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Business Description

We area Delaware limited liability company, originally incorporated on January 31, 1996, and converted to a limited liability company on July 2,2007. We do not do business under any other name. We are a direct wholly owned subsidiary of Realogy Services Group LLC (RSG),a Delaware limited liability company,a direct wholly owned subsidiary of Realogy Group LLC,a Delaware limited liability company (Realogy Groups). Realogy Group is a direct wholly owned subsidiary of Realogy lntermediate Holdings LLC ("intermediate Holdings"),a Delaware limited liability company, and a direct wholly owned subsidiary of Realogy Holdings Corp., a Delaware corporation ("Realogy Holdings"). Realogy Franchise Group LLC ("RFG"),a Delaware limited liability company, which is a direct wholly owned subsidiary of RSG,provides to us administrative services to and certain shared services described below. Our principal business address, as well as the principal business address of RFG, RSG, Realogy Croup, intermediate Holdings and Realogy Holdings, is 175 Park Avenue, Madison,New Jersey 07940. There are no predecessors that need to be disclosed in this Item 1. Cn October 12, 20l2,Rea1ogyHoldingsconsun^ated an initial public offering ofshares ofcommon stock and its shares are listed onTheNewYork Stock Exchange under the symbol,^RECV Realogy Croup and Realogy Holdings issue^oint audited annual financial statements and continue to serve as our Guarantors.

Prior Experience

We have been offering franehises for ERA real estate sales offices since March 1996. Our predecessors had been offering franchises for ERA® real estate sales offices since 1972. In 2010, we also began offering ERA Powered franchises to be operaed under the service marks "ERA Powered" and ERA Real Estate Powered as further discussed below. Although one or more ERA officers and employees are licensed New Jersey Real Estate brokers and some are former brokers or associates , we have never owned or operated an ERA real estate sales office an ERA Real Estate Powered office or other real estate brokerage offlees, although our affiliate operate such offices as described below). We have not offered franchises in any other lines of business.

Business Offered

We offer franehises for real estate sales offices in the United States to owners of existing real estate brokerage businesses and to persons who want to start a real estate brokerage business(the Franchise) The Franchise authorizes you to operate a real estate sales office Office") using the ERA® Identification" and the ERA Marketing System. The ERA identification refers to the ERA service mark and other trademarks, service marks, designs, logos and other conunercial symbols we periodically designate(collectively,the "Marks"). The ERA Marketing System is a system that we have developed which includes access tobrand specific systems, productivity resources, basic business development support, education, real estate referral and broker communications procedures, marketing and advertising services, products and othersupport funded by the ERA brand marketing fund (Brand Marketing Fund or "BMF") and various other items .

Initial Fees

The initial franchise fee you pay will depend on whether the Main Office will be located in a standard or Town & Country market and on the total number of ERA® Offices you franchise with us. You pay us an initial franchisee fee of $25,000 if the Main Office is located in a standard market or $12,500 if it is located in a Town & Country market. The initial franchise fee for each additional Branch Office is currently $7,500, regardless of the size of the market. If you are an existing franchisee and acquire another real estate brokerage business which you combine into your ERA® Office(s), we will not charge you an additional initial franchise fee. As further described in Item 1, we have a diversity and veteran program under which eligible franchisees may receive benefits that include a lowering or waiver of the initial franchise fee. If we approve your franchise application, we will countersign your Franchise Agreement. If you are subsequently approved to open additional ERA® Offices, your Franchise Agreement will be amended to reflect the existence and location of the additional Offices (see Location Addendum Exhibit C-3 or C-4). We may also condition the approval of such additional Offices on certain other terms and conditions, including minimum gross commission income for the Office or minimum annual royalty fees, which terms will be included in the Location Addendum or Limited Purpose Office Addendum to the Franchise Agreement, as applicable. The date we sign your Franchise Agreement is the "Effective Date" and your initial franchise fee is not refundable after the date. If we permit you to open a Limited Purpose Office in connection with a Main Office, we will charge you a one-time fee between $1,00043,500. See Item 1. In 2016. initial franchise fees ranged from $0 to $25,000 for a standard Franchise, and from $0 to $12,500 for a Town & Country Franchise. We do not intend to refund any initial franchise fees. You must pay us any franchise fees in a lump sum, unless we-beth agree to other arrangements or to payment terms under the financing programs described in Item 10. We have the right to vary, waive, negotiate or make an exception to our published fee structure and/or payment terms for any reason, including without limitation large or otherwise significant transactions. We also have the right to negotiate conversion funding or other incentives that may vary in type, amount and duration. Our exercise of these rights may have the effect of directly or indirectly decreasing the initial franchise fee. See Item 10. If you elect to participate in the ERA Sellers Security™ Plan when you first open your Office, you must pass an annual test. There may be participation fees for other voluntary programs. See Item 6.

Financing

Neither we nor any related company is obligated to provide you any financing. We or a related company, however, have the right to offer you financing based on several factors, including without limitation your financial need, credit history, ability to repay, net worth, your business operations, including history of growing your business, and your stability as well as our need for the development of your market area. We have the right to require you to furnish us with financial statements, tax returns and other documents. The terms of any financing, including the amount, the term of repayment, the amount of principal to be repaid, the amount of interest to be paid (where applicable), the security and other relevant terms are subject to negotiation between the parties as described below. We may require you to undergo a six-month operational review of your Franchise prior to the granting of any financing The review will include a financial analysis, assessment of the use and understanding of our programs, and your adherence to the requirements under the Franchise Agreement. Except as disclosed above, we do not offer financing that requires you to waive notice, confess judgment or waive a defense against us or the lender, although you may lose your defenses against us and others ina collection action onaNote that is sold or discounted. We have no plans to sell or assign any Note from you or any other franchisee Flowever, we have the right to do so in the future Upon any sale or assignments we will not remain primarily obligated to provide the financial goods or services. We do not guarantee your obligations to third parties. If RSG has a lender that provides finance opportunities to franchisees under the Preferred Alliance program we or RSG mav receive payments from such lender

Franchisee Revenue and Profit

We do not make any representations about a franchisee's future financial perfortriance or the past financial performance of company owned or franchised outlets. We also do not authorise our employees or representatives to make any suchrepresentations 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 hy contacting Oavid Collins, 175 Park Avenue, Madison,New Jersey 07940,(973) 407-5887,the federal Trade Commission, and the appropriate state regulatory agencies