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Business Description

Poolwerx is a Delaware limited liability company that was organized on January 29, 2015. Poolwerx does business under its corporate name. Poolwerx's principal business address is 4801 Spring Valley Road, Suite 103A, Farmers Branch TX 75244. To the extent that we have designated agents for service of process in any states, they are listed in Exhibit C. We began offering Franchises in March 2015 and have never offered any other franchises in any other line of business. Our predecessor is Cactus Valley Pools Services & Repairs, LLC (“Cactus Valley”).

Prior Experience

Our parent company, Poolwerx USA, LLC (“Poolwerx USA”), is a Delaware limited liability company that shares our principal place of business at 4801 Spring Valley Road, Suite 103A, Farmers Branch TX 75244. Except as provided below, we do not, nor do any of our affiliates, offer franchises in any line of business in the United States or offer products or services to our franchisees. Our affiliate, Poolwerx Development LLC (“Poolwerx Development”), is a Delaware limited liability company that shares our principal place of business at 4801 Spring Valley Road, Suite 103A, Farmers Branch TX 75244. On March 2, 2015, Poolwerx Development purchased substantially all of the assets of Cactus Valley. Cactus Valley has been dissolved and no longer offers or sells franchises in any line of business or offers products or services to our franchisees, and Poolwerx no longer offers franchises under the Cactus trademark. Poolwerx Development does not offer franchises in any line of business. Our affiliate, Poolwerx Operations, LLC (“Poolwerx Operations”), is a Delaware limited liability company that shares our principal place of business at 4801 Spring Valley Road, Suite 103A, Farmers Branch TX 75244. Poolwerx Operations does not offer franchises in any line of business. The parent company of Poolwerx USA is majority owned by Poolwerx Global Pty Ltd as Trustee for the Poolwerx Global Trust (“Poolwerx Global”), an Australian company. Poolwerx Global's principal place of business is 10 Camford Street, Milton, Queensland 4064, Australia. The parent company of Poolwerx Global is Poolwerx Priority Pty Ltd, an Australian company formed on February 16, 2016. Poolwerx Priority Pty Ltd's principal place of business is 10 Camford Street, Milton, Queensland 4064, Australia. The parent companies of Poolwerx Priority Pty Ltd are JOB Home No.2 Pty Ltd as Trustee for the O'Brien Family Trust No.2 (“JOB Home”) and Merle Norman Cosmetics Pty Ltd as Trustee for Merle Norman No. 2 Trust (“Merle Norman”). JOB Home and Merle Norman are Australian companies. JOB Home's principal place of business is at 10 Camford Street, Milton, Queensland 4064, Australia. Merle Norman's principal place of business is at 36 Industrial Avenue, Molendiar, Queensland 4214, Australia. Poolwerx Holdings Pty Ltd ACN 094 349 247, an affiliate of Poolwerx, owns the trademarks that you will use in your Poolwerx franchise, See Item 13. Poolwerx Corporation Pty Ltd is a subsidiary of Poolwerx Priority Pty Ltd ACN 610 778 339 and is an Australian company that 4825-7484-2449 v.5 Poolwerx Franchise Management LLC FDD - 2019 2 sells Poolwerx franchises in Australia. Their address is 10 Camford Street, Milton, Queensland 4064, Australia. Neither has ever offered franchises in any line of business in the United States. Poolwerx, Poolwerx Development and Poolwerx Operations have and continue to pursue opportunities to purchase existing mobile pool and related services businesses (each a “Mobile Unit”) and/or retail stores specializing in the sale of pool-related items (each a “Retail Hub”) in the United States with the intention of continuing to operate the existing businesses and eventually converting them to company-owned or franchised POOLWERX units. As noted above, in March 2015, Poolwerx Development purchased several company-owned “Cactus Valley” pool businesses and its small franchise system, all of which were eventually converted to operate under the POOLWERX trademark. In July 2015, Poolwerx Operations purchased several SC Pool & Spa Works and Crystal Tech/Vivopools retail stores in Arizona and California, all of which were eventually converted to operate under the POOLWERX trademark. In March 2017, Poolwerx Development purchased several Dolphin Pool Supply and Services retail stores in Dallas, Texas, all of which were eventually converted to operate under the POOLWERX trademark. Neither Poolwerx nor any of its affiliates intend to offer or sell any additional franchises or open any additional company-owned stores under these other brands. Except for Cactus Valley company-owned and franchised units, Poolwerx Development has never offered franchises in any line of business offering.

Business Offered

We are offering, under the terms of this Disclosure Document, the opportunity to become a franchisee to develop and operate one or more Mobile Units or Retail Hubs or both (collectively referred to as a “Franchise”) in a specified area. A Franchise operates under the mark POOLWERX, and certain other trademarks, service marks, trade names, signs, associated designs, artwork, and logos (collectively, the “Marks”). We may designate other trade names, service marks, and trademarks as Marks. A Franchise operates under a prescribed system of specifications and operating procedures that we have developed and will continue to develop (the “System”). The distinguishing characteristics of the System include, but are not limited to, our Franchise designs, layouts, and identification schemes (collectively, the “Trade Dress”); our specifications for equipment, inventory, and accessories; our relationships with vendors; our software and computer programs; the accumulated experience reflected in our training program, operating procedures, customer service standards methods, and marketing techniques; and the policies, procedures, standards, and specifications set out in our proprietary manuals (“Manuals”). We may change, improve, add to, and further develop the elements of the System from time to time. You may purchase the exclusive right to market your Poolwerx franchised business within a designated territory (the "Marketing Area"). This right will be incorporated in an agreement to be executed by Poolwerx and you (the “Franchise Agreement”). Our current form of Franchise Agreement is included as Exhibit A to this Disclosure Document. From time to time, Poolwerx and a Franchisee may agree on a business plan for development of Mobile Units and Retail Hubs within the Marketing Area. Under the Franchise Agreement, you have no right to use the Marks to market your franchise except within your exclusive Marketing Area. You may only use the System and the Marks in your Poolwerx franchised business and not in any wholesale, e-commerce or other channel of distribution. See Item 12. We may offer you the right to acquire one or more Refranchised Businesses from an affiliate (either Poolwerx Operations or Poolwerx Development). In addition to signing a Franchise Agreement for each Refranchised Business (which will include a Refranchising Addendum to Franchise Agreement attached to the Franchise Agreement), you must sign an agreement (“Asset Purchase Agreement (Sale)”) for the purchase of the assets of each Refranchised 4825-7484-2449 v.5 Poolwerx Franchise Management LLC FDD - 2019 3 Business you acquire from our affiliate. The Asset Purchase Agreement (Sale) is attached to this Disclosure Document as Exhibit L.

Initial Fees

The initial franchise fee (the “Initial Franchise Fee”) for a start-up Franchise is $35,000, of which between $5,000 to $10,000 shall be paid to us as soon as permitted by applicable law, as a good faith Deposit, according to the terms set forth in the Deposit Agreement, attached hereto as Exhibit K. We will determine your specific Deposit amount based on the size and location of your Marketing Area, other franchisee prospect interest in or around the Marketing Area, your experience and financial condition and whether we have an existing relationship with you. The Deposit will be applied toward the Initial Franchisee Fee if you purchase a Poolwerx Franchise. If you elect not to purchase a Poolwerx Franchise, the Deposit will be refunded (minus an amount to cover our costs, if any) within ten days after we receive written notice of your election not to proceed with the process of investigating the purchase of a Poolwerx Franchise. The balance of the Initial Franchise Fee is payable upon execution of the Franchise Agreement. This fee is for the exclusive marketing right for your Marketing Area to operate Mobile Units and/or Retail Hubs. During our fiscal year 2018, we charged Initial Franchise Fees ranging from $0 (for franchise prospects who were converting existing businesses) to $210,000 (to a franchise prospect purchasing a Refranchised Business – see below). You must also pay to Poolwerx an initial training fee (“Initial Training Fee”) of $6,000. These fees and costs are payable at the time of execution of the Franchise Agreement or in any event before you begin operating your Mobile Unit or Retail Hub. All these costs will be uniform for all franchisees opening Mobile Units or Retail Hubs, respectively. You must also pay to Poolwerx the convention fee (currently $3,000) before you sign the Franchise Agreement. Poolwerx also currently acts as the purchasing agent on a “pass through” cost basis for certain initial equipment, computer systems, signage, supplies and other items identified in the charts in Item 7. Poolwerx typically collects payments from you and then remits them to the designated suppliers. See Item 8. These payments are set by the specific third party and are not uniform for the reasons described in the charts in Item 7. If you purchase a Refranchised Business, you must purchase the assets of the Refranchised Business from us under the terms of the Asset Purchase Agreement (Sale) attached to this disclosure document as Exhibit L. The payment for the assets of a Refranchised Business will vary based on the existing routes/pool contracts and related prior revenues of the Franchised Business, the amount, type, and age of the equipment to be purchased, and other factors. See Item 7. We have not previously offered franchises for the operation of Refranchised Businesses. The payments for your purchase of the assets of each Refranchised Business are nonrefundable. Except as set forth in the Deposit Agreement, none of the costs in this Item are refundable.

Financing

We and our affiliates do not offer direct or indirect financing arrangements for any purpose in establishing or operating your Franchise, including in relation to the purchase price for the assets of a Refranchised Business. We and our affiliates do not guarantee your promissory note, lease, or any other obligation you may make to others.

Franchisee Revenue and Profit

The franchisor has not been in business for three years or more and cannot include all the financial statements required by the Rule for its last three fiscal years. Attached as Exhibit B to this Disclosure Document are (1) Poolwerx's audited financial statements for the fiscal years ended December 31, 2018 and December 31, 2017 and (2) Poolwerx's audited financial statements for the fiscal years ended December 31, 2017 and December 31, 2016. These financial statements have been prepared in accordance with generally accepted United States accounting principles and have been audited by an independent certified public accountant in accordance with United States auditing standards. Our fiscal year ends on December 31.