What standards and specifications has Degree Wellness developed for Studio leasehold improvements?

(see Item 14).

Approved Products, Distributors and Suppliers

We have developed standards and specifications for the leasehold improvements of your Studio, the equipment and materials used to perform services at your Studio, and products authorized for sale at your Studio. We have approved, and will continue to periodically approve, specifications and/or suppliers and distributors of the above items, services and products, which may include us or our affiliates, that meet our standards and requirements. These specifications include standards and requirements relating to product quality, prices, consistency, reliability, financial capability, labor relations and customer relations. You must (1) purchase products for sale by your Studio in the quantities we designate; (2) use those formats, formulae, and containers for products that we prescribe; and (3) purchase all products, services and other materials only from distributors and other suppliers we have approved.

We may approve a single distributor or other supplier (collectively, "supplier") for any product or service, and may approve a supplier only as to certain products or services. We may concentrate purchases with one or more suppliers to obtain lower prices or the best advertising support or services for any group of Studios franchised or operated by us. Our approval of a supplier may be conditioned on requirements relating to the frequency of delivery, concentration of purchases, standards of service (including prompt attention to complaints), and other similar criteria, and may be temporary, pending our continued evaluation of the supplier.

You are required to use our designated supplier for site selection assistance and construction project management. You must acquire a site for your Studio that meets our site selection criteria and that we approve. If you occupy the Studio according to a commercial lease, the lease must contain terms that we specify.

If you would like to purchase or lease any items from any unapproved supplier, then you must submit to us a written request for approval of the proposed supplier or the proposed supplier may submit its own request. We may inspect the proposed supplier's facilities, and require that product samples from the proposed supplier be delivered for testing either directly to us or any independent certified laboratory that we designate. We also may require you (or the proposed supplier requesting the evaluation) to pay us an evaluation fee (not to exceed the actual cost of the inspection and the actual cost of the test (see Item 6) to make the evaluation. We will approve or disapprove your proposed supplier within 60 days of receiving all of the information that we require for the evaluation. We reserve the right to periodically re-inspect the facilities and products or services of any approved supplier, and revoke our approval if the supplier does not continue to meet any of our criteria. Our criteria for approving suppliers are not currently available to franchisees for review.

Degree Wellness and Our Affiliates as Approved Suppliers

If you, or one of your owners, cannot legally provide services to your Franchised Business then you must contract with our designated supplier to provide medical director services.

We are currently not an approved supplier for any other product, service, or equipment. We reserve the right to designate us and/or our affiliates as approved suppliers, or the exclusive

supplier(s), from whom you may purchase or lease certain other categories of products, services, and equipment.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 26–29)