chisees chose to spend more than $60 per square foot.

Note 8: This expense includes, copier/scanner/fax, telephone equipment, desks, chairs, file cabinets, program inventory, supplies, the Customer Relationship Management Invoicing System and miscellaneous equipment, and estimated telephone company deposits. The items associated with the program inventory and supplies will need to be purchased; most cannot be leased.

Note 9: Assumes all furniture and equipment is purchased new.

Note 10: This estimate includes all your hardware costs, software license fees paid to third parties, and costs for assistance from an information technology (IT) service to help with initial set up of your network, firewall, and internet access, and for annual maintenance agreement with that IT service. The annual maintenance agreement is optional, but we recommend it. You may obtain your office computer hardware from any reputable supplier. You must ensure that all programs and applications running on your computer are legally licensed and that you have up-to-date anti-virus software installed on each machine. We will provide support regarding any IT issue related to the Software you are using in connection with the Brain Balance Program® (CRM or email, for example), but you will be responsible for computer hardware, Internet access, other software installed, and security, which includes ensuring that your location is PCI compliant.

Note 11: We estimate that the range given will be sufficient to cover general office supplies, such as files, folders, paper, and writing utensils for the first three (3) months of the operation of the Franchised Business, including marketing and advertising materials that must be purchased from an approved vendor.

Note 12: You may use an approved third-party call center, or employ an experienced sales person, who will be solely responsible for responding to incoming leads, provided you obtain our prior written approval. Our estimate includes only the cost of

monthly enrollment in a Call Center. Costs for leads and assessments are included in our estimate of Additional Funds.

• Note 13: The Brain Balance Program® Customer Relations Management System enables you to track leads, assessments, enrollments, and customer service inquiries and to prepare operations reports and to access a centralized helpdesk.
• Note 14: The cost to implement a credit card processing system varies based on the vendor you choose. Some vendors will waive fees to acquire the hardware, while others will charge you an implementation fee and an annual PCI compliance fee. In addition to the cost to set up your credit card processing system, you will incur transaction fees when you accept credit card payments. We expect that the merchant services agreement transaction fee average 2.25% to 3.5% depending on the type of payment.. If you do not use our recommended supplier and you pay credit card servicing transaction fees that are higher than the set percentage, we will deduct only the set percentage for credit card transactions from your GR; conversely, if you are able to negotiate a lower credit card servicing transaction fee than what we have negotiated for all Brain Balance® Centers, you will be permitted to retain the differential for the GR on which the Royalty is based.
• Note 15: You are required to acquire and use an accounting software that meets our standards (currently QuickBooks), which you may either purchase or license on a monthly basis. In addition, we will require you to use the services of a professional bookkeeper for at least the first six months of operation that must be approved by the Franchisor. In our discretion, we can continue to require you to use a professional bookkeeping service.
• Note 16: This is an estimate of the capital you will need to support additional expenses, such as payroll to cover required personnel including a Center Director (if you are not serving in this role) and a Program Director, cleaning service and supplies, repairs and maintenance, postage, credit card fees, supplies, and related expenses for the first three months, to the extent your collected revenue does not cover these costs. Amounts will vary depending on the salaries, provisions of various leases, and utilities' policies. New businesses often generate a negative cash flow. This is an estimate of your expenses during the first three (3) months of the operation of your Franchised Business. It is based on recent franchisee experiences in our system.
• Note 17: These costs will vary significantly depending on the distance traveled and the type of accommodations selected.
• Note 18: Prior to opening the Franchised Business, you will need to advertise for available staff positions as well as the opening of your franchise Center within your community.
• Note 19: None of the fees listed in this table and paid to us are refundable. The refundability of the fees paid to third parties is determined by the individual

refund policies of those third parties, although you should anticipate that most of them will not be refundable, including fees you pay to general contractors, signage providers, utility companies, wages you pay to staff, or fees you pay to most professional services providers.

Neither we nor any affiliate finances any of the initial investment.

Brain Balance® Satellite Center Estimate

| 4930-3912-1981.3 | 16 | |---|---| | This document was downloaded from franchimp.com. All the information on this website is published in good faith and for general information purpose only. FranChimp.com does not make any warranties about the completeness, reliability, and | | | accuracy of this information. Any action you take upon the information you find on this website (FranChimp.com), is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of our website. | |

| 4930-3912-1981.3 | 17 | |---|---| | This document was downloaded from franchimp.com. All the information on this website is published in good faith and for general information purpose only. FranChimp.com does not make any warranties about the completeness, reliability, and | | | accuracy of this information. Any action you take upon the information you find on this website (FranChimp.com), is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of our website. | |

| Type of Expenditure | Estimated Cost | Method of Payment | When Due | To Whom | |---|---|---|---|---| | | | | | Payment Is to | | | | | | Be Made |

commercial space is estimated to be between $10 and $50 per square foot but may be higher in major metropolitan areas. Non-commercial space would need to be approved through the home office.

Note 6: The figures in the chart are based upon the estimated average premiums calculated by the insurance brokers designated by us who have negotiated rates with carriers nationally as first years' premium for Commercial general liability and Professional Liability coverage, including, but not limited to, education services ($1,000,000 per occurrence and $3,000,000 in the aggregate), commercial automobile liability insurance covering vehicles that are owned, nonowned, or hired by the Franchised Business, providing bodily injury and property damage, Employment Practices Liability Insurance ("EPLI"), and workers compensation and disability insurance, if required. (See Item 8.)

Note 7: Our estimate for construction costs is based on you following our recommended build-out guidelines for a leased space of the square footage we recommend (see Note 4, above). If you choose to upgrade to more luxurious building finishes than we recommend, or if you lease and build out a significantly larger space, your cost may exceed our estimate. These estimates are based on build out costs as reported to us by franchisees for centers that opened 2019-2021. During this time franchisees received an average of approximately $61,000 in Tenant Improvement Credits ("TI"), and we have factored that into our costs. Franchisees reported TI ranging from zero to $75,000. Our estimates also removed abnormally low outliers caused by conditions such as a family member being a contractor, or build-outs completed at no cost by the landlord, as these are unusual circumstances we do not expect to be replicated in our estimates. The cost per square foot, during this time had both an average and median of $35/sq. foot (excluding TIs), and the range was as low as $6 and as high as $70. Approximately 32% of all build-outs were less than $20 per square foot. 24% were $20-$40 per square foot, 32% were $40-$60 per square foot, and 12% of franchisees chose to spend more than $60 per square foot.

Note 8: This expense includes, copier/scanner/fax, telephone equipment, desks, chairs, file cabinets, program inventory, supplies, the Customer Relationship Management Invoicing System and miscellaneous equipment, and estimated telephone company deposits. The items associated with the program inventory and supplies will need to be purchased; most cannot be leased.

Note 9: Assumes all furniture and equipment is purchased new.

Note 10: This estimate includes all your hardware costs, software license fees paid to third parties, and costs for assistance from an information technology (IT) service to help with initial set up of your network, firewall, and internet access, and for annual maintenance agreement with that IT service. The annual maintenance agreement is optional, but we recommend it. You may obtain your office computer hardware from any reputable supplier. You must ensure that all programs and applications running on your computer are legally licensed and that

you have up-to-date anti-virus software installed on each machine. We will provide support regarding any IT issue related to the Software you are using in connection with the Brain Balance Program® (CRM or email, for example), but you will be responsible for computer hardware, Internet access, other software installed, and security, which includes ensuring that your location is PCI compliant.

• Note 11: We estimate that the range given will be sufficient to cover general office supplies, such as files, folders, paper, and writing utensils for the first three (3) months of the operation of the Franchised Business, including marketing and advertising materials that must be purchased from an approved vendor.
• Note 12: A Satellite Center will rely on its related standard center to process leads.
• Note 13: The Brain Balance Program® Customer Relations Management System enables you to track leads, assessments, enrollments, and customer service inquiries and to prepare operations reports and to access a centralized helpdesk.
• Note 14: The cost to implement a credit card processing system varies based on the vendor you choose. Some vendors will waive fees to acquire the hardware, while others will charge you an implementation fee and an annual PCI compliance fee. In addition to the cost to set up your credit card processing system, you will incur transaction fees when you accept credit card payments. We expect that the merchant services agreement transaction fee will average 2.25% to 3.5% depending on the type of payment.. If you do not use our recommended supplier and you pay credit card servicing transaction fees that are higher than the set percentage, we will deduct only the set percentage for credit card transactions from your GR; conversely, if you are able to negotiate a lower credit card servicing transaction fee than what we have negotiated for all Brain Balance® Centers, you will be permitted to retain the differential for the GR on which the Royalty is based.
• Note 15: You are required to acquire and use an accounting software that meets our standards (currently QuickBooks), which you may either purchase or license on a monthly basis. In addition, we will require you to use the services of a professional bookkeeper for at least the first six months of operation that must be approved by the Franchisor. In our discretion, we can continue to require you to use a professional bookkeeping service.
• Note 16: Capital will be needed to support on-going expenses, such as payroll, office rental expenses, cleaning service and supplies, repairs and maintenance, postage, credit card fees, advertising – beyond the minimum $5,000 local advertising minimum, supplies, phones, utilities, and miscellaneous expenses, to the extent your collected revenue does not cover these costs. Amounts will vary depending on the salaries, provisions of various leases, and utilities' policies. New businesses often generate a negative cash flow. The amount should be sufficient to cover your

expenses during the first three (3) months of the operation of your Franchised Business.

Note 17: These costs will vary significantly depending on the distance traveled and the type

of accommodations selected.

Note 18: Prior to opening the Franchised Business, you will need to advertise for available

staff positions as well as the opening of your franchise Center within your

community.

Note 19: None of the fees listed in this table and paid to us are refundable. The

refundability of the fees paid to third parties is determined by those third parties, although you should anticipate that most of them will not be refundable, including fees you pay to general contractors, signage providers, utility companies, wages you pay to staff, or fees you pay to professional services providers. In some instances you may be able to obtain a refund for certain things, such as noncustomized furniture or basic supplies that you purchase at a store, but your ability to obtain a refund will depend on the return and refund policies of each individual supplier.

Neither we nor any affiliate finances any of the initial investment.

ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Required Purchases from Us

Our program offers your clients two complimentary sessions with a nutrition coach and access to a program portal supplied by us. You are required to offer and comply with this program. If you want to provide additional nutrition sessions to clients, you are required to use our nutrition coach.

We are the only supplier of our proprietary product which you must license from us and use in your Center.

You will be required to purchase and provide program kits to your enrolled students. These are distributed by our designated vendor which produces and distributes them on our behalf.

If you want to sell The Brain Balance Program® to clients who will participate virtually, rather than in person at your Center, and you do not want to provide virtual coaching services yourself, you may outsource your virtual coaching to us.

We are the only approved supplier for these goods and services and we do not approve alternate suppliers for the goods or services you acquire or license from us.

Required Purchases from Specified Vendors

We require you to license and use a specific accounting and program management software, our CRM system which is a customized program adapted for the Brain Balance Program® in which

all leads and student records must be entered and maintained, including all assessments, reports of assessments, progress conference reports and program data, and to license and use Google Workspace accounts that encompass email addresses that we will provide to you. You will pay us a license fee for access to these programs.

With the exception of workers compensation and disability insurance or where otherwise required by law, you must obtain all of your insurance policies through the insurance broker that we have selected as our preferred vendors. Our current, specific insurance requirements are listed at the end of this Item 8.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–30)