What are all the fees that Annex Brands franchisees must pay, as detailed in Items 5 and 6?

Express Retail Center. Except in the circumstances described below, for an express retail center, you must pay us a $17,500 initial franchise fee when you sign the franchise agreement.

If you are an honorably-discharged veteran of the U.S. armed forces and meet our requirements, under our participation in the International Franchise Association's VetFran Program, we will discount the initial franchise fee by 25% ($4,375), and you will pay us a $13,125 initial franchise fee. The express retail center must be built out and operational within 365 days after you sign the franchise agreement or we may terminate the franchise (see below). If you pay a discounted initial franchise fee, you must own and operate the retail center for at least 1 year after the date of opening; otherwise, if you sell the retail center before the end of the 1-year period, you must pay to us the discount amount of $4,375 when the express retail center is sold.

• g) $5,000 if Franchisee already owns and operates at least 1 Center or 1 Commercial Logistics Center and this Agreement is for a standard Center or flex Center that will be converted from a qualifying existing business providing the same services to the public; provided that the Center must be operational within 365 days after this Agreement is signed and must be owned and operated by Franchisee for a minimum of 1 year thereafter; and provided further that if the Center is sold before the completion of 1 year of operation, Franchisee must pay to Franchisor the discounted amount of the initial franchise fee ($30,000) upon sale of the Center;

You must deposit with us, before or at initial training, $3,000 for a standard, flex or express retail center. We will use the deposit to pay the cost of building permits for your retail center. We will partially refund the deposit to you if the building permits cost less than $3,000.

You must pay us on signing of the franchise agreement a one-time online financial training portal license and administrative fee ("license and administrative fee") of $330 for a standard retail center, flex retail center, or express retail center.

If you convert an existing business to a standard or flex retail center, you must pay us a $4,000 conversion training fee when you sign the franchise agreement, unless you already own and operate one of our retail centers or one of our Commercial Logistics Centers.

If you acquire an existing retail center by transfer, you must pay us a $4,000 training and processing fee, before initial training or before transfer, whichever occurs first, unless you already own and operate one of our retail centers or one of our Commercial Logistics Centers.

Note 10: If you request or require special on-site training or management, you must pay our thencurrent daily fee per trainer or manager (currently $300) and all reasonable travel, lodging and meal expenses of our personnel who travel outside the San Diego, California or Centennial, Colorado area.

Note 11: If you are acquiring an existing retail center (transfer), we require that you and the selling franchisee use the services of a 3rd party escrow company, title company, or escrow/closing attorney ("Escrow Agent") to administer certain aspects of the transfer process including the exchange of monies, execution of transfer documents, and other related items. The fees for this service that are charged by the Escrow Agent must be paid by you and/or the selling franchisee. Escrow fees typically range from $1,000 to $4,000 and vary depending on the particular location (geographic market, items escrow prepares, etc.) and other factors.

Note 14: If we believe your unaudited financial statements have material misstatements or omissions, we may require you to provide us with audited financial statements prepared at your expense by an independent certified public accountant who is acceptable to us.

Note 1: Unless otherwise noted, all fees are payable to us, are uniformly imposed and are nonrefundable.