What is the relationship between the initial franchise fee for Spray Net in Item 5 and the potential for purchasing additional territories as described in Item 12?

You must pay us an initial franchise fee amounting to $54,500 (the "Initial Franchise Fee"), which is deemed fully earned upon execution of your Franchise Agreement and we have the right to collect in a lump sum payment at that time. You may purchase additional Territories based on the table below. Upon approval by us, you may also purchase additional population between such levels for $0.66 per additional household.

At the time of signing your Franchise Agreement we will designate your Designated Territory. The scope of your Designated Territory will vary from the scope and size of the operating territories of other franchisees in our System depending on local factors, market conditions, and whether or not, at the time of signing your Franchise Agreement, you increase the size of your Designated Territory from a Base Territory to a Base Territory that has been supplemented by the purchase of additional Qualified Single-Family Households and/or Additional Territories. A Base Territory, generally, will consist of a geographic area that includes approximately 75,000 qualified single family households with annual household income exceeding $60,000 (each a "Qualified Single-Family Household"). Subject to availability, our approval, and payment of additional Initial Franchise Fees identified in Item 5 of this Disclosure Document, you may add additional Qualified Single-Family Households and/or Additional Designated Territories. Each Additional Designated Territory will also include approximately 75,000 Qualified Single-Family Households. The number of single-family households with the required household income level will be determined in the aggregate and will be calculated based on raw data and without regard to demographics or age. Your local marketing expenditure will increase if you add Additional Designated Territories.