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Business Description

We were incorporated in Texas on July 29, 2013, and maintain our principal place of business at 2811 McKinney Avenue, Suite 354, Dallas, Texas 75204. We do business only under our corporate name and under the trade name and service mark “SMOOTHIE FACTORY” and “SMOOTHIE FACTORY JUICE BAR.” Our agents for service of process in are listed in Exhibit G to this disclosure document. We have been offering franchises of the type described in this disclosure document since October 2013. We have also entered into license agreements, and intend to continue entering into license arrangements, with hospitality management companies for airport, collegial, medical, hospitality and other similar locations and certain other companies such as sports nutrition retailers and fitness club facilities in the United States. We have never operated a business of the type being franchised and do not engage in any other business activities. We are a wholly-owned subsidiary of Smoothie Holdings, LLC (“SH LLC”). SH LLC shares our principal business address at 2811 McKinney Avenue, Suite 354, Dallas, Texas 75204. SH LLC has never offered franchises in any line of business. We acquired the major portion of our assets from The Smoothie Factory, Inc. (“SFI”) in an asset transaction that closed on September 9, 2013. SFI is a Texas corporation that had been offering franchises for SMOOTHIE FACTORY Stores in the United States and internationally since August 1997. As part of the transaction, we acquired all rights to the SMOOTHIE FACTORY trademarks in North America (U.S. and Canada), South America, Latin America and Central America with the limited exception of the Caribbean Islands (as defined below) (the “Americas”). The Americas include the following countries: United States, Brazil, Mexico, Colombia, Argentina, Canada, Peru, Venezuela, Chile, Ecuador, Guatemala, Bolivia, Honduras, Paraguay, El Salvador, Nicaragua, Costa Rica, Panama, Uruguay, Guyana, Suriname, Belize, French Guiana, Greenland, Caribbean Netherlands, Saint Barthelme, Saint Pierre and Miquelon, and the Falkland Islands. The “Caribbean Islands” is defined as Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Bermuda, Bonaire, British Virgin Islands, Cayman Islands, Cuba, Curacao, Dominica, Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Montserrat, Puerto Rico, Saba, Saint Barts, Saint Kitts and Nevis, Saint Lucia, Saint Martin, Saint Thomas, Saint Vincent and the Grenadines, Saint Eustatius, Saint Maarten, Trinidad, Tobago, Turks and Caicos Islands, and the United States Virgin Islands. We also acquired a co-ownership interest, along with SFI, in all other SMOOTHIE FACTORY-related intellectual property, and the exclusive right to use and license the intellectual property in the Americas. SFI retained ownership of the trademarks and the right to use SMOOTHIE FACTORY-related intellectual property outside of the Americas and in the Caribbean Islands, and will continue to award and support franchises outside of the Americas and the Caribbean Islands. When we acquired the system, there were 41 SMOOTHIE FACTORY franchises operating in the United States. SFI maintains its principal business at 1029 Hosington Dr., Plano, TX 75094. SFI never offered franchises in any other line of business.

Prior Experience

We have never offered franchises in any other line of business, but certain of our affiliates offer franchises for other businesses: • Our affiliate, Red Mango FC, LLC (“RMFC”) franchises the operation of RED MANGO stores, which feature the sale of authentic frozen yogurt and treats, yogurt and non-yogurt based smoothie beverages, fresh- squeezed fruit and vegetable juices, health foods, café items (e.g., wraps, salads, soups, flatbreads) and related products and services. Pursuant to a former licensing agreement with SH LLC, RMFC has also licensed its franchisees the right to offer and sell SMOOTHIE FACTORY branded products according to a RED MANGO-SMOOTHIE FACTORY Co-Brand Amendment. RMFC has been offering RED MANGO franchises since July 2007, and has offered RED MANGO-SMOOTHIE FACTORY Co-Brand licenses from December 2013 through December 2016. As of December 30, 2018, there were 89 franchised RED MANGO stores in the United States, 10 of which are co-branded with SMOOTHIE FACTORY. RMFC has never engaged in any other business. • Our affiliate, Red Brick Pizza FC LLC (“RBPFC”) franchises the operation of RED BRICK PIZZA cafés, which feature the sale of high quality fire-roasted gourmet pizzas and other foods and beverages. RBPFC has been offering these franchises since October 2013. As of December 30, 2018, there were 7 franchised and no company-owned RED BRICK PIZZA cafés operating in the United States. RBPFC has never engaged in any business other than franchising the operation of RED BRICK PIZZA cafés. • Our affiliate, Greenz Salads FC, LLC (“GFC”), franchises the operation of GREENZ restaurants, which feature gourmet salads, soups, sandwiches, wraps, side dishes, desserts and beverages. GFC has been offering these franchises since April 2014. As of December 30, 2018, there were no franchised GREENZ restaurants operating in the DFW area of Texas. Greenz has never engaged in any business other than operating and franchising the operation of GREENZ restaurants. • Our affiliate, Souper Salad FC, LLC (“SSFC”), franchises the operation of SOUPER SALAD restaurants, which feature an all-you-can-eat buffet of fresh-cut salads and handcrafted soups, breads, desserts and beverages. SSFC has been offering these franchises since September 2014. As of December 30, 2018, there were 19 franchised SOUPER SALAD restaurants operating in the United States. SSFC has never engaged in any business other than operating and franchising the operation of SOUPER SALAD restaurants.

Business Offered

We franchise the right to operate retail stores that offer and sell non-alcoholic, fruit-based “smoothie” beverages, frozen yogurt, yogurt-based beverages, fresh-squeezed fruit and vegetable juices, health foods, and nutritional supplements under the trade name and service mark “SMOOTHIE FACTORY.” and/or “SMOOTHIE FACTORY JUICE BAR.” In the future, we may expand our product offerings to include other menu items, such as café items (e.g., sandwiches, soups, salads, wraps, flatbreads, and snack plates) at all or certain types of locations. SMOOTHIE FACTORY stores operate under our proprietary business system (the “System”), which includes a distinctive Store design and layout, product offerings, operating methods, procedures, standards and specifications, all of which we may improve and further develop. The Store will operate under the trade name and service mark “SMOOTHIE FACTORY” or “SMOOTHIE FACTORY JUICE BAR”) and will use other trade names, service marks, trademarks, logos, emblems and indicia of origin that we designate for use by SMOOTHIE FACTORY Stores (the “Marks”). This disclosure document describes four types of franchise offerings: ? A standard SMOOTHIE FACTORY or SMOOTHIE FACTORY JUICE BAR store, that occupies 800 to 1,000 square feet of commercial space, and that typically operates on a major thoroughfare, or in or adjacent to a retail strip mall or shopping center, or in an urban storefront. We call this a “SMOOTHIE FACTORY Store” or a “SMOOTHIE FACTORY Traditional Store.” ? A SMOOTHIE FACTORY or SMOOTHIE FACTORY JUICE BAR Store that occupies 250 to 800 square feet of commercial space, and that typically operates in a food court or kiosk located within an enclosed shopping SMOOTHIE FACTORY® 3 Franchise Disclosure Document | 2019 mall, college campus, medical facility, hospitality, or other closed market environment. We call this a “SMOOTHIE FACTORY Non-Traditional Store.” ? a co-brand opportunity that authorizes you to operate a SMOOTHIE FACTORY or SMOOTHIE FACTORY JUICE BAR Store, and to add on RED MANGO frozen yogurt and a toppings bar and other related products to the list of authorized menu offerings. If you are granted co-branding rights, you will sign the RED MANGO Co-Brand Amendment attached to the Franchise Agreement as Attachment H. We refer to this option as the SMOOTHIE FACTORY-RED MANGO Co-Branded Traditional Store. ? A co-brand opportunity that grants you the right to add on a SMOOTHIE FACTORYJUICE BAR store to a third party concept. In this disclosure document, the term “Store” includes SMOOTHIE FACTORY Stores, SMOOTHIE FACTORY JUICE BAR Stores, SMOOTHIE FACTORY-RED MANGO Co-Branded Traditional Stores, and SMOOTHIE FACTORY Nontraditional Stores, unless otherwise indicated, and the term “SMOOTHIE FACTORY Store” includes SMOOTHIE FACTORY Stores, SMOOTHIE FACTORY JUICE BAR Stores and SMOOTHIE FACTORY-RED MANGO Co-Branded Traditional Stores (but excludes SMOOTHIE FACTORY Non-Traditional Stores), unless otherwise indicated. If you are opening multiple Stores, you will sign our Store Development Agreement under which you commit to develop a defined number of Stores (minimum of two) in a designated geographic area (the “Development Area”) according to a defined schedule (the “Development Schedule”). Under the Store Development Agreement, you will enter into the then-current form of Franchise Agreement as new Stores are developed.

Initial Fees

When you sign the Franchise Agreement, you will pay us an initial franchise fee. Except for the differences described below, the initial franchise fee is uniform for all new franchisees. Some of our existing franchisees, however, have the right to develop additional Stores under existing agreements and on different terms. In addition, in certain circumstances, we may discount the initial franchise fee in connection with a franchisee's participation in a co-brand or management leveraged concept. SMOOTHIE FACTORY Store or SMOOTHIE FACTORY Traditional Store – the initial franchise fee is $30,000 unless you qualify for either the military veteran's program discount or for the discount presently available to qualified existing SMOOTHIE FACTORY franchisees. ? The military veteran's discount is available to veterans who have received a discharge (other than dishonorable) as well as any active-duty personnel. If the franchisee is a corporation, limited liability Company, or other legal entity, the veteran participant must maintain at least 51% ownership interest in the entity to qualify for this discount. To apply for the discount, you must provide us a copy of form DD-214, reflecting your military status, before the Franchise Agreement is signed. The military veteran's program discounts the initial franchise fee by 50% for the first Store opened; any subsequent Stores opened by a military veteran franchisee may be eligible for the discount presently available to qualified existing SMOOTHIE FACTORY franchisees. ? Qualified existing SMOOTHIE FACTORY franchisees who are in good standing under their existing franchise agreements are eligible to receive a $10,000 discount on the initial franchise fee for each subsequent SMOOTHIE FACOTRY Store; therefore, the initial franchise fee for a qualified existing franchisee would be $20,000 ($30,000 - $10,000 = $20,000). SMOOTHIE FACTORY Non-Traditional Store – the initial franchise fee is $15,000 unless you qualify for the military veteran's program discount. The military veteran's program discounts the initial franchise fee by 50% for the first SMOOTHIE FACTORY Non-Traditional Store opened. The qualified existing franchisee discount is not available on SMOOTHIE FACTORY Non-Traditional Stores. SMOOTHIE FACTORY-RED MANGO Co-Branded Traditional Store – the initial franchise fee is $30,000, plus you will pay a $5,000 license fee under the RED MANGO Co-Brand Amendment, described below. SMOOTHIE FACTORY Non-Traditional Store Co-Branded with a Third Party Concept – the initial franchise fee is $15,000. The initial franchise fee is nonrefundable upon payment.

Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation.

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. As of December 30, 2018, there were 27 franchised SMOOTHIE FACTORY Stores operating in the United States. This number does not include the additional 10 franchised RED MANGO stores that were co-branded with SMOOTHIE FACTORY. The following chart reflects historical sales information concerning the 23 SMOOTHIE FACTORY stores which were open for business for the 52 weeks ending December 30, 2018.