What does Degree Wellness identify for my Studio before opening?

Before you open your Degree Wellness Studio for business, we or our designee will:

1. Designate your Protected Territory (Franchise Agreement – Section 2.3). See Item 12 for additional information about your Protected Territory. You may only operate a Studio physically located in your Protected Territory.

• 1. Review and approve or disapprove your proposed Studio site (Franchise Agreement – Section 3.1). You must seek and select a mutually agreeable site within your Site Selection Area within 120 days after signing the Franchise Agreement. We will inform you of our approval or disapproval of your proposed site within 15 days of your proposal of the Studio site. The site must meet our criteria for demographics; traffic patterns; parking; ingress and egress; character of neighborhood; competition from, proximity to, and nature of other businesses; size; appearance; and other physical and commercial characteristics. We require your Studio to be a minimum of 1,800 square feet in size. Studios are typically located in high-traffic strip malls. For each proposed site, you must submit to us, in the form we specify, a description of the site and any other information or materials that we may require. We will not unreasonably withhold approval of a site that meets our standards for general location and neighborhood, traffic patterns, parking size, layout, lease terms, and other physical characteristics for Degree Wellness Studios. If you fail to identify a mutually agreeable site by the established deadline, then we may terminate your Franchise Agreement and the initial Franchise Fee may be forfeited.
• 1. If we require, approve the terms of the lease for the premises of your Studio (Franchise Agreement – Section 3.1). You must lease the premises for the Studio within 180 days after signing the Franchise Agreement. We may terminate your Franchise Agreement if you do not sign your lease by this deadline. Generally, we do not own premises that are leased to Studios. Your lease must include the provisions required by the Franchise Agreement, or you must obtain our express written approval as to any variations or exclusions of such provisions in your lease.
• 1. Furnish you with one set of plans, specifications, and other materials reflecting our suggestions and requirements for layout, equipment, fixtures, decorations and signs for a Degree Wellness Studio (Franchise Agreement – Section 3.2). Using an architect designated or approved by us, you must modify the plans and specifications to comply with all local ordinances, building codes, permit requirements, and lease requirements and restrictions applicable to the premises. You must submit final construction plans and specifications to us for our approval before you begin construction at the premises and you must construct the Studio in accordance with those approved plans and specifications.

You must open your Studio 12 months of signing your Franchise Agreement. (Franchise Agreement – Section 3.3). If you purchase multiple Studio franchises, we currently require that you open the second Studio and each additional Studio pursuant to your Development Schedule. We estimate that Studios will typically open for business approximately 8 to 12 months after signing the Franchise Agreement. Factors affecting this length of time include locating a site and signing a lease, construction or remodeling of the site, completion of required training, financing arrangements, local ordinance and building code compliance, weather conditions, delivery and installation of equipment, fixtures, and signs, and hiring and training of your staff.

• 1. Approve the final construction plans and specifications for your Studio (Franchise Agreement – Section 3.2). You must construct your Studio in accordance with the final construction plans and specifications approved for your Studio. See paragraph 4 above.
• 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).

We will not deliver or install these items for you.

We are not obligated to assist the franchisee in establishing prices.

We may provide suggestions; however, you will have the final determination on the pricing for goods and services.

Lend to you one copy of our Operations Manual, which contains our mandatory and suggested specifications, standards, and procedures for operating your Studio (Franchise Agreement – Section 5.1-5.2).

As part of the growth and expansion of Degree Wellness, and due to the nature of the business conducted by Degree Wellness Studio franchisees, the Operations Manual has evolved into a series of written materials and guides and video and audio presentations, including online trainings and franchise system support, which are frequently updated and supplemented.

The Operations Manual may be composed of or include writings, drawings, photos, video and audio recordings, and/or other written or intangible materials.

We may make all or part of the Operations Manual available to you through various means, including the Internet, websites, emails, or other remote means.

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