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Business Description

TAB is a Colorado corporation formed on January 2, 1996, under the name “IHTAB, Inc.” We changed our liame to “TAB Boards Ihtemational, Inc.” on April 4, 2002. We conduct business under our corporate name and certain trademarks (see Rem 13). Our principal business address is 11031 Sheridan BO^eyard, Westminster, Colorado 80020.

Prior Experience

We began offering franchises in January,. 1996. Since Our inception, we haye conducted and will continue to conduct TAB Businesses siniilar to the TAB Business you will operate through employees and independerit contract faCilitatOrs (“Independent Facilitator Coaches”), Our Independent Facilitator Coaches (who are not TAB employees) facilitate TAB Boards under indepndent' faCUitator coach agreements, some; of which were assigned to us by Direct Communication Service, Ihc. (“DCS”), our predecessor. We also sometimes offer area developer franchises under a separate Franchise Disclosure Document to provide franchise development services for TAB Business franchises and franchise support services to TAB Business franchisees; We do not offer fianChises in any other line of business, but we may do so in the future.

Business Offered

We offer franchises for the operation of TAB Businesses that form TAB Boards of TAB Members, facihtate TAB Board Meetings and provide business!Coachihg:under the Trademarks and using the LicensedMethods. TAB Businesses and franchises are marketed as “The Alternative Board®” to the general public. TAB Members pay a fee to franchisees to assess their businesses (the “Business Ass^essmeht Fee”) and a recurring monthly fee to a:ttend TAB Board Meetings (the “Membership Dues”). You will derive revenue from these activities (the “Gross Revenue”), Our franchisees may also earn, additional revenue from the TAB Opportunity from TAB Members (the “Additional Revenue”); Additional Revenue is part of the Gross Revenue. TAB Members may also purchase books, audiotapes, videotapes, CD-ROMs, Intemet-based assessments, newsletters, etc. that we or oifr affiliates develop from time to time (the “Supplemental Products and Services”) from you, at fees or prices you determine (see Item 16). We Offer four types of franchises for the operation of TAB Businesses. Under the MM TAB Business Franchise; NMM TAB Business Franchise, and Small TAB Busmess Franchise, you will pay us an initial franchise fee (the “Initial Franchise Fee”) (see Item 5) and a percentage-based royalty fee of your Gross Revenue (the “Royalty Fee”) (see Item 6). Under the Optional Franchise Fee TAB Business Franchise, instead of an Initial Franchise Fee, you will pay us a lower option fee (the “Option Fee”) (see Item 5) and a higher percentage of your Gross Revenue (see Item 6). You may elect to convert an Optional Franchise Fee TAB* Business Franchise to an MM TAB Business Franchise, NMM TAB Business Franchise dr Small TAB Business Franchise at any time after ydur TAB Business generates at least $50,000.00 in Gross Revenue. You will pay The difference between the Option Fee paid and our then-current Initial Franchise Fee charged at the time you elect to convert (the “Conversion Fee”); you will Hot receive any manner of credit for the Royalty Fees you have paid against the Conversion Fee. The NMM TAB Business Franchise and Small TAB Business Franchise are only available in certain territories that we believe did not contain enough total businesses to meet our requirements fonan MM TAB Busihess-Franchise and are oiily offered in our discretion.

Initial Fees

We offer four, franchise models. When you sign a Franchise Agreement for an MM TAB Business Franchise, an NMM TAB Biisiness Franehise Or a Small TAB Business Franchise; you must pay us the;lhitial,Franchise;Fee, the initial training fee (the “Initial Training Fee”)tand the marketing fee (the “Marketing: Fee”). When you sign a Franchise- Agreement and the TAB Boards International, Inc, optional Franchise Fee Addendum (Exhibit K), you must pay us the Option Fee (in lieu of the Initial Franchise Fee), the Initial Training Fee and the MarketingPee.

Financing

Neither we lior any agent of affiliate currently offer, directly of indirectly, any financing to you, nor do we; guarantee any lease Or other'obligations for you.

Franchisee Revenue and Profit

The FTC's Franchise Rule pennits a fr^chisor to provide information about the actual or potential financial perfdnnance of its fianchised andybr firanchisorTOwned outlets, if there is a reasonable basis for the information, and if the information is iricluded in the Franchise Disclosure Document. Financial performance information that differs fi-om that included in Item 19 may be. given only if (1) a franchisor provides the actual records, of an existing,outlet you arexonsidermg buying, or (2) a fianChisbr supplements the information provided in Item 19, for example, by providing information about performance of a particular location or under particular circumstances.