Vanguard Cleaning Systems

4325 S. 60th Street, Suite 2 Greenfield, WI 53220

[email protected]

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Vanguard Cleaning System, Inc. is a California corporation incorporated in April 1984. Its principal office is located at 655 Mariners Island Blvd., Suite 303, San Mateo, California, 94404.

Vanguard offers and sells Vanguard Cleaning Systems® Master Franchises for qualified entities to operate as Vanguard's subfranchisors. Under the form of Master Franchise Agreement attached as Exhibit A, Vanguard grants a Master Franchisee the right to subfranchise independently owned businesses providing commercial janitorial services under the Vanguard Cleaning Systems service mark and using the Vanguard Cleaning Systems business System, as defined below, (“Janitorial Businesses”) in a prescribed area (the “Development Area”). This Disclosure Document describes the master franchise offer made to prospective subfranchisors. Vanguard does not conduct a commercial cleaning services business and is engaged exclusively in the business of awarding and supporting Vanguard Cleaning Systems Master Franchises. As a Vanguard subfranchisor, you will recruit subfranchisees, offer new subfranchisees optional business plans that include 1 or more commercial janitorial accounts, provide billing and collection services and other business development support to subfranchisees and deliver to interested subfranchisees the optional Vanguard Cleaning Systems Business System Program curriculum and other informational programs intended to reinforce brand standards and goodwill associated with the Marks. Vanguard Janitorial Businesses have access to processes, standards, know-how and other proprietary information and procedures (the “System”) and certain service marks and other commercial symbols of Vanguard called the “Marks,” which you sublicense them to use. As a subfranchisor, you will be subject to the Federal Trade Commission's Franchising Rule which requires the delivery of a Disclosure Document in a prescribed form to prospective subfranchisees before the sale of the subfranchise. Depending on the state in which you offer subfranchises, you may also be subject to state franchise registration and disclosure laws, which typically require registration before offering or selling subfranchises and the delivery of the registered Disclosure Document to the prospective subfranchisee prior to the sale. These registrations and the Disclosure Documents must be renewed and amended periodically. The form of the Disclosure Document you would use and register follows the same format as this Disclosure Document, but it will contain information about the subfranchise being offered and about you. You will be solely responsible for ensuring your compliance with all applicable registration and disclosure laws, preparation of the Disclosure Document and related expenses. A list of the state franchise registration and disclosure laws is attached as Exhibit B, which is subject to change. You may not offer franchises for sale in a particular registration state until you receive an effective registration from the state, unless you or the transaction qualifies for an available exemption from registration under state law. As a subfranchisor, you may also be subject to certain state franchise relationship laws in your dealings with subfranchisees. These laws typically require good cause and prior written notice before you can terminate a franchise. They may also limit your rights to refuse to renew a franchise or refuse to approve the transfer of a franchise. Some of them also prohibit certain discrimination among franchisees by franchisors and other specified practices designated as unfair. A list of these laws is attached for your information as Exhibit C, which is subject to change. It is your responsibility to ensure that you are complying with all applicable laws in your dealings with subfranchisees. If you become an owner of a Vanguard Cleaning Systems master franchisee, you will be an independent business owner and solely responsible for the day to day operations of that business, including the hiring, firing, disciplining, promoting, compensating, and scheduling of your own employees and all of the terms and conditions of their employment. The people you select to work in your VCS Business will be your agents and employees. They will not be our employees or agents in any manner, including as a joint or co-employer. Therefore, you will be solely responsible for ensuring that your master franchise business complies with all applicable laws and regulations, including the Fair Labor Standards Act, the Occupational Safety and Health Act, any state wage and hour or workers compensation act, any state unemployment compensation benefit law or regulation, or any other federal, state or local employment-related or employee benefit law or regulation, as well as privacy and data protection laws, rules and regulations. There are no regulations specific to your subfranchisees' Janitorial Businesses known to Vanguard, other than possibly the California Property Service Workers Protection part of the Labor Code, which imposes certain registration, reporting and training requirements on janitorial businesses in the state subject to the law, and possibly the licensing and reporting requirements established under Oregon law for certain property services contractors administered by the Bureau of Labor and Industries in that state. If you do business in California or Oregon you should consult with local counsel to evaluate whether such statutes may also pertain to your master franchise business in those states. Like other businesses, Janitorial Businesses may be subject to generally applicable laws like privacy and data protection, worker's compensation, OSHA regulations, environmental regulations and others. These regulations may require measures be taken for the protection of employees and the public. You should contact local and state authorities for detailed information on these requirements. The market for the services provided by Janitorial Businesses is fairly well developed. Additional growth is expected from new business construction and the trend toward outsourcing janitorial and maintenance work. Typical customers of Janitorial Businesses include owners or operators of business and professional offices, as well as commercial, industrial and medical facilities. Competition includes nationally franchised and local janitorial and building maintenance businesses. The market for the sale of subfranchises is also fairly well developed. Typical purchasers of Janitorial Business franchises include people and companies interested in an investment opportunity with relatively low capital requirements and which permits owners, if they so choose, to gradually ramp up the Janitorial Business. Competition for the sale of subfranchises will include national franchisors and some local and regional businesses offering comparable investments in franchises and business opportunities.