CMIT SOLUTIONS

Data Based On: 136 franchisees who operated their outlets for the period of January 1, 2024 – December 31, 2024.

* 1. Average Gross Revenue: Calculated as a weighted average of gross revenues for 'Franchisees with Multiple Outlets' and 'Franchisees with One Outlet'. - Multiple Outlets: 56 franchisees * $1,460,756 - One Outlet: 79 franchisees * $487,310 - Weighted Average = (56 * $1,460,756 + 79 * $487,310) / (56 + 79) = $891,109.82 2. Median Gross Revenue: Not provided as a single overall median for all franchisees. Segment-specific medians are: - Franchisees with Multiple Outlets: $1,060,911 - Franchisees with One Outlet: $288,773 3. Best Guess Profit Range (Estimated Gross Profit minus Estimated Technician Costs): Calculated by first estimating a weighted average Gross Margin (GM) and Technician Cost as a percentage of total revenue for each franchisee segment, based on the revenue breakdown examples provided in 'Part III: Gross Revenue Breakdown Examples' on page 5. Assumptions for Gross Margin Calculation: - Revenue breakdown examples (Managed Services, Professional Services, Hardware & Software, Other) from Page 5 are representative. - Professional Services revenue uses the 'Gross Margin (Managed Service)' percentage. - Two scenarios for 'Other' revenue category's Gross Margin: 0% (low estimate) and the corresponding 'Managed Service' GM (high estimate). A. Estimated Gross Margin for Multiple Outlets (56 franchisees, Avg Revenue $1,460,756): - Revenue Mix (from 2-outlet example): MS+PS (71.4%), HS (26.7%), Other (1.9%) - GM rates (from Table 2c): MS+PS (73%), HS (29%) - Low Estimated GM: (0.714 * 0.73) + (0.267 * 0.29) + (0.019 * 0.00) = 0.59865 - High Estimated GM: (0.714 * 0.73) + (0.267 * 0.29) + (0.019 * 0.73) = 0.61252 - Low Estimated Gross Profit: $1,460,756 * 0.59865 = $874,570.62 - High Estimated Gross Profit: $1,460,756 * 0.61252 = $894,841.69 B. Estimated Gross Margin for One Outlet (79 franchisees, Avg Revenue $487,310): - Revenue Mix (from 1-outlet example): MS+PS (60.041%), HS (36.5%), Other (3.5%) - GM rates (from Table 2d): MS+PS (75%), HS (26%) - Low Estimated GM: (0.60041 * 0.75) + (0.365 * 0.26) + (0.035 * 0.00) = 0.5452075 - High Estimated GM: (0.60041 * 0.75) + (0.365 * 0.26) + (0.035 * 0.75) = 0.5714575 - Low Estimated Gross Profit: $487,310 * 0.5452075 = $265,630.04 - High Estimated Gross Profit: $487,310 * 0.5714575 = $278,506.77 C. Estimated Technician Cost as % of Total Revenue: - Multiple Outlets (Table 3c & 2-outlet example): 35% of (MS+PS) Revenue, which is 71.4% of Total Revenue. So, 0.35 * 0.714 = 0.2499 (24.99% of total revenue) - One Outlet (Table 3e & 1-outlet example): 28% of (MS+PS) Revenue, which is 60.041% of Total Revenue. So, 0.28 * 0.60041 = 0.1681148 (16.81% of total revenue) - Total Technician Cost for Multiple Outlets: $1,460,756 * 0.2499 = $365,033.72 - Total Technician Cost for One Outlet: $487,310 * 0.1681148 = $81,939.81 D. Estimated Profit (Gross Profit - Technician Cost) for each segment: - Multiple Outlets Low: $874,570.62 - $365,033.72 = $509,536.90 - Multiple Outlets High: $894,841.69 - $365,033.72 = $529,807.97 - One Outlet Low: $265,630.04 - $81,939.81 = $183,690.23 - One Outlet High: $278,506.77 - $81,939.81 = $196,566.96 E. Weighted Average Estimated Profit Range for all 135 franchisees: - Low End: (56 * $509,536.90 + 79 * $183,690.23) / 135 = $318,856.26 - High End: (56 * $529,807.97 + 79 * $196,566.96) / 135 = $334,800.27 Note: This profit estimate accounts for Cost of Goods Sold and Technician Labor but does not include other potential operating expenses (e.g., rent, marketing, administrative salaries).