$105

Business Description

Sola Franchise, LLC is a limited liability company organized under the laws of Colorado in January 2018. Sola does not do business under any other name. Our principal business address is 50 South Steele Street, Suite 1050, Denver, Colorado, 80209. Sola offers Sola Franchises under the name “Sola Salon Studios”. Our agent for service in Colorado is The Corporation Company with a principal address of 7700 East Arapahoe Road, Suite 220, Centennial, CO 80112. Our agents for service of process for other states are disclosed in Exhibit D to this Disclosure Document. We began offering Sola Franchises in February 2018. We have never offered franchises in any other line of business. We operate the Sola Salons owned by our affiliates Sola Salon Studios LLC and Sola Salon Studios California, LLC. We have not engaged in any other type of business activity.

Prior Experience

We have one predecessor and one parent company. Our predecessor and former parent, Sola Franchise Corporation n/k/a Let's Ride Corporation (“SFC”), was incorporated under the laws of Colorado in March 2005. SFC's principal place of business is 8 Sunrise Drive, Cherry Hills Village, CO 80113. SFC offered Sola Franchises from March 2005 until December 31, 2017. We acquired substantially all of SFC's franchise assets and assumed all of SFC's existing franchise agreements on January 19, 2018. Our parent company Sola Holdco, LLC was organized under the laws of Delaware in August 2018. Its principal place of business is 50 South Steele Street, Suite 1050, Denver, CO 80209. Effective October 5, 2018, the membership interests of us and our affiliate, Sola Salon Studios LLC, were acquired by Sola Holdco, LLC. Sola Holdco, LLC does not offer franchises in this or any other line of business. We have two affiliates, Sola Salon Studios LLC (“SSS LLC”) and Sola Salon Studios California, LLC (“SSS CA LLC”). SSS LLC is a Colorado limited liability company that was formed under the laws of Colorado in August 2003. The principal business address of SSS LLC is 50 South Steele Street, Suite 1050, Denver, Colorado 80209. SSS LLC has never offered franchises in this or any other line of business. SSS LLC owns 13 Sola Salons in Colorado similar to the Franchise described in this Disclosure Document. We (or our predecessor) have operated the Sola Salons on behalf of SSS LLC since 2004. SSS CA LLC is a wholly owned subsidiary of SSS LLC. SSS CA LLC is a Colorado limited liability company that was formed under the laws of Colorado in July 2018. The principal business address of SSS CA LLC is 50 South Steele Street, Suite 1050, Denver, Colorado 80209. SSS CA LLC has never offered franchises in this or any other line of business. SSS CA LLC owns 12 Sola Salons in California similar to the Franchise described in this Disclosure Document. We have operated 11 of the Sola Salons on behalf of SSS CA LLC since January 2019, and 1 of the Sola Salons on behalf of SSS CA LLC since April 2019. We have two wholly owned subsidiaries. Sola Salon Studios International, LLC (“Sola International”) is Colorado limited liability Company that was formed under the laws of Colorado in July 2017. The principal business address of Sola International is 50 South Steele Street, Suite 1050, Denver, Colorado 80209. Sola International offers Sola Franchises outside of the United States and Canada. Sola Salon Studios Canada, Inc. (“Sola Canada”) is a Canadian corporation organized under the laws of the province of Quebec in June 2016. The principal business address of Sola Canada is 1 Place Ville-Marie #4000, Montreal, Quebec, Canada H3B 4M4. Sola Canada offers Sola Franchises similar to the Franchise described in this Disclosure Document in Canada and currently there are two opened franchise locations in the Greater Toronto Area of Ontario, Canada.

Business Offered

We offer Franchises for the operation of a business providing build-out and lease of turn-key salon studios to salon professionals under the Sola trademarks, trade names, service marks, and logos (“Marks”). Throughout this document, your Franchise business will also be referred to as your “location” or your “unit”. As a franchisee, you will typically purchase or lease existing building space ranging from 3,000 to 9,000 square feet and convert or remodel the purchased or leased space into individualized size salon studios (typically 8 feet by 12 feet) which are then licensed to independent salon professionals. As a franchisee, you will provide general salon management, maintenance inside the studios and common areas, wireless internet, parties and gatherings, some marketing/branding and a website page for each salon professional. Each salon professional will schedule his/her own appointments. The Franchise is operated under a business format that includes our valuable know how, information, trade secrets, methods, Manual, standards, designs, methods of trademark usage, copyrightable works, rental space sources and specifications, software, confidential electronic and other communications, methods of Internet usage, marketing programs, and research and development connected with the operation and promotion of the Business (collectively, the “System”) owned and developed by us and known as Sola Salon Studios (“Business” or “Salon”). We are designed to support you in your ongoing business efforts. We reserve the right to change or otherwise modify the System and add, modify, or delete any of our designs, lease processes, or services at any time in our sole discretion. We have also established a national leasing and guarantee program (“National Leasing Program”) (See Items 5, 10 and 11), and, at your election, we may provide you with services related to this program. You must operate your Franchise in accordance with our standard business operating practices and sign our standard franchise agreement (“Franchise Agreement”), which is attached to this Disclosure Document as Exhibit B. We also offer, to qualified applicants, the opportunity to develop additional units by purchasing either a group of three (3), a group of six (6), or a group of twelve (12) Sola Franchises. You will be required to sign the Multi-Unit Development Agreement (“MUDA”) at the same time you execute the Initial Franchise Agreement and you will be required to develop these additional units within a fixed time period. (See Exhibit I). The Initial Franchise Agreement will count as the first unit developed as part of your MUDA. You must sign our then-current franchise agreement for each additional unit opened under the terms of the MUDA. These franchise agreements may not be the same as the initial Franchise Agreement that you will sign for your first Franchise (“Initial Franchise Agreement”).

Initial Fees

Initial Franchise Fee the Initial Franchise Fee for a franchisee who has not previously purchased a Franchise and is not open for business (“New Franchisee”) is $55,000. At any time after you have purchased a Franchise and are open for business (“Existing Franchisee”), you may purchase additional individual Franchises at a discounted Initial Franchise Fee of $41,000. The Initial Franchise Fee is due when you sign the Franchise Agreement. The Initial Franchise Fee is fully earned upon payment and there are no refunds under any circumstances. During our fiscal year ended December 31, 2018, the range of actual Initial Franchise Fees paid to us was $15,000 to $45,000. The factors that influenced our decision to adjust the Initial Franchise Fee included the number of locations to be opened by the franchisee, if it's an additional location for a franchisee, the length of time the franchisee had been associated with any affiliate of ours, and the size of the Development Area. We reserve the right to take these and other factors into consideration when offering adjustments to the Initial Franchise Fee in the future. Development Fee for Multi-Unit Development If you choose and we agree, you may purchase multiple Franchises. You may purchase multiple units in a group of three (3), a group of six (6), or a group of twelve (12). You will be required to sign our Multi-Unit Development Agreement (“MUDA”) (Exhibit I) and agree to open your additional Salons upon a set schedule. The Development Fee is fully earned upon payment and are due when you sign the MUDA. There are no refunds under any circumstances. If you execute a MUDA, you will be required to execute a Franchise Agreement concurrently therewith. The Franchise Agreement signed concurrently with the MUDA will be for the first unit in the MUDA. Three (3) Unit MUDA: In addition to and at the same time you pay the Initial Franchise Fee of $55,000 (or $41,000 if you are an Existing Franchisee) for the first unit, you will pay a Development Fee for the two (2) additional units you agree to develop. The Development Fee for a New Franchisee will be $45,000 for the two (2) additional units you agree to develop for a total of $100,000 for three (3) units (an Initial Franchise Fee of $55,000 for the first unit and a Development Fee of $45,000 for the additional two units). The Development Fee for an Existing Franchisees will be $40,000 for the two (2) additional units you agree to develop for a total of $81,000 for three (3) units (an Initial Franchise Fee of $41,000 for the first unit and a Development Fee of $40,000 for the additional two units). You will pay the Initial Franchise Fee and Development Fee in a lump sum, which is fully earned upon payment. There are no additional Initial Franchise Fees required for the two additional units (You will pay the Initial Franchise Fee for the first unit). You will agree to open the first unit within 18 months, the second unit within 30 months and the third unit within 42 months. In no event, will the opening of all of the units exceed 42 months, or 3.5 years. 7 Sola Franchise, LLC Franchise Disclosure Document | 2019 68372270.3 Six (6) Unit MUDA: In addition to and at the same time you pay the Initial Franchise Fee of $55,000 (or $41,000 if you are an Existing Franchisee) for the first unit, you will pay a Development Fee for the five (5) additional units you agree to develop. The Development Fee for a New Franchisee will be $120,000 for the five (5) additional units you agree to develop for a total of $175,000 for six (6) units (an Initial Franchise Fee of $55,000 for the first unit and a Development Fee of $120,000 for the additional five (5) units). The Development Fee for an Existing Franchisee will be $100,000 for the five (5) additional units you agree to develop for a total of $141,000 for six (6) units (an Initial Franchise Fee of $41,000 for the first unit and a Development Fee of $100,000 for the additional five units). You will pay the Initial Franchise Fee and Development Fee in a lump sum, which is fully earned upon payment. There are no additional Initial Franchise Fees required for these five (5) additional units (You will pay the Initial Franchise Fee for the first unit). You will agree to open the first unit within 18 months, the second unit within 30 months, the third unit within 42 months, the fourth unit within 54 months and the fifth and sixth units within 66 months. In no event, will the opening of all of the units exceed 66 months, or 5.5 years. Twelve (12) Unit MUDA: In addition to and at the same time you pay the Initial Franchise Fee of $55,000 (or $41,000 if you are an Existing Franchisee) for the first, you will pay a Development Fee for the eleven (11) additional units you agree to develop. The Development Fee for a New Franchisee will be $220,000 for the eleven (11) additional units you agree to develop for a total of $275,000 for twelve (12) units (an Initial Franchise Fee of $55,000 for the first unit and a Development Fee of $220,000 for the additional eleven (11) units). The Development Fee for an Existing Franchisee will be $220,000 for the eleven (11) additional units you agree to develop for a total of $261,000 for twelve (12) units (an Initial Franchise Fee of $41,000 for the first unit and a Development Fee of 220,000 for the additional eleven (11) units). You will pay the Initial Franchise Fee and Development Fee in a lump sum, which is fully earned upon payment. There are no additional Initial Franchise Fees required for these eleven (11) additional units (You will pay the Initial Franchise Fee for the first unit only). You will agree to open the first unit within 18 months, the second unit within 30 months, the third and fourth units within 42 months, the fifth and sixth units within 54 months, the seventh and eighth units within 66 months, the ninth and tenth units within 78 months, and the eleventh and twelfth units within 90 months. In no event, will the opening of all of the units exceed 90 months, or 7.5 years. During our fiscal year ended December 31, 2018, the range of Development Fees paid to us was $40,000 to $251,000. Design Services If you purchase cabinetry from Kaemark Incorporated or any other approved cabinet vendor other than Sympateco, then you must purchase design services from us. If Sympateco stops offering approved design services, then you must purchase them from us. We will charge you an additional fee for these services. The additional fees will vary depending on the complexity and 8 Sola Franchise, LLC Franchise Disclosure Document | 2019 68372270.3 size of your project. We estimate these fees will be between $5,000 and $15,000. You must pay us for the Design Services as follows: $1,500 will be due upon signing the Design Agreement and you must pay the balance at the time the final design plan is provided to you. The fee for Design Services is deemed fully earned once paid and is non-refundable. If the Design Agreement is terminated for convenience of the franchisee, you will pay an early termination fee equal to 25% of the total fee for the Design Services. National Leasing Program We have established a national leasing and guarantee program (“National Leasing Program”), and, at your election, we may provide you with services related to this program. Under the National Leasing Program, if you elect to participate in the program, your lease will contain a limited rent payment guarantee from us or our affiliate for the greater of 4.5 years or until your location reaches 80% occupancy. If you elect to participate in the National Leasing Program, you will be required to pay a lease review and conformance fee (“Lease Conformance Fee”) at the time you sign the Franchise Agreement. The Lease Conformance Fee will compensate us for reviewing the lease for your specific location to ensure that it conforms to national lease terms negotiated by us. The Lease Conformance Fee will not exceed $7,500. If you participate in the National Leasing Program, you will also be required to pay a monthly lease guarantee fee, which will be the greater of $1,500 or 15% of your monthly base rent for the premises (“Lease Guarantee Fee”), which is further described in Item 6 and Item 10. Rent Manager Property Management Software You are required to subscribe to the Rent Manager Property Management Software by way of a month-to-month sublicense for the software that we will make available to you. There is a onetime set up fee of $150. We will automatically deduct the fee for this sublicense in the same manner that we deduct your royalty payments. Our current month-to-month sublicense fee is $50 per month for a single-user sublicense. The fee increases if you request multiple users. There is an addition $20 per month fee if you elect to utilize text messing services available through Rent Manager. We reserve the right to increase the fees at any time. Site Selection Assistance Fee We may provide you with one site visit to conduct an evaluation for a proposed location for your Business. However, if you request us to travel to multiple proposed locations and/or to conduct multiple on-site evaluations you will pay us a site selection assistance fee in the amount of $2,500 plus $500 per day that we are on-site (“Site Selection Assistance Fee”). You will also be required to pay our travel, meals and living expenses. If incurred, the Site Selection Assistance Fee is due in accordance with our invoice prior to opening your Business. The initial fees described above are not refundable under any circumstances.

Financing

We or our affiliate offer a National Leasing Program. The National Leasing Program includes our or our affiliate providing a limited rent payment guarantee for the later of 4.5 years or until your location reaches 80% occupancy. If you default then the landlord will look to us for payment or guaranty of the rent for your lease, with a landlord participating in the National Leasing Program. If we or our affiliate provide this limited guaranty, you will be required to pay the Lease Guarantee Fee each month (See Item 6). A default of your lease obligations will be a default under the franchise agreement. Except as described above, we do not offer direct or indirect financing. We do not guarantee your note, lease or any other 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.