Key Items to Watch out for in the U.S. LAWNS, INC. 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 Florida. 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 Florida 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

You pay us an initial franchise fee of $34,000 whenyou sign the Franchise Agreement. The initial franchise fee is paid in a lump sum, but we may finance up to 70% of this fee. If you are an honorably discharged veteran your initial franchise fee is $29,000, and we may finance 80% of this fee. You must pay an initial franchise fee of $29,000 for a Conversion Franchise. We may finance up to 80% of this fee. You must pay an initial franchise fee of $31,000 for a Small Conversion Franchise. We may finance up to 80% of this fee. The initial franchise fee is fully earned upon receipt and is not refundable. If you are an existing franchisee and you are approved as a purchaserof an additional franchise, you pay a lump sum initial franchise fee equal to 50% of the then-current initial franchise fee (meaning 50% of $34,000, or $17,000) when you sign the Franchise Agreement.

Additionally, you must pay us an Initial Prospecting Fee prior to opening your U.S. LAWNS Landscape Business. This fee ranges from $6,000 to $15,000and is spent by us to promote your business to commercial property owners, managers and decision makers in your Territory. The amount of the Initial Prospecting Fee is determined by use based on the mix of customer types and other market factors within your Territory.

If you are an existing franchisee, we may offer you the opportunity to develop between one and three U.S. LAWNSLandscape Businesses within designated Territories under an Area Development Agreement if you meet our then-current qualifications. If you sign an Area Development Agreement, the “Development Fee” is an amount equal to fifty percent (50%) of the current Initial Franchise Fee for existing franchisees for each Territory/U.S. LAWNSBusiness to be developed under the Area Development Agreement (meaning 50% of $17,000 or $8,500 per Territory to be developed), up to a maximum of three Territories to be developed. The part of the Initial Franchise Fee that is included in the Development Fee is credited against the then-current Initial Franchise Fee for existing owners as outlined in the then-current Franchise Agreement, payable upon the signing of each individual Franchise Agreement. Under the terms of the Area Development Agreement, you must develop and operate a certain number of U.S. LAWNS Landscape Businesses and will sign a separate Franchise Agreement with us for each Territory/U.S. LAWNS Landscape Business. We may not, however, require you to sign Franchise Agreement for the first Territory/U.S. LAWNSLandscape Business to be developed at the same time you sign an Area Development Agreement. The Development Fee is not refundable under any circumstances. If you are executing an Additional Territory Option Agreement you will pay a lump sum $5,000 option fee for the right to develop an additional U.S. LAWNSLandscape Business in a territory adjacent to your current territory for a 12-month period (see Item 12). The option fees are non-refundable.

Item 8: Restrictions on Sources of Products and Services

To help assure a uniform image and uniform quality of products and services in all U.S. LAWNS businesses, you must maintain and comply with our quality standards. Although you are not required to purchase or lease real estate from us, the location of your office is subject to our approval. You must purchase for use in your business (the “Business”) the following categories of goods, services, supplies, equipment and inventory according to specifications (including brand specifications) issued by us from time to time. These purchases include a vehicle, computersystems, lawn mowers, string trimmers, blowers, and hand tools. Items such as herbicides, insecticides, fertilizers, and other landscape related products may be used only if you provide extra services to your customers. From time to time, we may designate a single supplier for a product or service, and that single supplier may be us, an affiliate, or a third party. We may require you to use, offer and/or promote, and maintain in stock in such quantities as are needed to meet reasonably anticipated consumer demand, certain proprietary products, materials or equipment (“Proprietary Products”). You may buy Proprietary Products only from us (if we sell them) or our designated manufacturer or supplier. As of the date of this Disclosure Document, there are no Proprietary Products that you must use. You are not required to purchase products which are not Proprietary Products from us or any other supplier, but the items you purchase must satisfy our specifications.

For our most recently concluded fiscal year ending September 30, 2019, we received approximately $1,168,443 or approximately 13.5% of our total revenue of $8,673,793 based upon items sold to franchisees by us or our affiliates. Additionally, for our most recently concluded fiscal year ending September 30, 2019, we received $391,979 in rebates or approximately 4.6% of our total revenue as a result of purchases by our franchisees from third party suppliers. All products utilized by the Business in providing Landscape Maintenance Services must meet our specifications. You may purchase approved brands ofinventory from us or from any other supplier.

The other items used in the operation of the Business also may be subject to our specifications. These items may be purchased from us or from any other supplier. Specifications are included in the Franchise Agreement and the Operations Manual and may be provided to you in other written communications from us.

You must purchase and maintain from a company weapprove, insurance that insures both you and us, our affiliates our parent companies, our sister companies, and our customers and the owners of any property you service. The insurance policies must include, at a minimum: (i) commercial general liability insurance covering claims for personal injuries and property damage with minimum limits of $1,000,000 per occurrence, $2,000,000 general aggregate, $2,000,000 products/completed operations aggregate; (ii) employers liability insurance with minimum limits of $1,000,000 for bodily injurycaused by accident ordisease, or the minimum required by state law (whichever isgreater); (iii) vehicle liability for owner, leased, hired and non-owned vehicles with minimum limits of$1,000,000 combined single limit for bodily injury and property damage per occurrence; (iv) umbrella liability insurance with minimum limits of $1,000,000; (v) Worker’s Compensation Insurance; (vi) any other such insurance coverages or amounts as required by law or agreement related to the U.S. LAWNS Business;and (vii) any other insurance we may require from time to time. Additional insurance requirements are set forth in the Manual. All liability insurance policies must name us (and our affiliates, officers, directors and employees), as well as any subcontractors on the particular property, and/or our customers and/or the owners of any property you service) as additional insureds.

You must deliver to us at commencement and annually or at our request a proper certificate evidencing the existence of such insurance coverageWe may modify, upon written notice to you, the required minimum limits from time to time and by written notice to you, as conditions require, to reflect changes in relevant circumstances, industry standards, experiences in the U.S. LAWNS System, standards of liability and higher damage awards. You can expect items purchased or leased in accordance with our specifications will represent approximately 80% of total purchases you will make tobegin operations of the business and 10% to 20% of the ongoing costs to operate the business.

Upon request, we will periodically provide you with a list of approved suppliers for equipment and other items. We may modify the standards and specifications for these items from time to time. You are encouraged to use our approved suppliers as these have been identified as suppliers who meet our approval specifications. You may, however, wish to use products or equipment of a brand that is not currently approved by us, except for instances where we have designated a single source only. Before using a currently unapproved brand, you must first notify us of your intent to do so, submit to us information about the unapproved brand and obtain our written approval. We will let you knowwithin 30 days if we do not approve. We will determine whether the brand is substantially the same as the brands then approved by us. In the future, we may require different procedures to be followed for requests for approval of brands. We may charge you reasonable fees for evaluating proposed brands and may impose reasonable limits on the number of approved brands of any product or piece of equipment. We have established purchasing arrangements through our parent company and its affiliates to provide better service and cost savings to our franchisees.

Franchisees may purchase on a voluntary basis itemssuch as stationery, marketing materials, uniforms, and other products through us. Some of these accounts are run through SilverStar Solutions. A mark-up ranging from 0 to 20% is applied to products and equipment purchased by franchisees through us. The amount of the mark-up is based upon amounts necessary to cover overhead, billing and stocking costs. In order to anticipate the needs of our franchisees, if you purchase from us, we may request that you give notice of intent and a commitment to purchase through us. This notice and commitment must be given by you if requested by us.

Except as described in this Item 8, neither we nor our affiliates receive any payments from any suppliers because of their transactions with our franchisees. We may negotiate other purchase arrangements with suppliers for your benefit for uniforms, forms and marketing services. We do not provide any material benefits to you based on your use of designated or approved sources. There are no purchasing or distribution cooperatives. In certain instances, purchases made by our franchisees will be aggregated with purchases made by the BVC Companies and may contribute to the achievement by the BVC Companies of rebate levels that typically range from 0% to 3% of aggregate purchases. In addition to offering a preferred service and/or price to the franchisee suppliers may offer a rebate or other consideration to us ranging from 0% to 10%. One of our officers owns a small number of shares in one of our publicly-held approved suppliers, and our officers each have small holdings in Holdings, our ultimate parent company which is publicly-held. No other officers of the franchisor owns an interest in any approved supplier as of the date of this Disclosure Document.

Item 10: Financing

Note 1 – Equal monthly payments are based on prime rate plus 3-5% per annum fixed at the time of sale for five years with the adjustments for prime rate quarterly. Illustration: On December 1, 2018, the prime rate = 5.25%; finance rate = 10.25%. Monthly payment on $23,800 = $508.61. Monthly payment on $23,200 = $495.79. Monthly payment on $24,800 = $529.98. Note 2 – With your approved credit,we may finance up to 70% of the Initial Franchise Fee for a Standard Franchise or up to 80% of the fee for a Conversion Franchise or a Veterans Initiative Franchise. The loan will be fully amortized over a five-year period. If you are purchasing a Conversion Franchise, a Small Conversion Franchise, or a Veterans Initiative Franchise, your first payment will be due on the date you begin operations as a U.S. LAWNSfranchisee. We charge annual interest on the outstanding principal balance at the prime interest rate, plus 3-5% per annum, with the prime rate adjusted quarterly. You are required to execute a Business Note and Security Agreement substantially in the form of Schedule C of the Franchise Agreement (“Business Note”) in our favor. The required security for the loan is all of the assets of your Business and a personal guarantee of the Business Note (substantially in the form attached to the Business Note) by you and your spouse or by all of the shareholders of your corporation (or equity holders of any other type of entity). The Business Note can be prepaid at any time without penalty. If you do not pay on time, we can call the loan and demand immediate payment of the full outstanding balance and obtain court costs and attorneys’ fees if a collection action is necessary. We also have the right to terminate your Franchise Agreement if you do not make your note payments on time. You waive your rights to notice of a collection action and to assert any defenses to collection against us. We may discount the Business Note to a third party who may be immune under the law to any defenses to payment you may have against us. All franchisees approved for financing agree to the same financing terms for the portion of the Initial Franchise Fee that is financed. We presently do not guarantee any notes, leases or other obligations of our franchisees. Currently, we have no practice or intent of selling,assigning or discounting to a third party any note, contract or other instrument that you execute. We and our affiliates do not receive any direct or indirect payments from any person for the placement of financing.

Item 12: Territory

Franchise Agreement A geographic territory (the “Territory”) will be identified in Schedule A tothe Franchise Agreement when you sign it. The location of your Territory will be decided on by discussions between you and us. The size of your Territory will be based upon the opportunities within the Territory to provide landscape maintenance services. The minimum territory will be a ten mile radius from the center point. You will have protected rights within your Territory to provide “Landscape Maintenance Services” (as defined in the Franchise Agreement) under the U.S. LAWNSmarks. During the term of the Franchise Agreement, we will not, without your consent, offer or provideLandscape Maintenance Services using the “U.S. LAWNS” mark within your Territory, and we will not license others to do so (except as described with respect to Regional Accounts below in this Item 12). We do retainthe right to use other channels of distribution (e.g. the Internet, catalog, telemarketing, direct marketing) inside your Territory using our Marks or other trademarks. We do not have to pay you for exercising our rights. As a result, you will not receive an exclusive territory. You may face competition from other franchisees, from other outlets we or our affiliates may operate, or from other channels of distribution orcompetitive brands that we, our affiliates or third parties control, operate or franchise. BVC and its subsidiaries and affiliates may provide landscape maintenance and related services in your Territory under the various Brightview marks, and may solicit and accept orders within your Territory. BES (an affiliate of BrightView), through subcontractors, services Centrally Managed Accounts in the landscape maintenance and snow services area under the Brightview marks. Some of the Centrally Managed Account customers may be located in your Territory. BES and its subsidiaries and affiliates may solicit and accept orders within your Territory. Further,BVC and its subsidiaries and affiliates may provide landscape maintenance services in your Territory under the various Brightview marks, and may solicit and accept orders within your Territory. We nor any of our affiliates have established any procedures to resolve conflicts that may develop among BVC and its subsidiaries and affiliates and their respective businesses and you and us concerning territory, customers and ongoing franchise support. Continuation of your franchise rights and Territory does not depend on the achievement of a certain sales volume, market penetration or other contingency. However, if you do not meet minimum annual Gross Billings, we have the right to terminate the Franchise Agreement. The minimum annual Gross Billings are: (1) $50,000 for the first year of operation;(2) $100,000 for the second year of operation; and (3) $200,000 for the third year of operation and each subsequent year. You do not receive the option to acquire additional franchises unless you sign another franchise agreement or an Additional Territory Option Agreement with us.

Option Agreement If you request, we may grant you an option todevelop an additional U.S. Lawns Landscape Business in a specific geographic area (the “Option Territory”). You must sign an Additional Territory Option Agreement in the form attached as Schedule J tothe Franchise Agreement which contains the terms of the option, including a description of the Option Territory, the time within which you must exercise the option (the “Option Period”), and your rights during the Option Period. You must pay a non-refundable $5,000 option fee when you sign the Additional Territory Option Agreement. The Option Period will be for 12 months. If you elect to exercise your option by signing a new Franchise Agreement, you must pay us the then-current initial franchise fee when you sign the new Franchise Agreement.

Area Development Agreement If you sign an Area Development Agreement with us, you will receive certain protected rights to develop more than one U.S. LAWNSLandscape Business within designated Territories described in Appendix C attached to the Area Development Agreement. As further described in the following paragraph, you will not receive an exclusive territory. You may face competition from other franchisees, from other outlets we own, or from other channels of distribution or competitive brands that we control. We will not develop or operate or grant a franchise to operate a U.S. LAWNSLandscape Business in the Designated Area so long as you are in compliance withthe Development Schedule set forth in the Area Development Agreement. We and our affiliates expressly reserve the exclusive, unrestricted right, directly and indirectly, and through licenses and franchisees to: (i) establish and/or license others to establish franchised or company-owned U.S. LAWNSbusinesses at any location outside the Territory regardless of the proximity of such business to your Territory; (ii) advertise, market, promote and provide any goods and services under trademarks, service marks, trade names and other commercial symbols other than the Marks, at any location, within or outside the Territory, and to solicit prospective customers, including property management companies, for such goods and services wherever they may be located; (iii) merge with, acquire or become acquired by any businesses, including competitive businesses, which businesses operate under trademarks other than the U.S. LAWNSMarks and may offer or sell products and services that are the same as or similar to the products and services offered at or from your U.S. LAWNSBusiness, and which may be locatedanywhere inside or outside the Territory; and (iv) sell and distribute for ourselves and/or license others to sell and distribute within and outside the Territory, products or services the same as or different from the products and services offered from your U.S. LAWNSBusiness, and which are offered and distributed under marks different than the Marks. You may not solicit or accept orders from outside your Territory without our prior consent, or use other channels of distribution such as the Internet, catalog sales, telemarketing, or direct marketing to make sales outside your Territory with our consent or without adherence to our policies and procedures.

Regional Accounts We have the right to solicit Regional Accounts wherever located. In order to enable us to negotiate special arrangements involving Regional Accounts, including responding to requests for proposals (“RFP”) involving locations which may or may not be in your Territory, at our request, you must promptly evaluate the applicable Regional Account location(s) located within your Territory and prepare a bid package for each such location in accordance withsuch formats, procedures and specifications as we may establish, including any supplemental or modified bid package which we may require in order to satisfy the requirements of the Regional Account (each a “Bid Package”). If we accept the Bid Package, you must honor your proposal and sign all agreements and other documents and instruments as we and the Regional Account may require to fulfill the agreed on contract terms (“Regional Account Agreement”). We will give you the first opportunity to submit a Bid Package on each proposed Regional Account location which is within your Territory and to perform Landscape Maintenance Services to Regional Account locations located in your Territory; provided, however, that we may, as applicable, submit Bid Packages and perform such Landscape Maintenance Services or cause other owners or contractors to do so, if: (a) you fail to timely submit a Bid Package in accordance with our request, or if we determine that the Bid Package submitted by you is likely to be rejected by the Regional Account; (b) we reject your Bid Package or if the Regional Account notifies you or us that it does not wish to be served by you; (c) you for any reason fail or refuse to perform in accordance with the Bid Package and Regional Account Agreement; (d) you, at the time of the issuance of the RFP or submission of the Bid Package, are in default of your obligations or under any other agreement with us, or under any other Regional Account Agreement to which you are party; or (e) you are, in our judgment exercised in good faith, not qualified, equipped or otherwise capable to satisfy the RFP or Regional Account Agreement requirements or to performthe services as required. We may, but are not obligated to, compensate you for Landscape Maintenance Services performedby us, our affiliates or other owners or contractors for Regional Account locations located in your Territory in such amounts (if any) as we determine. We or an affiliate may charge a management fee to offset the sales and administrative expenses of processing and managing Regional Accounts. We reserve the right to modify the Regional Accounts Program from time to time.

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

You do not have to participate personally in the direct operation of the Business, even though we recommend that you do. You or one or more of your employees must successfully complete the initial training program. You must keep the Business under the direct full-time supervision of you or of a trained and competent manager who has completed our training program or equivalent training to our satisfaction. You must keep us informed at all times of the identity of any supervisory employee acting as regular manager of the Business. Certain of your employees will be required by us to sign our confidentiality/noncompetition agreement (Schedule E tothe Franchise Agreement). You and your owners must sign a personal guarantee, the form of which is attached to the Franchise Agreement. If you have entered into an Area Development Agreement, you and your owners must sign a personal guarantee, the form of which is attached to the Area Development Agreement.


You may provide Landscape Maintenance Services to any customer in your Territory. You must meet our requirements when operating your Business. You may not sell any product orservice which we have not approved in advance. You may not use the Business office or warehouse for any purpose other than the operation of the U.S. LAWNSbusiness. During each season of the year, you must offer all products and services which we have authorized. We may change the types of authorized products and services, and there is no limit on our ability to make these changes. You do not have to offer services which we have classified as “optional services.” You must purchase only materials and supplies which meet our requirements.

To view the full Franchise Disclosure Document, please click here