STRIDE Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

1.  Initial Franchise Fee:  $60,000

• The Initial Franchise Fee is non-refundable. The Initial Franchise Fee for a single Studio is $60,000. STRIDE does not provide financing for the Initial Franchise Fee.

2.  Travel and Living Expenses While Training:  $500 to $3,000

• This estimate is designed to cover the costs and expenses you might incur in connection with you (or if you are an entity, one of your operating principals you designate to be the Designated Operator for the Studio) attending and completing the required initial training.

• STRIDE will not charge you or your Designated Operator for this portion of its initial training that must completed on behalf of the franchisee/owner under your Franchise Agreement. You will be responsible for the costs and expenses associated with attending this training (e.g., transportation, meals, lodging, and other expenses).

• The estimate assumes that you or your Designated Operator will attend your respective training at the same time at STRIDE’s headquarters or corporate training location.

3.  Real Estate/Lease:  $22,500 to $52,500

• If you do not own adequate Studio space, you must lease suitable premises. These figures assume that the leased premises will be approximately 2,000 square feet.

• You will also likely be required to pay a security deposit. This estimate assumes your security deposit will amount to approximately one month of rent.

4.  Net Leasehold Improvements:  $101,250 to $178,250

• The cost of leasehold improvements will vary depending on: (i) the size and configuration of the premises which will be approximately 2,000 square feet; (ii) pre-construction costs (e.g., demolition of existing walls and removal of existing improvements and fixtures); and (iii) cost of materials and labor which may vary based on geography and location.

• It includes the net cost of leasehold improvements, including floor coverings, wall treatments, ceilings, painting, electrical, carpentry, plumbing, HVAC, and similar work, as well as materials and the cost of labor. This estimate also includes amounts you may expend in connection with architectural services, sound engineer consultants, utility deposits, and expenses incurred to acquire the required local business licenses and permits.

• For clarity, the estimates presented herein are net of tenant improvement amounts incurred and reimbursed by the landlord. This estimate presented herein is also assuming an average landlord tenant improvement contribution range between $35,000 and $190,000, or an average of $100,000.

5.  Signage:  $15,000 to $20,000

• You will need to purchase appropriate signage for your Studio that STRIDE approves.

6.  Insurance:  $1,550 to $2,550

• This estimate is for three months of your minimum required insurance, using STRIDE’s required or approved third-party vendor. The actual cost may be more than shown here.

7.  Exercise Equipment Lease (3 Months):  $25,400 to $28,000

• STRIDE’s standard franchise offering assumes and expects that new System franchisees will lease the designated treadmills that STRIDE designates for use in connection with the Studios and provision of the Approved Services. The range estimated here is based on the estimate STRIDE received from its Approved Supplier for this equipment.

• In addition to the leased treadmills, the initial required amount of running and other exercise equipment for a standard Studio is approximately free weights of various sizes, various equipment/supplies for use in connection with the provision of the Approved Services, heart rate monitor devices, and certain other equipment used in connection with the Studio.

• STRIDE’s standard franchise offering expects and assumes that you will acquire the treadmills and related equipment in this range via a lease-to-own or comparable agreement. This range accounts for the estimated amounts you will incur in connection with those lease or other agreement payments prior to opening, including (a) any deposit, and (b) the monthly payments due in the first three months you are open and operating your Franchised Business.

• If you determine not to follow STRIDE’s standard franchise offering and System recommendation and instead elect to acquire this equipment by purchasing it outright, then the costs of these treadmills and ancillary equipment will be much higher. As of the Issue Date of the current Disclosure Document, STRIDE estimates that the outright purchase price for these items would be approximately $246,000.

9.  Retail Inventory Package for Presale and Soft Opening:  $12,000

• This estimate is the cost associated with acquiring the following proprietary and required items: opening stock of retail inventory which includes, but is not limited to, presale merchandise, branded apparel made up of tops, bottoms, and accessories.

• The entire package must be purchased prior to Soft Opening.

• Shipping is not included.

• If credit is not used within 180 days of Soft Opening, credit will expire.

10.  Furniture, Fixtures, and Related Supplies:  $29,500

• This is a range of expenses that will be incurred when decorating and furnishing the Studio, including certain components of the Initial Buildout Package that you must purchase from STRIDE.

• Both the low-end and the high-end numbers represent a straight purchase of all furniture, fixtures, and related supplies (rather than leasing or making installment payments on these items).

11.  Audio Visual Equipment:  $46,000

• You must use STRIDE’s Approved Supplier for the purchase of your audio visual equipment package (the “AV Package”) and the computer system components STRIDE requires you to utilize in connection with your Franchised Business, including but not limited to a personal computer and the Point of Sale system (“POS”) hardware and software for use in the operation of the Studio.

12.  Initial Marketing Spend (including certain Opening Support Program costs):  $15,000 to $20,000

• You will be required to expend a minimum of $15,000 on advertising and promoting the opening of your Franchised Business.

13.  Shipping and Installation:  $24,000 to $32,000

• As of the Issue Date of the current Disclosure Document, STRIDE arranges for shipping the equipment, fixtures, and other items that are part of the Initial Buildout Package you must acquire. These amounts may vary based upon the location of your Studio.

14.  Authorized Coach Training and Related Expenses:  $8,000

• The low end of this estimated range assumes that your initial staff of Authorized Coaches will attend and complete the Authorized Coach Training remotely via STRIDE’s proprietary online training program.

• The high end of this estimate includes the Coach Training tuition fee(s), as well as the travel and other related costs and expenses, to have STRIDE send a Master Trainer to your franchised Studio to provide the Authorized Coach Training in person.

15.  Technology Fee – 1 Month Prior to Opening Plus First 3 Months and Music Licensing Fee (3 Months):  $1,712

16.  Additional Funds for First 3 Months:  $10,000 to $40,000

• This is an estimate of certain funds needed to cover your business (not personal) expenses during the first three months of operation of the Studio. These expenses include initial personnel wages; ongoing purchases of equipment and supplies; marketing expenses/fees and local advertising; utilities; and repairs and maintenance.

17.  Total Estimated Initial Investment:  $372,412 to $533,512