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Business Description

We are the franchisor of the Heaven’s Best franchise system. We license our franchisees in specified territories to own and to operate franchises under the Heaven’s Best names and marks. We authorize our franchisees to promote, advertise, and sell quality residential and commercial carpet, flooring, and upholstery cleaning and restoration products and services to the public and to use our Method of Operation and our service marks in the operations of the franchisee’s business. You will have the right to provide such services within a geographic area specified in the franchise agreement. Our principal office address is 247 N 1st E, Rexburg, Idaho 83440. Our telephone number is (208)359-1106.

Prior Experience

We have offered franchises since March 2018. We have never offered franchises in any other line of business. We do not operate any businesses of the type being franchised. We produce and sell innovative advertising and sales promotion materials. We may attempt to negotiate group discount rates for the benefit of our franchisees for wholesale products, supplies, and equipment. We do not have any other business activities. We have no parent.

Business Offered

Until 2016, our predecessor offered qualified “state owners” the right to offer and sell their own Heaven’s Best franchises in a specified Development Area (generally, an entire state). We do not offer or sell this master franchise opportunity but inherited state owner master franchisees in certain states, including: Alabama, Arizona, California, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Missouri, Nebraska, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, and Washington. These master franchisees previously offered and sold their own franchises and continue to service, train, and support their franchisees. We have revised or are in the process of revising our relationship with certain state owner master franchisees so that they serve as our sales and/or service representative to service, train and support new franchises for us. They provide some of the training and support services on our behalf, as required under the relevant franchise contracts within the Development Area. They receive a commission based on initial and ongoing fee payments that we collect from franchisees within the relevant Development Area. Exhibit H contains disclosures and information concerning our Heaven’s Best “State Owner” master franchises and our sales and service representatives. If we decide to offer the state owner master franchise or an area representative franchise, the offering will be made through a separate franchise disclosure document. These franchises would only be offered in a franchise registration state after the franchise offering is registered in that state.

Initial Fees

The Initial Franchise Fee is $39,900 for your first franchise territory purchased. If you purchase more than one franchise territory concurrently, the Initial Franchisee is $39,900 for the first franchise and a reduced Initial Franchise Fee of $19,900 for each additional franchise territory. To be eligible to pay the reduced initial franchise fees for multiple franchises, you must qualify financially to open multiple franchise territories and you must pay to us the entire Initial Franchise Fee upfront for each franchise territory when you sign the relevant franchise agreement. If you are an existing franchisee in good standing, then you may purchase additional franchise territories at a reduced Initial Franchise Fee at a 20% discount. To be eligible to pay the reduced initial franchise fee outlined above, you must be fully compliant and in good standing under all agreements with us, you must qualify financially to open an additional franchise territory, and you must pay to use the entire Initial Franchise Fee upfront for each franchise territory when you sign the relevant franchise agreement. We support the International Franchise Association’s VetFran program. If you meet the International Franchise Association’s requirements for this program and meet our standard franchisee criteria, you may qualify for a $1,000 discount on the Initial Franchise Fee for your first franchise territory purchased. Visit www.franchise.org and contact the International Franchise Association for details about this program. Simultaneous with the execution of the Franchise Agreement(s), you will pay to us the entire Initial Franchise Fee(s). The Initial Franchise Fee is paid in consideration for our sales expenses, administrative overhead, return on investment, our standard initial equipment and inventory package, training costs and stipend, and start-up costs related to the execution of the Franchise Agreement, the opening of the Franchise, and for our lost or deferred opportunity to sell franchises in the Franchise Territory to others. Our mandatory initial training includes training at our training facility. We pay for your lodging accommodations and pay to you a $300 stipend upon your successful completion of the training program. You are responsible for and must pay all other expenses, including transportation, travel, meals, wages, and other expenses that you or your manager incur related to attending training. You must arrange your travel through third party vendors not affiliated with us. Amounts paid to third parties may be refundable, depending upon the contracts or other arrangements between them and you. If you do not pass the entire mandatory training course to our satisfaction we may terminate the Franchise Agreement without refunding any of the Initial Franchise Fee or any other amounts paid to us, our affiliate, or others for training or travel reimbursement. You must open the franchise within the earlier of 180 days after the date of the Franchise Agreement or 30 days after successful completion of the initial training program. If this obligation is not fulfilled, we may elect to terminate the Franchise Agreement without refunding any of the Initial Franchise Fee and or other amounts paid to us, our affiliate, or others for training or travel reimbursement. In our fiscal year that ended September 30, 2018, we collected initial franchise fees that ranged from $25,000 to $34,900 and consistent with the available financing as published in the thencurrent franchise disclosure document. The initial fees are uniform except as described in this Item 5. We intend to raise the initial franchise fee after certain growth levels have been attained. The increased franchise fee and timing have not been determined as of this date. We have not contemplated and do not currently intend to raise the transfer or renewal fees, but reserve the right to do so in the future. We may offer franchises at a reduced rate to prospective franchisees who in our opinion possess the knowledge, experience, and competence to conduct business with minimal assistance from us or who are purchasing multiple franchises. The Initial Franchise Fee and the amount paid for the training and travel reimbursement are not refundable in whole or in part under any circumstances other than those listed above.

Financing

Except as described below and in Item 5 above, we do not provide direct or indirect financing and do not assist in providing financing for you. We do not guarantee any notes or financial obligations you may incur in setting up and operating your franchise. Summary of Financing Offered We may offer financing of up to 25% of your first Initial Franchise Fee ($29,925 down, we finance the remaining $9,975) at a 10% interest rate, compounded monthly, over 60 months. We may offer financing of up to 75% of your second and additional Initial Franchise Fees for franchise territories purchased concurrently with the first franchise territory ($4,975 down, we finance the remaining $14,925– per additional franchise territory). The same interest rate and 60-month term apply to financing of the Initial Franchisee Fee(s) for the concurrently purchased additional franchise territory(ies). Note 1 — If you meet our credit standards, we may finance, at our sole option, 25% of your Initial Franchise Fee for your first franchise territory. The down payment is $29,925 and the remaining balance of your Initial Franchise Fee will be $9,975. We may finance, at our sole option, up to 75% of your Initial Franchise Fee(s) for your second and any additional franchise territory(ies), but only if purchased concurrently with your first franchise territory. The down payment for each additional franchise territory is $4,975 and the remaining balance of each Initial Franchise Fee (per additional franchise territory) will be $14,925. We offer a 60-month term at an APR of 10%, compounded monthly. You must sign a Promissory Note for the financed amount. (See Franchise Agreement Section 2.1 and Exhibit 3). The only security we require is a personal guarantee of the Promissory Note by you and your spouse or by all the shareholders of your company (See Exhibit 3 to the Franchise Agreement). The note can be prepaid without penalty at any time during its 60-month term. Note 2 — Your minimum monthly payment may be more or less than these amounts, depending upon the amount financed. If you do not pay on time and default under the Promissory Note, we can: ? declare the entire principal amount plus accrued interest to be immediately due and payable; ? charge additional interest on the entire principal balance and accrued interest, up to 18% per annum (not to exceed the maximum rate permitted by law); ? obligate you to pay any and all court costs and other expenses, including reasonable attorney fees, incurred in collecting the debt; or ? terminate your franchise agreement. (See Franchise Agreement, Sections 2.1 and 6.3 and Exhibit 3). The Promissory Note will require you to waive and bar you from asserting the following defenses and legal rights: presentment for payment; notice of dishonor; protest; notice of protect; and diligence in collection. It will also require you to consent that the time of payment on any part of the note may be extended without otherwise modifying, altering, releasing, affecting or limiting your liability. Commercial paper from franchisees has not been and is not sold or assigned to anyone, and we have no plans to do so. We do not receive direct or indirect payments for placing financing. We do not guarantee your obligations to third parties.

Franchisee Revenue and Profit

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not 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 Robert Ashcraft, 247 N 1st E, Rexburg, Idaho 83440, (208)359-1106, [email protected], the Federal Trade Commission, and the appropriate state regulatory agencies.