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Business Description

SMF is a Florida Limited Liability Company formed on March 30, 2012. We operate under the name Suite Management Franchising, LLC, and our proprietary marks, including MY SALON SUITE, and SALON PLAZA and no other name. Our principal business address is 3900 N. Causeway Boulevard, Suite 1200, Metairie, Louisiana 70002. We franchise My Salon Suite Businesses and have done so since July 1, 2012. We began franchising Salon Plaza Businesses in April 2015. We have not, and do not, operate any franchises like those described in this Franchise Disclosure Document, or in any other line of business. We do not conduct any other business other than franchising My Salon Suite Businesses and Salon Plaza Businesses. We have no predecessor or parent entities. We have five (5) affiliates that operate businesses similar to the type offered in this Franchise Disclosure Document. These affiliates have not offered franchises in any line of business. Each of our affiliates has operated a My Salon Suite Business that is similar to the My Salon Suite Business being offered in this Franchise Disclosure Document since 2010 (Suite Management, Inc.); 2011 (Suite Management of Kenner and Suite Management of Sarasota); 2012 (Suite Management Sarasota South LLC); and 2018 (Suite Management Northshore, LLC). Our affiliates do not offer franchises in any other line of business and, except as otherwise provided in this Item, are not otherwise engaged in any other business activity. Our agent for service of process for Louisiana is Kenneth McAllister, 3500 Chateau Boulevard, Kenner, LA 70065. Our agent(s) for service of process for other states are listed in Exhibit D to this Franchise Disclosure Document. If a state is not listed, we have not appointed an agent for service of process in that state in connection with the requirements of franchise laws. There may be states in addition to those listed above in which we have appointed an agent for service of process. There may also be additional agents appointed in some of the states listed.

Prior Experience

We have five (5) affiliates that operate businesses similar to the type offered in this Franchise Disclosure Document. These affiliates have not offered franchises in any line of business. Each of our affiliates has operated a My Salon Suite Business that is similar to the My Salon Suite Business being offered in this Franchise Disclosure Document since 2010 (Suite Management, Inc.); 2011 (Suite Management of Kenner and Suite Management of Sarasota); 2012 (Suite Management Sarasota South LLC); and 2018 (Suite Management Northshore, LLC). Our affiliates do not offer franchises in any other line of business and, except as otherwise provided in this Item, are not otherwise engaged in any other business activity.

Business Offered

We offer two franchises in this disclosure document that operate under our proprietary system (“Franchise System”). One is for the use of the “MY SALON SUITE” trademarks, trade names, service marks, and logos (“MSS Marks”) for the operation of My Salon Suite Businesses. The other is for the use of our “SALON PLAZA” trademarks, trade names, service marks, and logos (“SP Marks”) for the operation of Salon Plaza Businesses. The term “Marks” also includes any distinctive trade dress used to identify a My Salon Suite Business or Salon Plaza Business, as applicable, whether now in existence or created at a later date. If you choose to acquire a franchise for a My Salon Suite Business, your business will operate under the MSS Marks. If you choose to acquire a franchise for a Salon Plaza Business, your business will operate under the SP Marks. My Salon Suite Businesses offer turnkey salon suite studios and related services in a luxury environment under the brand My Salon Suite to salon professionals where such professionals can provide health and beauty services to their own respective clients. Salon Plaza Businesses offer turnkey salon suite studios and related services featuring upscale modern décor under the brand Salon 4 MY SALON SUITE / SALON PLAZA 2019 FDD V2 Plaza to salon professionals where such professionals can provide health and beauty services to their own respective clients. Unless otherwise stated, any reference in this Franchise Disclosure Document to “Franchised Business” is applicable to both a My Salon Suite Businesses and a Salon Plaza Businesses. We will designate which of the Franchised Businesses in the attachment to the franchise agreement. The Franchised Businesses operate from a single location and facility we approve (the “Approved Location”) and provide turnkey salon studio spaces at the Approved Location to salon professionals where these professionals can provide salon services (such as hair styling, nail treatments, and massage therapy) to their respective clientele, as well as other authorized products and services at the Approved Location. Franchisees are required to sign our franchise agreement for the Franchised Business. Our current form of franchise agreement is attached to this Franchise Disclosure Document as Exhibit B (the “Franchise Agreement”). You will typically lease your Approved Location, which will normally range between 4,000 to 12,000 square feet in size, with the average size being approximately 5,122 square feet. The Approved Location is converted or remodeled into individual suites (“Individual Suites”). The leasable space per Individual Suite will vary, with the average Individual Suite ranging in size from 120 square feet to 180 square feet of leasable space that you will sublease to third-party salon professionals. Your Franchised Business will also be required to provide salon management and maintenance services for each Individual Suite, and the common areas of the Approved Location. Each Individual Suite and the common areas in your Approved Location must have access to wireless Internet. Each salon professional that subleases an Individual Suite is solely responsible for collecting its own revenue and scheduling its own appointments. Under the Franchise Agreement, you will be granted limited territorial rights within a geographical area we designate in our sole discretion (the “Protected Territory”). We will not establish and operate, nor license any other third party the right to establish and operate, a Franchised Business within the designated geographical area that we will identify in the Franchise Agreement. We retain all other rights, including without limitation, those rights set forth in ITEM 12. In our sole discretion, the size of your Protected Territory may vary from other franchisees based on the location and demographics surrounding your Approved Location, but the typical Protected Territory will be a radius of two (2) miles. Prior to signing your lease, we reserve the right to narrow and/or expand the boundaries of your Protected Territory, which may be described in terms of zip codes, streets, landmarks (both natural and man-made) and state or county lines which may result in a Protected Territory that is larger or smaller than the two (2) mile radius. You are solely responsible for ensuring that you comply with all applicable laws and regulations, as well as obtaining all necessary permits and licenses, in connection with the establishment and operation of your Franchised Business. We may provide you with template lease or sublease forms, but you must ensure that these forms (if provided) are modified as necessary to comply with such laws and regulations, including commercial leasing laws and other landlord-tenant laws. If you qualify, we may allow you to sign the Multi-Unit Option Agreement which is attached to this Franchise Disclosure Document as Exhibit C, and develop a designated number of Franchised Businesses under either the MSS Marks or the SP Mark. Under a Multi-3 Multi-Unit Option Agreement, you will have the right to open up to three (3) Franchised Businesses over a three-year period. Under a Multi-6 Multi-Unit Option Agreement, you will have the right to open up to six (6) Franchised Businesses over a six year period. Under a Multi-10 Multi-Unit Option Agreement, you will have the right to open up to ten (10) Franchised Businesses over a ten-year period. Both My Salon Suite Business and Salon Plaza Business allow the development of three (3), six (6) or ten (10) Franchises under the Multi-Unit Option Agreement.

Initial Fees

Initial Franchise Fee You must pay us an initial franchise fee (“Initial Franchise Fee”) when you sign the Franchise Agreement. The Initial Franchise Fee for a Franchised Business is $50,000. The Initial Franchise Fee includes the tuition for you and one (1) other individual you designate to attend our proprietary initial training program. The Initial Franchise Fee is due in full at the time you sign the Franchise Agreement(s), is uniform and non-refundable and is deemed fully earned by us once paid. Option Fee Franchisees may also purchase the rights to open additional Franchised Businesses by signing the Multi-Unit Option Agreement and paying an option fee (“Option Fee”). The Option Fee to open up to three (3) Franchised Businesses (the “Multi-3”) is $99,000. The Option Fee to open up to six (6) Franchised Businesses (the “Multi-6”) is $150,000. The Option Fee to open up to ten (10) Franchised Businesses (the “Multi-10”) is $200,000. Under a Multi-3 Multi-Unit Option Agreement, you will have the right to open up to three (3) Franchised Businesses over a three-year period. Under a Multi-6 Multi-Unit Option Agreement, you will have the right to open up to six (6) Franchised Businesses over a six year period. Under a Multi-10 Multi-Unit Option Agreement, you will have the right to open up to ten (10) Franchised Businesses over a ten-year period. To open additional Franchised Businesses under the Multi-Unit Option Agreement, you will be required to sign the then-current Franchise Agreement, but you will not be required to pay an Initial Franchise Fee (all other fees will apply). The Option Fee is uniform, payable when you sign your Multi-Unit Option Agreement, and is nonrefundable under any circumstances, even if you fail to open any Franchised Businesses. Design Standards You are required to obtain our then-current copy of our “Franchise System Standards and Specifications for the Build-Out, Remodeling or Construction of your Franchised Business” information (“Design Standards Fee”) and will be required to pay us a fee of $1,000. We will also provide to you or your architect any template architectural or design plans we have previously approved or designated for use (if we have any). For each additional Franchised Business that you open after the first Franchised Business, the fee for any template will be $1,000. This fee will be invoiced within 30 days of signing the lease. This fee is due in full within 5 days of when we invoice you, is uniform, is deemed fully earned by us once paid, and is non-refundable. Project Management Fee You must pay us a project management fee (“Project Management Fee”) of $2,500 to assist with design, service bids, bid process, service management and a total of up to two (2) construction site assistance visits from us including our travel and living expenses. If you require more than two (2) construction site assistance visits or you require any visit to be longer than two (2) days, you will pay our then-current fee, which is currently $500 per day, plus any travel and living expenses incurred by us. The Project Management Fee will be invoiced within 30 days of signing the lease. This fee is due in full within 5 days of when we invoice you, is uniform, is deemed fully earned by us once paid, and is non-refundable.

Financing

We do not offer direct or indirect financing, nor do we guarantee your note, lease or obligations to third parties. We may refer you to lenders or vendors that provide or assist you with financing that you may choose to work with at your option. We do not have a written arrangement, nor do we receive direct or indirect benefits from these third parties if you obtain financing.

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 any reasonable basis for the information, and if the information is included in the Disclosure Document. Financial information that differs from that included in ITEM 19 may only be given 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. Written substantiation for the financial performance representation will be made available to prospective franchisees on reasonable request. A new franchisee's financial results are likely to differ from the results stated in the financial performance representation.