Is the Degree Wellness brand development fund accounted for separately from other funds?

ill use 0% of the Fund contributions for advertising that is principally a solicitation for the sale of franchises.

The Fund will be accounted for separately from our other funds and will not be used to pay any of our general operating expenses, except for salaries, administrative costs, and overhead that we incur in activities reasonably related to the administration of the Fund and its marketing programs, including preparing advertising and marketing materials, and collecting and accounting for contributions to the Fund. We may spend in any fiscal year an amount greater or less than the aggregate contributions to the Fund in that year, and the Fund may borrow from us or other lenders to cover the Fund's deficits or invest any surplus for future use by the Fund. We will prepare an annual unaudited statement of monies collected and costs incurred by the Fund and will provide it to you upon written request. A franchisee may request an annual report of general category spending of the Fund. This report may be requested in writing and will be provided in the manner we determine no more than one time per year and only after March 1 for the prior year. There is no history of a prior fiscal year to disclose in this disclosure document.

We may cause the Fund to be incorporated or operated through an entity separate from us when we deem appropriate, and the entity will have the same rights and duties as we do under your Franchise Agreement. The Fund will be intended to enhance recognition of the Marks and the goodwill and patronage of Studio franchises. Although we will endeavor to use the Fund to develop advertising and marketing materials and programs and place advertising that will benefit all contributing franchises, we have no obligation in developing, implementing, or administering

advertising or promotional programs ensure that the Fund's expenditures in or affecting any geographic area are proportionate or equivalent to the contributions made by any franchise in that geographic area, or that any franchise will benefit from the development of advertising and marketing materials or the placement of advertising by the Fund directly or in proportion to the franchise's contribution to the Fund. We assume no direct or indirect liability or obligation to you or any other Degree Wellness franchisee in connection with the establishment or operation of the Fund, or the collection, administration, or disbursement of monies paid into the Fund. We will not be a fiduciary to you with respect to the management of the Fund.

We may suspend contributions to, and the operations of, the Fund for any period we deem appropriate, and may terminate the Fund upon 30 days' written notice to you. All unspent monies held by the Fund on the date of termination will be distributed to us, our affiliates, and you and our other franchisees in proportion to each party's respective contributions to the Fund during the preceding 12-month period. We may reinstate the Fund if terminated upon the same terms and conditions set forth in the Franchise Agreement upon 30 days' advance written notice to you.

In the future, we may also establish a program to provide additional marketing services to Studio franchises involving the placement of individuals on a local basis to perform marketing activities, subject to applicable law. If you choose to use this marketing program, you must agree to pay the fee determined by us. Your franchise will only be permitted to use this program if you pay this fee.

We are not required to spend ANY amount in advertising in your territory.

Computer System and Billing System

You must purchase and use the computer hardware and software and billing system (collectively, "Computer System") that we periodically designate to operate your Degree Wellness franchise. You must obtain the Computer System, software licenses, maintenance and support services, and other related services from the suppliers we specify (which may be limited to us and/or our affiliates). The Computer System will store and generate customer management and accounting, billing, and credit card information. The estimated initial cost of purchasing your Computer System will range from to . We may periodically modify the specifications for, and components of, the Computer System. These modifications and/or other technological developments or events may require you to purchase, lease, and/or obtain by license new or modified computer hardware and/or software and obtain service and support for the Computer System. The Franchise Agreement does not limit the frequency or cost of these changes, improvements, upgrades, or updates. We have no obligation to reimburse you for any Computer System costs. Within 60 days after you receive notice from us, you must obtain the components of the Computer System that we designate and ensure that your Computer System, as modified, is functioning properly.

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 32–42)