Does Body20 require franchisees to purchase certain other equipment and supplies from suppliers or service providers that Body20 has designated or approved?

eserve the right to designate us or our affiliates as approved or required suppliers of other goods or services in the future.

Currently, we require you to purchase from suppliers or service providers that we have designated or approved (i) certain other equipment and supplies, (ii) interior graphics and exterior signage, (iii) the Technology System, (iv) music licenses, and (v) payment processing services. We may require you to purchase other goods or services from approved or designated supplies or services providers in the future.

When you develop and construct your Studio, we have the right to require you to obtain our prior written approval of any project managers, architects, engineers, or designers that you would like to use before you engage them.

One of Sequel Brands' officers owns an interest in us and our affiliates, and we are a supplier with whom you are required to do business. None of our or Sequel Brands' officers own an interest in any unaffiliated suppliers with whom you are required or recommended to do business.

Insurance. You must obtain before you begin construction and/or development of the Studio and must maintain at all times the types of insurance and the minimum policy limits specified in the Manuals. Currently, we require you to obtain and maintain:

Comprehensive General Liability and Professional Liability Insurance. You must maintain comprehensive general liability and professional liability insurance with the following minimum limits:

• 1. Each Occurrence: $1,000,000
• 1. General Aggregate: $5,000,000 (per Studio)
• 1. Products Completed Operations Aggregate: $5,000,000
• 1. Personal and Advertising Injury: $1,000,000
• 1. Participant Legal Liability: $1,000,000
• 1. Professional Liability: $1,000,000
• 1. Damage to Premises Rented to You: $1,000,000
• 1. Employee Benefits Liability (each employee): $1,000,000
• 1. Employee Benefits Liability (aggregate): $2,000,000
• 1. Medical Expense (any one person): $5,000
• 1. Sexual Abuse and Molestation: included (not excluded)

Such insurance will include coverage for contractual liability (for liability assumed under an "insured contract"), products-completed operations, personal and advertising injury, premises liability, third party property damage and bodily injury liability (including death).

Automobile Liability Insurance. You must maintain automobile liability insurance covering liability arising from the use, operation, or maintenance of any vehicle (including owned, leased, hired, or non-owned vehicles) used in connection with the ownership or operation of the Studio. This requirement applies only if such vehicles are used in the course of operating the Studio. Coverage limits must meet or exceed the minimum compulsory requirements in your state; however, it is strongly recommended that you maintain coverage of at least $1,000,000 per occurrence as a combined single limit for bodily injury and property damage.

Workers' Compensation Insurance**.** You must maintain workers' compensation insurance for all employees as required by applicable state law, providing statutory benefits in accordance with such laws. This insurance must also include employer's liability coverage with limits of not less than $500,000 per accident for bodily injury, $500,000 per employee for bodily injury by disease, and $500,000 policy limit for bodily injury by disease.

Property Insurance. You must maintain property insurance written on a special causes of loss form with limits equal to the current replacement cost of all business personal property located at the Studio, including furniture, fixtures, equipment, and leasehold (tenant) improvements. Coverage must also include: (a) plate glass coverage with limits of no less than $25,000; (b) signage coverage with limits of no less than $10,000; and (c) business interruption and extra expense coverage with limits sufficient to cover no less than 12 months of rent.

Employment Practices Liability Insurance. You must maintain employment practices liability insurance with limits of no less than $1,000,000 per claim and in the aggregate, with a self-insured retention not exceeding $25,000. This policy must provide defense and indemnity coverage for claims brought by any of your employees, staff, or contractors alleging employmentrelated acts, errors, or omissions (including but not limited to discrimination, wrongful termination, harassment, and retaliation). The policy must also include third-party employment practices liability coverage.

You may be required to acquire additional insurance by the laws in your area. In addition, you should discuss with your insurance agent whether to purchase additional coverage beyond these minimum amounts.

All of your insurance carriers must be rated A or higher by A.M. Best and Company, Inc. (or such similar criteria as we periodically specify). These insurance policies must be in effect on or before the deadlines we specify. All coverage must be on an "occurrence" basis, except for the employment practices liability insurance coverage, which is on a "claims made" basis. All policies shall apply on a primary and non-contributory basis to any other insurance or selfinsurance that we or our affiliates maintain. We must be named as an additional insured under each policy that we require. Upon our request or as specified in the Manuals, you must provide us with certificates of insurance evidencing the required coverage. We may require additional types of coverage or increase the required minimum amount of coverage upon 60 days' notice to you.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–37)