What is the role of real estate brokers in determining the estimated investment ranges for a Fitstop franchise?

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Explanatory Notes to Item 7 Chart Above

General Note. The estimated investment ranges were prepared based upon and accounting for: (i) various sources of information, including (a) the experience of our affiliates developing two (2) System Businesses (each, an "Affiliate Business") over the past 18 months, (b) the experience of our Affiliate Franchisor and its System franchisees that have Franchised Businesses operating or under development in Australia, (c) information we have received from our current third-party Approved Suppliers for certain investment items or categories above, (d) information and data that we have received from various real estate brokers and/or other sources for information with respect to current real estate and commercial leasing markets, and (e) various other due diligence; and (ii) a number of expectations and reasonable assumptions that we make as part of our standard franchise offering, such as franchisee (a) securing an approved Premises and opening the Franchised Business within the prescribed timelines set forth in your Franchise Agreement (and on or before the Rent Commencement Date under the lease for the Premises), and (b) ensuring that the Premises is built out in accordance with our current System standards, specifications and processes, and (c) using our Approved Suppliers for certain Required Items as set forth in the Chart above and in Item 8 of this Disclosure Document below.

• 1. Initial Franchise Fee. Please see Item 5 of this Disclosure Document for additional details regarding this initial fee and the terms associated with the same. This amount must be paid in connection with each Franchised Business you are awarded the right to independently own and operate at the time such rights are awarded, and such amounts are deemed fully earned upon payment under your signed Franchise Agreement.
• 1. Training-Related Costs and Expenses. This is the estimated range of costs that a new System franchisee can expect to incur in connection with attending the Corporate Training portion of our Initial Training Program at our designated corporate training location (currently located in California). The low end of this estimate assumes that you or your operating principal will be the only person attending the Corporate Training and that the franchisee resides close enough that no major flight costs will be incurred. The high end of this estimate assumes that you and possibly one (1) other person (either your Designated Manager and/or lead Authorized Instructor) will attend the Corporate Training and that the attendees' travel costs will include standard airfare and lodging at one (1) of the hotels that we recommend nearby the Corporate Training location.

• 1. Initial Marketing Spend; Other Initial Marketing and Promotional Activities. The $10,000 Initial Marketing Spend will be expended as we direct in the Manuals or otherwise in writing, consistent with our System standards and practices, and we expect that all or substantial portion of this spend will be remitted to our designated Approved Supplier for online marketing and promotional services. In addition to this Initial Marketing Spend, we expect and may require that you expend up to an additional $1,000 to $10,000 on marketing, advertising and promotional services and/or collateral that we prescribe or approve in the Manuals to increase the visibility of your Franchised Business within your Designated Territory. Please see Item 9 of this Disclosure Document for additional information.
• 1. Site Selection Assistance. The low end of this estimated range assumes that the third-party provider you engage to assist in your review and analysis of potential sites for your Franchised Business for you to consider will provide such services and ultimately be compensated by the landlord of the site that you submit and we approve as the Premises of your Franchised Business which seems to be the common practice amongst many national real estate brokers such as CBRE®. The high end of this estimate assumes that "Site Selection" costs will include some type of payment to your site selection assistance provider, while also accounting for some additional out-of-pocket costs you might incur on preliminary buildout analysis or other information you submit as part of your site proposal package.
• 1. Lease: Security Deposit and other Pre-Opening Payments. These are estimated amounts of your security deposit under the lease for the Premises, which our standard franchise offering expects will be between 1,800 to up to 3,000 square feet. We expect that the lease terms, including rent, will vary substantively amongst our System franchisees based on (a) demand in the Designated Territory, (b) the population and other demographics of the Designated Territory and surround region, and (c) the terms you are responsible for negotiating with landlord with respect to rent (and/or free rent) and other primary business/payment terms under the lease for the Premises. These amounts will vary by market and may be refundable (as determined by the landlord). The low end of this estimate assumes a Premises in a suburban or rural area that is not in a city or other densely populated area or metropolitan area, with a security deposit amounting 1-2 months of rent. The high end of this estimate assumes that the Premises is located in a higher-end real estate market and/or more densely populated area, with a security deposit amounting to 2-3 months of rent.

Source: Item 7 — TEM 7: ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)