Detailed Information on The Joint Chiropractic’s Initial Franchise Fee, Royalty Fee + 26 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $39,900

• You must pay to The Joint Chiropractic an initial fee (“Initial Franchise Fee”) of $39,900 upon signing your Franchise Agreement for each franchise you purchase.

• The Joint Chiropractic offers a veterans discount of 15% off the Initial Franchise Fee for the first franchise you purchase if you are a veteran of the armed forces of the United States of America.

• If you purchase multiple Location Franchises from The Joint Chiropractic at the same time, the Initial Franchise Fee will be as follows for each Location Franchise you purchase from The Joint Chiropractic:

• First Location Franchise:  $39,900 (no discount)
• Each Additional Location Franchise:  $29,900 ($10,000 discount)

• Note that to qualify for the multiple Location Franchise discount, you must sign a separate Franchise Agreement for each Location Franchise and pay The Joint Chiropractic the total Initial Franchise Fee due for all Location Franchises you purchase at the same time.

• The Joint Chiropractic offers a discount in the Franchise Fee for franchisees and their DCs participating in the DC Path to Ownership Program. The discount is $9,900 off the multiple clinic Franchise Fee. The Franchise Fee total is $20,000 for franchisees qualifying for the program.

2.  Initial Application Fee:  $10,000

• You must sign a Letter of Intent (“LOI”) and pay an Initial Application Fee of $10,000, which will be fully credited against your Initial Franchise Fee, and pay the balance of your Initial Franchise Fee when you sign your Franchise Agreement.

• As stated in the LOI, the Initial Application Fee is non-refundable if your application is approved, and if at the end of the LOI term you do not for any reason timely satisfy any of The Joint Chiropractic’s written conditions for final approval or otherwise refuse to accept a Location Franchise that The Joint Chiropractic may offer you.

3.  Clinic Design Fee:  $1,000

• You must pay The Joint Chiropractic’s then-current Clinic Design Fee to prepare an initial clinic floor plan. Payment is due when you sign your Franchise Agreement.

• The current Design Fee is $1,000 in connection with your purchase of a new The Joint Chiropractic. This fee is not refundable.

4.  Royalty Fee:  7% of weekly Gross Revenues with a monthly minimum of $700

• Due Date:  Collected on the 1st and 16th of each month, or the next business day if the 1st or 16th falls on a weekend or holiday.

• You are obligated to pay The Joint Chiropractic the minimum Royalty Fee of $700 30 days after you open your franchise for business, or 30 days after your Opening Deadline, whichever occurs first.

5.  Contribution to the Company’s Advertising Fund:  currently 2% of weekly Gross Revenues

• Due Date:  Collected on the 1st and 16th of each month, or the next business day if the 1st or 16th falls on a weekend or holiday.

6.  Local or Regional Advertising Cooperatives:  varies without limitation; based on a vote of the cooperative

• Due Date:  As required by the cooperative.

• The amounts contributed to the Advertising Cooperative may be applied towards the Local Market Advertising requirement.

7.  Minimum Local Advertising Requirement:  $3,000 or 5% of your monthly Gross Revenues, whichever is greater

• Due Date:  Paid to approved vendors before the 10th day of the month following the month of reference.

8.  Interest:  lesser of (i) the highest commercial contract interest rate permitted by state law, and (ii) the rate of 18% per annum

• Due Date:  From the date payments are due, and continues until outstanding balance and accrued interest are paid in full.

• Charged on any late payments of Royalty Fees, contributions to the company’s advertising fund, amounts due for product purchases, or any other amounts due The Joint Chiropractic or its affiliates.

9.  Audit Expenses:  cost of audit and inspection, plus any reasonable accounting and legal expenses

• Due Date:  On demand.

• Payable if you fail to timely input financial data in the Office Management Program or fail to submit required reports. Also applies if an audit reveals you have understated Gross Revenues by at least 2% for any period of time.

10.  Fee for Sale of Prohibited Products or Services:  $100 per day administrative fee, plus the associated Royalty Fees due and any costs incurred by The Joint Chiropractic

• Due Date:  As incurred.

• Payable if you use, sell, or distribute non-authorized products or services in your Location Franchise.

11.  Computer System/Software Fee:  an amount set by The Joint Chiropractic; currently $599 (but may be increased up to $699 after 30 days prior written notice)

• Due Date:  Monthly.

• Payable to cover the monthly cost of computer software and programs, and updates, necessary to operate your franchise.

12.  Product and Service Purchases:  vary depending on the product and service

• Due Date:  As incurred.

• Payable for products and services you purchase from The Joint Chiropractic and/or its affiliates.

13.  Ongoing Training Fee:  up to $1,000 per day (plus reimbursement of expenses for onsite training)

• Due Date:  As invoiced.

• The Joint Chiropractic may require that you attend periodic ongoing training programs. You may also request that The Joint Chiropractic provide additional training (it is not required to provide this training). The Joint Chiropractic may charge the ongoing training fee for any ongoing training it provides.

• If The Joint Chiropractic agrees to provide onsite training, you must also reimburse it for all reasonable expenses it incurs, such as for travel, meals, and lodging. You are responsible for all costs you incur (including travel, meals, lodging, wages, etc.) for any of your personnel that attend training.

14.  Owners Meeting Fee:  up to $1,000 per day

• Due Date:  As invoiced.

• The Joint Chiropractic may require that the franchise owners attend periodic franchise owner meetings. It may charge you the owners meeting fee for each owner that attends. You are responsible for all costs you incur for travel, meals, and lodging.

15.  Insurance:  amount of unpaid premiums and related costs, administrative fees, and late charges

• Due Date:  On demand.

• Payable if you fail to maintain required insurance coverage and The Joint Chiropractic obtains coverage for you.

16.  Renewal Fee:  25% of the then-current Initial Franchise Fee

• Due Date:  Upon renewal.

• Payable upon renewal of the Franchise Agreement.

17.  Remodeling, Expansion, Redecorating, or Refurnishing Costs:  at least $20,000 every 4 years

• Due Date:  As incurred.

• Payable directly to vendors when you remodel, expand, redecorate, or refurnish your Location Franchise.

18.  Clinic Design Fee:  $250, $600, or $1,000

• Due Date:  Upon demand and always prior to commencement of The Joint Chiropractic’s Clinic Design for you.

• Amount varies depending on project.

19.  Transfer Fee:  $15,000 ($2,500 for a Permitted Transfer)

• Due Date:  Before transfer completed.

• Applies to any transfer of the Franchise Agreement or any change of ownership of the franchisee. A “Permitted Transfer” is any transfer of an ownership of less than 5% or any transfer of an interest by an owner to an immediate family member or related trust, unless the transfer results in a new person owning a controlling interest.

20.  Transfer Fee for DC Path to Ownership Program:  $5,000

• Due Date:  Before transfer is completed.

• Specifically for when a franchisee sells their clinic to their DC.

21.  Relocation Fee:  an amount set by The Joint Chiropractic, currently $2,500

• Due Date:  Before relocation is completed.

• Applies to any relocation of the Location Franchise in the same market and as approved by The Joint Chiropractic.

22.  Management Fee:  commercially reasonable fee, plus reimbursement of expenses

• Due Date:  As incurred.

• Payable if The Joint Chiropractic manages your Clinic.

23.  Supplier Review Fee:  The Joint Chiropractic’s reasonable costs of inspection and actual cost of test

• Due Date:  As invoiced.

• If you propose a new supplier or product for The Joint Chiropractic’s approval, it may charge you the supplier review fee.

24.  Legal Costs and Attorneys’ Fees:  all legal costs and attorneys’ fees incurred by The Joint Chiropractic

• Due Date:  As incurred.

• Payable if The Joint Chiropractic must enforce the Franchise Agreement, or defend its actions related to, or against your breach of, the Franchise Agreement.

25.  Indemnification:  all amounts (including attorneys’ fees) incurred by The Joint Chiropractic or otherwise required to be paid

• Due Date:  As incurred.

• Payable to indemnify The Joint Chiropractic, its affiliates, and its and their respective owners, officers, directors, employees, agents, successors, and assigns against all claims, liabilities, costs, and expenses related to your ownership and operation of your franchise.

26.  De-Identification:  all amounts incurred by The Joint Chiropractic

• Due Date:  As incurred.

• Payable if The Joint Chiropractic de-identifies the franchise upon its termination, relocation, or expiration.

27.  Overdraft Fee:  $35 per incident

• Due Date:  As incurred.

• Payable if a check for payment is not honored by the bank upon which it is drawn (or the maximum fee as permitted by law).

28.  Termination Fee:  one-half of then-current Initial Franchise Fee, plus The Joint Chiropractic’s attorneys’ fees and costs

• Due Date:  On demand.

• If you or The Joint Chiropractic terminates your franchise before your franchise term expires.