Face_Foundrie 2025 Franchise FAQ - FDD Ninja

Question 1

According to Note 10, what is the average percentage of Gross Sales from membership sales among all franchised Face Foundrie Facial Bars?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 2

According to Note 10, what is the average percentage of Gross Sales from service sales among all franchised Face Foundrie Facial Bars?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 3

According to Note 10, what is the median percentage of Gross Sales from membership sales among all franchised Face Foundrie Facial Bars?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 4

According to Note 10, what is the median percentage of Gross Sales from service sales among all franchised Face Foundrie Facial Bars?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 5

What was the average percentage of Gross Sales from membership sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 6

What was the average percentage of Gross Sales from product sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- on average 51.81% (with a median of 53.60%) of Gross Sales, and product sales made up on average 14.24% (with a median of 12.95%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 7

What was the average percentage of Gross Sales from service sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- on average 51.81% (with a median of 53.60%) of Gross Sales, and product sales made up on average 14.24% (with a median of 12.95%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 8

As of December 31, 2024, what is the total number of Face Foundrie franchise agreements signed but not yet open across all listed states?

Accepted Answer

| State | Franchise Agreements Signed, Not Yet Open | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---|---|---|---|
| Arizona | 2 | 3 | 0 |
| California | 3 | 4 | 0 |
| Colorado | 1 | 1 | 0 |
| Connecticut | 1 | 1 | 0 |
| Florida | 6 | 4 | 0 |
| Georgia | 1 | 0 | 0 |
| Idaho | 1 | 1 | 0 |
| Illinois | 1 | 1 | 0 |
| Iowa | 1 | 1 | 0 |
| Michigan | 1 | 1 | 0 |
| New Jersey | 1 | 1 | 0 |
| North Carolina | 3 | 1 | 0 |
| Tennessee | 0 | 1 | 0 |
| Texas | 2 | 1 | 2 |
| Totals | 24 | 21 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 9

What other entities, besides Face Foundrie, does Michele Henry serve as Chief Executive Officer for as of the date of this Face Foundrie FDD?

Accepted Answer

Michele Henry has served as our Founder and Chief Executive Officer since our inception in April 2020. Since September 2024, she has also served as the Chief Executive Officer of our parent, 2F Holdings L.L.C., and, since April 2025, she has served as the Chief Executive Officer of our parent's parent, Manifest Holdings Group LLC. Since September 2024, Michele has also served as the Chief Executive Officer of our affiliate, FF Management L.L.C., and all of its subsidiaries. She has also served as Chief Executive Officer of Face Foundrié LLC, in Eden Prairie, Minnesota, since its inception in December 2018; Face Foundrié Edina LLC in Eden Prairie, Minnesota, since its inception in January 2019; Face Foundrié NOLO LLC in Eden Prairie, Minnesota, since its inception in June 2019; and Face Foundrié Maple Grove LLC in Eden Prairie, Minnesota since its inception in February 2020; and Face Foundrié Products L.L.C. in Eden Prairie, Minnesota, since its inception in March 2022. Michele has also served, since July 2021, as Chief Executive Officer of Savant Aesthetics Institute L.L.C., in Eden Prairie, Minnesota, and, since July 2024, as Chief Executive Officer of Laserie LLC

and Laserie Edina LLC, both in Eden Prairie, Minnesota. Michele serves in her present capacities in Eden Prairie, Minnesota.

Source: Item 2 — BUSINESS EXPERIENCE (FDD pages 11–13)

Question 10

What is the Face Foundrie franchisee prohibited from doing with the Marks?

Accepted Answer

Franchisee agrees to use the Marks as the sole identification of the Facial Bar and identify itself as the independent owner thereof in the manner Franchisor prescribes.

Franchisee agrees to use only the Marks as Franchisor prescribes in connection with the Facial Bar and the sale of authorized products and services.

Franchisee may not use any Mark (or any abbreviation, modification or colorable imitation) as part of any corporate or legal business name or in any other manner (including any Internet related use such as an electronic media identifier, for web sites, web pages or domain names) not expressly authorized by Franchisor in writing.

Franchisee will not include the Marks on any employment- or personnel-related documents, including without limitation employment applications, employment agreements, or methods of payment to its employees.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 11

What is the Face Foundrie franchisee required to do regarding employee acknowledgements?

Accepted Answer

Franchisee will receive and maintain in each of its employee's files an acknowledgement that the employee works for Franchisee and not Franchisor, and Franchisee will on a monthly basis or as otherwise requested by Franchisor acknowledge in writing to Franchisor that such acknowledgements have been completed and maintained in Franchisee's personnel files.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 12

What initial franchise fees did Face Foundrie collect in the last fiscal year for new and existing franchisees?

Accepted Answer

discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of \$45,000, which was our then-current Initial Franchise Fee, and of \$36,000, which was our then-current Initial Franchise Fee for existing franchisees of o

Source: Item 5 — INITIAL FEES (FDD pages 13–15)

Question 13

How many Face Foundrie franchised outlets ceased operations for other reasons in 2022?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Arizona | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Arkansas | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| California | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|---|---|---|---|---|---|---|---|---|
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| Florida | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2024 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
| Georgia | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Idaho | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Illinois | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2024 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Iowa | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Michigan | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Minnesota | 2022 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2023 | 3 | 1 | 0 | 0 | 0 | 0 | 4 |
|  | 2024 | 4 | 1 | 0 | 0 | 0 | 0 | 5 |
| Missouri | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 0 | 3 |
| New Jersey | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| North Carolina | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| North Dakota | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| South Carolina | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| South Dakota | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|---|---|---|---|---|---|---|---|---|
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Tennessee | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Texas | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 2 | 0 | 0 | 0 | 0 | 4 |
| Utah | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| Wisconsin | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Total | 2022 | 7 | 12 | 0 | 0 | 0 | 0 | 19 |
|  | 2023 | 19 | 11 | 0 | 0 | 0 | 0 | 30 |
|  | 2024 | 30 | 18 | 0 | 0 | 0 | 0 | 48 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 14

What is the median Gross Sales for all Face Foundrie franchised and corporate facial bars included in the data?

Accepted Answer

Median Gross Sales is the middle Gross Sales number in the applicable data set, or the average of the two middle Gross Sales numbers when there is an even number of observations in the applicable data set.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 15

What was the median percentage of Gross Sales from membership sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- 10 Among all franchised Facial Bars reported in this table, membership sales made up on average 33.70% (with a median of 33.56%) of Gross Sales, service sales made up on average 53.64% (with a median of 55.27%) of Gross Sales, and product sales made up on average 12.66% (with a median of 12.53%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 16

What was the median percentage of Gross Sales from product sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- on average 51.81% (with a median of 53.60%) of Gross Sales, and product sales made up on average 14.24% (with a median of 12.95%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 17

What was the median percentage of Gross Sales from service sales for all Face Foundrie franchised Facial Bars reported in the table?

Accepted Answer

- on average 51.81% (with a median of 53.60%) of Gross Sales, and product sales made up on average 14.24% (with a median of 12.95%) of Gross Sales.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 18

Did Face Foundrie reacquire any franchised outlets in 2023?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Termin- ations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Arizona | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Arkansas | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| California | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|---|---|---|---|---|---|---|---|---|
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Colorado | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| Florida | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2024 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
| Georgia | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Idaho | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Illinois | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2024 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
| Indiana | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Iowa | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Michigan | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Minnesota | 2022 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
|  | 2023 | 3 | 1 | 0 | 0 | 0 | 0 | 4 |
|  | 2024 | 4 | 1 | 0 | 0 | 0 | 0 | 5 |
| Missouri | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 2 | 0 | 0 | 0 | 0 | 3 |
| New Jersey | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| North Carolina | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| North Dakota | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| South Carolina | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| South Dakota | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|---|---|---|---|---|---|---|---|---|
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Tennessee | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Texas | 2022 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 2 | 0 | 0 | 0 | 0 | 4 |
| Utah | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| Wisconsin | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 1 | 0 | 0 | 0 | 0 | 3 |
| Total | 2022 | 7 | 12 | 0 | 0 | 0 | 0 | 19 |
|  | 2023 | 19 | 11 | 0 | 0 | 0 | 0 | 30 |
|  | 2024 | 30 | 18 | 0 | 0 | 0 | 0 | 48 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 19

For Face Foundrie, what is the relationship between the franchisee and the franchisor?

Accepted Answer

Face Foundrié Franchising L.L.C. (the "**Franchisor**") and its affiliates developed and own a format and system (the "**System**") for establishing and operating a focused facial bar concept under the trademark "FACE FOUNDRIÉ"®, which offers efficient and effective services, including 20-to-50-minute facials, waxing, and skincare products, all delivered with high-end customer service (each is referred to as a "**Face Foundrié Facial Bar**").

Franchisor and Franchisee have executed a Franchise Agreement ("**Franchise Agreement**") granting Franchisee the right to operate a Face Foundrié Facial Bar (the "**Franchised Facial Bar**") under the terms and conditions of the Franchise Agreement.

In connection with starting or continuing your employment with Franchisee, you will be trained by us and you will learn of Franchisor's confidential information and know-how concerning the methods of operation of a Face Foundrié Facial Bar and the System*.*

Now, therefore, it is agreed that as a consideration of starting or continuing your employment, as a condition to your employment and the compensation that we have paid to you (and/or will pay you after today), you acknowledge and agree that you will comply with all of the following obligations:

#### **2. GRANT OF RIGHTS.**

- **2.01 Grant of Franchise.** Subject to the terms of this Agreement, Franchisor grants to Franchisee the right, and Franchisee assumes the obligation, to operate a Facial Bar from the location set forth on Exhibit A hereto (the "Premises") and to use the System and the Marks solely in connection therewith, for a term of ten (10) years, commencing on the Effective Date of this Agreement (the "Term").

Franchisee may not conduct the business of the Facial Bar or use the System at any site other than the Premises, or relocate the Facial Bar, without Franchisor's prior written consent.

Any approved relocation of the Facial Bar shall be at Franchisee's sole cost and expense, and Franchisor shall have the right to charge Franchisee a relocation fee equal to One Thousand Dollars ($1,000) plus any expenses Franchisor incurs in facilitating the relocation.

The option for renewal of the rights granted to Franchisee in this Agreement is described in Section 15 below.

- **2.02 Protected Territory.** During the Term, Franchisor will not operate (directly or through an Affiliate), nor grant to another Person the right to operate, any Face Foundrié Facial Bar located within the geographical area set forth on Exhibit A hereto (the "Protected Territory").

Notwithstanding the foregoing, Franchisor has the right to operate (directly or through an Affiliate), and to grant to others the right to operate, within the Protected Territory and elsewhere: (a) Face Foundrié Facial Bars or other businesses using any part or all of the System and/or Marks that are operating as of the Effective Date; and (b) businesses that Franchisor or its Affiliates purchase (or as to which Franchisor or its Affiliates purchases the rights as franchisor) that are part of another franchise system or chain and either continue to operate them independently or convert them to Face Foundrié Facial Bars.

- **2.03 Reservation of Rights.** Notwithstanding anything to the contrary set forth herein, Franchisor retains the right, in its sole discretion, to:

#### **8.03 Management of Facial Bar.**

- (a) Franchisee must designate on Exhibit B an "Operating Partner", which individual must be approved by Franchisor and: (a) own and control, or have the right to own and control (subject to terms and conditions reasonably acceptable to Franchisor), not less than a twenty percent (20%) interest in Franchisee's equity and voting rights; (b) have the authority to bind Franchisee regarding all operational decisions with respect to the Facial Bar; and (c) have completed Franchisor's training program to its satisfaction.

The Operating Partner must devote full-time efforts to the Facial Bar, and the Operating Partner may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise that may conflict with his or her obligations hereunder without our approval.

Franchisee shall provide Franchisor with a copy of any proposed arrangement, agreement or contract, and all amendments thereto, with the Operating Partner for Franchisor's prior review and approval, and upon approval thereof, executed copies thereof.

Franchisor shall have no responsibility, liability or obligation to any party to any such arrangement, agreement or contract, or any amendments thereto, on account of Franchisor's approval thereof or otherwise, and Franchisee agrees to indemnify and hold Franchisor harmless with respect thereto.

The Facial Bar at all times must be supervised by the Operating Partner who has completed the appropriate training programs to our satisfaction.

- (b) Salon Manager.

At least ninety (90) days prior to the opening of your Facial Bar, you agree to designate and to retain at all times during the term of this Agreement a Salon Manager who meets our qualifications to supervise the operation of your Facial Bar.

Your Salon Manager must devote full time and best efforts to the supervision of your Facial Bar and shall not engage in any other business, including the supervision or management of any additional Face Foundrié Facial Bar(s).

Each Face Foundrié Facial Bar must have a different Salon Manager.

You acknowledge and agree that the appointment of a Salon Manager will not relieve your Operating Partner of his or her supervisory responsibilities for the operation of your Facial Bar.

You and your Operating Partner shall remain fully responsible for your Salon Manager's performance.

Agreement, and if it does so, Franchisee will use the form of Membership Agreement that Franchisor provides to Franchisee, and will not make any modifications in the forms without Franchisor's prior written consent. Notwithstanding the foregoing, Franchisee acknowledges that it is responsible for ensuring that the Membership Agreements and its offer of Memberships comply with all applicable laws for its Facial Bar. If such laws require that Franchisee modify the Membership Agreements or the terms of Membership that if offers, Franchisee may do so only to the extent necessary to comply with such applicable laws, provided that Franchisee provide Franchisor with written notice at least fourteen (14) days prior to such modifications. Any Membership Agreement that has been modified without Franchisor's consent shall be void. Franchisee agrees to comply with Franchisor's System standards regarding Memberships, including regarding the following matters: (i) the types and terms of Memberships it may offer; (ii) the form(s) of Membership Agreement; (iii) the terms and conditions upon which a member may transfer his or her Membership from the Facial Bar to another Face Foundrié Facial Bar and vice versa; (iv) admission of members of the Facial Bar to other Face Foundrié Facial Bars; (v) procedures to follow when members transfer to or from the Facial Bar; (vi) use and acceptance of coupons, passes, certificates, and gift cards; (vii) group accounts and group Memberships (and discounts applicable thereto); and (viii) payment terms for Memberships. Franchisee agrees that Franchisor and its Affiliates own all information relating to clients and members of the Facial Bar, including names, addresses, telephone numbers, e-mail addresses, buying habits, preferences, demographic information and related information, that it comprises personal information and part of the Confidential Information, and that Franchisor and its Affiliates may use such membership information in its and their business activities.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 20

What subjects are covered in the Face Foundrie Initial Training Program?

Accepted Answer

| Preface                                            | 3  |
|----------------------------------------------------|----|
| Statement of Confidentiality                       | 4  |
| Introduction to FACE FOUNDRIÉ                      | 5  |
| Franchisor // Franchisee Relationship Expectations | 10 |
| Establishing FACE FOUNDRIÉ Business                | 16 |
| Licenses, Permits and Compliance with Laws         | 19 |
| Insurance                                          | 23 |
| Suppliers and Build Out                            | 24 |
| Facility Set Up                                    | 25 |
| Fresh Face Starter Kit                             | 25 |
| Finance                                            | 29 |
| EIN, Paying Taxes                                  | 30 |
| Bank Account Set Up                                | 30 |
| Franchising Fees                                   | 30 |
| Employer Policies                                  | 33 |
| State Employee Laws                                |    |
| Operations                                         | 48 |
| Daily Procedures                                   | 60 |
| Customer Service Standards                         | 63 |
| Company Policies                                   | 69 |
| Technology // POS                                  | 73 |
| BLVD University                                    | 75 |
| FACE FOUNDRIÉ Training Platform                    | 82 |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 33–43)

Question 21

What is the total number of Face Foundrie franchise agreements signed but not yet open across all states listed?

Accepted Answer

| State | Franchise Agreements Signed, Not Yet Open | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---|---|---|---|
| Arizona | 2 | 3 | 0 |
| California | 3 | 4 | 0 |
| Colorado | 1 | 1 | 0 |
| Connecticut | 1 | 1 | 0 |
| Florida | 6 | 4 | 0 |
| Georgia | 1 | 0 | 0 |
| Idaho | 1 | 1 | 0 |
| Illinois | 1 | 1 | 0 |
| Iowa | 1 | 1 | 0 |
| Michigan | 1 | 1 | 0 |
| New Jersey | 1 | 1 | 0 |
| North Carolina | 3 | 1 | 0 |
| Tennessee | 0 | 1 | 0 |
| Texas | 2 | 1 | 2 |
| Totals | 24 | 21 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 22

What was the total number of Face Foundrie franchised outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 19 | +12 |
|  | 2023 | 19 | 30 | +11 |
|  | 2024 | 30 | 48 | +18 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 23

What is the total number of on-the-job training hours provided to a Face Foundrie franchisee?

Accepted Answer

| Subject                          | Hours of Classroom Training | Hours of On The-Job Training | Location               |
|----------------------------------|-----------------------------------|------------------------------------|------------------------|
| Onboarding Calls                 | 4                                 | 0                                  | Online/Virtual         |
| Overview Prework                 | 6                                 | 0                                  | Online/Virtual         |
| Esthetics Prework                | 5                                 | 0                                  | Online/Virtual         |
| Introduction | 1 | 0 | Online/Virtual |
| to FACE FOUNDRIÈ |  |  |  |
| Product | 2 | 0 | Online/Virtual |
| // Service Overview |  |  |  |
| Operations                       | 16                                | 0                                  | Online/Virtual         |
| Technology // | 8 | 0 | Online/Virtual |
| POS |  |  |  |
| Management Tools                 | 6                                 | 0                                  | Online/Virtual         |
| Inventory | 4 | 0 | Online/Virtual |
| // Suppliers |  |  |  |
| Accounting | 2 | 0 | Online/Virtual |
| // Finance |  |  |  |
| Product Training                 | 0                                 | 2                                  | Corporate Headquarters |
| Protocol Hands-On                | 0                                 | 36                                 | Corporate Headquarters |
| BLVD                             | 0                                 | 3                                  | Corporate Headquarters |
| Model | 0 | 20 | Corporate Headquarters |
| // Test Out |  |  |  |
| Store Shadow                     | 0                                 | 3                                  | Corporate Store        |
| Totals                           | 54                                | 64                                 |                        |

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 33–43)

Question 24

What was the total number of Face Foundrie outlets at the end of 2024?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 7 | 19 | +12 |
|  | 2023 | 19 | 30 | +11 |
|  | 2024 | 30 | 48 | +18 |
| Company-Owned or | 2022 | 3 | 4 | +1 |
| Affiliate-Owned Outlets |  |  |  |  |
|  | 2023 | 4 | 6 | +2 |
|  | 2024 | 6 | 5 | -1 |
| Total Outlets | 2022 | 10 | 23 | +13 |
|  | 2023 | 23 | 36 | +13 |
|  | 2024 | 36 | 53 | +17 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 25

What is the total projected number of new company-owned Face Foundrie outlets expected to open in the next fiscal year across all listed states?

Accepted Answer

| State | Franchise Agreements Signed, Not Yet Open | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---|---|---|---|
| Arizona | 2 | 3 | 0 |
| California | 3 | 4 | 0 |
| Colorado | 1 | 1 | 0 |
| Connecticut | 1 | 1 | 0 |
| Florida | 6 | 4 | 0 |
| Georgia | 1 | 0 | 0 |
| Idaho | 1 | 1 | 0 |
| Illinois | 1 | 1 | 0 |
| Iowa | 1 | 1 | 0 |
| Michigan | 1 | 1 | 0 |
| New Jersey | 1 | 1 | 0 |
| North Carolina | 3 | 1 | 0 |
| Tennessee | 0 | 1 | 0 |
| Texas | 2 | 1 | 2 |
| Totals | 24 | 21 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 26

What is the total projected number of new franchised Face Foundrie outlets expected to open in the next fiscal year across all listed states?

Accepted Answer

| State | Franchise Agreements Signed, Not Yet Open | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company-Owned Outlets in the Next Fiscal Year |
|---|---|---|---|
| Arizona | 2 | 3 | 0 |
| California | 3 | 4 | 0 |
| Colorado | 1 | 1 | 0 |
| Connecticut | 1 | 1 | 0 |
| Florida | 6 | 4 | 0 |
| Georgia | 1 | 0 | 0 |
| Idaho | 1 | 1 | 0 |
| Illinois | 1 | 1 | 0 |
| Iowa | 1 | 1 | 0 |
| Michigan | 1 | 1 | 0 |
| New Jersey | 1 | 1 | 0 |
| North Carolina | 3 | 1 | 0 |
| Tennessee | 0 | 1 | 0 |
| Texas | 2 | 1 | 2 |
| Totals | 24 | 21 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 69–73)

Question 27

How does the initial franchise fee for Face Foundrie (Item 5) compare to the accounting fees listed in Item 7?

Accepted Answer

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Accounting | $500 | $500 | As | As | Us |

[Item 5: INITIAL FEES]

# **ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to $40,000. We also offer a reduced initial franchise fee of $40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of $45,000, which was our then-current Initial Franchise Fee, and of $36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

# **Accounting System Set-Up Fee**

We charge a one-time "**Accounting System Set-Up Fee**" of $500 to cover the setup of your QuickBooks with the approved chart of accounts and products and services. The Accounting System Set-up Fee is nonrefundable.

Question 28

How does the initial franchise fee for Face Foundrie (Item 5) relate to the ongoing support and training provided by the franchisor?

Accepted Answer

- **5.07 Modification by Franchisee.** If Franchisee develops any new modification, concept, process, improvement or slogan (including any and all inventions, discoveries, trademarks and improvements)

in the operation or promotion of the Facial Bar or to the System, the same shall be deemed a work made for hire, and Franchisee shall promptly notify Franchisor of, and provide Franchisor with all necessary information regarding, such modification, concept, process, improvement or slogan, without compensation to Franchisee. Franchisee acknowledges that any such modification, concept, process, improvement or slogan shall become Franchisor's sole and exclusive property and that Franchisor may use and/or allow other franchisees to use the same in connection with the System or the operation of Face Foundrié Facial Bars, without compensation to Franchisee. Franchisee shall assist Franchisor, at Franchisor's expense, in obtaining execution of all documents and taking all other actions which Franchisor may reasonably request to make possible the filing of patent applications for any such developments and to establish that Franchisor is the owner of both the developments and any patent applications made in connection with such developments

#### **6. FEES AND OTHER PAYMENTS.**

**6.01 Initial Franchise Fee.** Upon the execution of this Agreement, Franchisee shall pay to Franchisor an initial franchise fee in an amount set forth on Exhibit A (the "Initial Franchise Fee"). Franchisee acknowledges and agrees that the Initial Franchise Fee is paid as consideration for Franchisor granting Franchisee the right to develop, open and operate the Facial Bar using the Marks and the System, that the Initial Franchise Fee is fully earned by Franchisor at the time this Agreement is executed, and that the Initial Franchise Fee shall not be refundable for any reason.

#### **6.02 Royalty Fee and Minimum Royalty Fee.**

Question 29

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for building a successful and sustainable business?

Accepted Answer

[Item 5: INITIAL FEES]

# **ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to $40,000. We also offer a reduced initial franchise fee of $40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of $45,000, which was our then-current Initial Franchise Fee, and of $36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to $40,000 multiplied by the number of Facial Bars you

agree to open under our form of Area Development Agreement. You will not pay an additional Initial Franchise Fee for any of the Facial Bars we require you to develop under the Area Development Agreement. All portions of the Development Fee are payable in full when you sign the Area Development Agreement and are nonrefundable. In our last fiscal year, our Development Fee was uniformly $36,000 multiplied by the number of Facial Bars to be developed under an Area Development Agreement, which was our then-current Development Fee, except that we allowed one existing area developer to purchase additional units for $32,500 each.

#### **Initial Opening Package**

Our affiliate, Face Foundrié Products L.L.C., and other designated suppliers will be the designated suppliers of certain branded and proprietary items for use in your Facial Bar, including cleansers, masques, serums, oils, brow tints, and other facial supplies, printed marketing materials, and other items that we adopt for use in the System. Such items are estimated to cost in the range of $48,000 to $59,100, prior to opening your Facial Bar; of this amount, we estimate up to $500 will be paid to our affiliate for optional products. We may add to or delete from such items which must be purchased from us prior to opening, and on an ongoing basis, at any time. The cost for the purchase of these products and services are non-refundable. If we do not require that you purchase such items from us or our affiliate, you must purchase them from our designated supplier(s).

#### **Construction Visits**

We reserve the right to conduct on-site inspections during the construction of your Facial Bar, as we deem appropriate, to ensure the construction of the site meets our brand standards. We estimate that we will have one construction visit to your site and, as of the date of this Disclosure Document, there is no cost to you for this first visit. If additional construction visits are required, however, we may require you to pay us or reimburse us our out-of-pocket expenses that we incur in conducting such on-site inspections, including costs of transportation, lodging, and meals. We estimate that the payments to us for any additional construction visit will range from $500 to $1,500 per visit. These costs are non-refundable.

Question 30

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for creating a positive impact on the community?

Accepted Answer

ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of \$50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to \$40,000. We also offer a reduced initial franchise fee of \$40,000 to qualifying veterans who were honorabl

Question 31

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for future growth and expansion?

Accepted Answer

ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of \$50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to \$40,000. We also offer a reduced initial franchise fee of \$40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of \$45,000, which was our then-current Initial Franchise Fee, and of \$36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to \$40,000 multiplied by the number of Facial Bars you

agree to open under our form of Area Development Agreement. You will not pay an additional Initial Franchise Fee for any of the Facial Bars we require you to develop under the Area Development Agreement. All portions of the Development Fee are payable in full when you sign the Area Development Agreement and are nonrefundable. In our last fiscal year, our Development Fee was uniformly \$36,000 multiplied by the number of Facial Bars to be developed under an Area Development Agreement, which was our then-current Development Fee, except that we allowed one existing area developer to purchase additional units for \$32,500 each.

Question 32

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for future royalties and fees?

Accepted Answer

[Item 5: INITIAL FEES]

# **ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to $40,000. We also offer a reduced initial franchise fee of $40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of $45,000, which was our then-current Initial Franchise Fee, and of $36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to $40,000 multiplied by the number of Facial Bars you

Question 33

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for long-term profitability and return on investment?

Accepted Answer

ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of \$50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to \$40,000. We also offer a reduced initial franchise fee of \$40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of \$45,000, which was our then-current Initial Franchise Fee, and of \$36,000, which was our then-current Initial Franchise Fee for existing franchisees of o

Question 34

How does the initial franchise fee for Face Foundrie (Item 5) relate to the potential for reduced fees mentioned in the same item?

Accepted Answer

ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of \$50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to \$40,000. We also offer a reduced initial franchise fee of \$40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of \$45,000, which was our then-current Initial Franchise Fee, and of \$36,000, which was our then-current Initial Franchise Fee for existing franchisees of o

Question 35

How does the initial franchise fee for Face Foundrie (Item 5) relate to the value of the brand and the System?

Accepted Answer

ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of \$50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to \$40,000. We also offer a reduced initial franchise fee of \$40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of \$45,000, which was our then-current Initial Franchise Fee, and of \$36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to \$40,000 multiplied by the number of Facial Bars you

agree to open under our form of Area Development Agreement. You will not pay an additional Initial Franchise Fee for any of the Facial Bars we require you to develop under the Area Development Agreement. All portions of the Development Fee are payable in full when you sign the Area Development Agreement and are nonrefundable.

Question 36

What is the relationship between the initial franchise fee for Face Foundrie (Item 5) and the background check fee listed in the estimated initial investment (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES]

# **ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to $40,000. We also offer a reduced initial franchise fee of $40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of $45,000, which was our then-current Initial Franchise Fee, and of $36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to $40,000 multiplied by the number of Facial Bars you

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |

[Item 5: INITIAL FEES]

#### **Background Check**

After you apply to become a franchisee or area developer and after the expiration of the 14-day waiting period following your receipt of this disclosure document, you will be required to submit to a background check which includes a criminal/civil record search and a credit check. In connection with the background check, you will be required to pay a fee to us or directly to our background check provider. The fee will be in the amount of $200 to $300 for each owner of the franchise and is non-refundable upon payment. We estimate the total fee will range from $200 to $600, depending on whether you have one or two owners. If you have more than two owners, the fee may be higher.

[Item 7: ESTIMATED INITIAL INVESTMENT]

1. Background Check. After you apply to become a franchisee or area developer and after the expiration of the 14-day waiting period following your receipt of this disclosure document, you will be required to submit to a background check which includes a criminal/civil record search and a credit check. You will be required to pay a non-refundable background check fee that ranges from $200 to $300 per owner to us or directly to our designated background check provider. We will not countersign a Franchise Agreement until we have received results of the search and check. If we determine that you

are unsuitable to run a Face Foundrie Facial Bar as a result of background check and credit check results, we reserve the right to not accept you as a franchisee. The low range of the estimate assumes the franchise will have one owner and the background check fee is $200 per owner, while the high range of the estimate assumes the franchise will have two owners and the background check fee is $300 per owner. These expenses may be higher if the franchise will have more than two owners.

Question 37

What is the relationship between the initial franchise fee for Face Foundrie (Item 5) and the ongoing royalty fees described in Item 6?

Accepted Answer

[Item 5: INITIAL FEES]

# **ITEM 5. INITIAL FEES**

#### **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 ("**Initial Franchise Fee**"). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

We offer a reduced initial franchise fee to existing franchisees of ours that are open, operating, and in good standing (*i.e*., not subject to any uncured default notice). If you meet these conditions and we approve you to operate additional Facial Bars, we will reduce the Initial Franchise Fee to $40,000. We also offer a reduced initial franchise fee of $40,000 to qualifying veterans who were honorably discharged and are purchasing a single Facial Bar.

In our last fiscal year, we uniformly collected Initial Franchise Fees of $45,000, which was our then-current Initial Franchise Fee, and of $36,000, which was our then-current Initial Franchise Fee for existing franchisees of ours that were open, operating, and in good standing.

#### **Area Development Fee**

We offer Area Development Agreements for you to develop multiple (two or more) Facial Bars. The development fees you pay when you sign an Area Development Agreement will vary depending on the number of Facial Bars you commit to open. If you choose to enter into an Area Development Agreement, you must pay a development fee ("**Development Fee**") equal to $40,000 multiplied by the number of Facial Bars you
[Item 6: OTHER FEES]
---

Note 3: Beginning on the first day of the month following the earlier of (a) the date your Facial Bar opens, and (b) date that is 10 months from the signing of your Franchise Agreement (subject to any extensions that have been granted), you will be required to pay a Minimum Royalty Fee of $1,500 per month. We will generally reconcile the Minimum Royalty Fee with the Royalty Fees you have actually paid on the 5th day of the month following the month in which the fee applies, and we will debit your account for any additional Royalty Fees due, provided that we reserve to modify the timing or schedule of this reconciliation in our discretion.

---
Note 5: Company and affiliate-owned Facial Bars are not required to pay Royalty Fees or Technology Fees but will make marketing contributions to the Marketing Fund in the same amounts as similarly situated franchised locations. Company and affiliate-owned Facial Bars do not have a specific local marketing requirement, however they will make expenditures in local marketing programs as appropriate.

Question 38

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the initial franchise fee (Item 5)?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |

[Item 5: INITIAL FEES]

# **Initial Franchise Fee**

When you sign the Franchise Agreement you must pay us an initial franchise fee of $50,000 (“**Initial Franchise Fee**”). The Initial Franchise Fee is due in full when you sign the Franchise Agreement and is non-refundable. Other than as outlined in this Disclosure Document, we have no intention, now or in the future, of reducing the Initial Franchise Fee for any prospective franchisees, although we reserve the right to do so in our sole discretion on a case-by-case basis.

Question 39

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential for building equity?

Accepted Answer

of Page Intentionally Blank]**

# **ITEM 7. ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |#### Notes:

We do not offer direct or indirect financing for these items. Our estimates are based on our experience, the experience of our affiliates, expenditures that our franchisees have reported to us, and our current requirements for Facial Bars. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for utility deposits and other payments.

1. Background Check. After you apply to become a franchisee or area developer and after the expiration of the 14-day waiting period following your receipt of this disclosure document, you will be required to submit to a background check which includes a criminal/civil record search and a credit check. You will be required to pay a non-refundable background check fee that ranges from \$200 to \$300 per owner to us or directly to our designated background check provider.

Question 40

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential for creating a legacy?

Accepted Answer

of Page Intentionally Blank]**

# **ITEM 7. ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |#### Notes:

We do not offer direct or indirect financing for these items.

Question 41

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential for long-term success?

Accepted Answer

of Page Intentionally Blank]**

# **ITEM 7. ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |#### Notes:

We do not offer direct or indirect financing for these items.

Question 42

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential for passive income?

Accepted Answer

of Page Intentionally Blank]**

# **ITEM 7. ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |#### Notes:

We do not offer direct or indirect financing for these items. Our estimates are based on our experience, the experience of our affiliates, expenditures that our franchisees have reported to us, and our current requirements for Facial Bars. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for utility deposits and other payments.

1. Background Check.

Question 43

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential for profit?

Accepted Answer

of Page Intentionally Blank]**

# **ITEM 7. ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |#### Notes:

We do not offer direct or indirect financing for these items. Our estimates are based on our experience, the experience of our affiliates, expenditures that our franchisees have reported to us, and our current requirements for Facial Bars. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for utility deposits and other payments.

1. Background Check. After you apply to become a franchisee or area developer and after the expiration of the 14-day waiting period following your receipt of this disclosure document, you will be required to submit to a background check which includes a criminal/civil record search and a credit check.

Question 44

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential return on investment?

Accepted Answer

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |

Question 45

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this compare to the potential revenue a franchisee might generate?

Accepted Answer

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |

Question 46

What is the total estimated initial investment for a Face Foundrie franchise (Item 7) and how does this relate to the 'other fees' listed in Item 6?

Accepted Answer

| Type of Expenditure |  | Amount | Method of Payment | When Due | To Whom Payment is to be Paid |
|---|---|---|---|---|---|
|  |  | Low |  |  |  |
| Background Check Fee(1) | $200 | $600 | Lump Sum | Upon applying to be a franchisee, after the 14- day waiting period | Us or our background check provider |
| Initial Franchise Fee | $50,000 | $50,000 | Lump Sum | Upon Signing Franchise Agreement | Us |
| Accounting | $500 | $500 | As | As | Us |
| System Set-Up Fee |  |  | Arranged | Arranged |  |
| Rent and Security | $9,100 | $32,000 | As | As | Landlord |
| Deposit(2) |  |  | Arranged | Arranged |  |
| Leasehold | $45,000 | $233,000 | As | Before | Landlord, |
| Improvements(3) |  |  | Arranged | Opening | Contractors |
| Furniture, Fixtures | $57,100 | $86,000 | As | Before | Approved |
| and Equipment(4) |  |  | Arranged | Opening | Suppliers |
| Initial Opening Package(5) | $48,000 | $59,100 | As Arranged | Before Opening | Us and Approved Suppliers |
| Initial Technology | $9,000 | $11,500 | As | Before | Approved |
| Expenses(6) |  |  | Incurred | Opening | Suppliers |
| Signage(7) | $9,000 | $15,000 | As Incurred | Before Opening | Approved Suppliers |
| Initial Training | $16,500 | $26,900 | As | Before | Third |
| Expenses(8) |  |  | Incurred | Opening | Parties |
| Grand Opening | $25,000 | $60,000 | As | As Incurred | Third |
| Advertising(9) |  |  | Incurred |  | Parties |
| Licenses and | $1,800 | $4,600 | Before | Before | Government |
| Permits |  |  | Opening | Opening | Agencies |
| Type of Expenditure |  | Amount Low | Method of Payment | When Due | To Whom Payment is to be Paid |
| Professional Fees | $6,500 | $29,500 | As Incurred | As Incurred | Third Party Architects, Lawyers, Accountants |
| Insurance(10) | $1,000 | $3,350 | As Agreed | As Incurred | Insurance Companies |
| Supplies | $500 | $1,300 | As Incurred | As Incurred | Third Parties |
| Miscellaneous | $1,500 | $4,000 | As Incurred | As Incurred | Third Parties |
| Extension Fee | $0 | $2,500 | As Incurred | Only due if requesting an extension to your required opening date | Us |
| Additional Funds | $71,200 | $79,000 | As Agreed | As Incurred | Various |
| – For Initial 3 |  |  |  |  |  |
| Months of |  |  |  |  |  |
| Operation(11) |  |  |  |  |  |
| TOTAL | $351,900 | $698,850 |  |  |  |
| ESTIMATED |  |  |  |  |  |
| INITIAL |  |  |  |  |  |
| INVESTMENT |  |  |  |  |  |

Question 47

According to the FDD, is there assurance that a franchisee will sell as much as the Face Foundrie corporate facial bars?

Accepted Answer

**Some Facial Bars have sold this amount. Your individual results may differ. There is no assurance that you'll sell as much.**

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

Question 48

According to the Hawaii addendum, under what condition is each provision of the addendum to the Face Foundrie Franchise Disclosure Document effective?

Accepted Answer

Each provision of this Addendum to the Franchise Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently, without reference to this Addendum to the Franchise Disclosure Document, and only to the extent such provision is a then valid requirement of the statute.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)

Question 49

According to Iowa and New York law, what is the deadline for Face Foundrie Franchising L.L.C. to provide the disclosure document before signing an agreement or paying consideration?

Accepted Answer

If Face Foundrié Franchising L.L.C. ("we" or "us") offers you a franchise, we must provide this disclosure document to you 14 calendar days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale. If applicable, Iowa law and New York law require us to provide you with this disclosure document at the earlier of the first personal meeting or 10 business days before you sign a franchise or other agreement with, or pay any consideration to, us or an affiliate in connection with the proposed sale.

Source: Item 23 — RECEIPTS (FDD pages 74–257)

Question 50

According to Iowa and New York law, what is the deadline for Face Foundrie to provide the disclosure document before signing an agreement or paying consideration?

Accepted Answer

If Face Foundrié Franchising L.L.C. ("we" or "us") offers you a franchise, we must provide this disclosure document to you 14 calendar days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale. If applicable, Iowa law and New York law require us to provide you with this disclosure document at the earlier of the first personal meeting or 10 business days before you sign a franchise or other agreement with, or pay any consideration to, us or an affiliate in connection with the proposed sale.

Source: Item 23 — RECEIPTS (FDD pages 74–257)

Question 51

According to Michigan law, what is the deadline for Face Foundrie Franchising L.L.C. to provide the disclosure document before signing an agreement or paying consideration?

Accepted Answer

If Face Foundrié Franchising L.L.C. ("we" or "us") offers you a franchise, we must provide this disclosure document to you 14 calendar days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale. If applicable, Iowa law and New York law require us to provide you with this disclosure document at the earlier of the first personal meeting or 10 business days before you sign a franchise or other agreement with, or pay any consideration to, us or an affiliate in connection with the proposed sale. If applicable, Michigan law requires that we provide this disclosure document to you at least 10 business days before the execution of any binding franchise or other agreement with, or the payment of any consideration to, us or an affiliate, whichever occurs first.

Source: Item 23 — RECEIPTS (FDD pages 74–257)

Question 52

According to the Virginia addendum, to what extent are the provisions of the addendum effective for Face Foundrie?

Accepted Answer

Each provision of this Addendum to the Franchise Disclosure Document shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Virginia Retail Franchising Act are met independently, without reference to this Addendum to the Franchise Disclosure Document, and only to the extent such provision is a then valid requirement of the statute.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)

Question 53

According to the Virginia addendum for Face Foundrie, under what condition might a ground for default or termination stated in the franchise agreement not be enforceable?

Accepted Answer

In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Face Foundrié Franchising L.L.C. for use in the Commonwealth of Virginia shall be amended as follows:

Additional Disclosure: The following statements are added to Item 17.h. for the Franchise Agreement:

"Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement or development agreement does not constitute "reasonable cause;" as that term is defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)

Question 54

Does the addendum apply to a Face Foundrie franchisee if the facial bar will be located or operated in Washington?

Accepted Answer

| THIS ADDENDUM (the "Addendum") is made and entered into by and between FACE FOUNDRIÉ FRANCHISING L.L.C., a Minnesota limited liability company ("Franchisor") with its                          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| principal |
| business |
| address |
| at |
| 6446 |
| Flying |
| Cloud |
| Drive, |
| Eden |
| Prairie, |
| Minnesota |
| 55344, |
| and |
| , a ("Franchisee"), whose principal                                                                                                                                                                      |
| business address is                                                                                                                                                                                      |
| 1. |
| BACKGROUND. Franchisor and Franchisee are parties to that certain Franchise Agreement |
| dated, 20 (the "Franchise Agreement"). This Addendum is annexed to |
| and forms part of the Franchise Agreement. This Addendum is being signed because |
| (a) the Facial Bar that |
| Franchisee will operate under the Franchise Agreement will be located in Maryland; and/or (b) any of the                                                                                                 |
| offering or sales activity relating to the Franchise Agreement occurred in Maryland.                                                                                                                     |
| 2. |
| RELEASES. The following is added to the end of Sections 13.02 and 15.03 of the Franchise |
| Agreement: |
| Any release required as a condition of renewal, sale and/or assignment/transfer will not apply |
| to |
| any claims or liability arising under the Maryland Franchise Registration and Disclosure |
| Law. |
| 3. |
| INSOLVENCY. |
| The following sentence is added to the end of Section 14.02 |
| of the |
| Franchise Agreement: |
| Section 14.02 may not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 |
| et seq.). |
| 4. |
| FORUM FOR LITIGATION. The following language is added to the end of Section 18.04 |
| of the Franchise Agreement: |
| Franchisee may bring an action in Maryland for claims arising under the Maryland Franchise |
| Registration and Disclosure Law. |
| 5. |
| GOVERNING LAW. The following statement is added at the end of Section 19.04 of the |
| Franchise Agreement: |
| Notwithstanding the foregoing, the Maryland Franchise Registration and Disclosure Law shall |
| govern any claim arising under that law. |
| 6. |
| LIMITATION OF CLAIMS. The following is added to the end of Section |
| 18.06 of the |
| Franchise Agreement: |
| Franchisee must bring any claims arising under the Maryland Franchise |
| Registration and Disclosure Law within three years after Franchisor grants Franchisee |
| the franchise. |

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 55

Is the Face Foundrie Addendum for Washington franchisees only applicable if the franchisee is a resident of Washington?

Accepted Answer

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 56

Is the Face Foundrie Addendum for Washington franchisees only applicable if any offering or sales activity relating to the Franchise Agreement occurred in Washington?

Accepted Answer

2. **WASHINGTON LAW**. The following paragraphs are added to the end of the Franchise Agreement:

The provisions of this Addendum form an integral part of, are incorporated into, and modify the Franchise Disclosure Document, the franchise agreement, and all related agreements regardless of anything to the contrary contained therein. This Addendum applies if: (a) the offer to sell a franchise is accepted in Washington; (b) the purchaser of the franchise is a resident of Washington; and/or (c) the franchised business that is the subject of the sale is to be located or operated, wholly or partly, in Washington.

**CONFLICT OF LAWS**. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.

**FRANCHISEE BILL OF RIGHTS**. RCW 19.100.180 may supersede provisions in the franchise agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the franchise agreement or related agreements concerning your relationship with the franchisor. Franchise agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.

**SITE OF ARBITRATION, MEDIATION, AND/OR LITIGATION**. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 57

After Face Foundrie approves the final construction plans, can the franchisee change or modify them?

Accepted Answer

Once approved by Franchisor, such final plans shall not thereafter be changed or modified without the prior written permission of Franchisor.

Any such change made without Franchisor's prior written permission shall constitute a default and Franchisor may withhold its authorization to open the Facial Bar until the unauthorized change is rectified (or reversed) to Franchisor's reasonable satisfaction.

Source: Item 22 — CONTRACTS (FDD pages 73–74)

Question 58

When does the area developer's rights in the Development Territory under the Face Foundrie Area Development Agreement end?

Accepted Answer

Your rights in these territories will end at the earlier of: (i) the date your Area Development Agreement expires; and

(ii) the date you must sign the Franchise Agreement for your last Facial Bar under the terms of the Development Schedule. If the Development Territory covers more than one city, county, or designated market area, the protection for each particular city, county or designated market area will also expire on the date when we determine the protected territory to be given to you under a franchise agreement for your final Facial Bar to be developed in that city, county, or designated market area. When your rights in your Development Territory have expired under the Area Development Agreement, you will still have the rights granted to you in any portion of these territories under an individual franchise agreement.

Source: Item 12 — TERRITORY (FDD pages 43–46)

Question 59

What are the conditions under which Face Foundrie will not establish or operate, or license anyone other than the Area Developer to establish or operate, a Face Foundrié Facial Bar within the Development Area?

Accepted Answer

pment schedule specified in Paragraph 1 of Exhibit A to this Agreement (the "**Development Schedule**").

- 1.1.3 Each Franchised Facial Bar developed hereunder shall be at a specific location, which shall be designated in the Franchise Agreement, that is within in the area described in Paragraph 2 of Exhibit A to this Agreement (the "**Development Area**"). If a "TBD" (to be determined) search area has been designated in Paragraph 2 of Exhibit A, Area Developer hereby authorizes Franchisor to designate the Development Area and complete Exhibit A subsequent to execution of this Agreement upon Franchisor approval of Area Developer's proposed territory. Until Franchisor has so designated a Development Area, Area Developer will not have any rights to a protected territory.
- 1.2 **Development Area***.* Except as otherwise set forth herein (including, without limitation, the rights retained by Franchisor as described in Section 1.3), during the term of this Agreement, and so long as Area Developer is in compliance with its obligations under this Agreement and all of the Franchise Agreements between Area Developer (including any affiliate of Area Developer), Franchisor shall not establish or operate, or license anyone other than Area Developer to establish or operate, a Face Foundrié Facial Bar under the Marks and System at any location that is within the Development Area. Notwithstanding the foregoing, Franchisor has the right to operate (directly or through an Affiliate), and to grant to others the right to operate, within the Development Area and elsewhere: (a) Face Foundrié Facial Bars or other businesses using any part or all of the System and/or Marks that are operating as of the Effective Date; and (b) businesses that Franchisor or its Affiliates purchase (or as to which Franchisor or its Affiliates purchases the rights as franchisor) that are part of another franchise system or chain and either continue to operate them independently or convert them to Face Foundrié Facial Bars.
- 1.3 **Franchisor's Reserved Rights**.

Source: Item 23 — RECEIPTS (FDD pages 74–257)

Question 60

What are the consequences if either party initiates litigation or arbitration against Face Foundrie without complying with the mediation obligation?

Accepted Answer

- 16.3.1 Except for the matters identified above where Franchisor or Area Developer are permitted to seek injunctive relief without first mediating the dispute, if either party initiates litigation or arbitration without complying with their obligation to mediate in accordance with this paragraph (unless the other party has failed to respond on a timely basis or has indicated it will not engage in mediation in accordance with the provisions of this Section), then upon petition of whichever of the parties has a lawsuit or arbitration proceeding brought against it, the court or arbitrator will dismiss the litigation or arbitration without prejudice, and award reasonable attorneys' fees and costs to the party seeking dismissal in an amount equal to the reasonable attorneys' fees and costs the party seeking dismissal incurred.

If the court or arbitrator refuses for any reason to dismiss the action, then regardless of the outcome of the action, or of any award given in the action, the party initiating the litigation or arbitration will be responsible for all reasonable attorneys' fees and costs incurred throughout the litigation or arbitration by the other party as damages for failing to comply with the provisions of this Section.

Source: Item 23 — RECEIPTS (FDD pages 74–257)

Question 61

What is the dependency between the Area Development Agreement and the individual Face Foundrie franchise agreements regarding territorial rights?

Accepted Answer

| 166 |
| Accounting Guide                         | 168 |
| Closing Statement                        | 173 |

# **ITEM 12. TERRITORY**

#### **Under an Area Development Agreement**

If you sign an Area Development Agreement, we will describe the development territory in the Rider to that agreement ("**Development Territory**"). The territory will typically be described as a geographic area in which each of your Facial Bars must be developed. The factors that we consider in determining these territories include density of population, growth trends of population, apparent degree of affluence of population, the density of residential and business entities, traffic generators, driving time, natural boundaries, location of other Facial Bars, the number of Facial Bars you wish to develop, and our development plans. As long as you are in compliance with your obligations under the Area Development Agreement and all of the Franchise Agreements between you (and your affiliates) and us, we will not establish or operate, or license anyone other than you to establish or operate, a Facial Bar in these development territories, subject to our reserved rights below. Your rights in these territories will end at the earlier of: (i) the date your Area Development Agreement expires; and

(ii) the date you must sign the Franchise Agreement for your last Facial Bar under the terms of the Development Schedule. If the Development Territory covers more than one city, county, or designated market area, the protection for each particular city, county or designated market area will also expire on the date when we determine the protected territory to be given to you under a franchise agreement for your final Facial Bar to be developed in that city, county, or designated market area. When your rights in your Development Territory have expired under the Area Development Agreement, you will still have the rights granted to you in any portion of these territories under an individual franchise agreement.

If you are in full compliance with your Development Agreement and any existing Franchise Agreement you have entered into with us, then we will grant you the right to open the number of Facial Bars you agreed to open as part of your Development Schedule within your Development Territory. Your Development Schedule will depend on the number of units you acquire the rights to develop in your Development Agreement; however, generally, your Development Schedule will be based on you opening one Facial Bar every 10 months.

If you sign an Area Development Agreement, you must sign individual Franchise Agreements and find a site that meets our approval under our then-current site approval criteria under each individual Franchise Agreement you sign.

#### **Under a Franchise Agreement**

The Franchise Agreement grants to you the right to own and operate a Facial Bar at a specific location approved by us. You may not conduct the business of your Facial Bar at any site other than the approved premises or relocate your Facial Bar without our prior written consent. If the site for your Facial Bar has been identified before you sign the Franchise Agreement, then you must operate the Facial Bar at that site. If the site becomes unavailable to you for any reason, it is your obligation to select a new location, and to obtain our approval of that location before you acquire the site, and before you obtain any rights in the location. If a site has not been identified, we will designate an area, and you may locate your Facial Bar at any place within that area, so long as the site you select is not also within a territory of another Facial Bar. Until a site has been identified, you will not have any rights to operate your Facial Bar at any specific location.

Your Franchise Agreement may also specify a protected territory ("**Territory**"). We may attach a map to your Franchise Agreement that will identify the territory or we may simply describe an area surrounding your location. The map or description may not be a specific radius from your Facial Bar, because it will take into account traffic patterns and natural boundaries. Because each location is different, the Territory for each Facial Bar will be different; however, each Territory will generally contain a population of up to 40,000 individuals and range from a one to three-mile radius around the Facial Bar. The size and scope of the Territory will be determined, in our sole discretion, during the site confirmation process based upon various factors such as (a) whether the approved location is an urban area or a suburban area; (b) population of the area; (c) competition in the area; and (d) policies regarding protected territories and other conditions that we deem appropriate; among other factors.

Except as noted below, as long as you are in compliance with the Franchise Agreement, we will not operate a Facial Bar or grant to a third party the right to operate a Facial Bar within your Territory. Protected territories may overlap, but we will not approve anyone opening or operating a FACE FOUNDRIÉ facial bar within the protected territory given to another facial bar.

You may not move or relocate your Facial Bar without our prior written consent, which consent will not be unreasonably withheld.

Source: Item 12 — TERRITORY (FDD pages 43–46)

Question 62

What is the dependency between the background check results and Face Foundrie's acceptance of a franchisee?

Accepted Answer

ble, except as you may arrange for utility deposits and other payments.

1. Background Check. After you apply to become a franchisee or area developer and after the expiration of the 14-day waiting period following your receipt of this disclosure document, you will be required to submit to a background check which includes a criminal/civil record search and a credit check. You will be required to pay a non-refundable background check fee that ranges from \$200 to \$300 per owner to us or directly to our designated background check provider. We will not countersign a Franchise Agreement until we have received results of the search and check. If we determine that you

are unsuitable to run a Face Foundrie Facial Bar as a result of background check and credit check results, we reserve the right to not accept you as a franchisee. The low range of the estimate assumes the franchise will have one owner and the background check fee is \$200 per owner, while the high range of the estimate assumes the franchise will have two owners and the background check fee is \$300 per owner. These

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)

Question 63

What is the dependency between the execution of Franchise Agreements and the expiration of the Face Foundrie Area Development Agreement?

Accepted Answer

| Provision |  | Section(s) in | Summary |
|---|---|---|---|
|  |  | Area Development Agreement | rights or obligations under the Area Development Agreement, or any material asset of your business, without our prior written consent, which shall be subject to all of the conditions and requirements for transfers set forth in the Franchise Agreement executed simultaneously with the Area Development Agreement that we deem applicable to a proposed transfer under the Area Development Agreement. |
| (l) Franchisor approval | Section 7.2 |  | We have the right to approve transfers. |
| of transfer by area |  |  |  |
| developer |  |  |  |
| (m) Conditions for franchisor’s approval of transfer | Sections 7.2 and 7.3 |  | Unless waived, a transfer of the Area Development Agreement is conditioned on, among other factors, the requirement that the proposed transfer of the Area Development Agreement be made in conjunction with a simultaneous transfer of all existing Franchise Agreements to the same approved transferee. Additionally, your first Facial Bar under your first Franchise Agreement must be open and operating. |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION OF THE FRANCHISE RELATIONSHIP (FDD pages 51–59)

Question 64

What disclaimer is provided regarding the potential sales results of a Face Foundrie franchise?

Accepted Answer

**Some Facial Bars have sold this amount. Your individual results may differ. There is no assurance that you'll sell as much.**

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 59–69)

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