Can Basecamp Fitness require franchisees to purchase certain items from designated vendors?

lier or any item offered by a supplier, we will send you written notice of our revocation of an approved supplier or item.

As of the issuance date of this Disclosure Document, we have the following sole suppliers in our System:

• 1. We or a third party, depending upon the item, are currently the sole suppliers of certain items logo'd with our Marks, including any branded mobile applications, all retail products for re-sale, workout formats that you must use at your Basecamp Studio and all fitness programming. You must purchase the Build-Out Package from us. Additional items you will need to operate that are included in the Build-Out Package must be purchased from certain third parties who are the sole suppliers for these items. These items include signage, marketing materials, furniture, and fixtures.
• 1. ProVision, an affiliate of ours, is currently the sole supplier for certain fitness equipment, technology services, technology, network hardware, and security systems, including iPads, tablet devices, computers, lighting, audio and video systems, software and other related components including a point of sale system and certain cloud based technology included in the Technology & Fitness Equipment Package which you must purchase to operate your Basecamp Studio.
• 1. We have a sole supplier of studio management, billing, payment and scheduling software which you must use to operate your Basecamp Studio.

Supplies for your Basecamp Studio must be purchased from designated vendors. We are also currently a designated vendor for business supplies, and marketing materials, and we or our affiliates may be a mandatory, designated and/or preferred vendor for other items in the future. We do not currently, but we may implement a program that automatically ships supplies and/or marketing materials to your studio on a monthly basis based on your need and inventory levels at your cost.

We may require you to use our preferred vendors for your Grand Opening Program for your Basecamp Studio, which may include us or our affiliates, we may require you to submit your grand opening plans and local marketing plans for our prior approval, submit proof of purchase or other documentation to verify you have met minimum spend requirements, and show proof of performance of your advertising activity, or we may require you to implement a Grand Opening marketing plan that we develop in consultation with you and one of our preferred marketing vendors. Or, we may also require you to pay the $40,000 for the Grand Opening Program to us and we will execute the Grand Opening Program. We may require you to implement a local marketing plan that we develop in consultation with you and one of our preferred marketing vendors or we may require you to pay us the $2,500 per month you are required to spend on local advertising and we will spend it on local advertising in your market.

We may require you to work with our designated vendors that provide local marketing services, such as placing and managing digital and/or traditional paid media tactics. We may also require you to work with our designated vendor if you wish to conduct mass marketing to members or prospective members via email or text messages.

You may not send or otherwise transmit, or allow or use a third-party entity or service not approved by us to send or transmit any automated SMS text messages. All automated SMS text messages must be sent through our platform or another third-party platform approved by us.

Our affiliate, Healthy Contributions may provide services to you that are currently optional although we may make participation with all or some of Healthy Contributions incentive programs mandatory in the future. Healthy Contributions assists in the transfer, processing and distribution of funds and data for various fitness incentive programs, such as Group Memberships, Pay per visit, reimbursement, physical assessments, and vouchers and receives a fee for these services. Healthy Contributions also provides an online portal to offer, track and manage fitness membership programs. Healthy Contributions may also have exclusive arrangements with some companies that offer these incentive programs to your members and may solicit companies or organizations that have multiple offices to offer memberships or discounts on

memberships to their employees. Although currently optional, we may make participation with all or some of Healthy Contributions incentive programs mandatory in the future.

You must retain our designated architectural vendor to create a complete set of detailed Construction Documents.

We recommend, but do not require, that you use our designated vendor for construction management services to assist you with the build-out of your Basecamp Studio ("Construction Management Services"). Construction Management Services generally include consulting services regarding construction-related lease requirements, construction estimates, general contractor bidding and selection (you select the general contractor), the exterior sign review and approval process, utilities set up, obtaining building permits, site conditions and work progress, FF&E operation, maintenance and trouble-shooting; providing a punch list of open issues; construction warranty work; and obtaining occupancy approval. While our vendor provides consulting services in these various areas if you sign its construction management agreement, you alone are responsible for all fees, costs, and expenses associated with your Basecamp Studio's build-out, including plans and specifications, permits, licenses, construction and materials, FF&E, installation and insurance.

You must participate in all national campaigns, member programs (including providing reciprocal access to members of other Basecamp Fitness studios), consumer sales and satisfaction programs or surveys that we require, including loyalty programs, rewards programs, member challenges, as well as obtain and maintain all technology we require to deliver member exercise programming.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–32)