[Item 5: Initial Fees]

Item 5: Initial Fees

Franchise Fees

You will pay us a nonrefundable "Initial Franchise Fee" of $54,900 when you sign the Franchise Agreement. If you give us notice of termination within seven days after execution of your Franchise Agreement, we will return the Initial Franchise Fee within 14 days after receiving your notice of termination.

We also offer multi-unit development agreements under which you agree to open and operate an agreed number of Chatime Stores within a specific geographic area according to an agreed development schedule. If you enter into a multi-unit development agreement, you will pay us a non-refundable multi-unit development fee at the time of signing the multi-unit development agreement. The amount of the multi-unit development fee will depend on the number of locations to be opened. For each location, you will have to sign a separate individual unit franchise

agreement in our then-current form of franchise agreement, which may be different than our current form of franchise agreement. The multi-unit development fee ("Multi-Unit Development Fee") will serve as a full credit against the initial franchise fees for each location (including the first location), so that you will not be required to pay an Initial Franchise Fee at the time you sign each Franchise Agreement for each location.

The Multi-Unit Development Fee is as follows: For two locations, the fee is $98,900. For three locations, the fee is $134,900. For more than three locations, the fee is $134,900 plus $20,000 for each additional location. For ten locations, the fee is $274,900. The multi-unit development fee is fully-earned by us upon receipt and is not refundable under any circumstances, regardless of the number of units you open.

[Item 6: Other Fees]

Notes:

• (1) Type of Fee. All fees paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. If you give us notice of termination within seven days after execution of your Franchise Agreement, we will return the Initial Franchise Fee within 14 days after receiving your notice of termination. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers.
  • (2) Brand Marketing Fee. You will pay us 2.0% of Gross Sales of your Chatime Store

on the tenth day of each month based on the Gross Sales for the previous month (the "Brand Marketing Fee"). In our discretion, we may use the Brand Marketing Fee to pay the costs of (i) developing and conducting international or regional advertising and promotional campaigns including advertising in international or regional publications, (ii) engaging advertising agencies and marketing and research consultants, (iii) providing you with samples of brochures and marketing materials used by us or our affiliates for amendment and use by you in your Territory, (iv) coordinating and administering the activities described in (i) to (iii) including reasonable overhead, administrative, and employee expenses, (v) materials and printing, and (vi) any other marketing activity for the purpose of developing the Chatime brand internationally, regionally, or in your Territory.

We may combine the Brand Marketing Fee with other marketing fees provided by other franchisees. If you request any additional marketing assistance that is not within the scope of assistance provided for by the Brand Marketing Fee, then you will pay any additional fees we charge for such additional marketing assistance upon demand. You will not use any marketing or promotional materials unless such marketing or promotional materials have been first approved in writing by us.

[Item 5: Initial Fees]

Opening Inventory and Supplies

You must purchase from our affiliates an initial inventory of food products, supplies and equipment before opening your Chatime Store. The assortment and number of these items will vary depending on the size, configuration, and storage capacity of the Chatime Store, the specifics of the location, the season of the year, and other factors. The estimated cost of the opening inventory is $10,000 to $16,000. The cost is non-refundable.

Technology Systems

You must purchase from us or suppliers approved by us our then designated point of sale system and associated operating technology stack. The estimated cost of these technology systems is $10,500 to $14,000. The cost is non-refundable.

Uniforms

You must also purchase from us or suppliers approved by us the required uniforms for your Chatime Store personnel, the number of which will vary depending on the size of your Chatime Store and your staffing needs. The estimated cost of uniforms is $500 to $1,500. The cost is nonrefundable.

Initial Training

We will provide two weeks of initial training for up to four attendees, to be conducted by one or two of our representatives. You must pay us a non-refundable initial training fee of $5,000 for each Franchise Agreement. You will pay for you and your employee's reasonable accommodations, meal and related travel expenses. We estimate that the amount of travel and living expenses you will spend on you and your employees will be $200 per person per day.

[Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training]

If you fail the Initial Training program, you will be required to complete an additional training following the Initial Training at a place and time we determine. We may charge you a prorated fee

for such additional training and you will pay that fee upon receipt of our invoice prior to opening the outlet. (Clause 3.1(2) of the Franchise Agreement).

We will provide you with additional on-site advice, guidance, and support in connection with the opening of your Chatime Store for a fee. You will pay us reasonable compensation and reimburse us for all associated costs and expenses including, without limitation, costs for compensation, travel, accommodations, and meals, upon your receipt of our invoice. (Clauses 3.2 and 3.3of the Franchise Agreement).

[Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training]

Fees are payable for each element of the technology stack either to the designated supplier directly or to us if so designated.

We estimate the monthly license fees payable for the technology stack to range from $700 to $950.