We attempt to negotiate purchase agreements with suppliers, including favorable pricing terms, for the benefit of franchisees. As of the date of this Disclosure Document, we have negotiated purchase agreements (including pricing terms) with suppliers for FIT Bodywraps®, tanning lamps, teeth whitening trays and take-home whitening pens. We may also purchase items in bulk and resell them to you at our cost plus a reasonable markup. Currently there are no purchasing cooperatives but we may establish them in the future. You do not receive any material benefits for using designated or approved suppliers other than having access to any discounted pricing we negotiate.

Franchisor Revenue from Source-Restricted Purchases

We do not currently serve as an approved or designated supplier, but we may do so in the future. Our affiliate, FDTC, is the exclusive supplier for FIT Bodywraps®. Our affiliate, Evolv, is the exclusive supplier for all TANOLOGY® and BRONZE LUMINESSENCE™ skincare products and CALIFORNIA SPA® Ageless Serum, as well as certain branded supplies, such as name tags, bed tents, iTAN tote bags and key tags. FDTC and Evolv may also sell these products to the public and other retailers through other channels of distribution, although iTAN franchisees enjoy discounted pricing not generally available to other purchasers of these products. We may designate ourselves and our affiliates as approved or designated suppliers for other goods and services in the future. We and our affiliates may generate a profit from these purchases. Except for FDTC and Evolv, no person affiliated with us is currently an approved (or the only approved) supplier. Our Chief Executive Officer owns an interest in us (the franchisor) as well as FDTC and Evolv. There are no other approved or designated suppliers in which any of our officers own an interest.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 18–21)