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Business Description

To simplify the language in this disclosure document, “we” or “us” means SCA Franchising Corporation, the franchisor. “You” means the individual, corppfatidn or partnership who buys the franchise. If the franchisee will operate through a corporation or partnership, “you” also includes the ffanchisee's owners or partners. Our principal business address is 3817 West Magnolia Boulevard, Burbank, CA 915G5 and our telephone number is (800) 572-8010.

Prior Experience

We conduct business under the names “SCA Franchising Corporation” and “SCA Appraisal Services.” We are a California corporation incorporated In Burbank California on March 14 2007. Our Only affiliate is SCA Enterprises, Inc. (“SCA”)j a California corporation incorporated on'May 29, 1996. The principal busihegs address of SCA is 3817 West Magnolia Boulevard, Burbank, CA 91505 and its telephone number is (800) 572-8010.

Business Offered

Your business will operate a SCA Appraisal Services Business providing vehicle damage appraisai serv/ides for insurance companies (the “SCA Appraisal Services Business” or the “Appraisal Business”). We have not operated any SCA Appraisal Services Businesses. We franchise persons that operate a SCA Appraisal Services Business, In addition, we act as a reseller of appraisal estimating software subscriptions to our franchisees and to independent contractors that provide appraisal services for our affiliate, SCA. Neither we, hdr SCA (Our only affiliate) have previously offered or sold franchises for SCA Appraisal Services Busin.esSes, SCA has operated SCA Appraisal Services Businesses since 1979. Neither we, nor SCA (our Only affiliate) have offered franchises for any other types of business than those described: above. The market for your services consist of national ,and local insurance'companies. We may provide you with Opportunities to service national insurance companies. Sales are not seasonal, The market is Very Well developed and highly competitive. You will compete with other regional, local and national vehicle damage appraisat services.

Initial Fees

All franchisees pay an initial franchise fee of $10,000. You must pay the initial franchise fee ini full on the date you sign the Franchise Agreement. We will not refund any of the initial franchise fee. No other fees or payments are due to us or our affiliates for services or goods before your busiriess opens

Financing

We may offer to purehase the appra'isai fees owed to your Appraisal! Business (your aoeounts receivables for the appraisal fees due from insurance companies). We will pay you for the accounts receivables and in return we will have a security interest in your accounts receivables and the right to collect the appraisal fees. To obtain this financing, you must meet our qualifications and the Accounts Receivables must be Ovved by Insurance companies we approve in advance for appraisal services performed by your Appraisal Business. Our form of agreement for our purchase of accounts receivable is annexed as Exhibit C to the Franchise Agreement. We will maintain a reserve of 10% of collections, on a rolling basis, for amounts, that are uncollectible on account of claims by the insurance carrier of unsatisfactory work. Our purchase of your accounts receivable will be on a nonFrecourse basis and we do notoffer any other direct or indirect financing.

Franchisee Revenue and Profit

The FTCs Franchise Rule permits a franchisor to provide information about the actual or potential performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis forthe 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. Vile do not maKe any representations about franchisee's future^ financial performance or the past financial performance of company-owned or franchised outlets. We also do no authorize our employees or representatives to make any such representations 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 by contacting Our President, Tirriothy W; P, Davis, SGA Franchising Corporation, 3817 West Magnolia Boulevard, Burbank, CA 91505, telephone (800) 572,801,0, the Federal Trade Commission, and the appropriate state regulatory agencies,