Where can a Clean Your Dirty Face franchisee find the specifications for Operating Assets?

We have developed or may develop standards and specifications for types, models and brands of required fixtures, furniture, equipment, components of the Computer System, furnishings, and signs, and other products, materials, supplies and services to be used at CYDF Facial Bars (collectively, the "Operating Assets"). You may purchase and use only the Operating Assets meeting our standards and specifications. Currently, other than minor supplies (i.e., cleaning products) and equipment (i.e., computer cables), you are required to purchase all

Operating Assets according to our standards and specifications, including fixtures, furniture, equipment, and the Computer System. Our specifications for the Operating Assets are included in the Operations Manual or are otherwise periodically conveyed to you in writing by us.

We also have developed or may develop standards and specifications for suppliers and distributors of certain products and services, including by designating certain suppliers and distributors as an approved supplier, or the exclusive supplier of certain products or services. You must purchase the specified products and services only from the suppliers designated by us. If we have any approved any designed supplier for any product or service then must purchase such product or service from distributors and suppliers that meet our standards and specifications. Our affiliates or we may be the designated, approved or sole supplier or distributor, or otherwise be a party to these transactions. Currently, (i) you must purchase beauty products, salon chairs, furniture, and wallpaper from suppliers we designate or approve; and (ii) Krishna Chicago, is the sole supplier of certain CYDF-branded products and other supplies that you must use and offer for sale at your CYDF Facial Bar. We may require you to hire an architect or contractor we designate.

Approval of a product or supplier may be conditioned on requirements relating to product quality, prices, consistency, reliability, financial capability, labor relations, customer relations, frequency of delivery, concentration of purchases, standards of service (including prompt attention to complaints), and other criteria. Our specific criteria for approving suppliers are not currently issued to franchisees.

If you would like to purchase any products, services, Operating Assets or materials from a supplier that we have not yet approved (if such products, services, Operating Assets or materials are required to be purchased from designated or approved suppliers), you must submit to us a written request for approval of the proposed product and/or supplier before using or purchasing any item. We have the right to inspect the proposed supplier's facilities, and to require product samples from the proposed supplier to be delivered at our option either directly to us or to a third party we designate for testing. We may require you to reimburse us for our direct costs and expenses incurred for testing such product or supplier, including travel costs and costs of inspection(s). We will notify you in writing of the approval or disapproval of the proposed supplier within a reasonable time after completion of the investigation of the proposed supplier. If we fail to respond within 60 days, your request will be deemed denied. We may elect to withhold approval of the supplier. We are likely to reject your request for a new supplier without conducting any investigation if we already have designated an exclusive supplier for the item proposed to be offered by the new supplier. We may periodically re-inspect the facilities and products of any approved supplier and may revoke our approval if the supplier does not continue to meet any of our criteria. We also may charge suppliers a royalty for the right to manufacture products for use in CYDF Facial Bars.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)