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Business Description

We are a Florida limited liability company organized on August 30,2005, Our principal place of business is 12 Greenway Plaza, Suite 250, Houston, Texas 77046. We Conduct business under our name Mister Sparky Franchising, L.L.C., or under the trademark MISTER SPARKY®. We do not conduct business under any other trademarks or trade names.

Prior Experience

We do not have any predecessors. We began offering franchises of the type described in this Disclosure Document in July 2006. We were not previously engaged in the Electrical Services business Or sale of franchises. We began offering Area Development Agreements of the type: described in this Disclosure Document in April 2018.

Business Offered

We award franchises for electrical maintenance, repair and replacement services (“Electrical Services”) businesses to be operated under the trademark MISTER SPARKY, We do not engage in other business activities and, do not,and have never offered franchises in any other iine of business. If you;sign a franchise agreement, the business you operate will use the trademarks, service marks, trade names, logos,, and symbols we designate ,(which trademarks, serVicei marks, trade names, logos, and symbols we wiU call the “Licensed Marks”) to provide Electrical Services (the “Franchised Business”). The approved Electrical Services currently include only residential and commercial services, including, maintenance, repair and replacement services, and do not include, industrial, remodeling or new construction services. The Franchised Business will use the methods and procedures we have developed (the “System”), which includes standards and methods of operation, accounting, marketing, advertising and public relations, and the standards for conducting a Franchised Business. The standards include responsibility for warranties and guarantees of customer service levels, including, customer satisfaction and timeliness guarantees. The System for conducting a Franchised Business is described in our operations manual, which we call OpX Operational Excellence or OpX (the “Operations Manual, or otherwise in other writings designated by us as part of the standards for the System (collectively with the Operations Manual, “System Standards”). Our concept is to have a franchisee operate the Franchised Business from one approved location within the franchisee's territory.., However, some of our franchisees may be awarded multiple franchises in contiguous or adjoining territories., In those circumstances, those franchisees may operate their multiple franchises frorn an approved location, in only one of their franchised territories. Franchisees Will be either converting their existing electrical business into a Franchised Business (a “Conversion Franchise”) or will develop and open a new Electrical Services business (a “Start-Up Franchise”). We may pUrsUe opportunities to convert similar businesses operating under different trade names to a Mister Sparky Franchised Business. We may provide conversion incentives to those businesses (an “Incentive Program”), The terrns ofthe Incentive.Program vary depending on factors such as the existing sales Volurne Of the business, the size and location ofthe geographic area serviced, perceived cornpetitive advantage of the business, the skills and experience of the business leaders,, physical cortdition and age of the business and its assets, operating history,, our then current conversion policy,, the negotiations of the parties, and, other factors determined by us in Our sole and absolute discretion. We may negotiate these incentives when and as business circumstances warrant. Pursuant to a current Incentive Prograrn, we offer financial incentives for certain qualified large scale prospective conversion franchises pursuant to certain terms and conditions. We will notify you in advance and in writing if we believe you may qualify for an Incentive Program. Unless you qualify for an Incentive Program and aremotified by us in writing, that you qualify, you will not be entitled to receive the benefits of any Incentive Program. Any Incentive Program we offer or may offer in the future may be modified, limited, expanded, initiated, extended or terminated at any time in our Sole and .absolute discretion and without advance notice or amendment of this Disclosure Document. We also offer qualified applicants the ability'to enter into an area deVelopirient agreement (an, “Area Development Agreement”), to develop multiple Franchised Businesses within a specifically described geographic area (the “Development Area”)., Each Franchised BUsi'neSs developed.pursuant to the Area Development Agreement will operate within a defined territory in the Development Area. Our eurrent form of Area Developrheht Agreeifierit is attached to this Diselosure Document as Exhibit I. Ehesize of the Development Area will vary depending on the local market conditions and the number of Ffanehised Businesses to be developed, but each territory within the Development Area will be based on total population blocks of approximately 20,0,000. The Develpprnent Area, and the territories within the Development Area, will be determined before you sign the Area Development Agreement and will Ee described in the Area, Development Agreement, or an attachment to it (“Deyelopment Schedule”). You must develop the number of Franchised Businesses specified by the Area Development Agreement in the Development Area according to, and in a sequence described in, the Development Schedule, though you may, in our sole and absolute discretion, develop more than one Franchised Business at a time. We reserve the right to refuse to enter into an Area Development Agreement with any franchisee prospective franchisee as determined in our sole and,absolute discretion. In addition, we are not required to offer or enter into an Area Development Agreement with franchisees that develop more than one Franchised Business. For each Franchised Business developed under the Area Development Agreement, you must sign our then-current. Franchise Agreement, and any required amendments and related agreements, including a general release. The formsiOf Franchise Agreement you sign pursuant to the Area Development Agreement may be different from the foim included with this Disclosure Document, and may contain different terms and conditions (including but not limited lo different dr increased fees, and other financial terms). You must also meet ceftain eligibility requirements in order to develop franchised Businesses pursuant to the Area Development Agreement including that each of your Franchised Businesses maintain a minimum revenue of $300,00,0 per year. These eligibility requirements are discussed in greater detail in Item 12. You (and your Owners if you are a business entity) must agree to be individually bound by certain .obligations and covenants in the Area Development Agreement and, unless we agree otherwise, must personally guarantee your performance under the Area Development Agreement.

Initial Fees

Standard Initial Fees The minimum initial fees (“Initial Fees”) for both Conversion Franchises and Start-Up Franchises are $33,000 for a territory that has a minimum population of 200,000, plus $165 for each 1000 of population above 200,000. The population in a territory is generally approximately 200,000., We currently determine population by utilizing an electronic database called MapPoint®, but reserve the right to use such other software or database to determine population as we deem fit in our sole and absolute discretion. In the third quarter of 2019, or other time as we may determine in our sole and,absolute discretion, we intend to start using another database called GbBIS, offered by Intelligent Direct, Inc., to determine population. GbBIS is expected to have the same or similar fuhctibnality as MapPoint. If we; change our database from MapPbint to GbBIS (Or another electronic database) it will not change how your Initial Fees are ealeulated., The electronic database we use shows population information by zip code. The Initial Fees must be paid in a lurnp sum or, for qualifying franchisees, may be financed in installment payments. The Initial Fees will be fully earned by us upon your signing of the Franchise Agreement and are not refundable under any circumstances. Other Initial Fees Details Initial Fees paid may not be uniform. We may vary, reduce, negotiate or make an exception to our standard Initial Fees structpre and/or payment terms in order to facilitate mergers, conversions or other large transactions, as well as to accommodate certain existing franchisees that acquire additional locations. For example, at the present tirne, we may, in Our sole and absolute discretion, offer opportunities to purchase a franchise at a reduced fee to (i) qualified existing franchisees in good standing, (ii) qualified prospective franchisees that are converting existing companies to a Franchised Business or (iii) qualified veterans purchasing on the basis of the International Franchise Associatibh's® YetFran® Prograni. We make no representations that-these or any other opportunities or variations to the, standard Initial Fees will continue to be made available and they may be discontinued without notice at any time in our sole and absolute discretion. We are a member of the International Franchise Association (“IFA®”) and participate in the IFA's YetFran Program which provides special financial incentives to qualified veterans.. Pursuant to, this program, we offer a 10% discount on the initial franchise fee for all honorably discharged veteran's of American and Canadian armed forces for your first franchise only. We shall, determine, in our sole and absolute discretion, whether a prospective franchisee qualifies for this discount. In making, this determination, we may be guided by the definitions used by applicable United States or Canadian, government offices, but the decision remains ours. The software package that we currently require for our franchises is the Gloud-hosted. model of SuccessWare2I (“SuccessWare21') The ihitial activation fee is waived by SuccessWere for our franchisees, but SuecessWare21 vvill costyou a monthly fee, which cuiTently ranges from $325 to $525 per month. The: first month's payment of $325 tO $525 is usually paid before opening for business and the payment is non-refiindable. You must also pfy for a required SuccessWare21 training class. The cost of the SuccessWai'e21 ti:aining class is $1,795 for up to two attendees. You may send up to two additional attendees for an additional $ 1,795. We. estimate you will have to pay $.1,795 to. $3,,590 for SuccessWare21 training classes, depending on: the number of people that attend. This* arnount is> paid to SuecessWare usually before opening for .business, arid the; payment is non-fefuhdable. If you are cohyertihg aih Electrical Services business to a Franchised Business arid you do no.t currently use-SucCessWare21 „ SuecessWare may have to provide technical support to convert ypur Electrical Services business, data so it.can be imported into SuccessWare21 (S,uccessWare2,l may be referred to as “SUccessWare21 (ASP Option)” in other documents). If you qualify fof and choose to patiticipate in the Inceritive Program, the technical support provided by SuecessWare to convert your data will be at no cost to you. If you do hot qualify for the Incentive Prograrn or choose not to participate in the Incentive Program; the technical support provided by SuecessWare to convert your data vyill be paid by ypu at rates that will be established and updated at SuecessWare's sole and absolute discretion. Last year, new Conversion Franchisees that required technical support from SuccessWare to convert data paid SuecessWare $2,000 to $3,4O0 for this service. The amountyou will have to pay will depend on the type, quality, arid amount of data that needs to be converted. This amount is paid to SuecessWare usually before opening for business, and the payment is non-refundable. Development Fee When you sign an Area Development Agreement, you must pay us a lump-sum, npn- refundable development fee equal to $ 10,000 multiplied by the number of Franchised Businesses to be developed pursuant to the Development Schedule (“Development Fiee'). The Initial Fees for each Franchised Business deveioped pursuant to the Development Schedule. will be reduced to $2,000, and the $2,000 Initial Fee will be owed at the time you sign each Franchise Agreement pursuant to the Development Schedule. The Development Fee may not be uniform for all area developers entering into an Area Development Agreement under this offerirtg depending on the geographic area and Other factors. Unless otherwise provided by state law in your jurisdiction, the Development Fee will be fully earned by us upon your signing of the Area Development Agreement and is not refundable under any circumstances.

Financing

For qualified buyers that meet our credit standards, we may offer the option to pay Initial Fees with a promtssoi^ note, and for qualified buyers that meet our credit standards thatare eligible to sign an Area Development Agreement, we may offer the option to pay the'Deyelopment Fee vcith a promissory note. This option, is available at our sole and absolute discretion. We do not guarantee your note, lease orother obligations. The Initial Fees', if not paid in a lump sum when the Franchise Agreement is signed, may be financed to the extent that you qUalily for such financing.and to the extent permitted by law, If financed, thesbalance can be paid in up to 36. monthly installments at an interest rate that is typically between 1,2% and 18% per annurn or the highest permissible rate allowed by law. Franchisees obtain ing: financing from us must pay a minimum of $5,000, or 20% of the Initial Fees, whichever is greater, when the Franchise Agreement is signed. The interest rate is based, in part on prevailing conditions, your individual credit history,, your personal financial condition', and, other undefwritihg factors. The Development Fee, if not paid in a lump sum when the Area Development Agreement is signed, may be financed to the extent that you qualify for such financing and to the extent permitted by law; If financed, thebalance can be paid in up to 36 monthly installments at an intei-est rate that is expected to be between 12% and 18% per annum or the highest permissible rate allowed by law. Area developers: obtaining financing from us must pay a minimum of 20% of the Development Fee when the Development Agreement is signed.. The, interest rate is based, in part, on prevailing conditions, your individual credit history, your personal financial condition,, and other underwriting factors. A franchisee that finances the Initial Fees, and/for area, developers that: finance the- Development Fee, must sign a promissoiy note and guaranty' in the form of Exhibit C (“Promissory Note and .Guaranty”) and, as security, its Owners must sign the Owner's Guaranty. If an Owner's spouse is also an Owner, then the Owner's spouse must also sign the Owner's Guaranty. We currently do not take a security interest in the assets of your Franchised Business or your Owner's assets, but we reserve the right to do so.. You must make all payments to us by electronic funds transfer to an account designated by us or by such Other method that we may designate from time to time. You will be required to complete ah Automated Clearing House (ACFI) agreement authorizing automatic withdrawals, You can prepay the Promissory Note and Guaranty at any time without penalty. If you are in default of the! Promissory Note and Guaranty dr the Franchise Agreement, we can declare, the outstanding priheipal balance and all unpaid accrued interest immediately due and payable. You will have to pay our reasonable attorney's fees and other legall costs we incur in enforcing payment and collection of the balance due. The Promissory Note and Guaranty provide that you and your guarantor will waive demand for payment, presentment for payment, protest, notice of non-payment or dishonor, and all other notices and demands. We may assign the Promissory Note and Guaranty to a third party bpt we remain obligated to prpvide services according to the terms of the Franchise Agreement and/or the Development Agreement, as applicable. Any third party to Whom the Promissory Note and Guaranty may be assigned does not assume any of our obligations under the Franchise Agreement and/or the Development Agreement, as applicable; and under the Uniform Commercial Code you may not assert against the third party any defehses you may have against us. We do not receive any consideration for referring you to any prospective, lenders.

Franchisee Revenue and Profit

The FTC's Franchise Rule pertnits a franchisor to;provide information about the actual or potential financial perforrnance of its; franchised and/br franchisor-owned outlets, if there is a reasonable basis for the information, and if the infoiwation is included in the Disclosure Document. Financial performance inforrnation that: differs from that, included in Item 19 may be given only if: (1) a franchisor provides the actual re;cords 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 eircumstanees. We are providing you with historical financial performance representations for Franchised Businesses that had Net Sales, (as defined below) during the entire two-year period indicated. If a Franchised Business did not have Net: Sales for the entire tv^'o-year period indicated, vye did not include its results in the financial performance representations. Summary of Same Store Sales for Franchised Business Territories Same store sales for Franchised Business: Territories are based on Net Sales. Although the definition of “Net Sales” may change slightly from year to year, it is generally defined as all revenue received by a Franchisee for the peffoirnance of all services and the sale of all, products From or related to the Franchised Business (including revenues received for performing commercial services) less sales taxes, refunds to customerSi discounts ahd payments, to subcontractors: and permit costs related to the Franchised Business. A Franchised Business' Net Sales are obtained from individual financial packages submitted to Franchisor on a monthly basis. These' financial packages include profit and loss statements with sales data for Franchisor to calculate applicable franchisee fees.: Franchisee fees; are calculated on Net Sales, as defined in each indi.vidual franchisee's Franchise Agreernent. Net Sales are captured in electronic work papers and are the basis for this historical financial performance representation. Occasionally, franchisees fail to report. In such circumstances, estimates based on other financial records provided by non-reporting franchisees such as.required daily sales reports are employed. None of these estimates have a material impact on the total amoiints reported below. Franchisor reasonably relies on this data and believes it to be true and correct. However, Franchisor has not audited this data and cannot therefore provide any further assurahces; as to its accuracy or .completeness. We highly encourage you to work with a qualified accountant or other qualified business advisor in considering this, opportunity, its potential and to develop a business plan to determine if you are suited for this franchise opportunity. We further encourage you to consult with an attorney and Other advisors before executing the Franchisei Agreement.