D-BAT’s Initial Franchise Fee, Royalty Fee + 27 Other Fees

Detailed Information on D-BAT’s Initial Franchise Fee, Royalty Fee + 27 Other Fees (Items 5 and 6, 2021 FDD)

1.  Earnest Money Payment:  $20,000

• Before you sign a Franchise Agreement or Development Agreement, if you elect to sign D-BAT’s Letter of Intent, D-BAT will collect an earnest money payment from you in the amount of $20,000 per location to be developed in exchange for D-BAT’s related costs and expenses, its minimum requirements for a Facility size and location, and its assistance in reviewing proposed Facility locations and accepting or rejecting the same according to its standards.

• If you execute the contemplated Franchise Agreement before the date mutually agreed to and set in the Letter of Intent, D-BAT will credit all of the earnest money payment to your Initial Franchise Fee. The earnest money payment is non-refundable upon payment.

2.  Initial Franchise Fee:  $45,000

• When you sign the Franchise Agreement, you will pay D-BAT in full an Initial Franchise Fee of $45,000. The Initial Franchise Fee is considered fully earned and nonrefundable upon payment.

• If you qualify for D-BAT’s military veteran’s discount, the Initial Franchise Fee for your first Facility purchased will be discounted by $2,500. This discount is available to veterans who have received a discharge (other than dishonorable) as well as any active duty personnel.

3.  Development Fee:  100% of the Initial Franchise Fee for the first Facility and 50% of the Initial Franchise Fee for each additional Facility to be developed under the Area Development Agreement

• If you are acquiring development rights, upon signing D-BAT’s Area Development Agreement, you will pay to D-BAT a Development Fee equal to 100% of the Initial Franchise Fee for the first Facility and 50% of the Initial Franchise Fee for each additional Facility to be developed under the Area Development Agreement.

• If you qualify for D-BAT’s military veteran’s discount, the total Development Fee due will be discounted by $2,500.

• When you sign the Area Development Agreement, you will also sign a Franchise Agreement for the first Facility to be developed. When you sign the first Franchise Agreement, D-BAT will credit a portion of your Development Fee payment to the Initial Franchise Fee due for the first Facility under the Franchise Agreement, so that the Initial Franchise Fee is fully satisfied.

• When you sign each additional Franchise Agreement, D-BAT will credit a portion of your Development Fee payment to satisfy 50% of the Initial Franchise Fee due with respect to such Facility, and you will pay the balance of the Initial Franchise Fee for such Facility at that time.

• The Development Fee is nonrefundable upon payment.

4.  Initial Inventory Package:  $35,000 to $45,000

• Shortly after you acquire a site for the Facility, you must purchase from D-BAT or from designated or approved suppliers (including D-BAT), your opening and ongoing inventory of equipment, apparel, and other products to be offered and sold at the pro shop. D-BAT estimates the cost of this initial inventory will range from $35,000 to $45,000.

5.  Initial Cage Usage Supplies:  $15,000 to $23,000

• Before you open the Facility, you must purchase from D-BAT or from designated or approved suppliers (including D-BAT), the products and supplies needed in order to operate the Facility’s batting cages and conduct lessons. These products and supplies include, but are not limited to, your required quantity of baseballs and softballs for pitching machines, baseball and softballs for instructional lessons, batting tees, and home plates. D-BAT estimates that the cost of this Initial Case Usage Supplies package will range from $15,000 to $23,000.

6.  Initial Marketing Products:  $5,000 to $7,500

• Shortly before you open the Facility for business, you must purchase from D-BAT or from designated or approved suppliers (including D-BAT) between $5,000 and $7,500 of giveaway items to be used in the initial marketing and promotion of the Facility. These items will be given to local baseball and softball leagues and coaches, and will primarily consist of T-shirts, personalized fungo bats, gift certificates, and coaching buckets which include baseballs and softballs and baseball and softball-related accessories.

7.  Initial Software Fee:  $2,500

• When you sign your Franchise Agreement, you must pay D-BAT $2,500 as an Initial Software License Fee for the setup of its specifically designed D-BAT membership tracking and scheduling software, which also functions as your point-of-sale system.

8.  Construction Management and On-Site Training Fee:  $6,000

• When you sign your Franchise Agreement, you must pay D-BAT $6,000 as a Construction Management and On-Site Training Fee for: i) its assistance throughout the construction process including consultation on facility design and layout, facilitating contact with vendors, and project management supervision; and ii) costs incurred in providing on-site training to you, typically provided the week before you open.

9.  Management Fee:  40% of Membership Fees or 8% of Gross Revenue

• Due Date:  Monthly.

• D-BAT may, at its option, impose either of the monthly Management Fee calculation.

10.  Advertising and Promotion Fund Contribution:  2.5% of Membership Fees

• Due Date:  Monthly.

11.  Local Advertising/Advertising Cooperative Contribution:  2.5% of Membership Fees

• Due Date:  Quarterly.

• The rate may be increased by majority vote.

12.  Software License Fee:  currently, $354

• Due Date:  Monthly.

• When you sign your Franchise Agreement, you will pay D-BAT the Initial Software License Fee of $2,500. Once you begin operations, you will pay this continuing monthly Software License Fee.

13.  Additional Training:  not to exceed $500 per person per day; not to exceed $5,000 per Facility per year

• Due Date:  Before training.

14.  Mandatory Training:  $5,000 for up to two individuals D-BAT designates

• Due Date:  Before training.

• If the number of Membership Fees collected by your Facility during a consecutive 3-month period decreases by more than 35% from the number of Membership Fees collected in any consecutive 3-month period during the immediately preceding 18 months, D-BAT may impose a $5,000 Mandatory Training Fee and require that up to 2 individuals attend additional training at a location it designates, for which you will bear all salary, travel, lodging, and dining costs.

15.  Interest/Late Fee:  18% per year or the highest interest rate permitted by the jurisdiction in which the Facility is located, whichever is less

• Due Date:  Upon demand.

• Payable only if you fail to make payments by the applicable due date.

16.  Audit or Inspection:  cost of audit or inspection

• Due Date:  Upon demand.

• Audit or inspection costs must be reimbursed only if the audit or inspection shows an understatement of 2% or more of any amount required to be reported to D-BAT.

17.  Indemnification:  an amount equal to the value of all losses and expenses that D-BAT incurs on account of your operation of the Facility

• Due Date:  Upon demand.

• You must reimburse and pay D-BAT’s attorneys’ fees with respect to any and all losses and expenses incurred by it arising or resulting from your operation of the Facility.

18.  Replacement Fee for Manual:  $500 per volume

• Due Date:  Upon demand.

• Payable only if the Manual is lost, stolen, damaged, etc.

19.  Supplier Testing Costs:  reimbursement of D-BAT’s actual costs

• Due Date:  Upon demand.

• Payable only if you request approval of a new supplier.

20.  Insurance Premium:  reimbursement of premium plus administrative fee not to exceed 10% of annual premium

• Due Date:  Upon demand.

• Payable only if you fail to procure or maintain required insurance coverages, and D-BAT procures the insurance on your behalf.

21.  Renewal Fee:  $7,500

• Due Date:  Before renewal.

22.  Transfer Fee (payable if you are an individual transferring to a business entity for convenience of operation):  $3,000

• Due Date:  Before transfer.

23.  Transfer Fee (payable if your Principals are transferring among themselves or transferring a minority ownership interest to one or more third parties):  $5,000, plus reimbursement of expenses D-BAT incurs in connection with the transfer

• Due Date:  Before transfer.

24.  Transfer Fee (payable if you are assigning your interest in the Franchise Agreement, transferring all or substantially all of the assets of the Facility, or your Principals are transferring a controlling interest):  $15,000, plus reimbursement of expenses D-BAT incurs in connection with the transfer

• Due Date:  Before transfer.

25.  Costs and Attorneys’ Fees:  varies with circumstances

• Due Date:  On demand.

• You must reimburse D-BAT for its expenses in enforcing or terminating any agreements between you and D-BAT including any Franchise Agreement and/or Area Development Agreement.

Area Development Agreement

26.  Assignment Fee (Assignment of Franchise Rights):  $5,000

• Due Date:  Before or simultaneously with the execution of a Franchise Agreement.

• Payable only if you assign your right to enter into a Franchise Agreement to an Affiliate.

27.  Transfer Fee (payable if you are an individual transferring to a business entity for convenience of operation):  $3,000

• Due Date:  Before transfer.

28.  Transfer Fee (payable if your Owners are transferring among themselves or transferring a minority ownership interest to one or more third parties):  $5,000, plus reimbursement of expenses D-BAT incurs in connection with the transfer

• Due Date:  Before transfer.

29.  Transfer Fee (payable if you are assigning your interest in the Area Development Agreement, or your Owners are transferring a controlling interest):  $15,000, plus reimbursement of expenses D-BAT incurs in connection with the transfer

• Due Date:  Before transfer.