How does the initial franchise fee for Byrider (Item 5) relate to the franchisee's potential liability (as implied by obligations in Item 9)?

Franchise Agreement. You will pay a $60,000 lump sum franchise fee when you sign the Franchise Agreement. This initial franchise fee is refundable if Byrider Franchising Partners receives written notice from you within 60 days from the date of the Franchise Agreement and you sign the form of general release required by Byrider Franchising Partners. If you purchase additional franchises, you must pay the thencurrent nonrefundable initial franchise fee for each additional franchise. As of the date of this Disclosure Document, the initial franchise fee for each additional franchise is $35,000 (if you are a Traditional Franchisee, as provided below) or $40,000 (if you are an Ultra Franchisee, as provided below). The initial franchise fee for additional franchises is subject to change at the discretion of Byrider Franchising Partners without prior notice. Except as described above, the initial franchise fee is not refundable under any circumstances.

Reduced Franchise Fee for Veterans. If you are a veteran of the U.S. Armed Forces, your initial franchise fee will be reduced by $10,000. For purposes of determining whether you qualify, a "veteran" means a person who served in the active military, naval, air, or space service, and who was discharged or released therefrom under conditions other than dishonorable. If this applies to you, you will sign the Veteran Discount Addendum (attached as Exhibit K).

Byrider Franchising Partners applies the initial franchise fee to defray its cots for site review and approval, sales, legal compliance, salary, and general administrative expenses and profits.

• 9.4 Technology System Fees. Concurrently with the execution of this Agreement, Franchisee has executed the Byrider Software Services and User Agreement which is attached hereto as Exhibit D (the "Software Agreement"). The Company's technology system is made up of four components: 1) Byrider Proprietary Software, 2) off-the-shelf software, 3) hardware, 4) Software as a Service (SaaS) platforms from third party providers as well as public cloud-based platforms, and 5) dealer management system with integrated mandatory Customer Relations Management provided at no additional cost to Franchisee. The Customer Relations Management assists with Agency and Direct Consumer Complaints. When Franchisee's franchised location receives an Agency Complaint (such as Better Business Bureau, Attorney General, Consumer Financial Protection Bureau, Media, or Private Attorney), Franchisee must investigate the complaint, forward the complaint to the Company's Customer Service, and timely respond to the Agency; when Franchisee's franchised location receives a Direct Consumer Complaint (i.e., Customer Service phone/email), Franchisee will investigate the complaint, resolve it directly, and timely report the results to Customer Service detailing the resolution or action taken. The Company's Compliance Department administers the Customer Service mailbox and phone line and tracks the complaints and responses. Franchisee is responsible for investigating, taking corrective action, and resolving these complaints. Franchisee must license and use the Byrider technology system necessary to operate day-to-day business. Franchisee must pay the cost of the technology system to the appropriate vendor as shown on Exhibit D, Appendix B, upon receiving invoices. Exhibit D, Appendix A, identifies the items that are typically required per franchised location. The Company may at times allow for substitution of items in Appendix A at the request of Franchisee if a substitution will not materially impact the Company's delivery of services or support but is under no obligation to do so.
• 9.5 Reputation Management Fee. Franchisee is required to pay to the Company for reputation management texts performed by the Company or its designee.