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Business Description

General. Aaron’s, Inc. (“Aaron’s”) is a Georgia corporation, incorporated on March 28, 1962, with its principal place of business located at 400 Galleria Parkway SE, Suite 300, Atlanta, Georgia 30339. Aaron’s is one of the nation’s largest furniture lease and sales companies. Aaron’s leases and sells residential and office furniture, electronics, appliances and jewelry and currently operates 1,148 company owned showrooms in 28 states and the District of Columbia. Aaron’s conducts its operations through the following divisions: Aaron’s Sales & Lease Ownership®, Progressive Leasing, and Dent-A-Med. In addition, Aaron’s manufactures its own line of furniture through its Woodhaven Furniture Industries (“Woodhaven”) division. Woodhaven’s principal place of business is located at 23400 US Highway 319N, Coolidge, Georgia 31738. Aaron’s became a public company in November 1982 and its stock is traded on the New York Stock Exchange under the symbol AAN. Aaron’s has no predecessors. Aaron’s has one affiliate, Aaron Investment Company (“AIC”) that must be disclosed in this Disclosure Document. AIC is a Delaware corporation with its principal place of business located at 4005 Kennet Pike, Suite 270, Greenville, Delaware 19807. AIC owns the “Aaron’s®” and “Aaron’s Sales and Lease Ownership®” marks and has licensed to Aaron’s the right to use these marks and logos and to sublicense these marks and logos to franchisees. Aaron’s agents for service of process are listed in the Addendum to Disclosure Document for Item 1.

Prior Experience

As of December 31, 2016, Aaron’s and its franchisees operated 1,826 Aaron’s Stores in the United States. Before January 1, 2000, Aaron’s offered Stores to be operated under the Aaron’s Rental Purchase® service mark. Aaron’s now offers Stores to be operated under the service mark “Aaron’s Sales & Lease Ownership®” (this mark and any other service marks, trademarks, trade names, logos, signs, and other indicia of origin Aaron’s develops for use in the franchise system are referred to collectively as “Aaron’s Marks”). Aaron’s also operates 16 distribution centers, with 2 in Texas and 1 in each of the following states: Arizona, Florida, Georgia, Indiana, Kansas, Maryland, Massachusetts, Mississippi, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania and Tennessee. Aaron’s began offering franchises for Aaron’s Stores in May 1992. As of December 31, 2016, 696 Franchise Agreements were in effect for the operation of Aaron’s Stores in the United States. Of these Franchise Agreements, 676 Stores were operational, and 20 Stores were not yet opened. (Also, there are an additional 23 franchised Aaron’s Stores in Canada.) On April 15, 2014, Aaron’s acquired Progressive Finance Holdings, LLC (“Progressive”). Progressive is an internet based lease-to-own company that partners with retailers to offer point-of-sale lease and purchase programs primarily to customers that do not qualify for traditional, FICObased financing. Progressive currently serves 6,000 retailers at approximately 22,000 locations in the United States. Progressive is also a lease provider to the United States prepaid wireless industry and partners with leading United States consumer electronics, appliance and jewelry retailers, among others. In addition, Progressive conducts consumer credit inquiries and may provide consumer credit reports for Aaron’s franchisees’ use in determining whether to enter into a lease or purchase agreements with potential customers. Progressive maintains a business address at 256 West Data Drive, Draper, Utah 84020. Progressive has not engaged in any other business activities, and has not offered franchises in this or any other line of business. On September 22, 2015, Aaron’s, through its Progressive subsidiary, acquired Dent-A-Med, Inc. d/b/a The HELPCard (“DAMI”). DAMI offers a variety of openend financing programs for customers with near prime credit scores which are originated through a federally insured bank and have simple terms that are competitive with prime credit programs. DAMI currently serves more than 394 merchant partners in approximately 1,050 locations throughout the United States, and will be operated as a wholly owned subsidiary of Progressive. DAMI may provide customer financing to Aaron’s franchisees. DAMI maintains a business address at 203 E. Emma Avenue, Springdale, Arkansas 72764. DAMI has not engaged in any other business activities, and has not offered franchises in this or any other line of business. Between December 2005 and January 2014, Aaron’s also operated and offered franchises for RIMCO® Stores which sell and lease custom wheels, tires, and related products. On January 21, 2014, Aaron’s sold the RIMCO franchise system and all of the Aaron’s-owned RIMCO® Stores. Between December 2010 and May 2016, Aaron’s also operated and offered franchises for HOMESMART® Stores which sold and leased household furniture, electronics, computers, appliances and related products. On May 13, 2016, Aaron’s sold all of the Aaron’s-owned HOMESMART® Stores and discontinued the HOMESMART® franchise system.

Business Offered

Aaron’s offers franchises for the establishment and operation of retail businesses that lease and sell merchandise for consumer and/or business use, under the mark “Aaron’s Sales & Lease Ownership®” (“Aaron’s Stores” or “Stores”). Aaron’s also operates companyowned Aaron’s Stores. In this Disclosure Document, an individual that signs a Franchise Agreement or Area Development Agreement with Aaron’s is referred to as “you.” If you are an entity, the term “you” includes each of your shareholders, partners, members or principals. Aaron’s Stores sell and lease residential and office furniture, consumer electronics, and home appliances and accessories primarily to consumers who do not purchase them with cash or credit. Instead, customers make semi-monthly or monthly payments to Stores, and may return the products to the Store at any time without any further payment obligations or penalty. Customers may also make continuous payments for the term stated in the lease agreement, after which the customers will own the products. Until a customer owns or returns the product, you must perform, or arrange for, repair services. Stores are typically located in free-standing locations or strip shopping centers in moderate income neighborhoods. Aaron’s began experimenting in the lease purchase business for consumer electronics and appliances in 1983. In 1987, Aaron’s began operating Aaron’s Rent-ToOwn® stores, which were exclusively devoted to the rental purchase business. In May 1990, Aaron’s began experimenting with a 12-month rental purchase program (rather than the traditional 18-month program) in 5 of its Aaron’s Rent-To-Own® stores. Due to the success of this program, Aaron’s converted all of its rental purchase units to the 12-month program in August 1990. In May 2000, Aaron’s began transitioning its rental purchase units over to sales and lease ownership programs while continuing to use the 12-month program concept. Aaron’s currently offers 6-month, 12-month, 18-month and 24-month sales and lease ownership programs to its customers.

Initial Fees

The Franchise Agreement. The initial franchise fee (the “Initial Fee”) is payable when you sign the Franchise Agreement. Except as described in this Item 5, the Initial Fee is not refundable. Aaron’s will determine the Initial Fee and it will be stated on Exhibit A to the Franchise Agreement before you sign the Franchise Agreement. Subject to adjustment as described below, the Initial Fee is (i) $15,000 if the Designated Location (as defined in Item 11) is located (or if it is anticipated that the Designated Location will be located) in a county with a Population Base (as defined below) of less than 30,000 persons; (ii) $35,000 if the Designated Location is located (or if it is anticipated that the Designated Location will be located) in a county with a Population Base of 30,000 persons or more, but less than 60,000 persons; or (iii) $50,000 if the Designated Location is located (or if it is anticipated that the Designated Location will be located) in a county with a Population Base of 60,000 persons or more. In addition, Aaron’s may determine that the appropriate Initial Fee for your Store is $15,000, $35,000 or $50,000, regardless of the Population Base of the Designated Location, after taking into consideration the market concentration, projected population growth, competition and demographics of the area surrounding the Designated Location (or the area surrounding the anticipated Designated Location), the number of franchises and/or Aaron’s-owned Stores then-operating or projected to operate under the Aaron’s Marks in the area surrounding the Designated Location (or the area surrounding the anticipated Designated Location) and other factors Aaron’s deems relevant. “Population Base” as used in this Item means the total number of persons residing in the relevant county as determined by Aaron’s using the most recently published estimates issued by the United States Census Bureau. Within a reasonable period of time after the determination of the actual Designated Location of a Store, Aaron’s may adjust the Initial Fee if Aaron’s determines that an adjustment is appropriate based on the application of the criteria described above to the actual Designated Location, provided, the Initial Fee, as adjusted, will not exceed $50,000. If the adjusted Initial Fee is greater than the Initial Fee you paid, you must pay the difference to Aaron’s within 30 days after your receipt of written notice of the adjusted Initial Fee. If the adjusted Initial Fee is less than the Initial Fee you paid, Aaron’s will return the difference to you within 30 days after the determination of the adjusted Initial Fee, unless you and Aaron’s otherwise agree. Aaron’s from time to time will convert a third party chain of one or more rental purchase stores (“Conversion Program”) to an Aaron’s franchise. As part of the Conversion Program, the initial franchise fees described above are reduced. The percentage reduction of the Initial Fee for the Conversion Program is calculated based on the number of converted stores. By way of example, a rental purchase operator converting 1 to 5 stores would pay 60% of the full Initial Fee. Depending on the Population Base, Initial Fees could range from $9,000 to $30,000 dollars per store. An operator converting 6 to 10 stores would pay 50% of the full Initial Fee. The range of franchise fees depending on the Population Base could range from $7,500 to $25,000 per store. Finally, an operator converting more than 10 stores would pay 40% of the full Initial Fee. The range of franchise fees depending on the Population Base could range from $6,000 and $20,000 dollars per store. The Conversion Program’s reduced Initial Fee structure is reflective of the rental purchase operator’s demonstrated ability to have operated a competitive store, the goodwill associated with the rental purchase operator’s business and as an incentive for the decision to participate in the Conversion Program. Participants in the Conversion Program must follow the same requirements described below consistent with any other franchisee entering the franchise system. You must begin operating the Store within 6 months after the effective date of the Franchise Agreement or Aaron’s may terminate the Franchise Agreement. However, if Aaron’s determines that you have made a good faith attempt to open the Store, you can obtain an extension of up to 24 months if you have paid the Initial Fee. If Aaron’s permits you to extend your opening date, you may be required to pay extension fees that are payable per the following schedule: $500 per month extension option fee for months 1 to 12, $1,500 per month for months 13 to 18 and $2,500 per month for months 19 to 24. In each case, you must sign Aaron’s standard extension authorization form. If you do not open the Store within the required time period (including any extensions), or if you and Aaron’s cannot agree on a site, Aaron’s may terminate the Franchise Agreement. If Aaron’s terminates the Franchise Agreement for either of these reasons and you have submitted to Aaron’s a proposed location for the Store within 90 days of the effective date of the Franchise Agreement, Aaron’s will refund the Initial Fee (not including any portion of the Initial Fee that was paid by you or a related party under a Development Agreement and credited toward the Initial Fee), less (i) $4,500, plus (ii) broker fees or commissions paid by Aaron’s to recruit you and Aaron’s travel, meal, lodging, and payroll costs incurred in connection lodging costs incurred in providing you with training, site selection assistance, and other pre-opening assistance. If you have not submitted to Aaron’s a proposed location during this 90 day period, none of the Initial Fee will be refunded. In addition, when you sign the Franchise Agreement, you must purchase from Aaron’s an equipment package consisting of, among other things, price tags, price tag holders, acrylic advertising stands, vendor logos and interior signage and other items related to the operation of the franchised business. The cost of the equipment package may vary depending on the price available at the time of purchase. As of the date of this Disclosure Document, the cost of the package is approximately $8,000, and is non-refundable. In addition, you must lease certain required computer hardware and software from Aaron’s before you open for business, at an approximate cost of between $50 and $90 each week. Additionally, franchisees may, but are not required to, purchase or lease additional items, such as a sign lease, from Aaron’s. The sign lease will cost approximately $10 to $130 per week, paid over approximately 260 weeks. Finally, you must purchase an initial inventory of merchandise for offer or sale by your Aaron’s Store from Aaron’s and/or Woodhaven, which we estimate will cost approximately $100,000 to $150,000, including freight and shipping and handling charges, which may be assessed by Aaron’s designated distribution center and/or its shipping vendor. Certain components of the initial inventory may be purchased from our approved third-party suppliers. The Development Agreement. If you sign a Development Agreement, you must pay Aaron’s a non-refundable development fee that is based on the number of Stores that you agree to develop under the Development Agreement calculated upon the following formula: (i) 50% of the Initial Fee for each Store that is subject to a $15,000 or $50,000 Initial Fee, and (ii) $10,000 for each Store that is subject to a $35,000 Initial Fee (the “Development Fee”). The calculation and structure of the Development Fee is uniform for all Developers. If you are compliant with the Development Agreement, then Aaron’s will credit the portion of the Development Fee allocable to a particular Store against the Initial Fee due when you sign a Franchise Agreement for that Store. As discussed above, the Initial Fee for each Store may vary once a Designated Location is identified, based on the Population Base and demographics in the area surrounding the Designated Location. Within a reasonable period of time after the determination of the actual Designated Location for a Store to be developed under the Development Agreement, Aaron’s may adjust the Development Fee for that Store if Aaron’s determines that the Development Fee requires adjustment based on the application of the criteria discussed above to the actual Designated Location, however, the Development Fee for the Store, as adjusted, will never exceed $25,000. If the adjusted Development Fee for any Store is greater than the corresponding Development Fee for the Store (as stated on Exhibit A to the Development Agreement), you must pay the difference to Aaron’s within 30 days after your receipt of written notice of the adjusted Development Fee. If the adjusted Development Fee is less than the corresponding Development Fee for the Aaron’s Store (as specified on Exhibit A to the Development Agreement), Aaron’s will return the difference to you within 30 days after the determination of the adjusted Development Fee, unless you and Aaron’s otherwise agree. If you enter into a Development Agreement, you must open the number of Stores specified in the Development Schedule, within the time frames set forth in the Development Schedule. If you fail to timely open a Store, Aaron’s may terminate your Development Agreement. However, you may request an extension within which to open a Store before the Store opening deadline set forth in the Development Agreement. Aaron’s may, but is not obligated to, grant your extension request if you are compliant with the terms of the Development Agreement (other than the Development Schedule) and the Franchise Agreement you have signed for the Store, have paid the Initial Fee for the Store, and Aaron’s determines that you have made a good faith attempt to open the Store in a timely manner. If Aaron’s approves your request for an extension within which to open a Store, you must sign Aaron’s then-current extension authorization form and pay the following non-refundable monthly extension fees (the “Extension Fees”): (a) $500 per month for months 1 to 12 of the extension; (b) $1,500 per month for months 13 to 18 of the extension; and (c) $2,500 per month for months 19 to 24 of the extension. Extensions will not exceed 24 months. An extension within which to open one Store will not affect the deadlines within which you must open any other Store(s) under the Development Schedule. If Aaron’s grants you an extension within which to open a Store and later determines that you are not using your best efforts to open the Store within a reasonable period of time following the grant extension,Aaron’s may terminate the extension granted for that Store. The termination of an extension grant is an Event of Default under the Franchise Agreement.

Financing

Except as described below, Aaron’s does not offer direct or indirect financing. Inventory Financing. As of the date of this Disclosure Document, Aaron’s has made arrangements with SunTrust Bank or various other lending institutions (“Bank”), under which Bank may provide financing for inventory purchases to Aaron’s franchisees that meet Bank’s criteria. You are not required to obtain financing from Bank, and you may obtain financing, if available, from any other lender that is satisfactory to Aaron’s. If you seek financing from Bank and Bank approves you, Bank will lend $400,000 to $450,000 per Store (and possibly more if certain requirements are met) for inventory purchases. Bank offers financing under 2 programs, a 24-month scheduled pay program and, on a limited basis, subject to certain requirements, an established franchise financing program for qualified franchisees that currently consists of a term loan commitment and a revolving line of credit commitment, the terms of which are subject to varied economic conditions. To be eligible for the established franchise finance program, a franchisee must have operated at least one Aaron’s franchise for at least 18 months, must have had at least 2 Aaron’s franchises operating for one full year or more, and must have committed to develop a total of 4 or more Aaron’s franchises. As a Store matures, you may require additional borrowing capacity to meet your Store’s inventory needs. All credit line increase requests must be submitted in writing to Aaron’s. The request must be supported by appropriate documentation demonstrating the need for additional credit and the ability to support the increased debt service. All increase requests will be evaluated on a caseby-case basis and must be pre-approved in writing by Aaron’s and the Bank. Aaron’s does not guarantee that an increased credit line will be granted or approved. If you obtain financing from Bank, you must pay a $500 fee (subject to change without prior notification) to Bank at the closing of your financing arrangement. Bank will charge interest on amounts that it loans to you. Currently, the rate is the Bank’s established Prime Rate plus 4.00% (“Borrower’s Rate”), but it may be adjusted due to changing economic and market conditions, and Bank will charge a commitment fee, paid quarterly, on any unused portion of your loan commitment of .50% per annum. Under the 24-month scheduled pay program, amounts that you owe must be repaid in 24 consecutive, monthly installments. However, when you dispose of inventory that Bank has financed, you must make monthly prepayments to Bank of the net book value of all of the disposed inventory. Under the established financing program, the revolving line of credit permits interest only payments, with no prepayment of principal and the balance will be due at maturity. The term loan notes will be paid according to an amortization schedule based on the structure of the note. If you terminate your line of credit commitment, all amounts advanced to you will be due and payable in full upon the termination date. If Bank provides financing to you, it will have a security interest in all of your accounts, balances, merchandise, inventory, equipment, general intangibles, documents, instruments, chattel paper, books and records, and all products and proceeds of these items. If you are a partnership, Bank will require each partner to personally guarantee the debt. If you are an entity, Bank will require the majority equity owner to personally guarantee the debt. Each guarantor also must sign a Subordination Agreement under which the guarantor agrees that you will not pay any debt you owe to the guarantor while you owe any amount to Bank. You may prepay amounts owed to Bank at any time without a prepayment penalty. If you are late making a payment to Bank, the amount due will bear interest from the due date at the default rate, which is 2% higher than the then-current Borrower’s Rate, but this rate is subject to adjustment in accordance with a schedule established by the bank with Aaron’s. Currently, the default rate is the Bank’s Prime Rate, plus 6%. If you default under your loan arrangement, Bank can terminate the arrangement, require you to immediately pay all amounts you owe to Bank, require you to pay any costs and attorneys’ fees Bank incurs in collecting from you, foreclose on your collateral and exercise any other rights that it has under the agreements that you sign with Bank and under the law. If you default on your loan from Bank, Aaron’s has the right to terminate the Franchise Agreement. A financing arrangement between you and Bank can be terminated by either you or Bank on 90 days written notice. Samples of the loan documents that you and any guarantor(s) must sign in obtaining a loan from Bank under the 24- month scheduled pay program are attached to this Disclosure Document as Exhibit F-1. You agree to waive any notice of Bank’s acceptance and you also waive any requirement on the part of Bank to post a bond or other security in order to obtain possession of your collateral if you default. Under the Master Note included in these documents, you waive your rights of presentment for payment, notice of dishonor and protest. The Loan and Security Agreement includes an arbitration provision that requires you to arbitrate any dispute between you and Bank relating to that Agreement. The arbitration will be held in a place agreed on between you and Bank, but if no agreement can be reached, the arbitration will be held in Atlanta, Georgia. The Loan and Security Agreement permits Bank to assign its rights and obligations under that agreement at any time, and permits Bank to participate, sell or assign the loan(s) made under that agreement. If Bank makes any sale, participation or assignment, you could lose any defenses that you have against Bank. As of the date of this Disclosure Document, Bank has not sold or assigned any financing arrangement between Bank and any Aaron’s franchisee, and Aaron’s does not know whether Bank has any future intent to do so. Each quarter, Bank determines the total amount of funds it has committed to the Aaron’s franchisee loan program, but that Aaron’s franchisees have not used, and multiplies this amount by an amount (currently, 0.20% calculated based upon the pricing grid attached as Exhibit F-2). If this amount exceeds the total amount of commitment fees that Bank has received for the quarter from Aaron’s franchisees on the unused portion of their loan commitments, then Aaron’s pays the difference. If this amount is less than the total of the franchisee commitment fees, then Aaron’s receives the difference. For its services in facilitating and managing the loan process, and for performing certain services for loans made by Bank to Aaron’s franchisees, including guaranteeing the obligations of franchisees, as described below, Aaron’s also receives a rebate equal to the average daily outstanding balances of Bank loans to Aaron’s franchisees, multiplied by the following per annum rate, Borrower’s Rate minus the sum of the London Interbank Offered Rate (“LIBOR”), the designated servicing fee, and 200 basis points (2.00%). The basis point spread over LIBOR can be affected by Aaron’s financial ratios as negotiated under its senior debt facility. The agreement between Bank and Aaron’s governing the rebate is subject to change from time to time due to changing economic and market conditions Aaron’s must guarantee each loan made by Bank to an Aaron’s franchisee. However, if Aaron’s pays any amount for you as outlined under its guarantee obligation, Aaron’s will have the right to recover from you the amount of the payment, and all costs it incurs as a result of making the payment. If you default on your loan from the Bank, Aaron’s has the right to terminate your Franchise Agreement(s). Sign Lease. You must lease from Aaron’s one or more exterior signs for the Store, the amount and manner of lease payments for which are described in Item 6. The lease payments due under the Sign Lease Agreement for the sign(s) are computed so that Aaron’s cost for the sign(s) along with a 12% up charge for service and administration is repaid to Aaron’s over 5 years, with interest being charged at a fixed annual rate of the prime rate, as published in the Wall Street Journal on the date of the lease, plus 3.25% (subject to adjustment due to changing economic and market conditions). You can avoid the interest charge by paying to Aaron’s the total amount of lease payments to be made before opening the Store. If you default under your Sign Lease Agreement, Aaron’s can take possession of the sign(s) and require you to immediately make all past due lease payments. The Sign Lease Agreement provides that Aaron’s may assign the Sign Lease Agreement to a third party. If Aaron’s makes an assignment, you could lose any defenses you have against Aaron’s. Aaron’s has not sold, assigned or discounted to any third party all or part of the financing arrangement under a Sign Lease Agreement with any Aaron’s franchisee, and Aaron’s currently has no intention to do so in the future. Equipment Lease. Aaron’s has entered into a business equipment lease agreement under which Aaron’s leases point of sale and other business use computer equipment. You must sub-lease from Aaron’s the point of sale computer equipment for the Store, the amount and manner of lease payments for which are described in Item 6. The lease payments due under the Equipment Lease Agreement for the equipment are computed so that Aaron’s cost for the lease payments is covered along with a 12% up charge for service and administration. If you default under the Equipment Lease Agreement, Aaron’s can take possession of the equipment and require you to immediately make all past due lease payments. The Equipment Lease Agreement provides that Aaron’s may assign the Equipment Lease Agreement to a third party. If Aaron’s makes an assignment, you could lose any defenses you have against Aaron’s. Aaron’s has not sold, assigned or discounted to any third party all or part of the lease arrangement under an Equipment Lease Agreement with any Aaron’s franchisee, and Aaron’s currently has no intention to do so in the future. Promotional Financing. Aaron’s may establish a financing program for the benefit of Aaron’s franchisees to assist them in connection with Grand Opening Event Advertising. If the program is offered and you choose to participate, you must use Aaron’s in-house advertising department to plan and/or execute the Grand Opening Event Advertising program. This financing program will be in addition to, and not in substitution of, your obligations to spend amounts for advertising and promotion (Section 7.18 of the Franchise Agreement). If Aaron’s makes such a financing program available, Aaron’s may lend a franchisee up to $15,000 per Store, depending on the Population Base of the Designated Location, under the terms of a promissory note, the form of which is attached to this Disclosure Document as Exhibit I. Interest will be charged at a fixed annual rate of 4%, which will accrue beginning on the date of the promissory note and ending on the date the promissory note is paid in full, although franchisees will not be required to make any payments before 25 months from the date the Store begins its operations. Payments will be made in equal monthly installments of $2,000 until the principal and all accrued interest are paid in full. Payments will be applied first to accrued interest and then to the principal balance. If you are a partnership, Aaron’s will require each partner to personally guarantee the debt. If you are an entity, Aaron’s will require all owners to personally guarantee the debt. You may prepay amounts owed to Aaron’s at any time without a prepayment penalty. Nonpayment of any amounts due under the promissory note will be considered to be events of default under your Franchise Agreement and/or Development Agreement. Additionally, under the Franchise Agreement you must grant to Aaron’s a security interest in all of your rights in your leasehold interest for the Store and in all of your assets, whether now owned or later acquired, used in the Store, including all Goods, Equipment (other than leasehold improvements that constitute fixtures), Accounts, Merchandise, Inventory, Investment Property, Equipment, General Intangibles (including general intangibles that are classified otherwise under Revised Article 9 of the UCC), Documents, Instruments, Chattel Paper, (including, but not limited to, the Lease Contracts), Balances, and Books and Records (as these terms are defined in the FDD), and all products and proceeds of the foregoing and any other property, and all additions and accessions thereto, all substitutions and replacements therefor and all products and proceeds thereof or proceeds of insurance thereon, as security for the payment of all obligations you owe to Aaron’s or any of its Affiliates, including the Initial Fee, Development Fees, Continuing License Fees, Ad Production Fees (if any), Media Fees (if any), Sign Lease Payments and Equipment Lease payments, invoices for merchandise and all other fees and amounts you owe to Aaron’s. Under the Franchise Agreement, you must acknowledge that the Franchise Agreement is a security agreement under the UCC for purposes of establishing the respective rights of Aaron’s and you in the above-described personal property and the enforcement of the security interest against you.

Franchisee Revenue and Profit

The data below states certain historical revenue and expense information for Aaron’s-operated Stores. Written substantiation of data used in preparing this information is available on reasonable request. Except as explained below, neither Aaron’s nor its affiliates furnishes or authorizes any oral or written information of actual, potential, average or projected sales, costs, income or profits of existing or proposed Franchises. The success of your franchise will depend largely on your individual efforts, and the financial results of your franchise are likely to differ, perhaps materially, from the results summarized below. Written substantiation of the data included in this Item 19 disclosure will be made available upon receipt of written request. You should conduct an independent investigation of the costs and expenses you will or may incur in operating your franchised Aaron’s Store. Franchisees or former franchisees listed in this Disclosure Document may be one source of this information.