suit will be filed against you in the State of California. You must waive all defenses against us, and other legal rights. A copy of the form of Note and the accompanying Security Agreement used by us for this type of financing is attached as Exhibit G to this Franchise Disclosure Document. It is not our practice to sell, assign, or discount the Note to a third party. Except as provided above, we do not offer direct or indirect financing to you. Financing for the purchase of equipment for use in your Screenmobile Business may be available from third parties. We do not guarantee your Note, lease, or other obligation. We are listed on the Franchise Registry of the Small Business Administration.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to disclose information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, and/or affiliate-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Franchise 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 performance at a particular location or under particular circumstances. As of June 30, 2019, we had 121 franchised Screenmobile Businesses and one franchisor-owned Screenmobile Business in operation. This Item 19 provides information on 100 franchised Screenmobile Businesses that were open for at least 12 months as of December 31, 2018 (“Reporting Group”). Seventeen Screenmobile Businesses were not open at least 12 months as of December 31, 2019 and four Screenmobile Businesses that closed in 2018 and were not included in the Reporting Group. The information in the tables below is a historical financial performance representation for the Reporting Group for the 2018 calendar year (“Reporting Period”). The financial information was prepared from internal accounting records and reports. The numbers have not been audited but we have no reason to doubt their accuracy. All of the Screenmobile Businesses included in this Financial Performance Representation offer similar services and face a similar degree of competition anticipated for the Screenmobile Businesses offered under this Disclosure Document.