What is the Degree Wellness franchisee required to purchase and use to operate their franchise?

• 1. Identify the products, equipment, materials, inventory, supplies, and services you must use to develop and operate the Studio (including, if applicable, our optional programs), the minimum standards and specifications that you must satisfy in developing and operating the Studio, and the designated and approved suppliers from whom you must or may buy or lease these items (which might be limited to or include us and/or our affiliates) (Franchise Agreement –

• Section 5.1).

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.

However, the estimated annual expense in maintaining or replacing your computer system is $355 per year.

We will have independent, unlimited access to the information the Computer System generates, stores and tracks, including any information pertaining to your gross revenues and all other information stored by the Computer System. There are no limitations on our ability to access the information and data. Client related health information may be protected by HIPPA if franchisees became covered entities.

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