Pinnacle Builders Franchise Company, LLC

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Pinnacle Builders Franchise Company(PBFC)

• Franchise Turnkey Building Companies
• Entrepreneurs
• Real Estate Professionals
• Provide Builders - not connected with a Franchise
  - Support Services
• Train and Certify sales personnel as Pinnacle
  Construction Specialist (PCS)

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Our Franchise Business Model Leverages resources
and time Creates wealth regardless of skills
and experience Produces revenue without employees
Requires no professional licenses Operates with
minimal time requirement
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The backbone of the Pinnacle Builders Franchise
success is the Eagle Eye System
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• The money is made in the building business before
  the first nail is hammered.
• The Eagle Eye system administratively
  supervises and handles all of the construction
  backroom activities.

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Why Pinnacle - The Beginning

• Identified The Needs
• Home Builders
• Have Inconsistent and/or Non-existent Profits
• Lack Administrative, Marketing, Sales and
  Management Skills
• High Failure Rate
• Home Buyers
• Have Difficulty In Finding Qualified Builders
• Suffer When Builders Do Not Perform To Acceptable
  Levels

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Why Pinnacle - The Beginning

• Developed Systems and Solutions
• Home Builders
• Home Buyers
• Beta Tested Systems and Solutions
• Franchised Systems and Solutions (11/2005)

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Pinnacle Builders - Today

• Seven Franchises
• Denver, NC
• Statesville, NC
• Lake Norman, NC
• Asheville, NC
• Western North Carolina, NC
• Sherrills Ford, NC
• North Augusta, SC

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Pinnacle Builders - Today

• 10 Homes
• 7 complete, 3 under construction
• 9 PCS Agents

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Entrepreneur Franchise
When you purchase a Pinnacle Builders Franchise
you will have a uniquely integrated means of
marketing, designing, financing, building and
selling homes -
profitability
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Your Investment Immediately puts you into a
field-tested, proven system to manage all areas
of your own home building business
Entrepreneur Franchise
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Why A Franchise?
Franchise Success

• 550,000 individual franchises
• A new franchise opens nationally every five
  minutes
• Annually, 800 Billion of goods and services are
  purchased through franchises

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• Why
• Purchase a
• Pinnacle
• Builders
• Franchise?

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Pinnacle Builders Competitive Advantage

• Pinnacle Builders is the ONLY Company Providing
  a Complete Turnkey Solution for Building
  Residential Homes

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Pinnacle Builders Competitive Advantage

• Modest Initial Investment
• Entrepreneur Investor Franchise
• 27,500
• Setup Marketing Program Fee
• 1500
• Low Working Capital Requirement
• Start and successfully build your business with
  modest working capital

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Pinnacle Builders Competitive Advantage

• Unique Offerings
• The ONLY franchise company offering a complete
  disciplined managed approach to home building
• The ONLY franchise company offering a 100 money
  back guarantee

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Pinnacle Builders Competitive Advantage

• Unique Offerings
• We make money ONLY when you build a home
• No monthly or annual Royalty Fees
• Service fee is 4 of construction cost
• Advertising Fund is . 5 of Contract Price
• We do more than just sell you the rights to a
  system
• We work for you

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Our Entrepreneur Franchise
Includes

• Exclusive Franchise Territory
• No Other Pinnacle Builders Franchise
• Only you can direct mass marketing
• Other Franchisee cannot advertise in publications
  exclusive to your territory
• Franchisees can build in each others territory if
  clients leads them there

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Our Entrepreneur Franchise
Includes

• General Contractor
• Identification
• Qualification
• Website
• For your Franchise
• Promotion on Corporate Website

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Our Entrepreneur Franchise
Includes

• Online Project Accounting System
• We maintain it
• Input all data
• Vendors, sub contractors, supplies, etc
• Estimates, budgets
• Accounts payable
• Checks for your printing
• Bank account reconciliation
• Year end reporting
• 1099s
• Summary project reports for annual tax return
• You can access the system anytime, anywhere for
  check printing and reports

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Our Entrepreneur Franchise
Includes

• Marketing material
• Eagle Eye Building system
• Home Plans
• Plan Modification
• Contracts
• Training
• Three PCS agent training programs

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Our Entrepreneur Franchise
Includes

• Change Orders
• In-house Construction Loans
• Spec Loans
• Take Out Loans
• Construction Permanent Loans
• and more

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What in it for me
Profit
289,500 sales price (SP) 50,000 lot
cost 249,000 Contract Price (CP) 59,831 gross
profit (25 markup of CP) 6,640 franchise
fee (4 of CC) 830 advertising fund (.5
of CP) 11,975 Marketing fee (5.00 of CP)
40,386 Construction Profit (NP) 24232 GC
(assume on time /budget so 60 of NP) 16154
Franchisee (40 of NP)
28129
Total to Franchise (5 Marketing Fee 40 of NP)
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What in it for me
Profit
Using the same formula 400,000 sales price
40,224 total to Franchisee 600,000 sales
price 63,209 total to Franchisee
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PCS Leverage
Pinnacle Builders Lake Norman has 5 PCS agents.
If each PCS agent sold just 2 homes per year (10
contracts) and average contract to build 300,000
then the potential using PCS agents at 22,108
per sale would be 221,080
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PCS Leverage
Franchise Owners Love PCS Agents
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• How the Pinnacle Builders
• System Works

• Lot selected
• House plan selection (PBFCs or other)
• House plans customized if required
• House plans cost estimated
• Data loaded into system software
• Contract created and signed

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• How the system works

• Pre-construction meeting held
• Finishing schedule is confirmed
• Financing in place
• Construction begins
• System check balances takes over

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System Check Balances

• Purchase orders issued
• Sub-contractors complete task
• Invoices received by PBFC
• Invoices sent to General Contractor (GC) for
  approval
• PBFC creates checks
• Franchisee and/or GC signs and Franchise mails

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System Check Balances

• Draw request processed
• Lenders inspector verifies percentage of
  completion
• Lenders processes draw request
• Money transferred
• Certificate of occupancy issued
• PBFC accomplishes accounting, including year end
  tax accounting for the project

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Win-Win-Win

• Buyer
• General Contractor
• Franchise Owner

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The Buyer

• Benefit from cooperative purchasing power from
  national vendor accounts
• Can be assured that their home will be on-time
  on-budget because of our Eagle Eye building
  system
• Buyers get a custom homes. Most Buyers prefer
  a new custom home built to their own needs and
  desires

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The Buyer

• Buyers can use their own plans or choose from our
  4000 plans and customize until their heart is
  content
• Can trust our builders. This is critical to
  their home purchasing and building experience.
• Does not fall victim to the high failure rate of
  independent builders because of our Pinnacle
  Qualified Builder Program
• 67 Fail within the first 3 years

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• 5 Years Success Record
• Financial Stability
• Good References
• Inspectors
• Sub-Contractors
• Supplies and Vendors
• Past Client

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• Minimum 4 Homes Built Per Year
• Quality Driven Mindset
• Proven Attention To Details
• Qualifies for 3rd Party Structural Warranty
  Program

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The Buyer

• Have a third party advocate to make sure the
  building process - including financial control of
  the project goes as expected

Thats Why Buyers are Eager to Build Within the
Pinancle Builders System
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The Builder

• Challenge is hitting consistent margins. Most are
  not even profitable
• Results in a 67 failure rate in the first 3
  years
• Second only to restaurants owners
• There are a ton of pitfalls when it comes to
  controlling the bottom line

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The Builder

• Typical Builder not lacking in construction
  expertise
• Historically they lack skills in finance,
  management and marketing and sales
• They need the Pinnacle Builders System

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The Builder
Under Pinnacle Builders System

• Does not have to market or make the sale
• Does not have to handle the multitude of backroom
  activities common to the home building industry

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The Builder
Under Pinnacle Builders System

• Has the time to do what they do best
• Recruit qualified sub-contractors
• Stay in the field to supervise the
  sub-contractors

Thats why Builders are anxious to join our
system
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Getting Started

• Receive Uniform Franchise Offering Circular
  (UFOC)
• Select territory for analysis (TAR)
• Gather data required for franchise application
• Review UFOC and ask follow-up questions
• 10 day waiting period required
• Sign UFOC and PBFCs Franchise Agreement
• Pay franchise fee and marketing fee