INITIAL FEES**

Initial Franchise Fee

You pay us a $49,500 initial franchise fee at the time you sign the Franchise Agreement. The initial franchise fee is uniformly imposed except for the Veterans Discount, Conversion Discount and Multi-Unit Discount discussed below. If multiple discounts apply to the same Salon, you receive the discount that results in the lowest initial franchise fee. Discounts cannot be combined except as otherwise provided below.

Veterans Discount

If you qualify for the Veterans Discount, you pay us a $44,550 initial franchise fee for your 1st franchised Salon, which reflects a 10% discount ($4,950). To qualify, a person holding at least a 51% interest in the franchise must be an honorably discharged veteran of any branch of the United States military and provide us with a Form DD-214. If you purchase multiple Salons, the Veterans Discount will only be applied against the 1st Salon you purchase, except as provided below under Conversion Discount.

Conversion Discount

If you convert a Qualifying Conversion Salon to an iTAN Salon, you qualify for the Conversion Discount and pay us a $15,000 initial franchise fee. The Conversion Discount does not apply if you operated the pre-existing tanning salon less than 1 year prior to signing the Franchise Agreement. The Conversion Discount cannot be combined with the Veterans Discount for the purchase of a single Salon. However, if you qualify for the Veterans Discount and your first Salon qualifies for the Conversion Discount, we apply the Conversion Discount to your 1st franchised Salon and we apply the Veterans Discount to the next Salon you purchase that is

not a Conversion Salon.

Source: Item 5 — INITIAL FEES (FDD pages 10–11)