What is the requirement for completing the Training Program for Clean Your Dirty Face franchisees and staff?

e sole and complete responsibility for any and all consequences if the Computer System is not properly operated, maintained, and upgraded.

2.F. OPENING YOUR BUSINESS.

You may not open your Business until:

• we notify you in writing that your Business meets our standards and specifications (although our acceptance is not a representation or warranty, express or implied, that your Business complies with any engineering, licensing, environmental, labor, health, building, fire, sanitation, occupational, landlord's, insurance, safety, tax, governmental, or other statutes, laws, ordinances, rules, regulations, requirements, or recommendations, nor is our acceptance a waiver of our right to require continuing compliance with our requirements, standards, or policies);
• you (or your Operating Partner) and all your staff members satisfactorily complete the Training Program (defined in Section 4.A);
  • (3) you pay the Initial Franchise Fee and all other amounts then due to us;
• you give us certificates for all required insurance policies (as described in Section 8.J);
• you obtain all required supplies and opening inventory for your Business in accordance with our System Standards;
• you obtain all customary contractors' sworn statements and partial and final waivers of lien for construction, remodeling, decorating and installation services;

(7) you meet all regulatory requirements, including all state and local professional regulations.

Subject to your compliance with these conditions, you agree to open your Business for full use by customers within 180 days after the Effective Date. The date that your Business first opens for business shall be referred to herein as the "Opening Date."

Beginning on the Opening Date, for the duration of the entire term of this Agreement, you agree to operate your Business on a continuous basis in accordance with the terms of this Agreement and our System Standards, which may include minimum business hours and/or days of operation for your Business. You may not abandon your Business, close your Business for business, or operate the Business for less than the minimum business hours and/or days of operation that we specify from time to time, except with our prior written consent.

2.G. MAXIMUM BORROWING LIMITS AND LIQUIDITY.

You acknowledge and agree that you will, at all times, maintain sufficient working capital reserves as necessary and appropriate to comply with your obligations under this Agreement. On our request, you will provide us with evidence of working capital availability. We reserve the right, from time to time, to establish certain levels of working capital reserves, and you will comply with such requirements. We may from time to time designate the maximum amount of debt that any CYDF Facial Bars may service, and you will ensure that you will comply with such limits. You agree to apply for and diligently pursue any government-issued, government-sponsored, or government-guaranteed grants, non-recourse loans, or bail-outs for which you qualify and that are made available to small businesses as an economic stimulus, if necessary to comply with your obligations under this Agreement.

3. FEES.

3.A. INITIAL FRANCHISE FEE.

You agree to pay us a non-recurring initial franchise fee of Fifty Thousand Dollars ($50,000) when you sign this Agreement (the "Initial Franchise Fee"). The Initial Franchise Fee is due and fully earned by us when you sign this Agreement. You must pay us the Initial Franchise Fee by wire transfer of immediately available funds to an account we designate, or by any other method we specify. The Initial Franchise Fee is uniform and is not refundable in whole or in part under any circumstances.

3.B. ROYALTY FEE.

You agree to pay us a monthly royalty fee (the "Royalty") equal to five percent (5%) of your Business's Gross Sales during the preceding month. We reserve the right, upon five (5) business days' notice to you, to require you to pay the Royalty at any other increments we choose, which may include weekly.

For purposes of this Agreement, "Gross Sales" means all revenue or consideration that you receive, directly or indirectly, from operating your Business, including, all revenue or consideration you receive at or away from the Premises, and whether from cash, check, credit and

debit card, barter exchange, trade credit, or other credit transactions. Gross Sales includes the proceeds of any business interruption insurance or similar insurance.

Source: Item 22 — CONTRACTS (FDD page 54)