review these figures carefully with a business advisor before making any decision to purchase the Franchise Business.

ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT - CONVERSION LOCATION

| Type of | Amo | ount | Method of | | To Whom | |-----------------------------------------------|----------|----------|------------------------------------|----------------------------------------------------------|-------------------------------------| | Expenditure | Low | High | Payment | When Due | Payment is to be Paid | | Initial Franchise Fee ⁽¹⁾ | $50,000 | $50,000 | Lump sum | Upon signing of Franchise Agreement | Franchisor | | Travel and Living Expenses | $1,000 | $3,000 | As incurred | As incurred | Airlines, Hotels, Restaurants, etc. | | Rent or Real | $0 | $0 | As determined by lessor | Prior to opening | Lessor | | Estate ⁽²⁾ | | | | | | | Improvements/ | $12,500 | $50,000 | As incurred | Prior to opening | Vendors | | Conversions ⁽³⁾ | | | | | | | Furniture and Fixtures | $12,500 | $50,000 | As determined by vendors | Prior to opening or as arranged with vendors | Vendors | | Signage | $4,960 | $23,230 | As determined by vendors | Prior to opening or as arranged with vendors | Vendors | | Miscellaneous | $5,000 | $9,000 | As incurred | Prior to opening | Vendors, | | Opening Costs ⁽⁴⁾ | | | | | Utilities, etc. | | Operating | $0 | $0 | As incurred | Prior to opening | Approved Vendors | | Supplies ⁽⁵⁾ | | | | | | | Advertising/ Marketing (3 Months) | $15,000 | $20,000 | As incurred | Prior to opening | Mailings – Media | | Insurance (Annual) ⁽⁶⁾ | $1,400 | $4,000 | As determined by insurance company | Prior to opening or as arranged by vendor | Insurance Company/Agent | | Additional Funds – 3 Months ⁽⁷⁾ | $10,000 | $20,000 | As incurred | As incurred | Various Third Parties | | Design Standards | $1,500 | $2,500 | Lump sum | Prior to opening, within 5 | Franchisor | | Fee ⁽⁸⁾ | | | | | | | Type of | Amo | ount | Method of | | To Whom | | Expenditure ⁽¹⁾ | Low | High | Payment | When Due days of invoice | Payment is to be Paid | | Project | $0 | $0 | Lump sum | Within 30 days of signing the lease | Franchisor | | Management Fee ⁽⁹⁾ | | | | | | | TOTAL ESTIMATED INITIAL INVESTMENT(10) | $113,860 | $231,730 | | | | All amounts that you pay to us are nonrefundable. Third party lessors and suppliers will decide if payments to them are refundable. Neither we nor any of our affiliates offer any financing for any of your initial investment.

Notes:

• 1. Initial Franchise Fee. You will pay an Initial Franchise Fee of $50,000, and as discount of 50%, if you are a veteran of the U.S. Armed Forces that meets the requirements of the VetFran Program, or if you are a First Responder, as determined by us. The Initial Franchise Fee is non-refundable under the terms of the Franchise Agreement. See Item 5 for additional information about your Initial Franchise Fee.
• 1. Rent or Real Estate. You must lease or otherwise acquire a suitable facility for the operation of your Franchised Business. You will need a facility with approximately 5,039 to 8,218 square feet of space. Your actual rent payments may vary depending upon your location and your market's retail lease rates. If you purchase instead of lease, the premises for your Franchised Business, then the purchase price, down payment, interest rates, and other financing terms will determine your monthly mortgage payments.
• 1. Improvements/Conversions. The cost of converting your business to a My Salon Suite business will vary significantly based on the geographic location and square footage of your Franchised Business. Tenant improvement costs typically range between $183 per square foot and $286 per square foot.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 29–35)