On what is Degree Wellness's estimate of initial expenses based?

it Franchise" chart above). | | |

Explanatory Notes:

General. The preceding chart and accompanying notes describe the estimated total initial investment expenses to obtain and commence business for a single Degree Wellness Studio franchise. These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating a single Degree Wellness Studio. Unless negotiated with a third-party, non-affiliated vendor, all payments disclosed in this Item are non-refundable.

Our estimates are based on our experience with our Studio franchises and our current requirements for Studios. The factors underlying our estimates may vary depending on a number of variables, and the actual investment you make in developing and opening your Degree Wellness Studio franchise may be greater or less than the estimates given depending upon the location of your franchise, and current relevant market conditions.

Your estimated initial investment for each additional Studio you purchase may be lower if we charge a reduced Initial Franchise Fee. See Item 5 for additional information. See Item 10 for additional information regarding any financing options. All expenses payable to us and third parties are non-refundable, except as you may arrange for utility deposits and other payments. (3 Months)

1. Initial Franchise Fee; Initial Training Fee. The Initial Franchise Fee and Initial Training Fee that are payable in a lump sum upon execution of your Franchise Agreement is

• disclosed more fully in Item 5, and is deemed fully earned and non-refundable upon payment.
• 1. Training Program Expenses. These are the costs that we estimate for you and up to one (1) additional person to attend the portion of our Initial Training Program that takes place at a corporate training location (currently Michigan). In addition to the Initial Training Fee, you are responsible for the costs associated with attending training. These costs include transportation, meals, and lodging. Your total cost will vary based on who you choose to attend, how far they have to travel, and the type of accommodations you choose. These costs are typically non-refundable, but you should ask about refund policies before you patronize any vendor.
• 1. Studio Layout, Architect, Engineer, Drawings, and Permits. This range includes our required Architect's fee for your Studio's complete construction drawings as well as any construction permits. Such permits can vary widely in cost depending on your location.
• 1. Real Estate and Construction Management Services. Our standard franchise offering expects and assumes that you will use our third-party Approved Supplier, for real estate and construction project management services for the construction and buildout of your Franchised Business.
• 5. Lease - Security Deposit. This range is designed to cover the potential amounts that will be incurred in connection with leasing your approved Premises, with our standard franchise offering expecting that your Premises will: (i) be between 1,800 and 2,400 square feet in size; and (ii) involve a security deposit amounting to one (1) month of rent (based on our affiliates' recent experience opening of an affiliate-owned Studio as of the Issue Date). Your cost to lease is difficult to quantify because there are factors that will impact what you pay. These factors include the facility's location, its square footage, cost-per-square foot, renovation costs and any required maintenance fees. Your landlord may refund your security deposit, but most will not refund rental payments. You should ask your leasing agent or landlord about their refund policy before you sign a lease agreement.
• 1. Initial Equipment Package. These estimates are for new equipment, and assume you finance it over a five year period. The low presumes no money down financing all equipment. The high presumes no money down, only financing the cryo machine. Your financing terms will vary depending on your credit history and score. Our affiliate will finance up to $151,000 with no money down, ate a rate of prime plus 7%, for a five year period. See Item 8 and Item 10 for additional information.

Source: Item 7 — Estimated Initial Investment (FDD pages 22–26)