Highlights of TITLE Boxing Club’s Item 19 Financial Performance Representations (2013 FDD) – Part 1

• The information set forth in Table A is the pricing structure for Fitness Facility memberships so you understand the amount and timing of the membership fees collected by a Fitness Facility when a new member signs a membership agreement based on the assumption that the Fitness Facility charges the lowest minimum monthly fee, which is $59 per month.

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  The franchisor does not prohibit you from charging higher monthly fees, and many of the existing franchised facilities charge monthly fees that are in excess of the $59 per month minimum.

• In addition, the franchisor requires each Fitness Facility located in or around certain geographic areas such as New York City, Washington, D.C., Honolulu, Lake Tahoe, and specific sections of California and Alaska to charge minimum monthly fees that range from $69 to $99 per month.

• In the future, the franchisor may establish minimum or maximum prices for memberships that are in addition to, or that differ from, the prices described here.

• The Annual Title Card (Paid in Full) entitles the member to a one year membership and requires that the member pay the $59 per month monthly fee in full at the time the membership agreement is signed by the member. If the member chooses this membership and payment option, the standard $99 enrollment fee and the monthly fee ($59) for the last month is waived so that the payment due at signing equals $649 ($59 per month multiplied by 11 months). After the initial payment, the member does not pay additional amounts in the following months.

• The 6-Month Title Card (Paid in Full) entitles the member to a six-month membership and requires that the member pay a $69 per month monthly fee in full at the time the membership agreement is signed by the member. If the member chooses this membership, the $99 enrollment fee is waived and the standard monthly fee ($59) automatically increases by $10 per month (from $59 per month to $69 per month) and the payment due at signing equals $378 ($69 per month multiplied by 6 months). After the initial payment, the member does not pay additional amounts in the following months.

• The Annual Title Card (Monthly Installment) entitles the member to a one year membership and requires that the member pay the $99 enrollment fee plus the $59 per month monthly fee for the first and last month at the time the membership agreement is signed by the member. If the member chooses this membership and payment plan, the payment due at signing equals $217 ($99 enrollment fee plus $59 per month multiplied by 2 months). After the initial payment, the member must pay $59 per month in each of the following 10 months.

• The Club Card entitles the member to a one month membership which can be cancelled upon 30 days advance notice. The member must pay the $99 enrollment fee plus the $79 per month monthly fee for the first month at the time the membership agreement is signed by the member. If the member chooses this membership and payment plan, the standard monthly fee automatically increases by $20 per month (from $59 per month to $79 in this example) and the payment due at signing equals $178 ($99 enrollment fee plus $79 per month for the first month). After the initial payment, the member must pay $79 per month until the member cancels the membership upon 30 days advance notice.

• From January 1, 2013 through March 31, 2013 for the 70 Fitness Facilities that were open and operating on January 1, 2013, an average of approximately 8% of new members purchased paid in full memberships. In certain of these facilities, the percentage of new members purchasing paid in full memberships was as high as 24% and as low as 0% during that time period. Of those 70 Fitness Facilities, 22 (or 31%) had paid in full memberships that exceeded the 8% average during that time period.

• The franchisor does not project or attempt to project the number of memberships that you will sell to your members or the composition of any particular type of membership or payment plan as a percentage of your total memberships sold.

Table A – Pricing Structure for Memberships at TITLE Boxing Club Facilities

Annual Title Card (Payment in Full)

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