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Business Description

The Company is a limited liability company formed in June 2013 in the State of Florida. Our principal place of business is 2121 Vista Parkway, West Palm Beach, Florida 33411. We do business under our company name and Experimax®. We do not have any predecessors or a parent entity. Our agents for service of process are listed in Exhibit F to this Disclosure Document.

Prior Experience

We grant franchises to qualified persons for the right to own and operate an Experimax business (the “Business”) under the terms of our standard Franchise Agreement (a copy is attached as Exhibit A). We began granting franchises in October 2014 and have 126 locations in 10 countries (as of December 31, 2018). In late 2018, we modified our trade mark for the retail stores from “Experimac” to “Experimax”, however, our company name has remained the same and is still “Experimac Franchising, LLC”. We operate a store located in Huntersville, North Carolina that is similar to an Experimax business. This business was originally opened as a franchise location in July 2016 and was acquired by us in December 2018.

Business Offered

EXM offers to you, our customer, and the right to own and operate an Experimax Store (“Store”). In your Store and on the Internet you will purchase and resell used electronic products such as laptop computers, tablets and cell phones plus new accessories and components for these products such as cases, cables, chargers, adapters, keyboard covers and external drives (the “Products”). You will also refurbish and repair computers, tablets and cell phones. In your Store you will use our trademarks, trade name, proven and sophisticated procedures and trade secrets. The market for used electronic products and for repair services has grown rapidly. Competition for your Store will come from small retailers and franchisees of other franchise systems offering similar used products and repair services; internet based companies buying and selling similar used products online only and to a lesser degree from businesses offering primarily repair services. You will also compete with retail chains selling new accessories similar to those sold in an Experimax Store. On e-commerce websites, you will compete in the purchasing and selling of the Products with the affiliates' stores in West Palm Beach, Boynton Beach and Orlando, Florida, the Company owned store in Huntersville, North Carolina and other franchisees. Your Experimax Store as a reseller of used electronic products will be subject to state and local laws regulating dealers in second-hand goods. These laws will require you to obtain a license to operate the business. To obtain the license, you may be subject to a criminal background check. These laws will also regulate aspects of your business including gathering and retaining information regarding the sellers of used products sold by your Store and the length of time that must expire before an item can be resold. There will be other local, state and federal laws applicable to your business. We encourage you to make further inquiries and seek legal counsel about these laws.

Initial Fees

Except as noted below, all franchisees purchasing a new Experimax franchise pay an initial franchise fee of $49,500 when they enter into our Franchise Agreement. Prior to executing the Franchise Agreement, you will be required to pay a $9,500 deposit (commonly referred to as a “binder”) upon signing a Deposit Receipt, a copy of which is attached to this disclosure document as Exhibit C. At least 14 days prior to paying this binder or signing a Deposit Receipt, we will provide you with a copy of this Disclosure Document, together with a copy of all proposed agreements relating to the sale. This binder is fully refundable if you do not purchase an Experimax franchise. After we receive your binder, we assist you with your search for your Store location. On the date you enter into your Franchise Agreement, the binder is applied against the initial franchise fee leaving a remainder of $40,000. The initial franchise fee is nonrefundable. Experimax franchisees acquiring a second store will pay a second-store franchise fee of $39,500 that is nonrefundable and due at closing. Any conversion franchisee converting an existing business similar to an Experimax franchise also will pay an initial franchise fee of $49,500, which is nonrefundable and must be paid upon execution of the Franchise Agreement. See Item 6 regarding payment of royalties by a conversion franchisee. In addition, if you are purchasing an existing resale outlet, the seller will pay to us $29,500 or the then current transfer/training fee from the closing proceeds as described in Items 6 and 7. Eligible United States military veterans with 1 to 10 years of active duty service will receive a discount of 10% of the franchise fee. Eligible veterans with 11 to 20 years of active duty service will receive a discount of 15% of the franchise fee. Eligible veterans with 21 or more years of active duty service will receive a discount of 25% of the franchise fee. Eligible veterans will receive a discount of 5% of the transfer fee. An eligible veteran is a veteran who has received an honorable discharge. Owners in good standing of our affiliated brands (Signarama, Fully Promoted, TBA, SuperGreen, JSS, VTX, and TGG) purchasing our franchise will pay a franchise fee of $39,500. In addition to the initial franchise fee, you must purchase an initial equipment package from us, a retail accessories and repair (parts) inventory package and an opening inventory package from Premium Supplier (our affiliate) or another supplier we may designate as further described in Items 7 and 8. The cost of the initial equipment package including shipping is $94,900, plus taxes and a deposit of $12,500 is due at the time of signing the Franchise Agreement. The balance of the purchase price, $82,400, plus taxes is due within 10 days of the signing of the lease for the premises. The initial equipment package contains all of the equipment and supplies, except for a few items, to begin operations. See Items 7 and 10 for information regarding obtaining financing for the purchase of the initial equipment package. The cost of the retail accessories and repair (parts) inventory package including shipping is $5,000 to $11,000 plus taxes. The cost of the opening inventory package including shipping is $10,000 to $28,000 plus taxes. The retail accessories and repair (parts) inventory contains an initial inventory of products including accessories for cell phones, computers and tablets and other electronic equipment and parts you will use to make repairs and upgrades. The opening inventory package contains an initial inventory of pre-owned electronic equipment. The costs of the retail accessories and repair (parts) inventory package and the opening inventory package are due at closing and are nonrefundable. Our affiliate, Franchise Real Estate assists our franchisees with site selection, lease negotiation, construction management, store design and layout and in obtaining building renovation costs. You may use Franchise Real Estate's services at your option. Franchise Real Estate may be compensated by your landlord for their services, but if you opt not to use Franchise Real Estate and you retain another real estate company for this assistance, then you will be required pay a service charge to Franchise Real Estate for their pre-opening assistance of $3,500. This service charge will be required to be paid prior to opening your Business and is non-refundable.

Financing

We offer indirectly arrangements for financing of your equipment through equipment leasing companies. We do not offer directly or indirectly any arrangements for financing of any other initial investment expenditures or of the continuing operation of your franchise. We do not guarantee your note, lease or any other obligation. We have arranged for you to obtain financing for the purchase of equipment through Advantage Leasing Corporation, an unrelated third party that is not affiliated with EXM in any manner. This loan company will finance your purchase of the equipment package that you need to obtain to establish the franchise business, up to $94,900 worth of equipment. If you obtain a loan for the purchase of your equipment through Advantage Leasing Corporation (“Advantage”) you will pay $2,699 monthly (payment factors and terms are subject to change without notice), plus any applicable sales and use tax. Advantage will require a security deposit of $9,500 and a $550 documentation fee at the time of signing the loan documents. Advantage's loan term is 48 months with no end of loan purchase option payment required. Depending on your credit standing and EXM – CA –2019 FDD 26 qualifications, Advantage may approve your loan for a lesser amount than the maximum available of $94,900. If you are approved for a lesser amount, you will be required to pay the remaining balance of the equipment package, plus any applicable sales and use tax to EXM. Advantage's loan agreement requires you and your spouse to personally guarantee your payment of the loan, and Advantage will hold a security interest in the equipment being financed. Your loan with Advantage may be prepaid after 12 payments without any prepayment penalty. A copy of Advantage's loan agreement is included with this Disclosure Document as Exhibit B. EXM receives a fee of 1% of the loan amount from Advantage. In the event of a default, the loan company may take action against you. Such action may include the acceleration of the terms of your loan, repossession and removal of the equipment with or without notice to you. You will also be responsible for their reasonable collection costs, legal fees and expenses incurred in enforcing the loan terms and recovering the equipment. Further details can be found in sections 6 and 7 of the Advantage loan agreement in Exhibit B. Should you cease to be a franchisee prior to the completion of the loan payments, another franchisee may apply to take over the remaining terms of your loan. However, the loan company may choose to retain your personal guaranty until the loan is paid in full. EXM may identify new finance companies or equipment leasing companies at any time and refer franchisees to a different finance or leasing company for financing of equipment. A new finance or leasing company may compensate EXM or pay EXM a fee for referring its franchisees to it for financing or leasing.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual financial performance of its franchises and/or franchisor-owned units, 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 of a particular location under particular circumstances. The financial performance representation information in this Item 19 includes certain historical financial performance information relating to our Stores' operation in calendar year 2018. We obtained 100% of the average gross sales data and average profit margin data for the Stores represented from monthly sales and costs reported to us by franchisees and submitted to us by our affiliates. The average gross sales and average profit margin results shown below are a historic representation for: (1) all Stores located in the United States which have been open for at least 2 full calendar years; and (2) submitted sales and costs reports for all 12 months in calendar year 2018. The monthly sales and costs reports have not been audited by certified public accountants nor have we sought to independently verify their accuracy for purposes of the financial performance representations. Not all Stores properly reported sales in 2018. The financial performance representations include average annual gross sales and profit margin results of Stores for the year 2018. “Gross Sales” means total reported sales revenue, excluding any county or state sales tax collected. “Costs” includes the costs of goods sold (store's purchase price) and in case of repairs includes labor. Costs excludes all other expenses, including, but not limited to, rent, royalty fees, advertising, taxes, start-up costs and insurance will impact your operating profit and are not included in the Average Costs figures. “Gross Profit” equals Gross Sales minus Costs. “Gross Profit Margin” equals (Gross Sales minus costs) divided by Gross Sales, multiplied by 100. No affiliate-owned outlets and 18 franchise outlets closed during2018. Of the 18 franchise outlets excluded, 3 closed in 2018 after being open for less than 12 months. Some outlets have sold this amount. Your individual results may differ. There is no assurance that you'll sell as much. Written substantiation of this financial performance representation will be made available to you upon reasonable request. We do not make any representations about a franchisee's future financial performance and other than the preceding financial performance representation, we do not make any representations about 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 Jill K. Klein, General Counsel, 2121 Vista Parkway, West Palm Beach, FL 33411, telephone: 561-640-5570, the Federal Trade Commission and the appropriate State Agencies.