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1 Development Fee. We also offer to certain qualified persons rights to develop at least 2 Franchise Businesses within a Development Area under a Stretch Zone Area Development Agreement. In consideration of the Area Development Rights we grant to you, at the time that you sign the Area Development Agreement, you will pay to us a nonrefundable Development Fee based on the number of Franchise Businesses you commit to developing.

OUR EXPERIENCE IN COMPILING THESE ESTIMATES

We relied on our almost nine years, and our predecessors' 19 years, of experience in the stretching business and the total investment in opening Stretch Zone businesses in compiling these estimates.

ITEM -8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Franchise Agreement

PURCHASES FROM US, OUR DESIGNEE OR APPROVED SUPPLIERS OR UNDER OUR SPECIFICATIONS

PURCHASES FROM US

At present, you must purchase solely from us the following items. We may change these items based on our experience.

FURNITURE, FIXTURES AND EQUIPMENT

You must purchase the furniture, furnishings and fixtures from us. We do not deliver or install these items.

BOOKKEEPING SOFTWARE

You must sublicense from us the QuickBooks Online accounting system.

HIRING AND ONBOARDING SOFTWARE

You must sublicense from us the Career Plug hiring and onboarding software.

MICROSOFT OFFICE 365 SOFTWARE

You must sublicense from us a Microsoft Office 365 Software.

KNETK SOFTWARE

You must sublicense from us KnetK Software, which is middleware software that enables marketing automation, website and data reporting and analytics, member surveys, and local website management.

FACTOR 4 SOFTWARE

You must sublicense from us Factor 4 gift card and loyalty program software.

PERKVILLE SOFTWARE

You must sublicense from us Perkville loyalty and reward programs software.

CANVA SOFTWARE

You must sublicense from us Canva graphic design tool software. [Item 6: ITEM -6 OTHER FEES]

We base this estimate on the rates in effect in Florida.

The cost of workers' compensation insurance varies from state to state.

• ¹³ Licenses and Permits.

Local, municipal, county and state regulations vary on what licenses and permits you must obtain to operate the Franchise Business.

In Florida, you must obtain city and county occupational licenses and a city retail license.

• ¹⁴ Attorney's Fees.

You may decide to form a Business Entity to operate the Franchise Business before beginning operations.

You will have to comply with the fictitious, assumed, or trade name statutes of the state in which the Franchise Business will be located.

These estimates include attorneys' fees, publication fees, filing fees and other costs for business entity formation, compliance with your state's fictitious or assumed name statute and review of this Franchise Disclosure Document, and lease review and negotiation, depending on the scope of representation.

These fees may vary from state to state depending on each state's laws and the prevailing rates of attorneys' fees.

• ¹⁵ Accountant's Fees.

We recommend that you retain an accountant to advise you, including for the preparation of a business plan, tax advice on business entity formation, set up of accounting system, tax planning and compliance.

• **¹⁶ Travel, Lodging, Meals, Etc.

During Franchisee Training and Regional Manager Training Programs**.

You will be responsible for your and your personnel's traveling, living, and other expenses (including local transportation expenses), and compensation incurred in connection with attending our training programs.

We assume no responsibility for your human resource-related liabilities or costs during this training.

We will provide our Franchisee Training Program to you (if you are one or more individuals) or Franchise Owners (if you are a business entity) prior to opening.

We also will provide our Regional Manager Training Program (which includes our Stretch Practitioner Training Program) to your Regional Manager prior to opening.

We anticipate that you or your Designated Representative will serve as your Regional Manager, although you may elect to hire another individual to serve as your Regional Manager.

The typical costs of training that you will bear are for

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¹This fee is payable to us.

GRANT OF SECURITY INTEREST

As security for your obligations to us under the Franchise Agreement or any other agreement, you will grant to us a first priority security interest in the assets comprising your Franchise Business. You will sign the Security Agreement, and authorize us to record the UCC-1 Financing Statement and Rider included in Exhibit J.

REFUNDABILITY

All fees are nonrefundable.

UNIFORMITY

The expenses in this ITEM are uniformly imposed for persons currently offered a Franchise Business and/or Area Development Rights.

ADVERTISING COOPERATIVES – VOTING POWER OF COMPANY-OWNED UNITS

As of the date of this Disclosure Document, we have established two advertising cooperatives. Once an advertising cooperative is formed, Company-Owned Units whose limited protected territories are located within the DMA of the advertising cooperative must join the advertising cooperative and will have the same voting power as Franchised Units on all matters, including fees. The obligation of each Unit to contribute to an advertising cooperative (if formed in the applicable DMA) will not exceed 2% of monthly Gross Revenues. We will credit these contributions against your obligation for Local Advertising.

ITEM -7 ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT – SINGLE UNIT FRANCHISE

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FINANCIAL REPORTING

You must also provide us with regular reports and periodic financial statements in the form we specify.

OUR RIGHT TO DERIVE REVENUE FROM FRANCHISEE PURCHASES AND LEASES

We and/or our Affiliates may derive revenue based on your purchases and leases, including from charging you for products and services that we or our Affiliates provide to you and from promotional allowances, volume discounts, rebates, commissions, and other payments made to us or our Affiliates by suppliers and/or distributors that we designate or approve for some or all of our franchisees. We and our Affiliates may use all amounts received from suppliers and/or distributors, whether or not based on your or other franchisees' actual or prospective dealings with them, without restriction for any purposes that we or our Affiliates consider appropriate.

REVENUE FROM REQUIRED PURCHASES OR LEASES BY FRANCHISEES

We derive revenue from required purchases or leases by franchisees. Our total revenue from all operations during 2024 was $12,830,150. Of this amount, $2,319,603 was derived from required purchases or leases by franchisees. This amount represents 18% of our total revenue from all operations during 2024. During 2024, none of our affiliates derived revenue from required purchases or leases by franchisees.

MAGNITUDE OF REQUIRED PURCHASES OR LEASES

We estimate that the proportion of required purchases and leases to all purchases and leases by you of goods and services is 15% to 30% in establishing the Franchise Business and 70% to 85% in operating the Franchise Business.

NO PAYMENTS FROM DESIGNATED SUPPLIERS

We did not derive revenue from Designated Suppliers for required purchases or leases Stretch Zone franchisees.

PURCHASING OR DISTRIBUTION COOPERATIVES

There are currently no purchasing or distribution cooperatives that you must join or in which you may participate.

NEGOTIATION OF PURCHASE ARRANGEMENTS

We do negotiate purchase arrangements with suppliers for your benefit and the benefit of the other franchisees. We have negotiated fee arrangements and costs for all necessary marketing and advertising materials, furniture and fixtures, leasehold improvements and signage.

MATERIAL BENEFITS

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We anticipate that you or your Designated Representative will serve as your Regional Manager, although you may elect to hire another individual to serve as your Regional Manager.

The typical costs of training that you will bear are for

transportation, lodging, compensation and meals for the Trainees. The estimate is for items that are non-discretionary in nature. Generally, these costs vary widely as a function of the distance traveled, the accommodations and restaurants selected, the distance between the hotel and the training center and the transportation selected.

• ¹⁷ Contribution to Media Fund. You must make an initial Advertising Contribution to the Media Fund when your location opens. This Advertising Contribution will be deducted from your ClubReady Remittances.
• ¹⁸ Grand Opening. During the, approximately, three weeks before and the three weeks after the opening of the Franchise Business, we will assist you with the grand opening plan, as outlined in the Operations Manual, to introduce your Franchise Business to the community. We will provide you with promotional support, such as social media scheduling and posting, email scheduling and sending, photography, press release writing and promotion, print assets, grand opening assets, such as ribbon and scissors, and tools to assist in the capture of content – tripod, Bluetooth microphone, etc.
• ¹⁹ Additional Funds. The franchise disclosure laws require us to include this estimate of any other required expenses you will incur to operate your franchise business during the "initial phase of operations," which is defined as a minimum of 3 months or a longer period if "reasonable for the industry." You should have adequate working capital before beginning operating the Franchise Business. You must be able to meet your operating expenses from pre-opening, including hiring and training expenses, until the Franchise Business develops sufficient cash flow to cover all costs. These figures do not include any payments to you during the initial phase of operations. You must have sufficient personal resources to cover your living expenses. You should work with your accountant to develop a personal/family cash flow budget and determine if there is sufficient revenue on the personal level to provide for your family through the initial phase of operations.

REFUNDABILITY

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The previous tenant or the landlord may have installed leasehold improvements that are very compatible and reduce your costs.

• 4 Architect's and Engineer's Fees.

You may retain a local architect to conform our standard plans and specification to the approved site.

You may also need to engage an engineer to prepare and seal any applicable drawings that comply with local code and regulations.

If the real estate space meets our criteria of a vanilla box with all numbing and electrical intact, no architect or Contractor is needed.

Our Store Opening Specialists design the space and do the layout, and we need no additional walls constructed.

We simply need an empty 1,000- 1,200 sq. ft. space that has a bathroom.

We place furniture, fixtures and equipment in place.

• 5 FF&E.

You must purchase from us as the Designated Supplier the furniture, fixtures, and furnishings necessary to operate your Franchise Business.

The cost varies according to local market conditions, the size of the Premises, your selections made from our approved line of items, price differences among suppliers, the location of the Premises and other related factors.

We do not deliver or install these items.

• 6 Computers.

We believe that computers and management information systems play a critical part in the performance of the Business System.

We require that all new Franchise Businesses open with the Computer and POS Systems along with all communication, peripheral equipment and related accessories and Software we mandate (the "Computer and POS Systems").

You must enter into the Software Sublicense Agreement included in Exhibit K.

We currently lease the Software to you for $375 per month (i.e., the Technology Fee).

• 7 Outdoor Signage.

We specify the outdoor signs subject to the landlord's and local governmental agency's requirements.

You will maintain the outdoor signs in a condition acceptable to us.

Sometimes the cost of the outdoor signage is included in the lease.

• 8 Indoor Signage and Graphics.

You must purchase from our Designated Supplier Store Décor, the indoor signs and graphics.

You may prepare, construct and erect the signs and graphics after obtaining approval from the applicable governmental authority and the landlord.

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• 8 Indoor Signage and Graphics.

You must purchase from our Designated Supplier Store Décor, the indoor signs and graphics.

You may prepare, construct and erect the signs and graphics after obtaining approval from the applicable governmental authority and the landlord.

You will maintain the interior signs and graphics in a condition acceptable to us.

• 9 Utility Deposits.

You will incur certain deposits with local utilities (for example, electric, telephone, gas, water, etc.).

These will vary depending on the policies of the local utilities.

• ¹⁰ Supplies.

We will only allow office and store supplies that support the image and positioning of the Business System in the marketplace.

Supplies of this nature include the format, type, decoration and style as they relate to store and office supplies, particularly in the area of stationery and forms.

You agree to the importance of image and positioning to the Business System and agree to use only the supplies we specify or otherwise approve.

These costs are based upon our estimate of the initial supplies.

• ¹¹ Stretching Tables and Accessories.

You must purchase from our Designated Supplier, Stretch Equipment, LLC, the Stretch Zone stretching tables and the related accessories of kits, bolsters and wedges.

The purchase price is not refundable, except for defective items.

• ¹² Insurance.

Source: Item 6 — ITEM -6 OTHER FEES (FDD pages 16–33)