Business Description

We are a limited liability company formed in Delaware Our principal business address 6900 Turkey Lake Road, Suite 200, Orlando, Florida 32819 and our telephone number is (407) 203-2626 If we have an agent for service of process in your state, we disclose that agent in Exhibit A. We do business only under our company name and the COMPASS Intellectual Property (defined below) We have never operated COMPASS Hotels. We have no predecessors and no business activities that are not descnbed here One of our parent companies is Margantaville Enterprises, LLC, whose pnncipal business address is the same as ours Another parent company is Margantaville Holdings LLC, whose principal business address is the same as ours We have offered franchises for COMPASS Hotels since 2018 and have never offered franchises in any other line of business Pnor to offering franchises, we, through affiliated entities, entered into trademark license agreements for COMPASS Hotels in some locations.

Prior Experience

We grant franchises for upscale, select service hotels that use the Hotel System (defined below) and are identified by the COMPASS Intellectual Property (each, a “COMPASS Hotel”, and collectively, “COMPASS Hotels”) COMPASS Hotels offers attractively designed rooms with upscale amenities and exceptional service standards incorporating state-of-the-art technology, design, and food and beverage offerings They typically are in primary and secondary cities and offer complimentary hot breakfast, free high-speed Internet access, a fitness center, swimming pool and meeting space We call the COMPASS Hotel that you will operate under the Franchise Agreement your “Hotel” You operate the Hotel only from the location we approve before signing the Franchise Agreement. Pursuant to the Hotel FBR Rider to the Franchise Agreement, you may be granted the opportunity to operate one or more Margaritaville branded restaurants and/or bars and/or a Margantavilie-branded retail store in your Hotel (each, an “FBR Unit”) A copy of the form of Hotel FBR Rider is attached as Exhibit D Any FBR Unit will be licensed to use the proprietary trademarks and copyrighted materials applicable to that FBR Unit under the Hotel FBR Rider You must make space available in your Hotel for the FBR Unit meeting our specifications for size, design, and layout specifications For FBR Units that are restaurants/bars, you will be required to utilize our specified menu items (“Core Menu”) for a certain percentage of the food offenngs, along with certain alcoholic and non-alcoholic beverage choices Currently, the Core Menu makes up approximately eighty percent (80%) of food offerings The Franchise Agreement does not grant you the right or option to own and operate any other Margaritaville branded or themed restaurant, bar, or retail store within your Hotel other than as mutually agreed. If you are not granted the opportunity to operate a Margaritaville branded restaurant and/or bar, you shall be required to operate one or more mutually agreed upon food and beverage concepts that encompasses the overall and general brand standards and themes Whether or not you are granted the nght to operate a FBR Unit or you operate another such mutually-agreed upon concept, you must obtain our written approval to establish and operate any other bar, restaurant, lounge, cafe, or eating establishment, or any retail store, other than Grab and Go retail options in your Hotel, including approval of the concept, menu, and vendors for such concept at our sole discretion.

Business Offered

None of our affiliates currently provide products or services to COMPASS Hotel franchisees. The following companies are our affiliates who currently offer franchises or licenses in the United States and around the world. The branded hotels that some of these affiliates operate or franchise might use the same reservations systems and other systems and processes as COMPASS Hotels 1 Margaritaville Enterprises, LLC is the owner and licensor of the intellectual property rights used by COMPASS Hotels in addition to other intellectual property rights that it licenses to related companies Further, Margaritaville Enterprises has the exclusive right to use and sublicense, in connection with hospitality and other businesses, all intellectual property, including, but not limited to, music, lyrics, photographic works, books films, articles, and other works of authorship that are 100% owned and controlled by Jimmy Buffett, Coral Reefer Music, and any other entities which are majority-owned and controlled by Jimmy Buffett In 2014, Margantaville Enterpnses offered a franchise for a Margantaville restaurant located m Chicago, Illinois Meirgantaville Enterprises has also licensed certain intellectual property rights used by COMPASS Hotels for other lines of business, including but not limited to, other lodging products, restaurants, casinos, alcoholic beverages, drink mixes, food products, blenders, clothing and other consumer products Margantaville Enterprises' principal business address is the same as our address. 2 Margaritaville Hotels & Resorts, LLC (“MHR”), which is wholly owned by Margantaville Enterprises, LLC, began offenng trademark license agreements for full-service hotels and resorts operating in the United States under the Margantaville name (without a sub-brand) in Apnl 2019 Prior to offenng such agreements, other entities wholly owned and controlled by Margantaville Enterprises, LLC, entered into trademark license agreements for Margantaville Hotels & Resorts MRH has never offered franchises in any other line of business MHR's pnncipal business address is the same as our address. 3 Margaritaville Restaurants, LLC (“MR”), which is wholly owned by Margantaville Enterprises, LLC, began offering franchises for bars and restaurants operating in the United States and internationally under the trademark Air Margantaville® m April 2019 Pnor to offering franchises, other entities wholly owned and controlled by Margantaville Enterprises, LLC, entered into trademark license agreements for Air Margantaville® and other branded restaurants MR has never offered franchises in any other line of business MR's pnncipal business address is the same as our address.

Initial Fees

Application Fee You must complete our franchise application, a form of which is attached as Exhibit B, to help us evaluate your qualifications to become a franchisee At the time you submit your application, you must pay us a $5,000 application fee Initial Franchise Fee You must pay us an initial franchise fee equal to the greater of (i) $60,000 or (ii) $500 multiplied by the total number of guest rooms at the Hotel The initial franchise fee is due upon execution of the Franchise Agreement. Comfort Letter Fee You must obtain a comfort letter or similar agreement, a form of which is attached as Exhibit F, that we reasonably specify from each lender, each ground lessor (if applicable), the owner of fee simple title to the Hotel's real property or building and improvements (if you are not that owner), and each other entity with an interest (or any power or right, conditional or otherwise, to acquire an interest) in the Hotel's real property or building and improvements (each a “Comfort Letter Party”) Under this comfort letter or similar agreement, the Comfort Letter Party agrees (among other things) to assume your obligations under the Franchise Agreement (subject to our rights under the Franchise Agreement) if the Comfort Letter Party or any of its affiliates acquires title or otherwise assumes possession, or the right to sell or direct the disposition of, the Hotel's real property or building and improvements You must pay our then applicable, non-refundable comfort letter fee, which currently is $2,500, for each comfort letter that we negotiate relating to the Hotel. Product Improvement Plan If you want to convert an existing hotel to a COMPASS Hotel, adapt another type of existing structure (e g, an office building) for use as a COMPASS Hotel, or sell or otherwise transfer the ownership of an existing COMPASS Hotel, we charge an additional non-refundable fee of ranging from $2,500-$5,000 to prepare the product improvement plan (“PIP”) for the hotel You must pay the PIP fee before we schedule the PIP inspection In some circumstances, we may waive the PIP fee or apply the PIP fee towards the payment of your Initial Franchise Fee, but we are not obligated to do so Extension Fee You must start and complete construction and open the Hotel according to the timetables referenced in Section 2 07 of the Franchise Agreement We may terminate the Franchise Agreement if you fail to meet the required timetable You may request one or more extensions of time by giving us written notice and a $10,000 “Extension Fee ” We will inform you of the length of the extension if and when we grant it We will refund the Extension Fee only if we deny the extension Fees for Initial Training and Related Expenses You must pay fees for certain brand standard training programs that we conduct before you open the Hotel This training will be provided by us at an agreed upon COMPASS Hotel or other Margantavilie- branded venue as mutually agreed upon by you and us Your General Manager, food and beverage manager, and sales director, and any other salaned employee in a director or higher-level position (“Key Personnel”) must complete the training, which lasts approximately one week You will be responsible for all costs associated with the trainees, including, but not limited to, wages, salaries, housing, travel-related expenses and per diem charges incurred by trainees, subject to a mutually agreed upon budget for those costs You will not, however, be responsible for costs or expenses related to the training venue or the venue's employees Further, we will provide to you a task force to assist in on-site pre-opening training for the Hotel That task force may include personnel employed directly by us or personnel from existing COMPASS Hotels or other Margantaville-branded venues We will be responsible for any costs associated with our personnel, while you will be responsible for any other costs relating to the task force, including costs related to personnel from existing COMPASS Hotels or other Margaritaville-branded venues We estimate that the total costs for fees and expenses payable to us for initial training and related expenses, including any optional initial training costs, will range from $35,000 to $60,000 These payments are not refundable Website Set-up Fee Prior to opening your Hotel, you must pay to us a $10,000-$20,000 one-time fee to set up your Hotel's individual webpage within the COMPASS system website Range of Initial Fees As a result of signing our Franchise Agreement you will pay, or make commitments to pay, total initial fees as described in this Item 5 to us and/or our affiliates ranging from $110,000 to $162,500 for a 120-room hotel.

Financing

We do not currently have a fixed financial assistance program for our franchisees and do not offer financial assistance to franchisees Currently, neither we nor our affiliates offer direct or indirect financing Neither we nor our affiliates guarantee your note, lease or obligation.

Franchisee Revenue and Profit

We do not make any financial performance representations 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 Knsten Fancher, Chief Legal Officer and General Counsel at 3715 Northside Parkway, Suite 4-475, Atlanta, Georgia 30327, (470) 698-2246, the Federal Trade Commission, and the appropriate state regulatory agencies.