Does Degree Wellness currently have any advertising cooperatives or councils established?

L of the System website in the manner that we may designate.

Local and Regional Advertising Cooperatives

We may, in our sole discretion, elect to form an advertising cooperative and/or advertising council for the benefit of the franchise system. If advertising cooperatives or councils are formed, we will retain the right to change, dissolve or merge any such cooperative or council, in our sole discretion. As of the date of this disclosure document we have not established any advertising cooperative or council, however, when applicable, the terms of the Franchise Agreement require you to participate in any such advertising cooperative or council as directed by us. The members of the Cooperative for any such area will consist of all Degree Wellness Studios whether operated by us, our affiliate, or by any of our affiliate's wholly-owned subsidiaries or by franchisees. The franchisees will administer the cooperative. If we require you to participate in an established cooperative advertising campaign for your market area, you minimum contribution will be $1,000 per month. The actual amount will be set by the cooperatives governing documents, of which we do not have a copy to provide to you. Each cooperative will establish their own governing documents and self-govern. If Franchisor-owned locations are a part of the advertising cooperative, then they will contribute at the same rate as franchisee-owned locations and have the same voting rights. Each franchisee in the same market will be required to be a member. Your $1,000 minimum monthly cooperative contribution will apply to the satisfaction of your local advertising requirement once the Studio is open at least 12 full months. Governing documents are not available for the franchisee's review. The contribution amount will be set by a majority vote of the members of the cooperative. A membership of the cooperative is determined by the numbers of locations a franchisee may have. For example if a franchisee has three locations within the cooperative, they have three memberships and will be entitle to three votes.

Advertising Councils

There is currently not an advertising council ("Council"), but we reserve the right to establish one in the future. We will select the Council's members, and we may change or dissolve the Council at any time. We anticipate that a Council would serve in an advisory capacity, but may grant to the Council any operational or decision-making powers that we deem appropriate. We, or one or more of our affiliated companies or persons, may also offer separate, optional, advisory councils or groups that may have additional costs to you should you decide to participate.

Advertising by Us – Brand Fund

We currently administer a brand development fund (the "Fund") for the benefit of the entire System of Studio. We use the Fund to meet certain costs related to maintaining, administering, directing, conducting and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which we believe will enhance the image of the System. We require all Degree Wellness Studios to contribute 1% of their gross revenues to the Fund. All Degree Wellness Studio will be required to contribute to the Fund on the same basis as you, respectively, unless prohibited by law. Your required Fund contribution may be increased to

an amount equal to up to two percent (2%) of the gross revenues generated by your Studio upon 60 days' prior written notice of such an increase via the Manuals or otherwise in writing. Other franchised and affiliate-owned Studio will contribute to the Fund in the same amount and manner as franchised Studio subject only to limitations under applicable law.

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