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Business Description

To simplify the language in this Disclosure Document, “we,” “us” or “our” means FADS USA, Inc., the franchisor. “You” or “your” means the person or persons who buy(s) the franchise. If you are a corporation, partnership, limited liability company or other legal entity, certain provisions of the Franchise Agreement will apply to your owners. This Disclosure Document will indicate when your direct and indirect owners are also covered by a particular provision (See Item 15).

Prior Experience

We are a Delaware corporation incorporated on January 10, 1995. We initially were formed under the name Megadance USA Corp., and we changed our name to FADS USA, Inc. We do business under our company name (FADS USA, Inc.) and under the trade and service mark FRED ASTAIRE DANCE STUDIOS® and related trademarks, service marks and logos listed in Item 13 (the “Marks”). Our principal business address is 10 Bliss Road, Longmeadow, Massachusetts 01106. Our agents for service of process and state administrators, if applicable, are listed in Exhibit A to this Disclosure Document

Business Offered

Dance studios operating under the Marks are referred to in this Disclosure Agreement as “Studios.” Studios that are independently owned and operated by third party franchisees are referred to in this Disclosure Document as “Franchised Studios.” As of the date of this Disclosure Document, neither we nor any of our affiliates operate any company-owned or affiliate-owned Studios. As of December 31, 2018, there were 168 Franchised Studios operating in the United States and 9 Franchised Studios operating in 6 other countries. We are not engaged in any other business activities and have never offered franchises in any other lines of business, except our Subfranchisor Program (which we have discontinued) and our Area Representative Program (both are described below).

Initial Fees

The initial franchise fee (the “Franchise Fee”) for a single Studio ranges from $25,000 to $40,000 based upon the location of the Studio and the cost of living of the area in which your Studio is located. The Franchise Fee is due upon execution of the Franchise Agreement.

Financing

We and our affiliates do not offer direct or indirect financing arrangements for any purpose in establishing or operating your Studio. We and our affiliates do not guarantee your promissory note, lease or any other obligation you may make to third parties

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document. Financial performance information that differs from that included in this 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.