[Item 5: INITIAL FEES]

ITEM 5 INITIAL FEES

Franchise Agreement

Initial Franchise Fee

You must pay to us a lump sum initial franchise fee of $60,000 (the "Initial Franchise Fee") to establish a single Studio under a Franchise Agreement. The Initial Franchise Fee is due upon the signing of the Franchise Agreement. The Initial Franchise Fee will be fully earned by us upon payment and is not refundable, in whole or in part, under any circumstance.

Separately, if you (or your affiliates) already own and operate a BFT Studio, then the Initial Franchise Fee for your second franchise will be reduced to $50,000. If you (or your affiliates) already own and operate at least two BFT Studios, then the Initial Franchise Fee for your third or subsequent franchise(s) will be reduced to $40,000. These reduced Initial Franchise Fees are conditioned on the prerequisite that you (and your affiliates) are in compliance with all franchise agreements and any other agreement between us (and our affiliates) and you (and your affiliates).

Pre-Sales and Soft Opening Retail Inventory Kit

Prior to opening your Studio, you must purchase the following from us: (i) opening inventory that includes branded apparel, including t-shirts, towels, exercise clothing and related accessories; and (ii) a pre-sales start-up package that typically includes (a) marketing and promotional items such as a branded EZ Up tent, feather flags and portable fitness and other exercise equipment to be utilized in conjunction with your pre-opening support program described below, and (b) branded apparel that is specific to the location of your Studio (collectively, the "Pre-Sales and Soft Opening Retail Inventory Kit"). The components will be determined in coordination with our team to ensure brand consistency and optimal product selection. The cost for the Pre-Sales Retail Package will be collected directly by the Retail team at the start of the Pre-Sales Phase, while the Soft Opening retail inventory cost will be included as a line item in the equipment invoice. While you currently purchase the Pre-Sales and Soft Opening Retail Inventory Kit from us, we may designate that you purchase it directly from a third-party Approved Supplier. [Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]

1. The following is added to the end of Item 4:

Neither we, our affiliate, predecessor, officers, or general partners or any other individual who will have management responsibility relating to the sale or operation of franchises offered by this Disclosure Document have, during the 10-year period immediately preceding the date of the Disclosure Document: (a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code; (b) obtained a discharge of its debts under the U.S. Bankruptcy Code; or (c) was a principal officer of a company or a general partner in a partnership that either filed as a debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained a discharge of its debts under the U.S. Bankruptcy Code during or within 1 year after that officer or general partner of the franchisor held this position in the company or partnership.

1. The following is added to the end of Item 5:

We apply the initial franchise fee to defray our costs for site review and approval, sales, legal compliance, salary, and general administrative expenses and profits.