Home Care Franchise Disclosure Document Example

FRANCHISE DISCLOSURE DOCUMENT

XYZ FRANCHISE MANAGEMENT, LLC
(A Massachusetts limited liability company)
ABC Road, Suite 520
Woburn, Massachusetts 01801
(888) 888-8888
info@Homecarecare.com
TM

The franchise offered is for the operation of Medicare Certified home healthcare agency which provides Medicare Certified, non-medical Accredited and private pay skilled medical and non­medical services, home healthcare, hospice care and personal care aide assistance.

The total investment necessary to begin the operation of a Home Care Agency Franchise Business is $100,450 to $109,250. This includes $80,000 that must be paid to us or our affiliate.

This disclosure document summarizes certain provisions of your Franchise Agreement and other information in plain English. Read this disclosure document and all accompanying agreements carefully. You must receive this disclosure document at least 14 calendar days before you sign a binding agreement with, or make any payment to the franchisor or an affiliate in connection with the proposed franchise sale. Note, however, that no government agency has verified the information contained in the document.

You may wish to receive your disclosure document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact Jan Jane Doe, XYZ FRANCHISE MANAGEMENT LLC, ABC Road, Suite 520, Woburn, Massachusetts 01801, (888) 888-8888.

The terms of your contract will govern your franchise relationship. Don’t rely on the disclosure document alone to understand your contract. Read all of your contract carefully. Show your contract and this disclosure to an advisor like a lawyer or accountant.

Buying a franchise is a complex investment. The information in this disclosure document can help you make up your mind. More information on franchising such as “A Consumer Guide to

BFM Franchise Disclosure Document                                                            1
April 1, 2014

Buying a Franchise,” which can help you understand how to use this disclosure document is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue NW, Washington, DC 20580. You can also visit the FTC’s home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising.

There may also be laws on franchising in your state. Ask your state agencies about them. Date of Issue of this Franchise Disclosure Document: April 1, 2014

BFM Franchise Disclosure Document                                                              2
April 1, 2014

STATE COVER PAGE

Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE.

Call the state franchise administrator listed in Exhibit A for information about the franchisor, or about franchising in your state.

MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

Please consider the following RISK FACTORS before you buy this franchise:

1. THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY MEDIATION/ARBITRATION/ LITIGATION ONLY IN MASSACHUSETTS. OUT OF STATE MEDIATION/ARBITRATION/LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU MORE TO MEDIATE/ARBITRATE/ LITIGATE US IN MASSACHUSETTS THAN IN YOUR HOME STATE.
2. MASSACHUSETTS LAW GOVERNS THE FRANCHISE AGREEMENT AND THE RELATIONSHIP BEWTWEEN US AND YOU. THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU WANT TO COMPARE THESE LAWS.
3. EVEN THOUGH THE FRANCHISE AGREEMENT PROVIDES THAT MASSACHUSETTS LAW APPLIES, LOCAL LAW MAY SUPERCEDE IT IN YOUR STATE. PLEASE REFER TO ANY STATE-SPECIFIC ADDENDUM THAT MAY BE ATTACHED TO THIS DISCLOSURE DOCUMENT FOR DETAILS.

We use the services of one or more FRANCHISE BROKERS or referral sources to assist us in selling our franchise. A franchise broker or referral source represents us, not you. We pay this person a fee for selling our franchise or referring you to us. You should be sure to do your own investigation of the franchise.

State Effective Dates: (See the next page for state effective dates.)

BFM Franchise Disclosure Document                                                            3
April 1, 2014

STATE EFFECTIVE DATES

The following states require that the Franchise Disclosure Document be registered or filed with the state or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.

This Franchise Disclosure Document is registered, on file or exempt from registration in the following states having franchise registration or disclosure laws, with the following effective dates:

Hawaii

Illinois

Indiana

Maryland

Michigan

Minnesota

New York

North Dakota

Rhode Island

South Dakota

Virginia

Washington
Wisconsin

In all the other states, the effective date of this Franchise Disclosure Document is the issuance
date of April 1, 2014.

BFM Franchise Disclosure Document                                                            4
April 1, 2014

FRANCHISE DISCLOSURE DOCUMENT
TABLE OF CONTENTS

ITEMS                                                                                                                   PAGE

Item 1

THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES………………………………………………………………………………………………… 1

Item 2

BUSINESS EXPERIENCE……………………………………………………………………………. 2

Item 3

LITIGATION………………………………………………………………………………………………… 3

Item 4

BANKRUPTCY…………………………………………………………………………………………….. 3

Item 5

INITIAL FEES……………………………………………………………………………………………… 3

Item 6

OTHER FEES……………………………………………………………………………………………….. 4

Item 7

ESTIMATED INITIAL INVESTMENT…………………………………………………………. 5

Item 8

RESTRICTIONS ON SOURCES OF HOME CARE PRODUCTS AND SERVICES…………….. 8

Item 9

FRANCHISEE’S OBLIGATIONS…………………………………………………………………. 9

Item 10

FINANCING………………………………………………………………………………………………… 11

Item 11

FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND

TRAINING………………………………………………………………………………………………….. 11

Item 12

TERRITORY………………………………………………………………………………………………. 17

Item 13

BFM Franchise Disclosure Document                                                              5
April 1, 2014

TRADEMARKS………………………………………………………………………………………….. 18

Item 14

PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION………….. 19

Item 15

OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE

FRANCHISE BUSINESS……………………………………………………………………………. 20

Item 16

RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL………………….. 20

Item 17

RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION. 21

Item 18

PUBLIC FIGURES……………………………………………………………………………………… 25

Item 19

FINANCIAL PERFORMANCE REPRESENTATIONS………………………………. 25

Item 20

OUTLETS AND FRANCHISEE INFORMATION………………………………………. 25

Item 21

FINANCIAL STATEMENTS……………………………………………………………………… 26

Item 22

CONTRACTS…………………………………………………………………………………………….. 27

Item 23

RECEIPTS…………………………………………………………………………………………………. 27

BFM Franchise Disclosure Document                                                              6
April 1, 2014

XYZ FRANCHISE MANAGEMENT, LLC
FRANCHISE DISCLOSURE DOCUMENT

Item 1

THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES

The Franchisor

To simplify the language in this Disclosure Document “we” “us” or “our” means XYZ FRANCHISE MANAGEMENT, LLC, the franchisor. “You” means the person who buys the franchise. If a corporation, partnership, limited liability company or other business entity buys the franchise, “you” also means each of the individual owners of the corporation, partnership, limited liability company or other business entity.

We are limited liability company, formed under the laws of Massachusetts on October 17, 2013. Our principal business address is ABC Road, Suite 520, Woburn, Massachusetts 01801. We conduct business under our corporate name, under the trade name and service mark “Home Care Agency”, URLs, domain names, website addresses, email addresses, digital cellular addresses, wireless web addresses and the like (“e-names”) and associated logos, designs, symbols and trade dress (collectively, the “Marks”). Our franchised business is a home healthcare agency which provides Medicare Certified , non-medical Accredited and private pay skilled medical and non-medical services, home healthcare, hospice care and personal care aide assistance (“Franchised Business” “Home Healthcare Services” or “Agency”).

We are owned by our members.

We have never operated a business similar to the Franchised Business. We have offered franchises for Home Care Agency businesses since April 1, 2014. We have never offered franchises in any other line of business.

Agents for Service of Process

Our agent for service is disclosed in Exhibit A.

Parent

We do not have a parent.

Predecessor

We do not have a predecessor.

Affiliates

BFM Franchise Disclosure Document                                                            7
April 1, 2014

Our affiliate, Home Agency Software Systems, LLC, a Massachusetts limited liability company was formed on January 31, 2014 for the purpose of developing and providing home healthcare management software for use by the Home Care Agency franchised businesses and other healthcare providers. Its principal place of business is 136 Treble Cove Road, N. Billerica, Massachusetts 01862.

Our affiliate, Always Available Healthcare, LLC, a Massachusetts limited liability company was formed on December 20, 2013, to provide home healthcare services. Its principal place of business is 254 Winter Street, Weston, Massachusetts 02493.

Our affiliate, Eden Healthcare Agency, LLC, a Texas limited liability company was formed on November 27, 2013, to provide home healthcare services. Its principal place of business is 8203 Willow Place Drive S, Suite 230, Houston, Texas 77070.

Our affiliate, Home Healthcare Agency, LLC, a Pennsylvania limited liability company was formed on September 10, 2013, to provide home healthcare service. Its principal place of business is 201 Penn Center Blvd, Suite 400, Pittsburgh, Pennsylvania 15235

Our affiliate Home Faith Consulting, LLC a Massachusetts limited liability company was formed on September 3, 2013, to provides healthcare provider accreditation, management, licensure and operating consulting services under the trade name Certified Homecare Consulting. Its principal place of business is 10 Bridge Street, Unit 9, Pelham, New Hampshire 03076.

Our affiliate, Home Home Hospice, LLC, a Massachusetts limited liability company was formed on July 30, 2013 to provide hospice services. Its principal place of business is 1824 Main Street, Brockton, Massachusetts 02301.

Our affiliate, Home Independent Living, LLC, a Massachusetts limited liability company was formed on July 30, 2013 to provide personal care services, case management, teaching, and assessment. Its principal place of business is 1824 Main Street, Brockton, Massachusetts 02301.

Our affiliate, Home Medical Equipment, LLC, a Massachusetts limited liability company was formed on April 24, 2013 to provides durable medical equipment. Its principal place of business is 1824 Main Street, Brockton, Massachusetts 02301.

Our affiliate, Home Transportation, LLC, a Massachusetts limited liability company was formed on September 26, 2012 for the purpose of providing non-medical transportation services. Its principal place of business is ABC Road, Suite 520, Woburn, Massachusetts 01801.

Our affiliate, Jan Jane Doe Home Healthcare Agency, LLC, a Massachusetts limited liability company was formed on May 20, 2010 for the purpose of opening and operating the first Home Care Agency. Its principal place of business is 10

BFM Franchise Disclosure Document                                                            8
April 1, 2014

Tower Office Park, Suite 520, Woburn, Massachusetts 01801.

Our affiliates never offered franchises of the type being offered in this Disclosure Document nor in any other line of business.

Except as provided above, we have no parent, predecessor or affiliates required to be disclosed in this Item 1.

The Franchised Business

We grant franchises for the establishment and operation of a Home Care Agencywhich provides Home Healthcare Services under a franchise agreement (“Franchise Agreement”).

You will initially offer private pay non-medical home healthcare and personal care assistance. In addition to non-medical services a Home Care Agencyfranchise, once certified and licensed to do so, is required to offer skilled medical services. However, prior to offering skilled medical services you must qualify and comply with all federal, state and local laws including state and federal care industry standards, local health care regulations, various licensing standards and other requirements that may apply. You must also have proper insurance that provides coverage for the medical services offered.

Medicare is a federally-funded health care program available to U.S. residents who meet certain qualifications. The program provides coverage for hospital stays, doctors’ appointments, prescription and home health care. To receive these benefits the Medicare recipient must get health care from an approved clinic or physician. Providers must apply to become Medicare Certified to treat Medicare recipients. The Franchised Business will not offer skilled medical care until you become Medicare Certified.

The Franchised Business is operated under the trade name Home Care Agency. In order to become a Home Care Agencyfranchisee, you must sign our current Franchise Agreement and operate your Agency in accordance with our standards and specifications.

Comprehensive care and skilled medical services to home care clients include

skilled nurse visits, physical therapy, home health aide services, patient care attendant, medication management and reminders, Alzheimer’s and dementia care, live-in care, wound care, pre- and post-hospital/surgical care, accident victim care and training staff for group homes, assisted living facilities, nursing homes and hospitals

Non-medical services to home care clients include companionship services, support around the house to foster independence, outings, social work, food and meal preparation, help with grocery and clothing shopping, light housekeeping, running errands, reading services, support for bathing, dressing and toileting, assistance with recreational activities, pet care and other

BFM Franchise Disclosure Document                                                              9
April 1, 2014

miscellaneous activities, and special needs care.

The Home Care Agency System

We franchise the right to operate a Home Care Agencyfranchised business, in accordance with Home Care Agency System (“System”) characterized by the HOME CARE Marks; uniform operating methods, procedures and techniques; custom computer software; methods and techniques for record keeping and reporting; promotional techniques, marketing and advertising; and certain business practices and policies. We may change, improve and develop the System periodically. You may be allowed to offer some optional services, or use different vendors from our specifications, but you will need our prior written approval.

The Franchised Business will be operated in accordance with Home Care Agency confidential operating manual (“Operations Manual”), a copy of which will be loaned to you or made available to you through a password protected website.

Market Competition

The target market for services and products provided by Home Care Agency is the general population with an emphasis on the senior, 65 and older market and other adults who need extra assistance in daily living. Current U.S. Census estimates that there are over 40 million people in the United States who are age 65 or older. The market for home care services in the United States is very large, fully developed and growing at a steady pace as the number of people over the age of 65 is growing rapidly.

Your competitors will include home care services on a local, regional and national ranging from independent companies through to national providers including other national franchise systems. In addition, there are other competitors that focus on provision of medical-related services such as in-home skilled nursing care, providing homemaker/companion and personal care services as a sideline.

Revenues generated from home care services are not influenced by seasonality throughout the year. Home Care Agency is a year round business.

Regulations

You are responsible for operating in full compliance with all laws that apply to your Home Care Agency Franchised Business and the Home Healthcare Services that you manage. The healthcare industry is heavily regulated. These laws may include federal, state and local regulations relating to: the practice of medicine, and the operation and licensing of home healthcare services; the relationship of providers and suppliers of home health care services, on the one hand, and medical providers, on the other, including anti-kickback laws (including the Federal Medicare Anti-Kickback Statute and similar state laws); restrictions or prohibition on fee splitting; physician self-referral restrictions (including the federal “Stark Law” and similar state laws); payment systems for medical benefits available to individuals

BFM Franchise Disclosure Document                                                            10
April 1, 2014

through insurance and government resources (including Medicare and Medicaid); privacy of patient records (including the Health Insurance Portability and Accountability Act of 1996); use of medical devices; and advertising of medical services. While not all of these laws and regulations will be applicable to all Home Care Agency franchised businesses, depending on location, services provided, and which types of government or private insurance may be accepted at Home Care Agency franchised businesses, it is important to be aware of the regulatory framework.

You must secure and maintain in force all required licenses, permits and certificates relating to the operation of the Franchised Business. You must not employ any person in a position that requires a license unless that person is currently licensed by all applicable authorities and a copy of the license or permit is in your business files. You must comply with all federal, state and local laws and regulations regarding the management of a Home Healthcare Services agency including home health agency license, nurse staffing license, certified as a skilled nursing agency, and/or employment agency license. Some states require you obtain a license to provide employment services. We may require you to obtain a particular permit, license, certification or accreditation.

You must also ensure that you and your business entity complies with all laws and regulations, and secures and maintains in force all required licenses, permits and certificates relating to the operation of a Home Healthcare Services agency. Each state has medical and other boards that determine rules and regulations regarding their respective members and the scope of services that may legally be offered by their members. The laws and regulations generally include requirements for the service providers to hold required state licenses and registrations to work (as applicable) in the state where the Franchised Business is located, and to hold required certifications by, or registrations in, any applicable professional association or registry. If a state or jurisdiction has such a law or regulation, these laws and regulations are likely to vary from state to state, and these may change from time to time.

We are presently aware that the following states have statutes that may require a license for some or all of the non-medical and personal care services you will be providing: Arkansas, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Utah, Virginia and Washington. These statutes may require a minimum level of education or work related experience, and/or payment of a fee in order to obtain a license. There may be other states with licensing, certification, or registration requirements. Many states also have specific record keeping or other requirements for service providers who receive payments from Medicare, Medicaid, or private health insurance. Some states may require a Certificate of Need. Some states have imposed a moratorium on the issuance of home healthcare licenses.

The Franchise Agreement will not interfere, affect or limit the independent exercise of medical judgment by your staff licensed to do so. It will be your responsibility to research all applicable laws, and we strongly advise that you consult with an attorney and/or contact

BFM Franchise Disclosure Document                                                            11
April 1, 2014

local, state and federal agencies before signing a Franchise Agreement with us, to determine your legal obligations and evaluate the possible effects on your costs and operations.

In addition, you must operate the Franchised Business in full compliance with all applicable laws, ordinances and regulations, including, without limitation, government regulations relating to occupational hazards, health, EEOC, OSHA, discrimination, employment, sexual harassment, worker’s compensation, unemployment insurance and withholding and payment of federal and state income taxes, social security taxes and sales and service taxes. You should consult with your attorney concerning those and other local laws, regulations and ordinances that may affect the operation of your Franchised Business. You should be aware of any pending or future legislation that may affect you Franchise Business. Changes to existing federal and state laws and new laws and regulations may increase your cost of doing business.

You will also be required to conduct criminal background checks of all employees before employment, and on an annual basis during employment, in a manner as we specify in our Operations Manual.

Item 2

BUSINESS EXPERIENCE

Managing Member – Jan Jane Doe

Ms. Doe has been our managing member since our inception.

From January 31, 2014 to present, Ms. Doe has been the managing member of Home Agency Software Systems, LLC, a developer and provider of home healthcare management software, with a principal place of business North Billerica, Massachusetts.

From December 20, 2013 to present, Ms. Doe has been the managing member of Always Available Healthcare, LLC, a home healthcare provider, with an office in Weston, Massachusetts.

From November 27, 2013 to present, Ms. Doe has been the managing member of Eden Healthcare Agency, LLC, a Texas limited liability company, with an office in Houston, Texas.

From September 10, 2013 to present, Ms. Doe has been the managing member of Home Healthcare Agency, LLC, a Pennsylvania limited liability company, with an office in Pittsburgh, Pennsylvania.

From September 3, 2013 to present, Ms. Doe has been the managing member of Home Faith Consulting, LLC, which provides healthcare provider accreditation, management, licensure and operating consulting services under the trade name Home Healthcare Consulting with an office in Pelham, New Hampshire.

BFM Franchise Disclosure Document                                                            12
April 1, 2014

From July 30, 2013 to present, Ms. Doe has been the managing member of Home Home Hospice, LLC, which provide hospice services, with an office in Brockton, Massachusetts.

From July 30, 2013 to present, Ms. Doe has been the managing member of Home Independent Living, LLC, which provides personal care services, case management, teaching, and assessment, with an office in Brockton, Massachusetts.

From April 24, 2013 to present, Ms. Doe has been the managing member of Home Medical Equipment, LLC, which provides durable medical equipment with an office in Brockton, Massachusetts.

From September 26, 2012 to present, Ms. Doe has been the managing member of Home Transportation, LLC, which provides non-medical transportation, with an office in Woburn, Massachusetts.

From May 20, 2010 to present, Ms. Doe has been the managing member of Jan Jane Doe Home Healthcare Agency, LLC, a Medicare certified and Massachusetts Accredited home healthcare provider with an office in Woburn, Massachusetts.

From 2010 to April 2011, Ms. Doe was employed as a registered nurse at Whittier Pavilion, Haverhill, Massachusetts.

From 2002 to April 2010, Ms. Doe was employed as a registered nurse at Lahey Hospital and Medical Center, Burlington, Massachusetts.

From 2006 to 2010, Ms. Doe was employed as a registered nurse at Premier Medical Center, Burlington, Massachusetts.

From 2006 to April 2009, Ms. Doe was employed as a registered nurse at Onward Healthcare Agency, Burlington, Massachusetts.

Item 3

LITIGATION

No litigation is required to be disclosed in this Item.

Item 4

BANKRUPTCY

BFM Franchise Disclosure Document                                                            13
April 1, 2014

No bankruptcy is required to be disclosed in this Item.

Item 5

INITIAL FEE

The Initial Franchise Fee is $45,000. You must pay the Initial Franchise Fee in a lump sum when you sign the Franchise Agreement. In consideration for the Initial Franchise Fee, we grant you a franchise to operate a Home Care AgencyBusiness and provide you and certain of your personnel with initial training and our Home Care Agency marketing kit, which includes 500 branded business cards, 250 marketing brochures, 100 branded pocket folders and three branded polo shirts.

If you do not hold validly current Medicare Certification you must pay the $25,000 Medicare Certification Fee in a lump sum when you sign the Franchise Agreement. In consideration for the Medicare Certification Fee, our affiliate Home Faith Consulting, LLC dba Certified Homecare Consulting will provide you and certain of your personnel with consulting services to assist you in developing pro forma budgets, preparing licensure applications, and managing the accreditation process to help you reach your goal of becoming a Medicare Certified Home Health Agency (CHHA).

If you do not hold validly current Non-Medical Accreditation you must pay the $10,000 Non-Medical Accreditation Fee in a lump sum when you sign the Franchise Agreement. In consideration for the Non-Medical Accreditation Fee, our affiliate Home Faith Consulting, LLC dba Certified Homecare Consulting will provide you and certain of your personnel with consulting services to assist you in developing pro forma budgets, preparing licensure applications, and managing the accreditation process to help you reach your goal of becoming a Non-Medical Homecare Agency.

If you are creditworthy we may offer to finance the initial fees as further described in Item 10 of this Disclosure Document. We reserve the right to change, modify or discontinue this program at any time.

These initial fees are uniform but may change in the future. All fees are fully earned and non­refundable.

You pay us or our affiliates no other fees or payments for services or goods before your Franchised Business opens.

Item 6

OTHER FEES

BFM Franchise Disclosure Document                                                            14
April 1, 2014

BFM Franchise Disclosure Document                                                            15
April 1, 2014

BFM Franchise Disclosure Document                                                            16
April 1, 2014

NOTES:

(1)       All fees are uniformly imposed by and payable only to us and are payable through Electronic Funds Transfer. You must authorize your bank to accept automatic withdrawals for all fees to us through EFT of the stated amount from your bank into our bank account when due. You must provide us with all documents necessary to direct your bank to honor these pre-authorized bank debits. (See Franchise Agreement, Addendum H – EFT Authorization). All fees

BFM Franchise Disclosure Document                                                            17
April 1, 2014

are non-refundable.

• The term “Gross Revenue” will mean and include the total of all revenue and income to which You receive from the provision of services and products to clients of the Franchised Business or any other source, whether or not sold or performed from the Franchised Business and whether received in cash, in services in kind, from barter and/or exchange, or otherwise. You will deduct from your Gross Revenue (but only if they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to clients, if the taxes are separately stated when the client is charged and if the taxes are paid to the appropriate taxing authority. You will also deduct from your Gross Revenue the amount of any documented refunds, charge backs, credits and allowances you give in good faith to clients. All barter and/or exchange transactions to which Franchised Business furnishes services and/or products in exchange for goods or services to be provided to Franchised Business by a vendor, supplier or client will, for the purpose of determining Gross Revenue, be valued at the full value of the goods and/or services so provided to Franchised Business.
• Royalty, Advertising Fund and Licensing Software Fees will begin from the date the Franchised Business is opened and continue through the term of the Franchise Agreement. You must also submit a weekly client activity report in a form provided by us. The client activity report must be delivered to us by the following Thursday of each week for the preceding week’s activities. Additional reports may be required.
• Interest rate will be 1.5% per month or if the maximum interest rate permitted by state law is less, then interest will be charged at the lesser allowed rate. Interest begins from the date payment was due.
• Home Agency Manger Software is our proprietary client management software which we license to you. You will pay a monthly Licensing Software Fee based on the number of client you serviced the preceding month as follows: From 0 to 9 clients – $50.00, 10 to 19 clients -$250, 20 to 49 clients -$500, 50 to 100 clients – $1,000, over 100 clients – $2,000.
• You must maintain high standards of quality service. You will cooperate with us by maintaining high standards in the operation of the Franchise Business and you must, at all times, give prompt, courteous and efficient service to your clients. All Franchised Business work must be performed competently. The Franchised Business must, in all of its dealings, adhere to the highest standards of honesty, fair dealing and ethical conduct. If we feel that you did not fairly handle a client complaint, we may intervene and satisfy the client. You must reimburse us for all our costs associated with satisfying your client.

Except as provided above, there are no provisions for any of these fees to increase during the term of your Franchise Agreement. We do not finance any fee except as provided in Item 10 of this Disclosure Document.

Item 7

BFM Franchise Disclosure Document                                                          18
April 1, 2014

ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT

BFM Franchise Disclosure Document                                                            19
April 1, 2014

Notes:

• We offer some financing; see Item 10 for details.
• We recommend that you consult a franchise attorney to review the Franchise Agreement before you sign it. In addition you should consult a competent attorney about state health and licensing regulations and other laws that may apply to your Franchised Business. You may also wish to consult other advisors such an attorney about business entity formation and an accountant. While you may sign the Franchise Agreement individually, you may elect to form a legal business entity, and transfer the franchise interest to that entity.
• You may initially open your Franchised Business at your home as long as your home is located within your Designated Territory and operating a home based business complies with zoning regulation and licensing requirements. However, once the Medicare Certification process begins you are required to lease, if you do not own, a business office to operate your Home Care Agency Franchised Business. You will need approximately 400 to 500 square feet of space. Rent for space varies widely between areas, and could range anywhere from $800 to $1,200 per month. Drive-by visibility is not essential since Home Care Agency services are not sold on a walk-in basis.
• In addition to Accreditation fees, certain states require licensure for personal care services and homemaker companion services. You should investigate licensure requirements for the state in which you will operate and the licensure fees that may be required.
• Costs vary widely from location to location and from state to state. Required coverages include, without limitation, casualty, liability, non-owned auto insurance, surety /employee bonding and workers compensation. Workers compensation insurance rates vary widely by state

BFM Franchise Disclosure Document                                                          20
April 1, 2014

and the cost of your workers compensation coverage may be significantly higher. You must obtain and maintain insurance, at your expense, as we require, in addition to any other insurance required by law or otherwise, described in greater detail in our Operations Manual. We may periodically change the types and amounts of coverage required under the insurance policies, based on changes in circumstances, if the changes apply to all Home Care Agency Franchised Businesses. All insurance policies must name us and any affiliates that we designate as additional insureds and give us at least 30 days’ prior written notice of termination, amendment, or cancellation. You must provide us with certificates of insurance evidencing your insurance coverage no later than 10 days before your Franchised Business opens and annually as prescribed in our Operations Manual.

• Estimate of labor needed to get your Home Care Agency Franchised Business ready to open for business, and extra labor expense you will incur while training your staff both before and after opening. Based on past experience of our affiliates and on managements’ experience at other types of home healthcare businesses, the typical start up period during which labor costs can be expected to run higher than normal is 12 to 18 months.
• Except as otherwise described in the notes below, the above table provides an estimate of your initial investment for a new Home Care Agency business and the costs necessary to begin operation of your Agency. All costs listed in the table are estimates only. We relied on our experience to compile these estimates. Although we have tried to be as accurate as possible in our estimate of your initial investment, you should review these figures carefully with a skilled business advisor before you decide to purchase the franchise. We cannot guarantee that you will not have additional expenses in starting your business. Your actual costs will depend on factors which include the location of your Home Care Agency Franchised Business; licensing requirements; how much you follow Home Care Agency’s recommended methods and procedures; your overall management and business skills; local economic conditions; competition; the prevailing local wage rate; and the amount and effectiveness of your advertising and promotion. All payments to us are non-refundable. Any refund of payments made to various vendors will depend on the terms you arrange with those vendors.

Item 8

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You may initially operate as a home based business, however, once the Medicare Certification process begins you are required to lease, if you do not own, a business office to operate your Home Care Agency Franchised Business. We do not provide specifications for leased space nor restrict the location of your office, if it is located within your Designated Territory, and complies with local zoning and licensing requirements.

Our affiliate, Home Faith Consulting, LLC is the required vendor which will provide you and

BFM Franchise Disclosure Document                                                            21
April 1, 2014

certain of your personnel with consulting services to assist you in developing pro forma budgets, preparing licensure applications, and managing the accreditation process to help you become a Medicare Certified Home Health Agency and receive your Non-Medical Accreditation.

You must purchase the Home Care Agency Start of Care and HR Packets printed materials from our designated third party vendor, which produces them to our specifications, including required language.

You must purchase payroll, bookkeeping and billing services from our designated third party vendor.

To insure 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 as we may periodically prescribe in the Operations Manual or otherwise in writing; and except as required by law or state licensing requirements you must refrain from deviating from these methods, standards and specifications without our prior written consent. We may revise the contents of the Operations Manual, and you must comply with each new or changed standard and specification. You must at all times insure that your copies of the Operations Manual are kept current and up to date.

You must designate at least one general manager, who, if not you, must be approved by us and attend and complete, to our satisfaction, the initial training program. We approve managers based on their relevant experience and an individual interview we may conduct with each candidate. You must sell or offer for sale only those products and services as we have expressly approved for sale in writing; sell or offer for sale all types of services we specify; refrain from any deviation from our standards and specifications without our prior written consent; and discontinue selling and offering for sale any products or services which we may, in our discretion, disapprove in writing at any time. You must maintain in sufficient supply of inventory (as we may prescribe in the Operations Manual or otherwise in writing), and use at all times, only those products acquired from a supplier or suppliers we designate or approve, and those other products, materials, supplies, furnishings, equipment and signs as conform with our standards and specifications.

You must purchase and install, at your expense, all furnishings, equipment including facsimile machine, telephone(s), computer, printer and signs as we may reasonably direct periodically; and refrain from installing or permitting to be installed on or about the premises of your Home Care Agency Franchised Business, without our prior written consent, any furnishings, equipment, signs or other items not previously approved as meeting our standards and specifications.

All products and services offered or sold at or through the Franchised Business, and other products, materials, supplies, furnishings, and equipment used in the operation of the Franchise Business, must meet our then-current standards and specifications, as established in the

BFM Franchise Disclosure Document                                                          22
April 1, 2014

Operations Manual or otherwise in writing. You must purchase all products and services for which we have established standards or specifications solely from suppliers that we have approved (which may be us or our affiliate(s)). These suppliers do not make payment to us because of transactions with you and other franchisees. Except as disclosed above, none of our members owns an interest in any of our approved suppliers.

We do not receive any payments of any kind from suppliers or vendors based on the leases or purchases paid by franchisees.

We do not provide any direct material benefit (such as right to acquire additional franchises or territories) to franchisees for use of approved suppliers, and you will not receive any direct material benefit for using designated or approved sources.

We may negotiate purchase arrangements with suppliers (including price terms) for the benefit of our franchisees, but have no obligation to do so.

If you desire to purchase products or equipment from a party other than an approved supplier, you must submit to us a written request to approve the proposed supplier, together with evidence of conformity with our specifications as we may reasonably require. We do not charge a fee for your requests. We will use our best efforts, within 30 days after our receipt of the completed request and completion of the evaluation and testing (if required by us), to notify you in writing of our approval or disapproval of the proposed supplier. As a condition of permitting a supplier to produce any item bearing the Marks, we may require the vendor to sign a license agreement obligating the vendor to meet quality standards and respect our trademark rights. We have no obligation to approve any request for a new supplier, product or service. If we do not render a decision in writing, the request is deemed denied. You must not sell or offer for sale any products of the proposed supplier until our written approval of the proposed supplier is received. We may periodically revoke our approval of particular products or suppliers when we determine, in our sole discretion, that these products or suppliers no longer meet our standards. Upon receipt of written notice of revocation, you must cease to sell any disapproved products and cease to purchase from any disapproved supplier. You must only offer and sell products to retail clients for their use and consumption and not for resale. We grant and revoke approval of suppliers based on their ability to meet our standards and specifications and their ability to support our financial and operational requirements.

We formulate and modify specifications and standards imposed upon franchisees by evaluating the market acceptance of products and the financial stability of suppliers. We do not issue our specifications and standards to franchisees for approved suppliers, nor are criteria for suppliers approval made available to franchisees or suppliers who are not our approved vendors.

We will inspect your Franchised Business as often as we deem necessary to ensure that our standards and specifications are maintained. If we find anything that does not meet our

standards, you will be required to correct them within a reasonable period of time. If you fail to

BFM Franchise Disclosure Document                                                            23
April 1, 2014

take corrective action, we may close the Franchised Business until the corrective action is taken or otherwise terminate your Franchise Agreement. At any time after five (5) years from the date you open the Franchised Business, we may require you to remodel your Franchised Business at your expense to bring it up to current standards.

The estimated proportion of the cost of goods and services purchased or leased from us, our affiliates, or other approved suppliers, to the total cost of purchases and leases required in establishing and operating the Franchised Business, is 20%.

We do not have a purchasing or distribution cooperative related to our franchisees.

Item 9

FRANCHISEE’S OBLIGATIONS

This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.

BFM Franchise Disclosure Document                                                            24
April 1, 2014

Item 10

BFM Franchise Disclosure Document                                                            25
April 1, 2014

FINANCING

Except as stated below, we, our agents, and our affiliates offer no financing arrangements, and we, our agents, and our affiliates do not receive payment or other consideration for the placing of financing or do not guaranty any note, lease or obligation you enter into for your Home Care Agency Franchised Business.

We may offer financing to qualified credit worthy prospective franchisees for the purchase of a Home Care Agency for the Initial Fees (Franchise Fee, Medicare Certification Fee, Non-Medical Accreditation Fee disclosed in Item 5). Financing is not offered for any other purpose either in connection with the establishment or the operation of a Home Care Agencyfranchised business.

If you qualify and accept financing from us, you must sign the Promissory Note and the Security Agreement attached as Addenda F and G to the Franchise Agreement. The Promissory Note will provide for an annual interest rate of 12%. In no event will we charge an interest rate that exceeds the maximum allowed by law. The Promissory Note must be paid by electronic funds transfer in scheduled monthly installments beginning not more than 24 months from the date of signing the Franchise Agreement and paid in full within 36 months thereafter. The Promissory Note may be prepaid at any time without penalty. You and your spouse must personally guaranty the Promissory Note. We will retain a security interest in your Franchised Business or other assets.

Under the Promissory Note, you waive: (1) the right to claim or enforce any right of offset, counterclaim, recoupment or breach in any action brought to enforce your obligations under the Note (Section 7); (2) the right to demand, presentment for payment, notices of nonperformance or nonpayment, protest and notice of protest, notice of dishonor, diligence in bringing suit and notice of acceleration (Section 8); (3) questions of governing law, personal jurisdiction and convenience of forum and venue (Section 14 and 16); (4) trial by jury (Section 15); and (5) all claims that you may have against us and any persons and entities related to us, other than our obligations under the Franchise Agreement accruing on or prior to the date of the Promissory Note (Section 18) If any of the events of default described in Section 5 of the Note occur, the entire unpaid principal and accrued interest of the Note will become immediately due and payable without further notice. Under Section 9 of the Note, you agree to pay all of our expenses and costs of collection, including attorneys’ fees and expenses, court costs, costs of sale and costs of maintenance and repair we incur in connection with the enforcement of the Note, collection of amounts due and sale or other disposition of any collateral.

Under the Security Agreement, you waive: (1) questions of governing law, personal jurisdiction and convenience of forum and venue (Sections 7.3 and 7.5); and (2) trial by jury (Section 7.4).

A default under the Franchise Agreement or any other agreement with us constitutes a default under the Promissory Note (Section 5) and the Security Agreement (Section 5). A default under the Promissory Note or the Security Agreement constitutes a default under the Franchise

BFM Franchise Disclosure Document                                                          26
April 1, 2014

Agreement, which gives us the right, among other remedies, to terminate the Franchise Agreement. We require you to sign a Personal Guaranty to the Franchise Agreement. We may assign or discount any Promissory Note you sign.

Item 11

FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND

TRAINING

Except as listed below, we are not required to provide you with any assistance. Before you open your business, we will:

1. We recommend that you begin your Franchised Business operations from your personal residence, if it is located within your territory. This approach will save you a substantial amount of money at the outset, when your cash flow is likely to be at its lowest level. However, once the Medicare Certification process begins you are required to lease, if you do not own, a business office to operate your Home Care Agency Franchised Business. We do not approve or impose requirements or restrictions on your choice of business office site as long as it is in your territory and complies with licensing requirements, if any. We are not responsible for assisting you in finding a site for your business office, nor are you required to obtain our approval of your site.
2. Designate your territory within which you will open a Home Care AgencyFranchise. (Franchise Agreement – Section 3 and Addendum A)
3. Loan you a copy of our Operations Manual, which contains mandatory and suggested specifications, standards, methods, and procedures. The Operations Manual will be in one or more of the following: loose-leaf or bound paper volumes; bulletins; notices; letters, videos; CDs; DVDs and/or other electronic media; online postings; e-mail and /or electronic communications; facsimiles; intranet; or any other medium capable of conveying the Operations Manual’s contents. The Operations Manual is confidential and remains our property. We may modify the Operations Manual in the future, but the modifications will not alter your status and rights under the Franchise Agreement. (Franchise Agreement – Section 8)

The Table of Contents of the Operations Manual appears as Exhibit J to this Disclosure Document. The total number of pages in our Operations Manual is 75 pages.

1. Give you general assistance in the opening of your business. We will also make our personnel available to help you plan pre-opening promotional programs. You will need to give us at least 30 days notice of the planned opening date of your business if you wish us to provide you with pre-opening assistance. (Franchise Agreement – Section 8)

BFM Franchise Disclosure Document                                                          27
April 1, 2014

1. e) Train you and your key management person in our system as described in detail below under Training. (Franchise Agreement – Section 12)

During the operation of your business, we will:

1. Continue to loan you the Operations Manual, and furnish you with any and all updates and other Manuals and training aids that are developed in the future. Any training videos/films we make will be made available to you at our cost. (Franchise Agreement – Section 8)
2. If we deem it necessary or advisable, give you individual or group guidance and assistance, by personal visit or telephone, or by newsletters, brochures, reports or bulletins or electronically. This help may include advice on maximizing sales and profits, marketing, employee hiring and training, client service, vendor relations, equipment maintenance, or any operating problems you may be experiencing. (Franchise Agreement – Section 8)
3. Allow you to participate in programs that may be developed and offered by us on a system-wide basis to our franchisees. (Franchise Agreement – Section 8)
4. Provide you with copies of our available advertising material, if you desire, at our cost. You may also develop and use your own advertising material, but samples of all advertising, promotional and marketing materials or plans that we have not prepared or previously approved must be submitted for our approval before you use them. Any plans or materials submitted by you to us that have not been approved or disapproved, in writing, within 15 days of receipt by us, will be deemed disapproved. You may not use any advertising or promotional materials that we have disapproved. (Franchise Agreement – Section 20)
5. Provide you with additional training programs that we may develop in the future. There is charge for mandatory and optional programs you attend, in addition you must pay the travel, hotel and other related expenses of yourself and anyone attending with you. Our current charge for additional training programs is $500 per person. We reserve the right to increase this fee after the first 12 months. We may charge for optional training programs. (Franchise Agreement – Section 12)
6. As we deem appropriate, test new products, services, equipment or technologies, and if they meet our standards and specifications, we will make them available to you. (Franchise Agreement – Section 8)
7. We will host a minimum of one page on the Home Care Agency Internet website with contact and other information specific to your Franchised Business, and provide you with no less than one e-mail address, which you must use as the Franchised Business’ e-mail address. (Franchise Agreement – Section 8)
8. We may periodically but not more than once every year conduct a National or Regional

BFM Franchise Disclosure Document                                                          28
April 1, 2014

Conference. You are required to attend the Conference, and to pay all expenses incurred in connection with attending the event including transportation cost, meals, lodging and living expenses. The duration, curriculum and location of the Conference will be determined by us.

Advertising

You must pay to the Advertising Fund a monthly fee in the amount up to 2% of your Gross Revenue based on the preceding month’s Gross Revenue. See Items 6 and 9 of this Disclosure Document.

We and our designees will have the sole authority to direct all advertising, marketing, and promotional programs of the Advertising Fund and will have sole discretion over all aspects of those programs, including the concepts, materials, and media used and the placement and allocation of them. The Advertising Fund will be used, in our discretion, to pay for developing and conducting activities that we believe will enhance the goodwill associated with the Marks and the image of the Home Care Agency System and to pay for the administration of the Advertising Fund and its programs. Up to 15% of the total Advertising Fund annually may be used to cover our or our designee’s costs and overhead for activities reasonably related to the administration of the Advertising Fund, including costs and salaries of our or our designee’s personnel who perform services for the Advertising Fund. The Advertising Fund’s activities and programs may include, among other things, conducting and preparing advertising, marketing, public relations, client surveys, and/or promotional programs and materials, and any other activities that we believe will enhance the image of the System, such as preparing and conducting radio, television, print, and Internet-based advertising campaigns; utilizing social and business networking media sites and other emerging media or promotional tactics; developing, maintaining, and updating our Website on the Internet; direct mail advertising; marketing surveys; employee advertising and/or public relations agencies; purchasing promotional items; providing promotional and other marketing materials and services to the businesses operating under the Home Care Agency System. Advertising Fund contributions will be used primarily for advertising on the national, regional or local level. (Franchise Agreement, Section 20)

All franchisee, company and affiliate-owned Home Care Agency Businesses will contribute to the Advertising Fund on the same basis, and the expenditure of funds will be limited to advertising, promoting and marketing the goods and services offered by our System. If you are not yet contributing to the Advertising Fund you may be excluded from receiving benefits from the activities of the Advertising Fund. Advertising funds will not be used to sell additional franchises. In our most recent fiscal year, we did not collect any advertising fees.

Except as indicated above, we do not receive payment for providing goods or services to the Advertising Fund. We will maintain separate bookkeeping accounts for the Advertising Fund and may, but will not be required to cause Advertising Fund contributions to be deposited into one or

BFM Franchise Disclosure Document                                                            29
April 1, 2014

more separate bank accounts. The Advertising Fund is not a trust, and we are not a fiduciary or trustee of the Advertising Fund or the monies in the Advertising Fund. However, we may, in our discretion, separately incorporate the Advertising Fund or create an Advertising Fund trust, over which we may be the trustee, into which Advertising Fund contributions may be deposited. (Franchise Agreement- Section 20)

Excess funds not spent in any given fiscal year will be carried forward to the next fiscal year. Although once established the Advertising Fund is intended to remain in existence, we reserve the right to terminate the Advertising Fund only after all monies have been spent for advertising and promotion. The Advertising Fund will not be audited. You will have the right to review an annual accounting of the Advertising Fund’s expenditures upon written request. (Franchise Agreement- Section 20)

We will spend funds to benefit the Home Care Agency franchise system. This does not mean, however, that expenditures in your territory will be equivalent or proportionate to your contribution. We may place additional regional or national advertising at our own expense, but we are not obligated to do so. (Franchise Agreement – Section 20)

You may develop your own advertising plans and materials provided they are submitted to us in advance for review and approval. You must obtain our prior written approval of all advertising plans and materials at least 30 days before the start of any plans unless they have been previously approved by us. You are not permitted to use any plans or materials until they have been approved by us in writing and must promptly discontinue use of any advertising or promotional plans and materials upon our request. Any plans or materials submitted by you to us that have not been approved or disapproved, in writing, within 15 days of receipt by us, will be deemed disapproved. You agree that upon termination, transfer, or expiration of this Agreement, you will immediately remove all advertising that you control and notify all advertising sources that your advertising must be removed and/or canceled immediately. For advertising that cannot be immediately canceled, you are responsible for any and all costs related to such advertising until such time as it can be canceled or it expires.(Franchise Agreement – Section 20)

We have the power to require Advertising Cooperatives to be formed, changed, dissolved or merged. If an Advertising Cooperative is established, we may designate a geographic area in which three or more Franchised Businesses are located as an area in which to establish an Advertising Cooperative. The Advertising Cooperative’s members will include all Home Care Agency businesses operating in the geographic area, including us and our affiliates, if applicable. We may also require that you join an existing Advertising Cooperative operating in a geographic area encompassing or near your Franchised Business. We will determine how any Advertising Cooperative is organized and governed, but the Advertising Cooperative’s members are responsible for its administration and determination of contribution levels. All Advertising Cooperatives will be governed by written documentation generated and/or designated by us. Such documentation is available for Advertising Cooperative member review. All material decisions of the Advertising Cooperative, including contribution levels, will require

BFM Franchise Disclosure Document                                                          30
April 1, 2014

the affirmative vote of at least 51% of all Home Care Agency businesses operating within the Advertising Cooperative’s area (including those that we and our affiliates operate, if any), with each Home Care Agency Business receiving one vote. If an advertising cooperative is established your participation will be funded from your Advertising Fund royalty contribution. The terms of the cooperative advertising will be established by us at that time it is established. Funds contributed to an Advertising Cooperative will not be utilized to solicit new franchise sales. (Franchise Agreement – Section 20)

You may have as many telephone numbers and telephone directory listings for your Home Care Agency Franchised Business as you choose. However, we will own all rights to the telephone listings, and you must transfer them to us on the expiration, termination, repurchase or transfer of your franchise, at your expense. You must sign an authorization that grants us the right to change, transfer or terminate your telephone listings, your email addresses, domain names and comparable electronic identities, on your behalf upon expiration, termination, repurchase or transfer of your franchise.

Computer System

We do not provide specification for your computer system. We do not control the brand or purchase of your computer hardware or operating software or its maintenance. The current required software for the computer system is our proprietary Home Agency Manager Software to record, manage and keep current all client activity. You must also obtain and pay for maintenance and support and upgrades for Microsoft Office Professional 2010 or newer, and QuickBooks Online, QuickBooks Pro 2014, or other similar (current) accounting application. We do require that you have high-speed Internet access, and that you use an internet browser created or updated in the last 180 days (e.g. Internet Explorer 11.0, Mozilla Firefox 18, Google Chrome 24, Safari 6, etc.). You have sole and complete responsibility for: (1) the acquisition, operation, maintenance, and upgrading of your Computer System; (2) the manner in which your Computer System interfaces with our and any third party’s computer system (including secure data transfer between your Computer System and any other device, in accordance with all applicable laws and regulations); and (3) any and all consequences if the Computer System is not properly operated, maintained, and upgraded. The annual cost of required maintenance, support, updating and upgrading is estimated at between $1,000 and $2,000.

Internet/e-commerce

We restrict, designate, and have the right to approve, or control all of your electronic media, including Internet activities, and e-mail marketing correspondence, digital content, and electronic communications if any. This includes any websites and all Social Networking and Marketing activities, including Twitter, Facebook, LinkedIn or any social media outlets. This also includes any group or social buying platforms, promotions or campaigns. You must follow the most recent rules and regulations published in our Operations Manuals or other manuals we have created regarding the upkeep and communications sent out via these channels.

BFM Franchise Disclosure Document                                                            31
April 1, 2014

You are not permitted to establish a website on the Internet using any domain name containing the words Homecareare.com, .net, .biz, .org or any other top level domain or variation thereof. We maintain the Homecarecare.com Internet website and provide you with access to our website and a page contained within our website for your Franchise. We may require that you utilize e-commerce products or services designated by us.

Any digital or electronic content published must be within brand communication standards and is subject to our approval. All digital imagery bearing our Marks are subject to our approval.

Due to the speed of electronic communication, all instructions by us which are deemed to restrict, designate or control e-commerce activities must be responded to within 24 hours.

You must subscribe to high-speed Internet access through cable or DSL that we designate in our Operations Manual. The cost varies geographically from $100 to$200 to set-up and $50 to $150 per month.

Your high speed Internet access and our proprietary Home Agency Manager Software will permit you to connect with our corporate office and with franchisees to share information, exchange ideas, and transfer data subject to your and our compliance with HIPAA (the Health Insurance Portability and Accountability Act of 1996) or other applicable laws relating to confidentiality of patient records.

We have the remotely access your records to monitor your productivity and we have no limitations on our ability to do so. You are required to install the software we designate into your Computer System so as to permit our access. (Franchise Agreement- Section 9)

We also reserve the right to restrict, designate and have the right to approve or control any existing or future (not yet developed) Fan Page or other advertising or social networking services of the Franchised Business, including the sending of bulk e-mail or facsimiles, other than in accordance with the guidelines in the Operations Manual or otherwise as we specify in writing.

Franchise Agreement

The length of time between signing your Franchise Agreement and actually opening for business should be three to six months. This time period is generally determined by how long it takes you to complete training and initiate marketing. You must open your Home Care Agency Franchised Business within six months of signing your Franchise Agreement. If you fail to open your Home Care Agency Franchised Business within 12 months of signing the Franchise Agreement, we have the right to terminate the Franchise Agreement.

The Medicare Certification and Non-Medical Accreditation process will take approximately 12

BFM Franchise Disclosure Document                                                          32
April 1, 2014

to 18 months. The factors that affect this timetable are unforeseeable delays in licensure, if any. If you fail to be granted Medicare Certification and Non-medical Accreditation within 24 months of the execution of this Agreement we have the right to terminate the Franchise Agreement.

Training

Anyone who attends the training program must complete the program to our satisfaction. We may extend the training program for anyone who fails to successfully complete it. There is no charge for initial training of up to two persons, but you must pay the travel and living expenses for you and your people during the training program. Initial Training will last for approximately one week, and will be conducted at our affiliate location in Boston, Massachusetts. Training programs are scheduled and run as needed. Yours will be scheduled so that you complete it two to six weeks before opening your business. The training program will be conducted by one or more of our personnel identified in Item 2. (Franchise Agreement – Section 12)

An outline of the initial franchisee training program is as follows:

INITIAL TRAINING PROGRAM

BFM Franchise Disclosure Document                                                            33
April 1, 2014

SELF-PACED VIDEO TRAINING PROGRAM

BFM Franchise Disclosure Document                                                            34
April 1, 2014

The Video Training Program is a self-paced program conducted via Video tapes provide to you after you have completed your initial training. The time to complete the Video Training varies depending on how much time you can devote to training and how quickly you are able to absorb the materials. We expect Video Training to take you two weeks to complete.

NOTES:

• It is the nature of the Business that all aspects of training are integrated, that is, there are no definitive starting and stopping times.
• The training program is supervised by Jan Jane Doe and operated by trainers which are approved by the Home Care Agency operation team. Jan Jane Doe is provided in Item 2. The training program includes training by a variety of personnel including managers and administrative personnel.

Item 12

TERRITORY

Under your Franchise Agreement, we will grant you a defined territory (“Designated Territory”) for your Home Care Agency Franchised Business within which you will operate a single Franchised Business using the Marks and System. Your Franchise business office must be located within your Designated Territory at a location that you will

BFM Franchise Disclosure Document                                                            35
April 1, 2014

determine and that we need not approve. You do not need our permission before relocating your Franchised Business as long as it is in your Designated Territory. Your Designated Territory will be a fixed geographical area, defined by the borders of specified U.S. Postal Service ZIP Codes as of the date that you sign the Franchise Agreement. We will list the ZIP Codes in Addendum A to your Franchise Agreement. Population within your Designated Territory will be approximately 250,000 people (but no fewer than 200,000) when your Designated Territory is established. The population in Your Designated Territory will be determined by a review of any combination of records of any local or state agency or commission charged with tracking population count in Your Designated Territory. Depending on the configurations of and populations within ZIP Codes, we may in our sole judgment, grant a franchisee a designated territory with a population higher than 250,000. Your Designated Territory could vary in size from a city in an urban location to a county in a more suburban area. If the U.S. Postal Service moves, alters or eliminates the ZIP Code(s) assigned to you, we may re-define the boundaries of your Designated Territory to correspond as nearly as possible to the territorial border defined in your Franchise Agreement. Our decision on this matter is final. You maintain the rights to your Designated Territory even if the population increases.

Except as noted above, your business office must be within your Territory unless we give you a written waiver of this requirement.