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Business Description

We are a Delaware Limited Liability Company organized on June 9, 2015. Our principal business address is 4401 Park Road, Benicia, California 94510. If we have an agent in your state for service of process, we disclose that agent in Exhibit “D.” We conduct business under our corporate name, 1-800-Radiator and 1-800-RADIATOR & A/C®, and no other name. Although we reserve the right to do so, we have not offered franchises in other lines of business We are a direct, wholly-owned subsidiary of Driven Systems LLC, a Delaware limited liability company (“Driven Systems”). Prior to April 2018, we were a direct, wholly-owned subsidiary of Driven Brands Funding, LLC, a Delaware limited liability company (“Driven Brands Funding”) and an affiliate of Driven Systems. The principal business address of Driven Systems and Driven Brands Funding is 440 South Church Street, Suite 700, Charlotte, North Carolina 28202.

Prior Experience

Our predecessors have offered franchises for 1-800-RADIATOR & A/C® Warehouses (defined below) since 2004. We do not own or operate any 1-800-RADIATOR & A/C® Warehouses. Our affiliate, 1-800-RADIATOR & A/C ® Corporation (“A/C Corporation”), has owned and operated 1-800-RADIATOR & A/C® Warehouses since 2001 and, as of December 30, 2017, owned and operated 5 1-800-RADIATOR & A/C® Warehouses. Prior to the Securitization Transaction, A/C Corporation distributed radiators and parts and provided certain support to 1- 800-RADIATOR & A/C® Warehouses. Those functions have been assumed by All Parts Holdings following the closing of the Securitization Transaction. Neither we nor our predecessors have conducted any other business and have never offered franchises in any other line of business.

Business Offered

We offer franchises to qualified individuals and entities to develop and operate a business that offers primarily wholesale distribution of certain automotive parts and other products we specify from a warehouse location operated in accordance with our specifications to manage inventory, delivery and services which are provided to automotive repair shops, parts stores, body shops, and other repair shops (collectively, “Shops”) located within a defined geographical area. In this disclosure document, we call these businesses “1-800-RADIATOR & A/C® Warehouses,” and we call the 1-800-RADIATOR & A/C® Warehouse that you operate under the Franchise Agreement the ‘Warehouse.” 1-800-RADIATOR & NC® Warehouses operate under the trademark and service mark “1-800-RAD1ATOR & A/C®” and associated logos, trademarks. Service marks, commercial symbols, and e-names, which have gained and continue to gain public acceptance and goodwill (collectively, the “Marks”). You may purchase a new 1-800-RADIATOR & A/C® Warehouse (“Start-up Warehouse”) or you may purchase an existing 1-800-RADIATOR & A/C® Warehouse, which may be owned by us, our affiliate or a franchisee (“Re-sale Warehouse”). You will provide the same products and services to customers, whether you purchase a Start-up Warehouse or a Re-sale Warehouse. In each case, you must sign our current form of Franchise Agreement, which is attached to this disclosure document as Exhibit “B.” We and our affiliates have developed a sophisticated, proprietary operation system (the “Network”) to handle inventory management, purchasing, customer ordering, pricing, delivery, reporting and accounting for 1-800-RADIATOR & A/C® Warehouses. The Network also provides extensive customer and product data that is utilized to drive marketing activities and optimize sales and purchasing. The Network and other parts of the system (the “System”) are fully expandable and can manage increases in volume and revenue. An important part of the System is the Operations Manual (the “Manual”). As of the date of this disclosure document, the automotive parts and products we permit 1-800- RADIATOR & A/C® Warehouses to distribute to Shops include radiators, condensers, air conditioning compressors, fan assemblies, fuel pumps, hoses, exhaust-related products and services and heavy duty hard parts and services (such as heat exchange products, engine cooling accessories, HVAC system components and accessories, engine management and emissions control components, exhaust components, diesel after-treatment products and services, steering and suspension products, fuel storage and delivery system components, medium and heavy duty commercial and institutional truck, tractor and bus components) (the “Core Products”), and other automotive parts and related services we periodically designate (the “Additional Products” and, together with the Core Products, collectively, the “Products”). Certain Products bear a brand owned by an affiliate (“Private Label Products”). As of the date of this disclosure document, Private Label Products include hoses. You may only offer and sell Private Label Products if you qualify for participation in the associated programs which may require additional marketing and compliance with inventory requirements. Private Label Products must be purchased from Approved or Designated Suppliers (defined in Item 8).

Initial Fees

Initial Franchise Fee When you sign the Franchise Agreement (Exhibit “B” to this disclosure document), you must pay to us an initial fee of $45,000 (the “Initial Franchise Fee") for your Warehouse. Our affiliates may acquire franchises to own and operate 1-800-RADIATOR & A/C® Warehouses for discounted initial franchise fees. The Initial Franchise Fee is non-refundable. In the fiscal year ended December 29, 2018, we received Initial Franchise Fees ranging from $0 to $45,000 from franchisees. Warehouse Equipment Package Before opening your Warehouse, you must purchase a Warehouse Equipment Package for $42,000, which will include the items listed in Attachment 2 to the Franchise Agreement that we complete prior to signing the Franchise Agreement. This amount is imposed uniformly among all franchisees for Start-up Warehouses and is non-refundable. Opening Marketing Package Before your Warehouse opens, you must pay us up to $30,000 for the opening marketing package (the “Opening Marketing Package”). This amount is used at our discretion, at any time before or after the opening of your Warehouse, to cover expenses related to helping you set up and market your Warehouse, including travel, lodging, salaries, food, promotional and marketing materials, mailers, outbound phone sales calls, organizing inventory (including purchasing additional inventory that we may require), conducting marketing activities in your Territory, or providing onsite remedial training to you or your employees. Promotional and marketing materials may include door hangers, t-shirts, notepads, stickers and other promotional items. We will provide you with an accounting of the amounts spent on the Opening Marketing Package, and you will only be billed the actual costs of such items. This amount is nonrefundable. Initial Inventory Before your Warehouse opens, you must purchase an initial inventory which consists primarily of the Products. The amount of initial inventory will typically range from $200,000 to $700,000 depending on the anticipated sales volume as well as current market prices and is nonrefundable. You must acquire and maintain a minimum inventory level we prescribe from time to time and may not exceed the out-of-stock percentage we specify on the parts you sell, as specified by product category, as we prescribe in the Manual. You must stock all product lines we require in your Warehouse, unless we otherwise provide our express written consent. We may periodically revise the minimum inventory level, out-of-stock percentage and/or product categories. You must purchase the inventory from Designated or Approved Suppliers through the Network. You will pay All Parts Holdings, and it will process your payments to suppliers through the Network. All Parts Holdings is the only Approved Supplier of 1-800 ALL PARTS® branded hoses, which are offered as part of our associated program. You currently are not required to purchase any inventory Products from All Parts Holdings.

Financing

Although we do not offer any financing, our affiliates, in their sole discretion, may finance a portion of the initial costs and fees related to your purchase of the 1-800-RADIATOR & A/C® franchise if you meet certain credit requirements. This financing is provided in conjunction with or in lieu of SBA financing or other conventional financing that you obtain in connection with your 1-800-RADIATOR & A/C® franchise purchase. The following chart summarizes the terms of such financing, but the actual terms and conditions will be contained in a Promissory Note and Security Agreement and such other documents as agreed to between you and our affiliate. The form of Promissory Note, Security Agreement and UCC-1 Financing Statement are attached as Exhibit “I” to this Disclosure Document. Notes: (1) In its sole discretion, our affiliate may elect to finance all or a portion of the purchase price for the franchise if you meet certain credit requirements. The amount financed is generally negotiated on an individual basis depending on several factors, including your credit history, guarantees of your owners, and financial condition. We may require you to obtain SBA or other conventional financing related to the purchase of the franchise, in order to qualify for a loan from our affiliate. (2) You must sign a Security Agreement which grants our affiliate a security interest in all of the furniture, fixtures, equipment, accessories, inventory, licenses, permits, goods, materials, supplies, accounts, general intangibles, and all other assets, supplies and materials, under the Uniform Commercial Code, to secure the prompt payment and performance of all of your obligations to our affiliate, including the indebtedness on the Promissory Note. If you are a business entity, your principal owners may be required to guaranty your obligations under the Promissory Note and the Security Agreement. (3) Upon an event of default or acceleration event, the entire unpaid principal balance and all accrued interest will be accelerated and become immediately due and payable in full, and the interest rate will increase to the lesser of 18% or the maximum rate permitted by law. Events of default are listed in the chart above. You must pay all costs of collecting amounts due under the Promissory Note. In addition, a default under any of the financing documents constitutes an event of default under the Franchise Agreement. Except as described above, neither we nor any affiliate offers direct or indirect financing to you, guarantees any note, lease or other obligation of yours, has any practice or intent to sell, assign or discount to a third party all or any part of any financing arrangement of yours, or receives any direct or indirect payments or other consideration from any person for the placement of any financing with the lender.

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.