$185

Business Description

HRI is a Utah corporation incorporated in March 1994 vyith its principal business address at 12412Ave, South, Suite 300, Nashville, TH 37203; we continue to have an additional location at 1530 North 1000 West,, Logan, UT 84321, which was HRi's principal address frorn 1993 tb May 2012. HRI was originally incorporated in,Galifornia in November 1977. HRIIs agent for service of process is disclosed in Exhibit A

Prior Experience

On September 7, 2011, Baird Capital Partners ("BCP") acquired control of HR! from: The Home Depot, Inc , and HRI became, a wholly owned subsidiary of HRI Holdings, lnc(“HRI Holdings"), which was ovimed by BCP. BCP and HRI Holdings' address is 227 W. Monroe Street, Suite 1900, Chicago, Illinois 60606. HRI began offering Chem-Dry Franchises in 1994 and Its predecessors offered Chem-Dry Franchises since September 1978. HRI does business under the names "Chem-Dry" and "Harris Research, Inc." From'May 2003 through December'2012, HRI offered N-Hancefranchises in the United States and in Canada until: August 2017. HRI continues to offer master franchises for N- Hance businesses in other countries and currently has master franchises in Canada, Australia, and New Zealand. Aside from N-HanCe franchises, neither HRI nor any predecessor, parent.or affiliate has offered franchises in any other line of business.

Business Offered

To become a franchisee of a Chem-Dry Business, you must enter into the Franchise Agreement (the “Franchise Agreement”) and the Business Note (the “Business Note”);attached as Exhibits B and C, If a franchisee iS a corporation or other entity, all ownersvi/ith more than 5% ownership interest must executedhe Guaranty and Assumption of Obligation attached to the Franchise Agreement. Under the terms of the Franchise Agreement, you must offer and perform carpet and area rug cleaning up holstery cleaning, spot removal and protecting services, including removing red stains, treating pet Urine odor on carpets and imparting stain resistance to carpet fibers. You also may offer and perform additional approved services which may require certification by successful completion of additionaltraining and/or the purchase of additional equipment and cleaning: solutions. We reserve the right to Change the list of additional approved services frOm time to time, but the current list of additional approved services includes leathef and vinyl cleaning, carpet repair, earpetspot dyeing, vinyl composite tile cleaning services, wood floor cleaning, dryer vent cleaning, and air duct Cleaning.

Initial Fees

You must pay HRI an initial fee, which will vary depending upon how many Chem-Dry franchises that you, already own and the type of franchise that you purchase. If you are purchasing your first; Chem-Dry franchise, then Chart A states the initial fed associated with acquiring your first franchise. If you are an existing Chem-Dry franchisee,, then Chart B states the initial, fee for acquiring an additional franchise.

Financing

HRI has no obligation to provide you any financing for any portion ofthe Initial Fee. However, with approved credit HRi may finance the Initial License Fee portion of the Initial Fee for qualified prospective franchisees underspecified terms and conditions. We are unable to estimate whether you will be able to obtain financing from a third.:party lender for the remaining portion of the: Initial Fee (which, may only include the New Business Set) and! if you are able to obtain financing from a third party, we cannot predict the terms of any third-party financing. We do not receive payment from any person or persons for the placement of your financing with a third-party lender

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 and/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 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