(ii) If you use the Stretch Zone name and logo in an inappropriate way;

• (iii) If a person providing stretching service is not certified by us, a $250 fine will be issued for every day the person continues to provide stretching services;
• (iv) If we find that your employees are not in uniform or otherwise complying with our dress code - $200 fine; or
• (v) If you receive an inspection report from us that reveals material violation or our operating standards.

The Manuals contains further information on other types of violations that are subject to fines. If there is a violation that has not been listed, the fine will be $250.

(k) Other Fees. There are other fees, and reimbursement and indemnification obligations on your part contained in this Agreement and disclosed in ITEM 6 of the FDD.

Section 3.2 PAYMENT SCHEDULE

Royalty Fees, Technology Fees, training fees, Advertising Contributions and Fines are automatically billed and paid when are due by processing through our POS system. If we do not specify a due date, these amounts are due upon receipt of our invoice. Any payment or report not actually received by us on or before the due date is overdue. All payments will be processed through our POS system.

Section 3.3 PAYMENT SYSTEM

You will open a separate operating account with a bank for the Franchise Business. You will make all Royalty Fees, Technology Fees and Media Fund contributions and other invoices due us and our Affiliates from remittances from your members that have been deposited into your operating account by ClubReady processing payments due us (the "Payment System"). You will cooperate with us to implement the Payment System within 15 days before the Opening Date. You agree to cooperate with us in maintaining the efficient operation of the Payment System including depositing all Gross Revenues you receive into your operating account within 1 Business Day of receipt. You cannot initiate payments through the ClubReady Electronic Payment System, but we are able to initiate payments through the ClubReady Electronic Payment System for invoices that are due us.

Section 3.4 INTEREST ON LATE PAYMENTS; LATE CHARGE

(a) Interest. If any payment under this Agreement or any other agreement between us or our Affiliates and you for your Franchise Business is overdue for any reason, you must pay to us, on demand, in addition to the overdue amount, any insufficient funds (NSF) charges we incur and interest on the overdue amount from the date it was due until paid equal to the lesser of: (i) 18% per annum; or (ii) the maximum rate of interest permitted by law.

• (b) Late Charge. You must also pay a late charge of $100 for each overdue payment.
• (c) NSF Charges. If you deliver a check which is returned due to insufficient funds or is otherwise not paid, we may assess you a service charge of $50 or 5% of the face value of the check, whichever is greater, limited to the highest amount permitted by law.

Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)