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FRANCHISE DISCLOSURE DOCUMENT Cellairis Franchise, Inc. 6485 Shiloh Roaad Building B, Unit # 100 Alpharettta, GA 30005 (678) 513-4020 [email protected] www.cellairis.com The franchisee will sell wireless device accessories including cellular telephone accessories and related services such as cell phone and wireless device reepair from one of three types of outlets. The three types of outlets are (1) a Retail Merchandising Unit (an “RMU”); (2) an Interactive Kiosk; or (3) a Full Store. The total investment necessary to begin operation of (1) a Cellairis RMU franchise ranges from $43,060 to $90,775, (2) an Interactive Kiosk franchise ranges from $90,860 to $163,275, and (3) a Full Store franchise ranges from $182,300 to $397,025. This includes (1) $25,225 to $58,600 that must be paid to the franchisor or its affif liate for an RMU, (2) $699,925to $128,100 that must be paid to the franchisor or its affiliate for an Interactive Kiosk, and (3) $129,875 to $316,950 that must be paid to the franchisor or its affiliate for a Full Store. This disclosure document summarizes certain provisions of your franchise agreement and other information in plain English. Read this disclosure document and alll 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 governmental agency has verified the information contained in this document. The terms of your contract will govern your franchise reelationship. Don’t rely on the disclosure document alone to understand your contract. Read all of your contract carefully. Show your contract and this disclosure document to an advisor, like a lawyer or an 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 aas “A Consumer’s Guide to 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, D.C. 20580. You can also visit the FTC’s home page at www.ftc.gov for additional informationn. 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. Issuance Date: April 10, 2014 L:\Cellairis\7191-001\Renewal 2014\FDD.2014.standard.final.clean.docx 1 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 DOCUMENT. Call the state franchise administrator listed in Exhibit B 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 IN ORDER 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 CERTAIN DISPUTES WITH US BY ARBITRATION ONLY AT A SUITABLE LOCATION WITHIN THE BOUNDARIES OF THE CITY OF ATLANTA. OUT-OF-STATE ARBITRATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. WE HAVE THE RIGHT TO BRING CERTAIN ACTIONS, CLAIMS, AND SUITS IN THE FEDERAL OR STATE COURT IN GEORGIA. IT MAY COST YOU MORE TO ARBITRATE OR LITIGATE WITH US IN GEORGIA THAN IN YOUR OWN STATE. 2. THE FRANCHISE AGREEMENT STATES THAT GEORGIA LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS. 3. YOU MUST OPERATE THE FRANCHISE ONLY AT THE LOCATION SPECIFIED WHEN THE FRANCHISE IS PURCHASED. IF YOU SUBSEQUENTLY LOSE THE RIGHT TO OPERATE AT THE ORIGINAL LOCATION, WE HAVE THE RIGHT TO TERMINATE YOUR FRANCHISE. 4. YOU DO NOT RECEIVE AN EXCLUSIVE TERRITORY. WE MAY ESTABLISH COMPANY OWNED AND FRANCHISED OR LICENSED OUTLETS ANYWHERE, AND MAY ESTABLISH OTHER CHANNELS OF DISTRIBUTION AND SELL OR DISTRIBUTE ANY PRODUCT OR SERVICE TO THE GENERAL PUBLIC, UNDER THE SAME AND/OR DIFFERENT TRADEMARK, IN COMPETITION WITH YOU. 5. YOU MUST PAY ROYALTY FEES OF AT LEAST $800 PER MONTH FOR YOUR FIRST YEAR, $850 PER MONTH FOR YOUR SECOND YEAR, $900 PER MONTH FOR YOUR THIRD YEAR, $950 PER MONTH FOR YOUR FOURTH YEAR, AND $1,000 PER MONTH FOR YOUR FIFTH YEAR, EVEN IF THE FRANCHISE HAS NO REVENUE. 6. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE. We use the service 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 make sure to do your own investigation of the franchise. Effective Date: See the next page for state effective dates. 2 ATTACHMENT “1” STATE EFFECTIVE DATES The effective dates of registration of this Disclosure Document or exemption in the states listed below are: California Connecticut April 2, 2008 Florida June 9, 2013 Hawaii Illinois Indiana Kentucky May 19, 2006 Maryland Michigan Minnesota Nebraska May 16, 2006 New York North Dakota Rhode Island South Carolina April 11, 2008 South Dakota Texas June 5, 2006 Utah July 17, 2013 Virginia Washington Wisconsin In all other states, the effective date of this Franchise Disclosure Document is the issuance date of April 10, 2014. 3 TABLE OF CONTENTS Item 1 The Franchisor and any Parents, Predecessors, and Affiliates.......... 5 Item 2 Business Experience……………………………………………….. 8 Item 3 Litigation………………………………………………………….... 10 Item 4 Bankruptcy…………………………………………………………. 15 Item 5 Initial Fees………………………………………………………….. 15 Item 6 Other Fees………………………………………………………….. 17 Item 7 Estimated Initial Investment………………………………………. 23 Item 8 Restrictions on Sources of Products and Services………………… 34 Item 9 Franchisee’s Obligations…………………………………………... 44 Item 10 Financing…………………………………………………………... 45 Item 11 Franchisor’s Assistance, Advertising, Computer Systems, and Training………………………………….. 46 Item 12 Territory…………………………………………………………..... 55 Item 13 Trademarks………………………………………………………… 56 Item 14 Patents, Copyrights and Proprietary Information………………….. 58 Item 15 Obligation to Participate in the Actual Operation of the Franchise Business………………………………. 59 Item 16 Restrictions on What the Franchisee May Sell…………………….. 60 Item 17 Renewal, Termination, Transfer and Dispute Resolution…………. 62 Item 18 Public Figures…………………………………………………….... 68 Item 19 Financial Performance Representations…………………………… 68 Item 20 Outlets and Franchisee Information………………………………... 69 Item 21 Financial Statements……………………………………………….. 83 Item 22 Contracts…………………………………………………………… 83 Item 23 Receipts…………………………………………………………….. 83 EXHIBITS A State-Specific Addendum B State Administrators C Agents For Service of Process D Franchise Agreement E Sub-license Agreement F Personal Guaranty and Subordination Agreement G Conditional Lease Assignment Agreement H Cellairis Franchised Stores I Audited Financial Statements J General Release K List of Former Franchises L WorldPay Customer Processing Agreement M Franchise Disclosure Questionnaire N Receipt 4 Item 1 THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES The franchisor is Cellairis Franchise, Inc. and is referred to in this disclosure document as “we”, “us”, or “Cellairis”. The person who buys a Cellairis® franchise is referred to as “you” in this disclosure document. If you are a corporation, limited liability company, or other legal entity that affords protection from liability, certain provisions in the agreements described in this disclosure document also apply to your owners by virtue of our requirement that owners personally guarantee your obligations under the agreements. We are the owner of a system (the “System”) for the operation of Cellairis® branded retail interactive kiosks with four sides of products in display cases operated with the employee(s) behind a counter with storage space behind the counter (an “Interactive Kiosk”), branded retail merchandising units which are movable display centers which hold and display Products (defined below) on all four sides (“RMU” and also referred to as “cart”), branded traditional full retail stores which may be in-line with other stores and is likely to be operated in a shopping mall, freestanding building, or in an in-line retail plaza such as a lifestyle center or strip center (“Full Store”), and other physical facilities (collectively “Business Units”), which specialize in the sale of wireless device accessories including cellular telephone accessories, Parts (defined below) and other related products (the “Products”) and specified services including cellular telephone and wireless device repair (the “Services”), as well as the use and sale of parts and equipment necessary to perform the Services (the “Parts”) under marks licensed and authorized for use in the Business Units, including the “Cellairis” ® mark (the “Marks”). We were organized as an S-corporation in Georgia on August 9, 2005. We do not do business under any other name. We have no predecessors but we have an affiliated distributor of products, see the description of Global Cellular, Inc. below. Our principal place of business is 6485 Shiloh Road, Building B, Unit #100, Alpharetta, Georgia 30005. The name and address of our agent for service of process is stated on Exhibit “C” to this disclosure document. We have no parent or predecessor. We have never offered any other franchise and we do not operate any Business Units for this franchise.

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