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Business Description

We are offering PiRTER® franchises in the United States under master franchise rights granted to us in June 1997 by Pirtek Fluid System Pty. Ltd., (“PFS”), the head franchisor based in Austria. Several items of information in, this Diseipsui-e; Document are stated twice Where neeessai7,' once for us and separately for PFS. This duplicate, disclosure is required by federal regulation, but you should be aware that we are an independent business from PFS and operate under a master franchise agreement with PFS that obligates us to adhere to various requirements that PFS establishes and modifies from time to time: The: master franchise agreement is fritter described in Item 1,3. PFS does not guarantee the performance of our franchise obligations. Through an acquisition effective, on December 19, 20'14,. Although not a subsidiary of PFS, we now are under common ownership with PFS, and PFS is now considered an affiliate of ours, for purposes of this Disclosure Document. As discussed below, PFS is also the head franchisor of the Pirtek business.. PFS's address is listed below. PFS does not guarantee the performance of our obligations to you. Your franchise agreements. A Contract solely between you and us. We are a Delaware Limited Liability Company formed in June 1997. We have, no parents or predecessors. Our principal business address is 300 Gus Hip Boulevard, Rockledge, Florida 32955. We do business under our corporate name and Pirtek.

Prior Experience

We grant franchises to qualified persons, for the, right to own and operate a Pirtek service and supply center business: (the “Business” or “Semce and Supply Center”). We also are in the business of the administration of our franchise system, we started granting PlRTEK service and supply center franchises in June 1997, we have: not previously offered franchises in any other line of business. As of December 31, 2Q18, there were 74 franchised PlRTEK businesses (wide one location temporarily closed, As. further described in Item 20. Although we have had affiliate operate company-Owned Pirtek businesses in the past, as of the date of this Disclosure, Document, we; do not have any affiliates or any affiliate or corporate owned PlRTEK businesses. PFS is an Australian company incorporated in New South Wales, Australia in December 1979'. PFS' principal business address, is 3-5 Garling Road, Kings Park, New South Wales. 2148; telephone: (6, 12) 8822-9000. PFS does not offer or sell franchises; in the United States-nor does it provide any products- or services to franchisees: in the United States. Further, PFS has no predecessors or any affiliates offering, or selling franchises- in the United States or providing, products or services to, franchisees in the United' States. PFS does business under its corporate name and the trade “Pirtek Hose Service Centers.” PFS it's operated the PiRTEK hose sertnce center business in Australia since 1980, and in 1986 it began to offer Pirtek franchises in Australia. PFS has not offered franchises in any other line of business, As of December 31, 201-8, there were 98 franchises in Australia. These franchises are the type of business that the franchisee will operate .(that is, hose service center businesses Since 1988, PFS also has granted master franchise rights for the PiRTEK business and the operation of PiRTEK centers in many other countries throughout the world. In all, as of December 31, 2018, there were PiRTEK hose service, center businesses- in a number of countries around the world, including Australia, Belgium, England, Germany, Ireland Kenya, Namibia, Netherlands, New Zealand, Norway, Scotland, Singapore, South Africa, Tanzania, Wales and Zambia. The Pirtek systems some of these countries are operated by independent, unaffiliated, master licensees with no- common ownership interests like exist in the United States.'

Business Offered

The franchise granted to you is the right to own and operate a Pirtek Business according to the terms of the standard PiRTEK Franchise Agreement (the “Franchise Agreement”). A copy of the Franchise Agreement is included in this Disclosure; Document as Exhibit 2. During the operation of your Business, you will use our distinctive products euid services, standards and specifications, sales and business techniques and ilpage (the “System”), as well, as the, trademarks associated with the System (the “Marks”) as further described in Item 13,. Your Business will consist of the sale, custom assembly and installation of industrial and hydraulic hoses, fixed tube assemblies, fittings and related components and other distinctive products arid services. You Will operate your Business from a Service & Supply Center and mobile sales arid service units (“MSSU's”) (collectively referred to sometimes' As. the “Center”) within a particular geographic tentoria (the “Territory”). Most franchisees will develop their Business as a Tier-1 Business, which means that you will develop and operate your Service & Supply Center in the initial months Of the Business and continue to add MSSU's as your Business grows. In limited instances in less populated areas, we may authorize a. franchisee to operate a Tier 2 Business, Which means that you will initially operate two MSSUs, and Without a service & Supply Center, with the requirement that you add additional MSSUs arid open a Service & Supply Center within specified timeframes set forth in Appendix A to the- Franchise Agreement, The Franchise Agreement for a Tier 1 Business and a Tier 2 Business is the same, except as Set forth in Appendix A to the Franchise Agreement. The disclosures in this Disclosure Document apply to both a Tier 1 and Tier 2 Business, except where we include separate disclosure for each of the Tiers'. You will sell the PiRTEk products and services, from your Business to a vast array of mobile and stationary (fixed), plant and equipment users within the following markets, depending on the location of your Business: earthwork and constriction; industrial manufacturing; food production; materials handling; air;, sea arid land transport; agriculture; mineral exploration and mining; and government and utilities businesses and Others. You will compete with other businesses within the “bulk” or Original Equipment Manufacturing (“OEM”) hose and fitting market. This market is very competitive and includes national and international brand product, suppliers, like Aeroquip, Parker Haitian and Gates Rubber Co. Other competitors may be generally associated with rubber tire production and include Goodyear, Dunlop, Yokohama and Bridgestone. As of the. Date of this Disclosure Document predict what impact these significant economic conditions will have on businesses generally or the industrial and hydraulic hose industry. There may be additional unforeseen changes in the economy and the industry. There are no laws or regulations speech to the Operalioii of a business featuring the sale, assembly and installation of the Pirtek products, although there may be specific regulations applicable in some industries in which your customers operate. For example^ in the food industrial stainless steel piping must be used in food processing; In addition, your Business will be subject to federal state ;and local laws regarding the storage- use and disposal of hazardous materials'. There also will be other-local, state and federal laws applicable to your Business that apply to businesses generally, and we urge you to make further, inquiries, about, these laws. It is your sole responsibility to obtain and keep in force all necessary' licenses and permits required by public authorities:

Initial Fees

You must pay to us an Initial Franchise Fee of $5000 for a Tier 1 Business and $20,000 for a Tier 2 Business. In addition, for a Tier 1 Business you must pay to us an Opening Set-up Fee in an amount between $-5,000 and $14000, plus for both a Tier 1 and Tier 2 Business you must pay up to $ 10000 for our designated computer system (“Computer System”) and Computer Connection Fee, although in 201'8 the Computer System Fee we collected was $5,000. You must pay the Initial Franchise Fee when you sign the Franchise Agreement. Additionally, you must pay the Openings Set-up Fee on or before the first day of the initial training program, and the: Computer System and Computer Connection Fee before you commence business operations. In connection with the Opening Set-up Fee, we will spend approximately 10 to 15. Business days at your Center prior to opening to generally get you ready to open your Center for business. In addition, to the Initial Franchise' Fee, Opening Set-Up Fee and Computer System and Computer Connection Fee, you must purchase from us the Opening inventory, and certain items of the equipment, uniforms and other similar items with the PirTEK trademark (‘‘Other Items”)' for your Tier 1 Business, for a total of approximately $130,000 to:$200,000 and for a Tier 2, Business those amounts total approximately $50,000 to ,$100,000. During our 2018: fiscal year, we collected amounts ranging from $123500 to $'150,000 for the Other Items: described in this Paragraph., We participate .in the Veterans Transition Franchise Initiative (commonly referred to as “Vet Fran”), which seeks to provide an opportunity for veterans who want to be in business, If you are' an honorably discharged veteran of the: U.S. Armed Forces', you may be eligible to receive a -$.15;,000 discount off the Initial Franchise Fee amount due at the time you sign, the Franchise Agreement for a Tier 1 Business or $5,,000 off the Initial Franchise Fee for a Tier 2 Business. All amounts in. this Item 5 are payable' in lump sum and are not refundable.

Financing

We do not guarantee your loans, leases, or other obligations. You must obtain necessary financing through third parties.

Franchisee Revenue and Profit

The FTC 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: (I|. a franchisor provides the actual records of an existing outlet you 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. 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 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 our management by contacting, Daniel Perry, President and ?Chief Operating Officer, Pirtek USA, LLC, 300. Gus Hipp Boulevard, Roekledge, Florida 32955, (321) 701-3330, the Federal Trade Commission and any appropriate state regulatory agencies.