[Item 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS]

Ownership Participation

You must designate an owner with overall responsibility for the management and operation of your Salon (the "Managing Owner"). The Managing Owner must: (a) be approved by us; (b) successfully complete all training programs we require; (c) dedicate full-time efforts to the Business; and (d) at all times hold at least a 20% ownership interest in the franchise (or the entity that is the franchisee under the Franchise Agreement) unless we waive this requirement. The Managing Owner is not required to provide onsite management of your Salon as long as a trained manager is onsite. Any new Managing Owner you appoint must successfully complete our then-current initial training program before assuming responsibility for the management of your Salon.

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

Training Program (§5)

Initial Training Program

We will provide an initial training program for the Managing Owner and your initial general managers. You may send other owners to initial training, but it is not required. Your Managing Owner must successfully

complete initial training to our satisfaction at least 2 weeks before your Salon opens.

Our initial training program currently includes: (a) 2 to 4 weeks of self-paced remotely conducted training that is conducted in separate 2 stages; (b) 5 days of hands-on training conducted at a designated training facility in San Diego, California; and (c) 5 days of onsite training and assistance conducted at your Salon at the time you open.

• 1. Remote Training Stage 1: Stage 1 of remote training consists of online core operational curriculum administered through iTAN University, which is accessed through LMS. This is a self-paced program that is expected to take 1 to 2 weeks to complete. This training will be supplemented with 12 hours of live virtual training sessions conducted remotely by our Franchise Business Coach using MS Teams (or any other virtual platform we designate).
• 1. Hands-On Training San Diego: After the trainees have successfully completed stage 1 of remote training, they must attend and successfully complete 5 days of hands-on practice and training that takes place at a designated training facility in San Diego, California. Our current designated training facility is a franchised Salon located in San Diego, California. We may change the training facility at any time. Hands-on training typically occurs 1 month prior to opening, although we reserve the right to change the timing.
• 1. Remote Training Stage 2: Stage 2 of remote training includes online management and franchise owner training courses conducted through iTAN University. This training will also be supplemented with 12 hours of live virtual coaching sessions conducted remotely by our Franchise Business Coach using MS Teams (or any other virtual platform we designate). Remote training conducted via LMS will be monitored through a training reports system. Stage 2 training typically begins after completion of hands-on training in San Diego, although we reserve the right to adjust the order of training at our discretion.
• 1. Onsite Training: Onsite training includes approximately 5 days of training that takes place at your Salon immediately prior to and through your opening date. Onsite training is an informal training program where our designated trainer will monitor your operations and assist you with the opening of your Salon.

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

Ongoing Training Programs

From time to time, we may require that your Managing Owner and general managers attend system-wide refresher or supplemental training courses. Any new Managing Owner you appoint or general manager you hire must successfully complete initial training before assuming responsibility for the management of your Salon. After successfully completing initial training, your Managing Owner may provide initial training for new general managers you hire. However we may, for good cause, revoke the Managing Owner's right to train general managers. If we inspect your Salon and determine you are not operating in compliance with the Franchise Agreement and the Manual, we may require that your Managing Owner and general managers attend remedial training relevant to the operational deficiencies we observed. You may also request that we provide additional training. We are not required to provide additional training you request.

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

We provide our preopening initial training program at no additional charge. We charge an initial training fee of $1,500 for each person you send to initial training after your Salon opens.

Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 35–36)