Key Items to Watch out for in the ComForCare Franchise Systems, LLC 2020 FDD

Certain states require that the following risk(s) be highlighted: Out-of-State Dispute Resolution. The franchise agreement requires you to resolve disputes with the franchisor by mediation, arbitration and/or litigation only in Arizona. Out-of-state mediation, arbitration, or litigation may force you to accept a less favorable settlement for disputes. It may also cost more to mediate, arbitrate, or litigate with the franchisor in Arizona than in your own state.

Certain states may require other risks to be highlighted. Check the “State Specific Addenda” (if any) to see whether your state requires other risks to be highlighted.

Item 5: Initial Fees

Standard Franchise Initial Free Deluxe Franchise The initial franchise fee to purchase a ComForCare Business is $49,500 for a territory (“Exclusive Area”) with a population of between 25,000 and 35, 000 individuals over the age of 65 years (“Senior/s”) (Please see Item 12 Territory for additional information). In exchange for payment of the initial franchise fee, you will receive the items identified on Exhibit D to this Disclosure Document.

Standard Franchise The initial franchise fee to purchase a ComForCare Business is $35,000 for a territory (“Exclusive Area”) with a population of between 15,000 and 25,000 individuals over the age of 65 years (“Senior/s”) (Please see Item 12 Territory for additional information). In exchange for payment of the initial franchise fee, you will receive the items identified on Exhibit D to this Disclosure Document. Please note that: ? We will not sell a franchise territory with less than 15,000 Seniors; and ? We will not reduce the Senior population of an established Deluxe Franchise territory in order to make it conform to a Standard Franchisee’s Senior population.

Deluxe Standard Franchise with Additional Seniors At our sole discretion, we may award you the right to increase your Exclusive Area through the purchase of a territory with more than 35,000 Seniors (but less than 50,000 Seniors). Your initial franchise fee will be the $49,500 fee plus each additional Senior awarded multiplied by $1.98. As an example, if you are awarded an Exclusive Area with 40,000 Seniors, your initial franchise fee would be $59,400 ($49,500 + (5,000 Seniors x $1.98)). Please note: (i) we will not adjust an adjacent viable territory to add additional Seniors to your Exclusive Area, and (ii) any Seniors must be located in zip codes that adjoin the original Exclusive Area.

Multi-Unit Development; Expansion Deluxe Multi-Unit Franchise At our discretion, we may offer to qualified candidates the right to purchase more than one, single Deluxe franchise unit. Qualified candidates that are allowed to purchase additional units will be required to sign a separate franchise agreement for each franchise they purchase. Purchasers of two, single units will pay an initial franchise fee of $89,500 ($49,500 for the first single unit purchase and $40,000 for the second unit purchased.) Purchasers of three, single units will pay an initial franchise fee of $124,500 ($49,500 for the first single unit purchase; $40,000 for the second unit purchased; and $35,000 for the third unit purchased.) Any additional units purchased thereafter will be an additional $30,000 each.

Standard Multi-Unit Franchise At our discretion, we may offer to qualified candidates the right to purchase more than one, single Standard franchise unit. Qualified candidates that are allowed to purchase additional units will be required to sign a separate franchise agreement for each franchise they purchase. Purchasers of two, single units will pay an initial franchise fee of $65,000 ($35,000 for the first single unit purchase and $30,000 for the second unit purchased.) Purchasers of three, single units will pay an initial franchise fee of $90,000 ($35,000 for the first single unit purchase; $30,000 for the second unit purchased; and $25,000 for the third unit purchased.) Any additional units purchased thereafter will be an additional $25,000 each. There will be no initial franchise fee discounts if you purchase a Deluxe and Standard Franchise Territory at the same time. For example, if you purchase Standard Franchise and a Deluxe Franchise at the same time, you will pay $84,500 ($49,500 for the Deluxe and $35,000 for the Standard.) Please see Item 12 for additional information. If you currently own a ComForCare Franchise and you want to purchase an additional franchise territory(s), we may, but are not obligated to, provide a discount off the initial franchise fee for that (those) additional franchise territory(s).

Purchase of Existing Franchise (Resale) If you are a new Franchisee to our System and purchase an existing franchise or if you are an existing franchisee to our System and purchase an existing franchise, the initial fee is $20,000 (“Resale Fee”) for each additional franchise you purchase regardless of whether the selling franchise is a Deluxe or Standard. You will not, however, receive the items identified on Exhibit D to this Disclosure Document. Please see Item 6 for additional information.

Conversion Single Unit Development At our discretion, we may offer qualified candidates the right to purchase and convert a currently operating independent home care business into a ComForCare franchise (“Conversion Program”). We may, but are not obligated, to reduce the initial franchise fee for a converted franchise based on such factors as the length of time you have been in business and revenue being generated. The conversion initial franchise fee is deemed fully earned and nonrefundable upon payment. During our fiscal year 2019, we did not have any conversion franchises.

Veteran’s Discount To honor those men and women who have served in the United States military, the Veterans Transition Franchise Initiative, known as “VetFran,” was developed to help those individuals’ transition to civilian life. This initiative is a voluntary effort of International Franchise Association (IFA) member-companies that is designed to encourage franchise ownership by offering financial incentives to honorably discharged veterans. ComForCare offers a 15% discount off the initial franchise fee for the first single unit purchased to individuals who qualify under VetFran. This discount does not apply to Conversion Franchises.

First Responder’s Discount ComForCare offers a 15% discount off the initial franchise fee for the first single unit purchased to individuals who serve (or have served) their communities and country as first responders. The term “first responder” refers to those individuals who in the early stages of an incident are responsible for the protection and preservation of life, property, evidence, and the environment, including emergency response providers as defined in section 2 of the Homeland Security Act of 2002 (6 U.S.C. ? 101), as well as emergency management, public health, clinical care, public works, and other skilled support personnel (such as equipment operators) that provide immediate support services during prevention, response, and recovery operations. This discount does not apply to Conversion Franchises.

General Information Regarding Initial Fees The aforementioned initial fees are payable in one lump sum upon the signing of the Franchise Agreement, are not refundable, and are fully earned by ComForCare upon receipt. No other payments will be made to us for goods or services before the opening of your Franchised Business

Referral Fee If you refer an unrelated, third-party prospective franchisee directly to us and the prospective franchisee is granted the right to purchase a Franchised Business, upon receipt of the full initial franchise fee, we will pay you a $10,000 referral fee (“Referral Fee”). These referred prospective franchisees cannot be bound by any existing franchise broker and/or franchise referral programs. In addition, you or your immediate relatives cannot have any ownership or equity in their proposed Franchised Business. The Referral Fee is not available for the state of Washington and for the resales of existing Franchised Businesses. We reserve the right to offer, modify, withdraw or reinstate any referral program in the future without notice to you.

Item 8: Restrictions on Sources of Products and Services

Standards and Specifications To ensure that the highest degree of quality and service is maintained, you must operate the Franchised Business in strict conformity with the methods, standards, and specifications that we list in our proprietary and confidential Manual, which may exist in various parts, locations, and formats, and may include a combination of audio, video, written material, electronic media, website content, and/or software components. You must not: (i) deviate from these methods, standards, and specifications without our prior written consent, or (ii) otherwise operate in any manner which reflects adversely on our Proprietary Marks or the System. Our Manual states our standards, specifications, and guidelines for all goods and services that we require you to obtain in establishing and operating your Franchised Business. We may, from time to time, notify you of new or modified standards, specifications, and guidelines through periodic amendments, or supplements to the Manual or through written communication (including electronic communication). You must purchase, install, maintain in sufficient supply, and use, only those items that conform to the standards and specifications described in the Manual or otherwise in writing; you must not use nonconforming items. In addition, you must sell or offer for sale only those products and services that we have expressly approved for sale in the Manual or otherwise in writing, and discontinue selling any products or services that we, in our discretion, determine may adversely affect the System. You must not offer any unapproved products or services. You must obtain and maintain insurance policies protecting you, us and our affiliates, and our respective shareholders, directors, employees, and agents against any demand or claim regarding personal and bodily injury, death, or property damage, or any loss, liability, or expense whatsoever arising or occurring at or in connection with the operation of your Franchised Business. Such policies must be written by an insurer acceptable to us and conform to our standards and minimum amounts of coverage. All insurance policies you purchase must name us and any affiliate we designate as additional insureds and provide for 30 days’ prior written notice to us of a policy’s material modification or cancellation. The cost of your premiums will depend on the insurance carrier’s charges, terms of payment, and your insurance and payment histories.

Certified Senior Advisor We recommend, but do not require, that you become a Certified Senior Advisor (CSA) through the Society of Certified Senior Advisors. The initial fee is between $1,495 and $1,795 while the annual renewal fee is approximately $175. CSA certification is offered through online and live classroom settings. It consists of approximately 102 hours of home study. It consists of approximately 102 hours of home study. We estimate the costs of the items you must purchase from approved suppliers as outlined above when starting the business, will be approximately 6% of the total estimated initial investment. We estimate the costs of the items you must purchase from approved suppliers, outlined above, will be approximately 20% of total administrative expenses for the first year of operation. For the year ending December 31, 2019, our revenue from the license of the HealthManager operational software to our franchisees was $580,958 or 5% of our total revenues of $11,634,313. For the year ending December 31, 2019, our revenue from the license of the G-Suite email and document operational software to our franchisees was $92,396 or 0.8% of our total revenues of $11,634,313. There are currently no purchasing or distribution cooperatives. On February 1, 2018, Stephen Greenwald, ComForCare Franchise Systems, LLC’s in-house counsel was granted the option to purchase 9,432 shares of one of our vendors, Aclaimant, Inc., a risk management software solution company. Stephen has not exercised these options, receives no compensation, nor is involved in the day-to-day management of the company.

Approval of New Suppliers If you would like to use any product or service in establishing or operating your business that we have not approved (for products and services that require supplier approval), you must request approval by providing us with a sample of the item you would like us to approve. We do not charge a fee for this approval. Unless we provide you written approval within 30 days of your request, your request will be deemed unapproved. We may revoke the approval of a supplier if it fails to continue to meet our standards. We will notify you if we revoke our approval of a product, service, or supplier and you must immediately stop purchasing said products or services or utilizing that supplier.

Item 10: Financing

We do not offer direct or indirect financing. We do not guarantee your borrowings, notes, leases, or other obligations

Item 12: Territory

The Franchise Agreement designates the Approved Location for the Franchised Business. If no Approved Location exists at the time you sign the Franchise Agreement, as is typically the case, we will describe the Approved Location in an amendment to the Franchise Agreement after you select and we approve the Approved Location. You may not relocate your office without our express written consent, not to be unreasonably withheld. Any relocation is at your sole expense.

Territory Each new Deluxe Franchise will receive the right to operate their Franchise in a territory (“Exclusive Area”) with a population of between 25,000 and 35,000 people over the age of 65. Each new Standard Franchise will receive the right to operate their Franchise an Exclusive Area with a population of between 15,000 and 25,000 people over the age of 65. Your Exclusive Area will be defined by reference to specified U.S. Postal Service Zip codes that will be described in Addendum A of the Franchise Agreement. Zip codes are a system of postal codes used by the United States Postal Service (“USPS”) and are changed by the USPS from time to time. The map of your Exclusive Area will be for illustrative purposes only and will illustrate the Zip codes as they exist in your Exclusive Area on the date that you sign your Franchise Agreement. Changes by the USPS will affect the Zip code and area that make up your Exclusive Area. For example, if the USPS moves certain addresses from a Zip code in your Exclusive Area into a Zip code in anoth er franchisee’s area or into an unassigned area, those addresses will no longer be part of your Exclusive Area. However, we will work with you to minimize the impact of such a change. We determine Exclusive Area populations using GbBis mapping application, and statistics are updated every 6 months as released by the United States Census Bureau. More information regarding GbBis can be found at www.gbbis.com. During the term of the Franchise Agreement, and provided you are in compliance with the Franchise Agreement, we will not establish or franchise another, the right to establish a Franchised Business inside the Exclusive Area. You may not sell products or services from any location other than at or from within your Exclusive Area and may not sell products or services identified by the ComForCare trademarks through any other channels of distribution, including the Internet (or any other existing or future form of electronic commerce). Except as expressly provided in the Franchise Agreement or Manual, you will concentrate all Franchised Business advertising and solicitation within the Exclusive Area. We reserve the right to: (i) offer and sell products and services similar to those provided by you via alternative channels of distribution, including the Internet and other channels of e-commerce; (ii) establish and operate, and license others, the right to establish and operate, businesses using the Proprietary Marks and System at any location outside of your territory; (iii) establish and operate, and grant others the right to establish and operate, businesses that offer similar products to those offered by us under any other mark other than the Proprietary Marks at any location; (iv) acquire, or be acquired by, any company, including a company operating one or more businesses offering products or services similar to those offered by us, in any location; and (v) use the Proprietary Marks and System, and license others to use the Proprietary Marks and System, to engage in any other activities not expressly prohibited by the Franchise Agreement. We are not required to pay you any compensation if we exercise any of these rights. You are prohibited from soliciting or providing Approved Services to customers outside your Exclusive Area, except as authorized. Approved Services may only be provided within another franchise owner’s exclusive area if that franchise owner has granted you permission, in writing, to care or service the specific customer. You may be authorized by us in the Manual or written communication to provide Approved Services outside of your Exclusive Area if that area is not included in another franchise owner’s Exclusive Area. You may enter into cooperative marketing agreements, and sales activities with other franchise owners in your, or their, area.

National Accounts We, and our affiliates, have the right to enter into agreements with National Accounts, both inside and outside the Exclusive Area. A “National Account” is a referral source that offers, on a local, statewide, national or regional basis, the opportunity for Franchisees in the applicable geographic area to provide any Approved Services and/or Approved Products to the referral source’s members, affiliates, or, however designated, other persons who have a similar relationship with that referral source. In addition, we may remove you from participating in the National Accounts program if you are in default of your Franchise Agreement or any other agreement with us or you are not qualified to provide the services requested by the National Account(s). Thereafter we may: (i) provide the services requested by the National Account(s) inside the Exclusive Area, or (ii) contract with a third-party, which may be another ComForCare franchisee, to provide the services requested by the National Account(s) inside the Exclusive Area. We are not required to pay you any consideration or compensation if we or a third-party provide services to a National Account(s) inside your Exclusive Area.

Minimum Performance Requirements To maintain the exclusivity of your area and retain your business, Franchisees must attain and maintain, at the minimum the following billable hours: For any renewal term, you must attain and maintain the highest gross minimum sales indicated above for the operation of the Franchised Business by the first month of the renewal term. The Minimum Performance Requirements for a Resale or Conversion Franchisee is determined at the time of the conversion. If you choose to convert your existing home care business to a Conversion Franchised Business, your Exclusive Area may have more or less population than as stated above depending on factors that include the location of your Conversion Franchised Business, our Exclusive Area criteria, and your current trade area. Your Exclusive Area will be defined in the Franchise Agreement after our completion of a review of your prior business operations. If you are converting an existing business to a Conversion Franchised Business and have clients outside the Exclusive Area, you may, as determined by us based on facts and circumstances, be prohibited from continuing to provide services to such clients if such clients are receiving such services in another franchisee’s Exclusive Area. We reserve the right to define “Effective Date” as the shorter of 30 days from completion of your training or the date you received your state license (if applicable). Your failure to meet these Minimum Performance Requirements constitutes a material default under your Franchise Agreement, permitting us to terminate your franchise, refuse to enter into a renewal agreement with you, reduce the size of your Exclusive Area, or terminate your territorial rights. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. The designated levels of minimum billable hours do not imply that you will achieve these amounts or any other amounts within any certain time frame.

Item 15: Obligation to Participate in the Actual Operation of the Franchise Business

We require that you personally supervise the Franchise Business full-time, as well as employ on a full-time basis, at least one other administrative or marketing employee. “Full-time” is defined as the expenditure of at least 35 hours of work per week, including vacation, sick leave, and other excused absences (a minimum of 70 hours weekly cumulatively between 2 individuals). You also must employ, on a part-time contingent basis, a nurse for the purpose of providing clinical oversight to the agency’s operations, training field caregivers, performing client assessments and supervisory visits, and for maintaining physician orders where physician orders are required to be maintained.

If you are awarded multiple Franchised Businesses, you must employ, in addition to the staffing indicated above, at least one additional full-time employee in a key management position (e.g., Director of Marketing,Director of Recruiting, Director of Clinical Services, Director of Operations, etc.), for each additional territory. However, you must, at all times have full-time marketing and sales coverage in each territory you purchase.

Additional Requirements You must have regular services available at least 8 hours a day, 5 days a week, and emergency services must be available 24 hours a day, 7 days a week. All services are to be provided according to the terms of a written contract and all personnel must be certified and/or licensed to conduct the services they may be conducting (if a certification and/or licensure is required). In some states, you may be required to employ a person with healthcare experience to manage the daily operations of your business and/or supervise clients and caregivers. All of the owners of the Franchise must sign a personal guaranty in the form attached to the Franchise Agreement.

Item 16: RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You must offer and sell only products and services that we have expressly approved for sale in the Manual or otherwise in writing. You must discontinue selling and offering for sale any products or services that we disapprove in writing at any time. You must not offer any unapproved products or services. You have the ability to set your own prices for products or services sold through your Franchised Business. You may not solicit sales outside your Exclusive Area (see Item 12 and Section 7 of the Franchise Agreement for more information on restrictions).

Except as described in the preceding paragraph, you are not restricted by the Franchise Agreement, or any of our practices or customs, regarding the products or services you offer for sale or to whom you may sell. You must comply with all reasonable requirements if we supplement, improve, or modify the System, including offering and selling new or different services and products that we specify. We have the right to change the types of authorized goods and services, and there are no limits on our right to make changes.

To view the full Franchise Disclosure Document, please click here