How is the 'Successor Term Fee' calculated for a Pump It Up franchise?

• B.

Subsequent Franchise Agreement.

You will have the option to request the right to continue as a franchisee at the Premises after the expiration of the Initial Term.

The qualifications and conditions for the successor term are described below:

• (1) You must give us written notice of your election to continue as a franchisee at the Premises no less than 10 months ("Renewal Notice Deadline"), nor more than 18 months, before the end of the Initial Term;

• (2) You must pay to us a successor term fee equal to 25% of the initial franchise fee then being charged to new franchisees (the "Successor Term Fee");

• (3) Neither you nor any of your affiliates are in default under this Agreement or any other agreements with us or our affiliates;

• (4) You must have the right to remain in possession of the Premises (or another location acceptable to us) for the entire duration of the term of the new Franchise Agreement;

• (5) You must renovate and update the Franchised Business to reflect the then-current image and standards of Pump It Up Businesses;

• (6) We reserve the right to require you to correct any existing deficiencies of the Franchised Business or in your operation of the Franchised Business and satisfy our then-current System Standards.

This may include, but not be limited to, adding any new products or services that are then being offered in the System, meet our qualifications for new franchisees, and complete any additional certification and training requirements that apply to you, your Operating Principal, and/or your managerial personnel (which may involve the payment of training fees);

Source: Item 23 — RECEIPTS (FDD pages 60–225)