Detailed Information on GNC’s Initial Franchise Fee, Royalty Fee + 24 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $15,000 to $20,000

• Before you are awarded a franchise for a GNC Store, you must sign a Franchise Agreement with GNC and pay it an initial franchise fee. The initial franchise fee is payable in a lump sum and is fully earned when the Franchise Agreement is signed.

• The initial franchise fee for a GNC Store varies according to the type of franchise you purchase and is shown in the table below.

New Franchise Store

• If awarded to a New Franchisee:  $20,000
• If awarded to an Existing Franchisee:  $15,000
• If awarded to an Employee:  $15,000

Conversion Store

• If awarded to a New Franchisee:  $20,000
• If awarded to an Existing Franchisee:  $15,000
• If awarded to an Employee:  $15,000

GNC Smoothie Bar:  $1,000

2.  Development Fee:  see formula below

• Under the Development Agreement, you will obtain the right to develop and open an agreed upon number of GNC Stores, provided you do so in accordance with the specified Development Schedule. You must open a minimum of two GNC stores under the Development Agreement.

• You must pay GNC a development fee (“Development Fee”) equal to the sum of the following:

• (i) a development rights fee for the Development Area (which will be determined by GNC and will vary depending on the location of the Development Area and other factors it deems relevant),

• (ii) a fee equal to the applicable initial franchise fee shown in the table above for the first GNC Store you agree to develop and open, and

• (iii) a fee equal to 50% of the total initial franchise fees for the remaining GNC Stores required to be developed and opened during the term of the Development Agreement.

• The Development Fee is payable in a lump sum upon execution of the Development Agreement and is fully earned when the Development Agreement is signed.

3.  Royalty:  6% of total gross sales (including GNC Smoothie Bar gross sales, if applicable)

• Due Date:  Monthly.

• Gross sales include all revenue from the franchise location. Gross sales do not include sales tax or substantiated refunds in the ordinary course of business.

4.  National Advertising:  3% of total gross sales (including GNC Smoothie Bar gross sales, if applicable)

• Due Date:  Same as Royalty fee.

5.  Transfer Fee – Franchise Agreement:  transfer fee not to exceed then-current undiscounted initial franchise fee for new franchisees for a new Store, except that the fee will be: (1) $1,000 if you transfer all or a controlling interest in your franchise to an entity that you own (or that is owned by, or under the same ownership as, the existing franchisee), or if the transfer is to your immediate family member; or (2) $2,500 if the transfer is of less than 50% of your ownership interest in the franchise or the existing franchisee

• Due Date:  At the time a signed Franchise Agreement is returned to GNC, or if a Franchise Agreement is not signed in connection with the transfer, at the time of transfer.

• Payable when you sell your franchised business or otherwise complete a transfer, which you may only do with GNC’s prior consent.

6.  Transfer Fee – Development Agreement:  $10,000

• Due Date:  Upon a permitted assignment of the Development Agreement.

• Payable when you transfer your Development Agreement, which you may only do with GNC’s prior consent.

7.  Franchise Store Relocation Fee:  $10,000 or such greater amount as GNC may determine from time to time, to cover its administrative and other costs in processing the relocation

• Due Date:  Payable upon the permitted relocation of your GNC store.

• You may request to relocate your GNC store if you cannot continue to operate due to an act of God (fire, flood, earthquake) or extreme hardship.

• Approval of a relocation is in GNC’s sole discretion. It may at times waive this fee on a case-by-case basis if, in its sole discretion, circumstances merit.

8.  Remodeling:  $25,000 to $150,000

• Due Date:  When remodeling is complete, or GNC may require periodic payments during the remodeling process (which may include payment in stages during the remodeling process).

• Once every 5 years, if GNC determines it is necessary, or periodically and potentially more frequently, as required by the terms of the Franchise Agreement and Store lease.

• You may be required to remodel the Store, at your expense, at the time of entering into a Franchise Agreement if you franchise a Conversion Store.

9.  Insurance Reimbursement Fee:  $500 per occurrence

• Due Date:  Immediately on demand.

• You pay GNC.

10.  Late Payment Charges:  1 1/2% interest per month on overdue amount

• Due Date:  Immediately.

• This charge applies to all payments you owe GNC.

11.  Insufficient Funds Fee:  $30 per occurrence

• Due Date:  Immediately on demand.

• Payable if any of your payments to GNC are not honored by your financial institution.

12.  Store Technology Maintenance:  $75 per month (1st register); $25 per month (2nd register)

• Due Date:  Monthly.

• You pay GNC.

13.  Network Connection:  $180 per month

• Due Date:  Monthly.

• You pay GNC.

14.  Credit Card Processing (EMV, Secure):  $16 per month

• Due Date:  Monthly.

• You pay GNC.

15.  In-Store Wi-Fi:  $10.50 per month

• Due Date:  Monthly.

• You pay GNC.

16.  Financial Services:  $345 (1 Store); $320 per Store (2-5 Stores); $295 per Store (6-9 Stores); $245 per Store (10-14 Stores); $220 per Store (15+ Stores)

• Due Date:  Monthly.

• You pay GNC.

• GNC may (but is not obligated to) provide financial services to you through General Nutrition Financial Services. If it chooses to provide these services, and you opt to or are required to use them, you will pay GNC the monthly fee(s) above for financial services.

• You will pay GNC the fee shown for One Store, plus the applicable fee for each subsequent Store that you franchise, on a monthly basis.

17.  Rent:  $825 to $18,433 per month

• Due Date:  Monthly (1st of the month).

• You will pay rent to your Landlord.

18.  Franchise Renewal:  $12,500

• Due Date:  At least 60 days prior to expiration of then-current term.

• You pay GNC.

• Additionally, GNC may require you to remodel in connection with the renewal.

19.  Audit:  if an audit discloses an understatement of 3% or more in any report of Gross Sales, you must reimburse GNC for all costs and expenses of the audit.

• Due Date:  Immediately on demand.

20.  Indemnification:  will vary depending on the circumstances

• Due Date:  As incurred.

• You must reimburse GNC if it is held liable for damages or other expenses related to the operation of your franchise.

21.  Attorneys’ Fees and Costs:  will vary depending on the circumstances

• Due Date:  As incurred.

• Payable only if you do not comply with the Franchise Agreement.

22.  Liquidated Damages:  will vary depending on the circumstances

• Due Date:  Immediately on demand.

• You pay GNC.

23.  Default Cure Fee:  up to $1,000 per occurrence, depending on the infraction

• Due Date:  On or before the expiration of the cure period.

• You pay GNC.

24.  Annual Inventory Fee:  approximately $540

• Due Date:  Annually.

• GNC may require you to conduct an annual physical inventory count, which GNC may perform.

• If you participate in General Nutrition Financial Services, this fee is included in your monthly Financial Services fee.

• If you do not participate in General Nutrition Financial Services, you will be billed for this fee.

25.  Non-compliance Management Fee:  25% of total gross sales

• Due Date:  As incurred and if necessary.

• Gross sales include all revenue from the franchise location. Gross sales do not include sales tax or substantiated refunds in the ordinary course of business.

• If you are in default of your franchise obligations and unable to operate your Store to GNC’s standards, GNC may, in its sole discretion, assume operations of the Store for any period of time, and you will be required to pay to it 25% of your total gross sales earned during the period in which it operates the Store, in addition to any other royalties and fees payable to it pursuant to your Franchise Agreement.

26.  Operating Management Fee:  $2,000 per week

• Due Date:  As incurred and if necessary.

• In the event that a franchisee dies or is disabled, GNC may, in its discretion, operate the Store until such time that a transfer can be completed under the terms of the Franchise Agreement.