Detailed Information on QC Kinetix’s Initial Franchise Fee, Royalty Fee + 23 Other Fees (Items 5 and 6, 2022 FDD)

1.  Initial Franchise Fee:  $55,000

• The Initial Franchise Fee for a single area franchise (“Initial Franchise Fee”) is $55,000 for a QC Kinetix Business in a protected area.

• QC Kinetix has established a program for qualified veterans of the United States who have been honorably discharged to receive a discount of $1,000 off the Initial Franchise Fee when purchasing a franchise. This program does not apply to additional franchises.

• QC Kinetix retains the right in its sole discretion to modify or terminate this veteran discount program at any time with or without notice.

• The Initial Franchise Fee is paid in a lump sum at the time the Franchise Agreement is signed and is deemed fully earned and nonrefundable upon payment per the terms of the Franchise Agreement.

2.  Development Fee:  to be negotiated

• If QC Kinetix determines in its discretion to enter into a Development Agreement with you for new QC Kinetix Businesses, you must pay to QC Kinetix a nonrefundable development fee at the time of signing your Development Agreement equal to the sum of the initial franchise fees for each unit under the development agreement set forth below.

• The Initial Franchise Fee for each Business location, in consideration of the developer’s agreement to open and operate a specific number of QC Kinetix Businesses within the territory, is as follows:

Initial Franchise Fee for Each Location

• 2 Units:  $50,000 each
• 3 Units:  $45,000 each
• 4 Units:  $41,250 each
• 5 Units:  $37,000 each
• Each Unit After 5:  $20,000 each

• The total Development Fee is paid in a lump sum at the time the Development Agreement is signed and is deemed fully earned and nonrefundable upon payment per the terms of the Development Agreement.

3.  Royalty Fee:  8% of weekly Gross Revenues, with a $1,000 minimum royalty in months 3-5 after opening, and a $1,500 minimum royalty starting in month 6 after opening through the end of the term

• Due Date:  Due on a weekly basis, each Tuesday of the following week.

• The minimum royalty is collected monthly if Royalty Fees do not meet the minimum threshold.

4.  Fees for Technology-Related Services and Support:  currently, up to $1,750 per month for software and ongoing support

• Due Date:  Due to QC Kinetix on a monthly basis.

• Due to QC Kinetix’s approved vendors as incurred.

• Payable to QC Kinetix, its affiliates, and/or approved vendors.

5.  Local Marketing Fees:  in the first month, $20,000, provided that by the sixth month and then after, can be raised to $40,000 monthly. The actual amount will be determined by QC Kinetix based on the market where your Business is located.

• Due Date:  Due on a monthly basis to approved vendors.

• Spent by you to promote your Franchise Business locally.

6.  Brand Development Fee/Fund:  currently, 1% of weekly Gross Revenues

• Due Date:  Due on a weekly basis; each Tuesday of the following week.

• QC Kinetix may increase this fee; however, your total contribution will not exceed 2% of Gross Revenue in any calendar year.

7.  Call Center Fee:  between $1,500 and $3,500 per Franchise unit per month depending on the number of clinics in your Territory

• Due Date:  Due to QC Kinetix on a monthly basis.

8.  Interest and Late Fees:  1.5% per month or maximum rate allowed by law, plus $25, provided the total of Interest and Late Fees cannot exceed the maximum amount permitted to be charged by applicable law

• Due Date:  On due date of fees.

• Payable to QC Kinetix upon occurrence.

9.  Audit Expenses:  cost of audit fees, plus interest at 18% per annum (1.5% per month), up to the maximum interest allowed by law

• Due Date:  10 days after receipt of audit report.

• Payable only if you understate Gross Revenues by 2% or more.

10.  Transfer Fees:  $15,000 if transferred to an individual or entity that is new to the QC Kinetix System; $7,500 if transferred to a current franchisee in the QC Kinetix System and approved by QC Kinetix; a $1,500 fee if you transfer ownership between existing owners that have already been approved by QC Kinetix or if you are adding a new owner that does not change majority ownership of the Franchisee entity

• Due Date:  Prior to the execution date of the Franchise Agreement related to the transfer or sale.

• Payable to QC Kinetix when the Franchise Agreement is signed or a material portion of the assets in the Business is transferred.

11.  Additional Training:  $500 per additional person per day, plus the cost of travel and related expenses

• Due Date:  Prior to commencement of the additional training.

• While the Initial Franchise Fee includes the cost of QC Kinetix’s Initial Training program, the Initial Franchise Fee only covers training for up to 2 individuals.

12.  Continuing Education:  $500 per person per day, plus the cost of travel and related expenses

• Due Date:  At time training is scheduled and/or additional assistance is requested by you.

13.  Convention Unattendance Fee:  $1,000 per day of the national convention you do not attend

• Due Date:  Immediately after each national convention.

• Payable to QC Kinetix.

14.  Relocation Fee:  $15,000

• Due Date:  Payable upon QC Kinetix’s notice to you that your relocation has been approved.

• Payable to QC Kinetix.

15.  Project Management Fee:  $9,000

• Due Date:  As incurred.

• Payable to approved vendor.

16.  Renewal Fee:  10% of the then-current Initial Franchise Fee

• Due Date:  Prior to the execution date of the successor Franchise Agreement.

• You must comply with all of QC Kinetix’s renewal requirements.

17.  Renovation and Maintenance:  will vary under circumstances

• You must comply with all of QC Kinetix’s renovation and maintenance requirements.

18.  Insufficient Funds Fee:  $25 per occurrence

• Due Date:  On demand.

• Payable to QC Kinetix upon occurrence.

• Three or more ISF charges within any 12-month period is cause for termination of the Franchise Agreement.

19.  Costs of Enforcement, including Attorney’s Fees:  will vary under circumstances

• Due Date:  As incurred.

• Payable as incurred by QC Kinetix in obtaining injunctive relief or the enforcement of any item of the Franchise Agreement.

20.  System Modification:  all reasonable costs and expenses associated with system modification

• Due Date:  As required.

21.  Insurance Policies:  amount of unpaid premiums, plus QC Kinetix’s expenses for obtaining the policies required

• Due Date:  As required.

• Payable only if you fail to maintain the types and limits of insurance that QC Kinetix requires for your Business.

22.  Indemnification:  will vary under circumstances

• Due Date:  On demand.

• Payable as incurred by QC Kinetix.

23.  Inspection Fee:  $1,500 if you fail to pass an inspection for the second time in any 12-month period

• Due Date:  On demand.

• Payable to QC Kinetix.

24.  Interim Management Fee:  10% of weekly Gross Revenues, plus any travel or lodging expenses for QC Kinetix’s personnel engaged in operating the Business

• Due Date:  Due on a weekly basis; each Tuesday of the following week.

• Payable to QC Kinetix upon it managing the Business in your stead in the event you are placed in default of the Franchise Agreement.

25.  Failure to Report Fee:  $200 per instance when a required financial report is not received by the 20th day of each month

• Due Date:  Due only if you do not send an accurate or complete financial report by the 20th of each month.

• Payable to QC Kinetix.