[Item 6: OTHER FEES]

Notes to Item 6:

(1) We or our affiliates impose all the fees in this table, you pay them to us or our affiliate, and we (or our affiliate) do not refund them. All fees in this Item 6 are uniformly imposed unless otherwise noted.

• (2) "Gross Revenue" means the total of all receipts derived from gross rental receipts and other revenue, whether the receipts are evidenced by cash, credit, checks, services, property, or other means of exchange.

Gross Revenue excludes only sales tax receipts that you must by law collect from customers and that you actually pay to the government, promotional or discount coupons to the extent that Franchisee realizes no revenue, and employee receipt of services, if free, or any portion not paid for by an employee.

On a monthly basis, we will calculate the Gross Revenue generated from the operation of your Beauty Bungalows Franchise from reports generated by the software programs we require you to use.

You must authorize us to make electronic funds transfer debits from your bank account for payment of the Royalty Fee and any other fees you owe to us.

• (3) Technology Fees include amounts for technology services that we pay for on your behalf.

We will automatically deduct the Technology Fees in the same manner that we deduct your royalty payments.

Currently, the Technology Fee is $150 per month and the first month will be assessed pro rata from the date on which you begin receiving the technology services. We reserve the right to increase the fee by providing you with written notice of any change at least 30 days prior to the implementation of the new fee amount.

• (4) Training for you, your Manager, and one additional person (a total of three (3) people)) is included in the Initial Franchise Fee.

Additional charges are only applied if you choose to train more than three people.

Training fees can be increased or decreased by us at any time in our discretion.

• (5) Ongoing assistance by telephone is included.

We will charge you the Additional Assistance fee only if you require additional assistance at your Beauty Bungalows Franchise location.

Fees for additional assistance can be increased or decreased by us at any time in our discretion.

• (7) You must maintain insurance policies in amounts as specified by us periodically in the Manual.

Insurance coverage must include general liability, combined single limit, bodily injury andproperty damage insurance for premises operations, and all other occurrences against claims of any person, employee, customer, agent, or otherwise.

• (8) We may establish and require a marketing cooperative in a geographic area in which two or more Beauty Bungalows are located ("Marketing Cooperative").

The Marketing Cooperative's members will include all Beauty Bungalows operating in the geographic area, including those operated by us and our affiliates, if applicable.

We may require you to join a Marketing Cooperative existing or established in a geographic area encompassing your Beauty Bungalows Franchise.

All material decisions of the Marketing Cooperative, including contribution levels, will require the affirmative vote of at least 51% of all Beauty Bungalows operating within the Marketing Cooperative's area (including those that we and our affiliates operate, if any)

We may hold periodic regional or national conferences to discuss on-going changes in the industry, operational techniques, studio rental developments, training, bookkeeping, accounting, advertising programs and new service procedures. We may require you to attend these conferences at our then-current conference attendance fee, currently $500 per attendee. If we charge a conference fee, you will be required to pay the fee regardless of your attendance at the conference (See Item 6).