Business Description

CGR is a Texas limited liability company that was formed on July 2, 2019. We do business under our company name, CORE Group Restoration, and no other name. Our principal business address is 925 South Capital of Texas Highway, Suite 250B, Austin, TX. CGR has not offered franchises in any other line of business. We began offering franchises for CORE Businesses in July 2019. We have not, and do not, operate franchises in any other line of business. We have no predecessor or parent entities. Our agent for service of process in Texas is United States Corporation Agents, Inc., 9900 Spectrum Drive, Austin, TX 78717. Our agents for service of process for other states are identified by state in Exhibit D. If a state is not listed, we have not appointed an agent for service of process in that state in connection with the requirements of franchise laws. There may be states in addition to those listed above in which we have appointed an agent for service of process. There may also be additional agents appointed in some of the states listed.

Prior Experience

Our affiliate, CORE Group Restoration, Inc. (“CGR Affiliate”) is a California corporation that was incorporated on March 29, 2018. CGR Affiliate's principal address is 1630 North Main #340, Walnut Creek, CA 94596. CGR Affiliate owns and controls all of the intellectual property utilized by all of the CORE Businesses and licenses it to us. CGR Affiliate also may provide referral work to franchisees as well as social media advertising services (see Item 6). CGR Affiliate does not conduct the type of business the franchisee will operate, nor has ever offered franchises for CORE Businesses or for franchises in any other line of business. One of CGR Affiliate's shareholders operates a franchise like those described in this Franchise Disclosure Document and has done so since 1991.

Business Offered

We offer franchises (“CORE Group Restoration Franchise(s)” or “Franchise(s)”) for the use of our “CORE GROUP RESTORATION” trademarks, trade names, service marks and logos (“Marks”) for the operation of CORE Businesses. We only offer Franchise opportunities to existing independent businesses that provide services and products similar to those offered by CORE Businesses. We do not offer start-up opportunities and have no intention to do so in the future. CORE Businesses are operated under our proprietary CORE Group Restoration system (“System”). The System may be changed or modified by us throughout your ownership of the Franchise, and you will be required to implement any new programs we require. CORE Group Restoration Franchises provide disaster recovery and property damage restoration services to residential and commercial customers using the Marks and our System. CORE Group Restoration Franchises provide most services at customer houses or at business locations. Franchisees are required operate their CORE Business from a commercial facility that we approve (“Facility”). We offer multiple CORE Group Restoration Franchises under our Multi-Unit Franchise. If you purchase a Multi-Unit Franchise, you will sign the “Multi-Franchise Addendum” which is attached to this Franchise Disclosure Document in Exhibit H, in addition to the Franchise Agreement included with this Franchise Disclosure Document. When you open each additional CORE Group Restoration Franchise under the Multi-Franchise Addendum, you will sign the then-current CORE Group Restoration franchise agreement, which may differ from the current Franchise Agreement included with this Franchise Disclosure Document. The Multi-Franchise Addendum supplements the terms of the Franchise Agreement in relation to the opening of these additional CORE Group Restoration Franchises. Under the Multi-Franchise Addendum, you are not granted any territorial rights or any other rights except those granted under the franchise agreements for the additional CORE Businesses.

Initial Fees

You must pay us an initial franchise fee (“Initial Franchise Fee”) when you sign the Franchise Agreement. The Initial Franchise Fee is payment for the pre-opening assistance that we provide to you to allow you to open your CORE Business and also offsets some of our franchisee recruitment expenses. The Initial Franchise Fee is due in full at the time you sign the Franchise Agreement, is deemed fully earned by us once paid and is non-refundable under any circumstances, even if you fail to open your CORE Business. Each Franchise Agreement will grant you the right to operate one CORE Business. The Initial Franchise Fee is uniformly calculated. Multi-Unit Franchise If you purchase multiple CORE Group Restoration Franchises, you will sign the Multi-Franchise Addendum, which is attached to this Franchise Disclosure Document in Exhibit H. Under the Multi- Franchise Addendum, your Initial Franchise Fee is calculated using the same table above, except your Initial Franchise Fee will not exceed $75,000 for all CORE Group Restoration Franchises within a single state. Under the Multi-Franchise Addendum, there is no development territory or development schedule to open additional CORE Businesses. To open additional CORE Businesses under the Multi-Franchise Addendum, you will be required to sign the then-current CORE Group Restoration franchise agreement, but you will not be required to pay an initial franchise fee (all other fees will apply). Territory Fee Beginning one month after you sign the Franchise Agreement, you must pay us a monthly territory fee (“Territory Fee”) based on the population of your territory. The Territory Fee is non-refundable and is uniformly calculated.

Financing

We may extend financing for up to 50% of the Initial Franchise Fee based on the franchisee's qualifications and its credit rating. The financing terms will be monthly payments for terms of either 6 months or 12 months. You will sign a Promissory Note for the amount financed. You will be required to sign a Security Agreement which would require the pledge of security in the Franchise and all assets of the CORE Business. The required down payment is 50% of the amount of the loan. For a 6-month term, the interest rate will be 5% and the principal and interest payments would be up to $6,341 per month. For a 12-month term, the interest rate will be 8% and the principal and interest payments would be up to $3,262 per month. Payment is due by the fifth day of each month. You will make monthly payments for up to a period of 12 months following the date of the Franchise Agreement until the Promissory Note is paid in full. The Promissory Note shall become immediately due and payable, without notice or demand, upon the occurrence of any one or more of the following events of default: (a) your failure to make any required payment on or before the date such payment is due; (b) the filing of a petition by or against you under the provisions of any state insolvency law or the Federal Bankruptcy Act; or (c) any assignment by you for the benefit of creditors. In this event, interest and principal will bear interest at 10% from and after the date of default. The Promissory Note will not include a penalty for prepayment. The Promissory Note must be signed by you and be personally guaranteed by your owners (if you are a legal entity) under the Owners Agreement, the form of which is attached to the Franchise Agreement as Attachment C. A default under the Promissory Note would be a default under the Franchise Agreement, and may result in the termination of your Franchise Agreement. You must also pay all costs of collecting the amount due under the Promissory Note, including attorney fees. Suit will be filed against you in the State of Texas. You must waive all defenses against us, and other legal rights. A copy of the form of Promissory Note and the accompanying Security Agreement used by us for this type of financing is attached in Exhibit H to this Franchise Disclosure Document. We may sell, assign or discount the Promissory Note to a third party. Except as provided above, we do not offer direct or indirect financing to you. We do not guarantee your Promissory Note, lease, or other obligation.

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 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 925 South Capital of Texas Highway, Suite 250B, Austin, TX 78746, [email protected], the Federal Trade Commission, and the appropriate state regulatory agencies.