this Item.

INITIAL FEES

Initial Fee

You must pay us an initial fee equal to the greater of $50,000 or $400 per Guest Room (as defined below) (the "Initial Fee") when you sign the Franchise Agreement. The Initial Fee is fully earned and non-refundable and must be paid before we will countersign the Franchise Agreement. During the 2024 fiscal year, we charged a discounted Initial Fee ranging from $25,000 (for a Brand Hotel with fewer than 125 Guest Rooms) to $50,000 (for a Brand Hotel with 134 Guest Rooms).

"Guest Room" means each rentable unit in your Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key. Adjacent Guest Rooms with connecting doors that can be rented as separate units are considered separate Guest Rooms. The initial number of approved Guest Rooms will be identified on Exhibit A to the Franchise Agreement.

Other Initial Fees

If you are entering into the Franchise Agreement for a newly constructed Brand Hotel, or if you are converting an existing hotel into a Brand Hotel, you will pay us an onboarding administration fee of $2,500 for the onboarding services we provide to you in connection with the opening of your Hotel. If you are acquiring an existing Brand Hotel, you will pay us a reduced onboarding administration fee of $2,000. This fee is non-refundable and is due during or immediately after the onboarding process. During the 2024 fiscal year, we charged an onboarding administration fee ranging from $1,000 to $2,500.

If you are converting an existing hotel into a Brand Hotel, prior to the execution of the Franchise Agreement, you must pay us up to $5,000 ("PIP Fee") to cover our costs to perform an initial inspection of your property, prepare a property improvement plan ("PIP"), and verify completion of the PIP. The PIP will set forth a list of property improvements that you must make to convert your property to a Brand Hotel under the Brand Standards. The PIP Fee is nonrefundable. If we are required to reinspect your Hotel to ensure you have complied with the PIP, you must pay us a PIP reinspection fee of up to $5,000. These fees will be due when billed and are non-refundable.

You will pay us a fee in the amount of $1,500 for the initial brand training we provide to you. The initial brand training fee is due when you sign the Franchise Agreement and is non-

refundable. In the event the initial brand training is conducted in-person rather than virtually, you must also reimburse us for our personnel's travel, meals, and lodging expenses, which we estimate to be up to $2,500. These costs are due when billed and are non-refundable.

You will be required to pay a PMS Interface and Tokenization Set Up Fee, which is charged by our third-party central reservation system ("CRS") provider, for setting up an interface with your PMS. You must pay the base fee in the amount of $650, which includes CRS tokenization and 2-way PMS integration. Additional optional features and services are available for additional fees, including 2-way RMS integration for $295 and/or 2-way enhanced reservation push for $800. We will collect this PMS Interface and Tokenization Set Up Fee from you and remit it to our CRS provider. This fee will be due when billed and is non-refundable.

Source: Item 5 — INITIAL FEES (FDD pages 23–25)