What services are provided to Extreme Art Studio franchisees?

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

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

Except as listed below, EAS is not required to provide you with any assistance.

Pre-opening Obligations

Before you open your Extreme Art Studio Business, we (or our designee(s)) will provide the following assistance and services to you:

• 1. Provide you with assistance, including site selection, site evaluation, lease review and construction project management for an Extreme Art Studio Business, as we have outlined in our Franchise Operations Manual (See Franchise Agreement – Section 2.1 and Extreme Art Rider).
• 1. Review your lease agreement for the Studio to ensure that its terms contain our required provisions and otherwise meet our minimum standards for an Extreme Art Studio Business (See Franchise Agreement – Section 2.1 and Extreme Art Rider).
• 1. Provide you with specifications for all initial and replacement furniture, fixtures, equipment, signs, inventory and supplies that conform to the standards and specifications described in the Franchise Operations Manual or otherwise in writing that are required to operate your Extreme Art Studio Business. We do not deliver or assist with the installation of any fixtures, furnishings, equipment, signs or other supplies. (See Franchise Agreement – Sections 2.2 and 8.4).
• 1. We will also provide you with a schematic design review for your Extreme Art Studio Business. You must submit final construction plans and specifications to us for our approval before you

begin construction at the Studio and must construct the Extreme Art Studio Business in accordance with those approved plans and specifications (See Franchise Agreement – Sections 2.2 and 8.2).

• 1. Advise you on necessary pre-opening procedures and assist you with inventory ordering of products, equipment and supplies through our affiliate or other suppliers, as applicable, which are necessary for commencement of operations, and provide implementation services for you in connection with the CR Software and the DB Software (See Franchise Agreement – Sections 2.4 and 3.6).
• 1. Loan to you or make available to you on our website or extranet, one copy of the Franchise Operations Manual, which may include audio and video media, software, other electronic media, and/or written materials. The Franchise Operations Manual includes approximately 246 pages. The table of contents for the Franchise Operations Manual is attached to this Franchise Disclosure Document as Exhibit C (See Franchise Agreement – Section 4.3).
• 1. Provide you with a list of our approved items, services and suppliers, and consultation on required purchases as we deem necessary and appropriate (See Franchise Agreement – Sections 2.2 and 8.3).
• 1. For your first Extreme Art Studio Business, provide an initial training program to you (or your operating owner, if applicable) and your Designated Manager, if applicable, at no cost provided all such persons attend the initial training program at the same time (See Franchise Agreement – Section 4.1).
• 1. For your first Extreme Art Studio Business, provide you with on-site training for up to three days prior to and during your grand opening (See Franchise Agreement – Section 4.1).
• 1. Provide you with templates for certain promotional and advertising materials, and consultation in connection with the grand opening marketing for your Extreme Art Studio Business (See Franchise Agreement – Section 9.1).
• 1. Provide you with other pre-opening consultation as we deem necessary and appropriate during normal business hours (See Franchise Agreement – Sections 2.1 and 4.2).

We do not provide the above services to renewal franchisees and may not provide all of the above services to franchisees that purchase existing Extreme Art Studio Businesses or for your additional Extreme Art Studio Businesses purchased under a Standard 2 Franchise or Standard 3 Franchise.

Site Selection

We will provide you with our site selection criteria for you to use to select and acquire a site for your Studio which meets our site selection criteria. You may not lease or purchase a site for your Studio until after we have approved the site in writing. The factors we consider in approving sites for your Studio include location; size; suitability; layout; access and visibility of the proposed location; proximity to other businesses; location and nature of any competitors; population density and demographics; vehicle traffic; pedestrian traffic; existing tenant mix; parking convenience; and other factors that may be relevant to your market. The same site selection criteria will generally be applicable to all Extreme Art Studio Business franchisees. We generally do not own the premises and lease it to you.

There are no deadlines for our approval or disapproval of your proposed Studio site, although we will typically be able to respond within two weeks after you submit to us all of the required information. Once we have approved your location, the Franchise Agreement or applicable Extreme Art Rider will automatically be amended to show the specific location as the only location where you are authorized to

operate the Extreme Art Studio Business. If you and we are not able to reach agreement on an approved site for your Studio within four months after you sign the Franchise Agreement or applicable Extreme Art Rider, then we have the option to terminate the Franchise Agreement without providing you a refund.

You must obtain our prior written approval of your Studio lease. Your Studio lease must meet our lease approval criteria, including certain mandatory lease provisions that we require for our protection. If you fail to enter into a lease for your Extreme Art Studio Business within six months after signing the Franchise Agreement, then we have the option to terminate the Franchise Agreement without providing you a refund.

Continuing Obligations

During the operation of your Extreme Art Studio Business, we (or our designee(s)) will provide the following assistance and services to you:

1. Advise you regarding the Extreme Art Studio Business operation based on your reports and our inspections. We also will guide you on standards, specifications, and operating procedures and methods that Extreme Art Studio Businesses use; customer service standards and policies; amounts and types of classes to be offered; required purchases and authorized operating assets and other items and arranging for their distribution to you from us or the suppliers; advertising and marketing materials and programs; and administrative, bookkeeping, accounting, and inventory control procedures. We will guide you through the Franchise Operations Manual, in bulletins, or other written materials, through the use of

electronic media, telephone conferences, and/or meetings at our offices or at your Studio or other designated location in your territory (See Franchise Agreement – Sections 4.2 and 8).

• 1. Continue to loan to you or make available to you on our website or extranet, one copy of the Franchise Operations Manual (See Franchise Agreement – Section 4.3).
• 1. Issue and modify System Standards for Extreme Art Studio Businesses. We may periodically modify System Standards, and those modifications may require you to invest additional capital in the Extreme Art Studio Business and/or incur higher operating expenses (See Franchise Agreement – Section 8.9).
• 1. License to you for your use, confidential and proprietary information designed to assist you in the operation of the Extreme Art Studio Business (See Franchise Agreement – Sections 5 and 6).
• 1. Allow you to continue to use confidential materials, including the Franchise Operations Manual and the Marks (See Franchise Agreement – Sections 4.3, 5 and 6).
• 1. Maintain and administer one or more websites to advertise, market and promote Extreme Art Studio Businesses and the products and services offered (each a "System Website") (See Franchise Agreement – Section 9.5).
• 1. Review requests for approval of additional items, services and/or suppliers, and notify you of our decision (See Franchise Agreement – Section 8.3).
• 1. Review samples of all marketing materials and other materials bearing our Marks you submit to us for approval and notify you of our decision (See Franchise Agreement – Section 9.2).
• 1. Provide you with additional training at our corporate headquarters or other location we designate, if we determine that you require additional training, or if you request additional training. For your first Extreme Art Studio Business, we provide up to two days of Additional On-Site Assistance at your Studio at a time designated by us (approximately six months after you open your Extreme Art Studio Business) as part of our training. (See Franchise Agreement – Section 4.1).

Optional Assistance

During the term of the Franchise Agreement, we (or our designee(s)) may, but are not required to, provide the following assistance and services to you:

• 1. Modify, update, or change the System, including the adoption and use of new or modified trade names, trademarks, service marks, or copyrighted materials, new products, new equipment, or new techniques.
• 1. Make periodic visits to the Extreme Art Studio Business for the purpose of assisting in all aspects of the operation and management of the Extreme Art Studio Business, prepare written reports concerning these visits outlining any suggested changes or improvements in the operation of the Extreme Art Studio Business, and detailing any problems in the operations which become evident as a result of any visit. If provided at your request, you must reimburse our expenses and pay our then-current training charges.
• 1. Maintain and administer a Brand Fund. We may dissolve the Brand Fund upon written notice.

• 1. Hold periodic national or regional conferences to discuss business and operational issues affecting Extreme Art Studio franchisees.
• 1. Provide you with a newsletter that we may periodically publish in print or electronic format, at our sole discretion.
• 1. Reserve the right to establish minimum and maximum resale prices for use with multi-area marketing programs and special price promotions as allowed by law.

Advertising

Brand Fund

We have a Brand Fund for marketing, developing and promoting the System, the Marks and Extreme Art Studio Businesses. You must pay one percent (1%) of your Gross Sales for the Brand Fund ("Brand Fund Contribution"). Your contribution to the Brand Fund will be in addition to all other advertising requirements set out in this Item 11. Each franchisee will be required to contribute to the Brand Fund, but certain franchisees may contribute on a different basis, depending on when they signed thei

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–37)