Which items in the Dermani Medspa Disclosure Document discuss pre-opening purchases and leases?

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

ITEM 11. FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING

Except as listed below, we are not required to provide you with any assistance.

Pre-Opening Obligations

We are required by the Franchise Agreement to provide certain assistance and service to you. Before you open your Franchised Business and begin managing the dermani MEDSPA®:

We will review the location you propose for the Premises and, if the site meets our requirements, we will approve the site. (Franchise Agreement, Section 2.1).

We may, but are not obligated to, require that you utilize a real estate broker that we designate, approve or recommend to assist you in locating a site and/or negotiating lease terms for the Premises.

Once we have approved your Premises, we will designate the boundaries of your Territory.

We will give you mandatory and/or suggested specifications and layouts for your Premises, which may include color schemes, specific furniture and medical equipment, as well as a planogram for a typical Medspa layout, including recommended office size and design, and required or recommended equipment and supplies.

We may provide guidance to assist you in working with designated contractors and suppliers to complete the development and build out of the dermani MEDSPA®, and we may require you to use a contractor that we designate or approve.

You must engage the services of a designer or architect to develop plans for the build-out of your dermani MEDSPA® that are specific to the Premises.

You and your architect must make sure that the blueprints comply with all applicable laws, ordinances and building codes.

You must submit all construction plans or final floor plan to us for our approval before you may begin the construction process. (Franchise Agreement, Section 2.2)

[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]

Required Purchases from Us or Our Affiliates

Except as provided in this Item, neither we nor our affiliates are currently required or the sole suppliers of any product or service used in the operation of the Franchised Business or management of the dermani MEDSPA®, but we reserve the right to designate ourselves or our affiliates as such in the future. Currently, we are an approved, but not the only, supplier that offers optional medical or esthetician services training programs for staff. In the fiscal year ended December 31, 2024, we received $ 111,426.69 (or 9.6% of our total revenue of $1,161,320) from the sale or lease of products or service to franchises.

Additionally, except as described in this Item, neither we nor our officers maintain an ownership interest in any approved or designated supplier.

Required Purchases or Leases as Percentage of Overall Purchases or Leases

We estimate that your purchases from approved suppliers or according to our specifications will represent approximately 65% to 85% of your total purchases in the establishment of the dermani MEDSPA®, and 75% to 95% of your total purchases in the continuing operation of the dermani MEDSPA®.

Purchasing or Distribution Cooperatives and Purchase Arrangements

We may establish strategic alliances or preferred vendor programs with suppliers that are willing to supply some products or services to some or all of the dermani MEDSPA®s in our system. If we do establish those types of alliances or programs, we may limit the number of approved suppliers with whom you may deal, we may designate sources that you must use for some or all products and services, and we may refuse to approve proposals from franchisees to add new suppliers if we believe that refusal would be in the best interests of the System or the franchised network of dermani MEDSPA®s.

No purchasing or distribution cooperatives exist as of the issuance date of this disclosure document.

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

You must execute a lease for the Premises which must be coterminous with the Franchise Agreement, or a binding agreement to purchase the site. We reserve the right to review and approve the terms of the lease or purchase agreement for the Premises, and we reserve the right to require that certain provisions be included in any lease for the Premises. You shall provide us with a copy of the executed lease or purchase agreement. You must also execute a collateral assignment of lease, attached to the Franchise Agreement as Exhibit B.

We estimate that the time period between beginning to find a site for the Premises and the start of operations at the dermani MEDSPA® will be approximately 5 to 9 months. Factors which may affect this time period include your ability to locate a site, negotiate a lease, secure financing, obtain necessary permits and licenses, construct or build-out facilities for the dermani MEDSPA®, and obtain and install fixtures and equipment, and obtain supplies.

[Item 7: ESTIMATED INITIAL INVESTMENT]

You should review these figures carefully with a business advisor before making any decision to purchase the franchise. You should take into account the cash outlays and probable losses that you may incur while you are trying to get established.

1. Total. In preparing the figures in this Item 7, we relied on the experience of the existing dermani MEDSPA®s that are owned and operated by affiliates, as well as information from franchises granted and opened in 2023 and 2024. The figures in this Item 7 chart, including for example, leasehold improvements, dermani MEDSPA® equipment, furniture and fixtures, and signage, reflect our current branding and image standards. The figures in the chart and the explanatory notes are only estimates. Your actual costs may vary considerably, depending, for example, on factors such as: local economic conditions; the local market for the dermani MEDSPA®; the length of time it may take to obtain permits and then build out the space for the dermani MEDSPA®; the prevailing wage rate; competition; the sales level achieved during the initial period of operation; and your management and training experience, skill, and business acumen. To the extent a location will experience special circumstances, for example, unexpected construction costs, such as the discovery of and removal of hazardous materials, or excessive permitting and licensing issues, some of the costs could be higher than in the chart. The above estimates do not factor in any current or potential tariffs that the United States government may impose. You should review these estimates on your own, preferably with a business advisor of your own choosing. If you seek to open and operate multiple Franchised Businesses under an Area Development Agreement, the chart above shows the estimated initial investment for each dermani MEDSPA® that you develop.

Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 28–30)