Club Pilates - 2017-04-27 - FDD - Xponential Fitness

Carlson, Greg (COMM)
From: Carlson, Greg (COMM)

Sent: Friday, June 02, 2017 2:57 PM
To: 'jcjuffy@fisherzucker.com'
Subject: E-copy - Second Copy F-7774 Pilates Franchise
Attachments: Copy F-7774 Pilates Franchise 5.31.17.pdf
Ms. Duffy:
Per our phone conversation earlier today, please find an electronic copy of the letter mailed out to your firm via regular
mail on May 3 1 , 2017 for F-7774, Club Pilates.
Sincerely,
Greg Carlson
Commerce Analyst
Minnesota Department of Commerce
Enforcement Division - Securities
85 7* Place East, Suite 500, Saint Paul, M N 55101
P: 651-539-1628
MINNESOTA DEPARTMENT OP
.COMMERCE
CONFIDENTIALITY NOTICE: This message is intended only for the use of the indivtdual(s) named above. Information in this e-mail or
any attachment may be confidential or otherwise protected from disclosure by state or federal law. Any unauthorized use,
dissemination, or copying of this message is prohibited. If you are not the intended recipient, please refrain from reading this e-mail
or any attachments and notify the sender immediately. Please destroy all copies of this communication.
85 7TH PLACE EAST, SUITE 500
SAINT PAUL, MN 55101-2198
MINNESOTA DEPARTMENT OF MN.GOV/COMMERCE/
651.539.1500 FAX 651.539.1547
COMMERC AN EQUAL OPPORTUNITY EMPLOYER
May 31, 2017
LANE FISHER, ESQ.

FISHER ZUCKER, LLC
21 SOUTH 21 ST STREET
PHILADELPHIA, PA 19103
t* \
%
w
Re: F-7774
CLUB PILATES FRANCHISE, LLC
CLUB PILATES F/A
Dear MR. FISHER:
The Annual Report has been reviewed and is in compliance with Minnesota Statute Chapter
80C and Minnesota Rules Chapter 2860.
This means that there continues to be an effective registration statement on file and that the
franchisor may offer and sell the above-referenced franchise in Minnesota.
The franchisor is not required to escrow franchise fees, post a Franchise Surety Bond or
defer receipt of franchise fees during this registration period.
As a reminder, the next annual report is due within 120 days after the franchisor's fiscal year
end, which is December 31, 2017.
Sincerely,
MIKE ROTHMAN
Commissioner
By:
Carolyn Thompson
Commerce Analyst
Registration Division
MR:CT:ct
85 7TH PLACE EAST, SUITE 500
SAINT PAUL. MN 55101-2198
INNESOTA DEPARTMENT OF
MN.GOV/COMMERCE/
651.539.1500 FAX 651.539.1547
COMMERCE AN EQUAL OPPORTUNITY EMPLOYER
May 31, 2017
LANE FISHER, ESQ.

FISHER ZUCKER, LLC
21 SOUTH 21ST STREET
PHILADELPHIA, PA 19103
Re: F-7774
CLUB PILATES F/A
Dear MR. FISHER:
The Annual Report has been reviewed and is in compliance with Minnesota Statute Chapter
80C and Minnesota Rules Chapter 2860.
This means that there continues to be an effective registration statement on file and that the
franchisor may offer and sell the above-referenced franchise in Minnesota.
The franchisor is not required to escrow franchise fees, post a Franchise Surety Bond or
defer receipt of franchise fees during this registration period.
As a reminder, the next annual report is due within 120 days after the franchisor's fiscal year
end, which is December 31, 2017.
Sincerely,
MIKE ROTHMAN
Commissioner
By:
Carolyn Thompson
Commerce Analyst
Registration Division
MR:CT:ct
£/6K' LoM ^
UNIFORM FRANCHISE REGISTRATION APPLICATION
File No. 7774

(Insert file number of immediately
preceding filing of Applicant)
State of Minnesota
State: State of Minnesota Fee: $200 Dept °f Commerce
APR 2 8 20
APPLICATION FOR (Check only one): Ree d $
INITIAL REGISTRATION OF AN OFFER AND SALE OF FRANCHISES
X RENEWAL APPLICATION OR ANNUAL REPORT
PRE-EFFECTIVE AMENDMENT
POST EFFECTIVE MATERIAL AMENDMENT
1. Full legal name of Franchisor: Club Pilates Franchise, LLC
2. Name of the franchise offering: Club Pilates
3. Franchisor's principal business address:
3185 Pullman Street

Costa Mesa, CA 92626
4. Name and address of Franchisor's agent in this State authorized to receive service
of process:

th
85 7 Place East, Suite 500
St Paul, MN 55101-2198
5. The states in which this application is or will be shortly on file:
California, Florida, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota,

Nebraska, New York, North Dakota, Rhode Island, South Dakota, Texas, Utah,
Virginia, Washington, and Wisconsin.
Form A (cont'd) - Uniform Franchise Registration Application Page 2
6. Name, address, telephone and facsimile numbers, and e-mail address of person to
whom communications regarding this application should be directed:
Lane Fisher, Esq.

Fisher Zucker, LLC
21 South 21^ Street
Philadelphia, PA 19103
Telephone: (215)825-3100
Facsimile No: (215) 825-3101
Email: Ifisherfgjfisherzucker.com; bgraefe@fisherzucker.com
We respectfully request that all correspondence be submitted via mail and email.
Certification
I certify and swear under penalty of law that I have read andnd know the contents of qf this application,
application,
including the Franchise Disclosure Document with an issuance nee date of j l p f l l 2^?% "ZOf
attached as an exhibit, and that all material facts stated iiin all those documents are accurate and
those documents do not contain any material omissions. I further certify that I am duly authorized
to make this certification on behalf of the Franchisor and that I do so upon my personal knowledge.
Signed at C»st*-s Mt*-*-. Ayttl k .,20 11-
Franchisor:
Name: Shaun Grove
Title: President
CERTIFICATION PAGE
I certify under penalty of law that I have read this application and the exhibits attached hereto and
incorporated herein by reference, and know the contents thereof and that the statements therein are true
and correct.
Executed on y-b .20 IT-
CLUB PIL^fES FRANCHISE, LLC

">
STATE OF
COUNTY 6 % r - ^
Personally appeared Bfcfore me this day of , 20 , the above-named, Shaun

Grove, to me known to be the pers&KMio executed the foregoing application (as President the above-
named applicant) and being first duly sêcji, stated upon oath that said application, and all exhibits
submitted herewith, are true and correct.
(Notary's Seal)
Notary
&J?Z&ttSgS22Etttt.
titttfad. m l not tht tni»«*m». accumcf. or vtWay d tfwt aocumam
fflata of California, Coynty of j3ifA#$&— ^ /
.day
Subscribed and sworn to (or affirmed) before me on tha. (=>
* d/KM &>17 ^SMAW*
proved to me on the basis of satetactory evidence tobethe
penonM who apoeared before.
(seal)
Signature. JUOI LOWENTHAL J-
&£&8u\
COUNTY OP OMME -
Mr COMB, Ivy JAM, M, a w y
He, 5
FisherZuckerBUSINESS LAWYERS
April 27, 2017
Via UPS
Mr. Daniel Sexton
85 7* PI E, Suite 500
Lane Fisher* St. Paul, MN 55101-2198
Jeffrey Zucker*
Re: Club Pilates Franchise, LLC: File No. 7774
F. Joseph Dunn*
Dear Mr. Sexton:
David). Allsman*
Frank A. Reino* Please find enclosed a franchise registration renewal application filed on behalf of the
above-captioned company, which includes the following documents:
William Graefe. jr.*
Priya Vimalassery* 1. Check in the amount of $200.00;

Max Staplin*
2. Uniform Franchise Registration Application;
Jarina Duffy*
3. Franchisor's Costs and Source of Funds;
Eli Bensignor*
Minerva Pinto* 4. Uniform Franchise Consent to Service of Process;
•member PA and N) bars

5. Certification Page;
memberPA.N] and WI bars
+
6. Consent of Accountant;
7. Franchise Seller Disclosure Form(s);
8. Two (2) hard copies of the amended Franchise Disclosure Document (one
clean and one red-lined against the Company's previously registered
disclosure document) for use in the State of Minnesota; and
9. One CD-ROM containing the complete franchise renewal application,

including two (2) copies of the amended Franchise Disclosure Document (one
clean and one red-lined) in .pdf format. The Company represents and warrants
that the information contained on this CD-ROM is identical to the hard copies
enclosed herewith.
Please be advised that franchisor's fiscal year end is December 31. Please be advised
that no advertising materials are being submitted at this time. Please call me if you have any
questions regarding this application. I look forward to receiving notification of your
acceptance.
Very truly yours,

21 S. 21st Street
P: 215.825.3100 FISHER ZUCKER L L C
F: 215.825.3101
811 Church Road

Suite 105
Cherry Hill N] 08002
www.fisherzucker.com
P: 856.665.5253
F: 856.488.2108 A limited liability company formed in the Commonwealth sylvania
^ ^ ^ B ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ B ^ B ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
FRANCHISOR'S COSTS AND SOURCE OF FUNDS
1. Disclose the Franchisor's total costs far performing fe pre-openlng obBgafions to provide
goods or services in connection with estabttshlnp each franchlsed business. Including real estate.
improvements, inventory, training and other Items staled In the offering:
Cateqory: Costs;
Real Estate: S
Improvements: %
: i
.Equipment 5
Inventory: s
Training: $t,000
Other Items; S 500
Total: $1,500
a. The source of these funds is the operating cash -Row and working capital of the
corporal ion.
UNIFORM FRANCHISE CONSENT TO SERVICE OF PROCESS
Club Pilates Franchise, LLC, a limited liability company organized under the laws of the State of
Delaware (the "Franchisor"), irrevocably appoints the officers of the States designated below and
their successors in those offices, its attorney in those States for service of notice, process or pleading
in an action or proceeding against it arising out of or in connection with the sale of franchises, or a
violation of the franchise laws of that State, and consents that an action or proceeding against it
may be commenced in a court of competent jurisdiction and proper venue within that State by
service of process upon this officer with the same effect as if the undersigned was organized or
created under the laws of that State and had lawfully been served with process in that State. We
have checked below each state in which this application is or will be shortly on file, and provided a
duplicate original bearing an original signature to each state.
California: Commissioner of the _ Rhode Island: Director,

Department of Business Oversight Department of
Business Regulation
X Hawaii: Commissioner of Securities
. South Dakota: Director of the
X Illinois: Attorney General Division of Securities
X Indiana: Secretary of State .Virginia: Clerk, Virginia State

Corporation Commission
X Maryland: Securities Commissioner
_ Washington: Director of Financial
Minnesota: Commissioner of Institutions
Commerce
^Wisconsin: Administrator, Division
X _ New York: Secretary of State of Securities, Department of
Financial Institutions
North Dakota: Securities
Commissioner
Please mail or send a copy of any notice, process or pleading served under this consent to:
Lane Fisher, Esq.

Fisher Zucker, LLC
st
21 South 21 Street
Dated: 1 4 Zoj?
Notary: Franchisor:
Residing in ^Xôunty,
Commission Expires:
Notarial Seal: Noiariitl

Ackmiwlfdnnu-m
= y•L
Aiiiiclwtl
President
ALL- PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate
is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of Orange
On 4 M I L ^ £oi7 before me, Judi Lowenthal, Notary Public

(Here Insert name andtitleof the officer)
personally appeared Stim*) &?0l/£

who proved to me on the basis of satisfactory evidence to be the person^) whose
name(tf) is/are subscribed to the within instrument and acknowledged to me that
he/sheAbey executed the same in his/herftheir authorized capacityîee), and that by
his/heffthetr signature^ on the instrument the person(s), or the entity upon behalf of
which the person^ acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal. v JUOI LOWENTHAL £

\ COMM. 8 2095215 >*
a) NOTARf PUBLIC •CALIFORNIA UJ
'LcXWWmX
Public Signature (Notary Public Seal)
ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM

This form complies with current California statutes regarding notary wording and,
DESCRIPTION OF THE ATTACHED DOCUMENT if needed, should be completed and attached to the document. Acknolwedgents from
other states may be completedfor documents being sent to that state so long as the
wording does not require the California notary to violate California notary law.
CcHW&r S&^c<?<//'A>£'£Z>
(Title or description of attached document) / • State and County information must be the State and County where the document
signerfs) personally appeared before the notary public for acknowledgment.
» Date of notarization must be the date that the signers) personally appeared which
(Title or description of attached document continued) must also be the same date the acknowledgment is completed.
» The notary public must print his or her name as it appears within his or her
1
Number of Pages / Document Date ^ A / / / commission followed by a comma.and then your title (notary public).
» Print the name(s) of document signerfs) who personally appear at the time of
notarization.
CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms (i.e.
fee/she/tbeyr is /are ) or circling the correct forms. Failure to correctly indicate this
• Individual (s) information may lead to rejection of document recording.
• Corporate Officer » The notary seal impression must be clear and photographically reproducible.
Impression must not cover text or lines. I f seal impression smudges, re-seal i f a
sufficient area permits, otherwise complete a different acknowledgment form.
—rnnej— » Signature of the notary public must match the signature on file with the office of
the county clerk.
• Partner(s) • Additional information is not required but could help to ensure this
• Attorney-in-Fact acknowledgment is not misused or attached to a different document.
• Tnjstee(s) *> Indicate title or type of attached document, number of pages and date.
• Other • Indicate the capacity claimed by the signer. If the claimed capacity is a
corporate officer, indicate the title (Le. CEO, CFO, Secretary).
• Securely attach this document to the signed document with a staple.
J
2015 Version wwvw.NotaryClasses.com 800-873-9865
KS
O R T E G A & K O N R A D , LLP
C f i? T I r i f p ? j 3 M C A -C t " '.. r-i 7 i \ T S
12526 High Bluff Drive. Suite 300. San Diego, CA 92130 • Direct 858.623.2786 • Fax 858.408.2457
www.ortegacpa.net
CONSENT
Ortega & Konrad, LLP consents to the use in the Franchise Disclosure Document issued by Club
Pilates Franchise, LLC ("Franchisor") on April 27, 2017, as it may be amended, of our report dated March
1, 2017, relating to the financial statements of Franchisor for the year ending December 31, 2016.
* H™*^, L-L-?
FRANCHISE DISCLOSURE DOCUMENT
Club Pilates Franchise, LLC,
a Delaware limited liability company
3185 Pullman Street
(949) 346-9794
sales@clubpilates.com
www.clubpilates.com
Club Pilates Franchise, LLC ("we," "us/' or "our") offers for sale a franchise to establish and operate
a fitness studio that provides Pilates and other exercise classes under the "CLUB PILATES" marks ("CLUB
PILATES Studio" or "Studio").
The total estimated investment necessary to begin operations of a CLUB PILATES Studio franchise
ranges from $ ^ 7 ^ 1 8 0 , 5 9 5 to $ ^ 4 7 ^ 2 4 9 , 2 9 5 . This amount includes $3^500143,995 to $156.295 that
must be paid to the franchisor or its affiliate prior to opening.
The total investment necessary to operate multiple CLUB PILATES Studios under our form of area
development agreement depends on the number of franchises we grant you the right to open. The total
investment necessary to enter into a development agreement for the right to develop three (3) CLUB PILATES
Studios is $233r#2256.095 to $3007^^324,795 which includes (a) $iQg QQQ219.495 to $231.795 that is paid
7
to us or our affiliates prior to opening, and (b) the total estimated initial investment to begin operation of
your initial CLUB PILATES Studio.
This Disclosure Document summarizes certain provisions of your Franchise Agreement and other
information in plain English. Read the disclosure document and all accompanying agreements carefully. You
must receive this disclosure document at least 14 calendar days before you sign a binding agreement with,
or make any payments to the Franchisor or an affiliate in connection with the proposed franchise sale. Note,
however, that no government agency has verified the information contained in this document.
You may wish to receive your Disclosure Document in another format that is more convenient for
you. To discuss the availability of disclosures in different formats, contact Shaun Grove at Club Pilates
Franchise, LLC, 3185 Pullman Street, Costa Mesa, CA 92626, and at (949) 346-9794.
The terms of your contract will govern your franchise relationship. Don't rely on the disclosure
document alone to understand your contract. Read all of your contract carefully. Show your contract and this
disclosure document to an advisor, like a lawyer or accountant.
Buying a franchise is a complex investment. The information in this disclosure document can help you
make up your mind. Information about comparisons of franchisors is available. More information on
franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use
this Disclosure Document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-
FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit
the FTC's home page at www.ftc.gov for additional information. There may also be laws on franchising in your
state. Call your state agency listed on Exhibit B or visit your public library for other sources of information on
franchising.
©m€2017 Club Pilates Franchise, LLC

30*62017 Franchise Disclosure Document
THE ISSUANCE DATE OF THIS DISCLOSURE DOCUMENT IS: APRIL % - a W 6 2 7 . 2017.
©30162017 Club Pilates Franchise, LLC

30442017 Franchise Disclosure Document
STATE COVER PAGE
Your state may have a franchise law that requires a franchisor to register or file with a state franchise
administrator before offering or selling in your state. REGISTRATION OF THIS FRANCHISE WITH A STATE
DOES NOT MEAN THAT THE STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS
DISCLOSURE DOCUMENT.
Call the state franchise administrator listed on Exhibit B for information about the franchisor, or
about franchising in your state. If you learn that anything in this disclosure document is untrue, contact the
Federal Trade Commission and the state administrators listed on Exhibit B.
MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE
INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND
CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT
RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT
IN ORDER TO RENEW.
Please consider the following RISK FACTORS before you buy this franchise:
1. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT CONTAIN A MANDATORY

BINDING ARBITRATION CLAUSE GOVERNING NEARLY ALL DISPUTES BETWEEN YOU AND US. THE
BINDING ARBITRATION (AND ANY LITIGATION) AND ANY ARBITRATION APPEAL WILL TAKE PLACE
IN THE COUNTY IN WHICH OUR THEN-CURRENT HEADQUARTERS IS LOCATED, CURRENTLY,
COSTA MESA, CALIFORNIA, AND THAT MAY COST YOU MORE (AND BE LESS CONVENIENT) THAN
IF THOSE PROCEEDINGS TOOK PLACE NEAR YOUR RESIDENCE OR BUSINESS. COSTS OF THE
ARBITRATION AND ANY ARBITRATION APPEAL MAY BE GREATER THAN IN LITIGATION. YOU AND
WE WILL GENERALLY BEAR EACH OF OUR OWN COSTS IN ANY DISPUTE, BUT THE ARBITRATOR
CAN ASSESS COSTS (BUT NOT ATTORNEY'S FEES) AGAINST A LOSING PARTY.
2. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT PROVIDE THAT THE LAWS OF
THE STATE OF CALIFORNIA GOVERN THE AGREEMENTS AND THAT LAW MAY NOT PROVIDE YOU
WITH THE SAME RIGHTS AND PROTECTIONS AS YOUR LOCAL LAW. YOU MAY WANT TO CONSULT
AN ATTORNEY REGARDING COMPARISON OF THESE LAWS.
3. IF YOU ARE AN INDIVIDUAL, YOUR SPOUSE MUST SIGN A PERSONAL GUARANTY. IF THE
FRANCHISEE IS A BUSINESS ENTITY, EACH OF THE ENTITY'S OWNERS, PARTNERS, MEMBERS,
OFFICERS, DIRECTORS, TRUSTEES AND BENEFICIARIES (AS APPLICABLE), AS WELL AS THEIR
RESPECTIVE SPOUSES, MUST SIGN A PERSONAL GUARANTY. THOSE WHO SIGN A PERSONAL
GUARANTY WILL BE JOINTLY AND SEVERALLY LIABLE FOR ALL DEBTS AND OBLIGATIONS OF THE
FRANCHISEE WHETHER OR NOT THEY ARE INVOLVED IN THE OPERATION OF THE FRANCHISE
BUSINESS. THESE INDIVIDUALS WILL ALSO HAVE THEIR PERSONAL ASSETS AT RISK.
4. THE FRANCHISOR ENTITY HAS A LIMITED OPERATING HISTORY (OPERATING SINCE MARCH 12,
2015) AND ITS FINANCIAL RESOURCES MIGHT NOT BE ADEQUATE TO FUND THE FRANCHISOR'S
PRE OPENING OBLIGATIONS TO EACH FRANCHISEE AND PAY OPERATING EXPENSES.
5. IF YOU FAIL TO MEET THE MINIMUM MEMBER QUOTA (40 MEMBERS PER DAY (AVERAGED OVER
ONE WEEK) BY THE 1ST YEAR ANNIVERSARY OF THE OPENING OF THE STUDIO; 65 MEMBERS PER
DAY (AVERAGED OVER ONE WEEK) BY THE END OF THE 2ND YEAR ANNIVERSARY; AND 85

3Q162017 Franchise Disclosure Document
MEMBERS PER DAY (AVERAGED OVER ONE WEEK) BY THE END OF THE 3RD YEAR ANNIVERSARY
AND EACH SUCCEEDING YEAR THEREAFTER) FOR 36 CONSECUTIVE MONTHS AT ANY TIME
DURING THE TERM OF THE FRANCHISE AGREEMENT, WE MAY INSTITUTE A MANDATORY
CORRECTIVE TRAINING PROGRAM OR TERMINATE THE FRANCHISE AGREEMENT AT OUR SOLE
DISCRETION.
WJHERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Effective Date: See the next page for state effective dates.

STATE EFFECTIVE DATES
The following states require that the Franchise Disclosure Documents be registered or filed with the state
or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New
York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.
This Franchise Disclosure Document is registered, on file or exempt from registration in the following
states having franchise registration and disclosure laws, with the following effective dates:
STATE EFFECTIVE DATE
CALIFORNIA
FLORIDA Effective
HAWAII Pending Registration
ILLINOIS Pendine ReeistrationADril 22. 2016
INDIANA April 22, 2016Effective
KENTUCKY Not Registered
MARYLAND Pending Registration
MICHIGAN Effective
MINNESOTA Pending Registration
NEBRASKA Effective
NEW YORK Pending Registration
NORTH DAKOTA Pending Registration
RHODE ISLAND Pending Registration
SOUTH DAKOTA Pending Registration
TEXAS Effective
UTAH Effective
VIRGINIA April 22, 2016Pendine Registration
WASHINGTON Juno 22, 2016Pending Registration
WISCONSIN April 20,20162017
©33162017 Club Pilates Franchise, LLC .

TABLE OF CONTENTS
PAGE
r r r r l
J IITI/=»Tir»kl c.
ITFM A BANKRUPTCY. n ,„„

g
iTcr/i ^ ^THFR FFFS 7
13
18
22
ITEM 10 F|NANC|NG.... , ,„...„,... 24
38
11
14
16
16
57
57
68
ITEM 21 FINANCIAL STATEMENTS
74
75
ITEM 6 OTHER FEES

ITEM 7 ESTIMATED INITIAL INVESTMENT 13
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES 18
ITEM 9 FRANCHISEE'S OBLIGATIONS 22
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING . 24
ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION 44

ITEM IS OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS .. .45
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL .46
ITEM 17 RENEWAL, TERMINATION. TRANSFER AND DISPUTE RESOLUTION 46
ITEM 18 PUBLIC FIGURES
CLUB PILATES FDD 30462017

ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS 57
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION 68
ITEM 21 FINANCIAL STATEMENTS 74
ITEM 22 CONTRACTS 74
ITEM 23 RECEIPTS 75
Exhibits
A. FRANCHISE AGREEMENT AND EXHIBITS

B. LIST OF STATE AGENTS FOR SERVICE OF PROCESS AND STATE ADMINISTRATORS
C. FINANCIAL STATEMENTS
D. STATEMENT OF PROSPECTIVE FRANCHISEE
E. TABLE OF CONTENTS OF MANUAL
F. FORM OF GENERAL RELEASE
G. STATE SPECIFIC ADDENDA
H. LIST OF FRANCHISEES AND THEIR OUTLETS
I. LIST OF FRANCHISEE WHO CEASED TO DO BUSINESS UNDER THE FRANCHISE AGREEMENT
J. DEVELOPMENT AGREEMENT
K. RECEIPTS

ITEM 1 THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language, this disclosure document uses "we," "us," "our," "Franchisor" or "Club Pilates"
to mean Club Pilates Franchise, LLC, the franchisor. "You" means the person, corporation, partnership or other
entity that buys the franchise. Terms not defined in this Disclosure Document (including various capitalized
terms) are defined in the Franchise Agreement attached as Exhibit A to this Disclosure Document (the "Franchise
Agreement").
Franchisor
We do business under the name Club Pilates Franchise, LLC, or in some cases, simply as "Club Pilates."
We do not do business under any other name. Our principal business address is 3185 Pullman Street, Costa
Mesa, CA 92626, and our business phone number is (949) 346-9794. We are a Delaware limited liability company
formed on March 12, 2015.
Except as provided in this Item, we do not offer franchises in any other line of business and we are not
otherwise involved in any substantive business activity.
Acquisition, Predecessors, Affiliates and Other Information
On March 12, 2015, we completed a transaction under which we acquired all rights, title and interest in
and to the CLUB PILATES franchise system and marks from our predecessor, Club Pilates Global, LLC ("CP
Global"). Please see additional disclosures regarding CP Global in the next paragroph.below. As part of that same
transaction, we also obtained the ownership rights to five (5) CLUB PILATES Studios that were open and
operating in and around San Diego, California from our affiliate Club Pilates, LLC ("CP"). CP Global and CP's
principal business address is the same as ours.
Our affiliate CP does not engage in any other business activities, and CP has never offered franchises in
any line of business. From 2007 to March, 2015, our affiliate, CP operated the five (5) non-franchised Club Pilates
Studios described above. Our predecessor CP Global offered and sold franchises for CLUB PILATES Studios
before the transaction above was completed from September 2012 through March 12,2015, but CP Global does
not currently offer franchises in any line of business or engage in any other business activities.
Except as disclosed above, we currently have no parents-eft predecessors or affiliates that we are
required to bo includodinclude in this Item.
Agent for Service of Process
Our agents for service of process are disclosed in Exhibit B.
The Business We Offer
We offer for sale a franchise to operate a distinctive CLUB PILATES Studio (each, a "Franchised
Business"), which is operated pursuant to the terms of our franchise agreement attached to this Disclosure
Document as Exhibit A (the "Franchise Agreement"). We expect that a Studio will typically be located in a retail
shopping center, and this franchise offering assumes that the size of a typical Studio will be at least 1,500 square
feet in size (a 25 ft. by 60 ft. rectangle). We may, however, consider alternative sites, on a case-by-case basis.
Under the Franchise Agreement, we will also grant you the right to operate your Franchised Business within a

designatod g e o g r a p h y area w ^
so^newêê^heÔ^
Ifyou own an e a t i n g ^ n e s s f a c ^ y and meet our other q u a l ^

business t o a C L 0 5 P ^ T 5 S Studio, ^converted Studio will likely encounter lower investment requirements
than thoseof a startupStudio 5achStudio wili offer Piiatesandotherexercise programs through live
instructional group and individual c l a s s e s , ^
usingaPilates BalletBar^Spring Board,5X0 Chair,and other Pilates'apparatuses^ strength
exercisesâteacher training programs and any other services that we authorize ( c o l l e c t i v e l y , ^
Services'^ All classes will he paid for and scheduled online via the Internet, and taught hy highly trained
instructors who have completedaminimum of SOO hours of customized instructor training.
The Studios are established and operated underacomprehensive design that includes spacious interior,
asignificant number of exercise equipmentâpparatuses, specifications, and procedures for operations; quali^
customer service; management and financial control; training and assistance; and advertising and p r o m o ^ ^
programs (collectively, the "CLOBPII^TES Systems The CLUB PILAT5SSys
procedures (collectively, the "System Standards") are described in our confidential operations m
"Manual"). The CLUB PII^T5SSystem and the Manual may bechanged,improved and further developed by us^
The Franchise Agreement issigned by us, byyou, and bythoseofyour principals whom wedesignate as
the principalfranchisee operator(s) (the designated Operator(s)")ofyourFranch^
Operator(s)(theremaybeuptotwosuchindividuals, butonlyoneaddresstowhichwecommunicatein regards
to the franchise) named has the authority to act for you in all matters relating to the Club Pilates Franchise,
includingvotingresponsibilities. Bysigning the FranchiseAgreement, you and the Designated O
to be individually bound by certain obligations in the Franchise Agreement, including covenants concerning
confidentiality and non-competition, and to personally guaranteeyour performance under the Franchise
Agreement. Depending on the type of business activities, which must be fully disclosed prior to signing this
document, inwhich you oryourDesignatedOperator(s)may be involved, we may requireyouoryour Designated
Operator(s) to sign additional confidentiality and non competition agreements.
You (or, if you are an entity, one of your Designated Operators) must at least complete the
ownerôperator module (the "OwnerÔperator Module") ofourproprietaryinitial training progr^^
TrainingProgram")priortotheopeningofthe Franchised Business.
You will also need to have at least one ( l ) i n s t r u c t o r ^ w h i c h may be your Designated Operator or
a n o t h e r i n d i v i d u a l ^ t h a t h a s c o m p l e t e d ; ( i ) a l l r e q u i r e m e n t s t o b e a c e r t i f i e d Pilates instructor
accumulatingat least 450 hoursofPilatesinstruction(collectively,the "Certified P^^
our proprietary "orientation program" designed to help those that have already complied with the Cer^^^^
Pilates Pequirements(each,a"Certified Pilates lnstructor")to provide our Approved ServicesataCLU^
StudioinaccordancewithourSystemstandardsandspecifications(collectively,the " O r i e n t a t e
instructor may complete the Orientation Program at our headquarters at the same time he/she attend the rest
of our InitialTraining Program or, with our approval, may complete the Orientation Program remotely v^
webinar^video instruction before taking the Orientation Program test.
Please note that our standard franchise offering assumes that at least one (1) of your Designated
Operator(s)andôr another individual you engage to serve as the initial instructor at your Franchised Busm^^
will beaCertified Pilates lnstructor,andthatthisCertified Pilates I n s t r u c t o r w i l l a ^ ^
component ofthelnitialTraining Program.We do offer,and will permit ourfranchisees to offer,af^^^
training" course that provides both (a) the instruction necessary to comply with the Certified Pilates
2
©38462017 C i o b P i i ^ F ^ ^ e . ^ C
30462017 ^ n c h ^ O i ^ o ^ e O o c o m e n t
Requirements, and (b) our Orientation Program (collectively, the "Teacher Training Program"), but our standard
franchise offering does assume that no one will need the full Teacher Training Program prior to opening. Instead,
the initial instructor and subsequent instructors at your Studio will already be Certified Pilates Instructors and
that such individuals will only be required to complete our Orientation Program before they can commence
working at your Franchised Business.
Multi-Unit Offering
We also offer qualified individuals and entities the right to open and operate three (3) or more
Franchised Businesses within a designated geographical area (the "Development Area") under our current form
of development agreement that is attached to this Disclosure Document as Exhibit J (the "Development
Agreement"), which will also outline a schedule or defined period of time in which you must open and commence
operating each Franchised Business (a "Development Schedule").
You will be required to sign a Franchise Agreement for the initial Franchised Business we grant you the
right to open within the Development Area at the same time you sign your Development Agreement, and you
will need to sign our then-current form of franchise agreement for each of the Franchised Businesses you open
under the Development Schedule.
You will be required to pay us a one-time development fee that will be calculated based on the number
of Franchised Businesses we grant you the right to open under the Development Agreement (the "Development
Fee"), but you will not be required to pay any other initial franchise fee at the time you execute your franchise
agreements for each Franchised Business we permit you to open under your Development Agreement.
Market and Competition
The market for fitness services and studios is crowded. You will face competition for members from
other Pilates studios, gyms, personal trainers, yoga studios, fitness/exercise centers and studios, health clubs,
barre-based studios, and even other CLUB PILATES franchisees.
Applicable Regulations
Some states require that health/fitness facilities have a staff person available during all hours of
operation that is certified in basic cardiopulmonary resuscitation or other specialized medical training. Some
state or local laws may also require that health/fitness facilities have an automated external defibrillator and/or
other first aid equipment on the premises. At a minimum, your Studio will be subject to various federal, state and
local laws, and regulations affecting the business, including laws relating to zoning, access for the disabled, and
safety and fire standards. You may need the local fire marshals or other local, state or federal agency's permission
before you begin operations. In addition, there may be local licensing and employment regulations, including
worker's compensation insurance requirements. You should examine these and other laws before purchasing a
franchise.
You should consult with your attorney, and local and state agencies/authorities, before buying a
Franchise to determine if there are any specific regulations you must comply with as it relates to offering the
Studio products and services to consumers in your state, and consider the effects on you and the cost of
compliance. These requirements can affect a broad scope of your operations, including location selection, and
hiring of personnel, among other things. It is your sole responsibility to investigate any regulations in your area,
including those related to the establishment and operation of a CLUB PILATES Studio generally.

We make no representations or assurances as to the specific licenses, permits, authorizations or
otherwise that may be required for operating your Studio, which can vary significantly by venue and change over
time. It is your responsibility to investigate and ensure that you are in compliance with all local, state, provincial
and federal business, retail sales, zoning, and other regulations and licensing requirements, and any applicable
laws and regulations, and to identify and obtain all authorizations necessary to operate your Studio. Please be
advised that you must investigate and comply with all of these applicable laws and regulations. You alone are
responsible for complying with all applicable laws and regulations, despite any advice or information that we
may give you. We have not researched any of these laws to determine their applicability to your Franchised
Business.
ITEM 2 BUSINESS EXPERIENCE
Founder: Allison Beardslev

Ms. Beardsley was the founder of Club Pilates Global, Inc. and held the positions of CEO and President of this
entity from June 2012 to March 2015, in Del Mar, California. Since December 2007, she has been the managing
member of our affiliate. Club Pilates, LLC, also located in Del Mar, California.
Chief Executive Officer: Anthony Geisler

Mr. Geisler has been our Chief Executive Officer since our inception in March 2015. Mr. Geisler was the President
of UFC Gym Franchise Company from January 2013 to February 2014 in Santa Ana, California. Mr. Geisler
created LA Boxing Franchise Company in February 2004 and served as President until he sold his venture in
December 2012 in Santa Ana, California.
President, General Counsel: Shaun Grove

Mr. Grove has been our President and General Counsel since our inception in March 2015. Mr. Grove was the
General Counsel for UFC Gym Franchise Company from January 2013 to June 2014, in Santa Ana, California. Mr.
Grove was the General Counsel for LA Boxing Franchise Corporation from March 2009 to December 2012, in
Santa Ana, California. Mr. Grove has owned and operated three (3) UFC Gym franchise locations in Southern
California since January 2012.
Chief Financial Officer: Scott LaRose

Mr. LaRose has been our Chief Financial Officer since June 2015. Mr. LaRose was the Chief Financial Officer for
UFC Gym Franchise Company from January 2013 to June 2015 in Santa Ana, California. Mr. LaRose was the Chief
Financial Officer for LA Boxing Franchise Corporation from January 2010 to December 2012, in Santa Ana,
California.
Vice President Real Estate: Richard Feinbere

Mr. Feinberg has been our Vice President Real Estate since our inception in March 2015. Mr. Feinberg was the
Director of Real Estate for UFC Gym Franchise Company from January 2013 to March 2015 in Santa Ana,
California. Mr. Feinberg was the Director of Real Estate for LA Boxing Franchise Corporation from November
2006 to December 2012, in Santa Ana, California.
National Sales Director: Sarah Luna

Ms. Luna became our National Sales Director in July 2015. Ms. Luna is a comprehensively certified Pilates
instructor and from February 2013 to July 2015, operated 2 Pilates studios as EQUINOX'S Pilates Coordinator, in
Irvine, CA and Hawthorne, CA. Ms. Luna attended Chapman University in Orange, CA from 2011 to March 2013,
where she received her MBA in entrepreneurship. From August 2000 to May 2011, Ms. Luna was a profosoional
dancer with the Giordano Banco Company in Chicogo, IL.
©3Q162017 Club Pilates Franchise, LLC

Vico Prosidont of Markoting; Keith Williams
Mr. Williomo hap boon our Vico President of Markotine sinco our inception in March 2015. Mr. Williams woo tho
Director of Marketing for UPC Gym Franchise Compony from January 2013 to March 2015 in Santa Ana,
California. Mr. Williams was tho Director of Markoting for LA Boxing Franchise Corporation from November
2006 to December 2012, in Santa Ana, California.
Director of Teacher Training: Vanessa Huffman

Ms. Huffman has been our Director of Teacher Training since October 2015. Ms. Huffman has been an
independent Pilates instructor in Los Angeles, California area since April 2003. Ms, Huffman worked in tho
education and progrom dovolopmont departments of Tho Dovorly I lills Country Club and Tho Jonathon Club, both
located in Los Angolos, California, from August 2007 to December 2011.
DiroctorVice President of Retail Sales: Kristin La RoquoRudy Flores

Mr. FloresMs. La ROQUG has been our DiroctorVice President of Retail Sales since Docombor 2015. June 2016.
From January 2014 to Docombor 2015,2013 to May 2016, Mr. Flores Ms. La Roaue worked as athe Product Sales
ManagorDirector for Morgan Taylor Nail Locquor, locatodUFC Gym Franchise Company in ftfeaSanta Ana,
California. -From October 2010 to January 2013 to Docombor 2014, 2013, Mr. FloresMs. La Roouo worked as
athe Product Sales aed-Director for LA Boxing Franchise Company in Santa Ana, California.
Vice President of Marketing: Vanessa Hobson

Ms. Hobson has been our Vice President of Marketing since January 2017. Ms. Hobson was an Account Director
for Epsilon from July 2014 to January 2017 in San Diego, California. Prior to that, she was a Senior Manager on
the 24 Hour Fitness corporate marketing team from August 2001 to 2013 at their headquarters in Carlsbad.
California.
Vice President of Finance: Megan Moen

Ms. Moen has been our Vice President of Finance since January 2016. Ms. Moen was a Senior Director for the
Valuation and Financial Advisory Services practice of FTI Consulting, Inc., located in Los Angeles, California, from
June 2013 to 2016.
Director of Bridge Training: Melody Ward

Ms. Ward has been our Director of Bridge Training since January 2017. Ms. Ward has been an instructor. Master
Trainer and Regional Manager for DuWop Cosmetics located in Van Nuys, California. From February 2010 to
Docombor 2012,with Club Pilates franchise locations since 2009 Ms. La Roouo worked as a Fashion Buyer for
Forever 21 at its hoadquartor office in Los Angeles, California.
Liz Cooper: Vice President of Operations

Ms. Cooper has been our Studio Operations Manager since March 2016. From January 2015 to March 2016, she
worked at Henri Bendel, located in Costa Mesa, CA, as the Visual Merchandising Coordinator. From January
2012 to December 2014, she worked at Fresh, located in Costa Mesa, CA, as the Visual Merchandising
Coordinator.
Carly Simms: Director of Recruiting

Ms. Simms joined Club Pilates as the Director of Recruiting and HR in January 2017. Ms. Simms managed her
own recruiting consulting practice. Hummingbird Recruiting, in Irvine, CA from July 2016 to January 2017. She
worked at the Irvine Company in Newport Beach, CA as its Talent Advisor from March 2016 until July 2016. She
worked for Signature Analytics in San Diego, CA as its Recruiting Manager from June 2015 to March 2016. She
worked for Special Counsel, located in San Diego, CA, as its Placement Director from July 2012 to June 2015.

ITEM 3 LITIGATION
No litigation is required to be disclosed in this Item.
ITEM 4 BANKRUPTCY
No bankruptcy information is required to be disclosed in this Item.
ITEMS INITIAL FEES
Franchise Agreement
Initial Franchise Fee
You must pay to us a lump sum initial franchise fee of $49,500 (the "Initial Franchise Fee") to establish
a single Studio under a Franchise Agreement (whether a start-up or conversion). The Initial Franchise Fee is due
upon the signing of the Franchise Agreement. The Initial Franchise Fee shall be fully earned by Franchisor upon
payment and is not refundable, in whole or in part, under any circumstance. Except as disclosed in this Item, we
uniformly impose the Initial Franchise Fee on all parties that are purchasing a single Franchised Business.
Initial FFE Package
You must purchase an initial package of furniture, fixtures and equipment that is designed to provide
you with the majority of these items that you will need in connection with outfitting, equipping and otherwise
building out your Studio (the "Initial FFE Packaged"), and includes the cost of shipping and installation. As of
the Issue Date of this Disclosure Document, the Initial FFE Package costs approximately $68,000between
$89,495 and $101,795 and contains (a) 13 Pilates reformers and various related equipment/supplies for use in
connection with the provision of the Approved Services, (b) a Studio fixture package comprised of a desk,
displays and display rack, storage cubbies, pedestals and 1 Barre package, and (c) certain other equipment used
in connection with the Studio (e.g., Pilates mini-balls, massage balls, foam rollers and yoga blocks). Currently,
you must purchase the Initial FFE Package from us but we reserve to designate another approved supplier in our
sole discretion. You must purchase the Initial FFE Package prior to opening your CLUB PILATES Studio and the
Initial FFE Package is non-refundable under any circumstances.
Proprietary Initial Inventory Kit
Prior to opening your CLUB PILATES Studio, you must purchase opening inventory from us in the amount
of $5,000 ("Proprietary Initial Inventory Kit"), which includes CLUB PILATES apparel, including t-shirts, yoga
pants, toe sox and jowolry, ossontiol oilcsocks and related accessories. The amount paid for the Proprietary Initial
Inventory Kit is non-refundable under any circumstances.
Development Agreement
If we grant you the right to open three (3) or more Franchised Businesses under a Development
Agreement, you must pay us a one-time Development Fee upon executing your Development Agreement. Your
Development Fee will depend on the number of Franchised Businesses we grant you the right to open within
the Development Area and is calculated as follows: (i) $125,000 for the right to open three Franchised
Businesses, plus an additional $40,000 for the right to open each additional Franchised Business (up to a total of
five); (ii) $35,000 per Franchised Business if you agree to open and operate between six and nine Franchised
6
Businesses; and (iii) $30,000 per Franchised Business if you agree to open and operate 10 or more Franchised
Businesses.
You will be required to enter into our then-current form of franchise agreement for each Franchised
Business you wish to open under your Development Agreement, but you will not be required to pay any
additional Initial Franchise Fee at the time you execute each of these franchise agreements. If you enter into a
Development Agreement, you must execute our current form of Franchise Agreement for the first CLUB PILATES
Studio we grant you the right to open within your Development Area concurrently with the Development
Agreement.
Your Development Fee will be deemed fully earned upon payment, and is not refundable under any
circumstances. The Development Fee described above is calculated and applied uniformly to all of our
franchisees.
ITEM 6 OTHER FEES
Type of Fee Amount Due Date Remarks
Royalty 6% of Gross Sales 3

Payable weekly based You will be required to start paying your
on the Gross Sales of Royalty once your Franchised Business
your Franchised begins collecting revenue from
Business during the operations. We reserve the right to
preceding business collect your Royalty on a different
week interval (for example, monthly).
2
Marketing Fund Currently, 2% of Payable weekly at the Your Marketing Fund Contributions will
1
Gross Sales same time and in the begin when the Studio begins collecting
same manner as the revenue from operations.
Royalty
Orientation Costs and As incurred Each instructor that provides Approved
Program Expenses (if you or Services from your Franchised Business
your instructor must (a) be a Certified Pilates Instructor,
decide to attend and (b) complete our Orientation
the Orientation Program.
Program as part of
our Initial Training Your initial instructors) may attend our
Program). Orientation Program at the same time
they attend the rest of our Initial Training
Program (and we will not charge such
attendees any training fee or tuition
provided they attend at the same time).
If you have a Certified Pilates Instructor

that needs (or requests) the Orientation
Program after you have completed the
Initial Training Program, then these
instructors may also have the ability to
participate in and complete our
Orientation Program remotely via
©3O462017 Club Pilates Franchise, LLC

webinar/video instruction, but they will

be required to pass the Orientation
Program test before providing any
instruction at your Studio.
Once a Certified Pilates Instructor working

at your Studio completes the Orientation
Program, that individual may assist in the
provision of the Orientation Program (and
related test) to other instructors at your
Studio.
Please see Item 11 for additional

information.
Teacher Training $2,000 per person. Prior to training. This fee is only payable to us in connection
Program Fee with each individual that is not a Certified
Pilates Instructor, but wishes to obtain
instruction necessary to (a) comply with
the Certified Pilates Requirements, and
(b) complete our Orientation Program.
If an individual wishes to attend the

Teacher Training Program at your Studio,
then they will pay a single fee to our
approved third-party provider of $4,750,
with (a) $2,000 going to us for certain
materials that we provide in connection
with this training (including the "Webinar
Training" described in Item 11 of this
FDD), and (b) the balance of $2,750 going
to your Franchised Business (or the
appropriate Studio that will be providing
the in-person instruction).
In order to provide the Teacher Training

Program at your Studio, such training will
need to be provided by an instructor that
(a) is a Certified Pilates Instructor that has
completed our Orientation Program, and
(b) is otherwise approved by us as a
"Master Instructor". Please note that our
then-current criteria and conditions for a
Certified Pilates Instructor that has
completed the Orientation Program to
also become a Master Instructor will be

set forth in our Operations Manual.
If you are not able to provide the Teacher

Training Program, then we will advise you
of the Studio closest to your Franchised
Business that can provide such instruction
to interested clientele.
Ongoing/Refresher Then-current Prior to training. This fee is paid in connection with

Training training fee, which additional training/instruction that we
is currently $500/ may provide on an ongoing basis in
day per trainer. connection with the overall operation and
development of your Studio.
We will only charge this fee in connection

with training that (a) you request we
provide, or (b) we are required to provide
on-site at your Franchised Business. We
will not charge this fee in connection with
training that we require you to attend at
our corporate headquarters or other
training facility we designate.
We will not charge any training fee in

connection with minor, day-to-day
assistance that we provide remotely over
the phone or via email, subject to our
availability.
In addition to our then-current training

fee, you will always be responsible for the
costs and expenses that are incurred in
connection with you and your personnel
attending training.
Renewal Fee $10,000 At time of renewal. You must renovate and reimage the
Studio at your expense at the time of
Renewal to conform to our then-current
standards and image.
Transfer Fee under $10,000 Before the transfer. Payable when you sell the Studio. No
Franchise charge if the Studio is transferred to a
Agreement corporation or other entity that you
control.

Type of Fee Amount OueOate Remarks
Assignment Fee $10,000 On submitting Payaê when you warn to se^ransfer

under Development application for the rights under your Development
Agreement consent to Agreement.
assignment
Insurance Policies^ Amount of unpaid Must have the Payable only if youfaiito maintain
premium. policies within 60 required insurance coverage and we
calendar days after elect to obtain coverage for you.
Our estimate for3 signing the Franchise
mosofthe Agreement, but no
minimum required later than the time
Insurances that you acquire an
Ô0^$900^ Interest in the real
$1^000 propertyfrom which
you will operate the
Studio.
AuditFees^ $500 $2,500 Within 15 calendar Payable only if auditsbows an

days after receipt of understatement.
audit report.
Late Fees The greater ofthe Upon demand. Applies to ail amounts not paid when due,
highest applicable until paid in fuii. We may also requireyou
legal rate for open topay anadministrativefeeof$50for
account business each late payment or late report.
credit, or 1.5^ per
month.
Penalty Fee Then-current fee Upon demand. Payable only in tbe event you fail to
charged by us comply with your material obligations
under your Franchise Agreement by (a)
Currently,$100for permittinganyinstructoratyourStudioto
each day of non provide Pilates instruction or other
compliance. Approved Services before they complete
tbeOrientation Program, or (b) offering or
selling any unauthorized products or
services at your Studio. The Penalty Fee
will be incurred during each day of non-
compliance.
Cost of All costs Including Upon settlement or You will reimburse us for all costs in
Enforcement or attorneys'fees conclusion of claim or enforcing our obligations concerningthe
Defense action. Franchise Agreement i f w e prevail
Indemnification All costs Including Upon settlement or You will defend suits at your own cost
attorneys'fees conclusion of claim or and hold us harmless against suits
action. involving damages resulting from your
operation ofthe Studio.
10
©38^2017 O ^ P i l ^ F ^ ^ ^
3O342017^nch^0iîoso^0ocume^
Alternative $1,500 per day for At time of request. Additionally, you must reimbursement us
5
Supplier Approval personnel engaged for any travel, accommodations, and
in evaluating a meal expenses.
supplier.
Business Then-current fee Payable every 4 Please see Items 8 and 11 of this
Management charged by our weeks, as agreed. Disclosure Document for additional
Software Fee 6
Approved information on Approved Suppliers
Supplier, which is
and this fee.
currently $269
Regional As the Cooperative As the Cooperative We may establish regional cooperatives

Cooperative determines determines comprised of Studios that are within a
given geographical area (each, a
"Cooperative"). If a Cooperative is
established where your Studio is located,
you will be required to participate in that
Cooperative and contribute to that
Cooperative in the amounts the
Cooperative determines.
Liquidated $10,000 As incurred. If you in any way compromise the secure
Damages access to the online version of the
Manual, including, but not limited to,
allowing unauthorized users access to the
Manual and its confidential contents, you
will be required to pay us liquidated
damages in the amount of $10,000, to
compensate us for the breach and related
damage to the System.
11
^âîmposodbyandêp^^ Nootherôrpayme^^
tobepaidto^nordoweimposeorcoâoyoêrôrpaymem^
^ o o o ^ o d a b ^ u ^ 5 ^ e ^ 5 e n o ^ Fees payaê to third paês may be ^ u o d a ^ e based oo your
mdividuaiarraêmeots.
NotestoCbartforFraocbê Agreement:
1
Gross Sales. ^ 5 ^ e p t as provided beiow, tbe term "Gross Sales" means tbe ^ a i ^ ^ ^ y ^ ^ ^
derive, directly ormdireotiyfrom all
taxes or similar taxes imposed by govemmentai authorities. (See Sections.3 o f t b e F r a ^ ^
more complete definition.) Pioasoooto that wo exciudereveouogooerated from tboprovisioo of tbe Teacher
Training Program atvour Studio from the definition of Gross Sales because vou are reouired to pay usafiat fee
of $2,000 for each individual that received the required t r a i n i n g ' s described more fuiiv in
Youmustparticipateinourthencurrentelectronicfundstransferandreportingprogram(s^
5xhibit3ofthe Franchise Agreement.) All fees owed and any other amounts designated by us must bereceived
orcreditedto our account bypreauthorizedbankdebitbySÔOp.m.on or beforetheapplicableduedate.your
franchised business maybe located inajurisdiction whose taxing authoritywill subject us to taxassessme
on p a y m e n t s y o u s u b m i t t o u s f o r t h e Royalty Feeand Marketing Fundcontributions. Undersuch
circumstances, you will be required to adjust, or "grossup" your payment to us to account for these taxes.
2
Marketing Fund We have establishedanational advertising and marketing fund (the "Marketing
Fund") and you w i l l b e required t o m a k e a w e e k l y contribution towards such fund ("Marketing Fund
Contribution") beginning the date your Studio begins collecting revenue from business operations. The
Marketing Fund may be used for (among otherthings) product development; signage; creation, production and
distributionofmarketing,advertising,pu^
social media; administration expenses; brand/image campaigns; media; national, regional and oth^^
programs; activities to promote current an^
consulting services; research; and any expenses approved by us and associated with your Studio. We will have
sole discretion o v e r ^ m a t t e r s relating to the Marketing Fund. You must payforyour own local a d v e r t i s e
Însurance Policies. The minimum limits for coverage under many policies will vary depending on
several factors, including the size ofyourS^^
Document for our minimum insurance requirements.
Âudit^F^.lntheeventthatanauditdisclosesanunderstatementofGrossSalesorot^^
in addition to the cost of the audit, you will be required to pay the marketing due on the amount of such
understatement, plus late feesand interest.
ÂlternativeSupoiierApproval Youmavreouest^
We may require you to pre pay any reasonable charges connected with our review and evaluation of any
proposal.
business M a n a g e m e n t S o f t w a r e F e e W e w i l l m a k e a v a i l a b l e t o y o u a b ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
program that you will download onto your computer and use in the operation of your Studio. Currently, the
approvedand requiredsoftwarefor u s e i n theStudio is ^ClubPeadyBanonline/webbasedbusiness
management program. You will pay the thirdparty vendor directlyfor all fees associated with the use o f t h e
software.We have the rightto access any and all information stored in the program that pertains to the S ^ ^
through file transfer protocol or pollingthrough the Internet, at our discretion.
12
©30^2017 O o b P i l ^ F ^ h i ^ ^ C
38^2017 ^ ^ e P i ^ ^ e O o ^ m ^
ITEM 7 ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT

A. Franchise Agreement
1
TYPE OF EXPENDfTURE AMOUNT METHOD OF WHEN DUE TO WHOM
PAYMENT PAYMENT IS TO BE
MADE
2
Initial Franchise Fee $49,500 Lump sum, in At signing of Us
cash, certified Franchise
check or bank Agreement
wire
Initial Training Program $0 N/A N/A N/A
3
(Fees)
Travel and Living Expenses $500 - $3,000 As arranged As incurred Transportation

3
While Training Carriers, Hotel
Facilities, Etc.
4
Real Estate/Lease $3,750 $n,250$7,00Q As arranged As incurred Landlord
-$21,000
5
Leasehold Improvements $110,000 - $3033,000 As arranged As incurred Approved Suppliers,
Architects and
Contractors
6
Signage $67,000 - $±014,000 As arranged As incurred Approved Suppliers
7
Insurance $300—$900-$1,000 As Arranged Before Opening Insurance Carrier
Pilates and Other Exercise $70,000 $75,000^ As required Before Opening UG and other
8
Equipment $80,000 Approved
SuppliorsUs
Proprietary Initial $5,000 Lumpsum Before Opening Us
9
Inventory Kit
10
Utility Deposits $0-$1,000 As arranged As incurred Utility Suppliers
11
Licenses and Permits $0 - $3,000 As arranged As arranged Local, State or
Federal Government
Furniture, Fixtures and $78,000-$11,000 As arranged As incurred VondorcUs
12
Related Supplies
Computer System and $31,200 -$2,000 As arranged As arranged Approved Suppliers
13
related equipment and Vendors
tn-t n cnn
Shipping" As arranged Before Opening \ / n n r J n r l I r
vtjnaorus
$6,800
Installation $3,995 As arranged Before Opening VondorUs
13
Additional Funds- $510,000-$15,000 As arranged As incurred Employees, Vendors,
15
3 months Utilities
TOTAL ESTIMATED INITIAL $158)252
16
INVESTMENT $224££?$ 180.595 to
$249,295
All amounts are non-refundable unless otherwise noted.
Notes to Table A:
1
General. The initial investment table shows certain expenditures required to establish and operate a
Studio. Note that these amounts may vary widely, and the amounts you have to spend or invest may be higher
or lower than the estimated amounts, depending on location, size ofthe Studio, marketing conditions and other
factors. We strongly recommend that you verify actual costs in your area, and for your intended location, and
prepare a business plan and have it reviewed by your own independent adviser, like an accountant, before
making any commitments to us or anyone else. Due to legal restrictions, we will not prepare, review or comment
on any business plan for a prospective Franchisee.
All amounts payable to us are nonrefundable, unless otherwise noted. Amounts payable to
suppliers/vendors are refunded according to arrangements you make with the vendor, if any. These figures are
estimates of the range of your initial costs in the first 3 months of operation only. Leasing and financing is
available for many of the above expenses. We do not offer direct or indirect financing, but we may assist you in
obtaining working capital through other sources. See Items 5 and 6, and other parts of this Disclosure Document,
for more information regarding Initial Franchise Fees and other costs.
2
Initial Franchise Fee. The Initial Franchise Fee is non-refundable. The Initial Franchise Fee for a single
Studio is $49,500. We do not provide financing for the Initial Franchise Fee.
3
Travel and Living Expenses While Training. As previously disclosed in Items 1 and 6 of this Disclosure
Document, you (or, if you are an entity, your Designated Operator) and, unless we agree otherwise, at least one
(1) Certified Pilates Instructor (which may be you or your Designated Operator) must attend our proprietary
Initial Training Program. This Program is comprised of two (2) modules, namely the Owner/Operator Module
(which must be attended by you and/or your Designated Operator) and our Orientation Program (which is for
your instructors, whom we assume will already be Certified Pilates Instructors as part of our standard franchise
offering). We will not charge any tuition or training fee in connection with the Initial Training Program, provided
all individuals attend at the same time. The estimate in the Chart above assumes that you (or your Designated
Operator), along with your initial instructor, will attend the appropriate portions of our Initial Training Program.
, You will be responsible for the costs and expenses associated with attending our Initial Training Program
(e.g., transportation, meals, lodging and other expenses). The amount you will spend while training will depend
on several factors, including the number of persons attending, the distance you must travel and the type of
accommodations you choose, if any are needed. The low estimate assumes that your Studio is located in fairly
close proximity to one (1) of our designated training facilities, and that the two (2) individuals attending our
Initial Training Program will not be required to incur costs associated with flying to one of these facilities in
California. The high estimate assumes that the two (2) individuals will need to fly to the Initial Training Program
(coach class) and will need to secure lodging while attending the program.
14
^^5^8ê8^^yOUdOÔWna^
^ ^ ^ U m e ^ t h e ^ ^
8ûme8bêmoo^yrem^êe^m^diothe^ngeof$^20^^
L a ^ o r d s may also vary tho hose r e ^ l rate ond charge root bosedonap^^ âddition
to hase rem, the lease may require you
rata shareofthe real estatetaxesandmsurance, and yourpro rata shareofHVACaodtra^^
amount you pay under the lease will vary depending on the size of the Studio, the t y ^
allocated to tenants underthe lease, your ability to negotiate with landlords, and the prevailing re^^
the geographic area. You may also he required to payasecurlty deposit equal toamonth^srent.The estimate
covers theflrst^months of operation, andlmonth^srentasasecurltydeposlt.
Slncerental, Improvement and other real-estaterelated costs can vary significantly by area, It^syo
responsibility t o ^ l n d e p e n d e n t l y r e s e a r c h a l l a p p l i c a b l e lawsand regulations^ and realestatemarket
condltlonsandcosts,whereyou plan to locate and operate yourfaclllty,andôbtaln appropriate advice from
your own accountant, attorney and real estate professional, before signing any binding documents or making
any investments or other commitments, whether to us or anyone else
^Leaseholdlmorovements.The cost of leasehold improvements will vary depending o ^ ^ ^ ^ ^ ^

configuration of the premises; (ii)pre-constructlon costs (e.g., demolition of e x i s t s
existing improvements and figures); and (iii) cost or materials and labor which may vary based on geography
and location.You mustadaptourprototypicalplansandspecificationsfortheconstruction and fini^^^
Studios including approved flooring mirrors and paint These amounts may vary substantially based on local
conditions, includingthe availability and prices oflabor and materials.These amounts may also vary d
on whether certain ofthese costs will be incurred bythe landlord and allocated overthe term ofthe lease. For
claritv.theestimatespresented herein are net of tenant improvement amounts incurred by the landlord.The
lowend of the range reflects modest improvements toasmaller location, and the high end reflects significant
physical improvements toalarger Studio.
^Signag^You will need to purchase appropriate signage foryour Studio that we approve.The co
your signage may be more or less than this estimate, and depends on the size, type and method of installation
you choose. Each landlord has different restrictions it places on interior and exterior signage that may affect
your costs.
^ I n s u r a r ^ T h i s estimate is for^monthsofyour minimum required

more than shown here. You will need to check with your insurance carrierfor actual premium quotes and costs,
and forthe actual amount of deposit.lnsurance costs can varywidely,based on the area in which yourbusiness
is located,your experience with the insurance carrier,the loss experience of the carrier,the amount of
deductibles and of coverage, and other factors beyond our control. You should obtain appropriate advice from
your own insurance professional before signing any binding documents or making any investments or other
commitments, whetherto us or anyone else.
8
Pilates and Other Exercise 5ouioment. The initial required amount of Pilates and other exercise
equipment forastandard Studio is approximately 13 P i ^
Boards, ^ ^ 5 X 0 Chairs, ^ ^ T R X u n i t s a n d smaller pieces ofrelated exercise equipment(e.g.,ba^
although we may raise or lower this requirement depending on the size of your GymStudio, which is included in
the Initial PP5 Package you must purchase from us. Financing for the equipment may be available. If you chose
tofinancetheequipment, your initial costswillbelessthan tbe range provided inthechartabove; however, your
overall payments maybehigher.
IS
© 3 0 ^ 2 0 1 7 Oub Pilars F r a n c e , tLC
30342017 F r a n c e OiîosorePocumeot
9
P r O P ^ 8 ^ 0 ^ ^ v e m ^ ^
t y p ^ f o r ^ e items h e l d i o o p ^ ^
o o d i e w o ^ o ^ o o t ^ o ^ o c k s and rented accessories.
Ôt^tvDeposits. Typicaiiâutiiitydepositwi^
company.
11
Licenses and Permits. The range of costs covers the expense to acquire the required iocai business
permits. We make no representations or assurances as to what (if any) licenses, permits, authorizations or
otherwise may he required in connection with your Studio. Our estimated costs include huiiding permits, fire
inspection, sales tax permit, and retail sales permits. If an electrical permit is necessary,the costs may he more,
you should investigate applicable requirements in your area and the related costs, including receiving advice
from regulatory agencies and your own lawyer,before making any commitments, whetherto us or anyone eise.
^Furniture, Fixtures and Supplies.This isarange of expenses that will be incurred when decorating and
furnishing the Studio, including (a)surveillance cameras and office expenses, and (b)the I n i t i a l s
you must purchasefromus.You are requiredtohaveatieastone(l)surveillancecamera installed in theStudio^
You may be required to purchase the camera(s) and related accessories from an Approved Supplier (see Itemg
of this Disclosure Document). The camera(s) must be web accessible You will use the camera to monitor
teacher performance, quality assurance and safety. We have an absolute right to also review and monitor the
camera(s) for the same purposes as you, and to ensure compliance with the Club Pilates System. You are
responsible for ensuring customer consent and for any failure to obtain such consent. You must indemnify us
for any breaches of privacy from your use of any surveillance camera. Both the low-end and the high-end
numbers representastraight purchase of all furniture, fixtures and related supplies (rather than leasing or
making installment payments on these items).
^ComputerSvstemand Related 5ouipment.You mustacouireapersonalcomputeroprin^randaPoi^

ofSalesystem("POS")foruseintheoperationoftheStudio.Yourcomputersystemmustbeequippedwithahigh
speed connection to the Internet and must includealocal area network withadedicated server. We will make
available to youacertain business management software program specific forthe Studio to be loaded on to your
system. You will pay the third-party vendor directlyfor all fees associated with the use ofthe software. (Please
see I t e m ^ o f this Disclosure Document for the fee amount and more details on the software.) You can expect
initial cash outiaysto be lower ifthe items can be leased ratherthan purchased.These costs are paid to suppliers,
when incurred, before beginning business and are usually not refundable. Please see I t e m l l o f t h i s Disclosure
Document for more information on the Computer System.In addition, this estimate includes c e r t a i n s
eouipment(e.gtablets,etc.)recommendedforuseinyourStudio
" S h i ^ ^ . We arrange for the shipping of all of your equipment and f u r n i t u r e / f i x ^ ^ ThiG amount
reflects shipping cootG to tho 5ast Coast andThese amounts may vary based uoon the location of yourStudio
Âdditional Funds. This is an estimate of certain funds needed to cover your business (not p ^ o ^ l )
expenses during the first three months of operation of the Studio. These expenses include initial employee
wages, management compensation (but not any draw or salary for you), ongoing purchases of equipment and
supplies, marketing fees, continuing improvement of the Studious physical features, local a d v e ^ ^
repairs and maintenance. Your cost will depend upon your management skill, experience and business acumen;
local economic conditions; the prevailingwage rate; competition; and sales ofthe Studio during the p e ^ ^
estimate is based on our affilioto^the experience of us and our affiliates in owning and operating Club Pi^^^
Studios for more than^years
16
©38^2017 O u b P i i ^ F ^ ^ , ^
38342017 F ^ o c h i s e P i ^ o ^ e P o c u m e n t
Tê^mo^doesnotgu^mee^
you might r e 8 ^ " b ^ k e v e n " o r ^ You wiii need ^ p i t ^ to support oo-gomg costs
of your business, such as t^xes, loan p ^ y m e m s ^ d other expenses, to the extern thotr^^
business costs. New businesses (franchised or not) often have larger expenses than revenues.
This amount is oniy an estimate We cannot guarantee that the amounts specified wiii be adequate and
you may need additional funds to open and operate. We do not furnish, or authorize anyone else, to furnish
estimatesastothecapitaiorotherreservefundsnecessaryto reach ^ b r e a k e v e n ^ o r a n y o t h e r f i n a n c i a i p o ^
or when or if you may be profitable, nor should you rely on any such estimates. In addition, the estimates
presented relate only to costs associated with the franchised b^
unrelated business or other expenses you may have.
Theavaiiabilityandtermsoffinancingtoyouwili depend upon factorssuchastheavaiiabilityoff^

ingenerai,yourcreditworthiness,thecoliateraisecuritythatyou may have, and policies o f l e n d i n g ^
concerning the type of business you operate. This estimate does not include any finance charge, interest, or
debt service obligation.
^Total Estimated Initial Investment. All of the above figures are estimates of certain initial start-up
expenses. As noted above, it is not all-inclusive, and we cannotguarantee you will not have additional expenses
in starting or operatingtheStudio.The total listed above does not include compensation for your time or labor
orany return onyourinvestment.Your costs will varydepending on such factors as: how closelyyoufollowthe
Club Pilates System; your management and marketing skills, experience and general business a b ^
and general economic conditions, including disposable income. You should review these figures carefully with
abusiness advisor (such as an accountant) before making any commitments. In preparing tbe figures in this
chart, we relied on our affiliates^ experience in owning and operating Club Pilates Studios.
B. Development Agreement
1
TYPE OF EXPENDITURE AMOUNT METHOD OF WHEN DUE TO WHOM
MADE
2
Development Fee $125,000 Lump sum, in At signing of Us
cash, certified the
check or bank Development
wire Agreement.
Initial Investment to Open $108,752 • See Chart A of this Item 7.
3
Initial Franchised Business $175,1S7$131,095 to
$199,795
TOTAL ESTIMATED INITIAL $233,752 This is the total estimated initial investment to enter
16
INVESTMENT $aOO^5Z$256,095to into a Development Agreement for the right to own a
$324,795 total of three Franchised Businesses, as well as the
17
costs to open and commence o p e n i n g your mâl
Franchisee Business forthe firstthree months (as
described more fuiiy in C h a r t A o f t h i s i t e m ^ . S e e
Note3
Notesto^hleB:
^ G e n ^ . A i i amounts payable to us are nonrefundable, u^

suppliersêndorsarerefundedaccordlngtoarrangementsyoumakewithtbevendor,ifany T b e s e ^ ^
estimatesoftherangeofyourinitiai costs inthefirstthree(^montbsofoperatingtbeinit^
you are granted underyourOevelopmentAgreement only. We do not offer direct or indirectfinancing,butwe
may assist you in obtaining working capital through other sourcesSeeitems5and 6, and other parts of t^^^
Disclosure Document, for more information regarding initial Franchise Fees and other costs.
^DeveloomentFee. TheDevelopmentFeeisnon-refundable.The Development Fee is described in

greater detail in I t e m S o f this Disclosure Document, and this Development Fee is for the right to open and
operateatotalofthree Franchised Businesses (provided you comply with your development obligations under
the DevelopmentAgreement)lfyouchoosetoopenmorethanthree Franchised Businesses, your Development
Feewillbecalculatedasfollows:(i)$125,000fortherighttoopenthreeCL0B PISTES
$40,000 for the right to open each additional CLUB PISTES S t u d i o ( u p t o a t o t a l o f f i v e ^ ^
PISTES Studio if you agree to open and operate between six and nine Franchised Businesses; and (iii) $30,000
per Franchised Business ifyou agree to open and operate lOor more Franchised Businesses.
Înitial Investment for First Franchised B u s i n e s s . ^

investment required t o o p e n t h e i n i t i a l Franchised Businessyou agreed t o o p e n a n d o p e r a t e u n d e r t h e
Development Agreement. You will be required to enter into our thencurrent form offranchise agreement for
the initial Franchised Business you open under your Development Agreement, most likely once you have found
aPremises forthe business thatwe approve. The range includesalltbeitemsoutlined in C h a r t ^ A . o f t h i s i t ^ ^
except for the $49,500 Initial Franchise Fee (because you are not required to pay any Initial Franchise Fee for
those Franchised Businesses you open under the Development Agreement).It does not include any ofthe costs
you will incur in opening any additional Franchised Business(es) that you are granted the right to open and
operate underyour Development Agreement.
1T5Mg RESTRICTIONSON50URC5SOFPROOUCTSAND^VIC5S
You must operate all aspects of your Franchised Business in strict conformance with the methods,
standards and specifications of our System. Our methods, standards, and specifications will be communicated
toyouinwritingthroughourconfidentiall^
for your use in connection with the Franchised Business and System. We may periodically change our System
standardsandspecificationsfromtimetotime,aswedeemappropriateornecessaryinoursolediscretion,and
you will be solely responsible for costs associated with complying with any modifications to the System.
Approved Productsand Services
You may only market, offer,sell and provide the Approved Services, as well as any related merchandise
and otherproducts that Franchisorauthorizesforsale in conjunction with the Approved Services (theÂpproved
Products") atyour Franchised Business Inamannerthat meets ourSystem standards andspecifications.Wewill
provide you w i t h a l i s t of our then-current Approved Products and Services, along with their standards and
IB
©30462017 C l o b P i ^ s F ^ h i ^ ^
30462017 ^ ^ i ^ O i s c l o ^ r e O o c o m e ^
s p e ^ ^ o ^ a s ^ o f ^
Wo may update or m o d ^ t h i s ^ i o w ^ m g at anytime
Ifyou wish to offer aoy product orservioemyourFraoohisedBus^

aod Services, or use any i t e m i o c o ^ e c t i o n with your Franchised 8 u s ^
standards and specifications, then you must obtain our prior written approval as described rnor^
item
Approved Suppliers
We havetherighttorequireyou to purchase any items or services necessarytooperateyourFranchised

Business fromasuppiierthat we approve or designate(each,an"Approved Supplied, which may include us or
our a f f i l i a t e d We wiil provide you w i t h a i i s t of our Approved Suppliers in writing as part of the M^
otherwise in writing, and we may update or modifythisiist as we deem appropriate.
Currently, we have Approved Suppliers for the following items that you must purchase in connection
withtheestablishmentand/oroperationofyourFranchisedBusinessî)Proprietarylnitiailn^^
Initial FF5Packageîii) certain other exercise equipment/suppliesîv) interior g ^
insurance coverage; (vi)shippingand installationservices; (vii)trainingmaterials,includingthe"Webinar
Training" associated with the Teacher Training Program; and (viii) proprietary p o i n ^ ^
Systems and thencurrentsoftwarewerequireyou to use in connection with that POS System and your Studio
W e m a y develop proprietary products foruse in your Franchised Business,including private-label

products that bear our Marks, and require you to purchase these items from us or our affiliate(s).
Ifyou wish to purchaseaproductorservicethat we requireyou to purchase from anApproved Supplier

from an alternate source, then you must obtain our prior written approval as outlined more fully in this Item.
We may provide our standards and specifications for ourApprovedProducts and Services directly to our
ApprovedSuppliers, and may provide these standardsand specifications to an alternative supplieryou propose
ifî)weapprovethesupplierinwritingasoutlinedmorefullyinthis Item; and (ii)thealternat^^^
to sign our prescribed form of non-disclosure agreement with respect to any confidential information we
disclose.
As ofthe date of this Disclosure Document: (i) besides the Proprietary Initial Inventory Kit, Initial FFE Kit,
Teacher Training materials, neither we nor any of our affiliates are an Approved Supplier for any items you are
required to purchase in connection with your Franchised Business; and (ii) none of our officers own an interest
in any of our Approved Suppliers other than us.
We reserve the right to designate us or any of our affiliates as an Approved Supplier with respect to any
item you must purchase in connection with your Franchised Business in the future.
Required Purchases and Right to Derive Revenue
The products or services we require you to purchase or lease from an Approved Supplier, or purchase
or lease in accordance with our standards and specifications, are referred to collectively as your "Required
Purchases." We estimate that your required purchases, purchases from Approved Suppliers and purchases that
must meet our specifications in total will be about 70% -95% of your total purchases to establish the Studio and
about 10% - 20% of your purchases to continue the operation of the Studio. Please be advised that these
19
percentages do not include the lease payments that you make in connection with your Premises (as defined in
Item 11).
We reserve the right to derive revenue from any of the purchases (items or services) that our System
franchisees are required to make in connection with the Franchised Business. For the calendar year ending
December 31, 201634+4, we derived $1,443.9743.928.245 or aW40.8% of our total revenue of
$3,978,3229.640,000 from our franchisees' required purchases.
Non-Approved Product/Service and Alternate Supplier Approval
We may, but are not obligated to, grant your request to: (i) offer any products or services in connection
with your Franchised Business that are not Approved Products and Services; or (ii) purchase any item or service
we require you to purchase from an Approved Supplier from an alternative supplier.
If you wish to undertake either of these actions, you must request and obtain our approval in writing
before: (i) using or offering the non-approved product or service in connection with your Franchised Business;
or (ii) purchasing from a non-approved supplier. You must pay our then-current supplier or non-approved
product evaluation fee when submitting your request, as well as cover our costs incurred in evaluating your
request. We may ask you to submit samples or information so that we can make an informed decision whether
the goods, equipment, supplies or supplier meet our specifications and quality standards. In evaluating a supplier
that you propose to us, we consider not only the quality ofthe particular product at issue, but also the supplier's
production and delivery capability, overall business reputation and financial condition. We may provide any
alternate supplier you propose with a copy of our then-current specifications for any product(s) you wish the
supplier to supply, provided the supplier enters into a confidentiality and non-disclosure agreement in the form
we specify. We may also inspect a proposed supplier's facilities and test its products and/or services, and request
that you reimburse our actual costs associated with the testing/inspection.
We will notify you in writing within 30 days after we receive all necessary information and/or complete
our inspection or testing to advise you if we approve or disapprove the proposed item and/or supplier. The
criteria we use in approving or rejecting new suppliers is proprietary, but we may (although are not required to)
make it available to you upon request. Each supplier that we approve must comply with our usual and customary
requirements regarding insurance, indemnification and non-disclosure. If we approve any supplier, we will not
guarantee your performance of any supply contract with that supplier under any circumstances. We may re-
inspect and/or revoke our approval of a supplier or item at any time and for any reason to protect the best
interests and goodwill of our System and Marks. The revocation of a previously approved product or alternative
supplier is effective immediately when you receive written notice from us of revocation and, following receipt
of our notice, you may not place any new orders for the revoked product, or with the revoked supplier.
Purchasing Cooperatives and Right to Receive Compensation
We may, when appropriate, negotiate purchase arrangements, including price terms, with designated
and Approved Suppliers on behalf of the System. We may establish strategic alliances or preferred vendor
programs with suppliers that are willing to supply some products, equipment, or services to some or all ofthe
CLUB PILATES Studios in our System. If we do establish those types of alliances or programs, we may: (i) limit
the number of approved suppliers with whom you may deal; (ii) designate sources that you must use for some
or all products, equipment and services; and (iii) refuse to approve proposals from franchisees to add new
suppliers if we believe that approval would not be in the best interests of the System.
We and/or our affiliate(s) may receive payments or other compensation from Approved Suppliers or any
20
other sopêrs on account of these
System,suchasrehates,commiss^
from suppers for any purpose that we deem appropriate. We aod/or
contracts with our suppliers under which we are ahie to purchase products, equipmem, s u p p l y
other items atapricethatwiii benefit us and ourfranchisees
We reserve the right to create additional purchasing cooperatives in the future. We may negotiate
voiumepurchaseagreementswithsomevendorsorApprovedSuppiiersforthepurchaseofgoodsandequipment
needed tooperatetheStudio.
Franchisee Compliance
When determining whether to grant new or additional franchises, we consider many factors, including
your compliance with the requirements described in this ItemB You do not receive any further benefit asa
result ofyour compliance with these requirements.
Insurance
You are obligated to obtain and maintain, at your sole expense, all of the insurance coverages that we
require. Your policy or policies must be written by an insurance company licensed in the state in which you
operate the Studio.The insurance company must have at least an"A" Rating Classification as indicated in A ^
Oest'sKev Rating Guide, in accordance with standards and specifications set forth in the Manual The sta^
mayvarydependingonthesizeofyourStudioand/orotherfactors,suchaswhatiscustomaryforbusinessesof
your type in your area, butwe typically require: the following insurance in the following amounts:
Coverage Minimum LlmltsofCoverage

GeneralAggregate $5,000,000
Products/CompletedOperationsAggregate $5,000,000
Personal and Advertising Injury $1,000,000
Each Occurrence $1,000,000
Participant Legal Liability $1,000,000
Professional Liability $1,000,000
Employee Benefits Liability (per employee) $1,000,000
Employee Benefits Liability (aggregate) $2,000,000
Damage to Rented Premises (per occurrence) $1,000,000
Medical Expense(any one person) $5,000
Other current insurance requirements include: (i)"ALLRI5K" or special form property coverage of no less ^
current replacement cost of the Studios equipment, fixtures and leasehold improvements (tenant
improvements)sufficient in the amountto restore the 5tudio to full operations(with glass coverage no less than
alimit of $25,000 and sign coverage no less t h a n a l i m i t of $10,000 in addition to equipment, fixtures and
leasehold improvements); (ii) Business interruption insurancewith coverage for at leasttwelve(12)mon^
actual losses; (iii) if you are usingavehicle in connection with your Studio operations. Auto L i a b i l i t y ^
Non-ownedautos)witha$l,000,000 Combined5ingle Limit Each Accident for Bodily Injury and Property
Damage; and (iv) Employment Practices Liabilitywithalimit no less than $1,000,000 per claim a^^
aggregate per location (and the retention may not exceed $1,000).
All insurance policies must name us and any of our Affiliotosaffiliates as additional insured parties.
21
Club P i i ^ ^ n ^ e . ^
38462017 ^ n c b ^ P i ^ i o s o ^ O o c u m e o t
Computer System
You must purchase the computer system that we specify, including computer hardware, software, point
of sale system, inventory control systems, and high-speed network connections (collectively, the "Computer
System"). The component parts of the Computer System must be purchased from approved suppliers. If we
require you to use any proprietary software or to purchase any software from a designated vendor, you must sign
any software license agreements that we or the licensor of the software require and any related software
maintenance agreements. The Computer System is described in more detail in Item 11 of this Disclosure
Document.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you
find more detailed information about your obligations in these agreements and in other items of the
Disclosure Document.
Section in Disclosure
Section in Franchise
Obligation Development Document
Agreement
Agreement Item
a. Site Selection and Sections 1.2,6.1,6.2,7.2 Section 8 Items 11 and 12

acquisition/lease and 7.3 of Franchise
Agreement
b. Pre-opening Sections 6.1, 6.2, 7.2, 7.3 Section 8 Items 5, 7 and 8
purchases/leases and 8.4 of Franchise
Agreement
c. Site development and Sections 6.1, 6.2, 7.1 and Section 3 Items 6, 7 and 11
other pre-opening 7.3 of Franchise
requirements Agreement
d. Initial and ongoing Sections 5.5 and 6.3 of Not Applicable Items 6, 7 and 11
training Franchise Agreement
e. Opening Sections 2.2 and 6.9 of Section 3, Exhibit B Item 11
Franchise Agreement
22
Agreement
Agreement Item
f. Fees Sections 3.2.F., 5,9.1 and Section 9 Items 5 and 6

14.2 of
Franchise Agreement
g. Compliance with Sections 1.2, 2.2, 4.2, 6.4, Section 3 Item 11
standards and policies 6.6,6.7,7.1,7.3, 7.4,8.7
/ Operating Manual and 9.3 of Franchise
Agreement
h. Trademarks and Sections 1.1,4,12.1,15.1 Section 13 Items 13 and 14
proprietary and 15.3 of Franchise
information Agreement
i. Restrictions on Sections 1.3, 2.1,2.2,7.1, Not Applicable Items 8 and 16
products/services 8.1 and 8.4 of Franchise
offered Agreement
j . Warranty and Section 8.3 of Franchise Not Applicable Not Applicable
customer service Agreement
requirements
k. Territorial Sections 1.3 and 8.8 of Section 1, 3, and Item 12
development and Franchise Agreement Exhibit B
sales quotas
1. Ongoing Sections 8.4 and 10.3 of Not Applicable Items 8 and 11
product/service Franchise Agreement
purchases
m. Maintenance, Sections 3.2.D. and 7.4 of Not Applicable Items 6 and 17
appearance and Franchise Agreement
remodeling
requirements
n. Insurance Section 10.4 of Franchise Not Applicable Items 6, 7 and 8
Agreement
o. Advertising and Sections 5.6 and 9 of Not Applicable Items 6 and 11
Marketing Fund Franchise Agreement
p. Indemnification Section 11.2 of Not Applicable Item 6
Franchise Agreement
q. Owner's participation/ Sections 8.3 and 8.6 of Section 7 Item 15
management/staffing Franchise Agreement
r. Records and reports Sections 10.1 and 10.3 of Not Applicable Item 11
Franchise Agreement
s. Inspections and audits Sections 8.2 and 10.2 of Not Applicable Items 11
Franchise Agreement
23
Agreement
Agreement Item
t. Transfer Section 14 of Franchise Section 16 Items 6 and 17

Agreement
u. Renewal Section 3.2 of Franchise Not Applicable Item 17
Agreement
v. Post-termination Sections 13.1 and 15.3 of Sections 14,15 Item 17
obligations Franchise Agreement
w. Non-competition Sections 12.2 and 13 of Section 11 Item 17
covenants Franchise Agreement
x. Dispute resolution Section 16 of Sections 21, 22 Item 17
Franchise Agreement
ITEM 10 FINANCING
We do not offer direct or indirect financing for any amount due under the Franchise Agreement or
Development Agreement. We do not guarantee your note, lease or any other obligation.
[ftEMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
A. Pre-Opening Assistance
Franchise Agreement
Before you open the Studio:
1. We will provide you (or, if you are an entity, your Designated Operator), as well as your Designated
Manager (if appointed) and any initial instructors of your Studio you designate, with our proprietary Initial Training
Program, that at least you (or, if appropriate, your Designated Operator) will need to complete prior to opening
your Studio. We will typically provide the Initial Training Program to you and your designated trainees within the
30 days preceding your Studio opening, but that timing will be subject to the availability and schedules of our
training personnel. We will provide this Initial Training Program at our corporate headquarters or other training
facility we designate, and this initial training (as well as other training provided by us in connection with your Studio)
is described more fully below in this Item under the heading 'Training". (Franchise Agreement, Section 6.3).
2. If the Authorized Location for your Studio has not been identified at the time the Franchise
Agreement is signed, we will work with you to designate a geographical area within which you must secure an
Authorized Location for your Studio ("Designated Market Area"). (Franchise Agreement, Section 1.3). We will also
24
comply with our o b l a t i o n s wit^
heiowmthisltemuoderthehe^
3. Concurrentlywith the execution of your Franchise Agreement, w

Manual, which contains mandatory and suggested specifications, standards and procedures. The Manual is
confidential and remains our property. We may modify the Manuai. (Franchise Agreement, Section 6.4). The
Tahle of Contents of the Manual is attached to this Disclosure Document as Exhlhlt 5^ The Manual currently
consists of ^H317 pages.
4. Within30calendardaysofexecutionofyourFranchiseAgreement,wewillproyideyou (through
the Manual or otherwise) with specifications for the layout and design of the Studio (Franchise Agreement,
Sections62,7.1and73)
5. Within30calendardaysofexecutionofyourFranchiseAgreement,wewillprovideyou (through
the Manual or otherwise) w i t h a l i s t of the Pilates fitness equipment and gear,standard fixtures, f u ^
supplies, andsignstohe used in theStudio, aswellasalist of Approved Suppliers (FranchiseAgreement,Section
66)
6. We will license you the use of our trademarks (Franchise Agreement, Section 4.2).
7. We will consult and advise you on the advertising, marketing and promotion for the Grand
Opening ofthe Studio. (Franchise Agreement, Section 6.9)
8. If you enter a Development Agreement, we will designate your Development Area.

(DevelopmentAgreement,Sectionland5xhihitA).
We are not required to provide any other service or assistance to you before the opening of the Studio.
8. Site Selection Assistance and TlmetoOoen
^teêcônAss^stonce
You mustassume all costs, liabilities, expensesandr^^^

and developingaPremises for your Franchised Business; and (ii) constructing, equipping, remodeling and/or
building out the Premises for use asaFranchised Business, all in accordance with our System standards and
specifications. If the Authorized Location for your Studio has not been identified at the time the Fra^
Agreement is signed, we will assign youaDesignatedMarketArea as previously disclosed in this Item.(France
Agreement, Section 1.3).
We may provide you with: (i) our current written site selection guidelines, to the extent such g u i d e s
are in place, andanyothersiteselectioncounselingandassistancewedetermineisappropriate; and (ii)thecontact
information of any local real estate broker that we have an existing relationship with and that is familiar with our
confidential site selection/evaluation criteria, if we know any such brokers in or around the Designated Market
Area you are assigned. (Franchise Agreement, Sections 1.2,1.3 and 6.1).
Our guidelines for site selection may require that you conduct, at your expense, an evaluation of the
demographicsofthemarketareaforthelocation.ldeally,theAuthorizedLocationofyourStudiowillbea
national-tenant, anchored commercial retail center that meets our then current requirements for population
density,demographics, available parking, traffic flow and entrance/exitfrom the site.The t y p ^ ^
2S
©30342017 C i o b P i i ^ F ^ n ^ e , ^
30342017 Franchise OisciosoreDooomeot
^ ^ 8 5 t ^ 0 0 ^ 8 ^ ^ a ^ ^ O ^ e A g ^ m ^ S ^ O n
6 ^
^ y o o ^ o t e a ^ w e w ^ approve or d ^ ^ o v e o f ^ e s ^
r e a s o n a b ^ r e ^ e ^ e d m f o r m ^ o n regarding your propo
We useaso^ware program to evaiuate the dem^
cannot agree o n a s i t e , we may extend the time for you to ohtainasite, or we may can^^^
Agreement.
We must aiso have the opportunity to review and approve/reject any iease or purchase agreement fora
proposed location hefore you enter into such an agreement.We may condition our approval onanumher of
conditions, inciudingî)the inclusion ofthe termsoutiinedin5ection7.2 ofthe Franchise Agr^^
5 t o the Franchise Agreement in the lease for the location; and (ii)receivingawrittenrepresenta^
landlord of the Premises that you will have the right to operate the Studio, including offering and s e ^
Approved Products and Services, throughout the term of your Franchise Agreement. (Franchise Agreement,
Sections 2.2(0 and7.2, and 5xhihit 5).
YoumustsecureanAuthorizedLocationthatweapprovewithinsix(^monthsofexecutingyourFranchise
Agreement for that Franchised Business o r w e may terminate that Franchise Agreement. (Franchise Agreement,
Section 1.2).
T^me to Oên. ^ r o n c ^ e Agreement
We will authorize the opening of your Studio when (i) all of your pre-opening obligations have heen
fulfilled, (ii)pre opening training has been completed, (iii) all amounts due us have heen paid, (^^^
insurance policies (and payment of premiums) and all other required documents have been received by us, and
(v) all permits have been approved. (Franchise Agreement, Sections S.4,S.5,63and 10.4).
The typical length of time between the signing of the Franchise Agreement and the time you open your
Studio is approximatelythree (3) to six (6) months. Your total timeframe may be shorter or longer depending on
the time necessary to obtain an acceptable Premises, to obtain financing, to obtain the permits and licenses fo^
the construction and operation of the Franchised Business, to complete construction or remodeling as it may be
affected by weather conditions, shortages, delivery schedules and other similarfactors, to complete the i^^^
and exterior of the Franchised Business, including decorating, purchasing and installing fixtur^^^
signs, and to complete preparation for operating the Franchised Business, including purchasing any inventory or
supplies needed priorto opening.
You are required to open your Franchised Business within six (6) months of executing your Franchise
Agreement, butwemayagree in writingtoprovideyouwithanadditionalthree(3)monthstoopenyourStudio if
you (a) have already secured an approved premises for your Studio, and (b) are otherwise making diligent and
continuouseffortstobuildoutand otherwise prepareyour Franchised Business for openingthroughoutthesix (6)
month period following the execution ofyour Franchise Agreement. If you do not open your Studio within the
timeperiodsetforthintheFranchiseAgreement,wewillhavetheoptiontoterminateyourFranchiseAgreement.
(Franchise Agreement, Sections 1.2 and22).
^metoOpen.êve^me^tAgreementô^cob^
if you have entered intoaOevelopment Agreement to open and operate three (3) or more Franchised
Businesses, your Development Agreement will includeaOevelopment Schedule containingadeadline by which
25
©30462017 C l o b P i i ^ F ^ h i ^ , ^
30462017 ^ n ^ i ^ P i ^ ^ e P o c u m ^
you must have each ofyour Franchised Businesses open and operating. (Development Agreement, Exhibit A).
C. Our Obligations During the Operation of the Franchised Business
Franchise Agreement
During the operation ofthe franchised business:
1 We will specify or approve certain equipment and suppliers to be used in the franchised business
(Franchise Agreement, Sections 6.6 and 7.1).
2. We will provide additional training to you and any of your employees at your request. You are
responsible for any and all costs associated with such additional training (Franchise Agreement, Section 6.3).
3. If you do not obtain and maintain appropriate insurance coverage, we may procure the
coverage on your behalf. We will pass the cost onto you. (Franchise Agreement, Section 10.4.D.)
4. We may institute various programs for auditing customer satisfaction and/or other quality
control measures (Franchise Agreement, Section 8.2).
5. We will maintain and administer the marketing fund (the "Marketing Fund") (Franchise
27
^ e ^ ^ ^ g ^ n d
TheMa^mgFoodwase^b^^
^ L ^ n o h ^ w ^ b e ^ ^ d t o m a k e a o o o ^ b ^
o f ^ m o m ^ y G r o s s e s to the M a y i n g ^ o d . Marketing Fund C o n t r i t i o n w ^ be payable to
Francbisor, weekly, from tbe day tbe 5 t ^
members, wbicbeveroûrs first. Franchisor wiii give Franchisee at least sixty (60) days written notice before
any such increasewill be instituted. (Franchise Agreement, Section 9.1).
TheiyiarketingFundisadministeredbyuswiththeadviceprovidedbytheiyiarketingFu^^
"MFC")pursuanttoacharteragreementamon
is subjectto change, Ciub Pilates franchisees elect or appoint^members to the MFC to serve f o r a o n e y ^ ^
corresponding to the calendar year and we select^members to serve foraone-year term corresponding to the
calendaryear.The^member MFC will, byamajority vote, assist us in determining the selection and p ^
ofregional and national advertising. 5achMFCmemberhasonevote. Ifthe MFCis deadlocked, our Presidentwill
breakthedeadlockwiththedecidingvote,whichshalibeb^
by us with the assistance of the MFC to meet the costs of conducting regional and national advertising and
promotional activities which are deemed most beneficial to the System. The MFC serves in an advisory capacity
only. With the assistance of the MFC, we will direct all public relations, advertising and promotions with sol^
discretion over the message, creative concepts, materials and media used in the programs and the placement
and allocation thereof.We have the powertoform,changeordissolvethe MFC. Wewillpayforthese activities
from the Marketing Fund. The Marketing Fund contributions may be used for traditional advertising activities,
such as website development, social media, public relations, advertising campaigns (television,
othermedia),orotherpromotionswhichwillraiseawa^
Sections 6.g and 9.1).
We are not obligated to ensure that Marketing Fund activities or dollars are spent equally, onapro rata
basis, eitheronyourStudio,orallStudiosinanarea.AbriefstatementregardingtheavailabilityofC^
franchises may be included in advertising and other items produced using the Marketing Fund, but we will not
otherwise use the Marketing Fund to payfor franchise sales or solicitations.
Reasonable disbursements from the Marketing Fund will be made solely for the payment of expenses
incurredin connection with tbe generalpromotionof the Marks and theSystem, including the costof
formulating, developing and implementing advertising and promotional campaigns; and the reasonable costs of
administering the Marketing Fund, including accounting expenses and the actual costs of salaries and f r ^
benefits paid to our employees engaged in administration ofthe Marketing Fund. The Marketing Fund is nota
trust or escrow account, and we have no fiduciary obligations regarding the Marketing Fund. We will retain
independent certified public accountants to prepare an annual audit of the Marketing Fund, at the expense of
the Marketing Fund, and sendacopy of the audit to franchisees upon written request. Our companyowned or
affiliate owned Studios will contribute to tbe Marketing Fund at the rate provided in our Franchise Ois^^
Oocument.Shouldtheadvertising contribution fortheSystem decrease atanytime, we havetberighttore^^^
our contribution from company-owned or affiliate-owned Studios to the rate specified forfranchised^^^^
We are not required tospend all Marketing Fund contributions in tbefiscalyearthey are received
You agree to participate in all Marketing Fund programs. The Marketing Fund may furnish you with
marketing, advertising and promotional materials; however,we may require that you pay the cost ofproducing,
shipping and handling for such materials.
28
©30342017 C l u b P i l ^ ^ n c ^ ^
30342017 ^nîseOiîosoÔocomeot
D ^ o g ^ e ^ ^ y ^ e n ^
com^ônsonprodu^
onadmio^^veexpeo^ôfôon^bôosooG^
reêdmê^
A d v ^ ^ g G ^ ^ ^ ^ ^ A d ^ ^ ^ g ^ g u ^
Youê^po^ê^^^mork^
submit sarnies o f ^ a d v e ^ o g o o d p r o m o t i o n m a ^ ^
commeîdemôtiooôr^ymed^mci^
obtainour advanced writteoapprovai b e f o r e a o y f o r m o f c o b r a n d m ^ o r advertising witbotber brands,
products or services, franchise Agreement, S e c t i o n s )
You must strictiyfoiiow tbe social mediaguideiines, code ofconduct, and etiquette as set fortb in tbe
Manual regarding social media activities. Any use of Social Media by you pertaining to tbe Studio must be in
good taste a n d n o t i i n k e d to controversial, unetbicai,immoral,iliegal or inappropriate content. You wili
promptly modify or remove any online communication pertaining to tbe Studio tbat does not comply witb tbe
FrancbiseAgreementortbe Manual.franchise Agreement, Section 9.3)
As part ofyour material obligations underyour Franchise Agreement, you must expend at least$l,S00
per month on marketing and advertising materials tbat we approve in connection witb tbe promotion ofyour
Studiowitbin your OesignatedTerritory (your "Local Advertising R e q u i r e m e n t " ) . ^
provide us witb an accounting of your monthly expenditures associated with your Local Advertising
Requirement, along with invoices and other relevant documentation to support those expenditures. Please be
advised thatthe Local Advertising Requirement is only the minimum amount you must expend each month, and
we encourage you to expend additional amounts on the local promotion of your Studio.
We have not yet establisbedalocal or regional advertising cooperative. We may,in the future, decide
to form one or more associations and/orsub-associations of Club Pilates Studios to conduct various market^^^
related activities onacooperative basis (a "CoOp"). If one or more CoOps (local, regional
formed coveringyour area, thenyou must join and actively participate.You may be required tocontributes
amountsas are determinedfrom time to time bysuchCoOps.(Franchise Agreement, Section 9.4)
^ ^0 Training
^ t ^ T r o ^ n g o n d pogroms
PriortoopeningyourPranchisedBusiness,youmustensurethat:(i)you(or,ifyou are an entity, your

Designated Operator) completes the Owner/Opera^
Iast23business days at our corporate headquarters or another training facility we designate (most likely
California); (ii) your Designated Manager (if appointed) attend and complete the Designated M a n a g e r s
Program; and (iii) atyour option and ifyou wish, o n e ( l ) o r more individuals that are Certified Pilates I n s t r u ^
and thatwill be responsible for providingthe Approved Services atyour Franchised Business may p a r t i e s
complete tbe Orientation Program component of our InitialTraining Program, which t y p i c a l l y ^
and is designed to provide advanced instruction on how to provide Pilates instruction, as well as the other
ApprovedServices, in accordancewithourSystemstandardsand specifications.Whilethereisnospecificdeadl^
bywhichyou must complete the InitialTraining Program, you must complete all o f y o u r t r a i n i n g o b l ^
to openingyour CLUB PILAT5SStudio.
29
©3^2017 0obPii8^5^^^,LLC
30462017 ^ ^ i ^ O i ^ i o ^ e O ^ m e ^
Please note that you may elect to have certain of your initial instructors and any subsequent instructors of
your Studio participate in completing the Orientation Program component of our Initial Training Program remotely
via webinar/video instruction. With that said, we recommend that at least one (1) of your initial instructors come
to the Initial Training Program with you (or your Designated Principal or Designated Manager, as applicable) and
complete the entire Initial Training Program (including the Orientation Program component) at the training
facility(ies) we designate.
In the event you are the owner of multiple Studios or otherwise wish to appoint a third-party individual to
manage the day-to-day operations of your Franchised Business, then that individual (a "Designated Manager")
must (a) attend and complete at least the Owner/Operator Module (and, if he/she is a Certified Pilates Instructor
and wishes to provide the Approved Services, the Orientation Program), and (b) otherwise be approved by us,
before assuming any management responsibility at your Franchised Business. (Franchise Agreement, Sections 5.5
and 6.3).
We do not charge a tuition or training fee for you or your designated trainees (Designated Operator,
Designated Manager (if appropriate) or initial instructors)) to attend the appropriate training program(s) below,
provided these individuals attend at the same time prior to the opening of your Studio. You will be responsible for
the costs and expenses associated with these individuals attending our Initial Training Program. (Franchise
Our primary initial training programs as of the Issue Date of this Disclosure Document are described below:
TRAINING PROGRAM
Owner/Operator Module
Hours of Hours of
Subject Location
Classroom Training On-The-Job Training
History and Philosophy Club Pilates Corporate

1 0
Office - Costa Mesa, CA
Real Estate Club Pilates Corporate
2 0
Construction Club Pilates Corporate
iiS 0
Expectations and Club Pilates Corporate
Obligations 1 0 Office-Costa Mesa, CA
Studio and Equipment Set- Club Pilates Corporate
up and Support 1 0 Office - Costa Mesa, CA
Pilates Class Club Pilates Training Studio
0 1 - Costa Mesa, CA
Products Club Pilates Corporate
0 Office - Costa Mesa, CA
30
Intro to Studio Club Pilates Corporate
Management Software L5 0 Office-Costa Mesa, CA
Sales and Operations Club Pilates Corporate
3.5 0 Office - Costa Mesa, CA
Finance Club Pilates Corporate
M 0 Office - Costa Mesa, CA
Pilates Class Club Pilates Training Studio
0 1 -Costa Mesa, CA
Club Pilates Corporate
Staffing and HR Support 1 0 Office-Costa Mesa, CA
Marketing Club Pilates Corporate
4^3 0 Office - Costa Mesa, CA
Training Re-Cap and Club Pilates Corporate
Summation 1 0 Office - Costa Mesa, CA
Test Club Pilates Corporate
1 0 Office - Costa Mesa, CA
TOTAL 3022 2
DESIGNATED MANAGER TRAINING PROGRAM
31
Designated Manager Training Program
Hours of Hours of
Subject Location
C o r p o r a t e Office or o t h e r t r a i n i n g
Ingredients of a Successful
GM 3l facility w o dosifinotoAt our corporate
headquarters.
C o r p o r o t o Office or o t h e r t r a i n i n g
Club Ready Software 43 facility WO dosifinatOAt our corporate
headquarters.
Prospect Generation At our corporate headquarters.
Site visitPre-Sale, Soft A t a S o u t h e r n California s t u d i o (or

Open, and In S t u d i o 21 at a l o c a t i o n later d e s i g n a t e d by
OassGrandOpen t*s}?At our corporate headquarters.
Retail Sales facility w o desinnateAt our corporate
headquarters.
Teacher Training Sales and
Program facility w o dosignotOAt our corporate
headquarters.
C o r p o r o t e Office or o t h e r t r a i n i n g
Sales Process: Demo Classes
and Memberships facility w o dosiEnatOAt our corporate
headquarters.
Studie-Marketing 32 facility w o dosifinatOAt our corporate
headquarters-
Private Training Sales corporate
Sales: Roll-Play & Agreement
Write-Up &2 facility w o dosifinatOAt our corporate
headquarters.
Club Pilates Signature Class At our corporate training center.
"What Not to Do" facility w e desiflnatoAt our corporate
headquarters.
Comprehension Exam facility w o desienatoAt our corporate
headquarters.
TOTAL 22
Club Pilates Bridge Training is an instructor onboarding training. It is for all instructors hired to work at
a Club Pilates franchise location. Bridge Training is not a Pilates certification nor is it meant to fill in gaps for non-
32
comprehensive instructors. We normally conduct Bridge Training monthly at corporate training centers and, as
needed for new locations. Our primary instruction is through videos, hands-on training, and a training manual
prepared specifically for the Club Pilates Bridge Training.
33
Orientation ProgramBridge Training
Hours of Hours of
Subject Location
VIDEO TOPICS: (Watch Priorto Day 1)
Option 1: Remote attendance at your Studio

Option 2: Club Pilates Corporate Office in
Costa Mesa, CA or Studio nearby
On lino E d u c a t i o n o l Option 2: Romoto attondanco3: Hosted at

TrainingHistory & Culture 315 mins your Studio
Option 1: Remote attendance at vour Studio
Workbook Troining
ComponontSales& Option 2: Romoto attondanco3: Hosted at
DEMO Classes 3lhour your Studio
Instructor Evoluation Option 2: Romoto ottondanco3: Hosted at

CritoriaRetail •115 mins your Studio
Option 2: Romoto grading by

lestSocial Media -3:15 mins Franchicoo3: Hosted at your Studio
ClubReadyTQTAL €30 mins Option 3: Hosted at vour Studio
Costa Mesa. CA or Studio nearby
CP Flow ProKramminR 15 mins Option 3: Hosted at vour Studio
Hot topics 5 mins Option 3: Hosted at vour Studio
TRX 45 mins Option 3: Hosted at your Studio
Barre 45 mins Option 3: Hosted at vour Studio
34
0
Costa Mesa, CA or Studio nearbv
Trigger Point 45 mins Option 3: Hosted at vour Studio
DAY 1: In-Studio PRACTICAL LEARNING
S Costa Mesa, CA or Studio nearbv
Introductions 15-20 mins Option 3: Hosted at vour Studio
Quick review of videos- o Costa Mesa. CA or Studio nearbv
time for questions 20 mins Option 2: Hosted at vour Studio
Club Pilates Equipment 0 Costa Mesa, CA or Studio nearbv
Overview 20 mins Option 2: Hosted at vour Studio
The CP wav + Laree Groups 0 Costa Mesa, CA or Studio nearbv
& Mixed Levels 30 mins Option 2: Hosted at vour Studio
Flow (Progressions + Option 1: Club Pilates Corporate Office in
Transitions + Creative o Costa Mesa, CA or Studio nearbv
Sequencing) 1 hour Option 2: Hosted at vour Studio
0 Costa Mesa, CA or Studio nearbv
Level Appropriateness 1 hour Option 2: Hosted at vour Studio
Soring Settings (cheat S Costa Mesa, CA or Studio nearbv
sheet) 30 mins Option 2: Hosted at vour Studio
Lunch 1 hour Option 2: Hosted at vour Studio
Review New Modalities and Option 1: Club Pilates Corporate Office in
class examples (TRX, Barre. 0 Costa Mesa, CA or Studio nearbv
Trigger Point) 3 hours Option 2: Hosted at vour Studio
CP Classes 45 mins Option 2: Hosted at vour Studio
Teaching Demos 30 mins Option 2: Hosted at vour Studio
Private Training o Costa Mesa. CA or Studio nearbv
Assessments 30 mins Option 2: Hosted at vour Studio
DAY 2: In-Studio "Teach-Backs"
Review anv questions as 0 Costa Mesa, CA or Studio nearbv
needed 1 Option 2: Hosted at vour Studio
g Costa Mesa, CA or Studio nearbv
Teach Full Class for Score 50 minutes Option 2: Hosted at vour Studio
35
Interactive Feedback for Q Costa Mesa, CA or Studio nearbv
each Instructor 10 minites Option 2: Hosted at vour Studio
Vanessa Huffman, whose biography is listed in Item 2, will oversee the initial training program. She has
13 years of experience in the fitness industry and has been with us or our affiliates since October 2015. Melody
Ward, whose biography is listed in Item 2, is in charge of the Bridge Training Program and has been with us or
our affiliates since 2009. We normally conduct our training monthly, as needed, but we reserve the right to
change this schedule based on (a) demand, and (b) the availability of our instructors. Our primary instruction is
through hands-on training, videos, the Manual and other instructional materials we prepare specifically for one
(1) or more ofthe initial training programs above in this Item. We may substitute other instructors to provide
certain parts of the Owner/Operator Module or Orientation Program, but these individuals will have all
completed the appropriate portion of the Initial Training Program on which they provide instruction.
On-Site Grand Opening Assistance (Discretionary)
Around the time you first open your Studio, we may send one (1) or more representatives to your Studio
to (a) provide assistance and recommendations regarding your opening and initial operations, and/or (b) provide
additional or refresher training associated with the Owner/Operator Module and/or Orientation Program, as we
deem appropriate in our discretion. If we determine to provide such on-site assistance, it will typically last
between 1-2 business days.
Orientation Program for Instructors - Ongoing
In the event you have one (1) or more instructors at your Studio that have completed the Orientation
Program, then those individuals may assist in the provision of the Orientation Program (including reviewing and
grading the test associated with the Orientation Program) to any other Certified Pilates Instructors that you wish
to engage to serve as instructors at your Studio. (Franchise Agreement, Section 6.3).
Teacher Training Program - Fees and Involvement of Franchisor
As part of the Approved Services, we will permit you to provide the Teacher Training Program at your
Franchised Business, provided you have a Certified Pilates Instructor that has (a) completed our Orientation
Program, and (b) otherwise met our then-current criteria to serve as a "Master Instructor" of the Teacher
Training Program (which, as previously disclosed, will be set forth in the Operations Manual or supplementary
Manuals). The Teacher Training Program typically involves approximately 450 to 500 hours of instruction,
including: (i) 12 days of online "classroom/webinar" training (the "Webinar Training") that can be completed
remotely (at home or at your Franchised Business or other local Studio that is authorized to provide the Teacher
Training Program); and (ii) approximately 40 days of practical, "hands-on" training, some of which can be
completed at home and some of which must be completed at a Studio that is authorized to provide the Teacher
Training Program. (Franchise Agreement, Section 6.3).
Presently, the Studios in our System typically charge a fee of $4,750 for an individual that signs up to
attend the Teacher Training Program. As disclosed in Item 6, we receive $2,000 of that $4,750 fee as
consideration for that individual to have access to our proprietary Webinar Training (and any other materials we
determine appropriate in connection with the Teacher Training Program). The remaining $2,750 is paid to the
36
Studio where the m d ^ d u a l o ^
Franchised Business (provided we have ^
theservicesofaCiuh Piiates "Master instructor" in your areas to conduct TeacherTraininga^
(Franchise Agreement, Section 5.5^
Whiieyoucouid t e c h n i c a l hire individuals to serve as instructorsand have them go through the entire
TeacherTrainingProgram,we expect and strongly recommend that you instead hire only Certified Piiates
instructors that wiii oniy need to complete our Orientation Program before they can hegin providing the
Approved Services at your Studio.
Our standard franchise offering assumes that your initial instructor(s) wiii already he C e r t i ^ ^
Instructors. Please note, however, that: (i) we will describe the proprietary Teacher Training P ^
be provided aspartofaStudio'sApprovedServicesinourOperations Manual or otherwritten materials thatwe
provide to you; and (ii) we may permit you to have o n e ( ^ or more instructors complete the Teacher Training
Program whileyou are securingan approved premisesforyourStudio and otherwisedevelopingthat Studio for
opening (but this may involveahigher investment than our standard franchise offering described in Item 7).
Addôno^T^nm^^nConnecônwÔêroôno^êô^
Wemayalsoprovide,andrequirethatyou (and your Designated Operator and Designated Manager,as

appropriate) attend, up to five (S) days of additional training each year at our designated trainingfaci^^^^
not charge anytrainingfee in connection with such trainingthat we require you to attend. (Franchise Agreement,
Sections).
You mayrequestthatwe provide certain additional or refreshertrainingto you, either at one ( l ) o f our designated
training facilities or on-site at your Franchised Business. We reserve the right to charge you our
training fee based on the number of days ofsuch training thatwe provide atyour request (regardless of location).
(FranchiseAgreement, Section 6.3).
You will be responsible for the costs and expenses associated with you and your designated personnel
attending any such additional training described in this Item. (Franchise Agreement, Sections S.S and 6.3).
^ Computer System hardware and Software
YoumustacquireacomputerforuseintheoperationoftheStudio.Youmustrecordallofyourreceipts,
expenses, invoices, member lists, class and employee schedules, and other business information promptly in the
computer system and use the software that we specify or otherwise approve. Currently, the approved and
required software for use in the Studio is ^CIubPeady,"anonline/webbased business management program
used for class scheduling, processing member credit and debit card payments, keeping your business records
and generating business reports among other things. At this time, we have approved no other compatible
program but we reserve the right to do so at our sole discretion. If the approved supplier for the required
software changes, you must migrate your operations to the new required software at our direction. The details
of these standards and requirements will be described in the Manual or otherwise in writing and may be
modified in response to changes in marketing conditions, business operating needs, or technology. (Franchise
Agreement, Sections S.4,S.7and 10.3).
You mustallowourapprovedsuppliertoupgradetheproprietarydatabaseconfigurationofthe required

software for the computer in your Studio as we determine necessary. Our approved supplier may provide you
periodic updates to maintain the software and may chargeafee for preparing the updates and maintaining the
37
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00342017 ^ ^ i ^ O i ^ i o ^ e O o c u m e n t
s o ^ a ^ T h e ^ ^ n o ^ ^ ^
us to have immedia^mdependem access to the ^formation monitored hy the system, and t h e r e i s n o
contractual limitation on our independent access or use of the information we ohtain.^
Sections 5 ^ a n d l 0 ^
You mustpurchase or lease, andthereaftermaintain,such computerhardware and software, dedicated

highspeed communicationsequipment and services, dedicated teiephoneand power lines, m o d e m s
^^(s),speakers,andothercomputer-reiatedaccessoriesorperipheraiequipmen^
purpose of, among other functions, recording Studio sales, scheduling classes, and other functions that we
require. You must provide such assistance as may he required to connect your computer system w i t h a
computer system used hy us. We will have the right, on an occasional or regular hasis, to retrieve such data and
information from your computer system as we, in our sole and exclusive discretion, consistent with consumer
privacy laws, deem necessary. You must operate your computer system in compliance with certain security
standards specified h y u s , w h i c h may he modified at our discretion from time to time. In view of the
interconnectionofcomputersystemsandthenecessitythatsuch systems he compatible with each other,you
expressly agreethat you will strictly complywithourstandards and specifications for all item(s)associa^^
your computer system, and will otherwise operate your computer system in accordance with ourstandards and
specifications, franchise Agreement, Sections S ^ and 10.3).
To ensurefull operational efficiency and optimal communication capability between and among
computer systems installed by you, us, and other Club Pilates franchisees, you agree, at your expense, to keep
your computer systemingoodmaintenanceandrepair, and following our determination that it will be
economical or otherwise beneficial to the System to promptly install such additions, changes, modifications,
substitutions and/or replacement to your computer hardware, software, communications equipment and
services, telephone and power lines, and other computer related facilities, as we direct.
We reserve the right to require you to update or upgrade any computer hardware or software during
the term ofthe franchise, and i f w e choose to do so, there are no limitations on the cost and frequency of this
obligation. The approximate cost of the Computer System includingacomputer or tablet computer,hardware
and software is approximately$l,200 but our Approved Supplier maypermityou to paythisout over 12 months.
There is no initial fee to obtain tbe software. The approximate cost of any annual maintenance upgrades or
updates or maintenance support contracts varies widely from $0 to $ 1 ^ ^ 8 0 0 , which does not include the
software fee of around $269 per month. We have no obligation to provide ongoing maintenance, repairs,
upgrades or updates, and any such obligations would be those ofthe software licensors.
IT5M^ TERRITORY
EranchlseA^reementÂuthorlêdt^catlonandOes^natedTerrltorv
You will operate the Studio ataspecific location approved by us (referred to as your "Authorized
Location"). Once you have secured your Authorized Location, wewillprovideyouaOesignatedTerrit^^
whichyouwillhavecertain protected rights.Your OesignatedTerritorywillcontainamaximumofS0,000peo
which will be approximatelyatwomile radius around your Studio, unless your Studio is located i n a m a j o r
metropolitan downtown area or similarly situated/populated central business district (a^Cen^
District").If your Studio is located inaCentral Business District, your OesignatedTe^^
people but maybe limited toageographicarea comprised ofanywherefromaradiusoftwo blocks to two miles
around your Studio, as we deem appropriate in our discretion.The size of your DesignatedTerritory may vary
from the territory granted to other franchisees based on the location and demographics surrounding your
Studio.
3g
© O O ^ ^ O ^ P i l ^ ^ ^ e , ^
30342017 ^nchiseOiîoêOocumeot
Tbe boondaês ofyour O e ^ g n a t e d T ^
(botb nature o n d m a n m a d e ) o r county
determine tbe p o p u ^ o n w i t b i n your D o n a t e d T e r r ^
(sucb as data pubiisbed by tbe ^ . C e n s u s Bureau or otber governments agencies and c o m m e r ^
ifyoubave been grantedaOesignatedTerritory^neitber we nor our a b a t e s wiii o p e ^ ^

or authorize another CiubPiiates franchisee to operate ores
Forthis reason, your OesignatedTerritoryisdeemedêxciusive" under appiicabiefranchisedisc^
piease note our reserved rights described iater in this item).
Except as expressiy provided in tbe Franchise Agreement,you have no right to exclude, control or
impose conditions on the location, operation or otherwise of present or future Studios, using any of the other
brands or Marks t h a t w e n o w , o r i n the future, may offer,and we may operateor license Studios or d i s t r i b u ^
channelsofanytype, licensed, franchisedorcompany owned, regardless of their location or proximity to the
Premises and whether or not they provide services similar to those that you offer. You do not have any rights
with respect to otherand/or related businesses, products and/or services, in which we may be involved, now or
in the future.
While you and other Club Pilates Studios will be able to provide the Approved Services to any potential
client that visits or otherwise reaches out to your Studio, you will not be permitted to actively solicit or r^^^
clients outside your OesignatedTerritory,unless we provide our prior written consent. L i ^
franchisees are not permitted to solicit and/or recruit prospective clientele within your DesignatedTe^^
You will not be permitted to advertise and promote your Franchised Business via advertising that is directed at
those outside your Designated Territory without our prior written consent,which we will not unreasonably
withhold provided (a) the area you wish to advertise in is contiguous to your OesignatedTerritory,and(b)that
area h a s n o t b e e n g r a n t e d to any third party in connection with aClub Pilates Studio (or Oevelopment
Agreement) of any kind
Wemaychoose,inoursolediscretion,toevaluateyourStudioforcompliancewiththeSystemStandards
using various methods(including, but not limited to, inspections,fieldservicevisits,surveillance camera
monitoring, member comments/surveys, and secret shopper reports). You must meet minimum standards for
cleanliness, equipmentcondition, repairand function, and customer service Youremployees, including
independent contractors, must meet minimum standards for courteousness and customer service. (Franchise
Agreement, Section B.BA)
unless waived by ^Franchisor due to unique market conditions, or vour Studios ô.vouFranchisoe
must meetacertain Minimum MomborMonthly Gross PoyenueQuota.lfyo^^Franchisoe fails
maintain ^0 momborspor day (avoragodovoronowook)ayerage monthly gross revonuos of $30.000 by t h e l ^
year anniversary of the opening of the Studio; 65 momborspor day (oyoragodovoronowook) and avorago
monthly gross revenues of $40.000 by the end of t h e ^ v e a r anniversary: and ^5 m o m b o r o p o r d a y ^ o r ^ d
over onowook) by tho ond of tho 3^ year annivorsory and each succeeding year thereafter,weFranchisor may
instituteacorrectivetrainin^program and/or require yo^Franchisee to perform additional local mar^^ If
ye^f^Franchisee fails to meet the Minimum MomborMonthly Gross Revenue Quota for thirty s i x ( 3 ^
consecutive months at any time during the ê^termof^h^theFranchiseAgreement.weFranchisor may
instituteamandatory corrective training program or terminate the Franchise Agreement at our solo discroti^^^
(FronchisoAgroomont,Soction8.8B)upon notice to you.
Oevelopment Agreement
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©00462017 C i u b ^ t ^ ^ o ^ e , ^
00462017 Franchise O i s ^ o r e P o c u m e o t
^youaregrantedtherighttoopen^
Agroemom, then we w ^ provide you ^
your Oeveiopment Area w^suhstantiîy vary from other System
Franchised Busmesseswegramyoutherighttoopen and operate; a n d ^ t h e i o ^
general areawherewemutuaiiyagreeyou wiii heopeningtheseiocations.ThehoundariesofyourDeveiop
Area may he described in terms of zip codes, streets, landmarks (hoth natural and man-made) or county iines,
or otherwise delineated onamapattached to the Datasheet.
Each Franchised Business you timely open and commence operating under our then current form of
franchiseagreementwiiiheoperatedî)fromadistinctsiteiocatedwithintheOeveiopmentArea;and^
its own OesignatedTerritorythatwewiil define once the site forthat Franchised Business has heen approved.
We will not own or operate, or licenseathird party the right to own or operate,aStudio utilizing the
Marks and System within the Oeveiopment Area until the earlier of: (i) the date we define the Designated
Territory of the finaiFranchised Businessyou were granted theright to operate under theOevelopment
Agreement; or (ii) the expiration or termination o f t h e Development Agreement for any reason. Your
OevelopmentArea will he exclusive duringthistime period.
Llpon the occurrence of any one of the events described in the preceding paragraph, your territorial
rights within theOevelopment Area will be terminated, except that each Franchised Business that you have
opened and are continuously operating as of the date of such occurrence will continue to enjoy the territorial
rights within their respective OesignatedTerritories that were granted under the franchise a g ^
entered into for those Franchised Business(es).
YoumustcomplywithyourdevelopmentobligationsundertheDevelopmentAgreement,includingyour
Oevelopmeht Schedule, in order to maintain your exclusive rights within the Development Area. If you do not
comply with your Development Schedule, we may terminate your Development Agreement and any further
developmentrightsyouhaveunderthatagreement. Otherwise, wewillnotmodifythesizeofyourDevelopment
Area except by mutual written agreement signed by both parties.
Reserved Rights
We and our affiliates reserve the exclusive right to conduct the following activities under the Franchise
Agreement and/or Development Agreement (as appropriate); (i) establish and operate, and license any third
party the right to establish and operate, other Studios and Franchised Businesses using the Marks and System
atanylocationoutsideofyourDesignatedTerritory(ies)and,ifapplicable,DevelopmentArea^
and sell products and services that are similar to the products and services offered by the Franchised Business
underadifferenttrademark ortrademarks at any location, within or outside the D e s i g n a t e d T e r r i ^
if applicable, the Development Area; (iii) use the Marks and System, as well as other such marks we designate,
todistribute any ApprovedProductsand/orServices in any alternative channel of distribution,
theTerritory(ies) and DevelopmentArea (including the internet, mail order,catalog sales,
wholesale stores, etc.), as further described below; (iv) to acquire, merge with, or otherwise a f f ^ ^
after that own and operate, and franchise or license others to own and operate, any business of any kind,
including, w i t h o u t l i m i t a t i o n , a n y b u ^
Products and Services (but under different marks), within or outside your DesignatedTerritory^^
applicable. Development Area; and (v) use the Marks and System, and license others to use the Marks and
System, to engage in anyother activities not expressly prohibited in your Franchise Agreement and, ifapplicable,
yourDevelopmentAgreement.
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©30462017 O ^ P i i ^ ^ o ^ i ^ , ^
30462017 F^nchiseOiîoêOocumeot
Neither the Franchise Agreement nor Development Agreement grants you any right to engage in any of
the activities outlined in the preceding paragraph, or to share in any ofthe proceeds received by us, our affiliates
or any third party from these activities, unless we otherwise agree in writing. Further, we have no obligation to
provide you any compensation for soliciting or accepting orders (via alternate channels of distribution) within
your Territory.
Internet Sales / Alternative Channels of Commerce
We may sell products and services to members located anywhere, even if such products and services
are similar to what we sell to you and what you offer at your Studio. We may use the internet or alternative
channels of commerce to sell CLUB PILATES brand products and services. You may only sell the products and
services from your approved Studio location, and may only use the internet or alternative channels of commerce
to offer or sell the products and services, as permitted by us, in order to register members for classes. We may
require you to submit samples of all advertising and promotional materials (and any use of the Marks and/or
other forms of commercial identification) for any media, including the Internet, World Wide Web or otherwise.
We retain the right to approve or disapprove of such advertising, in our sole discretion. Any use of social media
by you pertaining to the Studio must be in good taste and not linked to controversial, unethical, immoral, illegal
or inappropriate content. We reserve the right to "occupy" any social media websites/pages and be the sole
provider of information regarding the Studio on such websites/pages (e.g., a system-wide Facebook page). At
our request, you will promptly modify or remove any online communication pertaining to the Studio that does
not comply with the Franchise Agreement or the Manual. You are not prohibited from obtaining members over
the Internet provided your Internet presence and content comply with the requirements of the Franchise
Agreement.
Additional Disclosures
Neither the Franchise Agreement nor the Development Agreement provides you with any right or option
to open and operate additional Franchised Businesses (other than as specifically provided for in your
Development Agreement if you are granted multi-unit development rights). Regardless, each Franchised
Business you are granted the right to open and operate must be governed by its own specific form of Franchise
Agreement.
We have not established other franchises or company-owned outlets or another distribution channel
offering or selling similar products or services under a different trademark. Neither wo nor our affiliatoWe have
notestabiished, efnor do we presently intend to establish, other franchised or company-owned businesses that
are similar to the Franchised Business and that sell our Approved Products and Services under a different trade
name or trademark, but we reserve the right to do so in the future without your consent.
ITEM 13 TRADEMARKS
We grant you the right to operate a Studio under the following Marks; we may authorize you to use
ancillary Marks as well. The following Marks are registered and owned by us on the Principal Register or the
Supplemental Register of the United States Patent and Trademark Office:
41
Mark Registration/ Registration or Class
Serial No. Application/Filing Date
CLUB PILATES Reg. No. -Reg. Date: December 4, 2012 41
(Word Mark) 4,255,5174255517
(Supplemental Register)
Reg. No. Reg. Date: August 14, 2012 41

4,190,2734190273
(Principal Register)
CLUB PILATES Reg. No. Reg. Date: September 24, 2013 41

4,406,1734406173
CLUB PILATES
Ree. No. 5090777 Reg. Date: November 29, 2016 41

0 -In addition, the following Marks are pepdipg OP the Pripcipal Register of the United States
Patent and Trademark Office:
42
Mark Serial No. Application/Filing Date Class
CLUB PILATES Serial No. 87015270 Filing date: April 26, 2016 41
(Word Mark) (Principal Register)
Do PILATES. DO LIFE. Serial No. 87006969 Filing date: April 20. 2016 41
(Word Mark) (Priocipal Register)
DO DILATES. Serial No. 87008564

Filing Date: April 20. 2016 41
DO LIFE.
DO DILATES. DO LIFE. Serial No. 87010187
Serial No. 87008581 Filipg Date: April 20, 2016 41
1 (Priocipal Register)
CLUB @
CLU
1 TES
PILATES
Serial No. 87008677
We expect and intend to submit all affidavits and other filings necessary to maintain the registrations
above. We assert common law rights with respect to the Marks since we, or our affiliates, were the first to use
the respective marks. When tho "Club Pilatos" word mark hao acquired distinctivonoDs or Gocondary moaning,
wo intend to amend tho rogistration for ouch Mark and appeal tho docioion to register tho Mark on tho
Supplemental Rogistor. A registration on the Supplemental Register grants us the right to use the registered •
symbol when the mark is used with the Club Pilates Studio and any related products and services. It will also
block later-filed applications from using confusingly similar marks for related goods. A registration on the
Supplemental Register does not provide all the protections of a registration on the Principal Register. For
example, a Supplemental Registration does not convey the presumptions of validity, ownership and exclusive
rights to use the mark that attach with a registration on the Principal Register. A Supplemental Registration
cannot be used to stop importation of counterfeit products. Also, a Supplemental Registration can never become
incontestable.
There are no presently effective determinations of the United States Patent and Trademark Office, the
Trademark Administrator of any State, or any court, nor any pending material litigation involving any of the
Marks which are relevant to their use in any State. There are no pending interference actions or opposition or
cancellation proceedings that significantly limit our rights to use or license the use ofthe Marks in any manner
material to the System. We have filed all required affidavits for the Marks and will continue to.do so. None of
the Marks' registrations have come up for renewal at this point so we have not yet renewed any of the Marks'
registrations.
43
You m u s t f o ^ w our ru^s when you
partofacorporate name or with m o d i ^
to you. You may not use the Marks in connection with the sale of an unauthorized product or s e r ^
amanner not authorized in writing hy us. You must not use any other trade names or trademarks in the
operation of the Studio without first obtaining our written consent. Youmustnotestahiishawehsiteonthe
internet using any domain name containing the Marks or anyvariationthereofwithout our written consent We
retainthesoierighttoadvertiseontheinternetandcreateawehsiteusingtheMarksas domain names.
if it becomes advisahie, in our soie discretion, for us to modify or discontinue use of any of the Marks,
or use one or more additional or substitute Mark, you must compiy with our directions to modify or otherwise
discontinue the use of such Mark withinareasonabie time after notice by us. We wiii not be obligated to
compensate you for any costs you incur in connection with any such modification or discontinuance.
You cannot seek to register,reregister,assertciaim to ownership of, license or allow others to use or
otherwise appropriatetoitself any ofthe Marks or any mark or name confusingly similarto them, except insofar
as such action inures to the benefit of Franchisor and has our prior written approval. Upon the termination or
cancellation of the Franchise Agreement, you must discontinue use of the Marks, remove copies, replicas,
reproductions or simulations thereof from the premises and take all necessary steps to assign, transfer, or
surrenderto us all Marks which you may have used in connection with the Franchise Agreement.
You must immediately notify us of any apparent infringement of or challenge to your use of the
mark. Although not obligated to do so, we will take any action deemed appropriate and will control any
litigation or proceeding. You must cooperate with any litigation relating to the Marks which we or our
Affiliatooaffiliates, or the Licensor.might undertake.
We are not aware of any prior superior rights or infringing uses that would materially affect your use of
the Marks. But, there is alwaysapossibilitythat there might beone or more businesses, similarto the busm^^
covered bythe Franchise, operating in or nearthearea(s)whereyoumay do business, usinganame, trademark
andBor trade dress similar to the Marks and with superior rights to the name andBor trademark. We strongly
urge you to research this possibility,using telephone directories, local filings and other means, before you
anymoney,sign any documents or make any binding commitments. If you do not research the possibility of
othertrademarks in this business, you may be at risk.
There are no agreements currently in effect, which significantly limit our rights to useor license the use
ofthe Marks.
IT5M^ PATENT^CORYRI^TSANDÔÎETARYINEORMATION
You do not receive the right to use any item covered byapatent or copyright, but you can use tbe
proprietary information in the Manual. The Manuals are described in Item 11. Item 11 also describes the
limitations o n t h e u s e o f t h e Manual byyou and your employees.
We have no registered copyrights, nor are there any pending patent applications that are material to
thefranchise.However,weclaimcopyrightsoncertainforms, advertisements, promotional m a t e r ^ ^
source codeandotherConfidential Information as defined below.
There currently are no effective determinations of the Copyright Office (or any court regarding any of
the copyrighted materials.There are no agreements in effectwhich significantly limit our rightto use
44
©30342017 C l o b P i l ^ F ^ ^ , ^
30162017 ^ ^ i s e O i ^ i o ^ e O ^ o ^ o t
the copyrighted materials. Finally, there are no infringing uses actually known to us that could materially affect
your use ofthe copyrighted materials in any state. No agreement requires us to protect or defend any copyrights
or you in connection with any copyrights.
In general, our proprietary information includes "Confidential Information" as defined in Section 12 of

the Franchise Agreement, some of which is contained in our Manual, and includes, among other things, all
information (current and future) relating to the operation of the Studio or the System, including, among other
things, all: (i) manuals, training, techniques, processes, policies, procedures, systems, data and know how
regarding the development, marketing, operation and franchising of the Studios; (ii) designs, specifications and
information about products and services and (iii) all information regarding members and suppliers, including any
statistical and/or financial information and all lists. We disclose to you Confidential Information needed for the
operation of a Club Pilates franchise, and you may learn additional information during the term ofyour franchise.
We have all rights to the Confidential Information and your only interest in the Confidential Information is the
right to use it under your Franchise Agreement.
Both during and after the term ofyour Franchise Agreement, you must use the Confidential Information
only for the operation of your Studio under a Club Pilates Franchise Agreement; maintain the confidentiality of
the Confidential Information; not make or distribute, or permit to be made or distributed, any unauthorized
copies of any portion ofthe Confidential Information; and (iii) follow all prescribed procedures for prevention of
unauthorized use or disclosure of the Confidential Information. (Franchise Agreement, Section 12)
We have the right to use and authorize others to use all ideas, techniques, methods and processes
relating to the Studio that you or your employees conceive or develop.
You also agree to fully and promptly disclose all ideas, techniques and other similar information relating
to the franchise business that are conceived or developed by you and/or your employees. We will have a
perpetual right to use, and to authorize others to use, those ideas, etc. without compensation or other
obligation.
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
Under the Franchise Agreement, we do not require, but do recommend, that you (or the Designated
Operator) personally supervise the Studio. You may appoint a Designated Manager we approve to manage daily
operations of your Studio. We will not unreasonably withhold our approval of any Designated Manager you
propose, provided the individual has successfully completed the Owner/Operator Module of our Initial Training
Program and, if that individual will be providing any Approved Services, the Orientation Program (or, if necessary,
the full Teacher Training Program). Once approved, your Designated Manager may assist in the direct, day-to-
day supervision of the operations of the Studio, or to be the on-premises supervisor if you choose not to
personally supervise the Studio. If you are a business entity, your Designated Manager need not hold an
ownership interest in the business to be the on-premises supervisor.
You are solely responsible for the hiring and management of the Studio employees, for the terms of
their employment and for ensuring their compliance with any training or other requirements established by us.
You will keep us advised, in writing, of any Designated Manager involved in the operation ofthe Studio and their
45
©30442017 dub Pilates Franchise, LLC
c o n ^ t information Your ^
^mdiyiduaiwhohassucce^^^
You and your managersaodempioy^mustcompiywiththeconfidemiaiitYp^^

l ^ Y o u must oxecuteaporsonaiguarantYconcurrentiYwith the signing o f t h ^
iegaientity, having more than one owner,aii owners, shareholders, partnersôintv^^
person who directiy or indirectly o w n s a l O ^ or greater interest in the franchised business must ex^^
personal guaranty.
IT5M^ R5ÎCTIONSONWHATTH5^NCHIS55MAYS5^
You must offerfor sale and sell, only and ali those Approved Products and Services, and deal oniywith
thosesuppliers,thatweauthorizeorrequire,andhav
purchase the amount and type of equipment, including Pilates Peformers,aPilates Ballet Bar,SpringBoar^^^
5^0 Chairs, ^ e q u i p m e n t and other Pilates apparatuses and exercise equipment, and offer only those types
of Pilates and exercise classes that we authorize. Failure to comply with our purchasing restrictions may r^^
in the termination of your Franchise Agreement. We may supplement, revise andôr modify our Approved
ProductsandServicesas w e d e e m a p p r o p r i a t e f r o m t i m e t o t i m e , a s w e l l a s o u r S y s t e m s t a n d a r d s a n d
specifications associated with the provision of these productsBservices.These changes will he outlinedm
Manuals or otherwise in writing, and there are no contractual limitations on our right to mak^
changes.
If we discontinue any Approved Product or Service offered hy the Franchised Business, then you must
cease offering or selling such product^service withinareasonabie time, unless such product^service represents
ahealthorsafetyhazard(inwhichcaseyoumustimmediatelycomplyuponreceiptofnoticefromus).Youmay
not use the location of your Franchised Business for any other business purpose other than the operation of
your Franchised Business.
You may not advertise, offerfor sale or sell, any products andôr services that we have not authorized.
We reserve the right to change the types ofauthorized products and services at anytime in our discretion. You
agree to promptly undertake all changes as we require from time to time, without limit, except we will not
require you to thoroughly modernize or remodel the Studio any more often than once everySyears. You will
notmakeanymaterial alterations to yourStudio or itsappearance as originally approved by us without ourprior
written approval.
You mustrefrainfrom anymerchandising,advertising,orpromotionalpracticethatis unethical ormay be

injurious to our business andôr other franchised businesses or to the goodwill associated with the Marks
(Franchise Agreement, Section 4.2).
IT5M^ R5N5WA4^MÂTIO^TRANSP5RANOO^PUT5^SO^TION
TH5FRANCHIS5R5ÂTIONSHIP
Thlstahlellstscertalnlmportantprovlslonsofthefranchlseand related agreements^Yoush

theseprovlslons Inthe agreements attached tothls Disclosure Documents
46
Paragraph In
Proton Summary
Agreement
8. L e ^ h o f ^ ^ O ^ e Franchise Agreement: The term is lOyearsfrom the date the Franchise
term Paragraphs Agreement is signed.
b. Renews or extension of Franchise Agreement: You have the option to extend the term for two
term Paragraph 3.2 consecutive5year periods.
c. Requirements for renews Franchise Agreement: You have complied with ali o f t h e Franchise
or extension Paragraphs 3.2, 3.3, and Agreement provisions; you are not in default of
34 the Franchise Agreement; you have brought the
Studio into compliance with our current
standards; you have given us notice of renewal
no less than 90 days nor more thanlBO days
prior to the end of the initial term; you have
signed a then-current form of Franchise
Agreement, which may contain materially
different terms than the ones contained in your
Franchise Agreement; you have signedageneral
release in substantially the form of 5^hlbltFto
this Disclosure Document; and you pay us a
renewal fee equal to$10,0D0.
d. Termination byfranchisee Franchise Agreement: Not applicable.

NotAppiicabie
e. Termination by franchisor Franchise Agreement: The Franchise Agreement does not provide for
without cause NotApplicable termination without cause.
f. Termination by franchisor Franchise Agreement: We may terminate the Franchise Agreement
with cause Paragraphs! upondeliveryof n o t i c e t d y o u if youdefault
under the terms ofthe Franchise Agreement, as
further outlined below.
g. "Cause" ciefined^curabie Franchise Agreement: The following constitute curable defaults: you
defaults Paragraph 15.18 fail to comply with the Performance Standards;
or refuse to make payments due and do not cure
within 10 business days; or fail to comply with
any provision of the Franchise Agreement not
otherwise mentioned in (h.) below or any
mandatory specification and do not cure within
the applicable cure period. Some defaults have
10 calendar day cure periods and some have 30
calendar day cure periods
b "Cause" defined^ Franchise Agreement: The following events constitute non curable
noncurabie defaults Paragraph 15.1A defaults: failure to properly establish and equip
the premises;failuretocomplete training; make
amaterial misrepresentation or omission in the
47
Paragraph In
Provision Summary
Agreement
application for the franchise; conviction or plea

of no contest to a felony, or other crime or
offense that can adversely affect the reputation
of you, us or the Studio; make unauthorized
disclosure of confidential information;
abandonment of the business for 5 consecutive
days unless otherwise approved; surrender of
control of the business; unauthorized transfer;
you are adjudicated bankrupt, insolvent or make
a general assignment for the benefit of
creditors; your misuse of the Marks; failure on 3
occasions within any 12 consecutive month
period, or 4 occasions in any 24 consecutive
month period to pay amounts due, or otherwise
to comply with the Franchise Agreement; violate
any health, safety or sanitation law or conduct
your operation in a manner creating a safety
hazard; or violating the rights and restrictions of
your territory: Oporating; operating a
competing business.
Franchisee's obligation on Franchise Agreement: Your obligations include: stop operations of the
termination/non-renewal Paragraphs 12,13 and Studio; stop using the Marks and items bearing
15.3 the Marks; stop using "CLUB PILATES" in any
form as part of your corporate name; assign any
assumed names to Company; de-identify the
premises from any confusingly similar
decoration, design or other imitation of a Studio;
stop advertising as a Club Pilates franchise; pay
all sums owed; pay all damages and costs we
incur in enforcing the termination provisions of
the Franchise Agreement; return the Manual
and other confidential information to us; return
all signs to us; assign your telephone and
facsimile numbers, electronic mail and internet
addresses to us; sell to us, at our option, all
assets of the Studio, including inventory,
equipment, supplies and items bearing the
Marks; and comply with the covenants not to
compete.
j. Assignment of contract by Franchise Agreement: We may sell or assign some or all of our business
franchisor Paragraph 14.6 to any subsidiary or affiliate of Club Pilates, any
purchaser of Club Pilates, or any purchaser of
the Marks and related business.
48
Paragraph In
Proton Summary
Agreement
k. ^ns^byôohê Franchise Agreement: You may seil or assign your business, but only
definôn Paragraphia with our approval. We have sole discretion over
whether to approve or disapprove an
assignment.
L ^ n c h i s o r approve of Franchise Agreement: We have the rightto approve ali your transfers.
t^nsfer by franchisee Paragraphsl4Btandl4^ We may place reasonable conditions on our
approval of any transfer.
m. Conditions for franchisor Franchise Agreement: You must be in compliance with all agreements,
approval oftransfer Sections theManual,all contracts w i t h a n y p a r t y , a n d
transferee must assume all obligations under
theseagreements; transfereemeetourthen
current requirements and complete or agree to
complete our training program for new
franchisees; all sums due must be paid; all
obligationstothirdpartiesmustbesatisfied;the
Studio must be in full compliance with the
Manual and standards and specifications for
new Club Pilates Studios; the transferee must
satisfactorily complete training; and the
transferor must paya$10,000transferfee.
n. Franchisor'sright to acquire None There is no right for us to acquire your Studio

franchisee's business except as outlined below
o. Francbisor'soptionto Franchise Agreement: We have the optionêxercisable by giving 30
purchase franchisee's Section 153.1 days written notice to purchase any and all
business inventory, equipment, furniture, fixtures, signs,
sundries and supplies owned by you and used in
t h e S t u d i o , a t t h e l e s s e r o f ( i ) your costless
depreciation computed onareasonable straight
line basis (asdetermined in accordance with
generally accepted accounting principlesand
consistentwithindustrystandards and customs)
or (ii) fair market value of such assets, less (in
either case) any outstandingliabilitiesof the
Studio. In addition, we h a v e t h e o p t i o n to
assume your lease for the lease location of the
Studio, or if an assignment is prohibited, a
subleaseforthe full remainingterm on the same
terms and conditions as your lease.
p. Oeath or disability of Franchise Agreement: Must be transferred within six (6) months.
franchisee Paragraphia
q. Non-competition covenants Franchise Agreement: You must not have any interest in any
during the term ofthe Paragraphs competitive business specializing, in whole or in
franchise part, in the sale of frapchises or products that
49
Paragraphm
Proton Summary
Agreement
are the sameas o r s i m i i a r t o a n y product or

service provided through the Studio.
Additionaiiy,you must not employ or seek to
employ any person employed hy us or by any of
our other franchisees, or otherwise directly or
indirectly induce or seek to induce such person
to leave his or her employment during the term
o f t h e Franchise Agreement:—, without first
obtaining our consent or anv other franchisee.
r. Noo-compeôocovenams Franchise Agreement: You must not operatearetail Studio similar to
after the ^ a p c h ^ e ^ Paragraphs the CLUB PILAT5S Studio from the premises for
terminated or expires 2yearsafterterminationwithinal0 mile radius
of any Club Pilates brand Studio. Additionally,
f o r a p e r i o d o f ^ y e a r s after termination of the
FranchiseAgreement,you must not shall notî)
solicit business from customers of your former
Studio, (ii) contact any of our suppliers or
vendors for any competitive business purpose,
or (iii) solicit any ofour other employees, or the
employees of FranchisoBsaffiliates or any other
System franchisee, to discontinue employment.
s. Modificatieo ofthe Franchise Agreement: The Franchise Agreement can be modified only
Franchise Agreement Paragraphs by written agreement between us and you. We
can modify or change the System through
changes in the Manual.
t. integration^merger clause Franchise Agreement: Only the terms of the Franchise Agreement are
Paragraphs binding(subjecttoapplicablestatelaw)andmay
only be modified to the extent required by an
appropriate court to make the Franchise
Agreement enforceable. Any representations
orpromisesoutsideofthis Disclosure Document
and other agreements may not be enforceable.
u. Dispute resolution hy Franchise Agreement: You must first submit all dispute and
arbitration or mediation Paragraphs controversies arising under the Franchise
Agreement to our management and make every
effort to resolve the dispute internally.
At our option, all claims or disputes arising out

of the Franchise Agreement must be submitted
to non-binding mediation, which will take place
at our then current headquarters. If the matter
is mediated,the parties will splitthe mediators
fees and bear all of their other respective costs
ofthe mediation.
50
Paragraphs
Proton Summary
Agreement
Except for our right to seek injunctive reiief in

any court of competent jurisdiction and as
otherwisedescrihedahove,anyciaimarisingout
of or relating to the Franchise Agreement or the
relationship of the parties, and any controversy
regarding the estahiishment of the fair market
value of assets of the Studio wiii he resolved in
binding arbitration heforeasingle arbitrator in
Orange County, California (subject to applicable
state iaw).
^ Choice of forum Franchise Agreement Any action that is notsubjecttoarbitration must

Paragraph 17.4 be brought in state or federal court in Orange
County,California(subjecttoapplicable state
law)
w. Choice of law Franchise Agreement: The Franchise Agreement isgoverned by the
Paragraph 17.3 laws ofthe state ofCaiifornia without reference
to this state'sconflictofiaws principles (subject
to state law), exceptthatanydisputes or actions
involving any non-competition covenants,
including the interpretation and enforcement
thereof,mustbegovernedbytbelawofthe
state where the Studio is located.
[Remainder of Page Intentionally Left Blank]
DEVELOPMENT AGREEMENT
This table lists certain important provisions of the Development Agreement and related agreements.
You should read these provisions in the agreements attached to this disclosure document.
51
ACTION IN
OEVELOPMENT
CROVÔN SUMMARY
OTH5RAG^5M5NTS
^ Leogth ofthe term ofthe Section^5xhihitB Tbe Development Schedule will dictate the
Oevelopment Agreement amountoftimeyou havetoopenaspecific
number of franchises, which will differ for each
Developer and will be specified in ^xhibitBof
the Development Agreement.
h. Renews or extension ofthe Not Applicable NotApplicable
term
c. Requirements for developer to Not Applicable NotApplicable
renew or extend
d. Termination hy developer NotApplicable NotApplicable
e. Termination hyfranchisor Not Applicable NotApplicable
without cause
f. Termination hyfranchisorwith Sections We may terminate your Development
cause Agreement with cause as described i n ^ ( h ) of
this Item 17 Chart.
g "Cause" defined^curahie Section!^ We may terminate your Development
defaults Agreement after providing notice anda30-day
cureperiod(unlessadifferentcureperiodis
specified below) if: you fail to meet the
Development Schedule; you fail to develop,
open, and operateeachStudioandexecute
each Franchise Agreement in compliance with
the Development Agreement; you
misappropriate or misuse the Marks or impair
the goodwill of theMarks or System; fail to
make monetary payment under the
Development Agreement or any Franchise
Agreement to us or our affiliate, and fail to cure
within 14 days of receiving written notice from
us; fail to correct a deficiency of a health,
sanitation, or safety issue identified byalocal,
state or federal agency or regulatory authority;
or you fail to comply with any other material
term or material condition of the Development
Agreement or any Franchise Agreement.
h. "Cause" defined^noncurahle Section l ^ A ) We may terminate your Development

defaults Agreementautomaticallyuponwrittennoticeif:
you become insolvent or make a general
assignment for the benefit of creditors; f i i e a
bankruptcy petition or are adjudicated
bankrupt;a b i l l i n equity or appointmentof
receivership is filed in connection with you;a
52
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
receiver or custodian of your assets of property
is appointed; a proceeding for a composition of
creditors is initiated against you; a final
judgment is entered against you and not
satisfied within 30 days; if you are dissolved,
execution is levied against you; a suit to
foreclose any lien or mortgage against any of
your Studios is levied; the real or personal
property of a Studio is sold after being levied
upon; you fail to comply with the non-
competition covenants of the Development
Agreement; you or your principal discloses the
contents of the Manuals or other confidential
information; an immediate threat or danger to
public health or safety results from the
operation of a Studio operated by you; you or
your Principal has made a material
misrepresentation in the franchise application;
you fail on 3 or more occasions within a one (1)
year period to comply with a provision of the
Development Agreement; or you fail to comply
with the transfer conditions of the Development
Agreement.
Developer's obligations on Section 14(D), Section Upon termination, you have no right to establish
termination/ non-renewal 15 or operate any Studio for which an individual
Franchise Agreement has not been executed by
us and delivered to you at the time of
termination. All of your obligations under the
Development Agreement which expressly or by
their nature survive the expiration or
termination of the Agreement (including the
non-competition covenants of Section 11),
continue in full force and effect until they are
satisfied or by their nature expire.
j. Assignment of contract by Section 16(A) We have the absolute right to transfer or assign
franchisor the Development Agreement and all or any part
of its rights, duties or obligations to any person
or legal entity without your consent.
k. "Transfer" by developer - Section 16(B) A transfer includes voluntarily, involuntarily,
defined directly or indirectly, assigning, selling,
conveying, pledging, sub-franchising or
otherwise transferring any ofthe rights created
by the Development Agreement or any
53
ACTION IN
05V5^MENT
PROTON SUMMARY
OTHÂGR55^NTS
ownership interest in you.
L ^ n c h i s o r approve o f ^ n s f o r Section l ^ C ) We must approve all transfers, but we will not
by developer unreasonablewitbboldourapprovalifyoumeet
our conditions.
m. Conditionsforfranobiser Section l ^ C ) Our conditions for approvingatransfer include:
approval oftransfer all ofyou and your affiliates'money obligations
must be satisfied; you and your affiliates must
not be in material default of tbe development
Agreement o r a n y Franchise Agreement;you
must executeagenerai release in our favor; tbe
transferee must meet our tben current criteria
for Developers; tbe transferee must sign a
written assumption agreement assuming your
liabilities under theOevelopment Agreement;
youmustourthen-currentTransfer Fee;and
you must pay any referral fees or commissions
that may be due to any franchise broker,sales
agent, or any otherthird party.
n. FranobisoBsrigbt of first refusal Sectionl^ except in certain circumstances
to acquire developer'sbusiness (death/disability or transfer from individual
franchisee to business entity), you must provide
us withaperiod of 30 days to match any third-
party offer to purchase any ownership interest
in theOevelopment Agreement.If we do not
exercise this right, thenyou will have todays to
effectuate the transfer to the third party that
madethe offer on those exact t e r m s ^ i f the
transfer does not occur or the proposed terms
oftheofferchangeinanyway,thenwewillhave
another30 days to exercise our right of first
refusal.
o. Francbisor'soption to purchase NotApplicable NotApplicable
developer'sbusiness
p. Oeatb or disability of developer Sections) You will havea period of 90days t o f i n d a

suitablelegalrepresentativethatweapproveto
continue the operation of your Franchised
Business, provided that person completes our
trainingprogramandexecuteseitherapersonal
guaranty oranewOevelopmentAgreement.
Ouring this 90-day period, we may step in and

operate the Franchised Business on your behalf
54
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
and pay ourselves a reasonable amount to
reimburse our costs associated with this
operation on your behalf. We are not under any
obligation to step in and operate your business
during this period.
q. Non-competition covenants Section 11(B)(1) Neither you, your principals, guarantors, owners
during the term of the franchise or key employees, nor any immediate family
member of you, your principals, guarantors,
owners or key employees, may: (i) own,
operate, or otherwise be involved with.
Competing Business (as defined in the
Development Agreement); (ii) employ or seek to
employ any employees of us, our affiliates or
any other System franchisee/developer or
induce such persons to leave their employment;
or (iii) divert, or attempt to divert, any
prospective customer to a Competing Business.
r. Non-competition covenants Section 11(B)(2) For a period of two (2) years after the
after the franchise is terminated termination/expiration/transfer of your
or expires Development Agreement, neither you, your
principals, guarantors, owners, nor any
immediate family member of you, your
principals, guarantors, owners, may own,
operate or otherwise be involved with any
business that competes with us and is involved
in the licensing or franchising, or establishing of
joint ventures for the operation, of Competing
Businesses.
Section 11(B)(3) For a period of two (2) years after the

termination/expiration/transfer of your
Franchise Agreement, neither you, your
operate or otherwise be involved with and
Competing Business: (i) within the Development
Area; (ii) within a 40-mile radius of your
Development Area or any other designated
territory or designated area licensed by us to a
Studio as of the date of expiration/termination
of the Development Agreement through the
date you attempt to engage in any competitive
activity prohibited by this Section.
55
©30*62017 Club Pilates Franchise, LLC
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
During this two-year period, these parties are

also prohibited from: (i) soliciting business from
customers ofyour former Studios; (ii) contacting
any of our suppliers/vendors for a competitive
business purpose; or (iii) soliciting any
employees of us, our affiliates or any other
System franchisee or developer to discontinue
their employment.
s. Modification ofthe Section 23(F) Your Development Agreement may not be
Development Agreement modified, except by a writing signed by both
parties.
t. Integration/ merger/clause Section 23(G) Only the terms of the Development Agreement
(and ancillary agreements) and this Disclosure
Document are binding (subject to state law).
Any representations or promises outside of the
Disclosure Document and this Agreement may
not be enforceable. Nothing in this Agreement
or any related agreement is intended to disclaim
the representations made in this Disclosure
Document.
u. Dispute resolution by arbitration Sections 22(A)-(C) You must first submit all dispute and
or mediation controversies arising under the Development

of the Development Agreement must be
submitted to non-binding mediation, which will
take place at our then-current headquarters. If
the matter is mediated, the parties will split the
mediator's fees and bear all of their other
respective costs of the mediation.
Except for our right to seek injunctive relief in

otherwise described above, any claim arising
out of or relating to the Development
Agreement or the relationship of the parties,
and any controversy regarding the
establishment of the fair market value of assets
of the Studio will be resolved in binding
arbitration before a single arbitrator in Orange
56
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
County, California (subject to applicable state
law).
v. Choice of forum Section 22(A) Any action that is not subject to arbitration must
be brought in state or federal court in Orange
law).
w. Choice of law Section 21(A) The Development Agreement is governed by the
laws ofthe state of California without reference
to this state's conflict of laws principles (subject
to state law), except that any disputes or actions
involving any non-competition covenants set
forth in any agreement with us, including the
interpretation and enforcement thereof, must
be governed by the law of the state where the
Studio is located.
Applicable state law may require additional disclosures related to the information in this Disclosure Document.
These additional disclosures appear in Exhibit G, entitled State Specific Addenda, to this Disclosure Document.
We do not currently use any public figure or personality to promote the franchise.
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial
performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information,
and if the information is included in the disclosure document. Financial performance information that differs
from that included in Item 19 may be given only if (1) a franchisor provides the actual records of an existing
outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for
example, by providing information about possible performance at a particular location or under particular
circumstances.
BACKGROUND
This Item 19 discloses the historical financial information regarding the ±318 Studios that were (a) open and
operating for the entire 20163444 calendar year (the "Measurement Period"),-jm4 (b) operating utilizing at least
12 reformers as required by our current franchise offering and System, and (c) ooeratine utilizing the designated
software provider for the POS System as required by our current franchise offering and System for the entire
Measurement Period (collectively, the "Representative Studios").
Please be advised that 4416 of the Representative Studios were owned and operated by System franchisees over
the Measurement Period (which includes eeetwo Representative StttdteStudios that waswere previously
operated by an affiliotous and sold to a franchisee), with the remaining 2 Representative Studios owned and
57
o p e n e d by our o f ^ o t o ^ O f ^
m f o r m o t i o o o f ^ ^ ^ S t u d i o s from t b ^ l t o m on tbo grounds tbattbeyw^
tboomiroMoasuromom Period (oitberbooausotboyoponod or olosod at somopom^
^ o ^ ^ a d d i ^ o n a i S t u d i o s from tbis item on tbe grounds t b a t t ^
operations as required under our current System standards and speoifioations (and as part of
franchise offered under tbisOisoiosureOooumentâ^
ground^tbat^bo^
franchise offering and System for tbo entire Moasuroment Period
Partioftbisitemdisciosestbeayeragegrossreyenueamongst(a)the2^^cor^^
Studios over tbe Measurement Period, a ^ ( b ) the francbisee owned Representative Studios over tbe
Measurement Periods and (c) tbe ^ o t a i R o v o n u o ^
Studios(asexoiainedintbeNote5inParti)overthe Measurement Period
Part ii of this item containsamore detailed Chart disclosing certain information that we were abie to obtain
from ouroffiiiato regarding each ofthe^Pepresentative Studios thatwere owned and operated b y t h i s a f f ^ ^
overthe Measurement Period, namely (a)thecompositionoftheTotaiRovonuofigurorevenuefigures
in P a r t l o f this Item, (b) certain operating costs that each of these Representative Studios incurred over the
Measurement Period, (c) the remaining revenue generated by each of these Representative Studios over the
Measurement Period after deducting the operating expenses described above, and (d) the average amongst
these affiliate-owned Representative Studios with respect to each of the items described in this paragrapb^
did not require our franchisees that own the other 4416 Representative Studios to provide us with their
operating cost information, and we did not otherwise have access to this information as ofthe issue Date ofthis
OisclosureOocument-assuch,wearenotabietopresentsuchdataforthesefranchisedRepresentativeStudios
in Part il.
Written substantiation of the data used in preparing this information wili be made available upon
request, but please note that this information was provided to us by the respective owners of e a ^ ^ ^
Representative Studios^ (except for the comoanv owned Studios) We have not audited this information or
independentlyverified this information.
The Representative Studios described above have sold and expended the amounts set forth in this item below.
There is no guarantee or assurance that your Franchised Business will sell as much or spend as much as the
Representative Studios disclosed in this Item.
It is importantthatyoureviewthe Explanatory Notes following eachTable and general Notes atthe end o f ^ ^
Item 19, including those notes that may disclose actual or potential differences between the operation of one
(1) or more Representative Studios and the operation o f a n e w Franchised Business, as part of your evaluation
of ourfranchise offering.
PART I: AVERAGE GROSS REVENUE AMONGST REPRESENTATIVE STUDIOS OVER THE MEASUREMENT PERIOD
58
©3G162017 Club Pilates Franchise, LLC
Average Gross Revenue $442,822.73 Of the two offiliato(2) company-owned Representative
for AffiliatoCompanv- 447,051.86 Studios, one (1) (or 50%) of the Representative Studios
Owned Representative generated higher Gross Revenue over the Measurement
1
Studios Period than the Average Gross Revenue of
$/l42,822.73447,051.86.
Average Gross Revenue $342,346.06 Of the 16 franchisee-owned Representative Studios, seven
for Franchisee-Owned (7) (or 43.6%) of the Representative Studios generated
1
Representative Studios higher Gross Revenue over the Measurement Period than
the Average Gross Revenue of $342,346.06
Average Gross Revenue $258,200.41 Of the 442 franchisee-owned New Model Representative
for Franchisee-Owned 585,242.27 Studios, ftveone (1) (or 4550%) of the Representative
Representative Studios generated higher Gross Revenue over the
SWdies^Studios - New Measurement Period than the Average Gross Revenue of
2
Model $258,200.11585,242.27
59
Explanatory Notes to Part 1 of this Item 19
1. Gross Revenue. The term "Gross Revenue" means the total revenue generated by each Representative
Studio over the Measurement Period, including all membership and class packages revenue, retail sales
and "teacher training" income (described in Explanatory Note No. 2 following the Chart in Part II below).
Gross Revenue may not include certain income that each Representative Studio may have generated
from third-party vendors such as Groupon by virtue of promotions ran by the Representative Studios
through those third-party vendors because these vendors were not able to provide us with the full
reports detailing the income at issue as of the Issue Date of this Disclosure Document.
2. New Model. The term "New Model" as used herein refers to Studios where (a) the franchise owner was
selected and signed by new Club Pilates management post acquisition in 2015; and fb) the Studio was
opened and operated in accordance with the new Club Pilates studio model created by new
management post acquisition in 2015. For clarity, these 2 New Model Representative Studios are a
subset ofthe 16 franchisee-owned Representative Studios.
60
PART II: CERTAIN OPERATING EXPENSES AND RELATED INFORMATION REGARDING AWUAIECOMPANY-
OWNED REPRESENTATIVE STUDIOS
REP. STUDIO NO.Rep REP. STUDIO NO.Rep

M 19
Studio No. 1 Studio No. 2 AV£RACi Average
%of
% of Total Total Avorago % of Total
Amount Revenue Amount Revenue Amount Revenue
$513,487.40 $372,157,974 $442,822,73
1
Total -Revenue 470731.75 100.00% 23.371.96 100.00% 447,051.86 100.00%
Teacher Training $63,908,222 4^464.43 $33,301.5112, 8T952.98 $48,604,861
Revenue 2
0.850.00 % 600.00 6.725.00 ±079*3.74%
Traditional $449,579.27 $338,856,464 9±QS9Z $394,217.87
3
Revenue 881.75 7% 10,771.96 02% 430,326.86 &9T0296.26%
4
Certain Operating Expenses
Estimated Royalty (on
Wn-Studio Revenue $26,974^9 $20,331.3024, $23,653,072
5
Only) 92.91 5.^73% 646.32 5.4682% 5,819.61 5.3478%
Estimated Fees Paid in
Connection with
Teacher Training $26,908,728 $14,021.69^3 3T771.25 $20,465,207
6
Revenue ,778.95 57341.86% 05.26 ,042.11 4^1.58%
Cost of Solo! Third Party
$4,506.10 $5,707.26 ±753% $5,151.72 ±T±6%
Vendors
$753^8,99 $65&968,215. 04&1.94 $705.418,60
7
Marketing Fund 7.64 Or451.91% 44 % 6.54 0461.93%
$151,023.00 $138,222,455 374413, $146,133.18
s 8
Instructor E>(pon50 Rent 42,360.36 309.00% 7,965.29 69% 50,162.83 2Zmil.22%
Bonk Service $13,554,414 $11,452.9249, zmii.7 $12,503,674
9
fees^Merchandise Costs 6,311.94 37649.84% 819.52 7% 8,065.73 3^310.75%
1
Advertising/Promotion $19,896.61 4.23% $26,890.37 6.35% $23,393.49 5.23%
Merchant Account $6,340.5616 $5,317.0414,4 ±T433.40
fees^Services" .419.69 ±^33.49% 09.97 % ,414.83 WZ3.45%
Qffce $330.004.25 $320.004,012. $320.004,13
12
Supplios**Cleanine 4.25 0.0690% 51 0.0995% Ml 0.0792%
General Supplic; $59.88 $34.93 0î% $17.41
&m%
$3,075,002, $2,539^5060
13
Clooninc^lnsurance 784.96 0.6059% $2,004421.00 0.5457% 2.98 0.5758%
Computer and Internet
44 $804.92 044% $460.00 043% $632.46 044%
Exponsos
4
Profossionol FOGG * &0G% 0^0% MQ%
3
Rent * $54,658.90 10.64% $57,025.00 15.56% $56,291.95 12.71%
Fitnoss $283.431,25 $2,522.74 $1,103.0043
14
Accossorios^Water 9.24 0.0627% 1.608.30 0.6838% 3.77 0.32%
Repairs ond Maintononco^ $5,993.90 1.17% $1,845.66 0T&0% $3,919.78 &&9%
Security^ $524.85 040% 0^0% $262.43 046%
61
0
Insurance Premiums^ $3,572.00 0^0% $2,277.73 0^4% $2,924.88 &£6%
Towel Service^ $4,100.10 $3,427.50
oao% $3,763.85 &8S%
Utilitios" 1321.00 &06% $4,640.00 HS% $2,480.50
Water*
&s%%
$757.05 045% $1,255.70 &34% $1,006.38 0^3%
4
AdvortiGine/Promotion^ $06.71 OT02% $40.00 $72.86
&m% 0T02%
Total of Certain Operating
EKponsos^Êxpenses $307,730.23 59^337.8 $272,472,891 73,3146. $390,096.56
15 16 1 7
(excl. Payroll) ' 178,056.54 3% 95,293.98 13% 186.675.26 65M41.7696
Total Revenue Less
Certain Operating
ExponsosÊxpenses (excl. $205,767.26 4*4262.1 $99,685.09 3W»53, $152,726,17
18
Payroll) $292.675.21 7% $228.077.98 87% $260,376.60 34,4^58.24%
Explanatory Notes to Part II of this Item 19
1. Total Revenue. For each Representative Studio, the term "Total Revenue" means the total revenue
generated through the offer, sale and provision of all services and products at, from or through that
Studio over the Measurement Period.
2. Teacher Training Revenue. For each Representative Studio, the term "Teacher Training Revenue" means
the revenue generated by that Studio over the Measurement Period in connection with the sale and
provision of our proprietary Pilates instructor training program to its clientele (the "Teacher Training
Program"), which (a) is designed to provide education to third-party clientele in order for such clientele
to take the certifications necessary to become a Pilates instructor, (b) the affifetecompanv-owned
Representative Studios made available to clientele over the Measurement Period at an approximate
price of $4,750/trainee, and (c) you will be authorized to offer and provide at your franchised Studio
provided you complete our Initial Training Program. Please also see Explanatory Note No. 6 below for
additional information on the costs associated with the Teacher Training Program.
3. Traditional Revenue. For each Representative Studio, the term "Traditional Revenue" means the
revenue generated at that Studio over the Measurement Period from the sale of memberships, class-
based packages and all other Approved Products and Services that these Studios are authorized to offer
and sell, other than the revenue generated by that Studio's provision of the Teacher Training Program
(which is detailed in Explanatory Note No. 2 above).
4. Certain Operating Expenses. The term "Certain Operating Expenses" means the specific operating
expenses identified on the profit and loss statement for each af&Wecompanv-owned Representative
Studio over the Measurement Period (which are set forth in the rows immediately following this heading
in the Chart set forth in Part II of this Item 19).
5. Estimated Royalty. For each Representative Studio, the term "Estimated Royalty" means the Royalty Fee
our affiliatowe would have had to pay us over the Measurement Period if that Studio was owned by a
franchisee and governed by our current form of Franchise Agreement (attached to this FDD as Exhibit
A), which would amount to six percent (6%) of the Traditional Revenue of that Studio over the
Measurement Period.
62
^ ^5impo^^tooo^^ê"5s^
owoedRopêo^veSôm^Part^Câôoân^
our oîotowe did not a c t u a l oav u s t b ^ a m o o m because they
Royaitymcoppectioo with o p e r a t e its S t u d i o s . ^ e m ^
for eacbRepresentotive Studio a m o u n t
Revenue over tbe Measurement Period^becausetbot is tbe amount you wiii be required
pay to us in connection witbtbeTraditionai Revenue you generate at your Francbised business,
and(b)inagoodfaitbefforttoprovideyouwitbanaccuratepictureoftbetypeofexpensesyou
might incur in connection witbyourfrancbised S t u d i o s
b. OnderyourFrancbiseAgreement,tbe Royalty described in i t e m ^ o f this Disclosure Document

will only appiytoyourTraditionaiRevenueyou will be required to pay us the flat fee described
in Explanatory Note N o . 6 i n connection with each client to whom your Studio provides the
TeacberTraining Program.
6. e m o t e d êe^Po^n Connections
youwill be required to pay usaflat fee amounting to $2,000 in connection with each client you sign up
to attendtheTeacberTraining Program.Like tbe Estimated Royalty described in Explanatory Note No^
above, bowever,tbefiguresthatareprovidedforeach Representative Studio as tbe "Estimated Pees
Paid in Connection ÎtbTeacherTraining Revenue" is only an estimate that is (a) calculated based on
tbe number of clients to whom tbat Studio provided tbe Teacber Training Program over tbe
Measurement Period, and (b)designed to provide you with an accurate picture ofthe type of expenses
you might incur in connection witb your franchised Studio.Tobeclear,our affiliatowe did not actually
pay tbe fee amounts disclosed in this Part II Cbartfortbis line item expense^theywe do not bave an
agreement withôurselves tbat requires tbom to pay uôaymentofthese fees, but vou will be required
to pay sucb fees under your Franchise Agreement.
7 ^ o ^ e t ^ ^ n d . For each Representative Studio, the term "Marketing Fund" means the amounts
by that Studio asacontribution to the Marketing Fund that we have established to benefit the CIÔ^
PIRATES brand, Marks and System (as described more fully in I t e m l l o f this Disclosure Document).
Specifically, each affiliate owned Representative Studio paid ^ ^ a contribution amounting to
eêaooroximately two percent (42%) of theTraditional Revenue generated by that Studio o^Bertb^
Measurement Period^which is the amount we currently require our franchisees to pay under their
respective franchise agreements.
8 ^ t r ^ c ^ ^ p o n ^ o For each RoproGontativo Studio, tho term "Instructor Expense" moan^ tho amounts
that affilioto paid to third party instructors that oro employed or othorwiô engaged to provide cla^^^
instruction and other Approved Products and Sorvicoo at or through that Studio. ThoGO figured do not
include any ^)ôloryor other draw for tho owner oftho Studio at iûo,or^b)componâtion that lipoid
t o a rocoptioniGtorothor front officoporsonnol (oGoach affiliate owned RoproGontativoStudio has
operated without tho nood for ûchafront office ^taff, other than tho instructors doGcribod in thiG
Explanatory Note).ôu may choose to engage o n o ( l ) or more individual to Gorvoasarocoptioni^t
andôrothorwioo provide front office or administrative services—ploaso bo advised that engaging such
personnel may result in an incrooso in tho operating costs associated with operating your franchised
Studio Our standard fronchiso offering expects and assumes that you ôr,if you are an ontity,your
Designated Operator) will handle tboGO responsibilities directly or through tho instructors you engage
to otherwise provide instructionôrvicosat your Studio Please n o t o t h o t t h i s a m o u n t includes
applicable payroll taxes paid by each Reprosontativo Studio over the Moasuromont Period in connection
with wages paid to employed instructors.
83
©30342017 O u b P i i ^ F r a o ^ i ^ L L C
3O342017 Franchise PisciosurePocomeot
&—Bank Service Fees. For oach RoproGontativo Studio, tho term "Bank Sorvico FOOG" moanG tho amount
oxpcndod by that Studio on foos charged by third party banking inGtitutiono in connoction with
oporotionc over tho Moacuromont Period.
10. Merchant Account Fees. For each RoproGontativo Studio, tho term "Merchant Account FOOG" moanG the
amounto oxpcndod by that Studio ovor tho Moaouromont Period on fooG charged in connoction with
credit card procoGsing by tho doGignatod softworo provider for tho POS System that is uccd by that Studio
(and which you ore required to UGO in connoction with your fronchiGod Studio as of tho IGGUO Date of this
DiGcloGuro Document).
11. Offica Supplies. For oach Roprosontotivo Studio, tho term "Office Exponsos" moanG that amount
oxpondod by that Studio ovor tho Moaouromont Period on baGic office GupplioG such OG paper clipo,
staploG, toilet paper, paper towolc and other general offico itomo. This amount dooG not include cleaning
expenses or certain supplies nocoGoary to maintain the roformors and other equipment used in
connection with thoGO Representative Studios (plooso see Explanatory Note Nos. 12 and 18, rospectivoly,
for additional information on those costs).
12. General Supplies. For each Representative Studio, the term "General SupplieG" moanG tho amount that
Studio oxpondod ovor tho Moaouromont Period on clooning supplies (both for tho Studio and equipment
locatod within the Studio), oo well as roplacomont opringo/padG for tho roformoro utilizod at that Studio.
13.1. Cleaning, for oach Representotivo Studio, the tnrm "flp-ining" mrnn^ rhn rnpnrtnH -immmi thn
ewnor of that Studio expended on cleaning services at that Studio over tho Mcosuromont Period.
14. Computer and Internet Expenses. For oach Roprooontativo Studio, tho term "Computer and Intornot
ExponooG" moons that amount expended by that Studio ovor tho Moaouromont Period in connoction
with (a) maintaining Intornot QCCOSG via a cable modem (or comparablo dovico) through a local
tolocommunications company, and (b) other foes associated with maintaining tho computer system
UGod at that Studio.
15. Professional Fees. For oach RoproGontativo Studio, tho term "ProfoGGional Foos" meonc tho reported
amount oxpondod by that Studio on profosoional sorvicoG (accountant, legal, etc.) ovor tho
Mcosuromont Period.
^8- ffent. For each Representative Studio, the term "Rent" means the cumulative amount that
Studio expended on rent, common area maintenance and other amounts due under the lease for the
premises of that Studio over the Measurement Period. Please note that: (i) none of the Representative
Studios received any "free rent" or "deferred rent" over the Measurement Period; and (ii) given that
each of the Representative Studios described in this Part II were open for some time as of the
commencement of the Measurement Period, none of these locations were required to pay their
respective landlord any security deposit or other amounts that might typically be due at the beginning
of a landlord-tenant relationship. Ploaoo soo Explanatory Note No. 21 bolow for additional information
on tho Rent paid by Roprosontotivo Studio No. 3 ovor tho Measurement Period and what ouch paymonto
included.
47T9. Fitness Accessories.Merchandise Costs. For each Representative Studio, the term "FitnoGG
AccooooriosMerchandise Costs" means the amount expended by that Studio over the Measurement
64
Period in connection with fitness itomomerchandise that is used bysold to clientele in connection with
classes and memberships.
10. Advertising and Promotion. For each Representative Studio, the term "Advertising and Promotion"
means that amount expended bv that Studio over the Measurement Period in connection with other
advertising and promotional materials and efforts.
18. Repairs and Maintenance. For each Roprosontotivo Studio, tho term "Repairs and Maintenance" moans
that amount expended by that Studio ovor tho Measurement Period in connoction with repair and
maintenance work on (a) tho roformors and other equipment used by cliontolo at that Studio, and (b)
the Studio Generally. Please note that, as of tho Issue Date of this Disclosure Document, Roprosontotivo
Studio No. 3 disclosed in the Part II Chart above has 21 roformors on site ot its location, which is
substantially more than you will bo required to hovo on site at your franchised Studio. If you hove more
than tho required number of roformors at your franchised Studio, this may result in an increase in tho
amount you expend in connoction with repairing and maintaining such equipment. Please also noto that
tho figures for this line item do not include any amounts necessary to actually obtain and install tho
necessary roformors and other equipment at a now Studio (on tho grounds that all of tho Roprosontotivo
Studios doscribod in Part II wore already open and operating for some time as of the commoncomont of
tho Measurement Period).
49T11. Socuritv.Merchant Account Services. For each Representative Studio, the term
"SocurityMerchant Account Services" means the amountamounts expended by that Studio on monthly
foos duo in connoction with a dosignatod security system over the Measurement Period. Plooso bo
advised that: (i) as of tho Issue Date of this DiGclosuro Document, now franchisees on fees charged in
connection with credit card processing by the designated software provider for the POS System that is
used by that Studio (and which vou are required to purchaso and maintain a security syGtom that is tho
somo or oubstontially similar to tho one used by tho RoproGontativo Studios doscribod in this Item; and
(ii) none of those Roprosontotivo Studios wore required to expend any amounts on tho initial acquisition
of tho security system hardware components because those components wore obtained prior to tho
Moasuromont Period.use in connection with vour franchised Studio as of the Issue Date of this
Disclosure Document).
12. Cleaning. For each Representative Studio, the term "Cleaning" means the reported amount the owner
of that Studio expended on cleaning services at that Studio over the Measurement Period.
30rl3. Insurance. For each Representative Studio, the term "Insurance" means the amount expended
by that Studio over the Measurement Period in order to maintain the proper levels and coverages of
insurance required to operate that Studio. Please note that each ofthe Representative Studios disclosed
in this Part II Chart purchase insurance: (i) from the same third-party supplier that, as of the Issue Date
of this Disclosure Document, has been designated to serve as the supplier for our franchisees' respective
insurance coverages required under our Franchise Agreement and/or current Manuals; and (ii) in
amounts that are similar to that which you will be required to purchase under your Franchise
Agreements
21. Towel Service. For oach Representative Studio, tho term "Towel Sorvico" moons tho amount oxpondod
by that Studio ovor tho Moasuromont Period on laundry sorvicos for towels that are used by clients of
that Studio (including pickup and delivery services with rospoct to thoGO towels).
65
22. Utilities. For oach Roprosontotivo Studio, tho term "Utilitios" moans tho amount oxpondod by that Studio
ovor tho Moasuromont Period in connoction with tho utilities nocoGsary to oporoto that Studio from its
promises, including oloctric, gas and trash. Plooso noto that RoproGontativo Studio No. 3 haG a IOOGO
where those utilitios are covorod as part of tho "Rent" paid under that ioose (soo Explanatory Noto No.
16 for additional information). Those figures do not includo the costs associatod with having water (soo
Explanatory Noto No. 23 bolow).
Water. For each Representative Studio, the term "Water" means the amount expended by that
Studio over the Measurement Period in connection with having running water on-site at its premises.
21.1. Advertising and Promotion, for ooch noprosontativo Studio, the term "Advertising and
Pmmntinn" mnur- thnt nmm.n*- rwpnnHn^ hy thnt rf.rii H-rmircment Poriod in connection
with other advertising and promotional motorials and efforts.
Total of Certain Operating Expenses. This figure is calculated by taking the sum of all the
individual line items detailing specific operating expenses over the Measurement Period, which are
discussed more fully in Explanatory Note Nos. 5 through 23 above. It is important to note that this figure
may not include (a) every single item that could be considered an "operating cost" of the Representative
Studios over the Measurement Period, or (b) all the costs of goods you will incur in connection with the
operation of a new Franchised Business. Specifically, among those operating costs/expenses that are
not included under Certain Operating Expenses are those related to: (i) salary, draw or other
compensation for the owner of each Representative Studio; (ii) compensation paid to Instructors and
other personnel at the Studios: (iii) meals and expenses incurred by the owner in connection with
promoting the Representative Studios; (wiy) automobile/vehicle expenses; (ivy) third-party cleaning
service or shipping fees incurred over the Measurement Period; (vyi) certain taxes and related liabilities;
(v+yii) telephone-related expenses (as none of the Representative Studios in Part II incurred such
expenses) or cell phone charges for the owner/manager of the Representative Studios; (vyiii) fees that
might be charged by a third-party provider in connection with payroll processing; ef-Mix) bank service
fees; (x) office supplies: (xi) general supplies, such as cleaning supplies: fxii) computer and internet
expenses: (xiii) professional fees; (xiv) costs for repairs and maintenance: (xv) towel services: fxvi)
utilities: or fxvii) miscellaneous costs such as towel sorvicos, travel expenses and/or uniform expenses
(as ofthe Issue Date of this Disclosure Document we do not have any branded-uniform requirements,
but we reserve the right to implement such uniform policies in the future).
16. No Instructor Expense. Please be advised that the Part II Chart does not include anv compensation paid
to Instructors and other personnel at the Studio.
3^17. We strongly recommend that you speak to your business advisors to identify all types of
operating costs and expenses, including those related to marketing and advertising your Franchised
Business, and discuss them with your business advisor before entering into any agreement with us to
purchase a franchise.
^JJL Total Revenue Less Certain Operating Expenses. For each Representative Studio, this figure is
calculated by taking the Total Revenue figure set forth in the Part II Chart for that Studio and deducting
the Total of Certain Operating Expenses figure for that Studio also set forth in that Chart. This calculation
is subject to the figures in the Chart and the various Explanatory Notes set forth in this portion of Item
19.
66
2^19 A ^ o ^ 5 a c h ^ ^ m m ^ e P a ^ ^
fôws:
^ "Ave^geAmoun^ for each avenue and o p e ^ m g c o s ^ m e ^ ^

caâtedhytakingthesumofa^wo^RepresentaêStod^^
item, and then d i v i d i n g t h a t c u m ^ a ^ e f i g u r e h y t w o ^ ^
h. " A v g ^ o f T o t a i Revenue" for each line item is caicuiatedhy taking the sum
Representative Studios'amount for that given iine item, and then dividing that figure hy the
cumuiativeTotai Revenue of these t w o ^ R e p r e s e n t a t i v e Studios over the Measurement
Period.
NoteRe^rdm^ReoresentativeStudios9ndêml9êner^v
1. When reviewing this item 19 and evaluating ourfranchise offeringgeneraiiy,it is very import^^^
notethefoiiowingcharacteristicsofRepresentativeStudiosdescrihed inthis item 19(as compared
t o a n e w Franchised Business):
a. The territory whereineachcompanyowned ReoresentativeStudio operates isiocated

within the State ofCaiifornia, where the C ^
reputation and garnered goodwill amongst the relevant target audience (as compared to
another region of the united States where there are no Studio locations);
h. Theaffiliotecomoanv-owned Representative Studios do not h a v e a w r i ^ e n f ^ ^ h i ^ ^

other license agreementwithFranchisor,hut each oftheselocations(asdetailedmorefully
in Part II ofthisltem)does utilize the Marks and System inamanner similar to how you will
he requiredtousesuch intellectual propertyin r e o p e r a t i o n ofanew Franchised Business;
c. The a f f ^ e c o m o a n v o w n e d Representative Studios were not required to p ^ y u ^ o r ^ y

otherpartyan Initial Franchise Fee or the other initial fees described in I t e m S o f this
Disclosure Document. At the same time, none of the a f f ^ e c o m p a n v owned
RepresentativeStudios incurred thevariousotherpreopening costs and expenses overthe
Measurement Period that you are likelyto incur in connection with the development o f a
new Franchised Business^this is because these Studios were all open and operating for
sometimeasofthedatethe Measurement Period commenced;
d. Please note that e ^ e ^ ^ b o t h of the aâêcompanv-owned Representative Studios are

smaller than 1,S00 square foot inside, while one ^1) of the affiliate owned Representative
Studios is larger than 1,500 square feet in size, ôu will recall that our standard franchise
offering expects that your Franchised Business will be approximately 1,500 square feet in
size; and
e. Certain aspects of tbe Affiliatocompany owned Representative Studios are primarily

managed on a day to day basis by a single individual that is engaged by the
A f ^ ^ c o m p a n v owned Representative Studios on an indo
this engagement would be similar to you engaginga"Designated Manager" or other third
party to assist in managing certain aspects of your Franchised Business, we do not expect
thatyou will be engagingsuchathird party at the outset of operatingyour new Franchised
Business(unless you areamultiunit owner).
67
©30*62017 O u b P i i ^ F ^ ^ i ^ . ^
30*62017 Franchise OisciosoreOocument
2. Some o u t ^ s have sold and e a r n e d ^
assurance you'll sell or earn as much, ^ o ^
Buslness.ôur results may also vary because you will he establishing and o p e r a t i n g a s t a ^
business.
3. Tbe analysis above In this Item may not contain complete Information concerning tbe operating
costs and expenses that you will Incur In operating your Franchised Business Operating costs and
expensesmayvarysubstantlallyfrom business to business.
4. The figures provided In this Item exclude certain tax liabilities forwhlch you w ^
5 The figures disclosed In this Item may not Include all the professional fees or other a d m i n s
expenses that you might Incur In connection with opening and commencing operations of your
Franchised Business, Including legal and accounting fees.
6 Interest expense, interest Income, depreciation, amortization and other Income or expenses will
vary substantially from business to business, depending on the amount and kind of financing you
obtain to establish your Franchised Business.ôu should consult with your tax advisor regarding
depreciation and amortization schedules and the period over which assets of your Franchised
Business may be amortized or depreciated, as well as the effect, if any,of any recent or proposed
taxlegislationPleasenotethatthe
or amortization.
7. Expenses and costs, as well as the actual accounting and operational methods employed b y a
franchisee, may significantly impact profits realized in any particular operation. Actual
vary from Franchised Business to Franchised Business, and we cannot estimate the results o f a
particularFranchised Business. Therevenuesandexpensesofyourbusinesswiilbedirectlyaffected
by many factors, such as: (a) your Designated Territory's geographic location and population
demographics^b) advertising effectiveness based on market saturation;^) whether you operate
the business personally or hireathird party to serve as your Designated Manager; (d) your product
andservicepricing;(e)vendorpriceson materials, supplies and inventory; (f) personnel salariesan
benefits (life and health insurance, etc ); (g) insurance costs; (h) weather conditions; ( i ) a b ^ ^
generate customers; 0) customer loyalty; (k) employment conditions in the market; and (I) tbe
effortsyouandyourpersonnel put into your Franchised Business.
8. We suggest strongly that you consult your financial advisor or personal accountant concerning
financial projections and federal, state and local income taxes and any other applicable taxes that
you may incur in operatingaFrancbised Business. .
Other than the preceding financial performance representation, we do not make any financial performance
representations. We also do not authorize our employees or representatives to make any such representations
either orally o r i n w r i t i n g l f y o u are p u r ^
with tbe actual records ofthat outlet.Ifyou receive any other financial performance information or projections
of your future income, you should report it to the our management by contacting Shaun ^rove at Club Pilates
Franchise, I^C,31gSPullmanStreet,Cost^^
IT^20 OOT^SANOFRANC^5INFOÂTÔN
68
©30342017 O ^ P i i ^ ^ o ^ e , ^
30*62017 FôhiseOi^losoÔocumeot
TABLE 1
SYSTEM WIDE OUTLET SUMMARY
FOR YEARS 301*2014 TO 20162045
OUTLETS AT THE OUTLETS AT THE END

OUTLET TYPE YEAR NETCHANGE
START OF THE YEAR OFTHEYEAR
±10 4019 +9
FRANCHISED 20153044 4019 2039 +4020
20462016 5039 4074 +3035
20145043 45 +40
COMPANY-OWNED^ 54 0-1
30152016 54 43 -1
20143043 515 4524 +409
TOTAL OUTLETS 20153614 4524 3543 +4019
3045-2016 3543 4477 +4934
THE COMPANY OWNED OUTLETS WERE OWNED AND OPERATED BY OUR AFFILIATE, CLUB PILATES, LLC.
TABLE 2
TRANSFER OF OUTLETS FROM FRANCHISEES TO NEW OWNERS
(OTHER THAN CLUB PILATES FRANCHISE, LLC)
FOR THE YEARS 204*2014 TO 20163844
STATE YEAR NUMBER OF TRANSFERS

20143043 0
TOTAL OUTLETS 20152614 0
30452016 0
TABLE 3
STATUS OF SINGLE UNIT FRANCHISE OUTLETS
FOR YEARS 20442014 TO 20163044
CEASED OUTLETS
OUTLETS REACQUIRED
OUTLETS TERMI- NON- OPERATIONS AT END
STATE YEAR AT START BY
OPENED NATIONS RENEWALS -OTHER OFTHE
OF YEAR FRANCHISOR
REASONS YEAR
2014
0 0 0 0 0 0 0
20U
2015
AL 0 01 0 0 0 0 01
3044
2045
01 40 0 0 0 0 1
2016
69
CEASED OUTLETS
OUTLETS REACQUIRED
OF YEAR FRANCHISOR
REASONS YEAR
5043
01 40 0 0 0 0 1
2014
AZ
3814 4 0 0 0 G 6 4
2015 1 1 0 0 0 0 2
5043
€A 42 72 81 0 0 0 S3
2016
CA 2014 8 37 0 0 0 0 4615
2015 4615 14 6 0 0 0 5423
5043
CO 023 013 02 0 0 0 034
2016
CO 2014 0 1 0 0 0 0 1
2015 1 2 0 0 0 0 3
5043
A= 03 03 0 0 0 0 06
2016
FL 2014 0 0 0 0 0 0 0
2015 0 1 0 0 0 0 1
5043
KS 01 01 0 0 0 0 02
2016
GA 2014 0 0 0 0 0 0 0
2015 0 40 0 0 0 0 40
5043
MG 0 01 0 0 0 0 01
2016
IL
2014 0 0 0 0 0 0 0
2015 0 40 0 0 0 0 40
5043
m 0 1 0 0 0 0 1
2016
IN 2014 40 0 0 0 0 0 40
2015 40 0 0 0 0 0 40
5043
m 0 01 0 0 0 0 01
2016
KS 2014 0 0 0 0 0 0 0
2015 0 1 0 0 0 0 1
2016 1 0 o 0 0 0 1
70
OUTLETS CEASED OUTLETS
REACQUIRED
OF YEAR FRANCHISOR
REASONS YEAR
2014 0 0 0 0 0 0 o
MD 2015 0 1 Q 0 0 0 1
2016 1 1 0 0 0 0 2
2014 1 0 0 0 0 0 1
Mi 2015 1 0 0 0 0 0 1
2016 1 1 0 0 0 0 2
2014 0 0 0 0 0 0 0
MN 2015 0 0 0 0 0 0 0
2016 o 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
MO 2015 0 0 o 0 0 0 0
2016 o 1 0 0 0 0 1
2014 0 o 0 0 0 0 0
MT 2015 0 0 o 0 0 0 0
2016 o 1 0 0 0 0 1
2014 0 Q 0 0 0 0 0
NJ 2015 0 0 0 Q 0 0 0
2016 0 4 0 0 Q 0 4
2014 0 o 0 0 0 0 0
NV 2015 0 2 0 0 0 0 2
2016 2 1 0 0 o o 3
2014 0 0 0 o 0 0 0
OR 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
2015 0 0 0 0 0 0 0
TN
2016 0 1 0 0 0 0 1
5043
0 0 0 0 0 0 0
2014
TX
2015 0 1 0 0 0 0 1
2016 1 3 0 0 0 0 4
VA 2014 0 0 0 0 0 0 0
2015 0 40 0 0 0 0 4fi
71
OUTLETS CEASED OUTLETS
REACQUIRED
OF YEAR FRANCHISOR
REASONS YEAR
30i3
WA 0 81 0 0 0 0 01
2016
WA 2014 0 0 0 0 0 0 0
2015 0 2 0 0 0 0 2
2013
WI 02 0 0 0 0 0 02
2016
WI 2014 0 1 0 0 0 0 1
2015 1 0 0 0 0 0 1
2013
TOTAL 1 90 0 0 0 0 ±01
2016
TOTAL 2014 10 489 0 0 0 0 3019
2015 2019 26 6 0 0 0 4039
2016 39 38 3 0 0 0 74
TABLE 4
STATUS OF COMPANY-OWNED OUTLETS*
FOR YEARS 34132014 TO 20162044
STATE YEAR OUTLETS OUTLETS OUTLETS OUTLETS OUTLETS OUTLETS AT

AT START OPENED REACQUIRED CLOSED SOLD TO END OF THE
OF YEAR FROM FRANCHISEE YEAR
FRANCHISEE
CA 30i3 45 40 0 0 0 5
2014
50±4 5 0 0 0 81 54
2015
5015 54 01 0 0 12 4 3
2016
TOTAL 5013 45 10 0 0 0 5
2014
7015 5 0 0 0 81 54
aeM
5015 54 01 0 0 12 43
2016
""Tho Company Owned Outlets wore owned and operated by our affiliate.
72
TABLE 5
PROJECTED OPENINGS AS OF DECEMBER 31, 2016SG44
PROJECTED NEW
UNIT FRANCHISE PROJECTED NEW COMPANY-
FRANCHISED OUTLETS
STATE AGREEMENTS SIGNED BUT OWNED OUTLETS IN THE NEXT
IN THE NEXT FISCAL
OUTLETS NOT OPENED FISCAL YEAR
YEAR
AZAL 3-1 40 0
AZ 6 6 0
CA 3330 413 4-0
CO 24 33 0
MDCT 31 1 0
a 10 10 0
GA 4 3 o
ID 2 0 0
IL 5 5 0
WIN 1 1 0
MQMA 21 1 o
MD 4 1 0
Ml 2 2 0
MN 4 2 0
MTMO 1 1 0
NC 4 3 o
NJ 6 5 0
NV 42 40 0
NY 6 3 0
OH 1 1 0
OK 1 0 0
TXOR 32 2 0
TN 2 2 0
TX 14 8 0
UT 2 2 0
73
PROJECTED NEW
FRANCHISED OUTLETS
IN THE NEXT FISCAL
YEAR
VA 2 2 0
WA 4-2 81 0
WI 3 1 o
TOTAL 46123 4479 -w
A list of the names, addresses and telephone numbers of our current franchisees as of the Issuance Date of this
Disclosure Document is attached as Exhibit H.
A list of the names, addresses and telephone numbers of our franchisees who have had a franchise terminated,
canceled, not renewed or otherwise voluntarily or involuntarily ceased to do business under the franchise
agreement during the most recently completed fiscal year or who have not communicated with us within 10
weeks of the issuance date of this franchise disclosure document, is attached as Exhibit I.
In the last three fiscal years, none of our franchisees have entered any confidentiality agreements that restrict
their ability to speak openly about their experience with our franchise system.
There are no trademark-specific franchisee organizations.
If you buy the franchise offered in this disclosure document, your contact information may be disclosed to other
buyers when you leave the franchise system.
ITEM 21 FINANCIAL STATEMENTS
We have not been in business for three years or more and cannot include all the financial statements
required by the Rule for our last three fiscal years. Attached to this disclosure document as Exhibit C are our
audited financials for tho poriod from March 12, 2015 (our incoption) throufihfiscal years ending December 31,
2016 and December 31. 2015.- Our fiscal year ends on December 31 of each year.
ITEM 22 CONTRACTS
The following agreements are attached to this Disclosure Document
Exhibit A Franchise Agreement and Exhibits

Exhibit 1 Authorized Location Addendum
Exhibit 2 Electronic Funds Transfer Agreement
Exhibit 3 Electronic Debit Authorization
Exhibit 4 Guarantee
Exhibit 5 Addendum to Lease
Exhibit D Statement of Prospective Franchisee
Exhibit F Form of General Release
Exhibit G State Specific Addenda
Exhibit J Development Agreement
74
ITEM 23 RECEIPTS
Exhibit K to this Franchise Disclosure Document contains a detachable document, in duplicate,

acknowledging receipt of this Franchise Disclosure Document by a prospective franchisee. You should sign both
copies of the Receipt. You should retain one signed copy for your records and return the other signed copy to
our Chief Operating Officer at the following address: Shaun Grove at Club Pilates Franchise, LLC, 3185 Pullman
Street, Costa Mesa, CA 92626, and at (949) 346-9794.
75
Exhibit A
To Franchise Disclosure Document
FRANCHISE AGREEMENT AND RELATED EXHIBITS

30462017 Franchise Disclosure Document - Exhibits
© 30462017 Club Pilates Franchise, LLC

30462017 Franchise Agreement
TABLE OF CONTENTS
ARTICLE PAGE
1. GRANT OF FRANCHISE; LOCATION 2

2. ACCEPTANCE BY FRANCHISEE 3
3. TERM AND RENEWAL 4
4. TRADEMARK STANDARDS 6
5. FEES ....7
6.
7.
•••••••••••••••••••••••••I
FRANCHISOR SERVICES
FACILITY STANDARDS, LEASE AND CONSTRUCTION
12
17
8. STUDIO IMAGE AND OPERATING STANDARDS 19
9. ADVERTISING AND MARKETING 23
10. FINANCIAL REPORTS, AUDITS, COMPUTER SYSTEM AND INSURANCE
REQUIREMENTS 27
11. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION 30
12. CONFIDENTIAL INFORMATION 31
13. COVENANTS NOT TO COMPETE 32
14. TRANSFER OF INTEREST 34
15. DEFAULT AND TERMINATION OF AGREEMENT 35
16. RESOLUTION OF DISPUTES 41
17. MISCELLANEOUS PROVISIONS 45
18. ACKNOWLEDGMENTS 47
19. ENTIRE AGREEMENT 49
EXHIBITS
EXHIBIT 1 AUTHORIZED LOCATION ADDENDUM

EXHIBIT 2 ELECTRONIC FUNDS TRANSFER AGREEMENT
EXHIBIT 3 ELECTRONIC DEBIT AUTHORIZATION
EXHIBIT 4 GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGEMENT
EXHIBIT 5 ADDENDUM TO LEASE

CLUB PILATES
FRANCHISE AGREEMENT
In a number of places in this Franchise Agreement, you are asked to initial certain items to
show that they have been fully discussed with you, and read, understood and agreed to by
you. Initialing those areas does not lessen the importance of other areas or mean they are
not fully enforceable.
This Club Pilates Franchise Agreement (this "Agreement") is entered into as of the
day of , 20 between Club Pilates Franchise, LLC, a Delaware
limited liability company, doing business as "Club Pilates" ("Franchisor") and
, or his/her/their assignee, if a partnership,
corporation or limited liability company is later formed ("Franchisee"), upon the following terms,
conditions, covenants and agreements:
RECITALS
A. Club Pilates Franchise, LLC, a Delaware limited liability company ("Licensor"), owns and
has developed and administers a system and franchise opportunity, including various fitness and
exercise techniques and methods, trade secrets, copyrights, confidential and proprietary
information and other intellectual property rights (collectively, the "System") for the establishment
and operation of Pilates fitness studios ("Club Pilates Studios") identified by the "Club Pilates"
trade name and other trademarks and service marks licensed hereunder (the "Marks").
B. The System includes the Marks and trade secrets, proprietary methods and information and
procedures for the establishment and operation of Club Pilates Studios, including, without
limitation, confidential manuals (collectively, the "Manual"), training methods, fitness equipment,
furniture and fixtures, marketing, advertising and sales promotions, cost controls, accounting and
reporting procedures, personnel management, distinctive interior design and display procedures,
and color scheme and decor (collectively, the "Trade Dress").
C. Franchisor grants to qualified persons who are willing to undertake the required
investment and effort, afranchiseto own and operate a Club Pilates Studio offering (a) Pilates
instruction and related services that Franchisor authorizes (collectively, the "Approved Services"),
and (b) certain merchandise and other products Franchisor authorizes for sale in conjunction with
the Approved Services and Studio operations (collectively, the "Approved Products"), all while
utilizing the System and Marks.
D. Franchisee desires to obtain a franchise to use the System and Marks in the development
and operation of a Club Pilates Studio at the location specified in this Agreement (the "Studio").
E. Franchisee has independently investigated the business contemplated by this Agreement,

and recognizes that the nature of the business may change over time, that an investment in a Club
Pilates brand Studio involves business risks, and that the venture's success depends primarily upon
Franchisee's business abilities and efforts.
©30162017 Club Pilates Franchise, LLC A-l

NO^THEREFOR^mconsider^
byFranchiseeandofêmu^ covens
ôws:
1 GRANTOFFRANCmS^LOCATION
LI Grant Y o u a g r e e a t ^ times faith^^honestiy anddihgentiy toper^rmyour

obligations under this Agreement and to use your best efforts to
Studio. êeordingiy,Franebisor grants to Franebisee tbe nonêxeiusive right and license to:
A. Establish and operateasingle Club Pilates Studio utilizing only the System and the
ClubPilatesMarksât a loeationthathasbeen authorizedby Franchisor (the "Authorized
Locations in accordance with the provisions and for the term specified in this A ^
B. UseonlytheMarksofFranchisorunderthetermsofthisAgreementto identify and

promote the Studio offered hereunder and
C. Use theproprietary fitness andexercisemethods and know-how, as set forth

periodically in Franchisor's operations manual, other manuals, training programs, or o t h e ^
communicated to Franchisee.
12 Site An^roval Process. Franchisor will assist Franchisee in connection with site êlect^n
by: (i) providing Franchisee with its then^current site selection criteria, to the extent such cr^^^
has been reduced to writings and (ii) providing Franchisee with access toalocal real estate broker
that is fîliarwithFranchlsor'sconfidential site evaluation criteria, to the extent F r ^
established relationships with such brokers in or around the Designated Market Area (as defined
inSection 1.3 below).Franchisor will use commercially reasonable efforts to approve or rejecta
proposal foranAuthorized Location within 30daysofthedateFranchisorreceives all reasonably^
requested informationregardingtheproposedsite^Franchisor'sapprovaloftheproposedsi^^
be deemedtoheahindingaddendumtothis Agreement upon Franchisor and Franchisee's
execution ofFxhihitLwhich is attached hereto and incorporated herein hy referenced and which
will set forth the Authorized Location. Franchisor agrees not to unreasonably withhold approval
ofasite that meets its site criteria. Franchisee acknowledges that Franchisor's approval o f a
proposed site is permission only and not an assurance or guaranty to Franchisee ofthe availability,
suitability or success ofalocation, and cannot createaliability for Franchisor. While Franchisor
will providesite selection assistance as specifiedin Section ^.1 herein, Franchiseealone is
ultimately responsible for selecting and developing an acceptable location for the Studio.
Franchisee agrees to hold Franchisor harmless with respect to tbe selection of the Authorized
Location by Franchisee. Franchisee must obtain lawful possession ofan Authorized Location by
lease, purchase or other method and open for regular, continuous business within six(^) months
of the date that Franchisor accepts this Agreement. The openingdate may be extended an
additional three (3) months in certain instances, as explained in Section22D, below. Franchisor
hastherighttoternâtethisAgreementifF^
Franchisor'sapproval, within thetimeperiodallottedabove
©30462017 Club Pilates Franchise, LLC A-2

1.3 Authorized Location & Designated Territory. If the Authorized Location has not been
identified at the time this Agreement is signed, Franchisee must identify a site approved by
Franchisor within the following geographical area:
("Designated Market Area"). Once the Authorized Location for the Studio has been identified in
the Authorized Location Addendum, attached hereto as Exhibit 1. Franchisor agrees that, so long
as Franchisee is in good standing, neither it nor its affiliates will operate or establish, or authorize
another Club Pilates franchisee to operate or establish, a Studio using the Club Pilates System or
Marks within a certain geographical area surrounding the Authorized Location ("Designated
Territoiy"). The Designated Territory, if any, will be defined in Exhibit 1. hereto.
1.4 Rights Reserved to Franchisor. Notwithstanding anything contained in this Agreement,

Franchisor and its affiliates hereby reserve the exclusive right to: (i) open and operate, and license
third parties the right to open or operate, other Studios utilizing the Marks and System outside the
Designated Territory; (ii) market, offer and sell products and services similar to those offered by
the Franchised Business and other Studios (such as private label products that Franchisor may
develop) through alternate channels of distribution, including without limitation, via the Internet
and other e-commerce channels, catalog sales, direct mail or wholesale, at any location; (iii)
acquire, or be acquired by, any company, including a company operating one or more businesses
offering products or services similar to those offered by a Studio, located within or outside your
Designated Territory, and subsequently operate (or license a third party the right to operate) these
locations; (iv) open and operate, or license third parties the right to open or operate, businesses
that offer products and services similar to the Franchised Business under marks other than the
Marks at any location; and (v) use, and license others the right to use, the Marks and System to
engage in any other activity not expressly prohibited by this Agreement.
I have read Article 1, understand it, and agree to

comply with each of its Sections.
Your Initials: /
2. ACCEPTANCE BY FRANCHISEE
2.1 Acceptance bv Franchisee. Franchisee accepts this Agreement and the license granted
herein and agrees to develop and operate the Studio on the terms and conditions specified herein.
Franchisee agrees to follow the System requirements in the operation of its Studio, including,
without limitation, its facilities, staff, advertising, operations, and all other aspects of Franchisor's
business and the System now in effect and changed periodically. Franchisee (or, if Franchisee is
an entity, one of its operating principals) and its proposed Designated Manager (as defined in
Section 5.5(B) of this Agreement) must attend and complete the appropriate initial training to
Franchisor's satisfaction, as set forth in Section 6.3 of this Agreement.
2.2 Conditions. The rights being licensed herein are subject, without limitation, to the
following conditions:

A. Franchisee's business and the Studio shall be identified only by those Marks
approved in writing by Franchisor with at least one exterior sign as designated by Franchisor.
B. Concurrently, with the signing of this Agreement, Franchisee must execute a

personal guaranty in the form attached hereto as Exhibit 4 ("Personal Guaranty"). In the event
Franchisee is a legal entity having more than one owner, all owners, shareholders, partners, joint
venturers, and any other person who directly or indirectly owns a 10% or greater interest in
Franchisee (the "Owners") must execute the Personal Guaranty. Any person or entity that at any
time after the date of this Agreement becomes an Owner, pursuant to Section 14 or otherwise,
shall, as a condition of becoming an Owner, execute Franchisor's then-current form of Personal
Guaranty.
C. Franchisee shall submit the lease for the Studio to Franchisor for its written consent
before Franchisee executes the lease for the Authorized Location. The lease must contain the
provisions outlined in Section 7.2 and Exhibit 5 ("Lease Addendum").
D. Franchisee agrees that it shall open the Studio for regular, continuous business no
later than six (6) months after this Agreement is signed by Franchisor. If, through no fault of
Franchisee, the Studio has not opened after six (6) months. Franchisor may agree in writing to
provide Franchisee with an additional three (3) months to open its Studio if Franchisee (a) has
already secured an approved premises for its Studio, and (b) is otherwise making diligent and
continuous efforts to buildout and otherwise prepare its Franchised Business for opening
throughout the six (6) month period following the execution of this Agreement.
E. Franchisee agrees at all times to comply with the Manual, standards, operating
systems, and other aspects of the System (collectively, the "System Standards") prescribed by
Franchisor, which are subject to change at Franchisor's discretion.

Your Initials: /
3. TERM AND RENEWAL
3.1 Term. The term of this Agreement shall be for a period of ten (10) years beginning on the
date this Agreement is accepted by Franchisor, unless sooner terminated under Section 15. The
conditions to obtain a renewal Club Pilatesfranchiseagreement are those stated below in Section
3.2.
3.2 Renewal. Unless terminated at an earlier date, upon the expiration of the initial term,
Franchisee shall have the right to renew this Agreement for two (2) consecutive additional five (5)
year terms, subject to satisfaction of each of the following conditions:
A. Prior to each such renewal, Franchisee shall execute Franchisor's standard form of
franchise agreement being offered at the time of each such renewal. The provisions of each such
©3Q162017 Club Pilates Franchise, LLC A-4
renewsfranchiseagreement may
meindmg, without limitation, eh^
paytherenewalfeespeeifred infection 3.2^,instead of the initial franchisee Franchisee's
failure or refusal to execute and return Franchisor's then current standard form Franchise
Agreement toFranchisorwithinthirty (30) days afrerreceipthyFranchiseeshallconstitute
Franchisee'selection not to renew;
B. Franchisee shall demonstrate that it has the right to remain in possession of the
Authorized Location for the duration of the renewal term, or that it has heenahle to secure and
develop an alternative site acceptable to Franchisor;
G Inconsiderationofeachsuchrenewal ofthefranchise,Franchisee shall executea

general release in the form and substance satisfactory to Franchisor,releasing any and all claims
against Franchisor and its afriliates, officers, directors, employees and agents;
D Franchisee shall have completed or made arrangements to make, at Franchisee's

expense, such renovation and modernization of the Studio, including the interior and exterior of
the building, grounds, leasehold improvements, signs, furnishings, fixtures, equipment,
surveillancecameras, and decorasFranchisorreasonablyrequires so the Studio conforms with the
then-current standards and image ofFranchisor;
F. Franchisee, during the term ofthis Agreement, shall have substantially complied
with all ofthe provisionsofthis Agreement andall other agreements with Franchisor,and shall be
incompliancewiththeManualandwithFranchisor'spo^cles, standards and specifications on the
date ofthe notice ofrenewal and at the expiration ofthe initial term;
F. Franchisee shall pay to Franchisorarenewal fee equal to ^10,000 forasuccessor

franchise; and
G Franchisee shall have given Franchisor written notice ofrenewal no less tlian 90
days or more thanlÔ days before expiration of the initial term.
3.3 Franehiso^s Refusal to Renew Franchise. Franchisormavrefusetorenewthe franchise

if Franchisee is in default under this Agreement, or any other agreement with Franchisor or an
af^liateofFranchisor, or ifFranchisee fails to satisfy any ofthe foregoing conditions. Subject to
the above, Franchisor will not unreasonably deny renewal ofaFranchise.
3.4 NoticeofFxniraônReoniredhvLaw^faonlicable law reouires that Franchisor îvea

longerperiodofnotice to Franchisee than herein provided priorto the expiration ofthe initial term
or any additional term, Franchisor will give such additional required notice. I f Franchisor does
not give such required additional notice, this Agreement shall remain in effect onamonth-to-
month basis until Franchisee has received such required notice.
Your Initials: /
©^03^2017 Club Pilates Franchise, LLC A-5

^ T R A D E M A R K STANDARDS
41 NameandOwn^^F^ch^^now^^^^^
and all other M a r k s ^ n o w o r i n ^ f u ^ e ^ o r will be part oftheS
reeognizesthat the Marks are the soleandexelnsivepropertyofFraneh^
Franchisor. Franchisee f ^ h e r a e l ^ o w ^
solely from this Agreement and is hmited to the conduct ofaStudio pursuant to and in comph^^
with this Agreement and ali applicable standards, specifications and operating procedures
prescribed by Franchisor from time to time. Any unauthorized use of the Marks by Franchisee
shallheabreachofthisAgreementandanmfrmgemento^
Franchisee's use ofthe Marks inures to the benefit ofFranchisor, which owns all goodwill now
andhereafrer associated with the Marks. Franchisee agrees not to contest ownershipor registration
ofthe Marks Franchisor(andôritsaffiliates)ownsallright,titleandinterestin^^^
andFranchisee has and acquires hereby only the qualified license granted in this Agreement.
Franchisor renresents and warrants ^hat Franchisor or its affiliates own ^^^^
any liens or encumbrances^ and that Franchisor has theright to license the use ofthe
the licenseconvevedbytlnsA^cement does not mfrin^canyvaiid^renl^rceabletradem^^
owned by any other nartv. Franchisor agrees to indemnify Franchisee from any claims^ costs or
fees associated with any violation of tins ^
innnediatelynotifiedofanythirdnartychallenêtoFranohisee'sauthor^
tins Agreement, and Franchisor has tbe ri^htt^control any related i i t i ^ a ^ ^
42 Use
A. Franchisee shall notuse any Mark as part of any corporate or business name
with any prefix, suffix or other modifying words, terms, designs or symbols, or in any modified
form. Franchisee shalldisplay and use the Marks only inthe manner and formprescribedor
authorized by Franchisor and shall conduct no other business than that prescribed hy Franchisor.
Franchiseeshallnotuseanyothermark,name,connnercial symbol orlogotype in connection with
the operationof the Studio and shall not market any product relating totheStudiowithout
Franchisor's written consent, and if such consent is granted, such product must be marketed ina
manner acceptable to Franchisor.Franchisor may also permit Franchisee to use from time to time
other trademarks, service marks, trade names and commercial symbols as rnay be designated by
Franchisor in writing.
B. Franchisee agrees togivesuch notices of trademark andservicemark

registrations and copyrights as Franchisor specifies and to obtain such fictitious or assumed name
registrations as may be required under applicable law.
C Franchisee is prohibited froni using the Marks in advertising, promotion or

otherwise, without the appropriate ^ " o r " ^ (copyright and registration marks) or the
designations"^" o r " ^ " (trademark and servicemark), whereapplicable
©30162017 CiubPiiatesFraoobise^LC A6
30162017 Franobise Agreement
4.3 L^gaôn Franchisee agrees to notify Franchisor i n ^ e d i a t ^
aware that any person who is notahcenseeofFranchisor is nsing or infringing npon any of the
Marks. Franchisee may not connnnnicate with any person other than Franchisor and its counsel
in connection with any such use or infringement. Franchisor wiii have discretion to determine
what steps, if anyâre to he taken in any instance of unauthorized use or infringement of any ofits
Marks and wiii have complete control ofanyhtigation or settlement in connection with any claim
ofan infringementorunfaircompetitionorunauthorizedusewithrespectto the Marks. Franchisee
will execute any and all instruments and documents and will assist and cooperate with any suit or
other action undertaken hy Franchisor with respect to such unauthorized use or infringement such
ashy giving testimony or furnishing documents or other evidence. Franchisor will he responsible
for legal expenses incurred hy Franchisor in connection with any litigation or other legal
proceeding involving such third party. Franchisor shall not he liable for any legal expenses of
Franchisee unless approved in writing by Franchisor in its discretion.
44 Modêaô^ Diseontmuanee or Suhs^fôn Franchisor reserves tbe right, if

necessary inFranchisor's sole judgment,to change the principalMark(s) of theSystemona
national or regional basis, and upon reasonable notice, Franchisee shall at its expense adoptanew
principal Mark(s) designated byFranchisortoidentify the Studio. Franchisor shall have no
liability or obligation whatsoever withrespect to Franchisee'schange of any lârk.
4.5 Franehisors Revenues Franchisoranditsaffrhates may offer to sell to Franchisee ata

reasonable profit variousgoods and services, and reservethe right toreceivefeesorother
consideration in connection with sales promotion and advertising programs associated with the
Marks or from System vendors.

Your Initials: /
5. FEES
5.1 Initial Franchise Fee. Franchisee agrees to pay Franchisor an initial franchise fee in the
sum of Forty-Nine Thousand Five-Hundred Dollars ($49,500) for a single Studio upon execution
of this Agreement (the "Initial Franchise Fee") in the form of a cashier's check or bank wire. The
Initial Franchise Fee shall be fully earned by Franchisor upon payment and is not refundable under
any circumstance.
5.2 Royalty Fee. Beginning on the day the Studio starts generating revenue from its business
operations, and continuing during the Term of this Agreement, Franchisee agrees to pay
Franchisor, weekly, without setoff, credit or deduction of any nature, a royalty fee equal to six
percent (6%) of the Gross Sales (as that term is defined in Section 5.3, below) generated by the
Studio over the immediately preceding week (the "Royalty" or "Royalty Fee").
5.3 Gross Sales. Gross Sales means the total revenue generated by the Studio, including all
revenue generated from the sale and provision of any and all gift cards and other approved products

and services at or through the Studio and all proceeds from any business interruption insurance
related to the non-operation of the Studio, whether such revenues are evidenced by cash, check,
credit, charge, account, barter or exchange. "Gross Sales" does not include (a) any sales tax and
equivalent taxes that are collected by Franchisee for or on behalf of any governmental taxing
authority and paid thereto,-^ (b) the value of any allowance issued or granted to any client of the
Studio that is credited in good faith by Franchisee in full or partial satisfaction of the price of the
approved products or services offered in connection with the Studior, or (c) the provision ofthe
Teacher Training Program at tbe Studio.

5.4 Initial FFE Package and Proprietary Initial Inventory Kit: Studio Management
Software.
A. Prior to opening the Studio governed by this Agreement, Franchisee must purchase:
(i) an initial package of furniture, fixtures and equipment that is designed to provide Franchisee
with certain items needed in connection with outfitting, equipping and otherwise building out of
the Studio (the "Initial FEE Package"); and (ii) opening inventory comprised of certain branded
and other inventory that may be resold at the Studio (the "Proprietary Initial Inventory Kit"). Over
the term of this Agreement, Franchisee will be responsible for (a) maintaining and/or replacing the
items comprising the Initial FFE Package, and (b) maintaining certain levels of inventory with
respect to those items comprising the Proprietary Initial Inventory Kit, as set forth more fully in
this Agreement.
B. Franchisee further agrees to install at its expense and use the membership
accounting, cost control, point of sale ("POS") and inventory control systems through the supplier
Franchisor designates. The designated, or approved, supplier(s) for these services will be updated
in the Manuals as changes are made. Over the term of this Agreement, Franchisee will also be
required to pay Franchisor's then-current designated provider for the software that Franchisor
prescribes for use in connection with the Studio and the POS (the "Software Fee"), which may be
modified upon reasonable written notice to Franchisee.
5.5 Overview of Training Programs and Fees. The parties agree and acknowledge that: (i)
Franchisee or, if Franchisee is an entity, at least one (I) of Franchisee's operating principals (an
"Operating Principal") must complete the "Owner/Operator" Module and Franchisor's proprietary
initial training program (the "Initial Training Program"), as described more fully in Section 6.3.A
below; and (ii) each instructor that Franchisee engages to provide any of the Approved Services at
its Studio must (a) have at least 450 hours of Pilates instruction and meet certain other standard
criteria in the industry to become a certified Pilates instructor (the "Certified Pilates
Requirements"), and (b) complete Franchisor's proprietary "OrientationBridge Training Program"
that is designed to provide instructors with additional guidelines and instruction for providing the
Approved Services in accordance with the System (the "OrientationBridge Training Program").
The following fees are associated with the foregoing training and any additional training that
Franchisor or its designee might provide in connection with the Studio.
A. Initial Training Program. Franchisee will not be required to pay any training fee or
tuition in connection with individuals that attend the Initial Training Program prior to the opening
ofthe Studio, provided such individuals all attend at the same time. For those individuals that wish
to complete the Initial Training Program at a time other than when Franchisee (or, if applicable,
its Operating Principal) attends the Initial Training Program, Franchisor may charge such
individuals its then-current training fee (the "Training Fee"). Franchisor may also designate a
third-party individual that it approves to manage the day-to-day operations of the Studio (a
"Designated Manager"), but any such individual must at least complete the Owner/Operator
Module ofthe Initial Training Program prior to assuming any management responsibilities at the
Studio (with Franchisee paying the Training Fees associated therewith, if any)..

B. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
(1) IfF^chiseeôneofôp^mg principalis^

the Studio during normal business hoi^s to manage the day to day operatic
Franchisee nrnst appoint an individual to serve as the designated manager ofthe Studio
("Designated manager") ^Franchisee is the owner of multiple open Studios, the^
must ensure that either (a) Franchisee(orone of its operating principals),or(h)aDesignated
Manager, is on-site at the Studio during business hours to manage the day to day operations of
each such Studio.
(2) The Designated manager must attend and complete, to Franchisor's

satisfaction, the designated manager training program that takes place at Franchisor's cor^^
office priortotheopeningoftheStodio(the"DesignatedManagerTrainingFrogram'').Franchisee
is responsible for all costs associated with the Designated Manager's attendance at the training
programincluding, travel, food, lodgingand wage costs. Franchisor does not chargeatrainingfê
in connection with such training.
C ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
ofthe Approved Services atFranchisee's Studio must: (i) meet the CertifiedFilatesRequirem^
andotherwisebecertifredtoprovideFilates^
(ii) subsequently complete the OrientationBridge Training Frogram^
atthefnitialTraining Program ifthe instructor is in attendance(atno additional cost to Fr^^
or instructor), or (b)at any time after Franchisees, i f appropriate, its Operating Frinc^^
DesignatedManager) attends thelnitial TrainingFrogram viaremoteinstruction (videoor
webinar) or, if determined appropriate by the parties,viainperson instruction at Franchi^^^
headquarters or the Studio. There are no training or other fees associated with the
OrientationBridge Training Program o ^
that Franchisee will be responsible for in connection with ensuring that its instructors a ^
complete such OricntotionBridgeTraining Pro-am prior to providing anyApproved Serviced at
the Studio(whether as part ofthe InitialTraining Program or otherwise).
D. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ . F r a n c h i s e e will have the option of providingafull

teacher training''course to clienteie of theStudio which includesboth:(i) the i n s ^
necessary to comply with the Certified Pilates Requirements; and (ii) the OrientationBri^^^
Trair^Program(collectively,the "Teacher
the TeacherTraining Program at the Studio, that individual will payasingle fee o f $ 4 , ^
(a)$2,^bemgpaidouttoFranchisorforcertainmaterialsthatitprovides in connection
training, and (b) the balance of $2,750 paid out to Franchisee's Studio(or other S t u d i o s
actually providing the instruction to the client), fnorderto provide the Teacher Training Pr^^
at the Studio, such training will need to be provided hy an instructor that(a)isaCertifiedPilat^^
h^structor that has completedtheOrientationBridgeTrainingProâmând(b)isothe^^
approved by Franchisor asa"Master Instructor''(the criteria for which will be set forthmt^^
Manual or otherwise in writing by Franchisor).
F. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Franchisor may provide or request that France

and certain of its management personnel attend and complete up to five (5) days of
©30162017 OubPiiatesFraocbise^LC A10

additional/refresher training each year, but Franchisor will not charge Franchisee any Training Fee
in connection with such required training (but Franchisee will be responsible for the costs
associated with attending training at Franchisor's designated training facility).
F. No Training Fee for Minor, Day-to-Day Assistance. Franchisor will not charge
Franchisee any fees in connection with minor, day-to-day assistance that Franchisor provides
remotely over the phone, via email/fax or other electronic channel of communication, which
Franchisee understands and acknowledges will be provided subject to the availability of
Franchisor's personnel.
G. Costs and Expenses. Franchisee will be required to pay all costs and expenses
incurred in connection with any training that Franchisee or its personnel attends in connection with
Studio, including those costs related to travel, lodging, meals and (if appropriate) wages.
H. Training Fee for Certain Training. Franchisor reserves the right to charge its then-
current training fee in connection with training that (a) Franchisee requests Franchisor provide
(other than in connection with OrientationBridge Training Training that is provided by Franchisor
personnel at Franchisor's headquarters), or (b) Franchisor provides on-site at Franchisee's Studio
("Training Fee").
5.6 Fund Contribution. Franchisor has established a creative brand fund to promote the
System, Marks and CLUB PILATES brand generally (the "Fund"), Franchisee is required to
contribute up to two percent (2%) of the Gross Sales of its Studio to this Fund (the "Fund
Contribution"), commencing once the Studio opens for operations. The Fund Contribution will
typically be paid in the same manner and at the same interval that the Royalty Fee is collected
(based on the Gross Sales of the Studio over the immediately preceding reporting period).
5.7 Electronic Transfer: Right to Modify CoUection Interval.
A. The Royalty Fee, Fund Contribution and any other fees owed to Franchisor or its
affiliates, will be automatically debited from Franchisee's point-of-sale operating account
administered by the designated supplier of point-of-sale services on a weekly basis throughout the
Term, unless Franchisor provides reasonable written notice that Franchisor is modifying the
collection interval (e.g., notifying Franchisee that Franchisor will be collecting Royalty Fee, Fund
Contribution and other recurring amounts due on a monthly rather than weekly basis, with such
monthly fees based on the Gross Sales of the Studio over the preceding calendar month).
B. All amounts due to Franchisor for the purchase of products, services or otherwise
are due upon receipt of an invoice from Franchisor. Any payment or report not actually received
by Franchisor on or before the due date is overdue.
C. Franchisee agrees to complete and execute an "Electronic Funds Transfer

Agreement" (attached as Exhibit 2 to this Agreement) and any other form, including, without
limitation, an "Electronic Debit Authorization" (attached as Exhibit 3 to this Agreement) for the
purpose of authorizing an electronic debit, and to submit any information required by Franchisor
for such authorization.
©00162017 Club Pilates Franchise, LLC A-ll

D. Franchisee is required to use only the POS system provided by the designated
supplier and will pay the designated provider directly for all fees associated with the use ofthe
designated provider's software. Franchisee is not allowed to use an unapproved external terminal
to process transactions.
5.8 Interest and Late Charges. Amounts due to Franchisor (except interest on unpaid
amounts due) not paid when due shall bear interest from the date due until paid at the lesser of one
and one-half percent (1.5%) per month, or the highest rate of interest allowed by law. Franchisor
may also recover its reasonable attorneys' fees, costs and other expenses incurred in collecting
amounts owed by Franchisee.

Your Initials: /
6. FRANCHISOR SERVICES
6.1 Site Selection and Lease Negotiations. Although Franchisor will provide the site
selection assistance described in Section 1.2 of this Agreement, Franchisee is solely responsible
for locating, obtaining and evaluating the suitability and prospects ofthe Studio location, for the
review and negotiation of its lease, and for hiring an attorney or other advisor to review and help
negotiate the lease. The Authorized Location must meet Franchisor's then-current System
standards and specifications, as set forth in the Manuals or otherwise in writing by Franchisor.
Franchisor reserves the right to charge a reasonable fee for performing any Franchisee-requested
on-site evaluation to cover incurred expenses, including, but not limited to, travel, lodging, meals
and wages. Franchisor agrees not to unreasonably withhold approval ofa site that meets its site
criteria.
6.2 Unit Development. Franchisor shall consult and advise Franchisee on the proper display
of the Marks, layout and design, procurement of Pilates/fitness equipment, reformers, spring
boards, chairs and other equipment, furniture, fixtures, surveillance cameras with audio, initial
inventories, recruiting personnel, and managing construction or remodeling of the Studio. After
Franchisee has executed a lease for the Authorized Location, Franchisor shall deliver to Franchisee
specifications and standards for building, equipment, furnishings, fixtures, surveillance cameras
with audio, layout, design and signs relating to the Authorized Location and shall provide
reasonable consultation in connection with the development of the Studio. Franchisee's architect
must make any layout, design and specifications provided by Franchisor site-specific. Franchisee
agrees to make no changes, alterations or modifications whatsoever to the selected layout and
design without obtaining prior written consent from Franchisor.
6.3 Training-Related Programs and Obligations. Franchisee agrees and acknowledges that
the following training obligations and requirements must be strictly complied with and adhered to
at all times during the Term:

A. ^ ^ ^ ^ ^ ^ ^ ^ ^
L Prior to opening^Studi^ Franchisee must ensure t h a ^ ^

if an entity, its Operating Principal completes the ownerôperator module of Franchisor's
proprietary Initial TrainingProgram(the"0êrÔperatorMod^
^business days at Franchisor's corporate headquarters or another training facil^^
designates; and (ii) at Franchisee's option, one ( l ) o r more individuals that are Certified Pi^^^
histructor(s)and that will he responsible for providing the Approved Ser^^
and complete the Orientatio^ridgc Training Program component ofthe h i i t i a l ^
2. IfFranchiseehasaDesignatedManagerasdescrihedinSection5^(B)ofthis
Agreement, Franchiseemust ensure that such Designated Manager completes the Designated
ManagerTrainingProgram, which willtypically last three(3)husinessdaysat Franchisor
corporateheadquarters or anothertraining facility Franchisor designates.
3. IfanyoftheindividualsdescrihedinthisSectionfailtosuccessfullycomplete
the applicable training required hy this Section before the time Franchisee is r e q u ^
Studio hereunder,Franchisormayterminate this Agreement.
B.
(1) ^ y individual that wishes to provide Pilates instruction or any ofthe other
Approved Services at the Studio must first(a) demonstrate that he/she has met all Certified P ^
RequirementsandisothîseaCertificdPilatesh^structor,and(b)completetbeOrie^
Trainin^Program(eitheraspartofthehiitial Training Program or at some point t ^ ^
instructionmaterialsandtestthatispartofthe Systemstandardsand specifications)..Franchi^^^
terminate this Agreement upon written notice toFranchisee in the event Franchisee permits the
Approved Services to be provided by any individual that doesnotmeet the criteria in this Section. If
Franchiseefailstocomply,FranchisorreservestherighttochargeFranchiseeitsthen-cur^
fee ("Penalty Fee'') for each day that Franchisee permitsanoncertified^trainedP^
who has not completed Franchisor's required trainingprogramtoprovidePilates instruction or any
oftheother Approved Services at the Studio.
(2) Franchisee may elect to have certain of its initial instructors and any
subsequent instructors that wish to provide the Approved Services at the Studio participate in
completing the OrientotionBridgeTraining Program component of our h i i t i a l T r a ^
remotely via webinar/video instruction, but Franchisor stronglyreconmiends that at least o^^
Franchisee'sinitialinstructorscometothefnitialTrainingProgramwithFranch^
OperatingPrincipal, as applicable) and complete the entire hiitialTraining Pr^
OrientationBridgeTraining Program components.
(3) l^theeventanindividual wishes to completetheOrientationBridge Training

Program at the Studio rather than as part ofthe hutial Training Program, then Franchisee
Designated Manager) will he responsible for accurately grading the test and e n s u r i n g ^
individual at issue passed the test in accordance with System standards.
©30462017 Oub Pilates Francbis^LLC

(4) The Studio must h a v e ^ ^ t o n e ^ ) ^
h^struetoraud that has eompieted^
ail times when auy Approved Services are hemg provided.
(5) Once a Certified Piiates Instructor has successtuiiy completed the

OrientationBridge Training Program, that individual may assist in the provision of the
OricntationBridgeTrainmgPro^^
provide the otber Approved Services). It is up to Franchisee whether or not it will charge Certi^^
Pilates histructors that wish to ohtain the O r i e n t
ensure that Franchisee does not disclose or otherwise use the OrientationBridgeTr^^
materials that Franchisor provides (including the test itself forany purpose other than the
Orientatio^ridgc Training Program that is held on-site at the Studio.
(6) Franchisee must otherwise ensure that: (i) any OrientationBridgcTrainingn

Program heldatthe Studio is performed in accordance with System standards and specifications;^
any individual that participates in the OrientotionBridgcTrauinig Pro-am
that program and passes any test that is provided inconnectionwith the program;and (iii) no
personnel providesPilatesinstructionorotherApprovedServicesatthe Studio unlessandunt^
personnel successfully completes the OrientationBridge Troining Program and passes the
corresponding test. Franchisee agrees that Franchisor, as part of its right to inspect and audit the
operations ofthe Franchised Business on an ongoing hasis,mayrequire that Franchiseedemonstrate
that all required personnel has participated in and successfully completed the Oriental
Training Program and corresponding test.
C Around t h e t ^
may send one (1) or more representatives to the Studio to (i) provide assistance and
recommendations regarding the opening and initial operations ofthe Studio, andôr(ii) provide
additional or refresher training associated with the OwnerÔperator Module andôr the
Orientatior^ridgeTrainmgProgram^ all as Franchisor determines appropriate in its di^^^
(collectively,the "Discretionary On-Site Assistance"). In the event Franchisornot^
that it will he providing the Discretionary On-Site Assistance, such assistance typically
(l)to two (2) days andFranchisee must ensure that Franchisee(orits Operating Principal) and all
other management personnel are in attendance at the Studio during those days.
D. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ v ^ ^ ^ ^ ^ ^ ^ ^ ^ Franchisee willhe
permitted to provide the Teacher TrainingFrogram at the Studio as part ofthe Approved Service^^
providedFranchiseehasaCertifiedPilatesInstructorthat(a)hascompletedourOrienta^^^^
T r a i n s Program, and (h)otherwise meets FranchisoBsthenc^^
Instructor" of theTeacher Training Program(which will he set forth in the Manual or in a n o ^
written directive from Franchisor).
^T^^TheTeacherTrainingProgramtypicallyinvolvesapproximately450to500
hours of instruction, including: (i) certain online"classroom^êhmar"traim^
Training") that can he completed remotely (at home, at Franchisee's Studio, or at another local
StudiothatisauthorizedtoprovidetheTeacherTrainingFrogram); and(ii) approximately 40
©30462017 C^hâtesFranê^LC
ofpî^"handôn"t^
mu^becomp^dâStudioîs^
Teacher Training Program aiso ineindes the OrientationBridge Training Program remote
orientationmateriais.
^
(2) ^ymdividnais that wish to provide A ^
have not completed the Certified Piiates Requirements wili he required to(a)attend and e
theTeacherTramingProgram,or(h)otherwisehecomeaCertifiedPiiatesInstruc^
the OrientationBridge Training Programâsdescrihed in Section63B^)oft^^^
before that individual can provide anyApproved Services at the Studio. Any violation of this
Section will he grounds for termination ofthis Agreement upon written notice hyPranch^^
(3) Franchisee agrees and acknowledges that Franchisor is entitled to and will
receive the amounts described in Section5^.C in connection with each individual that attends the
TeacherTrainingProgramatFranchisee'sStudio, which isconsideration forthe Webinar Training
materials and proprietary content developed therein. This amount, once remitted to Franchisor, is
deemed fully earned and is not refundable under any circumstances.
(4) Franchisee acknowledges that Franchisor's standard franchise ofi^ring

assumes thatthe imtialinstructor(s)willalre^^
maypermitFranchiseetohaveone(l)ormoreinstructorscompletetheTeacher TrainingFrogram
while Franchisee is securing an approved premises for,and otherwise developing, the Studio fo^
opening. Franchisee specifically acknowledges, however, that if Franchisee chooses to take the
foregoing action,this may involveahigher investment than Franchisor's standardfranchise
ofiîng described in ftem7of the Franchise Disclosure Document that Franchisor timely and
properly disclosed to Franchisee priorto this Agreement being executed(the "FDD").
F. ^ ^ ^ B ^ ^ ^ ^ ^ ^ ^ . Franchisor may provide, and require that Franc

as well as any of its management personnel attend, up to five^) days of additional training each
year atatraining facility that Franclnsordesignates(without charging Franchisee any T ^
asdescribed in Section5.5ofthis Agreement).Franchisee may also request that Franchisorprovide
certain additional or refresher training to Franchisee, either at one ( l ) o f Franchisor's design^^^
training facilities or on-site at Franchisee's Studio,but Franchisor reserves the rights
Franchiseeitsthen-currentTrainingFeebased on thenumberofdaysofsucb training thatFran^
provides atFranchisee'srequest.
F. C ^ ^ ^ ^ ^ ^ ^ Franchisee will be responsible for the costs and expenses

associated with Franchisee and its personnel attending and completing all ofthe training described
in this Section, including without limitation, any costs related to travel, lodging, meal^
appropriate) wages^compensation for personnel.
6.4 Operations Manual Franchisor will grant Franchisee online access to an electronic
version of the Manual during the term of this Agreement. The Manual is anticipated to codify
existing mandatory and suggested specifications, standards and operating procedures currently
prescribed by Franchisor.Franchiseeaclôwledges that Franchisor may from time to time revise
its Systems as well as the contents ofthe Manual, and Franchisee agrees to complywith each new
©30462017 OubâtesFraocbise,^
30462017Franobise^reemem
or changed standard and specific The Mannat shall remain the
sole property ofFranehisor and shall he kept confidential hy Franchisee hoth during
this Agreement and subsequent to the termination, expiration, or non renewal of this
If Franchisee, intentionally or otherwise through its gross negligence, compromises the sec^^
access to the online version ofthe Manual (or any hard copy ofthe Manual), including, hut not
limitedto, allowingunauthorizedusersaccessto theManualand itsconfidentialcontents,
Franchisee will he required to pay Franchisor liquidated damages in the amount of$10,000, to
compensate Franchisor for the breach and related damage to the System.
6.5 Continumg Services. Franchisor shall p r o v ^

information to Franchisee in the development and operation ofthe Studio as Franchisor deems
advisable in its discretion. Such assistance may be provided,inFranchisor's discretion, by
Franchisor's directives. System bulletins, meetings and seminars, telephone, computer, e-mail,
fax, personal visits, newsletters or manuals.
6.6 Approved Lists.Franclnsor shall provide and from t ^

Franchisor's discretion, lists of specifications, approveddistributors and suppliers, approved
services and products, including, but not Ihnited to, Filates fitness equipment and gear, and
materials andsuppliesusedintheoperation ofthe Studio. Franchisor,or an affiliateofFranchisor,
may beadesignatedorapprovedsupplierofcertainequipment, gear, merchandise, apparel and
supplies.
67 P r i c ^ . Club Filateshasdevelopedan image that is based in part on affordableprices^

Filates classes offered by the System. Topromoteaconsistent consumer experience, and to
maximize the value of the products and services Studios offer, Franchisor may require fixed
minimum prices for any products or services offered by the System and Franchisee. Franchisee
is obligated to use the pricing required hy Franchisor, unless Franchisor consents to changes in
local pricing offered by Franchisee in order to (i) allow Franchisee to respond to unique, local,
marketing conditions, competition, or expenses; or (ii) comply with changes or interpretationsm
state or federal anti-trust laws. Consistent with state or federal law,Franchisor reserves the right
to change or eliminate its pricingprogram in tbe fnture, or to move from a required to
recommended pricing structure.
68 Fund. As detailed in Sectional ofthis Agreement, the Fundîf an when established^

will be maintained and administered byFranchisorwiththe assistance of the marketing fund
committee("MFC")tomeetthecostsof conducting regionalandnational advertisingand
promotional activities (including the cost of advertising campaigns, test marketing, m a r k e d
surveys, public relations activities and marketing materials)which Franchisor and the MFC
beneficial to the System.
6.9 Grand Opening AdvertisipgAssistance.Franchisor shall consult and advise Franchisee

on the advertising, marketing and promotion for the grand opening ofthe Studio.
©3O162017 Club Pilates Franchise, LLC A-16

Your Initials: /
7. FACILITY STANDARDS, LEASE AND CONSTRUCTION
7.1 Facility Specifications. Franchisee's Studio shall meet the following conditions:
A. The Studio shall be laid out, designed, constructed or improved, equipped and
furnished in accordance with Franchisor's standards and specifications. Equipment, furnishings,
fixtures, surveillance cameras with audio, decor and signs for the Studio shall be purchased from
suppliers approved or designated by Franchisor. Franchisee may remodel or alter the Studio, or
change its equipment, furniture or fixtures, only with Franchisor's consent. Franchisee must obtain
necessary permits, licenses and other legal or architectural requirements. The Studio shall contain
or display only signage that has been specifically approved or designed by Franchisor.
B. The Studio and all fitness equipment shall be maintained in accordance with
standards and specifications established by Franchisor or prescribed after inspection ofthe Studio.
Franchisee shall promptly repair or replace defective or obsolete equipment, signage, fixtures or
any other item of the interior or exterior that is in need of repair, refurbishing or redecorating in
accordance with such standards established (and updated from time to time) by Franchisor or as
may be required by Franchisee's lease.
C. Franchisee recognizes that the System will evolve. The fitness industry must
respond to new fads, new forms of exercise, new equipment and new training techniques. The
Club Pilates System must change to meet customer demands. Franchisee further understands that
Pilates fitness equipment and other equipment wears out, breaks down, or becomes obsolete.
Consequently, from time to time, as Franchisor requires, Franchisee must modernize and/or
replace items of the Trade Dress or Studio equipment as may be necessary for the Studio to
conform to the standards for new Studios. Further, Franchisee will be required to thoroughly
modernize or remodel the Studio when requested by Franchisor, but no more than once every 5
years. This may include replacing Pilates/fitness equipment and gear, and other updates and
improvements. Franchisee acknowledges that this obligation could result in Franchisee making
extensive structural changes to, and significantly remodeling and renovating the Studio, and
Franchisee agrees to incur, without limitation, any capital expenditures required in order to comply
with this obligation and Franchisor's requirements. Within 60 days after receiving written notice
from Franchisor, Franchisee shall have plans prepared according to the standards and
specifications that Franchisor prescribes and Franchisee must submit those plans to Franchisor for
its approval. Franchisee agrees to complete all work according to the plans that Franchisor
approves within the time period that Franchisor reasonably specifies and in accordance with this
Agreement. Franchisor, or its Affiliate, will hold themselves, and the Studios they operate (if any)

tothesame high s t a o d ^ and same fr^
Franchisee.
D. The Stndioshaiieontainsignageprominentiy identifying Franchisee hynameasan

independently owned and operated franchiseeofFranchisor.
F. The Stndio mnst have a snrveiliance camera with andio purchased from a
designated approved supplier installed at the Studio. The caniera(s)must he weh accessible. The
camera(s)willheusedhy Franchisee tomonitor teacher performance,qualityassurance and
safety. Franchisor has an absolute right to also review and monitor the camera(s) for the same
purposes as Franchisee, and to ensure compliance with the Club Filates System. Franchisee is
responsible for ensuring customer consent and for anyfailure to obtain such consent Franchisee
agrees to indemnify Franchisor for any breaches of privacy from Franchisee's use of any
surveillance camera.
7.2 Lease Franchisee is solely responsible for purchasing or leasingasuitable site for
theStudio. Franchisee must utilize one ofthe designated retail real
Manualôr otherwise communicated to Franclnsee^torevi^
Franchisee must submit thelease for the Studio toFranchisor for its writtenconsent before
Franchisee executes the lease for the Authorized Location. Franchisor will not withhold consent
arbitrarily; however, any leasemustcontamsubstan^
premises will be used only forthe operation ofaClubFilates Franchise;" (2) "The employe^^
Franchisor will have the right to enterthe leased premises to make any modifications necessary to
protecttheSystemandproprietary marks thereof;"^"Lessee agrees that Lessor may, upon
request of Franchisor disclose to said Franchisor all reports, information or datainLessor's
possessionwithrespecttosalesmadein,uponorfrom the leased premises;" andâcondltional
assignment clause to he contained inalease rider inaform approved by Franchisor,wbich shall
provide that Franchisor (or its designee) may, upontermination,expiration,non-renewalor
proposed assignmentof this Agreement,atFranchisor'ssoleoption,takeanasslgnmentof
Franchisee's Interest thereunder,without the consent of the Lessor or property owner, without
liabilityforaccruedobligations, paymentof additional consideration orincreaseinr^^^
timethereafter, reassign the lease toanew franchisee. Franchisor'sexecution of this Agreement
is conditioned upon the abovereferenced lease addenduminthe form attachedhereto^ as Exhibit
5("LeaseAddendum"),which shall he signed hy Franchisee and attached and made part of the
lease forthe Studio. Franchiseeacknowledgesthat ithas been advised to haveanyleasereviewed
by Franchisee'sown legal counsel.
7.3 Unit Development Franchisee agrees that after obtaining possession of the Authorized
Location, Franchisee will promptly,atFranchisee'ssole expense:
^. Obtain any standard plans and/or specifications ftom Franchisor;
B. Fmployaqualified licensedarchitect, as required by stateor local codes, to prepare

all drawings, designs, plans and specifications for the Studio, and submit same to Franchisors
review and approval prior to commencing construction;

G Compêthecon^cfionorr^
withplansandspecificafions approved hyFranchiso^^^
ordinances b i d i n g codes and permit requirement
D. Purchase or iease, in accordance with Franchisor'sstaodards and specifications, aii

fitness equipment,fixtures,inventory,suppiies and signs required for the Studio;
E. Hire and train the initial operating personnel according to Franchisor's standards
and specifications; and
F. Complete development ofand have the Studio open for business not later than six
(^months afterthedatethatFranchisoraccepts this Agreement.
7.4 Franchisee s Responsihidtv. Although Franchisormayprovide Franchisee with various

standard or sample plans and specifications withrespect to constructing and equipping the Studio,
it is Franchisee's sole responsibility to construct and equip the Studio In compliance with all
applicable federal, state and local laws and regulations, including, without limitation,^
codes, fire and safety codes, environmental laws, Occupational Safety and Health Administra^
laws, health laws, sanitation laws, Americans with Disabilities Act and all otherrequirements^
may beprescribed by any federal, state or local governmental agency. Franchisee further
aclôwledges and agrees that Franchisee is, and will continue to be at all times during the Term^
solely responsible for all employment decisions and to comply with all state, federal, and local
hirmg lawsand factions ofthe Studio, mclud
training, wageandhourrequirements,compensation,promotion,record keeping, supervision,^
discipline of employees, paid or unpaid, full or part time. Franchisee's employees must be
competent, conscientious, and properly trained. Franchisee aclôwledges that nothing in this
Agreement shall, or may be construed to, create any type of employer or joint employer
relationship between (a) Franchisee or any ofFranchisee's personnel,and (b) Franchisor in any
matter.
Ihave read A r t ^ ^ u n d e r ^ n d ^ a n d agreed

comply with each o f ^ s u ^ e e d o n s
Yourlmdal^ /
8 STUDIO IMAGE AND OPERATING STANDARDS
8.1 Gomodance Franchisee acknowledges and agrees that every detail regarding the
appearance and operation of the Stndlo Is hnportant to Franchisor, F r a n c h ^
otherClnhFilates franchisees in order to maintains
increase demandfr^rthe classes sold hy allfranchisees,and to protect FranchisoBsrepntation and
goodwills and, accordingly,Franchiseeagrees to comply strictly atall times with the reqnirem
ofthisAgreementandFranchisor'sstandardsandspecifrcations(whether contained in the Manual
oranyotherwrittenororal communication to Franchisee hyFranchisor^relatingtotheappearance
or operationof theStudio. Franchisee acknowledges thatotherStudiosmay operate under
differentfr^rmsofagreementwith Franchisor, and that the rights and obligations ofthe parties
other agreements may differfronrthose hereunder.
©30462017 C^hâtesFrancbise ^C
30462017 Francbise Agreement
8.2 Franchôrs Right to Inspection Todetermme whether Franchiseo is complymg with
this Agreement and Franchisor's standards and speeifieations^Fra^
supervise, determine andapprove the standards ofappearanee,qnahty and service
Studio including, without limitation, the right at any reasonahie time and without pr^^^
Franchiseeto:(i)inspect and examine the business premises, fitness equipment, facilities and
operation ofthe Studio in person or hyweh accessible surveillance cameras with audio, which are
requiredtobeinstalledineachclassroominthe Studio; (2) interview Franchisee and Fr^^
employees, includingany independent contractors; (3) interview Franchisee's members and
customers, suppliers and any other person with whom Franchisee does business;^confer with
members and staff of government agencies with authority over Franchisee about matters relevant
to the Studio; andûse "mystery shoppers,"whomayposeascustomersand evaluate Franchisee
andFranchisee'soperations.
8.3 Personnel. Franchisee agrees to employ in the operation of the Studio only persons of
high character and ability who maintain and exhibit traits of enthusiasm, cleanliness, neatness,
fiêndhness, honesty and loyalty,itbeingrecognized by Franchisee that such persons are necessary
in ordertopromoteandmaintaincustomersatisfaction and the goodwill ofthe System. Franchisee
agrees to staff the Studio at all times withasufficient number of qualified, competent personnel
who have been trained in accordance with Franchisor'sstandards. Franchisee shall be considered
the employer of all employees and independent contractors of the Studio. It is the sole
responsibility of Franchisee to hire, discipline, discharge and establish wages, hours, benefits,
employment policiesandothertermsandconditionsofemployment tor itsemployeesand
independent contractors. Franchisee is responsible for obtaining its own independent legal advice
regardmgtheemploymentofemployeesandindependentcontractors,andcomplyingwithanyand
all applicable laws pertaining thereto. Franchisor shall have no responsibility for the terms and
conditions of Franchisee's relationship with Franchisee's employees and/or independent
contractors. Franchisee shall engage innodiscriminatoryemploymentpractices and shall in eve
waycomplywithallapplicablelaws,rulesandregulationsoffederal,stateand local governmental
agencies, including, without limitation, all wage-hour, civil rights, imn^
andrelated employmentandpayroll related laws. Franchiseeshallmakeallnecessaryfilings with,
and pay all taxesandfeesdue to, the eternal Revenue Serviceandall other federal, stateand local
governmental agencies or entities to which filings and payments are required.
8.4 Products and Services to he Offered forSale.
A. Franchisee acknowledgesthatthepresentationofauniform image to thepublic and

the offering of uniform services and products is an essential element ofasuccessful franchise
system. In order to insure consistency,quality and uniformitytluôughout the System, F r a n c h ^
agrees(l)to sell or ofêr for sale only the services orproducts that have been expressly approved
for sale by Franchisor; (2) to sell or offer for sale all services and products required by France
(3) not to deviate from Franchisor's standards and specifications; and (4) to discontinue selling
and of^ring for sale any services or products that Franchisor may,in its discretion, disappro^^
anytime. Franchisor shall supply Franchisee withalist of suppliers from which Franchisee is
required topurchase fitness equipment, Pilates items, products or services forthe Studio.
Franchisor may changethis list from time to time, and upon notification to Franchisee, Franchisee
©3046^7 ^ b ^ a t e s ^ o b i s e ^ C
30462017 Francbise Agreement
shô^ypurchase fitness equips
as specified on the changed list. Franchisor or an affiliateofFranchisor may headesignated or
approved supplier of certain equipment, gear, merchandise, apparel and supplies Franchisee
agrees to keep the Studio and fitness equipment in clean condition,with all equipment well-
maintained and operational, and he ahle at all times during business hours to provide members
with all services and products specified by Franchisor.
B. Franchisee agrees that all exercise equipment must be purchased exclusively from
approved suppliers, must be maintained according to manufacturer or Franchisor specifications,
as applicable.
C Franchiseeand those it employs mustteach Club Filatesclassesexactlyasspecified

in the Manual and in othertraining materials provided hy Franchisor. Franchiseeagreesnotto add
anyexercises,stretches,choreography,orpositionsthatarenotapprovedbyFranchisor,and
Franchisee agrees not to leave out any exercises, stretches, choreography,or positions that are
required by Franchisor.
D. IfFranchisee proposes to offer for sale any products, classes or services that have
not been approved by Franchisor, Franchisee shall first notify Franchisor in writing and submit
sufficient information, specificationsandsamplesconcerningsuchproduct, classes a^
and/or service foradetermination by the Franchisor whether such product, classes or supplier of
servicecomplieswiththe Franchisor'sspeclfications and standards and/or whether such supplier
meets the Franchisor'sapproved supplier criteria. Franchisorshall,withinninety(90)days,noti^
Franchisee in writing whether or not such proposed product, class and/or supplier or service is
approved,as determined in Franchisor's discretion. Franchisor reserves the right tocharge
Franchisee reasonable costs in connection with Franchisor's review, evaluation and approval of
alternative suppliers.Thesecharges may includereimbursementfortravel, accommodations, meal
expenses, and personnel wages. Franchisor may from time to time prescribe procedures for the
submission of requests for approved products and/or suppliers or services and obligations that
approvedsuppliersmustassume(whichmaybeincorporatedinawrittenagreementtobeexecuted
by approved suppliers). Franchisorreservestheright to revoke its approval ofapreviously
authorized supplier,product,classorservicewhenFranchisor determines in itsdiscretion that such
supplier, product, class or service is not meeting the specifications and standards established by
Franchisor. ffFranchisor modifies its list ofapproved products, classes and/or suppliers and/or
services, Franchisee shall not, after receipt in writing ofsuch modification, reorder any product or
utilize any supplier, product, class or service that is no longer approved.
F. FranchiseeacknowledgesandagreesthatFranchisoris(ormayatanytimeinfuture
become)anapprovedordesignatedsupplierforcertainFilates/fitnessequipment,otherequipment,
products, logo items, signage and artwork; that Franchisor may derive income from the sale of
such items, and that thepricecharged by Franchisor niay reflect an ordinary and reasonable profit
consistent withabusiness ofthe kind thatproducesandôr supplies such items.
F. FranchiseeacknowledgesandagreesthatFranchisormaysellproductsand services
to members located anywhere, even if such products and services are similar to what Franchisor
sells to Franchisee and what Franchisee offers at the Studio. Franchisor may use the internet or
©30462017 OubPiiatesFrancbis^^
30462017 Franchise Aêemem
ahernafivechanneôfcomm^^
o ^ y ^ t h e p r o d u ^ and services^
internet orahernafivechanne^ of connnêto offer orse^
by Franehisor, in order to register members for elates. Nothing in tbe foregoing sbaii prohibit
Franchisee from obtaining members overthe Internet provided Fraoehisee'sinternet present
content eompiywiththereqnirementsofthis Agreement.
G Unless Franchisor agrees otherwise, Franchisee may not actively solicit potential
members or cnstomers,orotherwise promote theFranchisedBnsinessthroughany targeted
advertismg/marketing,ontside ofthe Designat
shall prohibit Franchisee from servicing members and other customers that contact Franchisee or
the Studio, regardless ofwhere those members/cnstomers reside or work.
H. Unless Franchisor directs or agrees otherwise in writing, Franchisee agrees not to

sell vitamins, supplements or other nutritional products orfrôditems, including bottled water,at
theStudio.
I. Franchisorreserves the rightto charge its thencurrent per day Penalty Fee for each
day Franchisee offers or sells unauthorized products or services from the Studio.
8.5 Compdanee with Laws. Franchiseeagreestocomplywithall federal, state and local

laws, rules, and regulations and shall as soon as practicable, but in any event prior to the opening
for business ofthe Studio, obtain all municipal and state permits, certificates or licenses
tooperatethe Studio and shall file and publish, ifrequired by applicable law,acertificate of doing
business^whetherunderafictitious nameor otherwise).Franchiseeacknowledgesandagrees that
it has the sole responsibilityto investigate and complywith any applicable laws in the state where
the Studio is located thatarespecific to theoperationofahealthBfitness studio. For example, some
states requirethathealth/fitnessfacilitieshaveastaffpersonavailableduringallho^
thatiscertifiedmbasiccardiopulmonaryresusc^
state orlocal laws may also require that health^fitness facilities have an automated external
defibrillator and/or other first aidequipmentonthe premises. Franchisee shalloperate and
maintain the Studio in strict compliance with all employment laws, building codes, fire and safety
codes, environmental laws, Occupational Safety a
laws, sanitation laws, Americans with Disabilities Act and any other requirements that may be
prescribed by any federal, state or local governmental agency. Franchisee agrees to immediately
provideFranchisorwithacopyofanynoticereceivedbyFranchiseefromany state, local or
governmental agency pertaining to compliance with any codes or requirements, or the failure to
complywith anycodesorrequirements,atthe Studio Franchisee hereby certifies andrepresents
thatFranchisee, and any ofits affiliates, any ofits partners, members, shareholders or othe
owners, and theirrespectiveemployees, officers, directorsrepresentativesoragents,arenotactm^^
directly or indirectly,for or onhehalfof any person, group,entity or nation named by any
Executive Order or the United States T r e a s u r y ^
National and Blocked Persons or other banned or blocked person, entity,nation or transaction
pursuant to any law, order, rule or regulation that is enforced or administered by the Offi^
Foreign AssetsControl. Franchiseeherehy agreestodefend, indemnify and holdharmless
Franchisor from and against any and all claims, damages, losses, risks, liabilities and expenses
©3046^7 OubâtesFraoob^^C A^
30462017 Franchise Aêement
(mûdmg^rney^ês^
forthinthis paragraph.
8.6 OperationalE^^Franchiseemavapp^
day^da^supervisionof the o p e r a t e of the Studi^^
sueeess^y completes theDesignatedMa^
managementresponsihihtiesatthe Studio. Franchisee agrees tokee
writing, ofany manager and aii teachers involved in the operation ofthefranchisedhusm^
their contact information. Franchisee agrees to keep the Studio open for the hours stated in the
Manual andasdeemedappropriatehy Franchisor, f f Franchisee does not haveaDesignated
Manager, then Franchisee(orits Operating Frincipai, as applicable) must he on-site at the S ^
during normal business hours to manage day to day operations.
8.7 Good Standing. FranchiseewillheconsideredinÔood Standing" ifFranchisee is notin

default of any obligation to Franchisor or any ofFranchisoBsaffiliates, whether arising u n d e r ^
Agreement or any other agreement between Franchisee and Franchisor(oranyofFranchisoBs
affiliates), the Manual or other System requirements.
8.8 Performance Standards Franchisee and Franchisor haveashared interest in the Studio
performing at or abovethe System Standards^ and meetingonnnnnumm^mbor quota
^mborûota")^Franchisorwouldnothaveenteredintothisfranchiserelatio^^^^^
had anticipated that Franchisee wouldnot meet these Performance Standards.
A. Franchisor may choose, in its sole discretion, to evaluate the

Studio forcompliancewith the System Standardsusingvariousmethods(including,butnotlimi^^^
to, inspections, freld service visits, surveillance camera monitoring, member comments/surveys
and secret shopper reports.)Franchisee must meet minimum standards for cleanliness, equipment
condition, repair andfunction,and customer service. Franchisee'semployees, includingany
independent contractors, must meet minimum standards for courteousness and customer service.
B. ^ — ^ ^ ^ ^ ^ ^ ^ ^ ^ Unless waived
hy Franchisor due to unique market conditions ortb^Stodio's^c,Franchiseemustmeetacertain
Minimum MemberMonthlv^ross Revenue Quota. IfFranchisee fails to achieve and maintain 40
members per day(averaêd over one wcek)ave^
year anniversary of the opening of the Studio;55 members per dayâveraged over one wc^k)and
averagemontblv gross revenuesof^40^00bvtheendofthe2^yearanniversary: and 70
perday(averagedov^ron^week)bytheendoftlie^yearanniversory and each succeeding year
thereafrer,^!^ Franchisor may instituteacorrective training program and/or require Franch^
to perform additional local marketing. IfFranchisee fails to meet the Minimum êmber^lomblv
O r o s s ^ v e ^ ^ u o t a for 36 consecutive months at any time durm
Franchisors at its solediscrction. mavinstituteamandatory corrective training pro^ramor
terminate this Aêement at it^ôlcdi^crctionunon written notice lo Franchisee.
1 have read Articled, understand it, and agree to comply with each of ito S^ction^.
Yourlnitiol^ /
9. ADVERTISING AND MARKETING
©3O462017Ciubâtes Franchise,^ A^
Franchise Aêement
9.1 Fund.
A. Franchisee will be required to pay the appropriate Fund Contribution to Franchisor

as described in Section 5.6 of this Agreement. In the event Franchisor increases the Fund
Contribution from what it is as of the date this Agreement is signed, Franchisor will provide at
least 60 days' written notice of such increase in the Fund Contribution.

B. The Fund is adminiêred by France
the Fund Commiêe^he "MFC") pursuantâeharteragreeme^^
memhers ofthe MFC, whiehservesman advisor eapaeityoniy.Under^^
is suhjeet to change, Franchisorfranchiseeseieet^memhers to the MFC to serve foraone
term corresponding to the calendar year and Franchisor seiects^memhers to serve foraone-year
term corresponding to the calendar year. The 4-memher MFC will, hyamajority vote, assist us
in determining the selection and placement of regional and national advertising. FachMFC
member has one vote. Ifthe MFC is deadlocked, our President wiii break the deadlock with the
deciding vote, which shall be binding. The Fund is maintained and operated hy Franchisor with
the assistance of the MFC to meet the costs of conducting regional and national advertising and
promotional activitieswhich are deemedmost beneficial to the System.
CD TheMFCshall represent Franchisee and adviseFranchisor with regardto all

advertising,marketingand publicrelationsprogramsandactivitiesfinancedbythe Fund, includm^
the creative concepts, materials and endorsements used and the geographic market, media
placementandallocation.The MFC will bepurely advisory in natureandwillhavenooperational
or ultimate decision-making authority. You agree that the Fund may be used to pay the costs of
preparing and producing associated materials and programs as Franchisor may determine,
including theuseof social media; video, audioand written advertisingmaterialsemploying
advertising agencies; sponsorshipof sporting, charitable or similar events; administerin
national andmulti-regionaladvertisingprogramsincludingpurchasingdirectmailand other me^^
advertismg,websitedevelopment/operationandtopayh^
number, and other charges, fees and/or expenses, including employing advertising agencies to
assist with marketing efiorts; and supporting public relations, market research and other
advertising, promotional and marketing activities. Abrief statement regarding the availability of
Club Filatesfranchisesmay be included in advertising and other items produced using the Fund.
D. Franchisor may spend in any calendar year more or less than the total Advertising
Contributions to the Fund in that year. Franchisor may cause the Fund to invest any surplus for
future use bythe Fund. Franchisor may borrow from Franchisor or other lenders on behalf of the
Fund to cover deficits ofthe Fund.
F. Franchisor and/or any Franchisor-Related Fersons/Fntities can provide goods,

services, materials, etc. (including administrative services andBor"in-houseadve^
services)andbecompensatedand/orreimbursed for the same by the Fund, provided that any such
compensation must be reasonable in amount. Franchisor can arrange for goods, services,
materials, etc. (including administrative services) to be provided by independent
persons/companies and all related costs, fees, etc. will be paid by the Fund.
F. TheFund willhe accounted for separately fromFranchisor'sother funds and

Franchisorwill not use the Fund for its general operating expenses.^11 taxes of any kind incurred
in connection with or related to the Fund, its activities, contributions to the Fund and/or any ot^^
Fundaspect,whetherimposedonFranchisor,theFundoranyotherrelatedparty, will be the sole
responsibility of the Fund. Franchisor will retain independent certified public accountants to
prepareanannualauditoftheFund, at the expense of the Fund, and sendacopy of the audit to
Franchiseeuponwrittenrequest. All interest earned onmonies contributed to, or held in, the Fund
©30462017 ^ b ^ a t e s ^ a o c b ^ ^ C
will be remind to the Fund and w i l l ^
Agreements
G Yon aelôwledge that the Fund Contributions are intended to maxin^zege^^^

pubiie recognition ofand the aeeeptanee ofthe Inteiieetuai Property for the ben^^^
asawhoie.Notwithstanding the f o r e g o ^
the Fund Contributions to make expenditures tor you that are equivalent or proportionate
contribution, or to insure that any particular Club Filates business benefits directly or
from advertising orpromotion conducted with the Fund Contributions.
H. Franchisor maintains the right to terminate the collection and disbursement ofthe
Fund Contributions and the Fund.Upon termination, Franchisor will disburse the remaining f ^
for the purposes authorized under this Agreement.
F In the event Franchisor or anyAffiliateofFranchisor owns and operatesaStudio

utilizing the System, these "company-owned" Studios will contribute to the Fund on the same
basis thatfranchisedStudios in the System are required to contribute.
92 LoealMarketing Activities.
A. Franchisee is responsible for local advertising and marketing activities to attract

members to the Studio. Franchisee must expend at least $1,500 per month on approved local
advertisingand marketingactivitiesdesigned topromotethe Studio within theDesignated
Territory. Upon Franchisor's writtenrequest, Franchisee must provide Franchisor with an
accounting of all expenditures made by Franchisee to comply with this Section, along with any
invoices or other documentation to support such expenditures.
B. Franchisee's advertising will be in good taste and conform to ethical and legal
standards and our requirements. Franchisor may require Franchisee to submit samples of all
advertising and promotionalmaterials(andanyuseofth^
identification) for any media, including the hiternet,World Wide Web or otherwis^^ Franchisor
retains the right to approve or disapprove of such advertising, in its sole discretion. Franchisee
agreesnotto use anymaterials or programs disapproved by Franchisor.
C. Franchisormustapproveanyform of co-branding, or advertisingwith other brands,

products or services, in writing, in advance.
9.3 SocialMedla Activities. Asusedin this Agreement, the term "SocialMedia" is

defined asanetwork of services, including, but not limited to, blogs,microhlogs, and social
networlring sites (such as Facebook, Linkedhi and MySpace),video-sharing and photo-sharing
sites(suchasYouTubeandFlicl^), review sites(suchasYelpandUrbanspoon), marketplaces!^
(such as eBay and Craigslist),Wil^s, chat rooms and virtual worlds, that allows participa
conmiunicateonlineandformcommunitiesaround shared interestsand experiences. While it can
beavery effective tool for building brandawareness, it can also be devastating toabrand if used
improperly. Therefore, Franchisee must strictly follow the Social Mediaguidelines,code of
conduct,and etiquette as set forth inthe Manual. Any use of Social Media byFranchisee
©3O462017^bâtesFr^hise^^ A^
pertaining to the Studio must be in good taste and not linked to controversial, unethical, immoral,
illegal or inappropriate content. Franchisor reserves the right to "occupy" any Social Media
websites/pages and be the sole provider of information regarding the Studio on such
websites/pages (e.g., a system-wide Facebook page). At Franchisor's request, Franchisee will
promptly modify or remove any online communication pertaining to the Studio that does not
comply with this Agreement or the Manual.
9.4 Franchisee Marketing Group(s) ("CQ-OPS"). Franchisor may decide to form one or
more associations and/or sub-associations of Club Pilates Studios to conduct various marketing-
related activities on a cooperative basis (a "Co-Op"). If one or more Co-Ops (local, regional and/or
national) are formed covering Franchisee's area, then Franchisee must join and actively
participate. Each Studio will be entitled to one (1) vote, but in order to vote the Studio must be in
Good Standing. Franchisee may be required to contribute such amounts as are determined from
time to time by such Co-Ops.

Your Initials: /

REQUIREMENTS
10.1 Records and Reports. Franchisee shall maintain and preserve for four (4) years or such
period as may be required by law (whichever is greater) from the date of their preparation such
financial information relating to the Studio as Franchisor may periodically require, including
without limitation, Franchisee's sales and use tax returns, register tapes and reports, sales reports,
purchase records, and full, complete and accurate books, records and accounts prepared in
accordance with generally accepted accounting principles and in the form and manner prescribed
by Franchisor. Franchisee agrees that itsfinancialrecords shall be accurate and up-to-date at all
times. Franchisee agrees to promptly furnish any and all financial information, including tax
records and returns, relating to the Studio to Franchisor on request.
10.2 Right to Conduct Audit or Review. Franchisor shall have the right, in its sole
determination, to require a review by such representative(s) as. Franchisor shall choose, of all
information pertaining to the Studio including, without limitation financial records, books, tax
returns, papers, and business management software programs of Franchisee at any time during
normal business hours without prior notice for the purpose of accurately tracking unit and System-
wide sales, sales increases or decreases, effectiveness of advertising and promotions, and for other
reasonable business purposes. Such review will take place at the Studio or Franchisee's head
office (if different), or both, and Franchisee agrees to provide all information pertaining to the
Studio requested by Franchisor during its review. If the review is done because of a failure by
Franchisee to furnish reports, supporting records or other required information or to furnish the
reports and information on a timely basis, Franchisee shall reimburse Franchisor for all costs of
the audit or review including, without limitation, travel, lodging, wage expense and reasonable

accounting and legal expend The forcgomg remedies shall be in a d d ^
Franchisor may have under this Agreement or applicable law.
1^3 Computer System and Software. Franchisee must acquireacomputer for use in the
operation ofthe Studio.Franchiseeagrees to record all ofits receipts, expenses, invoices, member
lists,class and employee schedules andother business information promptly inthe computer
system and use the software that Franchisor specifies or otherwise approves. Franchisor reserves
therighttochangethecomputersystem,andtheaccou^
and other software at any time. Data, including names, addresses, contact information, and credit
card or payment information ofmembers ofthe Studio will be captured on the required s o f t w ^
and willbecomethejoint property of Franchiseeand Franchisor during theTerm of this
Agreement. Franchisee willprovideFranchisorwithanypasswordsnecessarytoaccess the
business information forthe Studio that is stored on the required software and online. Franchisor
may use such information to conmiunicate directly to the members ofthe Studio, and to provide
updates, information, newsletters, and special offers to the members. Franchisee must upgrade
andmaintainthecomputersystemand software in the Studio,as required by Franchisorftom time
to time, and pay any fees associated with such upgrades. Upon expiration or termination of this
Agreement, Franchisee shall have nofurther access or rights to the member information and
Franchisor shall hethesoleowner of such information.
104 Insurance.
A. Frior to opening the Studio for business and throughout the entire term of this
Agreement, Franchisee will keep in force at Franchisee'sown expense and by advance payment
ofthe premium, the following insurance coverages:
(1) Workers'Compensation and Fmployer'sFiabilityfnsuranceaswell as such

other insurance,with statutory limits, as required by law in the jurisdiction where the ftanch^
business is located. Employers Liability or "Stop Gap" insurance,with limits of not less than
$l,000,000eachaccident;
(2) CommercialGeneralLiahilityfnsurance, Occurrence form, includingaper

location or project aggregate,with the following coverages: owners and contractors p r o t e c t
liability,broad form property damage, contractual liahihty,severabilityofm^^
and advertising injury; and products/completed operations; medical payments and fire damage
liability; insuring youandusagainstallclaims, suits, obligations, liabilitiesand damages,
including attorneys'fees,baseduponor arising out of actualor alleged personal injuries or
property damage resulting ftom or occurring in the course of, or on or about or otherwise relating
to the FranchisedBusiness including general aggregate coverage in the following limits:
Required Coverage Mmunum Limits of Coverage

GeneralAggregate $5,000,000
Froducts/Completed Operations Aggregate $5,000,000
Personal and Advertising Injury $1,000,000
FarticipantEegalLiability $1,000,000
©3O462017^bâtesFra^b^^ A^
3O462017 Franchise Agreement
^
Professional Liability $ 1,000,000
Medical Expense (any one person) $5,000
(3) "ALL RISK" or special form property coverage of no less than current
replacement cost of the Studio's equipment, fixtures and leasehold improvements (tenant
improvements) sufficient in the amount to restore the Studio to full operations. Glass coverage no
less than a limit of $25,000 and sign coverage no less than a limit of $10,000 in addition to
equipment,fixturesand leasehold improvements;
(4) Business interruption insurance with coverage for at least twelve (12)
months for actual losses. (For purposes of this Agreement, "Gross Sales" shall include any
proceeds received by Franchisee in connection with a "business interruption" insurance claim);
(5) Auto Liability (Hired and Non-owned autos) with a $1,000,000 Combined
Single Limit Each Accident for Bodily Injury and Property Damage, if Franchisee utilizes a vehicle
in connection with the operation of the Studio: and
(6) Employment Practices Liability with a limit no less than $1,000,000 per
claim and $1,000,000 aggregate per location. The retention may not exceed $1,000.
B. All insurance policies must be written by an insurance company licensed in the

state in which Franchisee operates its Studio. The insurance company must have at least an "A"
Rating Classification as indicated in A.M. Best's Key Rating Guide.
C. Franchisor reserves the right, from time to time, in its discretion, to upgrade the
insurance requirements or lower the required amounts as to policy limits, deductibles, scope of
coverage, or rating of carriers in response to current industry standards, market conditions and/or
landlord requirements. Within sixty (60) days of receipt of notice from Franchisor, Franchisee
agrees to revise its coverage, as specified in any notice from Franchisor.
D. Franchisee's obligation to obtain and maintain insurance shall not be limited by

reason of any insurance that may be maintained by Franchisor nor relieve Franchisee of liability
under the indemnity provisions set forth in this Agreement. All insurance shall name Franchisor
as an additional insured, waive any subrogation rights or other rights to assert a claim back against
Franchisor and shall contain a clause requiring notice to Franchisor thirty (30) days in advance of
any cancellation or material change or cancellation to any such policy. Franchisee shall give
Franchisor certificates of coverage at least annually. Failure to obtain or the lapse of any of the
required insurance coverage shall be grounds for the immediate termination of this Agreement
pursuant to Section 15.1, and Franchisee agrees that any losses, claims or causes of action arising
after the lapse of or termination of insurance coverage will be the sole responsibility of Franchisee
and that Franchisee will hold Franchisor harmless from all such losses, claims and/or causes of
action. In addition, but not to the exclusion of the foregoing remedy, if Franchisee fails to procure

or maintain the required insurance, Franchisor shall have the right and authority, but not the
obligation, to procure immediately the insurance and Franchisee shall reimburse Franchisor for the
cost of the insurance plus reasonable expenses immediately upon written notice. Franchisee is
required to submit to Franchisor a copy of a Certificate of Insurance, with Franchisor as an
additional insured, showing compliance with the foregoing requirements at least thirty (30) days
before Franchisee commences operation of the Studio. Franchisor shall have a security interest
in all insurance proceeds to the extent Franchisee has any outstanding obligations to Franchisor.

Your Initials: /
11. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION
H.l Independent Contractor. The only relationship between Franchisor and Franchisee
created by this Agreement is that of independent contractor. The business conducted by Franchisee
is completely separate and apart from any business that may be operated by Franchisor and nothing
in this Agreement shall create a fiduciary relationship between them or constitute either party as
agent, legal representative, subsidiary, joint venturer, partner, employee, servant or fiduciary of
the other party for any purpose whatsoever. Franchisee shall hold itself out to the public as an
independent contractor operating the business pursuant to a license from Franchisor, and
Franchisee agrees to take such action including exhibiting a notice to that effect in such content,
form and place as Franchisor may specify. It is further specifically agreed that Franchisee is not
an affiliate of Franchisor and that neither party shall have authority to act for the other in any
manner to create any obligations or indebtedness that would be binding upon the other party.
Neither party shall be in any way responsible for any acts and/or omissions of the other, its agents,
servants or employees and no representation to anyone will be made by either party that would
create an implied or apparent agency or other similar relationship by and between the parties.
11.2 Indemnification. Franchisee, as a material part of the consideration to be rendered to

Franchisor, agrees to indemnify, defend and hold Franchisor, as well as Franchisor's directors,
officers, principals/owners, managers, shareholders, affiliates, subsidiaries, employees, servants,
agents, successors and assignees (collectively, the "Indemnitees"), harmless from and against any
and all losses, damage, claims, demands, liabilities and causes of actions of every kind or character
and nature, as well as costs and expenses incident thereto (including reasonable attorneys' fees and
court costs), that are brought against any of the Indemnitees (collectively, the "Claims") that arise
out of or are otherwise related to Franchisee's (a) breach or attempted breach of, or
misrepresentation under, this Agreement or in connection with the offer/sale of the Studio prior to
the execution of this Agreement, and/or (b) ownership, construction, development, management,
or operation of the Studio in any manner. Notwithstanding the foregoing, at Franchisor's option,
Franchisor may choose to engage counsel and defend against any such Claim and may require
immediate reimbursement from the Franchisee of all expenses and fees incurred in connection
with such defense
©3Q3£2017 Club Pilates Franchise, LLC A-30

Your Initials: /
12. CONFIDENTIAL INFORMATION
12.1 Franchisor's Confidential Information.
A. Franchisee acknowledges and agrees that all information relating to the System and
to the development and operation of the Studio, including, without limitation, the Manual,
Franchisor's training program, members and supplier lists, or other information or know-how
distinctive to a Club Pilates Franchise (all of the preceding information is referred to herein as the
"Confidential Information") are considered to be proprietary and trade secrets of Franchisor.
Franchisee agrees that all Confidential Information is to be held in the strictest of confidence
during and after the term of this Agreement and is not to be divulged to anyone directly or
indirectly at any time, except to Franchisee's Studio employees, including any independent
contractors, with a need to know the information in order to operate the Studio. Upon Franchisor's
request, Franchisee shall require the Studio's employees and any independent contractors to
execute a nondisclosure and non-competition agreement in a form satisfactory to Franchisor.
Franchisee shall not acquire any interest in the Confidential Information other than the right to
utilize it in the Studio and agrees not to copy, duplicate, record or otherwise reproduce any
Confidential Information, in whole or in part, nor otherwise make them available to any
unauthorized person, nor use them in any other business or in any manner not specifically
authorized or approved in writing by Franchisor. Franchisee shall adopt and implement all
reasonable procedures to prevent unauthorized use, duplication or disclosure of Franchisor's
Confidential Information. If Franchisee or Franchisee's employees or any independent contractors
learn about an unauthorized use of any trade secret or confidential materials, Franchisee must
promptly notify Franchisor. Franchisor is not obligated to take any action, but will respond to the
information as it deems appropriate. If Franchisee at any time conducts, owns, consults with, is
employed by or otherwise assists a similar or competitive business to that franchised hereunder,
the doctrine of "inevitable disclosure" will apply, and it will be presumed that Franchisee is in
violation of this covenant; and in such case, it shall be Franchisee's burden to prove that Franchisee
is not in violation of this covenant.
B. Franchisee agrees that any new concept, process or improvement in the operation
or promotion ofthe Studio developed by or on behalf of Franchisee that relates to or enhances the
Club Pilates Operating System, or any aspect of Franchisor's business, shall be the sole property
of Franchisor, and Franchisee shall promptly notify Franchisor and shall provide Franchisor with
all necessary information and execute all necessary documents with respect thereto, without
compensation. Franchisee acknowledges that Franchisor may utilize or disclose such information
to other Franchisees.
12.2 No Other Interests. Franchisee further acknowledges that Franchisor would be unable to
protect its Confidential Information against unauthorized use or disclosure and would be unable to
encourage a free exchange of ideas and information among Club Pilates franchisees i f its
franchisees were permitted to hold an interest in other fitness or Pilates Studio businesses and
otherwise to compete with Franchise Therefore, during the term ofthis Agreement, Franchisee
must comply with the competitive covenant provisions of Article i^herein.
1^3 IniunetiveRedef. Franchisee expressly agrees that the existence of any claims it may
haveagainstFranchisor,whetherornotarisingontofthisAgreement,shallnotconstitnteadefense
to the enforcement of this A r t i c l e l ^ Franchisee acknowledges and agrees that any failure to
comply with the requirements ofthis Article 12will cause Franchisorirreparahlehûry^
no adequateremedyat law is available, andFranchiseeaccordinglyagreesthatFranchisor shall he
entitled to injunctive relief as specified in Sectionl6^ herein to enforce the terms of
12. Franchisee shall pay all costs and expenses, including, without limitation, reasonable
attorneys'fees, incurred by Franchisor in connection with theentorcementofthis Articled. The
foregoing remedies shall be in addition to any other remedies Franchisor may have under this
Agreement or applicable law.

Your Initials: /
13. COVENANTS NOT TO COMPETE
13.1 Non-Competition Covenants of Franchisee.
A. During the Term of this Agreement. Neither Franchisee, its principals, owners, or
guarantors, nor any immediate family of Franchisee, its principals, owners, or guarantors
("Restricted Parties"), may, directly or indirectly, for themselves or through, on behalf of, or in
conjunction with any other person, partnership or corporation own, maintain, engage in, be
employed or serve as an officer, director, or principal of, lend money or extend credit to,
lease/sublease space to, or have any interest in or involvement with any fitness or exercise
business, any fitness or exercise marketing or consulting business, any business offering products
ofa similar nature to those of the Studio, or in any business or entity which franchises, licenses or
otherwise grants to others the right to operate such aforementioned businesses ("Competing
Business"). Furthermore, the Restricted Parties shall not divert, or attempt to divert, any
prospective customer to a Competing Business in any manner.
BTC. After the Term of this Agreement. For two (2) years after the expiration, termination
or non-renewal (by Franchisor or by Franchisee for any reason) of this Agreement or after
Franchisee has assigned its interest in this Agreement, the Restricted Parties shall not own,
maintain, engage in, be employed as an officer, director, or principal of, lend money to, extend
credit to, lease/sublease space to, or have any interest in or involvement with, any other Competing
Business within a ten (10) mile radius of any Club Pilates brand Studio whetherfranchisedor
owned by Franchisor or any of Franchisor's affiliates.

132 Non^^tioncovena^
A. ^ ^ ^ ^ ^ ^ ^ ^ B f ^ ^ ^ W^^^cônof^cb^whohovc
complôdôClubPilo^
employanyperson employed by Franchisor or by any otherfra^^
directly or indirectly indnee or seek to indneesneb person to leave bis or ber employ
tbetermoftbisAgreement Teacbcrowbobavecomnlctod^^tbo^
TcacbcrTminingFrogramconscntofFranclnsor or any other francbiseeo^^^^ Instructors
and sales staffmavâe^work at more than one Studio. Franchisee acknowledges thatFranchisor
has the right to ofierto sell ortosellaClub Filatesfranchiseto any employee ofFranchisee.
B. ^ ^ ^ ^ ^ ^ ^ B ^ ^ ^ ^ F o r ^
or non-renewal(byFranchisor or byFranchisee for any reason) of this Agreement or afrer
Franchisee has assigned its interest in this Agreement, the Restricted Parties shall not (i)
business from customers ofFranchisee'sfr^rmer Studio, (ii) contact any ofFranchisor'ssupplier^
or vendors for any competitivebusinesspurpose, or (iii) solicit any of Franchisor's other
employees, or the employees of Franchisor's affiliates or any other System franchisee, to
discontinue employment.
13 3 Enforcement of Covenants.
A. Franchisee expressly agrees that the existence of any claims it may have against
Franchisor,whetherornotarisingoutofthisAgreement, shall not constituteadefense to the
enforcement ofthecovenants in this Article 13. Franchisee acknowledges and agrees that in view
ofthe nature ofthe System and the business ofFranchisor,the restrictions contained in this Article
13are reasonable and necessary to protect the legitimate interests of the System and Franchisor
FranchiseefêraclôwledgesandagreesthatFranchisee'sviolationofthetermsofthis Art
13 will cause irreparable injury to Franchisor for which no adequate remedy at law is available,
and Franchisee accordingly agrees that Franchisor shall be entitled to preliminary and permanent
injunctiverelief and damages, as well as, an equitableaccounting of all earnings, profits,^
benefrtsarisingfromsuchviolation,whichreniedies shall be cumulative and in addition to any
other rights or remedies to which Franchisor shall be entitled. Franchisee agrees to waive any
bond that may be required or imposed inconnectionwiththe issuance of any preliminary or
provisional relief. Franchisee shall pay all costs and expenses, including,without limitation,
reasonable attorneys'fees, incurred byFranchisor in connection with the enforcement of this
Article 13. ffFranchisee violates any restriction contained in this Article 13,and it is necessary
for Franchisortoseek equitable reliefs the restrictions containedherein shall remain in e ^
two (2)yearsafrer such reliefisgranted.ffFranchisee contests the enforcement of Articlel3and
enforcement is delayed pending litigation, and if Franchisor prevails, the period of non-
competition shall be extended for an additional period equal to the period of time that enforcement
ofthisArticlel3is delayed.
B. Franchisee agrees that the provisions of this covenant not to compete are
reasonable. If, however, any court should find this Article 1^ or any portion ofthis Article!^ to
be unenforceable andôrumeasonable, the court is authorized and directed to reduce the scope or
©3O462017 Club Pilates Franchise, LLC A-33

duration (or both) of the provision(s) in issue to the extent necessary to render it enforceable and/or
reasonable and to enforce the provision so revised.
C. Franchisor shall have the right, in Franchisor's discretion, to reduce the scope of
any covenant not to compete set forth in this Agreement, or any portion thereof, without
Franchisee's consent, effective immediately upon receipt by Franchisee of written notice thereof,
and Franchisee shall comply with any covenant as so modified.

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14. TRANSFER OF INTEREST
14.1 Franchisor's Approval Required. All rights and interests of Franchisee arising from this
Agreement are personal to Franchisee and except as otherwise provided in this Article 14,
Franchisee shall not, without Franchisor's prior written consent, voluntarily or involuntarily, by
operation of law or otherwise, sell, assign, transfer, pledge or encumber its interest in this
Agreement, in the license granted hereby, in the assets of the Studio, any of its rights hereunder,
or in the lease for the premises at which the Studio is located, and any purported sale, assignment,
transfer, pledge or encumbrances shall be null and void. If Franchisee is a corporation, limited
liability, partnership, or an individual or group of individuals, any assignment (or new issuance),
directly or indirectly, occurring as a result of a single transaction or a series of transactions that
alters the Percentage of Ownership Interest reflected in Section 17.5 of this Agreement must
promptly be reported to Franchisor and is a "transfer" within the meaning of this Article 14.
14.2 Conditions for Approval of Transfer. Franchisor shall not unreasonably withhold its
approval of a proposed transfer, provided that the prospective transferee, in Franchisor's
reasonable judgment, is of good moral character and reputation, has no conflicting interests, has a
good credit rating and sufficient and competent business experience, aptitude and financial
resources acceptable to Franchisor's then-current standards forfranchisees;and that the following
conditions are met: (1) Franchisee pays Franchisor a transfer fee in an amount equal to $10,000;
(2) Franchisee signs a general release of all claims in Franchisor's standard form; (3) the Studio
and equipment must be upgraded, refurbished or repaired i f Franchisor, in its sole discretion,
decides it is necessary; and (4) the transferee (a) completes (or has its Operating Principal
complete) the Owner/Operator Module and has its Designated Manager complete the Designated
Manager Training Program, and (b) has at least one (1) Certified Pilates Instructor that has
completed the OrientationBridge Training Program - or an individual that has completed the
Teacher Training Program - prior to resuming the provision of Approved Services at the Studio.
14.3 Permitted Transfers to a Corporation or LLC or Affiliate Company. If Franchisee is

an individual or partnership, and desires to assign and transfer its rights, assets and obligations
under this Agreement to a corporation or limited liability company that is wholly-owned by
Franchisee and formed for the convenience of ownership, it may do so without approval from
Franchisor, and without payment of a transfer fee, so long as the terms and conditions of this
Agreement remain unchanged, and the Franchisee shall own and control all of the equity and
votmg power ofaîssued and outs^^
and votmg power of the limited 1 ^
eaeh individual shall have the same proportionate ownership interest in the corporation or
liability company as he or she had in Franchisee prior to the transfer.
14.4 Death or DisahidtvofFranehisee. In the event ofthe death or disability ofFranchisee,

if anindividnal, or ofastockholderofacorporate Franchisee, or ofapartnerofaFranchisee which
isapartnership,oramemberofaFrancbisee which isalimited liability company,the transfer of
Franchisee'sorthe deceased stockholder's, partner's ormember's interest in this Agreements
his or her heirs, trust, personal representative or conservators, as applicable, must occur within six
(^months of the death or disability,but, shall not be deemedatransfer by Franchisee (provided
that the responsible managementemployees or agents of Franchisee have been satisfactorily
trainedatFranchisor'slnitial Training)norobligateFranchiseetopay any transferfee. If
Franchisor determines (i) there is no imminent transfer toaqualified successor or (ii) there is no
heir or otherprincipal person capable ofoperating the Studio, Franchisor shall have the right, but
nottheobligation, to immediately appointamanagerandcommenceoperating the Studio on behalf
ofFranchisee. Franchisee shall be obligated to, and shall pay to Franchisor all reasonable costs
and expenses for such management assistance, Including without limitation, the manager'ssala^
room and board,travelexpenses and allother related expenses of theFranchisor appointed
manager.Operation ofthe Studio during any such period shall be for and on behalf ofFranchisee,
provided that Franchisor shall only haveaduty to utilize reasonable efforts and shall not be liable
to Franchisee or its owners for any debts, loses or obligations incurred by the Studio, or to any
creditor of Franchiseefor any supplies,inventory,equipment, tumiture, fixtures or services
purchased by the Studio during any period in which it is managed hyaFranchisor appointed
manager. Franchisor may, in its sole discretion, extend the six (6) month period of time for
completingatransfer contemplated by this Section.
14.5 Reloeation Except in cases when Franchisee is in default of its lease, Franchisee may
identifyanewAuthorized Location within the same site selection area in which the Studio was
located, subject to the written consent and approval ofFranchisor.
14.6 Transfer hvPranehlsor Franchisor shall have the right to transfer or assign all or any
part ofitsrightsorobhgationsheremtoanyperson or legal en^^
assignment, pledge or other means.

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15. DEFAULT AND TERMINATION OF AGREEMENT
15.1 Termination of Franchise bv Franchisor. Franchisor shall have the right to terminate
this Agreement for "good cause" upon delivering notice of termination to Franchisee. For
purposes of this Agreement, "good cause" shall include, without limitation: (i) a material breach
of this Agreement or any other agreement between Franchisee and Franchisor or any of
Franchisor's affiliates, (ii) intentional, repeated or continuous breach of any provision of this
Agreement or any other agreement
affiliates, and (iii) the breaches set forth helow:
^ Immediate Termmation Franchisee shall he deemed to he in default and

Franchisor may termmate this Agreement and all ri^
Franchisee any opportunity to cure the d e ^
Franchisee, and such ternâtion shall he for good cause where the grounds for termination are:
(1) Franchisee has made any material misrepresentation or omission in

applyingforthefranchiseor in executingor performing under this Agreementoranyother
agreement between Franchisee and Franchisor or any ofFranchisor'saffiliates;
(2) Franchisee becomes insolvent by reason of Franchisee's Inability to pay

debts as they become due,or makes an assignment for the benefit of creditors or makes an
admission ofFranchisee'sinahility to pay obligations as they become due;
(3) Franchisee files a petition inbankruptcy, or an involuntary petition in

bankruptcyisfiledagainstFranchiseeorareceiverisappointed for Franchisee's business, ora
final judgment remains unsatisfied or of record for30 days or longer; or if Franchisee isa
corporation, limited liability company or partnership. Franchisee is dissolved;
(4) Franchisee voluntarily or otherwise abandons the Studio. For purposes of

this Agreement, the term "abandon" means: (i) failure to actively operate the Studio for more t^^
two (2) business days without Franchisor'sprior written consent; or (ii) any other conduct on the
partofFranchiseeoritsprincipalsthatFranchisordeterminesindicatesadesireor intent to
discontinue operating the Studio in accordance with this Agreement or the Manual;
(5) Franchisee or any of its principal officers, directors, partners or managing

members is convicted of or pleads no contest toafelony or other crime or offense that adversely
affect the reputation ofthe System or the goodwill associated with the Marks;
(6) Franchisee makes an unauthorized direct or indirect transfer or attempted or

purported transfer of this Agreement, or makes an unauthorized direct or indirect transfer or
attempted or purported transfer of an ownership interest in the Franchise, or fails or refuses to
transfertheFranchiseorthe interest in the Franchise ofadeceased or disabled controlling owner
thereof as required;
(7) Franchisee falsifies any financial reports or records required to be provided

byFranchisee to Franchisorunderthis Agreement;
(8) Franchisee's: (i) disclosure, utilization, or duplication ofany portion ofthe

System, the Manual or other proprietary or Confidential Information relating to the S ^
contrary to the provisionsofthis Agreement; or (ii) material misuse ofthe Marks in any manner
not expressly authorized by Franchisor;

(9) Franchisee v i o ^ s any h ^ t h or ^
operates the Stndiomamanner that presentsa^
pnhhe;
(tO) Franchisee fails toohtamiawtnt possession of anaeeeptahie location and to

open for business asaCinh Filates Stndio within six^monthsafterthisAgre
hyFranchisor^nnless Franchisor agrees otherwise in writing;
(11) Franchisee defaults under the lease agreement or otherwise loses the right
to possess the premises at the location at which the Studio is located;
(12) Franchisee fails to comply with the covenants not to compete as required in
Articlel3herein;or
(13) Franchisee, aftercuringadefaultpursuanttoSectionl^lBherein, commits

the sameactofdefaultagainwithin any twelve(12)consecutive month period whether ornot such
default is cured after notice thereofis delivered to Franchisee, or ifFranchisee received tlnêe (3^
or more default notices ftom Franchisor within any twelve (12) consecutive monthly period
whether or not such defaults were related to the same problem or were cured after notice thereof
was delivered to Franchisee.
B Termmationwifh Notice In addition to the provisions of Section 15.1A, i f

Franchisee shall be in default underthe terms of this Agreementand the default shall not be cured
or remedied (to Franchisor'ssatisfaction) within thirty (30) days after receipt of w r i ^
from Franchisor(orlOdays'prior notice in the event ofadefault that is described in Subsections
(6), (7) or (8) below),in addition to all otherremedies available to Franchisor at law or in equity,
Franchisormayinmiediately terminate this Agreement.lf any such default is not cured within
specified cureperiod, this Agreement shall terminatewithoutf^hernotice to Franchiseee^
immediately upon expiration ofthe cure period. Franchisee shall be in default, and each of the
following shall constitute good cause for termination under this Agreement:
(1) Failure, refusal orneglectby Franchisee to obtalnFranchisor'sprlorwritten

approval or consent anytime such approval or consent is required by this Agreement;
(2) Franchisee's failure to comply with any provision ofthis Agreement that
does not otherwise provide for immediate termination, or Franchisee's bad f^th in carrym^
the terms of this Agreement;
(3) FailurebyFranchiseetomaintainbooks and financialrecords forthe Studio

suitable for proper financial audit or failure byFranchisee to permit Franchisor to carr^
rights to conduct an inspection or audit as provided in this Agreement or failure by Franchisee to
submit as required by this Agreement all reports, records and information of the Club F
franchised business;
(4) Franchlsee,or if Franchiseehaselectednot to directly supervise"on

premises" the day-today Studio operations,thenFranchisee's management employee,fails to
©3O162017^bâtesâocbise,^
Franchise Agreement
comp^^toF^chiso^^^
(5) Franchisee fails to pay when due any amo^

affiliates under this Agreement or any other agreement, or is nnahle to obtain adequate finan^
to cover all costs ofdeveloping, opening and operating the Studio;
(6) Franchiseefails to paywhendueanyamountsowingtoanyperson or entity

in connection with the construction, leasing,financing,operation or supply ofthe Stud^
(7) Franchisee closes any hank account without completing all ofthe following
afier such closing: (i) immediately notifying Franchisor in writing, (ii)immediat^^^
another hank account, and (iii) executing and delivering to Franchisorall documents necessary^
Franchisor to begin and continue making withdrawals from such hank account hy electronic funds
transfer as Exhibits to this Agreement permits;
(8) Franchisee fails to maintain or suffers cancellation of any insurance

coverage required underthis Agreement;
(9) Franchisee allows classestobetaughtor training tobeconductedby

teacherswhohavenot successfully completed the Club FilatesTeacherTraining Program or our
OrientationBridgeTrainmg Program:
(10) Any transfer or attempted transfer by Franchisee or anypartner,member or

shareholder in Franchisee of any rights or obligations under this Agreement to any third party
withoutthepriorwritten consent ofFranchisor;
(11) Franchisee offers in conjunction with the operation of tbe Studio products
or services that have not been approved by Franchisor;
(12) Franchisee fails to abide by the pertinent marketing and advertising

requirements andproceduresand participate inmarketingprograms forthe business as established
by Franchisor; or
(13) Franchisee fails to comply with the Performance Standards as set forth in
the provisionsofthis Agreement, as prescribed by Franchisor, orin the Manual, including, but not
limitedto^ the Minimum monthly CirossR^
System Standards for cleanliness, customer service, equipment maintenance, andany other System
Standards whicheffectorenhancethememberexperience atthe Studio; and the minimum
Member ûota .
15.2 Cross-Defau^ If there are now,orhereafier shall be, other franchise agreements or any
otheragreementsineff^tbetweenFranchiseeandFranchisorand/oranyofFranchisoBsaffiliat^^^
adefaultbyFranchiseeunderthetermsandconditionsofthisoranyothersuch agreement, shall
at the option ofFranchisor, constituteadefault under all such agreements.
15 ^ Ohdgations of Franchisee upon Termination E ^ r a t i o n or Non-Renew^
©3O162017Oubâtesâ^bise,^
Franchise Agreement
Immediacy upon termmafio^
A. ^righ^privifegesandl^
inunedia^fy cease and be null and void and of no further forc^
priviiegesand licenses shall innnediafeiyrevert to Franchisor;
B. Franchisee shall cease to he an authorized Club Filates franchise owner,and shall

immediately at its own expense, remove all signs, obliterate or remove a l l i e d
any other item or form of identification that would in any way link or associate Franchisee,^
goods and/or services with Franchisor, and shall immediately cease to use, in any manner, the
Marks, System andany other copyrighted information ormaterialsorany confidential inf^
Franchisee obtained asaresult of the franchise granted to Franchisee;
G Franchisee shall inmêdiately terminate all advertising and promotional efforts and
any other act that would in any way indicate that Franchisee is or was ever an authorized dub
Filates franchisee;
D. Franchisee shall cancel any assumed name ofFranchisee or equivalent registration

that containsany Proprietary Mark, andFranchiseeshall fumishFranchisor with evidence
satisfactory to Franchisor of compliance with this obligation within five(5) days aftertermination,
expiration ornon-renewal of this Agreement;
F. Franchiseeagreesnot to useany reproduction, counterfeit, copy, or colorable

imitation ofthe Marks that is likely to cause confusion, mistake or deception, or that is likely
dilute Franchisor's rights in and to the lârks, and finder agrees not to use any trade dress or
designationoforiginordescriptionorrepresentationthat falsely suggestsorrepresentsan
association or connection with Franchisor;
F. Franchisee shall pay all sums owing to Franchisor and its approved suppliers for
outstanding amounts owed under the Franchise Agreement and otherwise in connection with the
Studio. In the event of termination for any default of Franchisee, such sums shall include all
damages, costsandexpenses,includingreasonablelegalfees, incurred by Franchisor asaresult of
the default;
G Franchisee shall comply with the covenants set forth in Articles 12 and 13 of this
Agreement; and
H Franchisee shall, at Franchlsor'soption, assigntoFranchisor any interest that

Franchiseehas in any lease forthe premises ofthe Studio;
F Franchisor shall havetheoption, exercisable hygivingwrittennoticethereofwithin

thirty (30) days from the date of such ternâtion, expiration or non-renewal to purchase an
all equipment, f ^ i t u r e , fixtures, signs, sundries and supplies owned by Franchisee and used in
the Sfudio, atthe lesserof(i)Franchisee'scostlessdepreciation computed onareasonable straight
line basis (as determined in accordance with generally accepted accounting principles and
consistent with industry standards and customs) or (ii) fair market value of such assets, less(in
©30162017 C^bâtesânchis^^
30162017 Fraocbise Agreement
ei^cânyoândrng^
to assume F r a n c h i ^ s ^ e ^ ^ ^
asublease for the^remammgtermou the same terms and e o n d ^
value will he attributed to the value of the Marks or the System or to the assi
(or sublease) for the premises or the assigmueut of auy other assets usediueoujuuetiouwit^
Studio, audFranehisor willuot herequired topay auy separateeonsideratiou tor auy sueh
assigmueut or sublease.
If the parties eauuot agree ou fair market value withiu thirty (30) days of
Frauehisor'snotleeofinteuttopurehase, fair marketvalue shall be determined by au
professional and impartial third party appraiser withoutregardto goodwill or going eoueeru value,
designated by Franchisor and acceptable to Franehisee,whose determination shall be fmal and
binding on both parties. The cost of such appraisal shall be borne equally hy Franchisor and
Franchisee. Ifthe parties cannot agree upon an appraiser one shall he appointed by the American
Arbitration Association, upon petition of either party.
Franchisor shallhavetherighttowithholdfrom repurchase price funds sufficient

to pay all outstanding debts and liabilities ofFranchisee and the Studio and to pay such debts and
liabilities from such funds.
^. Termination, expiration or non-renewal of this Agreement shall not affect, modify

or discharge any claims, rights, causes ofaction or remedies, which Franchisor may have against
Franchisee, whetherunder this Agreement orotherwise,forany reason whatsoever, whether such
claims or rights arise before or after termination.
154 Franchisor's R^hts and RemediesmAddition to Termmation.
^. I f Franchisee shall be in default in the performance of any of its obligations or

breach any term or condition ofthisAgreement,madd^
Agreement, and without lin^ting any otherrightsorremedies to which Franchisormay be entitled
atlaworinequity,Franchisormay,atitselection, immediately or at any time thereafter, and
without notice to Franchisee cure such default for the account of and on behalf of Franchisee
including, without limitation, entering upon and taking possession ofthe Studio and totals
the name ofFranchisee, all other actions necessary to effect the provisionsofthis Agreement and
any such entry or other action shall not be deemedatrespass or other illegal act, and Franchisor
shall not be liable in any manner to Franchisee for so doing, and Franchisee shall pay the entire
cost thereof to Franchisor on demand, including reasonable compensation to Franchisor for the
management ofthe Studio.
B ^s an alternative to Franchisor's exercising its rights under Sectionl55A, above,

andonly in theevent of a prematureterminationof this Agreement,Franchiseesballpay
Franchisor liquidated damages in an amount equal to the sum of the royalties paid to Franchisor
for the twenty four (24) months prior to the termination of this Agreement; provided, ho^^
exercise ofthis right shall not preclude Franchisor's right to seek injunctive relief as outlined
Section 16.5. Franchisee's payment toFranchisor would not beapenalty for breaching this
FranchiseAgreement,butratherareasonableestimateofthelossesFranchisorwould incur in the
©3O162017CiubPiiatesâ^bis^^
event ofthe closure of Franchisee's franchised business. Should Franchisor elect to enforce its
right to liquidated damages under this Section, Franchisee's obligation to pay such damages would
be in addition to Franchisee's obligations to (i) pay all amounts still owed to Franchisor, and (ii)
adhere to Franchisee's other post-termination obligations. Franchisor's right to payment of
liquidated damages would be in addition to all other post-termination remedies available to
Franchisor under the law.

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16. RESOLUTION OF DISPUTES
16.1 Governing Law. This Agreement shall be governed by and construed in accordance with
the laws ofthe State of California, without reference to this state's conflict of laws principles.
Notwithstanding the foregoing, the parties specifically agree and acknowledge that all claims,
causes of actions or disputes related to Franchisee's covenants not to compete set forth in Section
13 of this Agreement, including the interpretation, validity and enforcement thereof, shall be
governed by the laws of the state where the Studio is located.
16.2 Internal Dispute Resolution. Franchisee must first bring any claim or dispute between
Franchisee and Franchisor to Franchisor's management and make every effort to resolve the
dispute internally. Franchisee must exhaust this internal dispute resolution procedure before
Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt
resolution of disputes internally shall survive termination or expiration of this Agreement.
16.3 Mediation. At Franchisor's option, all claims or disputes between Franchisee and
Franchisor (or its affiliates) arising out of, or in any way relating to, this Agreement or any other
agreement by and between Franchisee and Franchisor (or its affiliates), or any of the parties'
respective rights and obligations arising from such agreement, which are not first resolved through
the internal dispute resolution procedure set forth in Section 16.1 above, will be submittedfirstto
mediation to take place at Franchisor's then-current corporate headquarters under the auspices of
the American Arbitration Association ("AAA"), in accordance with AAA's Commercial
Mediation Rules then in effect. Before commencing any legal action against Franchisor or its
affiliates with respect to any such claim or dispute, Franchisee must submit a notice to Franchisor,
which specifies, in detail, the precise nature and grounds of such claim or dispute. Franchisor will
have a period of thirty (30) days following receipt of such notice within which to notify Franchisee
as to whether Franchisor or its affiliates elects to exercise its option to submit such claim or dispute
to mediation. Franchisee may not commence any action against Franchisor or its affiliates with
respect to any such claim or dispute in any court unless Franchisor fails to exercise its option to
submit such claim or dispute to mediation, or such mediation proceedings have been terminated
either: (i) as the result of a written declaration of the mediator(s) that further mediation efforts are
not worthwhile; or (ii) as a result of a written declaration by Franchisor. Franchisor's rights to
mediation, as set forth herein, may be specifically enforced by Franchisor. Each party will bear its
own cost of mediation and Franchisor and Franchisee will share mediator fees equally. This
agreement to mediate will survive any termination or expiration of this Agreement. The parties
will not be required to first aêm^
if suebeontroversy, dispute, or
to violate, orposes an iumiiueut risk of vioiatiug^âuyfederaiiypro^
rigbtsiutheMarks, tbe System, oriuauyConfideutialluformatiouorotbereoufidentiai
information; (b) any of tbe restrictive covenants contained in tbisAgre
Francbisee'spayment obligations under tbis Agreement.
164 Mandatory BmdmgArb^rationExcent as provided in Section 165oft^^^

FrancbiseeandFrancbisoragreetbatanyclaim,dispute, suit, action, controversy,or proceeding
of anytype whatsoever including any claim tor equitable relief and/orwbereeitberparty is acti^^
asa"privateattorneygeneral,"sulng pursuant toastatutory claim or otberwise,between or
involving Franchisee and Franchisor on whatever theory and/or tacts based, and whether or not
arising out ofthis Agreement, ("Claim") will be processed in the following manner:
^ FranchiseeandFranchisoreachexpresslywaivesall rights to any court proceeding,

except as expressly provided in Sectionl6.5 below;
B. ^ 1 Claims shall be submitted to and resolved by binding arbitration that will take
place at Franchisor'sheadquarters or other location that Franchisor designates in Orange County,
California,beforeandinaccordance with the arbitrationrulesof the American A r b i ^
Association, judgment upon the award rendered by the arbitrator shall he entered in any Court
havingjurisdiction thereof.
C. Franchisor andFranchiseeagree that any arbitration between Franchisor and

Franchisee shall be ofFranchisee's individual claim
not be arbitrated onaclass-wide basis.
D. This arbitration provision shall be deemed to be self-executing, and in the event

eitherpartyfailstoappearatanyproperlynoticedarbitrationproceeding, an award may beenter^^
against such party notwithstanding said failure to appear.
F. In no event shall Franchisor he liable to Franchisee for punitive damages in any

action arising out of or relating to this Agreement, or any breach, termination or cancellafi^
hereof.
F. ^ny arbitrationproceedinginvolvingthis AgreementortheStudiogenerally,

includingalldemands,otherfilingsandevidencesubmittedmconnectionwith such proceeding,
must be kept strictly confidential by Franchisee and its representatives, unless Franchisor agrees
otherwise in writing.
16 5 Other Proceedings (Right to IninnedveRedef^ Franchisee acknowledges and agrees

that irreparable harm could be caused to Franchisor by Franchlsee'sviolation of certain provisions
ofthisAgreementand,assuch, in addition to any otherreliefavailableat law or equity,Franchisor
shall be entitled to obtain in any court of competent jurisdiction, without bond, restrainm^
or temporary or permanent inunctions in order to enforce, among other items, the provisions of
this Agreement relating to:(i)Franchisee's use of the Marks and Confidential Informafi^^
©3O462017^bâtesânch^^ A^
Franchise Agreement
(mûdmganypropri^ry^^
not tocompetâs well asany other violations of the restrietlveeovenants set forthin this
Agreement; (iii) Franchisee's obligations on termination or expiration of thi^
disputes and controversies based on or arising nnder the Fanham Act, or otherwise involving the
Marks, as now or hereafter amended; (v)dispntes and controversies involving enforcement of the
Franchisor's rights with respect to confidentiality under this Agreement; and(vi) the pr^^
ofanyactoromission hy Franchisee or its employees that constitutesaviolation of applicable
law, threatens Franchisor's franchise system or threatens other franchisees ofFranchisor.
Franchisee'sonly remedy if such an injunction is entered will be the dissolution of the injuncfi^^
ifappropriate, and Franchisee waives all damage claims ifthe injunction is wrongfully issued.
16.6 ChoieeofForum.
A. Franchisee acknowledges and agrees tbat this Agreement is entered into in

California and that, except for those actions described in Sectionl6.5 above, any action brought
by either party against the other for the purpose of enforcing the terms and provisions o f ^
Agreement (provided such action is not subject to the arbitration proceeding pursuant to the terms
of this Agreement or applicable law)shall be instituted solely inastate or federal court having
subject matterjurisdictionthereofonly in California in thejudicial district in which France
its principal place of business and in no other court and that Franchisee irrevocably waives any
objection Franchisee may have to the exclusivejurisdiction or the exclusive venue of such court.
B. IfFranchisee institutes any arbitration or other legal proceedings in any venue or

othercourtotherthan those specified,Franchiseeshallassumeallof Franchisor's costs in
connection therewith, includmg,witbout limitation, reasonable attorney fees r e g ^
outcome of such arbitration or legal proceedings.
C. Franchiseeacknowledges that Franchisormay bring an action in any other court of

competent jurisdiction to seek and obtain injunctive relief as set forth in Section 16.5 above,
includingtoenforceFranchisee'snon-compete obligations hereunder.
16.7 Waiverof^mtive Damages.Franchisee herebvwai^

law,anyrighttoorclaimforanypunitive,exemplary,incidental,indirect, specialorcon^
damages (including,without limitation, lost profits)against Franchisor arising out of any cause
whatsoever (whether such cause be hasedincontract, negligence, strict liability, other tort or
otherwise)andagreesthatintheeventofadispute,thatFranchisee'srecovery Is limited to act^^^
damages. If any other term of this Agreement is found or determined to be unconscionable or
unenforceable for any reason, the foregoing provisions shall continue in full fo^
including, without limitation, the waiver ofanyright to claim any consequential damages. Nothing
in this Section or any other provision ofthis Agreement shall be construed to prevent Franchisor
ftom claiming and obtaining expectation or consequential damages, including lost future roya^^
forthe balance ofthe term ofthis Agreement i f i t is terminated due to Franchisee'sdefault,whi^^
thepartiesagreeandacknowledgeFranchisormayclaim under this Agreement.
168 WAIVER OF ^ R Y T R I A L B F H F F A R T l F S H F R F B Y A G f ^ F T O W ^
B Y ^ Y f N ANY ACTION, F R O C F F D ^
©2^2017 ^bâtesânchise^LC A^
Franchise Agreement
OR EQUITY REGA^LESS OF WH^^ THISWAIVFR SHALL
AFFLYTO ANY MATTER WHAT^
ARISES O U T O E O R I S R E E A T E O I N ANY WAY TOTHIS AGREEMENT, THE
PERFORMANCE OF EITHER PARTY, AND/ORFRANCHISEE'SFURCHASEEROM
FRANCHISOR OFTHEFRANOHISEANO/ORANYOOODSORSERVICES
169 WAIYER OF CLASS ACTIONS THE PARTIES AGREE THAT ALL

PROCEEOINGSARISINGOUTOFORRELATED TO THIS AGREEMENT, OR THESALE
OFTHEFRANCHISEO BUSINESS, WILLBECONO^^
CLASS WIDE BASIS, AND THAT ANY PROCEEDING BETWEEN FRANCHISEE,
FRANCHISEE'S GUARANTORS AND FRANCHISOR OR ITS
AFFILIATES/OFFICERS/EMPLOYEES MAYNOTBECONSOLIDATED WITH ANY
OTHERPROCEEDINGBETWEENFRANCHISORAND ANY OTHER THIRDPARTY
1610 A ^ o r m ^ F ^ a n d C o ^
A. Illegal action or arbiâfion Is

Agreement, the prevailing party shall he entitled to recover reasonable compensation lor
preparation, investigation, conrt costs, arbitration costs (if applicahlc)andrcasonah^
fees, from the non^prevailingparty as fixed by an arbitrator or conrt of competent jnri^^^
B. Separate and distinct from the right ofaprevailing party to recover expenses, costs
and fês in connection with any legal proceeding or arbitration, the prevailing party shall a ^
entitled to receive all expenses, costs and reasonable attorneys'lees inenrredinconnectionwit^
the enforcement ofany arbitration award or judgment entered. Furthermore, the right to recover
post-arbitration award and post-judgment expenses, costs and attorneys'fees shall be severable
and shall survive any award orjudgment and shall not be deemed merged into such judgment.
16.11 No W^hholdlngof Payments. Franchiseeshallnot withholdall or any part of any

payment to Franchisor or any of its affiliates on the grounds of Franchisor's alleged
nonperformance or as an offset against any amount Franchisor or any ofFranchisor's affiliates
allegedlymayowe Franchisee underthis Agreement or anyrelated agreements.
16.12 Limitation ofAetions. Franchisee fm^her agrees that no cause ofaction ariînô^tof^
under this Agreement may be maintained by Franchisee against Franchisor unless brought before
the expiration of one (l)yearafrer the act, transaction or occurrence upon which such action is
based or the expiration of one year afrer the Franchisee becomes aware of facts or circumstances
reasonably indicatingthatFranchiseemayhaveaclaim against Franchisor hereunder, whichever
occurs sooner, and that any action not brought within this period shall be barred asaclaim,
counterclaim, defense, or set-off. Franchisee hereby waives the right to obtain any remedy based
on alleged fraud, misrepresentation, or deceit by Franchisor, including, without limitation,
rescission ofthis Agreement, in any mediation,judicial, or other aûdicatory proceeding arising
hereunder, except uponaground expressly provided in this Agreement, or pursuant to any right
expressly granted by any applicable statute expressly regulating the sale offranchises,or any
regulation orrules promulgated thereunder.

16.13 Third Party Beneficiaries. Franchisor's officers, directors, shareholders, agents and/or
employees are express third-party beneficiaries of the provisions of this Agreement, including the
dispute resolution provisions set forth in this Section 21, each having authority to specifically
enforce the right to mediate/arbitrate claims asserted against such person(s) by Franchisee.

Your Initials: /
17. MISCELLANEOUS PROVISIONS
17.1 Severability. Except as provided in Section 13.4, each article, section, paragraph, term
and provision of this Agreement, or any portion thereof, shall be considered severable and if, for
any reason, any such portion of this Agreement is held by an arbitrator or by a court of competent
jurisdiction to be unenforceable due to any applicable existing or future law or regulation, such
portion shall not impair the operation of or have any effect upon, the remaining portions of this
Agreement which will remain in full force and effect. No right or remedy conferred upon or
reserved to Franchisor or Franchisee by this Agreement is intended to be, nor shall be deemed,
exclusive of any other right or remedy herein or by law or equity provided or permitted, but, each
shall be cumulative of every other right or remedy.
17.2 Waiver and Delay. No failure, refusal or neglect of Franchisor to exercise any right,
power, remedy or option reserved to it under this Agreement, or to insist upon strict compliance
by Franchisee with any obligation, condition, specification, standard or operating procedure in this
Agreement, shall constitute a waiver of any provision of this Agreement and the right ofFranchisor
to demand exact compliance with this Agreement, or to declare any subsequent breach or default
or nullify the effectiveness of any provision of this Agreement. Subsequent acceptance by
Franchisor of any payment(s) due it under this Agreement shall not be deemed to be a waiver by
Franchisor of any preceding breach by Franchisee of any terms, covenants or conditions of this
Agreement.
17.3 Designation of Responsible Parties. Franchisee represents and warrants to Franchisor

that the list below states: (i) the name, mailing address and equity interest of each person holding
any shares or other form of ownership, or security interest convertible into an equity interest, in
Franchisee, showing percentage of ownership held by each and (ii) the name and mailing address
ofthe individual(s) who will be the Operating Principal(s) of the Studio. Each Operating Principal
named below has the authority to act for Franchisee in all matters relating to the franchised Studio
granted hereunder, including voting responsibilities. Only those individuals who are party to this
Agreement and have an ownership interest in the franchise entity may be listed as an Operating
Principal. Franchisee shall promptly notify Franchisor of any change in any such information.
Any change in the Operating Principal(s), or in ownership information ofFranchisee, is subject to
Article 14 and the training requirements of this Agreement:

Franchisee is a O , organized under the laws of
_, or • Franchisee is an individual or group of individuals, and
hereby represents and warrants that the information stated below is true and accurate as ofthe date
set forth below:
Shareholder, Partner, Member Percentage of

or Individual Name and Address Ownership Interest
Operating Principal (may also be referred to as the "Designated Operator" in

the FDD):
17.4 Franchisor's Discretion. Except as otherwise specifically referenced herein, all acts,
decisions, determinations, specifications, prescriptions, authorizations, approvals, consents and
similar acts by Franchisor may be taken or exercised in the sole and absolute discretion of
Franchisor, regardless of the impact upon Franchisee. Franchisee acknowledges and agrees that
when Franchisor exercises its discretion or judgment, its decisions may be for the benefit of
Franchisor or the Club Pilatesfranchisenetwork and may not be in the best interest of Franchisee
as an individualfranchiseowner.
17.5 Notices.
A. All notices which the parties hereto may be required or permitted to give under this
Agreement shall be in writing and shall be personally delivered or mailed by certified or registered
mail, return receipt requested, postage paid, or by reliable overnight delivery service, addressed as
follows:
I f to Franchisor:
Club Pilates Franchise, LLC
3185 Pullman Street
Attention: Shaun Grove
I f to Franchisee:
©3O3O2017 Club Pilates Franchise, LLC A-46

B. Theadd^^sheremgiven^no^
by wriên notice giventothe other party as herein provid^^ Notices delivered hy certified or
registered maii shall he deemed to have been given three^hnsiness days afier postmark hy
UmtedStatesPostal Service, orthenextbnsmess day ^
service orwhen delivered by hand.
17.6 No Recourse A g a m s t N o n p a r i v A ^ a t e s . ^ l claims obligations'h^^

ofaction (whether in contract or in tort, in law or in eqnity, or granted by statute) that rnay be
based upon, in respect of, arise under, out or hy reason of, be connected with, or relate in any
manner to this Agreement, or thenegotiation, execution, orperformanceof this Agreement
(including any representation or warranty made in, in connection with, or as an inducement to this
Agreement, but not including separate undertakings such as guarantees of performance, personal
guaranties, orcorporateguarantees),mayhemadeonlyagainst(andarethose solely of) theentities
that are expressly identified as parties in the preamble to this Agreement ("Contracting P a r t ^
NoPersonwhoisnotaContracting Party, includingwithout limitation any director, officers
employee, incorporator,member,partner,manager,stockholder,affiliate, agent,attomey, or
representativeof, andany financial advisor or lender to, any ofthe foregoing("Nonparty
Affiliates"), shall have any liability (whether in contract or in tort, in law or in e q u i t y , o r ^
bystatute) for any claims, causes of action, obligations, or liabilities arism^
connectionwith,orrelatedinanymannertothisAgreementorbasedon,inrespectof,orbyreason
of this Agreement or its negotiation, execution, performance, or breach; and,to the maximum
extent permitted by law, each Contracting Party hereby waives and releases all such liabili^^
claims,causesof action, andobligationsagainst any such Nonparty Affiliates, unlesssuch
liabilities, claims, causes of action, and obligations arise from deliberately fraudulent acts.
Without limiting the foregoing, to the maximum extent permitted by law,(a) each Contracts
Party hereby waives and releases any and all rights, claims, demands or causes of action that may
otherwise be available at law or in equity, or granted by statute, to avoid or disregard tbe entity
form ofaContracting Party or otherwise impose liability ofaContracting Party on any Nonparty
Affiliate, whether granted by statute or based on theories of equity, agency, control,
instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil,
unfairness, undercapitalization,orother^^
upon any Nonparty Affiliates with to the performance ofthis Agreement or any representation or
warranty made in, in connection with, or as an inducement to this Agreement. Nothing herein is
intended to preventaContractingParty from pursuing any distinct legal rights it may have against
aNonparty Affiliate which arise fromaseparate document, such asaguaranty of performance,
personal guaranty,corporate guaranty or similar agreeme
ofthis Agreement which limits the right ofprospective Third Party Beneficiaries, any Nonparty
Affiliate may rely on this provision and enforce it against any Contracting Party or other Perso
or entity.

Your Initials: /
18. ACKNOWLEDGMENTS

181 THE SUBMISSION OF THIS AGREEM^^
A ^ THIS AOIÊMENT SHALE H E O ^ ^
HEIÔEBYTHEEI^NOHISORANOTHEEI^NOHISEE THEOATEOEEXEOUTION
HYTHEFRANCHISORSHAEEBECONSIOEIÔTOEETHEOATEOEEXECUTION
THISAOREEMENT
18 2 THIS A O I ^ E M E N T S H A I T ^ ^ BE H I l ^ I N O ON THE
AND UNTIE IT SHALE HAVE BEEN ACOEFTED AND SIONEO BY AN AUTHORIZED
OFFICER OFTHEFRANCHISOR
183 FRANCHISEE ACKNOWLEDGES THATITREOEIVEDAOOMFLETECOFY OF

THIS AGREEMENT FORAFERIOD NOT LESS THAN FOURTEEN (14) CALENDAR
DAYS, DURING WHICH TIME FRANCHISEE CONDUCTED AN INDEPENDENT
INVESTIGATION OF THE BUSINESS LICENSED HEREUNDER TO THE EXTENT OF
FRANCHISEE'S DESIRE TO DO SO FRANCHISEE RECOGNIZES AND
ACKNOWLEDGES THAT THE BUSINESS VENTURE CONTEMPLATED BY THIS
AGREEMENTINVOLVESBUSINESSRISKS, ANDTHATITSSUCCESS W I L L B E
LARGELY DEPENDENT UPON THE ABILITY OF THE FRANCHISEE AS AN
INDEPENDENT BUSINESSPERSON FRANCHISOREXPRESSLY DISCLAIMS THE
MAKING OF,AND FRANCHISEE ACKNOWLEDGES THAT IT HAS NOT RECEIVED,
ANYWARRANTYORGUARANTEE,EXPRESSORIMPLIED,THATFRANCHISEEWILL
BE SUCCESSFUL IN THIS VENTURE OR THAT THE BUSINESS WILL ATTAIN ANY
LEVELOF SALES VOLUME,PROFITS, OR SUCCESSFRANCHISEE ACKNOWLEDGES
THATTHIS AGREEMENT, THE FRANCHISE DISCLOSURE DOCUMENT ("FDD"), AND
THE EXHIBITS HERETO CONSTITUTE THE ENTIRE AGREEMENT OF THEPARTIES
THIS AGREEMENTTERMINATES AND SUPERSEDES ANY PRIOR AGREEMENT
BETWEENTHEPARTIESCONCERNINGTHESAMESUBÊCTMATTER
18 4 FRANCHISEE AGREES AND ACKNOWLEDGES THAT FULFILLMENT OF ANY

AND ALL OF FRANCHISOR'S OBLIGATIONS WRITTEN IN THIS AGREEMENT OR
BASEDON ANY ORALCOMMUNICATIONSWHICHMAYBE RULED TO BEBINDING
INACOURTOFLAWSHALLBEFRANCHISOR'S SOLE RESPONSIBILITY AND NONE
OF FRANCHISOR'S AGENTS, REPRESENTATIVES, NOR ANY INDIVIDUALS
ASSOCIATED WITHFRANCHISOR'SFRANCHISECOMPANYSHALLBEFERSONALLY
LIABLETOFRANCHISEEFORANYREASON THISISANIMPORTANTPARTOFTHIS
AGREEMENTFRANCHISEEAGREESTHATNOTHINGTHATFRANCHISEEBELIEVES
FRANCHISEE HAS BEEN TOLD BY FRANCHISOR OR FRANCHISOR'S
REPRESENTATIVES SHALL BE BINDING UNLESS IT IS WRITTEN IN THIS
AGREEMENT THIS IS AN IMPORTANTPART OFTHIS AGREEMENT DO NOT SIGN
THIS AGREEMENT IF THERE IS ANY QUESTION CONCERNING ITS CONTENTS OR
ANYREPRESENTATIONSMADE

Your Initials: /

19. ENTIRE AGREEMENT
This Agreement, the documents referred to herein, and the exhibits hereto, constitute the entire
and only agreement between the parties concerning the granting, awarding and licensing of
Franchisee as an authorized Club Pilates Franchisee at the Studio location, and supersede all prior
and contemporaneous agreements. There are no representations, inducements, promises,
agreements, arrangements or undertakings, oral or written, between the parties other than those set
forth herein. Except for those permitted to be made unilaterally by Franchisor hereunder, no
amendment, change or variance from this Agreement shall be binding on either party unless
mutually agreed to by the parties and executed by their authorized officers or agents in writing.
This Agreement does not alter agreements between Franchisor and Franchisee for other locations.
Nothing in this Agreement or in any related agreement, however, is intended to disclaim the
representations Franchisor made in the FDD that Franchisor furnished to Franchisee.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below
to be effective upon execution by Franchisor.
[THE REST OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK

SIGNATURES ON THE FOLLOWING PAGE]

"FRANCHISOR" "FRANCHISEE"
If Franchisee is an individual:
By: Signature:
Date:
Title:
Signature:
Accepted: Date:
[Signatures continued on next page.]
If Franchisee is a corporation or other entity:
[Name of Franchisee]
By:
Title:
Date:
By: _
Title:
Date:

EXHIBIT 1 TO
CLUB PILATES FRANCHISE AGREEMENT
AUTHORIZED LOCATION ADDENDUM
This Addendum is made to the Club Pilates Franchise Agreement (the "Franchise Agreement") between
Club Pilates Franchise, LLC ("Franchisor"), and ("Franchisee") dated
, 20_.
1. Preservation of Agreement. Except as specifically set forth in this Addendum, the Franchise
Agreement shall remain in full force and effect in accordance with its terms and conditions. This
Addendum is attached to and upon execution becomes an integral part of the Franchise Agreement.
2. Authorized Location. The parties hereto agree that the Authorized Location referred to in
Section 1.3 of the Franchise Agreement shall be the following:
3. Designated Territory, if any. Pursuant to Section 1.3 of the Franchise Agreement, Franchisee's
Designated Territory will be defined as follows (if identified on a map, please attach map and reference
attachment below):
This Addendum is agreed to and accepted by the parties this day of , 20
FRANCHISOR:
By:
Title:
FRANCHISEE:
By:
Title:
By:
Title:

EXHIBIT 2 TO THE
ELECTRONIC FUNDS TRANSFER AGREEMENT
This Electronic Funds Transfer Agreement (the "Agreement") is made on this day of
2 0 _ by and between Club Pilates Franchise, LLC. ("Franchisor"),
and or their assignee, i f a partnership, corporation or limited
liability company is later formed ("Franchisee").
Whereas, Franchisor and Franchisee are parties to a Club Pilates Franchise Agreement executed
on even date herewith (the "Franchise Agreement") and desire to enter into an Addendum to the
Franchise Agreement;
Now, therefore in consideration of the mutual promises contained herein and as an inducement
to Franchisor to execute the Franchise Agreement, the parties agree as follows:
A. Franchisee shall pay any and all fees and other charges in connection with this Addendum and
the Franchise Agreement (including, without limitation, the Royalty Fees, contributions to the Fund and
any other payments due to Franchisor by Franchisee, and any applicable late fees and interest charges)
by electronic, computer, wire, automated transfer, ACH debiting, and bank clearing services
(collectively "electronic funds transfers" or "EFT"*), and Franchisee shall undertake all action necessary
to accomplish such transfers.
B. Upon execution and delivery of this Agreement, Franchisee shall execute and deliver two (2)
originals of the "Electronic Debit Authorization" attached as Exhibit 3 to the Franchise Agreement,
which authorizes Franchisee's bank or other financial institution to accept debit originations, electronic
debit entries, or other EFT, and electronically deposit fees and contributions owing Franchisor directly
to Franchisor's bank account(s). Upon Franchisor's request, Franchisee shall deliver to Franchisor all
additional information that Franchisor deems necessary (including, without limitation, financial
institution of origin and relevant accounts and ABA/transit numbers for any new bank accounts that
Franchisee opens after the date of this Addendum) in connection with such EFT.
C. By executing this Addendum, Franchisee authorizes Franchisor to withdraw funds at such days
and times as Franchisor shall determine via EFT from Franchisee's bank account for all fees and other
charges in connection with the Franchise Agreement and this Addendum, as described in the first
sentence ofthis paragraph. Franchisee authorizes weekly ACH debits via EFT based on an amount equal
to the total weekly amount due Franchisor, as set forth in Section 5 of the Franchise Agreement.
D. Franchisee is responsible for paying all service charges and other fees imposed or otherwise
resulting from action by Franchisee's bank in connection with EFT by Franchisor, including, without
limitation, any and all service charges and other fees arising in connection with any EFT by Franchisor
not being honored or processed by Franchisee's bank for any reason and a Fifty Dollar ($50) charge by
Franchisor for processing the EFT. Upon written notice by Franchisor to Franchisee, Franchisee may
be required to pay any amount(s) due under the Franchise Agreement and/or this Addendum directly to
Franchisor by check or other non-electronic means in lieu of EFT at Franchisor's discretion. It shall be

a non-curable event of default under Article 15 of the Franchise Agreement if Franchisee closes any
bank account without completing all of the following forthwith after such closing: (1) immediately
notifying Franchisor thereof in writing, (2) immediately establishing another bank account, and (3)
executing and delivering to Franchisor all documents necessary for Franchisor to begin and continue
making withdrawals from such bank account by EFT as this Addendum permits.
E. Except as specifically set forth in this Addendum, the Franchise Agreement shall remain in full
force and effect in accordance with its terms and conditions. This Addendum is attached to and upon
execution becomes an integral part of the Franchise Agreement.
F. Wherefore, the parties have set forth their hand and seal on the day and date first above written.
FRANCHISOR:
By:
Title:
FRANCHISEE:
By:
Title:
By:
Title:

EXHIBIT 3 TO THE
ELECTRONIC DEBIT AUTHORIZATION
[SAMPLE -MAY OBTAIN INFORM A TION IN DIFFERENT MANNER]
FRANCHISOR: Club Pilates Franchise, LLC
FRANCHISOR ID NUMBER:
The undersigned hereby authorizes Club Pilates Franchise, LLC (the "Franchisor"), to initiate debit
entries to the undersigned's checking account indicated below and the depository named below (the
"Depository"), to debit the same to such account.
Depository Name:
Branch:
City State and Zip Code:
Transit/ABA No.:
Account Number:
This authority is to remain in full force and effect until the underlying obligations under the Franchise
Agreement have been satisfied in full or released in writing by Franchisor.
This authorization further confirms my understanding of Exhibit 2 to the Franchise Agreement signed
by me/us in which I/we expressly agree that this authorization shall apply to any and all Depositories
and bank accounts with which I/we open accounts during the term of the Franchisee Agreement and any
renewals. Without limiting the generality of the forgoing, I/we understand that if I/we close any bank
account, I/we are obligated immediately to: (i) notify Franchisor thereof in writing, (ii) establish another
bank account, and (iii) execute and deliver to Franchisor all documents necessary for Franchisor to begin
and continue making withdrawals from such bank account/depository by ACH debiting or other
electronic means. I/we specifically agree and declare that this Authorization shall be the only written
authorization needed from me/us in order to initiate debit entries/ACH debit originations to my/our bank
account(s) established with any Depository in the future.
DATE:
ID NUMBER:
PRINT NAME(S): SIGNATURE(S):
©3Oi62017 Club Pilates Franchise, LLC

3Q462017 Franchise Agreement
EXHIBIT^TOTHE
CLUB PILATES FRANCHISEAGREEMENT
GUAI^TLL,INDEMNII^
For value receive andmconside^

"Pranehis^ to execute the Club Plates P r a n c e Agre^^
date herewith, hy aud between Prauehisor and or his assignee, if a
partnership, corporation or limited liability company is later formed (tbe "Franchisees,
(the "Cuarantor(s^,jointly and severally,hereby unconditionally
guarantee to Francl^sor and its successors and assigns the tu^
each obligation undertaken by Franchisee under the terms ofthe Franchise Agreement, including al^
Franchisee'smonetary obligations arising under or by virtue ofthe Franchise Agreement.
Upon demand by Franchisor, Guarantor(s)willinmiediately make each payment required ofF^

under the Franchise Agreement. Guarantor(s) hereby waive any right to require Franchisor to: (a)
proceed against Franchisee for any payment required under the Franchise Agreement;(b) proceed
against or exhaust any security from Franchisee; or (c)pursue or exhaust any remedy, inciuding any
legalorequitablerelief,againstFranchisee. WithoutaffectingtheobligationsofGuar^^
Guarantee,fndenmificationandAcknowledgment,Franchisor may, without noticetoCuarantor(s),
extend, modify,orrelease any indebtedness or obligation ofFranchisee, or settle, aûst or compr^
any claims against Franchisee.
Goaraotor(s) waive notice of ameodmeot of the Praoehise Agreement aod notice

payment hyPranchisee, and agree to he honndhy any and ad snch amendments and changes to
the Franchise Agreement.
Guarantor(s)hereby agree to defend, indemnify andholdFranchisor harmless against any andall^

damages, habilities,costs,andexpenses(including, without limitation, reasonable attorneys' fees,
reasonable costsof investigations, courtcosts,andarbitrationfeesandexpenses)resultingfrom,
consisting of, orarising out of or in connection with any failure by Franchisee to perform any obh
of Franchisee under the Franchise Agreement, any amendment, or any other agreement executed by
Franchisee referred to therein.
Guarantor(s) hereby acknowledge and agree to be individually bound by ail obligations and covenant
of Franchisee contained in the Franchise Agreement, including those related to non-competition and
confidentiality.
This Guarantee shall terminate upon the expiration or termination of the Franchise Agreem
that all obligations and liabilities of Cuarantor(s) that arise from events that occurr
effective date of such termination shall remain in full force and effect until satisfi^^
Guarantors), and all covenants that by their terms continueinforce afrer termination
the Franchise Agreement shallremaininforceaccordingtotheirterms.Upon the death of an individual
Guarantor, the estate of such Guarantor will be bound by this Guarantee, but oniy for defaults an^
obligations existing at the time of death, and the obligations of the other Guarantor(s)wi^^
full force and effect.
©3^2017OubâtesFra^b^^
30^2017 Franchise Agreement
Tbevahdityof^Gu^nândthe^
termma^ r e s t r i c t d i m m ^
takeorbe fbêdtotake against Franchise or by reason of any
rights or remedies reserved to Franobisor in tbe Franebise Agreeme
TbenseoftbesingniarbereinsbaiiineindetbepinraLEaebtermnsedintbisGnaran^
defined herein, sbaiibave tbe same meaning as wbennsed in tbe Franchise Agreement.
This Guarantee is to be performed in Orange Connty,Caiifornia and shali be governed by

in accordance with the taws ofthe State of California. Notwithstanding the foregoing, the undersigned
specificaiiy agree and aclôwiedge that any claims, causes ofaction or disputes arising out of or related
to Franchisee'sor any of Guarantor'scovenants not to compete(set forth in the Franchise Agreement
and now incorporated by reference as i f fully set forth in this Guaranty), including th^
validity and enforcement thereof, shall be governed by the laws where the Studios is located.
Guarantors) specifically agreethat the provision ofthe Franchise Agreementrelated to dispute
resolution(mternaldisputeresolution,non-bindingmediationandarbitration),m^
attorneys'fees and other enforcement ofthe Franchise Agreement shall apply equally with respect to all
claimsorcausesofactionarisingoutof or relatedtothisGuarantyinany manner (including the
interpretation thereof). Franchisor and Guarantor(s)agree that any dispute underthisGuar^^
resolved by arbitration as set forth in the Franchise Agreement (subject to the exceptions described
therein).
hi connection therewith, each ofthe undersigned hereby appoints the Secretary ofState for the
California as his agent for service ofprocess to receive summons issued by the court in connection with
any such litigation. Franchisor and Guarantor(s) agree that any dispute under this Guarantee shall be
resolved by arbitration pursuanttoArticielôfthe Franchise Agreement(except as otherwiseprovid^
in Articlelôf tbe Franchise Agreement).
fNWfT^SSWHFRFGF,each of the undersigned has signed this Guarantee as of the dat^

Franchise Agreement.
WITNESS: GUARANTOR(S)
By:
By:

E^H^T5TOTHE
CLUBPILATESFRANCHISEAGREEMENT
ADDENDUMTO LEASE
This Addendum toLease (this Âddendum^modifiesandsuppiementsthat certain iease dated

and entered into hyTenant and Landlord concerning theLoeation at
^ (thelease")
LandiordandTenant, intendingthatCinhPiiates Franchise, LLC,aDeiaw^

^Franchisor^(and its successors and assigns^heathirdpartyheneficiary of this Addendum
follows:
(1) Landlord shall,during the term ofthe Lease and thereafter, provide Franchisor all sales
and other inft^rmationitmay have, whether provided hy Tenant or otherwise, related to the o p e r a s
Tenant's Stndio as Franchisor may reasonably request;
(2) Tenant may displaythe trademarks, service marks and other commercial symbols owned
by Franchisor and used to identify the service and/orpro^
"ClubFilatesBtheStudiodesignandimagedevelopedandownedbyFranchisor, as it currently e ^ ^
and as it may be revised and further developed by Franchisor from time to time, and certain associated
logos in accordance with the specifications required by the Club Filates Manual, subject only to th^
provisions ofapplicable law and in accordance with provisions in the Lease no less favorable than those
applied to other tenants ofLandlord;
(3) Tenant shallnot, and the Landlord shall not permit the tenant to, sublease or assign all or
any part ofthe Lease or the Premises, or extend the term or renew the Leased without Franchisor'sp^
writtenconsent;
(4) Landlord shall concurrently provide Franchisor withacopy of any written default notice
sent to Tenant and thereupon grantFranchisorthe right (but not theobligation) to cure any deficiency or
defaultunderthe Lease, shouldTenantfailtodoso,withinfive(^daysaftertheexpirationofthep
in whichTenant may cure the default;
(5) TheFremises shall be used only for the operation ofaClub Filates Studio;
(6) Tenantmay, without Landlord'sconsent (but subject to providing Landlord with written
notice thereof), at any time assign this Lease or sublease the whole or any part of the Premises to
Franchisor or any successor, subsidiary or affiliate ofFranchisor;
(7) In the event of an assignment of the Lease to Franchisor as described in (6) above,
Franchisormay further assign this Lease, subject toLandlord's consent, soch consent not tohe
unreasonably withheldbasedontheremainingobligationsofassignee under theLease, toa duly
©30162017 CiubPiiotosFranchis^^C
authorized franchisee ofFranchisor, and thereupon Franchisor shall be released from any further liability
under the Lease;
(8) Until changed by Franchisor, notice to Franchisor shall be sent as follows:

3185 Pullman Street
Attn: Shaun Grove
(9) None of the provisions in this Addendum or any rights granted Franchisor hereunder,
may be amended absent Franchisor's prior written consent.
(10)
AGREED:
TENANT LANDLORD
By: By:
Its: Its:
Date: Date:

Exhibit B
LIST OF STATE AGENTS FOR SERVICE OF PROCESS

AND STATE ADMINISTRATORS
©30^2017 Club Pilates Franchise, LLC

LIST OF STATE ADMINISTRATORS AND AGENTS FOR SERVICE OF PROCESS
CALIFORNIA ILLINOIS
Commissioner of Business Oversight Franchise Bureau
One Sansome Street Illinois Attorney General
Suite 600 500 South Second Street
San Francisco, CA 94104 Springfield, Illinois 62706
Tel: (415) 972-8559 (217)782-4465
Fax: (415) 972-8590
Toll Free: (866) 275-2677 INDIANA
(for service of process)
CONNECTICUT Indiana Secretary of State
Department of Banking 201 State House
Securities and Business Investments Division Indianapolis, Indiana 46204
260 Constitution Plaza
Hartford, Connecticut 06103-1800 (state agency)
Tel: (860) 240-8230 Securities Commissioner
Indiana Secretary of State
FLORIDA Securities Division, Franchise Section
Tom Kenny, Regulatory Consultant 302 West Washington Street,
Department of Agriculture & Consumer Services Room E - l l l
Division of Consumer Services Indianapolis, Indiana 46204
P.O.Box 6700 Tel: (317) 232-6681
Tallahassee, Florida 32314
Tel: (850) 488-2221 IOWA
Fax:(850)410-3804 Dennis Britson
Director of Regulated Industries Unit
HAWAII Iowa Securities Bureau
(for service of process) 340 Maple
Commissioner of Securities of the State of Hawaii Des Moines, Iowa 50319-0066
Department of Commerce and Consumer Affairs Tel: (515) 281-4441
Business Registration Division Fax: (515) 281-3059
Securities Compliance Branch email: iowasec@iid.state.ia.us
335 Merchant Street, Room 203
Honolulu, Hawaii 96813 MARYLAND
(state agency) Maryland Securities Commissioner
Department of Commerce & Division of Securities
Consumer Affairs 200 St. Paul Place
King Kalakaua Building Baltimore, Maryland 21202-2020
335 Merchant Street, Rm 203
Honolulu, Hawaii 96813 (state agency)
Tel: (808)586-2722 Office of the Attorney General
Fax: (808) 587-7559 Division of Securities
200 St. Paul Place
Baltimore, Maryland 21202-2020
Tel: (410) 576-6360

MICHIGAN NEW YORK
(for service of process) (state agency)
Michigan Department of Consumer and Industry Services Office of the New York State Attorney
Bureau of Commercial Services General
Corporations Division Investor Protection Bureau
PO Box 30054 Franchise Section
Lansing, Michigan 48909 120 Broadway, 23rd Floor
Tel: (517) 241-6470 New York, NY 10271-0332
(212)416-8236 Phone
MICHIGAN (212)416-6042 Fax
(state agency)
Department of the Attorney General NORTH DAKOTA
Consumer Protection Division (for service of process)
Antitrust and Franchise Section North Dakota Securities Commissioner
670 Law Building North Dakota Securities Department
Lansing, Ml 48913 600 East Boulevard, 5th Floor
Tel: (517) 373-7117 Bismarck, North Dakota 58505-0510
MINNESOTA (state agency)

Commissioner of Commerce North Dakota Securities Department
85 Seventh Place East, Suite 500 600 East Boulevard, 5th Floor
St. Paul, MN 55101-2198 Bismarck, North Dakota 58505-0510
Tel: (651) 539-1600 Tel: (701) 328-2910
NEBRASKA OREGON
Gene Schenkelberg, Securities Analyst Director, Department of Consumer &
Department of Banking & Finance Business Services
1200 N. Street, Suite 311 Division of Finance & Corporate Securities
P.O.Box 95006 Labor and Industries Building
Lincoln, Nebraska 68509 Salem, Oregon 97310
Tel: (402) 417-3445 Tel: (503) 378-4140
Fax: (503) 947-7862
NEW YORK Email: dcbs.dfcsmail@state.or.us
Attention: New York Secretary of State RHODE ISLAND
New York Department of State Director
One Commerce Plaza, Securities Division
99 Washington Avenue, 6 Floorth
Department of Business Regulation,
Albany, NY 12231-0001 Building 69, First Floor
(518)473-2492 John 0. Pastore Center
1511 Pontiac Avenue,
Cranston, Rhode Island 02920
Tel: (401) 462 9582
© m 6 2 0 l 7 Club Pilates Franchise, LLC

SOUTH DAKOTA
Division of Securities
TEXAS Department of Labor & Regulation
Statutory Document Section 124 S. Euclid, Suite 104
Secretary of State Pierre, South Dakota 57501
1719 Brazos (605) 773-4823
Austin, Texas 78701
Attn: Dorothy Wilson WASHINGTON
Tel: (512) 475-1769 (state agency)
Administrator
UTAH Department of Financial Institutions
Director, Division of Consumer Protection Securities Division
Utah Dept. of Commerce P.O. Box 9033
160 East Three Hundred South Olympia, Washington 98507-9033
SM Box 146704 Tel: (360) 902-8760
Salt Lake City, Utah 84114-6704 Fax: (360) 902-0524
Tel: (801) 530-6601
Fax: (801) 530-6001 WISCONSIN
Commissioner of Securities
VIRGINIA Department of Financial Institutions
(for service of process) P.O. Box 1768
Clerk of the State Corporation Commission Madison, Wisconsin 53701-1768
1300 East Main Street, 1st Floor Tel: (608) 266-2801
Richmond, Virginia 23219
(state agency)
Director
State Corporation Commission
Division of Securities and Retail Franchising
1300 East Main Street, 9th Floor
Tel: (804) 371-9051
WASHINGTON
Administrator
Department of Financial Institutions
Securities Division
150 Israel Road SW
Turn water, Washington 98501
©30162017 club Pilates Franchise, LLC

3O162017 Franchise Disclosure Document - Exhibits
Exhibit C
FINANCIAL STATEMENTS

Financial Statements
Year Ended December 31, 2016 and the

Period March 12, 2015 (Date of Inception)
To December 31, 2015
Contents
Independent Auditors* Report 1-2
Balance sheets 3
Statements of income 4
Statements of changes in members' equity 5
Statements of cash flows 6-7
Notes to financial statements 8-16

I fJB
^
ORTEGA & K O N R A D , LLP
CERIIF1ED PUBLIC AtCOIINIAMIS
1 2 5 2 6 H i g h B l u f f D r i v e , Suite 3 0 0 , San D i e g o , CA 9 2 1 3 0 • D i r e c t 8 5 8 . 6 2 3 . 2 7 8 6 • Fax 8 5 8 . 4 0 B . 2 4 5 7

www.ortegacpa.net
INDEPENDENT AUDITORS' REPORT
To the Member of
Costa Mesa, California
We have audited the accompanying financial statements of Club Pilates Franchise, LLC (a Limited
Liability Company), which comprise the balance sheets as of December 31, 2016 and 2015, and the
related statements of income, changes in members' equity and cash flows for the year ended
December 31, 2016 and for the period of inception (March 12, 2015) to December 31, 2015, and the
related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of thesefinancialstatements in
accordance with principles generally accepted in the United States of America: this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free of material misstatements, whether due tofraudor
error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether thefinancialstatements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in thefinancialstatements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of thefinancialstatements, whether due tofraudor
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of thefinancialstatements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of thefinancialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion the financial statements referred to above present fairly, in all material respects, the
financial positions of Club Pilates Franchise, LLC, as of December 31, 2016 and 2015, and the
results of operations and cash flows for the year ended December 31, 2016 and for the period of
inception (March 12, 2015) to December 31, 2015 in accordance with accounting principles
generally accepted in the United States of America.
f H***^, LLP
March 1,2017
Balance Sheets
December 31, 2016 and 2015
Assets 2016 2015

Current Assets
Cash $ 1,870,109 $ 1,330,215
Accounts receivable 680,233 167,534
Inventory 1,235,106 319,199
Prepaid expenses 68,662 88,081
Other current assets 192,168 -
Note receivable - related party 1,000,000 -
Total current assets 5,046,278 1,905,029
Property and Equipment 632,173 563,458
Other Assets
Intangible assets 5,804,149 5,805,816
Deposits 25,400 20,400
Total other assets 5,829,549 5,826,216
Total assets s 11,508,000 $ 8,294,703
Liabilities and Members' Equity

Current Liabilities
Current portion of long-term debt s 108,333 $ -
Accounts payable 960,297 574,970
Accrued expenses 329,332 136,110
Marketing fimd 44,201 710
Deferred revenue 3,986,513 863,584
Due to related parties - 135,400
Total current liabilities 5,428,676 1,710,774
Long-Term Debt 2,291,667 2,500,000
Other Long-Term Liabilities
Total other long-term liabilities 2,201,222 357,185
Total liabilities 9,921,565 4,567,959
Members' Equity 1,586,435 3,726,744
Total liabilities and members' equity $ 11,508,000 $ 8,294,703
The accompanying notes are an integral part of this statement.

Statements o f Income
Year Ended December 31,2016 and the Period of
March 12,2015 (Date of Inception) to December 31,2015
Revenue 2016 2015

Franchise revenues
Franchise initiation fees $ 1359,751 $ 276,667
Franchise royalty fees 739,190 105,506
Developmentfranchiseagreement 115,936 86,949
Product and equipment sales 5,264,423 978,832
Other 624,935 129,434
Studio revenues 1,535,776 1,349,642
Total revenues 9,640,011 2,927,030
Costof Revenues
Cost offranchiserevenues 4,999,957 885,875
Cost of studio revenues 1,131,892 561,956
Total cost of revenues 6,131,849 1,447,831
Gross Profit 3,508,162 1,479,199
Selling, General & Administrative Expenses
Franchise expenses 2,951,590 1,336,448
Studio expenses 316,340 359,427
Total selling, general & administrative expenses 3,267,930 1,695,875
Income (Loss) From Operations 240,232 (216,676)
Other Income (Expenses)
Gainfromsale of assets 320,020 450,544
Interest expense (251,371) (211,991)
Interest income 17,000 -
Total other income (expense) 85,649 238,553
Net Income Before Provision of LLC Tax 325,881 21,877
Provision for LLC Tax (12,590) (6,800)
Net Income $ 313,291 $ 15,077

Statements of Changes in Members' Equity
^ ^ g ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ l , 2015
Additional
Common Preferred Paid-in Member Retained
Units Units Capital Distributions Earnings Total
Opening Balance, March 12,2015 $ - $ $ $ - $

Issuance of666,667 Common Units 666,667 666,66?
Issuance of2,000.000 Prefeired Units - 2,000,000 2,000.000
Capital contribution - - 1,045,000 1,045,000
Net Income - 15.077 15.077
Balance, December3l, 2015 666.667 2,000.000 1.045,000 15.077 3.726.744
Capital contribution
Member distributions (1.054,905) (1,045.000) (353,695) - (2,453.600)
Net Income - - 313,291 313,291
Balance, December31, 2016 $666,667 $ 945,095 $ $ (353,695) $ 328,368 $1,586,435

Statements of Cash Flows
2016 2015
Cash Flows From Operating Activities
Net Income $ 313,291 $ 15,077
Adjustments toreconcilenet income
to net cash provided by operating activities
Depreciation & amortization 92,592 46,737
Bad debt expense 20,000 -
Gainfromsale of assets (320,020) (450,544)
(Increase) decrease in:
Accounts receivables (532,699) (147,534)
Inventory (942,619) (319,199)
Prepaid expenses 19,419 (88,081)
Other current assets (192,168) -
Deposits (5,000) (20,400)
Increase (decrease) in:
Marketing fund 43,491 (8,805)
Net cash provided by operating activities 3,965,258 120,368
Cash flows from investing activities
Proceedsfromsale of assets 443,005 424,103
Purchases of property and equipment (279,369) (402,884)
Issuance of note receivable - related party (1,000,000) .
Net cash (used) provided by investing activities (836,364) 21,219
Cash flows fromfinancingactivities
Proceedsfromrelatedparty bans - 260,400
Marketing funds contributed as part of member unit issuance - 8,228
Payments on loanfromrelated party (135,400) (125.000)
Member capital contribution - 1,045,000
Member distributions (2,453,600) _
Net cash (used) provided byfinancingactivities (2,589,000) 1,188,628
Net increase in cash and cash equivalents 539,894 1,330,215
Cash and cash equivalents at beginning of year 1,330,215 _
Cash and cash equivalents at end of year S 1,870,109 $ 1.330.215

Statements of Cash Flows (Continued)
^g^^^^^^^^^g^^^^gj^^^^^
2016 2015
Supplemental Disclosure of Noncash Financing and Investing Activities:
Notes payable to Club Pilates Global Inc and Club Pilates, LLC
was reduced by $100,000 in exchange forfranchiseequipment $ 100,000 $ .
Club Pilates Franchise, LLC Capitalization

Accounts receivable $ - $ 20,000
Property & equipment - 250,991
Intangible assets - 5,807,161
Marketing fund cash - 8,228
Marketing fund liability assumed - (9,514)
Deferred revenues assumed - (910.199)
Net assets acquired $ - $ 5,166,667
Noncash Sources Used to Acquired Net Assets
Long-term debt issued $ - $ (2,500,000)
Common member units issued - (666,667)
Preferred member units issued _ (2,000,000)
Total noncash source used to acquire net assets $ - $ (5,166,667)
Supplemental Disclosure of Cash Flow Information

Cash paid during the year for
Interest expense $ 188,871 $ 211.476
Income taxes $ 6,800 S -

Notes to Financial Statements
Note 1. Summary of Significant Accounting Policies

This summary of significant accounting policies of Club Pilates Franchise, LLC,
(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for their integrity and objectivity.
These accounting policies have been consistently applied in the preparation of the
financial statements.
Nature of organization
The Company is a Delaware Limited Liability Company. The Company owns a
Pilates Fitness and Training system ("Club Pilates") that is proprietary to the
Company. The Company licenses its proprietary system to franchisees who in turn
provide facilities to promote Pilates training and instruction programs. The
Company also owns and operates three Club Pilates studio franchises as of
December 31, 2016 and four as of December 31,2015.
On March 12, 2015, the Company acquired the assets, certain liabilities and the
operations of Club Pilates Global, Inc. ("Global") and Club Pilates, LLC ("Pilates
LLC"). Global owned and operated the studio training system "Club Pilates" and
licensed the proprietary system to franchisees. Pilates LLC owned and operated
five Club Pilates studio franchises. Global and Pilates LLC were owned and
operated by the same shareholders/members.
Nature of Services and Revenue Recognition
Franchise Agreements
The Company offers two types of franchise agreements: A single-unit franchise
agreement and a multi-unit development agreement which gives the franchisee the
right to open two or more units in a particular geographic area.
Depending on number of units purchased, the initial franchise fee ranges from
$49,500 (single unit) to $300,000 (ten units) and is paid to the Company when a
franchisee signs the franchise agreement. In return for the initial franchise fee, the
Company provides site location assistance, training and the other services. The
initial franchise fee is non-refundable and is recognized once the franchise location
is open. Unrecognized franchise fees and related direct costs are deferred until
earned.
8
c^bp^sF^ch^LLC
Notes to ^nanc^sêmen^
D ^ m ^ ^ ^ 6 a n d 2 ^
NoteL Summary ofSign^cant Accounting Podc^ (Continued)

^ ^ - ^ ^ ^ ^
Once the franchisee has competed training and selected a franchise site, the
franchisccpaysthcCompany a iump-sumnonrcfundahlcpaymcntrangingfrom
$^5,000 to $10^000 for the start-up package. The start-up package includes
equipment, fixtures, freight, installation and retail inventory for t^^
site, revenue is recognized upon installation and huild out ofthe franchise
location. Unearned start-up package revenues and related direct costs arc deferred
until earned or incurred.
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
The Company assumedafive year Development Agent Agreement from Glohal
which was entered into on March^l,2014 In return forafeeof$250,000,Clohal
granted the developer, the exclusive right to development Cluh Pilates franchises in
the state of Colorado. In 2015,the Company modified the terms ofthe agreement.
Under the terms ofthe modified agreement, the developer is to receive 100^ of all
franchise feesfor locations it develops (maximum twenty-si^ locations)during the
period of March 31, 2014 toDecemher31, 2016 The development fee was
initially recorded as deferred revenue and has heen amortized and recognized as
revenue overthe term ofthe agreement.
^ ^ ^ C ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
Individuals interested in participating in Pilates classes can purchase single class or
monthly memherships that provide four, eight,or unlimited credits each month.
Classpaclâges are nonrefundable andrevenue is deferred until the classeshave
heen used. Monthly passes are nonrefundable and are recognized as revenue when
received.
The Company offersaClubPilatesTeacher Training Program. The non-refundable
program feeincludes training and materials andis recognized asrevenueupon
receipt and delivery of materials. Additional payments are paid to the franchisee
studio that conducts the teacher training.ClubPilatesTeacherTraining Program
income is included in other revenues.
^ ^ ^ ^ ^
Included in other revenues are referralfees earned fromunaffiliated vendors or
other entities to which the Company refers franchisees, referral fees are recognized
as income wheneamed.êferralfeesreceivable are estimatedby management
based on information received from the vendors from whom the fee is due. Actual
amounts received could differ from these estimates, however any such differences
would be immaterial to the financial statements.
December 31,2016 and 2015
Note 1. Summary of Significant Accounting Policies (Continued)

Nature of Services and Revenue Recognition (Continued)
Deferred Revenue
Total deferred revenues at December 31, 2016 and 2015 are as follows:
2016 2015
Deferred initiationfranchisefees $ 11,301,165 $ 1,086,916

Deferred start-up packages 2,441,722 465,260
Deferred development agent agreement - 115,936
Deferred product sales 418,036 -
Deferred Pilates classes & training 74,213 115,007
Deferred Costs (8,047,401) (562,350)
Deferred Revenue $ 6,187,735 $ 1,220,769
Short-term $ 3,986,513 $ 863,584

Long-term 2,201,222 357,185
$ 6,187,735 $ 1,220,769
Franchisees are charged a royalty ranging from four (4%) to six (6%) percent
(depending upon when they signed theirfranchiseagreement) of the franchisees'
monthly gross revenues. The royalty revenue is accrued and recognized monthly.
Under the franchise agreement the franchisees are charged two percent (2%) of
monthly gross revenues for national advertising and marketing services. The
agreement establishes a fund used for qualified advertising and promotional costs.
The balance of the fund is presented as a marketing fund liability on the balance
sheet.
Cash and cash equivalents
For purposes of the statement of cash flows, demand deposits, currency and
certificates of deposit with an original maturity of three months or less are
considered cash equivalents.
Accounts receivable
Accounts receivable is recorded net of allowance for expected losses. The
Company provides for estimated losses on accounts receivable based on prior bad
debt experience and a review of existing receivables. As of December 31, 2016 and
2015, there were no allowances and all accounts receivable are considered to be
collectible. Bad debt expense for the year ended December 31, 2016 and for the
period ended December 31, 2015 was $20,000 and $0, respectively.
10
Club Pilates Franchise, L L C

Inventory
Inventory consists primarily offinishedgoods and is stated at the lower of average
cost or market. The Company uses average costs for charging to cost of sales.
Advertising Costs
Advertising costs are expensed as incurred. For the year ended December 31, 2016
and for the period of March 12, 2015 to December 31, 2015, advertising expense
was $843,012 and $240,948, respectively.
Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Intangibles
Goodwill represents the excess of purchase price over the fair market value of net
assets acquired in the purchase of the Company's operations from Global and
Pilates LLC. Goodwill has an indefinite life and is not amortized. Alternatively,
goodwill is tested annually for impairment.
Trademarks represent the costs associated with the Company's acquisition of the
registered trade name of Club Pilates. The Company is amortizing these costs over
a period offifteenyears.
Property & Equipment
Property and equipment are carried at cost. Depreciation is provided using the
straight-line method forfinancialreporting purposes at rates based on the following
estimated useful lives:
Furniture & equipment 5 to 7 years
Computer equipment 5 years
Leasehold improvements 15 years
Video production & materials 5 years
Web design and domain 5 to 15 years
11

Franchise Stores
2016 2015
Stores at beginning of period 40 29
New stores opened 38 17
Stores closed (4) (6)
Stores at end of year 74 40
Concentration of Cash and Cash Equivalents

The company maintains its cash in bank deposit accounts that, at times may exceed
federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) up to $250,000 per bank. At December 31, 2016, the amount
in excess of insured limits was approximately $1,505,000. The Company has not
experienced any losses in such accounts. The Company believes it is not exposed
to any significant credit risk on cash and cash equivalents.
Income Taxes
The Company is a limited liability company and is treated as a partnership for
federal and state income tax purposes. Therefore, earnings and losses from the
Company are included in the individual income tax returns for the partners and
taxed accordingly. However, the Company is required to pay an annual gross
receipts fee and tax for its operations in California.
The Company's income tax filings are subject to examination, generally for three
years after they are filed. As of December 31, 2016, the Company had no tax filing
subject to examination.
Subsequent Events
Management has evaluated subsequent events through March 1, 2017, the date of
which the financial statements were available to be issued.
12
Note 2. Property and Equipment:

Property and equipment at December 31, 2016 and 2015 consisted ofthe following:
2016 2015
Furniture & equipment $ 395,165 $ 394,013

Computers 28,084 28,039
Autos 17,000 17,000
Leasehold improvements 148,896 71,474
Video production and materials 125,009 55,497
Web design and domain 35,606 36,922
749,760 602,945
Less: accumulated depreciation 117,587 39,487
$ 632,173 $ 563,458
Depreciation expense for the year ended December 31, 2016 and for the period of
March 12, 2015 to December 31, 2015 was $90,925 and $39,487, respectively.
Note 3. Intangible Assets
Intangible assets at December 31, 2016 and 2015 consisted ofthe following:
2016 2015
Goodwill $ 5,782,162 $ 5,782,162

Intangible assets with indefinite life 5,782,162 5,782,162
Trademarks 25,000 25,000
Less accumulated amortization 3,013 1,346
Intangible assets with defined life 21,987 23,654
Total intangible assets $ 5,804,149 $ 5,805,816
Amortization expense for the year ended December 31, 2016 and for the period of
13
Note 4. Long-Term Debt

Long-term debt consisted of the following: 2016 2015
Note payable to Club Pilates Global, Inc. (as $2,160,000 $2,250,000

amended November 2016), interest accrues at
10% per annum, requires quarterly interest only
payments starting March 31, 2015 until
September 12. 2017 when the note requires
quarterly principal installment payments of
$187,500 plus accrued interest until fully paid
June 30, 2020. Subject to subordination of
Senior Debt, as defined in the agreement, the
note is secured by all assets of the company.
Note is related to the Company's acquisition of
its operations on March 12, 2015.
Note payable to Club Pilates, LLC (as amended 240,000 250,000

November 2016), interest accrues at 10% per
annum, requires quarterly interest only payments
starting March 31, 2015 until September 12,
2017 when the note requires quarterly principal
installment payments of $20,833 plus accrued
interest until fully paid June 30, 2020. Subject to
subordination of Senior Debt, as defined in the
agreement, the note is secured by all assets of the
company. Note is related to the Company's
2,400,000 2,500,000
Less: current maturities 108,333
Total long term debt $2,291,667 $2,500,000
Aggregate maturities of long-term debt are as follows:

Year ended December 31,
2017 $ 108,333
2018 833,334
2019 833,334
2020 624,999
Thereafter
$2,400,000
14
Note 5. Commitments and Contingencies

Lease Commitments
The Company assumed and entered into various building leases that are classified
as operating leases.
Total rent expense for the year ended December 31, 2016 and for the period of
March 12, 2015 to December 31, 2015 was $ 341,422 and $290,931, respectively.
Future minimum lease payments under the non-cancelable operating leases with
initial or remaining terms of one year or more are as follows:
2017 $349,769
2018 266,815
2019 116,779
2020 51,612
Thereafter
Note 6. Related Party Transactions
Club Pilates, LLC and Club Pilates Global, Inc., both owned by the same
members/shareholders, collectively owned a 25% membership interest in the
Company up to November 3, 2016, at which point all common unit shares were
sold to LAG Fit, Inc.. As of December 31, 2016 and 2015, the Company has two
notes payable to Club Pilates, LLC and Club Pilates Global, Inc. for a total of
$2,400,000 and $2,500,000 respectively (See Note 4). For the year ended
December 31, 2016 and for the period of March 12, 2015 to December 31, 2015
the Company paid interest on these notes of $187,500 and $211,476, respectively.
LAG Fit, Inc. (LAG Fit), 100% holder of preferred units and 100% owner of all
common units as of November 3, 2016, advanced the Company $135,000 during
the 2015 year at a rate of 10%. The loan was repaid in full in March, 2016.
Interest paid on this loan in 2016 was $3,514 and $0 in 2015. As of December 31,
2016 and 2015 the Company owed LAG Fit $0 and $135,000 respectively.
As of December 31, 2016, the Company has a note receivable from LAG Fit in the
amount of $1,000,000. The note bears interest of 3.5% and matures on July 7,
2017. As of December 31, 2016, the Company has accrued $16,670 in interest
income related to this note.
15
Note 7. Members* Equity

The limited liability company operating agreement, as amended March 1, 2015,
authorizes the Company to issue interest in the Company in the form of two
classes of ownership interest, Common Units and Preferred Units.
There are 666,667 authorized and issued Common Units. Common Units are
entitled to their allocable interest of profits and losses as well as all distributions
from the Company. Common Units have voting rights.
There were 2,000,000 issued Preferred Units as of December 31, 2015. The
Preferred Units are non-voting with a 10% preferred return. When the Company
declares distributions or liquidates, Preferred Units have preferred distribution and
liquidation preference equal to the amount of unpaid return plus the original
capital ($2,000,000) and are not entitled to any further distribution. During the
year ended December 31, 2016, the Company made distributions totaling
$2,453,600 of which $353,695 paid the accumulated Preferred Units' 10%
preferred return, $1,054,905 paid down the 2,000,000 Preferred Units' original
capital, $1,045,000 paid back the Additional Paid-in Capital. As of December 31,
2016, there are 945,000 preferred units outstanding with $2,330 in cumulative
preferred returns in arrears.
16
The Period
March 12, 2015 (Date of Inception)
Contents
Independent Auditors' Report 1-2
Balance sheet 3
Statement of income 4
Statement of changes in members' equity 5
Statement of cash flows 6-7
Notes tofinancialstatements 8-15

• :
C [ R7 I FI L 0 PUBLIC ACCOUNT.\;J IS
5151 Shoreham Place. Suite 100, San Diego, CA 92122 - Direct 858.623.2786 • Fax 858.408.2457
www.ortegacpa.net
To the Members of
We have audited the accompanyingfinancialstatements of Club Pilates Franchise, LLC (a Limited

Liability Company), which comprise the balance sheet as of December 31, 2015, and the related
statements of income, changes in members' equity and cash flows for the period of inception (March
12,2015) to December 31,2015, and the related notes to thefinancialstatements.
Management is responsible for the preparation and fair presentation of thesefinancialstatements in
presentation of financial statements that are free of material misstatements, whether due tofraudor
error.
about whether thefinancialstatements arefreeof material misstatement.
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of therisksof material misstatement of thefinancialstatements, whether due tofraudor
preparation and fair presentation of thefinancialstatements in order to design audit procedures that
of the financial statements.
Opinion
financial positions of Club Pilates Franchise, LLC, as of December 31, 2015, and the results of
operations and cash flows for the period of inception (March 12, 2015) to December 31, 2015 in
accordance with accounting principles generally accepted in the United States of America.
£%£o ; h*n«U, LLP
March 1,2016
Balance Sheet
December 31, 2015
Assets
Current Assets
Cash $ 1,330,215
Accounts receivable 167,534
Inventory 319,199
Prepaid expenses 88,081
Total current assets 1,905,029
Property and Equipment 563,458
Other Assets
Intangible assets 5,805,816
Deposits 20,400
Total other assets 5,826,216
Total assets $ 8,294,703
Liabilities and Members* Equity

Current Liabilities
Accounts payable $ 574,970
Accrued expenses 136,110
Marketing fimd 710
Deferred revenue 863,584
Due to related parties 135,400
Total current liabilities 1,710,774
Long-Term Debt 2,500,000
Total other long-term liabilities 357,185
Total liabilities 4,567,959
Members' Equity 3,726,744
Total liabilities and members' equity $ 8,294,703

Statement of Income
The Period of March 12,2015 (Date of Inception) to December 31,2015
Revenue
Franchise revenues
Franchise initiation fees $ 276,667
Franchise royalty fees 105,506
Developmentfranchiseagreement 86,949
Product and equipment sales 978,832
Other 129,434
Studio revenues 1,349,642
Total revenues 2,927,030
Cost of Revenues
Cost offranchiserevenues 885,875
Cost of studio revenues 561,956
Total cost of revenues 1,447,831
Gross Profit 1,479,199
Franchise expenses 1,336,472
Studio expenses 359,403
Total selling, general & administrative expenses 1,695,875
Loss From Operations (216,676)
Gainfromsale of assets 450,544
Interest expense (211,991)
Total other income (expense) 238,553
Net Income Before Provision of LLC Tax 21,877
ProvisionforLLC Tax (6,800)
Net Income $ 15,077

Statement of Changes in Members' Equity
Additional
Common Preferred Paid-in Accumulated
Units Units Capital (Deficit) Total
Opening Balance, March 12,2015 $ - $ $ - $

Issuance of666,667 Common Units 666,667 666,667
Issuance of2,000,000 Preferred Units 2,000,000 2,000,000
Capital contribution 1,045,000 1,045,000
Net Income 15,077 15,077
Balance, December 31,2015 $666,667 $2,000,000 $1,045,000 $ 15,077 $3,726,744
Tite accompanying notes are an integral part of this statement.

Statement o f Cash Flows
The Period of March 12, 2015 (Date of Inception) to December 31,2015

Net Income $ 15,077
Adjustments to reconcile net income
Depreciation & amortization 46,737
Gamfromsale of assets (450,544)
Accounts receivables (147,534)
Inventory (319,199)
Prepaid expenses (88,081)
Deposits (20,400)
Accounts payable 574,970
Marketing fund (8,805)
Net cash provided by operating activities 120,368
Cashflowsfrominvesting activities
Proceedsfromsale of assets 424,103
Purchases of property and equipment (402,884)
Net cash provided by investing activities 21,219
Cashflowsfromfinancing activities
Proceedsfromrelated party 135,400
Proceedsfromrelated party loans 125,000
Marketingfendscontributed as part of member unit issuance 8,228
Payments on banfromrelated party (125,000)
Member capital contribution 1,045,000
Net cash provided byfinancingactivities 1,188,628
Net increase in cash and cash equivalents 1,330,215
Cash and cash equivalents at beginning of year _
Cash and cash equivalents at end of year $ 1,330,215

Statement of Cash Flows (Continued)
The Period of March 12, 2015 (Date of Inception) to December 31,2015

Accounts receivable $ 20,000
Property & equipment 250,991
Marketing fimd cash 8,228
Marketingfimdliability assumed (9,514)
Deferred revenues assumed (910,199)
Net assets acquired $ 5,166,667
Long-term debt issued $ (2,500,000)
Common member units issued (666,667)
Preferred member units issued (2,000,000)
Total noncash source used to acquire net assets $ (5,166,667)
Interest expense $ 211,476
Income taxes $ -

c^bp^^F^ch^LLC
ôtes to Finance Statements
D ^ m ^ ^ ^ 5
NoteL Summary ofSigm^cant Accounting Podges

Thissunâryofsignificamacco^
^hcCompany)isprcscntcdtoas^mundc^tanding^cComp^^
s^tcmcn^ The financial statements and notes arc representations of the
A ^ ^ ^ ^ ^ ^ ^ ^
The Company isaDelawarc Limited Liability Company. The Company ownsa
Pilates studio and training system (^Club Pilates") that is proprietary to the
Company. The Company licenses its proprietary system tofranchiseeswho in turn
Company also owns and operates five (four as ofyear end) Club Pilates studio
franchises.
Cn March 12, 2015,the Company acquiredtheassets,certain liabilities and the
operations of Club Pilates G l o b a l , ^
LLC"). Global owned and operated the sfudio training system ^Club Pilates" and
fiveClubPilatesstudio franchises. Global andPilatesLLC wereownedand
operated by the same shareholders^members.
^ ^ r ^ ^ ^ ^ c ^ ^ ^ ^ ^ ^ ^ c ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^
The Company offers two types of franchise agreements: Asingle-unit franchise
agreement andamulti-unit development agreement which gives thefranchiseethe
righttoopenthreeormoreunitsinaparticulargeographic area.
Dependingonnumberofunitspurchased, theinitial franchise feeranges from
^49,500 (single unit) to ^210,000 (six units) and is paid to the Company whena
franchisee signs thefranchiseagreement. In return for the initialfranchisefee, the
Company providessitelocationassistance,trainingandthe other services. The
initialfranchisef ^ is non-refundable and is recognized once thefranchiselocation
is open. Unrecognised franchise fees and related direct costs are deferred until
earned.
^
c^bp^sF^ch^LLC
ôtes to Fândal Statement
D ^ m ^ ^ ^ 5
NoteL Summary ofSigmficant Accounting Pod^(Continued)

^ ^ - ^ ^ ^ ^
Once the franchiseehas completed training and selected a franchise site, the
franchisee paysthcCompanya lumpsum nonrcfrmdahlc payment ranging from
^ , 0 0 0 to ^7,000 for the startuppackagc. The startuppackagc includes
equipment, fixtures, freight, installation and inventoryfr^rthe new fr^
revenue is recognized upon installation and huild out of the franchise location.
Uncamcdstart-uppackagc revenues and related dircctcostsarc deferred until
earned or incurred.
^ v ^ ^ ^ ^ ^ ^ B ^ ^ ^ ^
The Company assumcdafivc year Development Agent Agreement from Olohal

which was entered into on March^l,2014 Inrctumforafccof^0,000,Olohal
granted the developer, the exclusive rightto development Cluh Pilatesfranchisesin
the state of Colorado, fn 2015,the Company modified the terms ofthe agreement.
Under the terms ofthe modified agreement, the developer is to receive 100^ of all
franchise fees for locations it develops (maximum twenty-six locations) during the
period of March31,2014to December 31,2016. The development fee has heen
recorded as deferred revenue andishcingamorti^cdand recognized asrevenue
over the term of the agreement.
^ ^ ^ C ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
hidividuals interested in participating in Pilates classes can purchase single class or
monthly memberships that provide four, eight,or unlimited credits each month.
Class packages are nonrefundable and revenue is deferred until the classes have
been used. Monthly passes are nonrefundable and are recognized as revenue when
received.
The Company offersaClubPilatesTeacher Training Program. The program fee is
^4,750 and includes training and materials. The program fee includesa^2,000
nonrefrmdable deposit for purchase ofmaterials and is recognised as revenue upon
receipt and delivery of materials. The remaining balance of ^2,750 is paid to the
franchisee studio that conducts the teaching training.
December 31, 2015

Deferred Revenue
Total deferred revenues at December 31, 2015 as follows:
Deferred initiationfranchisefees $1,086,916

Deferred start-up packages 465,260
Deferred development agent agreement 115,936
Deferred Pilates classes & training 115,007
Deferred Costs (562,350)
Deferred Revenue $1,220,769
Short-term $ 863,584
Long-term 357,185
$1,220,769
Franchisees are charged a royalty ranging from two (2%) to six (6%) percent
(depending upon when they signed their franchise agreement) of the franchisees'
Under thefranchiseagreement thefranchiseesare charged one percent (1%), two
percent (2%) effective January 2016, of monthly gross revenues for national
advertising and marketing services. The agreement establishes an agency
relationship between the Company and thefranchisees,and the fees are recorded as
a liability and qualified advertising and promotional costs are charged against it.
The liability is presented as marketing fund liability on the balance sheet.
Accounts receivable
debt experience and a review of existing receivables. As of December 31, 2015,
there are no allowances and all accounts receivable are considered to be collectible.
Inventory
Inventory consists primarily offinishedgoods and is stated at the lower of average
10
dubp^^Franch^LLC
Notes to Fmancial Statements
D ^ m ^ ^ ^ 5
NoteL Summary o f ^ g m f i c ^ A ^ u n t i n g P o d r i ^ ( C o n t i n u ^
^ ^ r ^ ^ ^ ^
Advertising costs are expensed as mcurr^ For the period ofMareh 12, 2015 to
Deeemher31,20i5, advertising expense was $240^48
^ ^ ^ ^ ^ ^ ^
The preparation offinancialstatements in e o n f o ^
and disclosure of contingent assets and liabilities at thedate ofthe financial
statements and the reported amounts ofrevenues and expenses during the reporting
^ ^ ^ ^
Goodwill represents the excess of purchase price over the fair market value of net
assets acquired inthe purchase of theGompany'soperations from Global and
Filates LUG. Goodwill has an indefinite life and is not amortized. Alternatively,
Trademarks represent the costs associated with the Company's acquisition ofthe
registered trade name of Club Filates. The Company is amortizing these costs over
aperiod offifreenyears.
^r^^^^^^p^^
Property and equipment are carried at cost. Depreciation is provided using the
straight-line method l^rfinancialreporting purposes at rates based on the following
Fumitureêquipment 5to7years
Computer equipment 5years
Leasehold improvements 15years
îdeoproduction^materials 5years
Web design and domain 5to 15 years
^ r ^ ^ ^ ^ r ^
Stores at beginning of period 29

New stores opened 17
Stores closed (6)
Stores at end of year 40
11
December 31, 2015

Income Taxes
Subsequent Events
Property and equipment at December 31, 2015 consisted of the following:
Furniture & equipment $394,013
Computers 28,039
Autos 17,000
Leasehold improvements 71,474
Video production and materials 55,497
Web design and domain 36.922
602,945
Less: accumulated depreciation 39.487
#63,458
Depreciation expense for the period of March 12, 2015 to December 31, 2015 was
$39,487.
12
December 31,2015

Intangible assets at December 31, 2015 consisted of the following:
Goodwill $5,782.162
Intangible assets with indefinite life 5.782.162
Trademarks 25,000
Less accumulated amortization 1.346
Intangible assets with define life 23.654
Total intangible assets $ 5.805.816
Amortization expense for period of March 12, 2015 to December 31, 2015 was
$1,346.
Long-term debt consisted of the following:
Note payable to Club Pilates Global, Inc., interest $2,250,000

accrues at 10% per annum, requires quarterly
interest payments starting March 31, 2015 until
March 12, 2017 when the note matures. Subject
to subordination of Senior Debt, as defined in the
acquisition of its operations on March 12, 2015.
Note payable to Club Pilates, LLC, interest 250,000

2,500,000
Less: current maturities
Total long term debt $2,500,000
2016 $
2017 2,500,000
Thereafter
$2,500,000
13
December 31, 2015

Lease Commitments
The Company assumed various building leases that are classified as operating
leases.
Total rent expense was $290,931 for the period of March 12, 2015 to December 31,
2015.
2016 $434,207
2017 327,769
2018 236,215
2019 116,779
2020 51,612
Thereafter
shareholders, collectively own a 25% membership interest in the Company. As of
December 31, 2015, the Company has two notes payable to Club Pilates, LLC and
Club Pilates Global, Inc. for a total of $2,500,000 (See Note 4). For period of
March 12, 2015 to December 31, 2015 the Company paid $211,476 in interest on
these notes.
During the period of March 12, 2015 to December 31, 2015, Club Pilates, LLC
and Club Pilates Global, Inc. had collectively advanced the Company $38,404 in
cash. As of December 31, 2015, the advances had been paid in full.
The Club Pilates, LLC and Club Pilates Global, Inc shareholders, own and operate
a Company franchise. The following is a summary of transactions that occurred
between the Company and the majority shareholder's owned franchises.
Product and equipment sales to shareholder
owned franchise $ 3.472
14
December 31, 2015
Note 6. Related Party Transactions (Continued)

LAG Fit, Inc. (LAG Fit), 100% holder of preferred units and 75% effective
ownership of the Company, loaned the Company $125,000 during the year at a
rate of 10%. For period of March 12, 2015 to December 31, 2015 the Company
paid $11,648 in interest on this loan. As of December 31, 2015, the loan had been
paid in full.
In December 2015, LAG Fit advanced the Company $135,000. The advance bears
interest at 10% and is payable on demand. The amount is reflected on the balance
sheet as "due to related parties".
Note 7. Members* Equity
classes of ownership interest, Common Units and Preferred Units.
There are 2,000,000 issued Preferred Units. The Preferred Units are non-voting
with a 10% preferred return. When the Company declares distributions or
liquidates, Preferred Units have preferred distribution and liquidation preference
equal to the amount of unpaid return plus the original Capital ($2,000,000) and is
not entitled to any further distribution.. As of December 31, 2015, there was
approximately $161,000 in cumulative preferred returns in arrears on the Preferred
Units, and no distributions have been declared by the Company.
15
The Period
March 12, 2015 (Date of Ip&ption)
To April 15, 20:
Content;
6-7
-14
5151 Shoreham Place, Suite 100
San Diego. CA 92122
ORTEGA & KONRAD, LLP t 858-623-2786 f 858-623-2771
Certified Public Accountants
INDEPENDENT AUDITORS* REPORT
To the Members of
Newport Beach, California
We have audited the accompanying financial statements of Club Pjlates Franchise, LLC (a Limited
Liability Company), which comprise the balance sheet as of/April 15, 2015, and the related
statements of income, changes in members' equity and cash fl<Ws for the period of inception (March
12,2015) to April 15, 2015, and the related notes to the finanpfal statements.
Management is responsible for the preparation and faj/presentation of thesefinancialstatements in
accordance with principles generally accepted in tfte United States of America: this includes the
design, implementation, and maintenance of intpmal control relevant to the preparation and fair
presentation offinancialstatements that are fre//)f material misstatements, whether due tofraudor
error.
America. Those standards require/hat we plan and perform the audit to obtain reasonable assurance
about whether thefinancialstatements arefreeof material misstatement.
An audit involves perfbrmingprocedures to obtain audit evidence about the amounts and disclosures
in thefinancialstatements/The procedures selected depend on the auditor's judgment, including the
assessment of therisksof material misstatement of thefinancialstatements, whether due tofraudor
error. In making thosptisk assessments, the auditor considers internal control relevant to the entity's
preparation and faiypresentation of thefinancialstatements in order to design audit procedures that
are appropriate ur the circumstances, but not for the puipose of expressing an opinion on the
effectiveness ofthe entity's internal control. Accordingly, we express no such opinion. An audit
also included/evaluating the appropriateness of accounting policies used and the reasonableness of
significant^ccounting estimates made by management, as well as evaluating the overall presentation
of thefinancialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a baîs
Opinion
In our opinion the financial statements referred to above present fairly, in all material rejects, the
financial positions of Club Pilates Franchise, LLC, as of April 15, 2015, and t h / results of
operations and cash flows for the period of inception (March 12, 2015) to Aprir15, 2015 in
accordance with accounting principles generally accepted in the United States of.
$ify> f HcnuU, LLP
April 19, 2015

Balance Sheet
April 15, 201
Assets
Current Assets
Cash 2,070,825
Accounts receivable
Total current assets / 2,104,727
Property and Equipment /^ 241,904
Other Assets
Intangible assets / 5,807,162
Total other assets / 5,807,162
Total assets / $ 8,153,793
1
Liabilities and Members Equity
Current Liabilities
Revolving credit accounts 200
Marketing fund 10,674
Total current liabilities / 601360

Long-Term Debt / 2,500,000
Othe r Long-Te rm Liabilitie s /
Deferred revenue / 388,631
Total liabilities / 3,489,991
1
Members Equity / 4,663,802
Total liabilities aptfmembers' equity $ 8,153,793

Statement of Income
The Period of March 12,2015 (Date of Inception) to April 15,20:
Revenue
Franchise initiation fees
Franchise royalty fees
Developmentfranchiseagreement
Pilates class & training revenues 170,448
Total revenues
Z 202,421
Operating Expenses
Personnel expense 85,284
Legal and professional 49,563
Occupancy 23,282
Depreciation 9,087
Bank and merchant fees 7,435
Class supplies & services 1,794
Computer 1,613
Online services 1,377
Advertising and promotion 1,271
Miscellaneous 887
Total operating expenses / 181,968

Income from Operations 20,453
Other Income (Expenses) /
Interest expense / (23^18)
Net Loss / $ (2,865)

The Period of March 12,2015 (Date of Inception) to April 15,201

Statement of Cash Flows
The Period of March 12,2015 (Date of Inception) to April 15,20]

Net Loss (2,865)
Adjustments to reconcile net loss
Depreciation 9,087
Revolving credit accounts 200
Marketing fund 1,159
Deferred revenue (22,576)
Cash flows from financing activities
Proceeds from related party 38,404
Marketing funds contributed as part of member issuance 8,228
Net cash provided byfinancingactivities
Z 2,046,632
Cash and cash equivalents at be%
Cash and cash equivalents at end of 2,070,825

The Period of March 12,2015 (Date of Inception) to April 15, 201

Marketing fund cash 8,228
Marketing fund liability assumed (9,514)
Net assets acquired / $ 5,166,667

Common member units issued / (666,667)
Preferred member units issued / (2,000,000)
Total noncash source used to acquire net assets / $ (5,166,667)
Supplemental Disclosure of Cash Flow Information/
Cash paid during the year for /
Interest expense / $ 12,329
Income taxes / $ -

April 15,2015

(the Company) is presented to assist in understanding the Compam/s financial
statements. The financial statements and notes are representpfions of the
Company's management who is responsible for their integrityymd objectivity.
These accounting policies have been consistently applied in the/preparation of the
The Company is a Delaware Limited Liability Compap^. The Company owns a
Pilates studio and training system ("Club Pilates"/ that is proprietary to the
Company. The Company licenses its proprietary sygtem to franchisees who in turn
Company also owns and operates five Club Pil^jtes studio franchises.
On March 12, 2015, the Company acquire^the assets, certain liabilities and the
operations of Club Pilates Global, Inc. ("global") and Club Pilates, LLC ("Pilates
LLC"). Global owned and operated the/studio training system "Club Pilates" and
licensed the proprietary system to fraftchisees. Pilates LLC owned and operated
five Club Pilates studio franchise?/ Global and Pilates LLC were owned and
operated by the same shareholder/members.
Nature of Services and Reven/e Recognition
The Company offers twc/types offranchiseagreements: A single-unitfranchise(for
half-size or full-size)/agreement and a multi-unit development agreement which
gives thefranchisep4heright to open (over time) 3 or more units in a particular
geographic area.
Depending on/the type of agreement, an initiation franchise fee ranging from
$5,000 to $05,000 is paid to the Company when afranchiseesigns the franchise
agreemenj/ In return for the initial franchise fee, the Company provides site
location/assistance, training and the other services. The initialfranchisefee is non-
refumiable and is earned once thefranchiselocation is open. Unearned franchise
feesând related direct costs are deferred until earned.
8
April 15, 20]

Development Agent Agreement
The Company assumed a five year Development Agent Agreement from Global
which was entered into with Solid Care, Inc. (Solid Care) in 2014. In return for a
fee of $250,000, the Global granted Solid Care, the exclusive/ight to development
Club Pilatesfranchisesin the state of Colorado. During theXerm of the agreement,
plus any extensions, Solid Care is to receive 100% of allfranchisefees for the first
thirty (30) locations it develops, 50% offranchisefees/fhereafter plus 50% of net
royalties collected. Provided Solid Care complies with all terms of the agreement,
including developing a minimum of twenty (20)/locations during the first five
years, the agreement can be renewed for an additf&ial two five year terms. The fee
for each term renewal is $50,000. The development fee of $250,000 is being
amortized and recognized as revenue oveytne five year term of the agreement.
Unearned development fees is being deferred until earned.
Pilates Classes and Teacher Training
Individuals interested in participating^ Pilates classes can purchase class packages
ranging from one class to twent/or purchase monthly passes which allow the
participant unlimited classes during a month. With the exception some promotional
packages that expire in ten VCars, class packages expire one year from date of
purchase. Class packages/are nonrefundable and revenue is deferred until the
classes have been used. Monthly passes are nonrefundable and are recognized as
revenue when received,
The Company offer/a Club Pilates Teacher Training Program. The program fee is
$4,400, excluding/discounts, and includes training and materials. The program fee
includes a $2,000 nonrefundable deposit for purchase of materials and is recognized
as revenue unem receipt and delivery of materials. The remaining balance of the fee
is deferred and recognized as revenue as the training program progresses.
Deferred^Revenue
Total/deferred revenues at April 15, 2015 as follows:
Deferred initiationfranchisefees $ 348,750
Deferred Revenue $ 887,623
Long-term 388,631
$ 887,623
April 15, 20

Franchisees are charged a royalty ranging from two (2%) to four/(4%) percent of
the franchisees' monthly gross revenues. The royalty revenjde is accrued and
recognized monthly.
Under the agreement the franchisees are charged one percepf (1%) of monthly gross
revenues for national advertising and marketing services. The agreement
establishes an agency relationship between the Company and the franchisees, and
the fees are recorded as a liability and qualified advertising and promotional costs
are charged against it. The liability is presented ^/marketing fund liability on the
balance sheet.
For purposes of the statement of cash, lows, demand deposits, currency and
certificates of deposit with an origu maturity of three months or less are
Accounts receivable
Accounts receivable is recon&d net of allowance for expected losses. The
debt experience and a revieiw of existing receivables. As of April 15, 2015, there
are no allowances and aMccounts receivable are considered to be collectible.
Advertising Costs
Advertising costs ate expensed as incurred. For the period of March 12, 2015 to
April 15, 2015, advertising expense was $1,271.
Use ofestinti
The preparation of financial statements in conformity with accounting principles
and/disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
iod. Actual results could differ from those estimates.
10
April 15,201

Intangibles
Goodwill represents the excess of purchase price over the fair mark6t value of net
Pilates LLC. Goodwill has an indefinite life and is not amortêd. Alternatively,
Trademarks represent the costs associated with the Comp&ny's acquisition of the
registered trade name of Club Pilates. The Company is/mortizing these costs over
a period of fifteen years.
Property & Equipment
Property and equipment are carried at cost, depreciation is provided using the
straight-line method forfinancialreporting pi )Oses at rates based on the following
Furniture & equipment 5 to 7 years
Computer equipment 5 years
Franchise Stores
Stores at beginning of; 29

New stores opened 1
Stores closed
Stores at end of yfcar 30
Concentration ( f f Cash and Cash Equivalents

The compan/maintains its cash in bank deposit accounts that, at times may exceed
Corporation (FDIC) up to $250,000 per bank. At April 15, 2015, the amount in
exces/of insured limits was approximately $1,750,000. The Company has not
exndrienced any losses in such accounts. The Company believes it is not exposed
t</any significant credit risk on cash and cash equivalents.
Subsequent Events
Management has evaluated subsequent events through April 19, 2015, the date of
which thefinancialstatements were available to be issued.
11
April 15, 201

Property and equipment at April 15, 2015 consisted ofthe following:
Furniture & equipment 2^2,799
Computers 18-192
250,991
Less: accumulated depreciation 9.087
$241,904
Depreciation expense for the period of March 12, (15 to April 15, 2015 was
$9,087.
Intangible assets at April 15, 2015 consisted ofXhe following:
Goodwill / $ 5.782.162
5,782,162
Trademarks / 25,000
Less accumulated amortization
Intangible assets with define l i f t / 25.000
Total intangible assets / $ 5.807.162
There is no Amortization expfense for period of March 12, 2015 to April 15, 2015.
Note payable u/Club Pilates Global, Inc., interest $2,250,000

aerement, the note is secured by all assets of the
Acquisition ofits operations on March 12, 2015.
12
Notes to Financial Statements,
April 15, 20J
Note 4. Long-Term Debt (Continued)
Note payable to Club Pilates, LLC, interest ),000

/ 2,500,000
Less: current maturities /
Total long term debt / $2,500,000
Aggregate maturities of long-term debt arâs follows:

2016 $
2017 2,500,000
Thereafter
$2,500,000
Note 5. Commitments and Contim
Lease Commitments
The Company assun^d various building leases that are classified as operating
leases.
Total rent expend was $20,489 for the period of March 12, 2015 to April 15, 2015.
initial or laining terms of one year or more are as follows:
1016 $208,105
2017 135,180
2018 118,147
2019 76,920
Thereafter
13
April 15, 201

Club Pilates, LLC and Club Pilates Global, Inc., both owned Ky the same
April 15' 2015, the Company has two notes payable to Club LLC and Club
Pilates Global, Inc. for a total of $2,500,000 (See Note 4). period of March
12, 2015 to April 15, 2015 the Company paid $12,329 in fterest on these notes
and had accrued an additional $10,989 as of April 15, 201
As of April 15, 2015, Club Pilates, LLC and Clu) Pilates Global, Inc. had
collectively advanced the Company $38,404 in cash/The amount is reflected on
the balance sheet as "Due to related parties"
Note 7. Members' Equity
classes of ownership interest, Common Mnits and Preferred Units.
entitled to their allocable interest ffi profits and losses as well as all distributions
from the Company. Common IMts have voting rights.
There are 2,000,000 issued Preferred Units. The Preferred Units are non-voting
with a 10% preferred re*6n. When the Company declares distributions or
liquidates. Preferred Umts have preferred distribution and liquidation preference
equal to the amount ofûnpaid return plus the original Capital ($2,000,000) and is
not entitled to any firmer distribution.. As of April 15, 2015, there was $18,682 in
cumulative pretend returns in arrears on the Preferred Units, and no distributions
have been declap&l by the Company.
14
Exhibit D
STATEMENT OF PROSPECTIVE FRANCHISEE
©30i€2017 Club Pilates Franchise, LLC

^0^2017 Franchise Disclosure Document - Exhibits
CLUB PILATES
[Note: Dates and Answers Must Be Completed

in the Prospective Franchisee's Own Handwriting.]
Since the Prospective Franchisee (also called "me," "our/' "us," "we" and/or " I " in this document) and
Club Pilates (also called the "Franchisor or "CLUB PILATES") both have an interest in making sure that no
misunderstandings exist between them, and to verify that no violations of law might have occurred, and
understanding that the Franchisor is relying on the statements l/we make in this document, l/we assure the
Franchisor as follows:
A. The following dates and information are true and correct:
1- , 20 The date on which l/we received a Uniform Franchise Disclosure

Document about a Franchise.
Initials
2. , 20 The date when l/we received a fully completed copy (other than
signatures) of the Franchise Agreement, Development
l n t i a , s
' Agreement (if appropriate) and all other documents l/we later
signed.
3- , 20 The earliest date on which l/we signed the Franchise Agreement,

Development Agreement or any other binding document (not
l n l t i a l s
including any Letter or other Acknowledgment of Receipt.)
4. , 20 The earliest date on which l/we delivered cash, check or other

consideration to the Franchisor, or any other person or company.
Initials
B. Representations and Other Matters:
1. No oral, written, visual or other promises, agreements, commitments, representations, understandings,

"side deals," options, rights-of-first-refusal or otherwise of any type (collectively, the "representations"),
including, but not limited to. any which expanded upon or were inconsistent with the Disclosure Document, the
Franchise Agreement, or any other written documents, have been made to or with me/us with respect to any
matter (including, but not limited to. advertising, marketing, site location and/or development, operational,
marketing or administrative assistance, exclusive rights or exclusive or protected territory or otherwise) nor have
l/we relied in any way on any such representations, except as expressly set forth in the Franchise Agreement, or
a written Addendum thereto signed by the Prospective Franchisee and the Franchisor, except as follows:
(If none, the Prospective Franchisee should write NONE in his/her/their own handwriting.)
Prospective Franchisee's Initials:
2. No oral, written, visual or other claim, guarantee or representation (including, but not limited to, charts,

tables, spreadsheets or mathematical calculations to demonstrate actual or possible results based on a
combination of variables, such as multiples of price and quantity to reflect gross sales, or otherwise), which
stated or suggested any specific level or range of actual or potential sales, costs, income, expenses, profits, cash
flow, tax effects or otherwise (or from which such items might be ascertained), from franchised or non-
franchised units, was made to me/us by Franchisor, its affiliates or agents/representatives, nor have l/we relied
in any way on any such, except for information (if any) expressly set forth in Item 19 of the Franchisor's Disclosure
Document (or an exhibit referred to therein), except as follows:
3. No contingency, prerequisite, reservation or otherwise exists with respect to any matter (including, but
not limited to, the Prospective Franchisee obtaining any financing, the Prospective Franchisee's selection,
purchase, lease or otherwise of a location, any operational matters or otherwise) or the Prospective Franchisee
fully performing any ofthe Prospective Franchisee's obligations, nor is the Prospective Franchisee relying on the
Franchisor or any other entity to provide or arrange financing of any type, nor have l/we relied in any way on
such, except as expressly set forth in the Franchise Agreement, Development Agreement (if and as appropriate)
or a written Addendum thereto signed by the Prospective Franchisee and the Franchisor, except as follows:
4. The individuals signing for the "Prospective Franchisee" constitute all of the executive officers, partners,
shareholders, investors and/or principals ofthe Prospective Franchisee and each of such individuals has received
the Uniform Franchise Disclosure Document and all exhibits and carefully read, discussed, understands and
agrees to the Franchise Agreement, Development Agreement (if and as appropriate), each written Addendum
and any Personal Guarantees.
5. l/we have had an opportunity to consult with an independent professional advisor, such as an attorney
or accountant, prior to signing any binding documents or paying any sums, and the Franchisor has strongly
recommended that l/we obtain such independent professional advice, l/we have also been strongly advised by
the Franchisor to discuss my/our proposed purchase of, or investment in, a CLUB PILATES Studio Franchise with
existing Franchisees prior to signing any binding documents or paying any sums and l/we have been supplied
with a list of existing CLUB PILATES Studio Franchisees.
6. I confirm that, as advised, I've spoken with past and/or existing CLUB PILATES Studio Franchisees, and
that I made the decision as to which, and how many, CLUB PILATES Studio Franchisees to speak with.
7. l/we understand that: entry into any business venture necessarily involves some unavoidable risk of loss
or failure, the purchase o f a CLUB PILATES Franchise for anv other) is a speculative investment, an investment
beyond that outlined in the Disclosure Document may be required to succeed, there exists no guaranty against
possible loss or failure in this or any other business and the most important factors in the success of anv CLUB

PILATES Franchise, including the one to be operated bv me/us, are mv/our personal business, marketine. sales,
management, judgment and other skills.
If there are anv matters inconsistent with the statements in this document, or if anyone has suggested
that I sign this document without all of its statements being true, correct and complete, l/we will (a) immediately
inform the President of Club Pilates Franchise. LLG (949/346-9794). and fb) make a written statement regarding
such next to my signature below so that the Franchisor may address and resolve anv such issuefs) at this time
and before either party goes forward.
l/we understand and agree that the Franchisor does not furnish or endorse, or authorize its salespersons
or others to furnish or endorse, any oral, written or other information concerning actual or potential sales, costs,
income, expenses, profits, cash flow, tax effects or otherwise (or from which such items might be ascertained),
from franchised or non-franchised units, that such information (if any) not expressly set forth in Item 19 of the
Franchisor's Disclosure Document (or an exhibit referred to therein) is not reliable and that l/we have not relied
on it, that no such results can be assured or estimated and that actual results will vary from unit to unit,
FranchiGpfranchise to Fronchioofranchise, and may vary significantly.
l/we understand and agree to all of the foregoing and represent and warrant that all of the above
statements are true, correct and complete.
Date:
PROSPECTIVE FRANCHISEE (Individual) PROSPECTIVE FRANCHISEE (Corp., LLC or Partnership)

[Must be accompanied by appropriate personal
guarantee(s)]
Signature
Legal Name of Entity

Printed Name
a
State of incorporation, formation, etc.
Signature
By:
Name
Printed Name
Signature
Title:

Exhibit E
TABLE OF CONTENTS OF THE OPERATIONS MANUAL
©3G162017 Club Pilates Franchise, LLC

CLUB PILATES
OPERATIONS MANUAL
TABLE OF CONTENTS
Pago No, Pages in See**
Introduction 4-
Tho Start
Our Goal
Who Will Pilotoo Benefit?

Tho Club Pilates Studio Culture and Vibo
Club Pilatos Studio 10 Coi idmonts 4&
Contribute to tho groator good. Bo Opon and floxiblo to Chaneo.
Develop Now Material and SHARE it with Club Pilates. 13-
Logal Sorvicoo 40
An incluGivo online store, ochoduling, and merchant sorvico; -2±
Site Soloctioi -ZS. -&Q
Overview of Sito Critoria

This section provides guidolinos for solocting tho optimal space for
your studio. Tho need for ample parking in an area of conservative
rent and with minor tenant improvements is best suited for our
studios. Tho following information will provide general guidolinos
for a franchisee to follow: .
Examples of Club Pilates Critoria -25

Demographics -as
Exterior -26
Interior -26
Rent Parameters -2$
What tho Rool Eototo Broker NoodG to Know -22
Looco Nogotiationc -22
Letter of Intent -22
Freight Progrom -49
ihipping Acknowlodgomont -50
Gonorol Contractor Qualification Agroomont -52
iamplo Construction Contract -55
Construction Punchlist -62
Studio Construction Lodgoi •67
Overview -85-
Franchisoo Training Program

Paco No. Pagos in Sesto
Toachor Training Program gS i

ozr
0
6 /]
nn
!TO 9
Topics to Avoid During an Interview 94 19
Sample Hiring QuoGtions 93-
Work Pattern 93
Ambitions 94
Stress 94
Attendance/Punctuality 94
Problem Solving/Analytical Skills 94
Ability to Learn 94
Organization/Attention to Detail 95
Interpersonal Communication Skills 95
Cooporation • 95
Values Based Questions 95
Basic Charactoristics Interview Questions 96
IntorporGonal Behaviors Interview QuoGtionc 96
Motivation and Stylo Interview QuostionG 98
Managerial Interview Questions 99
Customer Sorvico Interview Questions 109
Pro-Hire Assossmont 1
lO"* 2
10° 11
117
i i i
l^S
1 7
l" "
n o A 3
Chango in Rolationship Document ±12

PORO No. Panos in Soction
Club Pilatos Tormination Chockliot
Toachor Training Enrollment Procoss •424 44

Operating Procedures for Instructors 482-
Oponing Procoduroo 4&2
CuGtomor Sorvico 4%
Chocking in Clients 483
Housokooping Duties 4&3
Doal Broakors 4&3
RoquiromontG for Each Class 3*3 3r
Ending Class 3*3
9
Closing Procedures 3*4
1 no
308
Samplo Business Plan 340 1
Total Pagos •344

1 " T
Cumulative Pages per
Chapter Section Page* Section
1 Real Estate 1 20
2 Getting Your Business Started 21 9
3 Construction & Build out 30 65
4 Sales 95 62
5 Teacher training 157 15
6 CP Training, Services & Classes 172 16
7 Day to Day operations 188 48
8 Markeing 236 49
9 Retail 285 9
10 Accounting & Finance 294 11
11 Resale, Transfer, Renewal & Closing 305 3
12 Recruiting 308 10
Total 317 " J
©m62017 Club Pilates Franchise, LLC

Exhibit F
GENERAL RELEASE OF ALL CLAIMS

(FRANCHISEE") and , an individual ("GUARANTOR") enter

into this General Release on , with reference to the following facts:
1 On : , Club Pilates Franchise, LLC, a Delaware limited liability company

("FRANCHISOR"), and FRANCHISEE entered into a Franchise Agreement (the "Franchise Agreement") to operate a
CLUB PILATES Franchised Business located at (the "Premises"). GUARANTOR
guaranteed FRANCHISEE'S performance under the Franchise Agreement pursuant to a Guarantee and Assumption of
Obligations (the "Guarantee"). In consideration of FRANCHISOR'S processing and approval of
, the Franchise Agreement provides that
FRANCHISEE must sign this General Release as a condition to such . All capitalized terms not otherwise
defined in this General Release shall have the same meaning as in the Franchise Agreement and/or the Guarantee.
2. For valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
FRANCHISEE and GUARANTOR hereby release and forever discharge FRANCHISOR, its parents and subsidiaries and
the directors, officers, employees, attorneys and agents of said corporations, and each of them, from any and all
claims, obligations, liabilities, demands, costs, expenses, damages, actions and causes of action, of whatever nature,
character or description, known or unknown (collectively "Damages"), which arose on or before the date of this
General Release, including any Damages with respect to the Franchise Agreement, the Franchised Business, the
Premises and the Guarantee. FRANCHISEE waives any right or benefit which FRANCHISEE or GUARANTOR may have
under Section 1542 of the California Civil Code or any equivalent law or statute of any other state. Section 1542 of the
California Civil Code reads as follows:
"Section 1542. Certain claims not affected by general release. A general release does not extend to
claims which the creditor does not know or suspect t o exist in his favor at the time of executing this
release, which if know by him must have materially affected his settlement with the debtor."
3. This General Release sets forth the entire agreement and understanding of the parties regarding the
subject matter of this General Release and any agreement, representation or understanding, express or implied,
heretofore made by any party or exchanged between the parties are hereby waived and canceled.
4. This Agreement shall be binding upon each of the parties to this General Release and their respective
heirs, executors, administrators, personal representatives, successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year set forth
above.
FRANCHISEE:
By:
Print Name:
Title:
GUARANTOR:
, an individual

Exhibit G
STATE SPECIFIC ADDENDA

A D 0 ^ O ^ ^ T 5 0 ^ O ^ ^
^he^8nohise^ôtedioor^^^
p r o t o n s in the O n i ^ m F r a n c e OôsureOocum^^^
heamendedasfo^w^
CAÔRNIA
AOOENDOMTOOÔSÔOCOMENT
C ^ o r n i a C o n a t i o n s Code, Section 31125 r e q u i ^

document, approved hy the Department of Business Oversight, p r i o r i
modification of an existing franchise.
Our wehsite has not heen reviewed or approved hy the Caiifornia Department of Business Oversight.
Anycompiaintsconcerningthecontentofthiswehsit^
Oversightatwww.dho.ca.gov.
TH5CALiFORNiAFBANCHiS5i^5STM5NT^WR5QUiR5STHATA
R5^NGTOTH5SAL5 0FTH5 FBANCHiS5B505^2R50TOGETHER WiTHT^^
1. The foiiowing language isadded to t h e e n d o f i t e m 3 o f t h e Disclosure Document:
Neither Ciuh Pilates Franchise, LLC, nor any person identified in item 2, or an affiliate or
franchise hroker offering franchises under our principal trademark is subject to any currently
effective order ofany national securities association or national securities exchange, as defined in
the Securities and Exchange Act of 1934, 1 5 0 S C A 7 B a e t s e ^ , suspending or expelling such
person from membership in such association or exchange.
2. The following paragraphs are added attheendofltem 17 ofthe Disclosure Document:
The FranchiseAgreementrequiresfranchiseetoexecuteageneral release of claims upon

renewal or transfer of the Franchise Agreement. California Corporations Code Section 31S12
provides that any condition, stipulation or provision purporting to bind any person acquiring any
franchise to waive compliance with any provision of that law or any rule or order thereunder is
void.
California Business and Professions Code Sections 20000through 20043 provide rights to
franchisees concerning termination or nonrenewal ofafranchise. If the Franchise Agreement
containsaprovision that is inconsistent with the law, the law will control.
The Franchise Agreement provides fortermination upon bankruptcy.This provision may

not be enforceable underfederal bankruptcy law (11 O.S.C.A. Sec. 101 etseu.).
The Franchise Agreement containsacovenant not to compete which extends beyond the
termination of the franchise. This provision may not be enforceable under California law but we
will enforce it to theextent enforceable.
© 3 0 4 6 2 0 ^ Club Pilate ^ n ^ e . LLC

303420^ ^ ^ e O i ^ l o ^ e O o c o m e o t ^ E ^ i b l t s
The Franchise Agreement requires application of the laws of the state where the business
is located. This provision may not be enforceable under California law, but we will enforce it to
the extent enforceable.
The Franchise Agreement requires binding arbitration. The arbitration will occur in
Orange County, California, with the costs being borne by the non-prevailing party. The prevailing
party shall be entitled to recover reasonable compensation for expenses, costs and fees in
connection with arbitration, including reasonable attorney's fees. Prospective franchisees are
encouraged to consult private legal counsel to determine the applicability of California and federal
laws (such as Business and Professions Code Section 20040.5 Code of Civil Procedure Section 1281,
and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a
forum outside the State of California.

HAWAII
ADDENDUM TO DISCLOSURE DOCUMENT
These franchises will be/ have been filed under the Franchise Investment Law of the State of Hawaii. Filing
does not constitute approval, recommendation or endorsement by the Director of Commerce and Consumer
Affairs or a finding by the Director of Commerce and Consumer Affairs that the information provided herein is true,
complete, and not misleading.
The Franchise Investment Law makes it unlawful to offer or sell any franchise in this state without first
providing to the prospective franchisee, or subfranchisor, at least seven days prior to the execution by the
prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the payment of
any consideration by the franchisee, or subfranchisor, whichever occurs first, a copy ofthe Disclosure Document,
together with an copy of all proposed agreements relating to the sale of the franchise.
This Disclosure Document contains a summary only of certain material provisions of the franchise
agreement. The contract or agreement should be referred to for a statement of all rights, conditions, restrictions
and obligations of both the franchisor and the franchisee.

ILLINOIS
1. The "Summary" section of Item 17(v), entitled Choice of forum, is deleted in its entirety.
2. The "Summary" section of Item 17{w), entitled Choice of law, is deleted and replaced with the following:
Illinois law applies.
3. Illinois law governs the agreement(s) between the parties to this franchise.
4. Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of Illinois
is void, provided that arbitration may take place outside of Illinois. 815 ILCS 705/4 (West 2010)
5. Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive
compliance with any provision of the Illinois Franchise Disclosure Act or any other law of Illinois is void. 815 ILCS
705/41 (West 2010)

ILLINOIS
AMENDMENT TO FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT
The Franchise Agreement and Development Agreement are specifically amended as follows:
In recognition ofthe requirements ofthe Illinois Franchise Disclosure Act of 1987 (as amended), the parties
to the attached Franchise Agreement ("Agreement") agree as follows:
1. Governing Law.
a. Section 16.7 of the Franchise Agreement, "CHOICE OF LAWS/' is deleted in its entirety and replaced
with the following:
EXCEPT TO THE EXTENT GOVERNED BYTHE UNITED STATES TRADEMARK ACT OF 1946 (LAN HAM ACT,
15 U.S.C. SECTIONS 1051 ET SEQ.), THE FEDERAL ARBITRATION ACT, OR OTHER FEDERAL LAW, THIS
AGREEMENT ANDTHE RIGHTS OF THE PARTIES HEREUNDERSHALL BE INTERPRETED AND CONSTRUED
UNDER THE LAWS OF THE STATE OF ILLINOIS.
b. Section 21(A) ofthe Development Agreement is hereby amended to provide that Illinois law governs
the agreements between the parties to this franchise.
3. Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise
agreement/development agreement that designates jurisdiction or venue outside of the State of Illinois
is void. However, a franchise agreement/development agreement may provide for arbitration in a venue
outside of Illinois.
4. Section 41 of the Illinois Franchise Disclosure Act provide that any condition, stipulation or provision
purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise
Disclosure Act or any other law of Illinois is void. Accordingly, insofar as the Franchise Agreement
requires you to waive your rights under the Illinois franchise law, these requirements are deleted from
the Franchise Agreement. This provision will not prevent the franchisor from requiring you to sign a
general release of claims as part of a negotiated settlement of a dispute or actual lawsuit filed under any
of the provisions of the Act, nor shall it prevent the arbitration of any claim pursuant to the provisions
of Title 9 of the United States Code.
IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment,
understands and consents to be bound by all of its terms.
Club Pilates Franchise, LLC Franchisee:.
By: By:
Title: • Title:

MARYLAND
1. The "Summary" section of Item 17(c) entitled Requirements for vou to renew or extend, and the
"Summary" section of Item 17(m) entitled Conditions for our approval of transfer, is amended by adding the
following:
Any general release you sign shall not apply to the extent prohibited by the Maryland Franchise
Registration and Disclosure Law.
2. The "Summary" section of Item 17(h) entitled "Cause" defined (defaults which cannot be cured), is
amended by adding the following:
The Franchise Agreement provides for termination upon your bankruptcy. This provision might
not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et sea.), but we will
enforce it to the extent enforceable.
3. The following are added to the end of the chart in Item 17:
Despite any contradicting provision in the Franchise Agreement, you have 3 years from the date
on which we grant you the franchise to bring a claim under the Maryland Franchise Registration
and Disclosure Law.
A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise

MARYLAND
AMENDMENT TO FRANCHISE AGREEMENT
The Franchise Agreement is specifically amended as follows:
Any provision requiring Franchisee to execute a general release of any and all claims against Franchisor shall not
apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
Termination upon bankruptcy ofthe Franchisee might not be enforceable under federal bankruptcy law (11 U.S.C.
Sections 101 etseg.), but Franchisor intends to enforce it to the extent enforceable.
Sections 17.3 and 17.4 shall be supplemented by the following additional language:
PROVIDED, HOWEVER, THAT THIS LIMITATION OF CLAIMS SHALL NOT ACT TO REDUCE
THE THREE (3) YEAR STATUTE OF LIMITATIONS AFFORDED FRANCHISEE FOR BRINGING
A CLAIM UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW.
Section 14-226 ofthe Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a
prospective franchisee to assent to any release, estoppel, or waiver of liability as a condition of purchasing a
franchise. Any provision of this Franchise Agreement which requires a prospective franchisee to disclaim the
occurrence and/or non-occurrence of acts that would constitute a violation ofthe Maryland Franchise Registration
and Disclosure Law in order to purchase a franchise are not intended to, nor shall they act as a release, estoppel
or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
IN WITNESS WHEREOF, each ofthe undersigned hereby acknowledges having read this Amendment, understands
and consents to be bound by all of its terms.
Club Pilates Franchise, LLC Franchisee:,
By: By:
Title: Title:

30342017 Franchise Disclosure Document r- Exhibits
MARYLAND
AMENDMENT TO DISCLOSURE QUESTIONNAIRE
The Franchisee Disclosure Questionnaire is specifically amended as follows:
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law (as
amended), Md. Code Bus. Reg. Sections 14-201 through 14-233, the following paragraph is added to the Franchisee
Disclosure Questionnaire:
Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a
prospective franchisee to assent to any release, estoppel, or waiver of liability as a condition of
purchasing a franchise. Representations in this questionnaire are not intended to nor shall they
act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise
Name of Franchisee/Applicant
Date:
Signature
Name and Title of Person Signing

MI^GAN
AOOENOUMTOOÔSUREOOCUMENT
Tho l o w i n g d ^ ^ ^ a ^ ^ ^ o d b y ^ S ^ o f M ^ ^
1 TH5STAT5 0 F M ^ G A N ^ O ^ T 5 C 5 ^ N U N ^ P ^ ^
ÂNYOFTHEF^^
AR5VOIOANOCANNOT85 5NFORC50AGA^TYOO
Each of the l o w i n g p r o y ^ o n s ^ v o i d and unenforceah^^^

franchise:
^ Aprohihition on the right o f a f r a n ^
B ^requirement thatafranchisee assent toareiease, assignment, novation, waêr or e s t o p s

whichdeprivesafranchiseeofrightsand protections p r o v i d e d i n t h e M ^ ^
notpreciudeafranchisee,afterenteringintoafranchiseagreement,fromsettiinganyandaiiciaims.
C ^provision that permitsafranchisor to terminateafranchise prior to the expiration of this te^

exceptfor good cause^ Good causeshaii include the faiiure ofthe franchisee to compiy with any iawfu^
of the franchise agreement and to cure such failure after heing given written notice thereof andareasonahie
opportunity,which in no eventneed he morethan 30days,tocuresuch failure.
0. ^provision that permitsafranchisor to refuse to renewafranchise without fairiy compensating

thefranchiseehyrepurchaseorothermeansforthefairmarketvalueatthetimeofexpirationofthefranchis^^^^
inventory, supplies, equipment, fixtures and furnishings. Personalised materials which have no value to the
franchisorandinventory,supplies, equipment, fixtures and furnishings not reasonably required in
thefranchise husinessarenotsuhjectto compensation.Thissuhsectionappliesonlyif:(i)the term ofthefranchis^
is less than5years, and (ii) the franchisee is prohibited hy the franchise or other agreement from continue
conductsubstantiallythesamebusinessunderanothertrademark,servicemark, tradename, logotype,adve^^^^
orothercommerciai symbol inthesameareasubsequenttotheexpirationofthefranchiseorthefranchiseedoes
not receive at least^monthsadvancenoticeoffranchisor^sintentnottorenewthefranchise.
5. ^provision that permitsthefranchisortorefusetorenewafranchiseontermsgenerally available

tootherfranchiseesofthesameclassortypeundersimilarcircumstances.Thissection does not requirearenewal
provision.
P. Aprovisionrequiringthatarbitration or litigation beconductedoutside this s

preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct a ^ ^ ^
location outside this state.
G. ^provision which permitsafranchisorto refuse to permitatransfer of ownership ofafranchise,

except for good cause. The subdivision does not preventafranchisor from exercisingaright of first refusal to
purchasethefranchise.Good cause shall include, but is not limitedto:
©30^2017 C l o b P i ^ F r a o ^ i ^ L t C
30162017 F r a ^ i ^ O ^ l ^ o ^ O o ^ m e o t ^ ^ b i t s
1) The failure of the proposed transferee to meet the franchisor's then-current reasonable
qualifications or standards.
2) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
3) The unwillingness of the proposed transferee to agree in writing to comply with all lawful
obligations.
4) The failure of the franchisee or proposed transferee to pay any sums owing to the
franchisor or to cure any default in the franchise agreement existing at the time ofthe proposed transfer.
H. A provision that requires the franchisee to resell to the franchisor items that are not uniquely
identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of
first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing
and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right
to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached
the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in
subdivision (C).
I. A provision which permits the franchisor to directly or indirectly convey, assign or otherwise
transfer its obligations to fulfill contractual obligations to the franchisee unless a provision has been made for
providing the required contractual services.
2. If the franchisor's most recent financial statements are unaudited and show a net worth of less than
$100,000.00 the franchisor shall, at the request of a franchisee, arrange for the escrow of initial investment and
other funds paid by the franchisee until the obligations to provide real estate, improvements, equipment,
inventory, training or other items included in the franchise offering are fulfilled. At the option of the franchisor, a
surety bond may be provided in place of escrow.
3. THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT
CONSTITUTE APPROVAL, RECOMMENDATION OR ENFORCEMENT BYTHE ATTORNEY GENERAL.
Any questions regarding this notice should be direct to:
State of Michigan
Consumer Protection Division
Attention: Franchise
670 G. Mennen Williams Building
525 West Ottawa
Lansing, Ml 48933
(517)373-1160
Note: Despite paragraph F above, we intend to enforce fully the provisions of the arbitration section
contained in the Franchise Agreement. We believe that paragraph F is unconstitutional and cannot preclude us
from enforcing our arbitration section. You acknowledge that we will seek to enforce this section as well.

MINNÔTA
âccordance with the requiremems ofthe state of Miooesotat^^

concoction with the Oisciosure Document. Any inconsistency with the information contained in the Disclosure
Document wiii he resoived in favor ofthis Minnesota Addendum.
1. item^^demarîsamendedhyaddingthefoiiowing:
As required hythe Minnesota FranchiseAct, Minn.Stat. Sec. 8 0 C . 1 2 ^ w e w i i i r e i m h u ^

any ofyour costs incurred in the defense ofyour rightto use the Marks, so iong as you were using
the Marks in the manner authorised hy us, and so iong as we are timeiy notified ofthe ciaim and
are given the right to manage the defense of the ciaim including the right to compromise, settle
orotherwise resolve the ciaim, and to determine whether to appealafinal determination of the
ciaim.
2. item 17 RenewalTermmaônDTransfer and 0 ^
A. Renewal andTermmaôn
With respect to franchises governed hy Minnesota iaw, we wilicompiy with Minn. Stat.
Sec.80C.14,Suhds.3,4andSwhich require, exceptincertainspecifiedcases, thatyou he
given 90 days'notice of termination (with 60 days to cure) and 180 days^ notice for non
renewal ofthe Agreement
8. CholceofForum
Nothing in the Disclosure Document or Agreement can abrogate or reduce any of your
rights as provided for in Minnesota Statutes 1984, Chapter 80C, or your rights to any
procedure, forum, or remedies providedforhytheiawsofthe jurisdiction
C. Releases
Agenerai release shall not relieve any person from liahiiity imposed hy the Minnesota
FranchiseLaw,Minn.Stat.,Chapter80C,Sections80C.22.
These franchises have heen registered under the Minnesota Franchise Act^ registration does n^^
constitute approvals recommendation or endorsement hythe Commissioner of Commerce of Minnesota o r a
flndlnghytheCommlsslonerthatthelnformation provided herein Istrue^completeând not misleads
The Minnesota FranchlseActmaêsIt unlawful toofferorsellanyfranchlselnthisstatewhlchls^^^^

toreglstratlonwlthoutflrstprov^
franchisee of any binding franchise or other agreement or at Ieast7days prior to the payment of any
consideration hy the franchisees whichever occurs firstâcopy of this Disclosure Document toge
copyof all proposed agreements relatlngtothefranchlse^Thls Disclosure Document contalnsasummaryon^
ofcertammaterialprovlslonsoftheFranchlseAgreement^Thecontractoragreementshouldhereferr^^
anunderstandlngofallrlghtsandohllgatlonsofhoththefranchlsorandthefranchlsee^
©30162017 O u b ^ l ^ ^ ^ ^ ^ C
30362017 F ^ n ^ e O i ^ o ^ e O o c u m e o t ^ E x h ^
MINNESOTA
In recognition ofthe Minnesota Franchise Law, Minn. Stat., Chapter 80C, Sections 80C.01 through 80C.22, and the
Rules and Regulations promulgated pursuant thereto by the Minnesota Commission of Securities, Minnesota Rule
2860.4400, et seq., the parties to the attached Franchise Agreement {"Agreement") agree as follows:
With respect to franchises governed by Minnesota law, Franchisor will comply with Minn. Stat. Sec.
80C.14, Subds. 3, 4 and 5 which require, except in certain specified cases, that Franchisee be given
90 days' notice of termination (with 60 days to cure) and 180 days' notice of non-renewal of the
Agreement.
As required by Minnesota Franchise Act, Minn. Stat. Sec. 80C.12(g), Franchisor will reimburse
Franchisee for any costs incurred by Franchisee in the defense of Franchisee's right to use the Marks,
so long as Franchisee was using the Marks in the manner authorized by Franchisor, and so long as
Franchisor is timely notified of the claim and is given the right to manage the defense ofthe claim
including the right to compromise, settle or otherwise resolve the claim, and to determine whether
to appeal a final determination ofthe claim.
With respect to franchises governed by Minnesota law. Franchisor will comply with Minn. Stat. Sec.
80C.14, Subds. 3,4 and 5 which require, except in certain specified cases, that Franchisee be given
Agreement.
A general release shall not relieve any person from liability imposed by the Minnesota Franchise
Law, Minn. Stat, Chapter 80C, Section 80C.22.
Nothing in the Disclosure Document or Agreement can abrogate or reduce any of your rights as
provided for in Minnesota Statutes 1984, Chapter 80C, or your rights to any procedure, forum, or
remedies provided for by the laws of the jurisdiction.
Any claims brought pursuant to the Minnesota Franchises Act, § 80.C.01 et seq. must be brought
within 3 years after the cause of action accrues. To the extent that any provision of the Franchise
Agreement imposes a different limitations period, the provision of the Act shall control.
IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, understands
Club Pilates Franchise, LLC Franchisee:
By: By:
Title: Title:

NEW YORK
The Disclosure Document is amended as follows:
1. All references made herein to a Disclosure Document shall be amended to Offering Prospectus.
2. The following paragraphs are added to the Disclosure Document Cover Page:
INFORMATION COMPARING FRANCHISORS IS AVAILABLE. CALL THE STATE ADMINISTRATORS LISTED IN

EXHIBIT B OR YOUR PUBLIC LIBRARY FOR SOURCES OF INFORMATION. IF YOU LEARN THAT ANYTHING IN THIS
DISCLOSURE DOCUMENT IS UNTRUE, CONTACT THE FEDERAL TRADE COMMISSION ANDTHE NEW YORK STATE
RD
DEPARTMENT OF LAW, BUREAU OF INVESTOR PROTECTION AND SECURITIES, 120 BROADWAY, 23 FLOOR,
NEW YORK, NEW YORK, 10271-0332.
WE MAY, IF WE CHOOSE, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE PROSPECTUS.
HOWEVER, WE CANNOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO
ACCEPT TERMS WHICH ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS PROSPECTUS.
3. Item 3 Litigation is amended by the addition of the following language: Neither the franchisor, its
predecessor, a person identified in item 2, or an affiliate offering franchises under the franchisor's principal
trademark:
A. Has an administrative, criminal or civil action pending against that person alleging: a felony, a
violation of a franchise, antitrust or securities law, fraud, embezzlement, fraudulent conversion,
misappropriation of property, unfair or deceptive practices or comparable civil or misdemeanor
allegations, or has pending actions, other than routine litigation incidental to the business, which are
significant in the context of the number of franchisees and the size, nature or financial condition of the
franchise system or its business operations.
B. Has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten-
year period immediately preceding the application for registration, has been convicted of a or pleaded
nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a
franchise, antifraud or securities law, fraud, embezzlement, fraudulent conversion or misappropriation of
property, or unfair or deceptive practices or comparable allegations.
C. Is subject to a currently effective injunctive or restrictive order or decree relating to the franchise,
or under a Federal, State or Canadian franchise, securities, antitrust, trade regulation or trade practice law,
resulting from a concluded or pending action or proceeding brought by a public agency;, or is subject to
any currently effective order of any national securities association or national securities exchange, as
defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership
in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating
to any other business activity as a result of an action brought by a public agency or department, including,
without limitation, actions affecting a license as a real estate broker or sales agent.

4. The following paragraph is added to Item 4 Bankruptcy: Except as disclosed above, neither the franchisor,
its affiliate, its predecessor, officers, or general partner has during the 10-year period immediately before the date
ofthe offering circular:
(a) filed as debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code;
(b) obtained a discharge of its debts under the bankruptcy code; or
(c) was a principal officer of a company or a general partner in a partnership that either filed as a
debtor (or had filed against it) a petition to start an action under the U.S. Bankruptcy Code or that obtained
a discharge of its debts under the U.S. Bankruptcy Code during or within 1 year after the officer or general
partner ofthe franchisor held this position in the company or partnership.
5. The following language is added to the end of Item 5 Initial Franchise Fee:
The initial franchise fee shall be used to compensate us for our costs in providing training
materials, evaluating the site, and other services we provide to you prior to and as you begin
operating your business.
6. Item 7 Initial Investment is amended by the addition of the following language:
There are no other direct or indirect payments to us in conjunction with the purchase of the
franchise.
7. The "Summary" section of Item 17(s) entitled Modification ofthe Franchise Agreement will be amended
by adding the following language:
We have the right to modify or revise lists of specifications, the Confidential Operations Manual, or any
part of the System, provided that any revisions or modifications will not unreasonably increase your
obligation or place an excessive and unreasonable economic burden on your operations.
8. The "Summary" section of Items 17(c) entitled Requirements for vou to renew or extent and 17(m)
entitled Conditions for our approval of transfer will be amended by adding the following language:
All rights enjoyed by the Franchisee and any causes of action arising in its favor from the provisions
of Article 33 of the GBL of the State of New York and the regulations issued thereunder shall
remain in force; it being the intent of this provision that the non-waiver provisions of GBL Section
687.4 and 687.5 be satisfied.
9. Item 17. Renewal. Termination: The "Summary" section of Items 17(d), entitled Termination, will
be amended by adding the following language:
The franchisee may terminate the franchise agreement or multi-unit development agreement on
any grounds available by law.
10. Item 17. Renewal, Termination, etc.: The "Summary" section of Items 17(j), entitled Assignment
of contract bv franchisor, will be amended by adding the following language:
However, no assignment will be made by the franchisor except to an assignee who, in the good faith and
judgment of the franchisor, is willing and financially able to assume the franchisor's obligations under the
franchise or multi-unit development agreement.

11. Item 17, Renewal. Termination: The "Summary" section of Items 17(w), entitled Choice of law,
will be amended by adding the following language:
The forgoing choice of law should not be considered a waiver of any right conferred upon the
franchisor or upon the franchisee or upon the multi-unit developer by Article 33 of the General
Business law of the State of New York.
WE REPRESENT THAT THIS PROSPECTUS DOES NOT KNOWINGLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT.

NORTH DAKOTA
1. The following language is added to the "Summary" section of Item 17(c) entitled Requirements for vou to
renew or extend and Item 17(m) entitled Conditions for our approval of a transfer:
The execution of a general release upon renewal, assignment or termination will be inapplicable
to franchises operating under the North Dakota Franchise Investment Law.
2. The applicable portion of the "Summary" section of Item 17(i) entitled Your obligations on
terminatlon/non-renewal is amended to read as follows:
If we prevail in anv enforcement action you will pay all damages and costs we incur in
enforcing the termination provisions of the Franchise Agreement
3. The following is added to the "Summary" section of Item 17(u) entitled Dispute resolution bv
arbitration or mediation:
To the extent required by the North Dakota Franchise Investment Law (unless such
requirement is preempted by the Federal Arbitration Act), arbitration will be at a site to
which we and you mutually agree.
4. The following is added to the "Summary" section of Item 17(r) entitled Non-competition
covenants after the franchise is terminated or expires:
Covenants not to compete upon termination or expiration of the Franchise Agreement

are generally unenforceable in the State of North Dakota except in limited instances as
provided by law.
5. The following is added to the "Summary" section of Item 17(v) entitled Choice of forum:
However, to the extent allowed by the North Dakota Franchise Investment Law, you may
commence any cause of action against us in any court of competent jurisdiction, including
the state or federal courts of North Dakota.

NORTH DAKOTA
1. The following is added to Section 3.2, "RENEWAL" and Section 14 'TRANSFER OF INTEREST":
The execution of a general release upon renewal, assignment or termination will be

inapplicable to franchises operating under the North Dakota Franchise Investment Law.
2. The following is added to Section 17.4, "CHOICE OF FORUM":
However, to the extent allows by the North Dakota Franchise investment Law, Franchisee may
commence any cause of action against Franchisor in any court of competent jurisdiction, including
3. The following is added to Section 16.1, "MANDATORY BINDING ARBITRATION"
which Franchisor and Franchisee mutually agree.
4. Section 18, "ACKNOWLEDGMENTS" is amended by the addition of the following language to the original
language that appears therein to read as follows:
Franchisee acknowledges that Franchisee received a copy of this Agreement, the

attachments hereto, if any, and agreements relating thereto, if any, at least seven (7) days
prior to the date on which this Agreement was executed.
5. Section 13.1 (regarding post-term restrictions) is amended by the addition ofthe following language to the
original language that appears therein:

provided by law.
By: By:
Title: Title:

RHODE ISLAND
The following language is added to Item 17(v) entitled Choice of forum:
, except as otherwise required by the Rhode Island Franchise Investment Act

RHODE ISLAND
In recognition ofthe requirements of the Rhode Island Franchise Investment Act (Section 19-28.1-14), the
parties to the attached Franchise Agreement agree as follows:
Section 17.4, "CHOICE OF FORUM" is amended by adding the following:
§19-24.1-14 ofthe Rhode Island Franchise Investment Act provides that "A provision in a
franchise agreement restricting jurisdiction or venue to a forum outside this state or
requiring the application of the laws of another state is void with respect to a claim
otherwise enforceable under this Act."
By: By:
Title: Title:

VIRGINIA
In recognition ofthe restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the
Franchise Disclosure Document for Club Pilates Franchise, LLC for use in the Commonwealth of Virginia shall be
amended as follows:
The following statement is added to Item 17.h:
"Pursuant to Section 13.1-564 ofthe Virginia Retail Franchising Act, it is unlawful for a franchisor
to cancel a franchise without reasonable cause. If any ground for default or termination stated in the
franchise agreement does not constitute "reasonable cause", as that term may be defined in the Virginia
Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."

WASHINGTON
A005NOOMTOOISCLOSUR500COM5NT
^ ^ o g n ^ o o o f ^ ^ o ^ m e ^ o f t h e W a s h ^ o n F ^ o h ^ e êstmemProtection Act (RCW

l^lOOBtBO^theôchêDi^
1. The following disclosure is added to Item S:
Ouetoourfioancial condition please he advised that we have securedasuretyhoo

amoumof$100,000to demonstrate ourfinancialcapahiiityto fulfill our pr^^^
tofranchisees/developersuodertheFranchiseAgreementandtheOevelopmeotAgreementthat
aresuhjecttothe jurisdictiooofthe Washington FranchiselovestmemProtectionA^
filewiththeSecurities Division ofthe Washington Department ofFinancial I n s t i t u t e
2. The following paragraphsare added a t t h e e n d o f l t e m l 7 :
ThestateofWashingtonhasastatute^RCWl^lOOÔ, which may supersede the Franchise

Agreementinyourrelationshipwiththefranchisorincludingtheareasoftermination and renewal
of your franchise There may also hecourt decisions whichmay supersede thefranchise
agreement in yourrelationshipwiththefranchisorincludingthe areas oftermination and renewal
ofyourfranchise.
In anyarhitration involvingafranchise purchased in Washington, thearhitrationsiteshallheeither

inthestateofWashington,orinaplacemutuallyagreeduponatthetimeofthearhitration,oras
determined hythe arbitrator.
lntheeventofaconflictoflaws,theprovisionsoftheWashington Franchise Investment

FrotectionAct,ChapterÔORCW shall prevail
Arelease or waiver of rights executedhyafranchisee shall not include rights under the
Washington Franchise Investment FrotectionActexceptwhen executed pursuanttoanegotiated
settlement aftertheagreement is in effectand where the parties are represented hyindependent
counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations
period for claims undertbe Act, rights or remedies undertheActsuchasarighttoajurytrial may
not be enforceable.
Transferfeesarecollectabletotheextenttha^
or actual costs ineffectingatransfer.
©30462017 C l u b P I I ^ ^ ^ ^ ^
304620^7 Franchise O l s o l ^ u ^ O o c o m ^ ^ ^ l ^
WASHINGTON
In recognition of the requirements of the Washington Franchise Investment Protection Act (RCW
19.100.180), the parties to the attached Franchise Agreement and/or Development Agreement agree as follows:
Due to our financial condition, please be advised that we have secured a surety bond in the
amount of $100,000 to demonstrate our financial capability to fulfill our pre-opening obligations
to franchisees/developers under the Franchise Agreement and the Development Agreement that
are subject to the jurisdiction of the Washington Franchise Investment Protection Act, which is on
file with the Securities Division of the Washington Department of Financial Institutions.
The state of Washington has a statute, RCW 19.100.180, which may supersede the Franchise
Agreement in your relationship with the franchisor including the areas of termination and renewal
of your franchise. There may also be court decisions which may supersede the franchise
agreement in your relationship with the franchisor including the areas of termination and renewal
of your franchise.
In any arbitration involving a franchise purchased in Washington, the arbitration site shall be either
in the state of Washington, or in a place mutually agreed upon at the time ofthe arbitration, or as
determined by the arbitrator.
In the event of a conflict of laws, the provisions of the Washington Franchise Investment
Protection Act, Chapter 19.100 RCW shall prevail.
A release or waiver of rights executed by a franchisee shall not include rights under the
Washington Franchise Investment Protection Act except when executed pursuant to a negotiated
settlement after the agreement is in effect and where the parties are represented by independent
period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may
not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated
or actual costs in effecting a transfer.
Club Pilates Franchise, LLC Franchisee^
By: By:
Title: Title:

Exhibit H
LIST OF FRANCHISEES AND THEIR OUTLETS

AS OF THE ORIGINAL ISSUE DATE OF THE DISCLOSURE DOCUMENT

LIST OF FRANCHISEES AS OF DECEMBER 3 1 , 3 0 * 5 2 0 1 6 AND THEIR FRANCHISED STUDIOS
Owner First Owner Last

Street City State Zip Studio Phone Studio Email
Name Name
3169 Green Valley cohobohcichts@clubpilatOD.comc
Lir dsay Booker fkLRoad Birmingham AL 35243 205-777-7976 ahabaheights(5>dubpilates.com
1825 East
Guadalupe Ste F-
Bil /Jennifer Guzick 102 Tempe AZ 85283 480.566.0335 tempe(5>clubpilates.com
20329 NrNorth
59th AverrAvenue orrowhoodffi>clubpilotGS.com
Jei nifer Marrinan Ste A-4A1 Glendale AZ 85308 480-372-8100 arrowhead@clubpilates.com
1702 E Prince 520 241
MarrinanS #420111W. TucsonPhoe 85719 4743480.372.8 tucsonffflclubpilotcG.'e&ffldownto
M- fyJennifer Monroe #128 nix AZ 85003 100 wnphoenix(Stclubpilates.com
th
2760 5 Ave, Sto.
M San Diogo GA wwa 610 701 6111 bonkorGhilK^clubpilatej
540
1820 Morron
Bailey&wft Readl354E 760 201
aw Colorado St, Suite GlendaleGa4 91205 3374818.724.9 corlsbodPclubpilotcs.comglendal
Be QgiXaAriGllo Whitmon tGGA sbad CA 92008 e@clubpilates.com
18037 Chats worth Granada m
Bereny
Mm. Street
2820Townseate
Hills
Thousand
CA 91344 (818)210-3288 firanadahills@clubpilates.com
Robert Bereny Rd #107 Oaks CA 91361 805.556.7070 westlakevillaee@clubpilates.com

1525 Mesa Verde coGtomoGa^clubpilotos.comcosta
Br tany Borga Dr. E. Costa Mesa CA 92626 949-791-7184 mesa@clubpilates.com
7012 #103 Edinger Huntington 213 204 dtla@clubpilotGG.com
A v c l l l Q S . IIODO BeachWs 92647 69QQ657.464.4 huntingtonbeachOclubpilates.co
j k ttanyDorok BorgaJonco CA eeeaa 696 m
4901 Morena Blvd.
Ch CU Clements Suite 210 San Di CA 92117 858.914.1459 morena@clubpilates.com
Davies/ 9460 Mira Mesa
:m
Ca •olyn/Dave Hays Blvd. UnitP San Dieeo CA 92126 858-254-3326 miramesa@clubpilates.conn
Davies/ 861 Harold Place, stlokofaclubpilotos-comchulavi
Ca olyn/-Dave Hays Suite 305 Chula Vista CA 91914 619-392-2572 sta(5>clubpilates.com
Dumaw encinitQGfSclubpilDtes.comcncinit
Ar elle Whitman 555 2nd St. Suite 2 Encinitas CA 92024 760-529-6706 as@clubpilates.com
Dumaw 904 W San Marcos
Ar elle Whitman Blvd. Suite 5 S a n
^rcos CA 92078 760-201-3070 sanmarcos@clubpilates.com
Dumaw 1820 Marron Road,
Ar elle Whitman Suite 100 Carlsbad CA 92008 760-201-3374 carlsbad@clubpilates.com
4354562 E.
Colorodo St root, 818 724
Gonzalezes Ster-AEI Camino Sunnyvale^ 94087 9977408.675.9 nlQndolo@clubpilQtoG.com
Le visRobocc; *Wy Real CA 071 sunnvvale@clubpilates.com
18037 ChatGworth mm 818 210
HammettB Strl7767 Santiago Bad* 92861 3288714.202.6 flronodohill5@clubpilatOG.comvill
En UyRobort orony Blvd., Suite 610 a=wm CA SUM 404 apark@clubpilates.com
21612 Piano
Trabuco Road, Trabuco
En SL Hammett Suite A Canyon CA 92679 949.534.2023 RSM@clubpilates.com

Name Name
2760 5th Ave, Suite
M. £££! Hughes no San DieEO CA 92103 858-531-2348 bankershill[5)clubpilates.com
hollvwoodfgclubpilotGG.comhollv
ioi e&Dorok Jones 730 N. La Brea Ave. Los Angeles CA 90038 323-774-2701 woodfSclubpilates.com
1119S.Hone
Street30100 Town Los 213-204-
DemkKeeiy/ JonesW#$s Center Drive, Suite AnpelesWew 90015 6900040 257 loGunjniGUQl^clubpilotos.comdtl
WWright 8-i no Niguel CA 33* a@clubpilates.com
1720 West Echo 310 021
SunsetP03 N. ParkMonhot &QG4323-505- monhattonbQOchffflclubpilotos.ee
G# 4sJones JonesSudor Sopulvcda Blvd. CA 90026 4355 mechopark@clubpilates.com
Lir da/ Kendall/ 1330 21st Street iocromonto@clubpilQtos.commid
Re )ecca Holden Ste 101 Sacramento CA 95811 916-347-0304 townsac@ciubpilates.com
14410 Big Basin
Ke i/Jessie Ko/Wu Way, STE E Saratoga CA 95070 669.256.5200 saratoga@clubpHates.com
Re lata and 50 El Camino Real,
Se in Lance
m
1921 Douelas
San Carlos CA 94070 650-722-4710 sancarlQs@clubpilates.com
Re lata and Boulevard, Suite

Se Lance 104 Roseville CA 95661 916.318.9908 roseville@clubpilates.com
5907 Severin
K§ jgCorolyn/ Davios/Hoy Son DiogoLa 91942 858-^4- miromGso@clubpiloto5.comlames
Baê sMann Moso Plvd, UmW Mesa CA saaas 33^531-2348 a@clubpilates.com
6690 Mission iisGionGorfio@clubpilotCG.commi
Ka ie Mann Gorge Road San Diego CA 92120 619-786-2300 ssionvallev@clubpilates.com
35000 Ji Ivlisston
Ke^y/U* GA 836% 949 446 8243 miGsionviGio@clubpilatoG.c-em
# t
3959 30th Street, lorthporkfSclubpilatGS.comnorth
Ka ie Mann Suite 101 San Diego CA 92104 619-677-1500 parkjgclubpilates.com
iato and 50 El Comino Real,
Loncc San Corlos OA 94070 650 722 4710 sancarlos@clubEHlotos.com
Sew #58
Wptson/Wr 27181 Ortogn Ih
Ke GA e** 5ic@clubpilatoo.com
# t Stt^^^SS pistrono
Dumaw Morcos
Af Son Mai €A 02078 760 201 3070 GonmorcoGtSclubpilatGG.com
Whitmon Blvd. Euiti 4
225 Town Center santOG(5)clubpilotos.€effl$antee(S)
Ka ie Mann Parkway, Suite C Santee CA 92071 619-485-1800 clubpilates.com
5077 Lankershim North
Sa kis / Esther Ovakmian Boulevard Suite F Hollywood CA 91601 818-2103422 NoHofSclubpilates.com
Robert/ 6766 Bernal Ave.
Je sica Shiraki Suite 530 Pleasonton CA 94566 925.255.0880 pleasanton(S)clubpilates.com
903 N.
S£pulveda2423Q Manhattan torroncGf5tclubpilatos.com
SuderLcrro Hawthorne Blvd?? BeachTorr-oft 90505 310-464- manhattanbeachgpclubpifates.co
Ch IsLiubo Parrowav Sto. 104. ee CA 90266 3800921-8004
17767
Santiagol313 S
SuderHam Harbor Blvd^-Ste, Fullerton 92832 714-262- villopark@clubpilatOG.com
Ch jsfmtlv ^0 CA $404.519.3841 fuHerton@clubpilates.com

Name Name
10720 Ventura
Aniyi 8W13920 City 818 207
Ar ihonvflikliit TruoneWee Center Drive Suite WoodlondC 91364 ^909.529.1 woodlondhillsfSclubpilotos.comc
101/1024010 hino Hills CA 91709 041 hinohiHs@clubpilates.com
27184 Ortega Hwy San Juan
Ke Watson Suite 206 CA
m. 25800 Jeronimo
Capistrano
Mission
92675 949-257-2292 sic(S)clubpilates.com
Ke Road Ste 404 Vieio CA 92691 949-446-8243 missionvieio(5>clubpilates.com

mm. 437 S Wodsworth
8W30100 Town 949-257-
Watsons Center Drive, Suite LakowoodLa 2292720 789 bolmortPdubpilptoGreeffllaEunani
Ke 4flKeelv PB-l fiuna Niguel COCA 92677 iOii guelgpclubpilates.com
3000 E. 3rd Ave, denvGr@clubpMoto5.comcherrvcr
M ry & Brian Busse Suite 20 & 21 Denver CO 80206 720-361-9995 eek@clubpilates.com
2229 Wildcat Highlands highlandsranchwest@clubpilates.
M SL Busse Reserve Parkway Ranch 80129 com
1931-V Sheridan m 720.557.9606
odcowotGr@clubpilates.com
Jei nifer Carlson Blvd. Edge water CO 80214 720-446-9777 edgewater@clubpilates.com
437 S Wadsworth
Ke /in Easterly Blvd. Suite F Lakewood CO 80226 720-789-1011 belmar@clubpilates.com
11757 West Ken
Caryl Ave?
SterAvenue, Suite kencoryl^clubpilatOGiCOfn
Ke 'in Easterly G Littleton CO 80127 720-579-7285 kencarvl@clubpilates.com
700 Ken Pratt
Joj Hendricks Boulevard Longmont CO 80501 720.442.8385 longmont@clubpilates.com
1203 Town Center obacoa@clubpilatok€em
An landa Gomez Drive, SterUnit 107 Jupiter FL 33458 561-449-8161 abacoa@clubpilates.com
Maria 117 SW 10th Ste
Ta ila Peck Gutierrez #103 Miami FL 33130 786.509.9831 Brickell@clubpilates.com
2960 Shallowford
^ phanie Little Rd #200 Marietta GA 30066 678.647.6220 eastcobb(S)clubpilates.com
2047 N. Clybourn
A^^y Phelos Ave Chicago 60614 312.734.1069 lincolnpark@clubpilates.com
2482 E. 146th
Ra ph/Julie Thorpe Street Carmel IN 46033 317) 565-4828 carme1@clubpilates.com
QiOeWO'Del 6601WT119th Overland southop@clubpilotos.com
Ar drea StrootSt Park KS 66209 913-.562-.957O overlandpark@clubpilates.com
454 B Governor Severna 5ovornapork@clubpilotos.com
La ira Cutchall Ritchie Highway Park MD 21146 4lO-.64B-.440O severnapark@clubpilates.com
2661 Riva Road Ste
La ira Cutchall 625 Annapolis MD 21401 240.324.7474 annapolis@clubpilates.com
39799 Grand River novifBclubpilatcs.comnoviOclub
Kr iten Cronin Avenue Novi Ml 48375 248-410-7700 pilates.com
31255 Southfield
Kr sten Cronin Road Beverly Hills Ml 48025 248.878.9905 beverlvhills@clubpilates.com
11660 Fountains Maple
Br nt Ras Dr Grove MN 55369 763.219.4880 ArborLakes@clubpilates.com
122 HHItown
An Jrea Schade Village Center Chesterfield MO 63017 636.556.0526 chesterfield@clubpilates.com

Name Name
1707 W. Oak
AS — Thomison Street. Suite C Bozeman MT 59715 406.404.1922 bozeman(S)clubDilates.com
Dimitrios/
Helen/
Ar êlis / Arnold/
De Garcia Amy 225 Broad Ave Westfield NJ 07090 908.233.0950 westfield(5)c!ubDilates.com
875 Route 17
South, Ramsey
Jo n Mokrav Center Ramsey NJ 07446 551.264.9222 ramsev(5)clubDilates.conn
Al son / Chris Saoka 525 Cedar Hill Ave Wyckoff NJ 07481 201.447.2500 wvckoff(S)cl ubDilates.com
437 Old Hook Road
Al son Warner Unit #5 Emerson NJ 07630 201.949.7222 emersontSclubDilates.com
6815 Sierra Center
Al son Beardsley Parkway, Suite 500 Reno NV 89511 775-298-1678 reno(5)clubDilates.com
8665 W. Flamingo losvoGOG^clubpilatOG.comspringv
Vit toria/-Emil Rechester Rd., Suite 118 Las Vegas NV 89147 702-608-1396 allevOclubDilates.com
6815 Sierra Center
Parkway, Sto.
£0010525 S.
AW softVictoria RechesterS Eastern Ave. Ste Hendersonfi 89052 702.907.27583 reno@clubpilatQS.com
/E nil oardsloy 140 *** NV 80511 henderson(5)clubpilates.com
12305 SW Horizon
Da i / Debra Wynkooo Blvd Suite J207 Beaverton OR 97007 (503) 605-1453 progressridRefSclubpilates.com
6300 Poolar Ave
Ta a & Philic Barnes Ste 103 Memphis TN 38119 901.646.5054 EastlVtemphis@clubpilates.com
Fichaud/ 7316 Louetta Road
Ch •is / Susan Brvan #B302 Spring TX • 77379 (281) 607-2485 klein@clubpilates.com
2951 Ranch
Su an Martinez Road620S Lakewav TX 78738 575.937.0479 lakewav@cluboilates.com
Sc. >tt/Elisa/Na Pontone/ 14129 Memorial houGtofi@cluboilotoG.comhousto
te Hunt Drive Houston TX 77079 281-661-3114 n@clubpilates.com
Sc( )tt/Elisa/Na Pontone/ 10705 Soring
te Hunt Green Blvd., #200, Katv TX 77494 832.913.1847 Katv@clubDiiates.com
43670 Greenwav
Ry in Ask Corporate Drive Ashburn VA 20147 703.828.0779 ashburn@clubpilates.com
425 326
1426253-709- bollovuo@clubpilotes.com
Ni ki Adams 143 106th Aver NE Bellevue WA 98004 1446 bellevue@clubDilates.com
124 4th'Aver 253-277- kont@clubpilotGS.com
Ni ki Adams South, Sto. 130 "Kent WA 98032 S586.709.1446 kent@clubDilates.com
6077 W. Mequon moQuon@clubpilotos.commequo
M< gan Sinnen Rd Mequon WI 53092 414-939-3644 n@clubpilates.com
FRANCHISEES THAT HAVE SIGNED FRANCHISE AGREEMENTS BUT ARE NOT YET OPEN
AS OF DECEMBER 31,30152016 (INCLUDING DEVELOPERS THAT HAVE NOT YET OPENED THEIR FIRST STUDIO)
Emjil
GwAef-Flrst Name Owner-Last Name Phono Number State
Lindsay Booker (205) 451-2482 AL

303*2017 Franchise Disclosure Document - Exhibits
Doug & Maggie Anderson 480.388.1852 AZ
Kathy Garrison 520.444.0163 AZ
Don & Emma Gatzemeier 602.663.2049 AZ
480.826.4181;
Bill & Jennifer Guzick 480.695.7116 AZ
Keith Jacobs 910-274-8201 AZ
480 372 jonnifor.mDrrinan@clubpil
&10G(619) 200- atos.com
Jennifer Marrinan 2992 AZ
925.719.3518(6 min.t5ao@clubpilatcG.com
MwJulianne (Juli) Attawaylsae 19)248-5891 CA
Rebecca Bailey (323) 898-8244 CA
Ken & Allison Bloore 818.917.8114 CA
Janani (Jan) Siva Parrel Swift 520.289.0439 CA
Ronnie Sarwar Fizzah Raza 615.364.1690 CA
Jim Griffin 224.436.0647 CA
Emily Hammett (626)233-9220 CA
Brian Holmes 661.332.2233 CA
Fernando Hoy os 619.831.1086 CA
Megan Huehes 619-204-9090 CA
916-205-1470:
Linda/Rebecca Kendall/Holden (916)990-4224 CA
Ken & Jessie Ko & Wu 408.641.1511 CA
Renata and Sean Lance (6501 759-3283 CA
Jerry & Melissa Miller 510.919.4484 CA
Chandra Mohan 408.887.0000 CA
Bora Park 213.840.2203 CA
Johnny & Ronnie MnL 510.739.0836 CA
Natalie Poletti 650.302.1285 CA
Michael & Alvssa Rubin 562.754.4204 CA
Roberta Jessica Shiraki 650.766.5900 CA
Am it & Seema Srivastava 408.202.9619 CA
Katya Stromblad 818.257.3047 CA
chris.eudorgflclubpilatOG.co
Chris Suder 176<M908-9257 CA m
Shahin Teranchi 951.237.2379 CA
Joni/Tiffany Thomas/Davis 773.320.0921 CA
5hori.toolGy@clubpilatoG.c
Sheri Tooley 818.384.3035 CA em
Amy & Anthony Truong 949.278.7719 CA
homa.vonkatosan@clubpil
Hema & Anathan VonkatosanVenkat 208.863.0943 CA atOG.com
Watson / 323.505.4355 dorejk.jonGGtgclubpilatOG.c
Gefek-Keelv/Ed Lombarditeaes (619) 261-5898 CA em

johnny.pong@clubpilatoG.
Johnny e*mg 1Q,73Q.083C GA eem
714 510 3812 Chris.GudortjjPclubpilotoG.c
Chris ClementsSato 619-203-8538 CA em
George & 657 464 4606 brittany.borga@clubpilato
JulieDrittonv BorregoBorgo 720.278.3084 GACO o.com
robocca.bailoy(a>clubpiloto
Robocca 323.8Q8.S244 €A G.com
Gmily.hammGtt@clubp #at
Emily 714 202 6404 GA GG.com
robocca.bailey @clubpilatQ
Robocca Bailey 323.808.82^ €A 5.com
w 610.248.5801 GA juliattaway@gmail.com
nikkita.wooraGingho@club
Nikkita Woorasingho 818.330.7057 GA pilatGG.com
sarkis.ovakimion@clubpilo
Sarkis Ovakimian 818.675.5061 GA tos.com
nikkita.woorQGingho@club
Nikkita Woorasingho 818.330.7057 GA pilatos.com
omily.hammott@clubpilat
Emily Hammett 711 202 e m GA os.com
730 361 mary.busso@clubpilatoD.c
999&(760) 801- em
Mary Busse 9416 CO
Kevin Easterly 760.845.5686 CO
720 142 joo.hondrick5@clubpilatei
83^303-513- eem
Joe Hendricks 4498 CO
Scott Ackerman 917.692.8894 CT
Ed/Christina Elearessta/Harper 305.606.6198
Christine Goldman 321.231.5262
Rick& Dawn Graham 210.559.1732
Heath Johnson 508.725.2108
Kelly Kennedy 305.389.5399
Tania Peck Maria Gutierrez 786.218.3572
Mochon /
Daniela / Horacio Rosentgberg 786.301.2759
Nathan Phityaw 904.635.0298
Jamie Sackett 305.301.2050
Chris Wilson 732.803.0226
Sheetal and
Sandeep Dube 503.780.6302 G_
Mandv Ledford 828.925.3263 GA
Kellen Stennett 404.456.4110 GA
Mark Worlev 678.488.0785 GA
Hieu&Thy Le 208.890.1770 ID

Laura Louis 208.841.0247 ID
Janet Asburv 773.983.8165 IL
Abbv Phelos 312.399.3256 IL
Steve & Robin Schlichting 815.985.1337 IL
Allison & Aaron Smith 630.337.6350 IL
Eric Smith 630.362.9593 IL
Raloh/Julie Thorpe 317.696.4600 IN
Mike & Tammv Miller 860.817.8995 MA
Laura Cutchall (858) 603-3360 MD
Jan & Chuck G rover 240.578.0093 MD
Ed Horan 845.764.1943 MD
Karla / Liana Kav / Bateman 717.825.6150 MD
248-410- kriGton.cronin@clubpilQtOG
Kristen Cronin ZZG04259 Ml .com
Nick Vogel 989.992.8422 Ml
Steve & Angela Bounds 303.883.4605 MN
David Kodet 612.877.0764 MN
Tooher Nelson 612.723.6075 MN
Brent Ras 612.385.0588 MN bront.rQ5@clubpilato5.com
Andrea Schade 775^771^9606 MO androa@clubpilatoG.com
SchadoPennvnarkp
v ^ i *v v 1 d H i y k/w V l \ C
•ync 7-7-1 ncftf-riq
AndrooJohn r 0.240.1792 M0NC

/inc cnc c\Ar\A
Joe mith/Ruggieri 336.404.7871 MTNC OG.com

Doug Harris 704.491.6717 NC
Aleshka Cleveland 828-774-9405 NC/SC
Caroline & Dennis Collins 917.796.9618 NJ
Dimitrios/Helen / 914.772.9973;
Angelis / DeGarcia Arnold/Amv 917.921.2595 NJ
Emese Horvath 770.910.2934 NJ
201.916.3359; allison.Gapka@clubpilatoG.
Allison / Chris Sapka 973-.95l-.2074 NJ tern
Richard . Uku 917.670.7396 NJ
Scott Untener 914.261.1219 NJ
Allison Beardsley 775-298-1678 NV
Victoria/Emil Rechester (323) 899-7083 NV
Isaac Chu 646.610.0389 NY
Sarah Gevinski 646.425.8244 NY
Louisa Goldenberg 646.729.3230 NY
David Lo 646.379.0824 NY
Heather Rhvu 310.972.8786 NY
David Wolk 914.260.7489 NY
Bob Pallatroni 513.225.4475 OH
Curt Clark 918.740.0777 OK

Scott & Misty Sander 971.998.0279 OR
dQn.wynkoop(5)clubpilatoG
Dan / Debra Wynkoop 503T-720T-9556 OR r-eem
Tara & Philip Barnes 901.628.8004 TN
Tom Fielder 615.579.3070 TN
Lance & Sara Becker 512.787.3703 TX
Chris and Nathalie Buck 214.770.5525 TX
Ivan Canga 832.868.5973 TX
705 716 1620 chriG.fichaud@clubpilatoG.
Chris & Susan Fichaud /Bryan 713-254-0213 TX tern
nato.hunt@clubpilatoG.co
NateTheresa & 858.212.678775 m
Glenn HtmtFraser 0-8595 TX
575 037 GUGan.martinoz@clubpilat
043983 2.659.4 5 QG.com
SusanBret Gowen 01 TX
Hector / M o l l y Hernandez/Lindner 512.593.3652 TX
Pam Heslop 281.497.4557 TX
Todd & Debi Martin 972.977.7277 TX
Jodi&Shahid Mehmood 682.553.8173 TX
nato.hunt@clubpilotoG.co
Scott& Elisa/Nate Pontone/Hunt [858,1212,-6787 TX m
Delma / Rick Schriever 281.840.0864 TX
Bobby Springer 615.268.9432 IX
Daniela & David Wells 832.923.0228 TX
Mike&
Becky/Scott &
Karie Edmonds/Miller 801.707.5630 UT
Travis/Heidi Sanger 701.866.5036 UT
Vince Black 703.307.9085 VA
Michael Grams 703-949-0378 VA
Nikki Adams (253) 709-1446 WA
Sheetal Guttieoli 425.829.8733 WA
Nathan & Erica Baldwin 608.609.5152 WI
Meean Sinnen (414) 315-5765 WI
Robert & Beth Tsuchiyama 404.307.5634 WI

Exhibit I
LIST OF FRANCHISEES THAT LEFT THE SYSTEM

AT SOME POINT DURING OUR PAST FISCAL YEAR (20152016)
ContactFirst City, Stoto,

Last Name Address State
Name Phone Number
Katie Picaao; Cindy Reyes 469 Magnolia A v e , Sto.-406 Corona, CA 03870; (051) 268 0656
Jonnifor Gold; Brigotto Guido 5010 COGS St., Sto. H San Diogo, CA 02100; (858) 220 2162
302 N. El Camino Rool, Sto. San Clomonto, CA 02672; (040) 482
Constanco Moisan 106 4306
Michaol AZSunnyvolo
Eodyno; Gina 1111 E. El Camino Real , CA 04087;
Be* # ^ 1 7 0 2 E Prince #120. Tucson. (108)841
V e € € t o
MarM Beardslev AZ 85719 4403 (520) 241-4743
Olivia Scira; 11789 Nicole Tomoculo, CA 92591; (951) CA
Liuba Stephanie Lone, Sto. 297 782824239 Hawthorne Blvd.
Kotio Picazo 64Lerro- Parrawav #104, Torrance, CA 90505 619-518-3338
Anaheim, CA 92808: (760) 262 CA
NikkitaSuconn Weerasinehe400 733719720 Ventura Blvd Suite
Clifford, Claudia S. Chaporrol Ct., 101/102, Woodland Hills. CA
Sticding Sto. 140 91364 (818) 339-7057

Exhibit j
©3OW2017 Club Pilates Franchise, LLC

AREA DEVELOPMENT AGREEMENT
DEVELOPER
DATE OF AGREEMENT

30+62011 Development Agreement
TABLE OF CONTENTS
1. REFERENCES AND DEFINITIONS 2

2. USE OF SYSTEM 3
3. GRANT OF DEVELOPMENT RIGHTS 3
4. DEVELOPMENT RIGHTS AND OBLIGATIONS 4
5. STUDIO CLOSINGS 6
6. PROCEDURE FOR EXERCISING DEVELOPMENT RIGHTS 6
7. DUTIES OF DEVELOPER 7
8. SITE SELECTION, LEASES, FRANCHISE AGREEMENT 8
9. DEVELOPMENT FEE 9
10. SUPERIORITY OF INDIVIDUAL FRANCHISE AGREEMENT 10
11. COVENANTS 10
12. RELATIONSHIP OF THE PARTIES 12
13. PROPRIETARY MARKS 13
14. TERMINATION 14
15. EFFECT OF TERMINATION AND EXPIRATION 16
17. APPROVALS 20
18. NONWAIVER 20
19. DEVELOPER'S RECORDS AND REPORTS 21
20. NOTICES AND PAYMENTS 21
21. GOVERNING LAW 25
22. ARBITRATION AND OTHER DISPUTE RESOLUTION PROVISIONS 25
23. ENFORCEMENT 25
24. CAVEAT 27
25. MISCELLANEOUS 28
EXHIBITS
ATTACHMENT: GUARANTY AND ASSUMPTION OF OBLIGATIONS

EXHIBIT A - DEVELOPMENT AREA
EXHIBIT B - DEVELOPMENT SCHEDULE
EXHIBIT C - FRANCHISE AGREEMENT
EXHIBIT D - STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS
EXHIBIT E - CONFIDENTIALITY AGREEMENT AND ANCILLARY COVENANTS NOT TO
COMPETE
©3W420I7 Club Pilates Franchise, LLC

34442017 Development Agreement
THIS AREA DEVELOPMENT AGREEMENT (the "Agreement"), is made and entered into
this day of , 20 , by and between: (i) Club Pilates Franchise, LLC, a limited
liability company formed and operating under the laws of the State of Delaware whose principal business
address is 3185 Pullman Street, Costa Mesa, California 92626 (the "Franchisor"); and (ii) , a/n
with a business address at (the "Developer").
WITNESSETH:
WHEREAS, as the result of the expenditure of time, effort and expense, Franchisor has created a
unique and distinctive proprietary system (hereinafter the "System") for the establishment, development
and operation of a CLUB PILATES Studio (each, a "Studio") that provides Studio offering (a) Pilates
instruction and related services that Franchisor authorizes (collectively, the "Approved Services"), and (b)
certain merchandise and other products Franchisor authorizes for sale in conjunction with the Approved
Services and Studio operations (collectively, the "Approved Products"), to the general public and/or
through a membership-based program, under the mark CLUB PILATES.
WHEREAS, Franchisor owns the System and the right to use the Proprietary Marks (as defined
below), and grants the right and license to others to use the System and the Proprietary Marks;
WHEREAS, the distinguishing characteristics of the System include, without limitation,

proprietary methodology and procedures for the establishment and operating procedures, site selection
guidance and criteria, specifications for the design, layout and construction of the interior of the Studio,
standards and specifications for the furniture, fixtures and equipment located within a Studio, established
relationships with approved or designated suppliers for certain products and services, and standards and
specifications for advertising, bookkeeping, sales and other aspects of operating a Studio.
WHEREAS, Franchisor identifies the System and licenses the use of certain trade names, service
marks, trademarks, emblems and indicia of origin, including the mark CLUB PILATES and other trade
names, service marks and trademarks as are now designated and may hereafter be designated by
Franchisor in writing for use with the System (the "Proprietary Marks");
WHEREAS, Developer desires the right to develop, own and operate multiple CLUB PILATES
Studios under the System in a defined geographic area under a Development Schedule (the "Development
Schedule") set forth in this Agreement; and
WHEREAS, Developer acknowledges that Developer has conducted an independent investigation

ofthe business contemplated by this Agreement and recognizes that, like any other business, the nature of
the business conducted as a CLUB PILATES Studio may evolve and change over time, that an
investment in a CLUB PILATES Studio involves a business risk and the success of the venture is largely
dependent upon Developer's business abilities and efforts.
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, agree as
follows
CLUB PILATES MUDA

I ^ E R E N ^ A N D D ^ N ^ ^
^ DEVELOPMENT AREA
"DôpmÂ^^me^^geographicâd^ribedm
^ DEVELOPMENTSCHEDULEÊVEEOPMENTPERIOD
"Development Schedu^" means the sehedê for Developer toopen and operatea speeifie
eumnlatlvemmêrofCLL^PlL^^ Eaeh
"Development Period" isaperlodoftlme set l^rthmthe Development Schedule wherem
meet each specific development obligations.
C ERANCHISEAGREEMENT
Except for the royalty fê and the advertising contributions, wluch shall remain the same in each
ftanchise agreement executed pursuant to this Agreement and any extensions of this Agreement, the term
"Franchise Agreement" means the then current f^rmofagreements (including the fianchise agreement
and any exhibits, riders, collateral assignments of leases or subleases, shareholder guarantees and
prelimmary agreements) that Franchisor customarily u
and operation ofaCEUB PILATES Studio.
Concurrent with the execution of this Agreement, Developer shall execute the Franchise
Agreement for the first Studio that Developer is granted the right to open within the Development Area
hereunder. Franchisor, in its sole discretion, but subject to the express provisions contained herein, may
modify or amend in any respect the standard form ofFranchise Agreement it customarily uses in granting
afranchisetbraCLUB PILATES Studio
The parties agree and acknowledge that: (i) Developer most timely execnteFranchisor^s then
current form ofFranchise Agreementf^r each C L l ^ PILATES Studio that Developer is required t^
and commence operating pursuant to the Development Schedule; and (ii) Franchisor may, in its
discretion, modify or amend the form ofFranchise Agreement
Agreement is executed as it deems appropriate fbr(a)use in the CLUB PILATES System generally,and
(b) execution by the parties in connection with the Studios that Developer must subsequently open and
commence operating underthis Agreement.
D PRINCIPALS
The term "Principals" includes, collects

is an entity,any officers and directors of Developer (including the officers and directors of any general
partner of Developer) and any person and of any entity directly owning andôr controlling ten percent
(10^) or more of Developer, oramanaging member or manager ofalimited liability company. The
initial Principals shall be listed in Exhibit D.The Principals must execute an agreement in substant^
the form of the attached Guaranty and Assumption of Obligations (immediately following this
Agreement)undertaking to be bound jointly and severally to all provisions of this Agreement
^
C^^T^ÛOA
^ USEOFSVSTEM
Developer acôw^dge^ and d o e s ^

eaeb and every aspect ofthe System. Developers ri^ht to êtheS^tomdevelooer Studios is speeifieally
limitedto theDevelo^ment Areaâ^ as wellas the terms and eonditionsof this Agreement and
Franchise Agreements executed pursuant thereto.
^ GRANTOFDEVELOPMENTRIGHTS
A. GRANT AND TERM
In reliance on the representations and warranties of Developer and its Frincipals^Franchisor

grants toDeveloper, andDeveloperherehy accepts theright andohligationtodevelop, adesignated
number of CLl^FITATFS Studios within the Development Area in lull compliance with the ter^^
this Agreement, including the timely development obligations to openaspecific cumulative number of
CLUB FITATFS Studios over prescribed periods of time as established in the Development Schedule;
and in full compliance with all obligations and provisions under the Ibrm(s) of Franchise Agreement
entered into forthe right to own and operate each individual CLUB FILATES Studio.
The term of tins Agreement shall commence upon full execution of this Agreement and, unless
earlier termmated by Franchisorpursuant to the ter^s hereof, this Agreement shall expire upon the ea^^
of: (i) the dateDeveloper timely opens thelastCLUBFlLATES Studioitisrequiredtoopenand
conênce operations within the Development Area pursuant to this Agreement; or (ii) the last day of the
last Development Feriod on the Development Schedule. Developer acquires no rights underthis
Agreement to developCLUBFlLATES Studiosoutside theDevelopment Area.Uponexpirationor
terminationofthis Agreement fbranyreason,Developerwillhavenorights whatsoever within the
Development Area (other than any territorial rights that Franchisor has granted to Developer in
connection with any CLUB FILATES Studio(s)that Developer has timely opened pursuant toaFranchise
Agreement as required by the Development Schedule prior to the date this Agreement is terminated or
expires).
B. COMMTFMENTOEDEVELOPER
Franchisor has granted these rights in reliance on the busm^

character and expectations ofperfbrmance by the Developer and its Principals. This Agreement is for the
purpose ofdeveloping and operating the CLUB FILATES Studios, and is not for the purpose of reselling
the rights granted by this Agreement.
C^ DEVELOPMENTPLAN
The following conditions and approvals are conditions precedent before the right ofDeveloper to
develop each CLUB PILATES Studio becomes effective. Atthe time Developer selectsasite for each
CLUB PILATES Studio, Developer must satisfy the operational, fmancial and training require
forth below:
(1) Operational: Developermustbeinsubstantial compliance with the material terms

andconditions of this Agreement and all Franchise AgreementsgrantedDeveloper.ForeachCLUB
PILATES Studio operated by Developer, Developer must be in substantial compliance with the standards,
specifications, and procedures set forth and described in the Manuals (defined in the Franchise
Agreement).
^
C^ÂT^ÛOA
(2) F m ^ i a k D ^ o p e r and the Principal most satisfy FranehisoBs financial
criteria^rDeveiopersandPrincipa^ with respect to Deveioper'soperationof itsexistingCLUB
PILATES Stndiosîfany, and the proposed CLUB PILATES Stndio. Developer mnst he in compliance
and not heen in defanh during the t w e l v e s ) months preceding DevelopeBsreqnest for appro^^
monetary ohhgations of Developer to Franchisor or its affiliate under any Franchise Agreement granted
under this Agreement.
D^ EXECUTION OFFRANCHISEAGBEEMENT
This Agreement is notaFranchise Agreement and does not grant Developer any right or license
to operateaCLUB PILATES Smdio, or to provide services, or to distribute goods, or any right or license
in the Proprietary Marks. Developer must timely execute Franchisor's thencurrent fbr^
Agreement for each CLUB PILATES Studio that Developer is required to open under the Development
Schedule
^ BEVELOPMENTBIGHTSANDOBLICATIONS
A^ RESERVATION OERIGHTS
Franchisor(on behalf of itself and its affiliate and its subsidiaries) retains the rights, in its
discretion and without granting any rights to Developer: ( l ) t o itself operate, or to grant other persons the
right to operate, CLUB PILATES Studios at locations and on terms Franchisor deems appropriate outside
the Development Area granted Developer, and (2) to sell the products and services authorized for CLUB
PILATES Studios under the Proprietary Marks or under other trademarks, service marks and commercial
symbols through dissimilar channels ofdistribution and under terms Franchisor deems appropriate within
andoutside theDevelopment Area, including,but not limited to, by electronicmeans,suchas the
Internet, and by web sites established by Franchisor, as we determine, in our sole discretion.
In addition. Franchisor, any other developer and any other authorized person or entity shall have
theright, atanytime,toadvertiseandpromotethe System, in the Development Area. Developer
acknowledgesandagrees that Developer isonlygrantedtherighttodevelopandoperate CLUB
PILATES Studios withintheDevelopment Area. Accordingly, within and outside theDevelopment
Area, Franchisor and its affiliate and its subsidiaries may also operand sell, and may authorize others to
of^r and sell products and services identified by the Proprietary Marks (including membershi^^
cards)atorfiom any location.
Franchisor orony other developer or any otl^crouthoriêd person or entity ^hallh^vet^^^

anytime, to eotobli^h and operate bu^m^^
outoido the Development êa granted by d^cAroo Development Agreement ond within and out^^^
Deoignot^dTerrito^grontedbyaFronchiê Agreement, under the Fropri^to^Ma^
and conditions a^deternîned by Fronchiôr: to acquire the or oôr^hi^m^^
buîneêo providing produce and êîcc^ similar to thoê provided ataCLUB FILATES Studio and
franchioo,lic^nê or create similar arr^^
theêbuîneê^ (or the franchisees or the licen^cc^ of the^cbuînc^^
may inolndewitbin the Development Area granted by thi^ Area Development Agreement and w i ^
DeoignatedTerrito^ wanted by any franchise a^reement.Franclusor and its a f f i l i a t e s ^
ri^ht to: (i^ open and operated and license others the ri^ht to open and operated Studios usin^ the
Proprietary Marks and System at anv location outside ofyour Development Area: (ii) open and operated
andlicenseotherstheri^httoopenandoperate.businessesthatoperate under marks other than the
Proprietary Marks the offer similar products and services that are offered byaCLUB FILATES Smdio.
regardless of location: (iii) otherwise markets offer and sell products and services that are s i m ^
^
CLUBÂ^ÛOA
PÛC^ and S ^ C e S O^red by 8 S ^ O U n d e r a difierem trademarkor ^ e m a ^ re^d^S Of
looaôn: ^ u s e the Proprietary Marks and System as well as otbersneb marks wedes^nat^ to
distribute any ApprovedFroduetsandôrSeêesinanyahernatêehannel ofdistributionatany
loeation^neludin^ via the h^terneL mail orderêatalo^ s a l e s . t o i l ^
to aeonire^merêwith^ or other^vise affiliate witl^ and after tlât own an
otbersto own andoperateânyhusiness of any kind, ineiudin^ without l i m i t a t ^
offers products or seîeesthe same as or similar to the AoorovedProduetsandServiees^
different marks^reârdlessoflocation^
to use dê Proprietary Marks and Systems to e n ^ e in any other activities not expressly
Agreement
Franchisormay heacquired(whether through acquisidonof assets,ownership interestsor

otherwise, regardless of the form of transaction, hyahusiness providing products and similar se^
those provided ataCLUBPlLATESSmdio,orhy another husiness,even if such business operates,
fianchisesandBorlicensescompetitivebusinesseswidîn theDevelopment Areagranted by the Area
Development Agreement and within the DesignatedTerritory granted byaFranchise Agreement.
Franchisor has the right to own, operate and license others to own and operate other business
concepts in and outside the Development Aêa^ provided the other buînes^ concepts ore not similar toa
CLl^FlLATESSmdio utilizing thcProprieta^MarlândSyotemconsis^^^
Section.
Franchisor has no obligation and will notpay Developer i f i t exercises any oftherightsspecified
above within the Development Area granted by the Area Development Agreement or within the
DesignatedTerritory granted byaFranchise Agreement.
8. RIGHTS DURING DEVELOPMENT PERIODS
Exceptaoprovided belowSubiect to SectionÂând tlêother tem^softhis A^reemenL if

Developer(i)isincompliance with the material terms andconditions containedinthis Agreement,
including the timely development obligadons to openaspecific cumulative number of CLUB PfLATES
Smdios over prescribed periods of time as established in 8xhibitB(the "Development Scêdule^^ and
(ii) is in substantial compliance with all material obligations under Franchise Agreements executed by
Developer for individual CLUB PILATES Studios under this Agreement; then during the Development
Schedule, Franchisor: (i) will grant Developer the right to own and operate CLUB PILATES Studios
located within the Development Area pursuant to the terms of this Agreement; and (ii) will not operate
(directly or through its affiliate), nor grantaânchise for the location of^ any CLUB P
withm the Development Area, except forfianchisesgranted to Developer under this Agreement or other
dân through the uêo and exceptions ao described in Section ^(A)ofthi^ Agreement..
IfDeveloper, for anyreasonwithin his control, fails to comply with the Development Schedule,
this failure constitutesamaterial default of this Agreement, and Franchisor has the right to t e r m ^
Agreementpursuantto Section 14 of this Agreement. In the event Developer fails to cure the noticed
default within the time allowed under Section 14, Franchisor may terminate this Agreement and grant
individualor area developmentfiânchiseswithintheDevelopment Areatothirdparties or own and
operate Studios owned by Franchisor or by the affiliate ofFranchisor. Franchisor and Developer agree
that the timely development ofStudios by Developerin compliance with the Development Schedule will
control the rights granted Developer by this Agreement, regardless of the time period granted Developer
to open a Studiopursuant to a Franchise Agreement for such Studio Upon termination ofthis
Agreement, allrightsgranted Developer revert to Franchisor, who is free to franchise any other person to
^
^ U 8 ^ ^ ^ U 0 A
u s e ^ S ^ m w i ^ ^ D ^ o ^
withm^DevôpmeotArea
Notwi^^dmgauythmgco^medm^Sîo^F^^
ou^fimereasonableex^sioo of timenottoexceed 90 daystoco^
many one of the Developmem Poriod as set IbrtbmtbeDevelopmeotSobe^^
(^Developer has already exeeutedalease for, or o t h e r s
for any CLUB PILATES Studlo(s) it isrequh^dto open and operate durmg that
(ii)DeyelopernotifiesPranehisor ofits need for sneh an extension no less than Ôdays prior to expira^
ofthat Development Period. The parties agree and aelôwledge that Pranehisor's grant of tbisone^^^^
extension nnder this Section will not extend, modify or otherwise affect the expiration of any of
Developer^ssnhseqnent Development Periods or snhseqnent development obligations.
CD DEVELOPMENTOBLIGATIONS
Developer will at all times faithfully,honestly,and diligently perform his obligations^

Agreement and will continnonsly exert his best efforts to timely promote and enhance the development of
CLUBPILATES Studios withintheDevelopment Area Developer agreesto open andoperate the
cumulative number of CLUB PILATES Studios at the end of each Development Period set forth in the
Development Schedule (see Exhibit B). Developer agrees that compliance with the Development
Schedule is the essence ofthis Agreement.
BD EXPIRATION OR TERMINATION
After this Agreement expires or terminates for any reason,Eranchisor shall have the absolute
right to own andoperate, or license other parties theright to own and operate CLUB PILATES
STUDIOS, intheDevelopmentArea, except in those DesignatedTerritories granted undereach Franchise
AgreementthatDeveloperenters into pursuant to this Agreement.
^ STUDIOCLOSINGS
If during the term of this Agreement, Developer ceases to operate any CLUB PILATES Studio
developed under this Agreement for any reason. Developer must developareplacement CLUB PILATES
Studio to fulfill Developers obligation to have open and in operation the required number of CLUB
PILATES Studios upon the expiration of each Development Period. The replacement CLUB PILATES
Studio must be open and in operation within nine (9)months after Developer ceases to operate the CLUB
PILATES Studio to bereplacedor Developer will be in material breach of this Agreement. If, during the
termofthis Agreement, Developer,in accordance with theterms of anyEranchise Agreement f o r a
CLUB PILATES Studio developed under this Agreement, transfers its interestsinthat CLUB PILATES
Studio,atransferred CLUB PILATES Studio shall continue to be counted in determining whether
Developer has complied with the Development Schedule so long as it continues to be operated asaCLUB
PILATES Studio Ifthe transferred CLUB PILATES Studio ceases to be operatedasaCLUB PILATES
Studio, itwillnotcounttowardDeveloper'scomplianeewith theDevelopment Schedule.
^ PROCEBUREEOREXERCISINGBEVELOPMENTRIGHTS
DevelopershallenterintoaseparateEranchise Agreement withEranchisorforeachCLUB

PILATES Studio developed pursuant to this Agreement.The Franchise Agreement to be executed for the
first CLUB PILATES Studio to be developed by Developer under this Agreement must be executed and
delivered to Franchisor concurrently with the execution and delivery of this Agreement. All subsequent
CLUB PILATES Studios developed under this Agreement must be established and operated under the
^
C^^T^ÛOA
thencurrent form of Franchise Agreed
under the System. The thencurrent f^rm ofFranchise Agreement may differ fiom the f^rm attached as
Exhibit C; however, the provisionsregardingroyalty fees and advertising contributions sha^
established in Exhibits Developer must execute the then^current form ofFranchise Agreement for each
CEUBFIEATES Studio to bedevelopedunderthisAgreement
Developer aclôwledges that the projected opening dates for each CEUBFIEATES Studio set
fbrthintheDevelopment Schedule arereasonablerequirements. Developer mustexecuteaFranchise
Agreement for each Studio by the earlier of: (i) fifteen ( 1 ^
location that Franchisor approves for the CEI^FIEATES Studio at issue; and(ii) the date necessary
Developer to otherwise comply with its development obligations under this Agreement.
^ DUTIESOFDEVELOPER
AD ORGANÂTIONOEDEVELOPER
Developer makes the following representations, warranties and covenants and accepts the
following continuing obligations:
(1) IfDeveloper is a corporation, limited liability company or a partnership,

Developer represents,warrants and covenants that: (i) Developer is duly organized and validly existing
under the state law of its formation; (ii) Developer is duly qualified and is authorized to do business in
eachjurisdiction whichrequiressuch qualification; (iii) the execution and performance ofthis A
are within Developer's corporate power, if Developer isacorporation or ifDeveloperisapartne^ship
permitted under Developer's written partnership agreement, or if Developer is a limited liability
company,permitted under the management agreement;
(2) IfDeveloper isacorporation, copies ofits articles of incorporation, bylaws, other

governing documents, any amendments, resolutions ofthe Board ofDirectors authorizing entry into and
performance of this Agreement shall be promptly fm^shed to
copies of Developers written partnership agreement and other governing documents shall be promptly
furnished toFranchisorbefbre the executionof this Agreement. I f Developer isa limitedliability
company,copies ofDeveloper'sorganizational documents and management agreement shall be promptly
furnished to Franchisor;
(^) I f Developer isacorporation,partnership, limited liabilitycompany,or other

fon^ of legal entity other than an individual, Developer shall maintain at all timesacurrent list of all
owners ofrecord and all beneficial owners ofany class ofvoting securities in Developer or, ifDeveloper
isapartnership, Developer shall maintain at all timesacurrent list of all owners of an interest in the
partnership, or, ifDeveloper isalimited liability company,it shall maintain at all timesacurrent list of
managers and members ofthe limited liability company;
(4) If, after the execution of this Agreement, a^y person ceases to qualify as one of
the Developer's Principal's (as defined in Section 1), or ifDeveloper believes in the event any individual
laterqualifiesasoneofFrincipals, Developer shallpromptlynotifyFranchisor and that person shall
executeanydocuments(including,asapplicable, this Agreement) as Franchisormay reasonablyrequire;
(^) IfDeveloper isacorporation, Developer must maintain stop^transfer instructions

against the transfer ofits records ofany equity security and each stock certificate ofthe corporation shall
have conspicuously endorsed upon itastatement inaform satisfactory to Franchisor that it is held subject
to allrestrictionsimposed upon assignments by this Agreement; provided, however, that the requirements
^
C^^T^ÛOA
o f ^ S e c d o n ^ s h a ^ not apply t o a p u ^ IfDeveloperisapartnership, its written
partnership agreement shall provide that ownerslup of an interests
that further assignment or transfer is snhjeet torestrictionsimposed on assignments h y ^ ^ If
Developeris alimitedliahility eompanyîtsartieles of organizationandoperatingagreementmnst
provide that ownership interests are snhjeet to restrictions on transfers imposed on assignments hythi^
Agreement;
(^ Developer agrees to maintain at all times throughout the term of this Agreement,
sufficientworlringcapital to fulfill its obligations underthis Agreement; and
(7) Each Principal who has right, title, or interest of ten percent(10ôr more in the
ownership of Developer, must each execute and hind themselves to the confidentiality and
noncompetition covenants set forthmthe C o n f i d e n t
Compete (Exhibit E) The Principals agree to jointly and severally guarantee the performance of all of
Developer's obligations, under the ter^ns ofthis Agreement, except the obligation to open Studios.
BD REQUIREMENTS OPREPRESENTATIVE
Upon the execution ofthis Agreement, Developer must designate and retain an individual
throughout the term of this Agreement to act on behalf of Developer in all transactions with Developer
concerningDeveloper's obligations under this A g r e e m e n t s
individual, Developer must perform all obligations of the Representadve The Representative m
reasonable efforts to do the allowing, during the entire period he servesinthat capacity: (l)ma
direct or indirect ownership interestinthe Developer; (2) devote substantial time and reasonable efforts
the supervision and conduct of the business contemplated by this Agreement and execute this Agreement
as one of the Principals; and (3) meet Eranchisor'sstandards and criteria fbraRepresentative as set forth
in the Manuals or otherwiseinwriting by Franchisor, ff the Representative or any designee is not able to
continue to serve in the capacity ofRepresentative or no longer qualifies, Developer must promptly notify
Franchisor and designateareplacement.
CD BESTEEEORTS
Developer mustuse his best efforts to substantially comply with all requirements of federal, state
and local rules, regulations and orders.
^ SITESELECTIONÊASESÊRANCIHSEAGREEMENT
AD SELECTION OESITERVPEVEEOPER
Developer assumes allcosts,liabilities,expensesandresponsibilitiesforlocadng,obtaming,

financing and developing sites for CLUB PfLATES Studios, and for constructing and equipping C E I ^
PfEATES Studios at those sites^ The selection ofasite and the development ofaStudio at any site is the
responsibility ofDeveloper. The selection ofasite by Developer is subject to our approval and must be
in compliance with Franchisor's site selection procedures and its standards for demographic
characteristics,parlring,trafficpatternsandthepredommantcharacterof theneighborhood,andother
conêrcial characteristics of the site and any other factors Franchisor may consider relevantinreviewing
asite selected by Developer. Developer must not enter intoabinding commitment withaprospective
seller or lessor of realestate with respect tothesitefbraStudio until Franchisor has approvedthe
proposed site. Developer specifically acknowledges that the selectionof a site by Developer in
compliance with Franchisor's site selection procedures and the approval ofasite by Franchisor does not
constitutearepresentation, promise or guarantee by Franchisor that the site and the Studio to be operated
^
ÛBÂ^ÛOA
a t ^ s i t e w ^ be p r o f i l e or success^ Developeraeknowledges^êtorsgoveroiogtbesueeessof
a CLUB PILATES Sôareunpredie^ble ^ beyoÊrauebisoBs eoôl. Eranebisor is not
responsible to Developer or to any otbe^
Developer'sexpeetatlons for revenue or operational criteria.
BD DEMOGRAPHIC F O R M A T I O N
Before aeqniringasite for any Studio by lease or purebase, Developer must loeateasitefbr^
Studio tbat satisfies tbe site selection guidelines Eranebisor provides to Developer and must subm^
Emnclusor, in tbe form Erancbisorspecifies,adescription of tbe siteâdemograpbic study and o ^
information and materials Franchisor may reasonably require and sball represent in writing tbat
Developer bas tbe opdon or other firm commitment to obtain tbe site. Emncbisor will review information
provided byDeveloper for the site which may include the population of the work force or residents,
character o f t h e neighborbood, household income, ingress and egress, and trade area. I f onsite
evaluations by Franchisor are requested by Developer or determined to be necessary by Franchisor, then
Franchisor or its designee will, at Franchisor's expense, provideasingleonsite inspection in connecti^^
with each Studio that Developer is required to open hereunder at Franchisor's expense. Developer must
reimburse Franchisor for the reasonable expenses Franchisor incurs for any additional on site evaluations
including, but not lin^ted to, the cost oftravel, lodging, meals and wages ofFranchisor'srepresenta^
and employees.
CD LEASEOBPURCHASEOPSITE
Developer shall not make any binding commitment to purchase or lease real estate fbraproposed
s i t e f b r a C L D B PILATES Studiountil theproposed sitehasbeen approvedby Franchisoranda
Franchise Agreement has been executed by Franchisor and Developer(or its affiliate)foraStudio at such
site. Developer shall provide Franchisor w i t h a c o p y o f either the proposed contract of sale orlease
relating to the sitebefbre theFranchise Agreement is executed. Developer must comply with the
conditions set forth in the Franchise Agreement at issue in connectionwith the signing of suchalease,
mcludingensuringthat both Developer and the landlordfbr the proposed site executeFranchisoB^
prescribed ôm of Collateral Assignment of Lease.Developer must useanvapprovedordesi^nated
suppliers that Franchisor designates in connection with the site selection and acouisition process
BD PRANCHISEAGBEEMENT
Franchisor will deliver a Franchise Agreement, in the then-current form, to Developer for
executionbyDeveloper(oritsaffiliate). Withthe executionof this Agreement,Developer must
concurrendy execute the Franchise Agreement establishing Developer'sfirst CLUB PILATES Stndio and
return both this Agreement and the Franchise Agreement to Franchisor. IfDeveloper fails to execute the
Franchise Agreement, Franchisor may,at its sole discretion, revoke its approval of the site and its offer to
grant Developerafianchise to operateaCLUB PILATES Studio atthe site.
^ BEVELOPMENTPEE
Concurrently with the execution of this Agreement, Developer must pay to Franchisor a
nonrefundable area development fee equal to ^ (the "Development Fee"). The
Development Fee is deemed fully earned by Franchisor upon execution of this Agreement in
consideration of lost development opportunities and is nonrefundable under any circumstances.
Developer will not be required to pay any additional initial franchise fee for each Studio opened pursuant
to this Agreement upon executingaFranchise Agreement fbrthat Studio.
^
CLUB^^ÛOA
1^ SUPERIORITY OFINDIVIDUALFRANCHÊAGREEMENT
Developer undeânds and agreesânyanda^mdividu^Pranc^^

Developer and PranelusorfbrCTUB PILATES S^dioswidtin the D e ^
this Agreement. The continued efieetiveness ofany Franchise Agreement does not depend on the
continued effectiveness of this Area Development Agreement. If any conflict arises with this Agreement
and any Franchise Agreement, the Franchise Agreement controls, has precedence and superiority (except
with respect to the opening deadline for each CLUB PILATES Studio Developer is granted the right to
open under this Agreemeht).
IL COVENANTS
A. Developerand the Representativecovenantthatduring the term ofthis Agreement,

except as otherwise approved in writing hy Franchisor, Developer and the Representative must devote
substantial time, energy and hestef^rts to the management and operation of the development activities
required under this Agreement
B. Developeracknowledgesthat,asaparticipantin Franchisor's System,Developer will

receiveproprietary and confidential information and materials, trade secrets, andtheunique methods,
procedures and techniques that Franchisor has developed. As such. Developer agrees to the covenants in
this Section to protect Franchisor, the System, Proprietary Marks and Franchisor'sotherftanchise^^
developers.
(1) During the term of this Agreement, neitherDeveloper,itsPrmcipals,owners,

officers or guarantors, nor any immediate family ofDeveloper, its Principals, owners, officers or
guarantors, may,directly or mdirectly,fbr themselves or through, on behalf of, or in conjuncfi^
otherperson, partnership or corporation:
(a) Own, maintain, engage in, be employed or serve as an officer, director,

or principal of, lend money or extend credit to or have any interest in or involvement with, anyfimessor
exercise business, anyfitnessor exercise marketing or consulting business, any business offering products
ofasimilar nature tothose of the Smdio,or in any business or entity which franchises,licenses or
otherwisegrantstoothersthe right to operatesuchaforementionedbusinesses(each,a"Competing
Business"), or(b)of^rs or grants licenses orfi^nchises,or establishes joint ventures, for the own^
operationofaCompetingBusiness. For purposes of this Agreement,aCompeting Business doesnot
include: (i) any business operated by Developer underaFranchise Agreement with Franchisor; or (ii) any
businessoperatedbyapublicly^tradedentityinwhichDeveloperowns less than two percent (2^) legal
or beneficial interest
(b) Employ or seek to employ any person who is at that time employed by
Franchisor, Franchisor's affiliates or any other Sy
indirectly induce or seek to induce such person to leave his or her employment thereat; or
(c) Divert,orattempttodivert,any prospective customer toaCompeting

Business in any manner.
(2) Foraperiod of two (2) years after the expiration and nonrenewal,transfer or
ternâtion ofthis Agreement, regardless ofthe cause, neither Developer, its Principals, owners, offi^
and guarantors, nor any member ofthe inunediate family ofDeveloper, its Principals, owners, officers or
guarantors, may,directly or indirectly,fbr themselves or through, on behalf of, or in conjunction w i ^
other person, partnership or corporation, be involved with any business that competes in whole or in part
^
C^^T^ÛOA
with Franchisor b y o ^ r m g o r g r ^
ownership or operadonofaCompctingB^
Section is any location where Franchisor can demonstrate it has offered or sold fianoh^^
this Agreement is terminated or expires.
(^ Foraperiod of t w o ^ y e a r s after the expiration and nonrenewal, transferor

termination of this Agreement, regardless of the cause, neither Developer, its Principals, owners,^
and guarantors, nor any memher ofthe immediate family ofDeveloper, its Principals, owners,officer o
guarantors, may,directly or indirectly,fbrthemselves or through, on hehalf of, or in conjunction wit^
otherperson, partnership or corporation:
(a) Own, maintain, engage in, he employed as an officer, director, or

principalof,lendmoney to,extend credit to or have any interest i n o r involvement with any other
Competing Business: (i) within the Development Area; or ( i i ) w i t h i n a f o r t y ^ m i l e radius of
perimeter of the Development Area heing granted hereunder or any other designated territory or
development area licensed hy Franchisor toaCLUBPfLATES Studio (whether ftanchised or company
ownedâtanytimefrom thedate ofexpirationorterminationof this Agreement through thedate
Franchisee attempts to undertake the competitive activity at issue
(h) Solicit business from customers ofDeveloper'sfbrmer Studios or contact

any of Franchisor's suppliers or vendors l^r any competitive business purpose, nor solicit any of
Franchisor'sother employees,or tbe employees ofFranchisor's affiliates or any other System ftanchisee
ordeveloperto discontinue employment.
C. It is tbe parties'intent that the provisions of this Sectionllbe judicially enforced to

fullest extent permissible under applicable law. Accordingly,the parties agree that any reduction in scope
or modiftcahon of any part of the noncompetition provisions contained herein shall not render any other
partunenfbrceable. In dê event ofthe actual or threatened breach of this SectionllbyDeveloper,any of
Developer's Principals, or any member ofthe inêdiate family ofDeveloper or Developer's Princip^^
Franchisor shall be entided to an injuncdon restraining such person from any such actual or threatened
breach. Developer acknowledges that thecovenants containedherein are necessary to protect the
goodwill ofother System franchisees and developers, and the System. Developer further acknowledges
that covenants contained in this Section 11 are necessary to protect Franchisor's procedures and know^
how transmitted during the term of this Agreement. Developer agrees that in the event of the actual or
threatened breachof this Section 11,Franchisor's har^nwillbeirreparableandthat Franchisor has no
adequate remedy at law to prevent such harm. Developer and the Principals agree to pay all costs and
expenses (including reasonable attorneys' fees) incurred by Franchisor in connection with the
enforcement of this Sectionll. Developer acknowledges and agrees on Developer's own behalf and on
behalf of the persons who are liable under this Sectionll that each has previously worked or been
gainfully employed in other careers and that the provisions of this Sectionllin no way prevent any such
person from eamingaliving. Developer further acknowledges and agrees that the time limitation of this
Sectionllshall be tolled during any defaultunder this Sectionll.
D. Developer must ensure that all management personnel of Developer's Studios opened
under this Agreement, as well as any officers or directors of Developer, execute Franchisor'sthen^current
form of Conftdendality and Noncompetition Agreement. Developer must furnish Franchisoracopy of
each executed agreement.
F Developer hereby agrees that the existence of any claim Developer may have against
Franchisor,whether or not arising from this Agreement, sball not constituteadefense to Franchisor's
enforcement of the covenants containedintlus Sectionll Developer agrees to pay all costs and expenses
^
CLU8ÂT^Û0A
(inûdrng reasonable a ^ o m e y ^ ^
Seefionll
F. Noîtbstanding tbe foregoing Franelusorreservestberigb^

rednee tbe period of dme or geograpbieseope of tbe nonêompedtion covenants
Hand in Exhibit E, by written notice to Developer
1^ RELATIONSmPOFTHEPART^
A. Tbe parties agree tbat tbis Agreement does not createafidnciary relationship between
tbemât Developer is an independent contractor and must at all times represent itself as an independent
contractor. This Agreement does not create either party as an agent, legalrepresentative,snbsidiary,joint
venturer, partner,employee or joint employer. Developer shall hold itself out totbe public as an
independent contractor operatingpursuant to this Agreement. Developer agrees to take any action
necessary to tbat end, including without limitation, exlubitinganotice on signage and member c o n ^
asrequiredby Franchisor as to content and manner of disclosure
B. Developerunderstandsandagreesthatnothing inthis Agreement authorizes Developerto

make any contract, agreement, warranty or representation on Franchisor's behalf, or to incur any debt or
other obligation in Franchisor's name and that Franchisor shall in no event assume liability for, or be
deemedliableunderthis Agreementasaresultofany suchaction^ or forany actoromissionof
Developer in the conduct of its business pursuant to this Agreement or any claim or judgment arising
therefrom.
C. Developer and each of the Principals shall, at all times, indemnify and hold harmless
Franchisor and its affiliate, successors andassigns and theoffrcers, directors, shareholders, agents,
representatives and employees ofeachofthem ("Indemnitees'') ftom all losses and expenses incurred in
connection with any formal or informal action, suit, proceeding, claim, demand, investigation or inqui^
or any settlement thereof,wbich arises out of or is based upon the action or negligence of Developer or
any Principal in any ofthe following:
(1) The infringement, alleged infringement, or any other violation or alleged

violationofanyProprietaryMark or otherproprietary right owned by Franchisor;
(2) Claims of sexual harassment or discrimination by Developer'semployees or bya

guest at the Studio;
(^ The violation of any federal, state or local law, regulation, rule, standard or
directive, or any industry standard, including without limitation, health, sanitad^^
regulations;
(4) Libel, slander or any other form of defamation ofFranchisor or the System, by
Developer or the Principals;
(^ The violadon or breach by Developer or any of the Principals of any warranty,

representation, agreement or obligation of this Agreement or any Franchise Agreement; and
(^ Acts, errors or omissions ofDeveloper or any ofits agents, servants, employees,

contractors, partners, affiliates or representadves.
^
C ^ ^ T ^ ^ O A
Notwi^^mganyt^
mdemm^ defend or hold Francis
Franehôr'sgross neghgenee or willful miseondneL
D. Developer and eaeh of die Prineipals agree to give Franchisor inêdiatenodee of

snehaedon, suit, proceeding, claim, demand, inquiry or invesdgadon.
E. Franchisormay, at any time and without notice, as it, in its reasonahtediscretion,

consent, or agree to setdement, or take such other remedial or corrective action as it deems expedient with
respect to the action, suit, proceeding, claim, demand, inquiry or investigation
F Ail losses and expenses incurred under this Section 12 shall he chargeahte to and shall he
paid hy Developer or any ofthe Principals pursuant to this Secdon 12, regardless ofany actions, activity
ordefenseundertakenhyFranchisororthe subsequent success orfailureofsuch actions, acdvity or
defense. However, FranchisorwillindenîfyDeveloperfrom losses orexpenses resulting fiom the direct
result ofFranchisor'snegligence or intentional acts
G The phrase "losses and expenses" shall include,wiônt limitation, all monetary losses,
compensatory, exemplary or punitive damages,fmes,actualcosts,expenses, lost profits, reasonable
attorneys' fees, courtcosts, settlementamounts, judgments, damages toFranchisor'sreputation and
goodwill, costs offinancing or advertising material and media costs and all expenses of recall, refunds,
compensation, public notices and such other amounts incurred in connecdon with the matters described
H ^veloper must give Franchisor notice of any such action immediately upon Developer
having received notice ofany such action, claim orproceeding
1. Under no circumstances shall Indemnitees be required or obligated to seek recovery from

third parties or otherwise mitigate their losses in order to maintainaclaim against Developer. Developer
and the Principals agree that the failure of Franchisor to pursue recovery or nutigate loss fiomt^^^
pardes willinno way reduce the amounts recoverable from Developer orthe Principals
L P r o p e r and the Principals expressly agree that the terms of this Secdon 12 shall
continue in full force and effect afier the termination, expiradon or transfer of this Agreement
interest herem.
^ PROPRIETARVMAR^S
A. Developeracknowledges that Developer has no interestinor to the Proprietary Marks

and Developer's right to use tbeProprietary Marks is derived solely fromtheindividualFranc^^^^
Agreements entered into between Developer and Franchisor for the purpose of operating CLUB
PILATES Studios. Developer agrees that all usage of the Proprietary Marks by Developer and any
goodwill established exclusively benefits Franchisor. Developer agrees that after termination or
expiration of this Agreement, Developer will not, except with respect to CLUBPfLATFS Studios
operated by Developer under individual Franchise Agreements, directly or indirectly, at any time or in
any manneridentify itself or any business asaDeveloper or former Developer of, or otherwise asso
with, Franchisor or use in any manner or for any purpose any Proprietary Mark or other indicia o f a
CLUB PILATES Studio or any colorable imitation.
B. Developer must not use any Proprietary Mark as part of any corporate or trade names or
with any prefix, suffix, or other m o d i f ^ g words, terms, designs, or symbols, or in any modified f b ^
nor may Developer use any Proprietary Markinconnect^
^
CL^^T^ÔA
busmessconduc^dby Developer underFranchise Agreement entered intobetweenDeveloperand
Franehisor,or in any othermannernotexplieidy authorized in w^
C Developer must inêdiatelynodfyFranehisor in wridng ofany apparent inftingement of

or challenge to Developers use of any Proprietary Mark, or elaimhy any person of any rights in any
Proprietary Mark or sindlar trade name, trademark, or service mark of which Developer heeomesaware^
Developer must not communicate with any person other than Franchisor and its counsel regarding any
inftingement, challenge or claim. Franchisor has sole discretion to take action it deems appropriate and
the right to exclusively control any litigad
administradve proceeding arising out ofany inft^gement, challenge, or claim or otherwise relating t^
Proprietary Mark.
D. Franchisor has registered the domain name www.cluhpilatesstudio.com. Developer

acknowledges that Franchisor is the lawful and sole owner of this domain name,which incorporates the
trademark CLUB PILAFFS. Developer agrees not to register the trademark CLUB P1LATFS or any of
the Proprietary Marks now or hereafter owned hy Franchisor or any ahhreviation, acronym or variation of
the Proprietary Marks, or any other name that could he deemed confusingly similar, as Internet domain
names, including, hut not limited to, generic and country code top level domain names available at the
present time or in the future.
^. Developer agrees and acknowledges that this Agreement does not grant Developer any
righ^ whatsoever to use any Proprietary Mark, and that such rights are only granted through Devel^^^
timely execution ofaFranchise Agreement that will govern the operation ofaCLUBPlLATFS Studio
that Developeris required to openpursuant to the Development Schedule
1^ TEBMINAÔN
A. Franchisor may terminate this Agreement foramaterial default of this Agreement hy

Developer and all rights granted herein shall automadcally terminate upon written notice to Developer,
upon the occurrence ofany ofthe following:
(1) ffDeveloperhecomes insolvent, makesageneral assignment for the benefit of

creditors; filesavoluntary petition in bankruptcy,or an involuntary petition is filed against D
bankruptcyôrDeveloperisadjudicatedbankrupt; or i f a b i l l i n e q u i t y or other proceeding for the
appointmentofareceiverofDeveloperorothercustodian for Developer or assets is filed and consented
toby Developer; or ifareceiver or other custodian (permanent or temporary) of Developer's assets or
property,oranypartthereof, is appointed byacourt of competent jurisdiction; or ifaproceedingfora
composition of creditors under any state or federal law should be initiated against Developer; or ifafinal
judgment remains unsatisfied or of record for thirty ( ^ days or longer, (unless supersedeas bond is
filed); or ifDeveloper is dissolved; or if execution is levied against Developer; or ifasuit to foreclose any
lien or mortgage against the premises or Studio is levied; or if the real or personal property of Studio is
sold afier levy thereon by any sheriff, marshal or law officer;
(2) ffDeveloperorany of itsPrincipalsfail to comply withSection 11 ofthis

Agreement;
(^ I f Developer or a Principal discloses the contents of theManuals or other

confidential information contrary to this Agreement;
(4) f f an immediate threat or danger to public health or safety results fromthe

operation ofaStudio operated by DeveloperunderaFranchise Agreement;
^
CLUB^LAT^ÛOA
(^ I f Developer oraPrincipal has made
with its applieadon for the ftanehise;
(^ If Developer tads on t h r e e ^ o r more oeeasions within any one (t)year period

to comply with one(l)or more provisions of this Agreemen^whether or not sneh failures to comply are
cured afternoticethereofis delivered to Developer; or
(7) Failure to comply with the conditions of transfer of any interest in Developer as
required ofthis Agreement.
B. Franchisor may terminate this Agreement and all rights granted herein, upon thirty
days written notice toDeveloper, o r a less timeas specifiedhelow, for a material default of this
Agreement,which shall constitute good cause for terminadon and the failure of Developer to cure the
good cause for termination within the notice period Good cause for termination shall he the occurrence
ofany one ofthe following events of default:
(1) IfDeveloper fails to meet the development requirements set forth in the
Development Schedule;
(2) I f Developer fails to develop, open and operate each Studio and execute each
Franchise Agreement in compliance with this Agreement;
(3) IfDeveloper fails to designateaqualified replacement Representative;
(4) I f Developer misappropriates, misuses or makes any unauthorized use of the

Proprietary Marks or materially impairs the goodwill associated with the Proprietary Marks or with t^^
System and does not cure such default following written nodceftom Franchisor;
(^ IfDeveloper, fails, refuses or is unahle to promptly pay when due any monetary
obligation to Franchisor or its affiliate required hy this Agreement, or hy any Franchise Agreement or any
other agreement between the parties and does not cure the monetary default within fourteen (14) days
following written notice from Franchisor;
IfDeveloperfailstocorrectadeficiencyofahealth, sanitation, or safety issue

afternotice of such deficiency is issued byalocal, state, orfederal agency or regulatory authority; or
(7) I f Developer fails to comply with any other material term or material condidon
imposed by this Agreement or any Franchise Agreement executed pursuant thereto.
G. Failure of Developer to cure the default within the specified time, oralonger period of
timeasapplicablelawmay require, will resultinDeveloper'srightsunder this Agreement tobe
terminated effective on the expiration ofthe notice peri^
D. Upon terminadon of this Agreement, Developer has no right to establish or operate any
Studio for which an individual Franchise Agreement has not already been executed by both Franchisor
and Developer, as well as delivered to Developer, as ofthe date oftermination. Franchisor, effective upon
termination of this Agreement shall have the absolute right and is entitled to establish, and to lice^^
otherstoestablish,GLUBPILATFS Studios in the Development Area, except as may be otherwise
provided under any Franchise Agreement which is then in effect between Franchisor and Developer
^
C ^ ^ T ^ ^ O A
^
E No defauh under this Agreement shall constitute a default under any Franchise
Agreement hetween the parties, unless Developer's acts or omissions also violate the terms and
conditions ofthe applicable Franchise Agreement.
F. No right or remedy herein conferred upon or reserved to the Franchisor is exclusive of

any other right or remedy provided orpermittedhy law or in equity.
1^ EFFECTOFTERMINAÔNANDEX^RAT^N
All ohligadons ofFranchisor and Developer under this Agreement,which expressly or hy their
nature survive the expiration or termination of this Agreement, continueinfull force
expiration orterminadon of this Agreement and until they are satisfied in full or hytheirnamre expire.
1^ TRANSFER OFINTEREST
AD BV FRANCHISOR
Franchisor has the absolute right to transfer or assign this Agreement and all or any part of its
rights, dudes or obligadons to any person or legal entity without the consent of or notice to Developer.
This Agreement shall inure to the benefit of, and be binding on the successors and assigns ofFranchisor.
BD DEVELOFER MAV NOT ASSIGN WITHOUT AFFROVAE OF THE

FRANCHISOR
Developerunderstands and acknowledges that the rights and duties created by this Agreement are
personal to Developer and its owners and thatFranchisor has granted these rights to Developerinreliance
upon the individual or collective character, sl^ll, aptitude, attimde, business ability and fm
of Developer andôr its owners. Unless otherwise provided with respect to an assignment to an entity
controlled by Developer as provided in Secdonl^D), none of these rights nor any ownership interest in
Developer may be voluntarily, involuntarily, directly or indirecdy, assigned, sold, conveyed, pledge^^
sub^fi^chised or otherwise transferred by Developer or its owners (including by merger or consolidation,
by issuance ofaddidonal securities represendng an ownership interest in Developer, by conversion ofa
general partnership toalimitedparmership, by trans^r or creation of an interest asageneral partner ofa
partnership,by transfer of an interest in Developer ormthisAgêementinadivorce proceeding, or if
Developer or an owner ofDeveloper dies, by will,declaradonofor transfer in trust or the laws ofthe
intestate succession) without the approval ofFranchisor. Any attempted assignment or transfer without
such approval will constituteabreach of this Agreement and will not t r ^ f e r any rights or interests t^
such assignee or transferee.
CD CONBITIONSFORAFFROVALOF ASSIGNMENT
IfDeveloper is in substantial compliance with this Agreement, Franchisor shall not unreasonably
withhold its approval of an assignment ortransfer contemplated by Sectionl^(B)so long as the proposed
assigneeortransfererhasgoodandmoralcharacter, sufficient businessexperience and aptimde to
develop andownandoperate Studios,and otherwise meets Franchisor's thenDcurrent standards for
developersand System franchisees. Franchisormay require that any oneor moreof thefbllowing
conditions be met before, or concurrently with, the effective date of any such assignment ortransfer:
(1) All the accrued monetary obligadons ofDeveloper or any ofits affihates and all
other outstanding obligations to Franchisor or its affiliate arising under this Agreement or any Franchise
^
C ^ ^ ^ ^ U O A
Agreement or other agreemembe^^
whatsoevernatnre, priorto the t r a ^
(2) Developer and its affiliates are not in material default of any substantive
provision of this Agreement, any amendment hereof or sueeessor hereto, or any Franehise Agreement
granted pursuant to its terms, or other agreement between Developer or any ofits affiliates and Franeh^^
or its affiliate;
(^ Developer and its Principals, as applieable, shall have exeeutedageneral release,

inaform sadsfaetory to Pmnehisor, releasing Pranehisor of any and all claims against Franchisor and its
affiliate and their respective past and present partners, tbe past and present officers, directors,
shareholders, parmers, agents,representadves,independent contractors, servants and employees of each
ofthem, in their corporate and individual capacities, including, without lindtadon, claims arisi^^
related to this Agreement and any other agreements between Developer and Franchisor, or under federal,
state or local laws, rules, and regulations or orders;
(4) The transferee shall demonstrate to Franchisor's satisfaction that the transferee
meets the criteria considered byFranchisor when reviewingaprospective developer's applicationfbr
development rights, including, but not limited to, Franchisor's managerial and business experience
standards, dât the transferee possesses good moral character, business reputation and credit rating; that
the transferee has the aptimde,financialresourcesand capital committed for the operation of th^
andthegeographicproximity ofother territories withrespect to which transfereehasbeengranted
developmentrightsorofotherCTUBFlLATFS Studios operatedby transferee, if any;
(^ The transferee shall signawrittenassumpdon agreement, inaform prescribed by

Francldsor, assuming full, unconditional, joint and several liability ftom the date of the transf^^
obligations, covenants and agreements ofDeveloperinthis Agreement; and, if transferee isacorporation,
limited liabilitycompanyorapartnership,transferee'sshareholders, partners, members o
as applicable, shall also execute such agreement;
(^ Developer shallpayatransferfeeequal t o ^ O ^ o f theDevelopmentFee to

Franchisor at the time oftransfer, unless the transfer is being made: (i) to an immediate f ^ i l ^
Developer diat Franchisor approves pursuant to Section l ^ F ) ; or (ii) in the form of an encumbrance of
the assets of any Franchised Business(orasubordinatingFranchisor'ssecurity interest in such assets) as
anecessarycondition to obtain SBAortraditional bank financing;
(7) Developer acknowledges and agrees that each condidon,which must be met by
the transferee, is reasonable and necessary; and
^) Developer must pay any referral fees or commissions that may be due to any
fianchisebroker,sales agent or otherthird party upon the occurrence of such assignment.
Franchisor's consent to a transfer of any interest in Developer described herein shall not
constituteawaiver of any claims it may have agamst the transferring party, nor shall it be deemeda
waiver ofFranchisor'sri^t to demand exact compliance with any of the terms of this Agreement by the
transferee Dpon an approved transfer under this Section, Developer will only be bound by,and liable in
connection with, its post^term obligations under this Agreement.
^
C^^LA^ÛOA
DD A^GNMENTTOACORPO^T^^
(1) NotwiândingtheprovisionsofdusSecdooôf^
(30) days'prior written nodoe to Francbi^ and w i t ^
this Agreement toaoorporadon or limited liabdity company that oo
development andôroperadon of CLUBPlLATESStudios. Developer shall he the owner of allthe
voting stock or interest ofthe corporation or linutedliahility company, or ifDeveloper is more than one
individual, each individnalshall have the same proportionate ownership interestinthecorporati^^
had in Developer hefore the transfer. Developer and each of its Principals, as applicable, may transfer,
sell or assign their respecdve interests in Developer, hy and amongst themselves with Pranchisor'sprior
written consent, which consent shall not he unreasonably withheld; but may be conditioned on
compliance with Sectionll,except that such transfer, sale or assignment shall not effectachange in the
controlling interest in Developer.
(2) Anyperson who is or becomesashareholder or member ofDeveloper or has or

acquires beneficial ownership of any sl^res of stock equal to or greater than ten percent(10^)ownership
interest in Developer must execute an agreement in substandally the form of the attached Guaranty and
Assumpdon of Gbligadons undertaking to bebound jointly and severally to all provisions ofthis
Agreement. Developer must furnish Franchisor at any time upon requestacertified copy of the articles of
incorporation or articles of organization andalist, inaform Franchisor requires, of all shareholders
members ofrecord and all persons having beneficial ownership of shares of stock, reflecting their
respective interests in Developer.
^ RIGHT OP PIRSTREPUSAL
IfDeveloper receives and desires to accept any bona fide offer to transfer an ownership interest in
tlus Agreement fiomathird party, then the Developer shall promptly notify Fmnchisor in wridngan^
send Franchisor an executed copy of the contract of transfer Franchisor shall have the right and option,
exercisable within thirty (^0) days afier actual receipt of such notification or of the executed contract of
transfer which shall describe the terms of die offer, to send written notice to Developer that Franchisor
intends to purchase the Developer's interest on the same terms and conditions offered by dê third p a ^
Closing on the purchase must occur within sixty (^0) days ftom thedate of notice by Franchisor to the
Developer of Franchisor's election to purchase. I f Franchisor elects not to accept the offer within the
thir^Ô)dayperiod,Developershallhaveaperiodnot to exceed sixtyÔ) days to complete the transfer
subject to the conditions for approval set forth in Section 1^(C) of this Agreement Any material change
in the tertns of any offer before closing shall constituteanew offer subject to the same rights of firs^
refusal by Franchisor as in the case of an initial offer. Failure of Franchisor to exercise the option
afforded by this Sectionllshall not constituteawaiver of any other provision of this Agreement ffthe
ofier from a tlurd party provides for payment of consideration other than cash or involves certain
intangible benefits, Franchisor may elect to purchase the interest proposed to be sold for the reasonable
cashequivalent,oranypublicly^radedsecurities, including its own, orintangible benefits simda^
being offered, f f the parties cannot agree withinareasonabie time on the reasonable cash equivalent of
thenonDcashpartof theoffer, thensuch amount shallbedeterminedby an independent appraiser
designated by Franchisor,and his determination shall be binding.
^ DEATH ORDISABILITY
Upon the death or permanent disability of Developer (or the managing shareholder, managing
member or partner), the executor, administrator,conservator or other personalrepresentative of that
person, or the remaining shareholders, partners or members, must appointacompetent manager that is
approved by Franchisor w i t l ^ ninety (90) days ftom the date of death or permanent disability (the "90
^
c^^T^ûoA
Day P e r i o d 8 ^ r e ^ e n d o f ^ 9 0 Day Period,^
comp^Franchô^strammg program and must e^herex^^
devôpment agreement fbrdieunexpired term of this Agreem^^
partnership, eorporateordmiteddahdity company DevelopeBsohdgations to Frane^^
achates. I f the Studio is not heing managed hyaFranchisor approved manager during the 90Day
Feriod, Franchisor is authorized, hut is not required, to inunediatetyappointamanager to maintam the
operations of Developer's Studios for and on hehaif of Developer untd an approved assignee is ahie to
assume the management and operation of the Studio. Franchisor's appointment ofamanager of the
Studio does not relieve Developer ofhisohhgations, and Franchisor is not liahletbr any dehts, losses,
costs orexpensesincurred in the operationsoftheStudioortoanycreditorof Developer forany
products, materials, supplies or services purchased hy the Studio duru^g any period in which it is managed
hy Franchisor's appointed manager. Franchisorhas the right to chargeareasonahle fee for management
services and to cease to provide management services at any time. Franchisor's right of first r e f ^
forthinSecdonl^F) will not apply toatransfer under this Section if the transferee is an immediate
family memher ofDeveloper thatFranchisor approves.
G. PUBLICORPRIVATEOFFERINGS
(1) Developer acknowledges that the written information used to raise or secure
funds can reflect upon Franchisor. Developer agrees to suhmit any written information intended to he
used for that putpose to Franchisor hefbre its inclusion in any registration statement, prospecms or simd^^
offeringcircular or memorandum. Thisrequirementappliesunderthe fbllowingconditions: (i) if
Developer attempts to raise or secure funds hy the sale of securities in Developer or any affiliate of
Developer (including common or preferred stock, bonds, debentures or general or limited partnersl^^
interest) and (ii)ifany ofits owners attempt to raise or secure funds by the sale ofsecurities in Developer
or any affiliate of Developer (including conunon or preferred stock, bonds, debentures or general
limited partnership interests) Developer (or any of its owners) agrees not to use the written maters
submitted to Franchisor or any other written materials to raise or secure funds unless and undl Franchisor
approves ofthe language. No information respecting Franchisor or its affiliate shall be included in any
securides disclosure document, unless that information has lênfunîshed to Franchisor, in
pursuant to the written request of the Developer. The written request shall state the specific putpose for
which the information is to be used. Should Franchisor, in its sole discretion, object to any reference to
Franchisor or its affiliate or any of their businesses in the offering literature orprospectus, the 1^^^
prospectus shall not be used unless and until the objections of Franchisor are withdrawn. Franchisor
assumes no responsibility for the offering whatsoever. Developer must pay Franchisorapublic offering
fee of ThreeThousandFiveHundred Dollars (SÔO) forthe costs toFranchisor toreview the
information. The written consent ofFranchisor pursuant to this FaragraphGdoes not imply or constitute
the approval of Fmnchisor with respect to the method offinancing,the offering literature s u b m i t
Franchisor or any other aspect ofthe offering.
(2) Theprospectus or other literature utilized in any offering must contain the
following language in boldface typeon the first textual page:
^NETFHER CLUB PILATES FR^^

ANY O F I T S AFFILIATES SUBSIDIARIES IS DIRECTLY OR INDIRECTLY
THE ISSUER OF THE SECURITIES OFFERED^ NEITHER CLUB FILATES
FRANCHISE, LLC NOR ITS AFFILIATE NOR ANY OF ITS AFFILIATE S
SUBSIDIARIES ASSUMES ANY RESPONSIBILITY WITH RESPECT TO THIS
OFFERING ANDBOR THE ADEQUACY OR ACCURACY OF THE
INFORMATION SET FORTH, INCLUDING ANY STATEMENTS MADE WITH
RESPECT TO ANY OFTHEMD NEITHER CLUB PILATES FRANCHISE,LLC
^
C ^ ^ T ^ ^ ^ A
NOR ITS AFFHÂTE NOR ANY OF ^TS AFFILIATE S SUBSIDIARIES
ENDORSES OR MAIZES ANY RECOMMENDATION WITHRESFECT TO THE
INYESTMENTCONTEMFLATEDBYTHISOFFERINCB^
(^ Developer and each ofôwners agrees to m d e n ^ i ^ defend and h ^

Franehisorand its affiliate, and dieirrespeedve officers, directors, employees a^^
claims, demands, liabilities, and all costs and expenses (including reasonable attorneys'^
Franchisor as tbe result of tbe ofter or sale of securities. Tbis Agreement applies to any and all claims,
demands, liabibties,andallcostsandexpenses(includingreasonableattomeys' fees)assertedby a
purcbaserofanysecurity or byagovemmental agency. Franchisor bas tbe right (but not tbe obligation)
to defend any claims, demands or liabilities andôr to participate in tbe defense of any action to wbicb
Franchisor or its affiliate or any of theirrespectiveofficers, directors, employees or agents is named asa
party
IL NOTICE TO FRANCHISOR
Provided Developer is not thenapubliccompany,if any person holding an interestinDeveloper

(other than Developer oraFfincipal,which parties shall be subject to the provisions set forth above)
transfers suchinterest, then Developer shallpromptlynotifyFranchisorofsuchproposedtransfer in
writing and provide information as Franchisor may reasonablyrequestbefore the transfer. The transferee
may not be one of Franchisor's competitors. The transferee must executeaConfidendality Agreement
and Ancillary Covenants Not to Competeinthe form then required by Franchisor, wluch form shall hem
substantially the same form attached hereto as Exhibit F. Franchisor also reserves the right to designate
the transferee as one of the Principals. IfDeveloper isapublic company, this provision applies only to
transfers in interest by Principals or to any person or entity controlling more than ten percent (10^) of
Developer's voting stock.
APPROVALS
A. Wherever this Agreementrequiresthe prior approval or consent ofFranchisor, Developer

shall makeatimely written request to Franchisor for such approval or consent.
B. Franchisor makes no warranties orguarantees upon whichDevelopermay rely and

assumes no liability or obligation to Developer or to any third party to which it would not otherwise be
subject,byprovidinganywaiver,approval, advise, consent,orservices to Developerinconnecdon with
this Agreement, or by anyreasonof neglect, delay or denial of any request therefor
1^ NONWAIVER
A. No failure of Franchisor to exercise any power reserved to it by this Agreement, or to

insist upon strict compliance by Developer or Principals with any obligation or condition hereunder, and
no custom orpracdce of the parties atvariance with the terms hereof, sball constituteawaiver or estoppel
of Franchisor's right to demand exact compliance with any of the terms herein and Developer and the
Principals warrant and undertake that it shall not rely on such failure, custom or practice. Waiver by
Franchisor of any pardcular default byDeveloper or anyofthePrincipals shall not affect or impair
Franchisor's rights with respect to any subsequent default of the same, similar or different nature,^
shall delay,fb^bearance,or omission of Franchisor to exercise any power or right arising out of any
breach or default by its other developers or by Developer of any of the terms, provisions, or covenants
hereof, affect or impair Franchisor's right to exercise the same, nor shall such consdtuteawaiver by
Franchisorofanyrighthereunder,ortherighttodeclare any subsequent breach or default and to
terminate tbis Agreement prior to the expiration of its term. Subsequent acceptance by Franchisor ofany
^
c^B^r^ûoA
payment due to it hereunder shall notb^
hy Developer ofany terms, eoveuauts or eondldous ofthis Agreement.
B. All rights and remedies of the parties hereto shall he eumuladve and not altemadve,m
addidon to and not exclusive of any other rights or remedies whieh are provided for herein or whieh may
he available at law or in equity in ease of any hreaeh, failure or default or threatened hreaeh,fai^
default of any term, provision or condition of this Agreement, the rights andremediesof the parties hereto
shall he continuiug and shall not he exhausted hy any one or more uses thereof, and may he exercised at
any time or from time to time as often as may he expedient; and any option or election to enforce any
such right or remedy may he exercised or taken at any time and from time to time The expiration or
early termination ofthis Agreement shall not discharge or release Developer from any liability or
obligation then accrued, or any liability or obligation continuing beyond, or arising out of, the expiradon
or early termination of this Agreement.
1^ DEVELOPER S RECORDS AND REPORTS
A. Developer must keep accurate records concerning all transactions and written
conûnicadons between Pranchisorand Developer relating to the development and operation ofStudios
in the Development Area. Franchisor'sduly authorized representative has the right, following reasonable
notice, at all reasonable hours of the day to examine all Developer'srecords with respect to the subject
matter of this Agreement, and has full and free access to records for that purpose and for the purpose of
making extracts. All records must be kept available for at least three^yearsafterpreparation.
B. Developer must furnish toPranchisor monthly writtenreports regardingDeveloper's

progress on the development ofCLUBPfTATES Studios under this Agreement.
^ NOTICES ANDPAVMENTS
All written nodces and reports permitted or required to be delivered by the provisions of this
Agreement or of the Manuals shall be deemed so delivered at the time dehvered by hand or byemail
with receipt confirmed by the receiving party or one (1) business day after sending by overnight courier
with delivery confirmed and addressed to the party to be nodfted at its most current address of which the
nodfying party has been notified. The following addresses for the pardes shall be used unless and untila
different address has been designatedbywrittennotice to the otherparty^
Nodces to Franchisor:
Club Pilates Pranchise,TTC

Attn: Shaun Grove
^l^Pullman Street
^
C^^T^ÛOA
Withanaddidon^copy^
FisherZucker LLC
A ^ Lane Fisher
^South^Street
Fhilade^hia,FA^l^
NotieetoDeveioper:
ATTN^
2L GOVERNINGLAW
A. This Agreement shall he governed hy and construed in accordance with the laws of the
State of Calitbrnia, without reference to the state'sco^
actions involving any non^competition covenants set forth in anyFranchise Agreement, including
interpretadon and enforcement thereof, must he governed hy the law of the state where the Studio is
located.
^ ARBITRATION AND OTHERDISPUTE RESOLUTION PROVISIONS
A. Developer must first hring any claim or dispute between Developer and Franchisor to
FranchisoBsmanagement and make every effort to resolve the dispute internally.Developer must exhaust
this mternal dispute resolution procedure before Developer m
party. This agreementto first attempt resoludonof disputes internally shall survive terminadon or
expiration ofthis Agreement
B. At Franchisor's option, all claims or disputes between Developer and Franchisor (or its
affiliatesârising out of, orin any way reladng to, tlus Agreement or any other agreement by and betwee
Developer and Franchisor(or its affiliates), or any of the parties'respective rights and obligations ar^^^
ftom such agreement,which are not first resolved through the internal dispute resolution procedure sent
fbrthinSection 22(A) above,will be submitted first to mediation to take place at Franchisor's tben^
current headquarters under the auspices of the American Arbitration Association ("AAA''), in accordance
with AAA's Commercial Mediation Rules then in effect. Before commencing anylegal action against
Franclnsor or its affiliates with respect to any such claim or dispute, Developer must submitanotice to
Franchisor, which specifies, in detail, the precise nature and grounds ofsuch claim or dispute. Franchisor
will haveaperiod of thirty (30) days following receipt of such notice within which to notify
to whetherFranchisororits affiliateselectstoexerciseitsopdontosubmitsuchclaimordisputeto
mediation. Developer may not commence any action against Franchisor or its affiliates with respect to
any such claim or dispute in any court unless Franchisor fails to exercise its option to submit such claim
or dispute to mediation, or such mediadon proceedings have been te^ninated either: (i) as the result ofa
written declaradon ofthe mediators) that fiuêr mediation efforts are not word^while; or
ofawritten declaration by Franchisor. Franchisor's rights to mediadon, as set forth herein, may be
specifically enforced by Franchisor. Each party will bear its own cost of mediation and Franchisor and
Developer will share mediator fees equally. This agreement to mediate will survive any terminadon or
expiration of this Agreement.The parties will not be required to first attempt to mediateacontroversy,
dispute, or claim through mediation as set forth in this Section 22(B) i f such controversy, dispute, or
^
CLUB^^^ÛOA
^mconceâoa^gadonâ
v i o ^ m ^ ^ ^ ^ ^
m^confideu^^rmad^^ôf^re^^^
anyofDôpeBspaymôb^dûn^Âgree^^
C ^ ^ o p e r and Franchisor b e l ^
quickie cost ^ c d v c l y and professional and to retn^
Sections 2 2 ^ ^ of this Agreement, Devciopcr and Franchisor have agreed
Ardcie 22 support these mutual ohjectives and, therefore, agree that any htigation,c^^^
action, controversy,orproceeding of any type whatsoever including any claim for equitahlereh^^
whereeither party isactingasa^privateattomey general," suingpursânttoastatntory claim or
otherwise, hetween or involving Developer and Franchisor on whatever theory andôr facts hased^
whetherornotarisingoutofthisAgreement,^CIaim^will he processed in the fbllowingm
a. Developer andFranchisoreachexpressly waives ailrights toany court proceeding,

exceptasexpresslyprovidedinSecdons22ând22^,hefow.
h. All Claims shail he submitted to and resolved hyhinding arbitration in Orange County,
Califbmia, before and in accordance with the arbitration rules o f t h e American
A^bitradon Association judgment upon the award rendered by the arbitrator shall be
entered in any Court havingjurisdicdon thereof
c. Franchisor and Developer agree tbat any arbitration between Franchisor and Developer
shall be ofDeveloper'sindividnal claim and that the claim snbject to arbitration shall not
be arbitrated onaclass^wide basis.
d. This arbitration provision shafl be deemed to be selfêxecudng, and in the event either
party fads to appear at any properly noticed arbitration proceeding, an award may be
entered agamst such party notwithstanding said failure to appear.
e. fn no event shall Franchisor be hable to Developer for punitive damages in any action
arising out of or reladng to this Agreement, or any breach, termination or cancetladon
hereof.
f. Any arbitration proceeding conducted under this Section, including all demands, filings
and evidence submitted in connection therewith, must be kept strictly confidential, unless
Franchisor agrees otherwise in writing.
D. Developer acknowledges and agrees that irreparable han^n could be caused to Franchisor
by Developer's violadon of certain provisions ofthis Agreement and, as such, in addition to any other
reliefavailableat âwor equity,Franchisor shall be entitled to obtain in any courtofcompetent
jurisdiction, without bond, restraining orders or temporary or permanent injuncdons in order to
among other items, the provisions of this Agreement relating to: (i) Developer's use ofthe Propriety
Marksandconfidential information; (ii) theinterm covenant not to compete,aswelfasany other
violations of the restrictive covenants set forth in this Agreement; (iii) Developed
terminadon orexpirationofthisAgreement;(iv)disputes and controversies based on or arising under the
Lanham Act, as now or hereafter amended; (v) disputes and controversies involving enforcement of the
Franchisor's rights with respect to confidentiality under this Agreement; and (vi) to prohibit any act or
omission by Developer or its employees that constitutes a violation ofapplicable law, threatens
Franchisor's ftanchise system or threatens otherftanchiseesof Franchisor Developer'sonly remedy if
^
C ^ ^ T ^ ^ O A
such an mjuncdon is enured w i d ^
waives a^ damage claims ifthe i n j u n ^
E. Franchisors oncers, directors, shareholder agents andôrcmpioyc^^

party heneficiaries of the provisions of this Agreement, including the dispute resolnd
forth in Section 22 of this Agreement, each having authority to specifically enforce the right to mediate
claims asserted against such person(s)hy Developer.
F. Asacondition precedent to commencing an action for damages or for violation or hreach

of this Agreement, Developer must nodfy Franchisor within thirty (30) days after the occurrence of the
violation or hreach, and failure to timely give such nodce shall preclude any claim for damages.
G. Developer shall not withhold all or any part of any payment to Franchisor or any of its
affiliates on the grounds of Franchisor's allegednonpertdrmance or as anofiset against any amount
Franchisor or any ofFranchisor's affiliates allegedly may owe Developer under this Agreement or any
related agreements.
H. Developer further agrees that no cause of action arising out of or under this Agreement
may he maintained hy Developer against Franchisor unless brought hefbre the expiration of one(t)year
afier the act, transaction or occurrence upon which such acdon is based or the expiration ofone year after
the Developer becomes aware of facts or circumstancesreasonablyindicating that Developer may havea
claim against Franchisor hereunder, whichever occurs sooner, and that any acdon not brought within this
period shatl be barred asaclaim, counterclaim, defense, or setoff Developer hereby waives the right to
obtain any remedy based on alleged ftaud, misrepresentation, or deceit by Franchisor, including, without
limitation, rescissionofddsAgreement,many mediation,^
arisinghereunder,exceptuponagroundexpresslyprovided in this Agreement, or pursuant to any right
expressly granted by any applicable statute expressly regulating the sale of franchises, or any regulation
or rules promulgated thereunder.
f. Developer hereby waives to the fullest extent permitted by law,any right to or claim for
any punitive, exemplary, incidental, indirect, special or consequential damages (including, without
limitation, lost profits) against Franchisor arising out of any cause whatsoever (whether such cause be
basedin contract, negligence, strict hability, other tort or otherwise) and agrees thatinthe event o f a
dispute, that Developer's recovery is limited to actual damages, f f any other term of this Agreement is
found or deternêd to be unconscionable or unenfbrceable for anyreason,the foregoing provisi^^
continueinfullfbrceandeffect,including,withoutlimitation,the waiver ofany r i g h t s
consequentialdamages.Nothinginthis Secdonor anyother provision of this Agreementshallbe
construed to prevent Franchisor fiomclaimingandobtainingexpectationorconsequentialdamages,
including lost future royalties for the balance of the term of this Agreement i f it is terminated due
Developer's default, wldch the parties agree and acknowledge Franchisor may claim under this
Agreement.
^ THFFARTfFSHERFBYAG^FTOWAfVFTRf^
FROCFFDfNGORCOUNTERCLA^
WHfCH FARTY BRINGS SDFF THIS WAfVFR SHALL AFFLY TO ANY MATFFR
WHATSGFYFRBFTWFFNTHFFARTfESHFf^TGWHfGH AIDSES OUT OF GR IS f ^ L
INANYWAYTOTHfSAGRFFMENTORTHFFFRFORMANGFOFFITHFRFARTY
^ THF PARTIES AGREE THAT ALLFRGGEEDINGS ARISING GUT OF OR

RELATEDTGTHISAGREEMENTWILLBEGGNDUGTEDGNANINDIVIDUAL,NGTAGLASS
WIDE BASIS, AND THAT ANY FRGGEEDING BETWEEN DEVELOPER, DEVELOPER'S
^
C ^ ^ T ^ ^ O A
GUARANTORS AND F ^ N C H ^ ^
BE CONSOLIDATED WITH ANY OTHER PROCEEDING BETWEEN FRANCHISOR AND
OTHER THIRDPARTY
^ ENPGRCEMENT
AD SEYERABHÎTYANBSUBSTITUTIONGPYALIBPRGYISIONS
(1) Except as express provided t o t h e c o n ^ ^ m ^ A g r e e m e o ^ e ^ ^

paragrap^term and provision of dds Agreement, is considered severable
portion of tbis Agreement is beid to be invabd, contrary to, or in conflict witb any applicable present or
fbtnre law or regnladoninafinal, unappealable ruling issued by any conrt, agency or t r i b ^
competentjurisdictionmaproceedingtowbicbPrancbisorisaparty, tbat ruling sball not impair tbe
operation of, or bave any otber effect upon, otber portions of tbis Agreement as may remain odêrwise
intelligible, wbicb sball condnue to be given full force and effect and bind tbe parties to t^^^
altbougb any portion beld to be invalid sball be deemed not to beapart of tbis Agreement ftom tbe date
tbetimefbrappealexpires, ifDeveloper isaparty,otberwise upon Developer's receipt ofanotice of non-
enforcement fr^mErancbisor.
(2) Ifanyapplicableandbinding law or rule of any jurisdiction requiresagreater

prior notice oftbe termination o f ^ s Agreement tban is required in tbis Agreement, or tbe taking of some
otber acdon not required,or i f under any applicableandbindinglaworruleofanyjurisdiction,any
provision of tbis Agreement or any specification, standard or operating procedure Erancbisor prescribes is
invalid or unenforceable, tbe prior notice andôrotber action required by law or rule sball be substituted
for tbe comparable provisions, and Erancbisorbas tbe rigbt, in its sole discretion, to modify tbe invab
unenforceable provision, specificadon, standard or operating procedure to tbe extent required to be valid
and enforceable. Developer agrees to be bound by any promise or covenant imposing tbe maximum duty
permitted by law wbicb is prescribed witbin tbe terms of any provision of tbis Agreement, as tbougb it
were separately ardculated in and madeapart of tbis Agreement, tbat may result ftom striking from any
of tbe provisions, or any specification, standard or operating procedure Franchisor prescribes, any portion
or portions wbicbacourt may bold to be unenforceable inafinal decision to wbicb Franchisor isaparty,
or ftom reducing the scope of any promise or covenant to the extent required to comply with acourt
order. Modifications to this Agreement shall be effective only in that jurisdiction,unless Franchisor
elects to give them greater applicability, and this Agreement shad be enforced as originady made an^
entered into in all other jurisdictions.
BD EXCEPTIONS
Neither Franchisor nor Developer are liableft^rloss or damage or deemed to be in breach of this
Agreement i f its fadure to perform its obligations results fiom: (I) transportation sho^^
supply of labor, material or energy, or the voluntary foregoing of the right to acquire or use any of the
foregoing in order to acconôdate or comply with the orders, requests, regulations, recommendations or
instructions of any federal, state or municipal government or any department or agency;^complian^
with any law, ruling, order, regulation, requirement or instruction of any federal, state, or munici^^^
government or any department or agency;âcts of God^âcts or omissions of tbe other party;^)
fires, strikes, embargoes,war or riot; o r ^ a n y other similar event or cause. Any delay resuldng from
any of dêse causes shall extend performance accordingly or excuse performance, in whole or in part, as
may be reasonable.
^
C^Â^ÛOA
^ RIGHTSOFPARTIESARECUMULATIVE
The rights ofFranchi^ and D e v ^ ^

enforcement hy Franchisor or Developer ofany right orremedypreeln^
Franchisor or Developer ofany other right or remedy which Franchisor or Developer is enddedhy law to
enforce.
DD COSTS ANDATTORNEYSFEES
ff Developer isinhreachor default ofany monetary or nonmonetary ohligationunder this

Agreement or any related agreement hetween Developer and Franchisor andôr Franchisor's affiliates,
and Franchisor engages an attorney to enforce Franchisor's rights (whether or not formal judicial
proceedings are initiated), Developer must reimburse Franchisor for all costsêxpenses incurred in
connection with enforcing its rights under this Agreement including all reasonable attorneys' fees, court
costs and arbitration expenses. ffDeveloper institutes any legaf acdon to interpret or enforce the terms of
this Agreement, and Developer's claim in soch action is denied or the acdon is dismissed, Franchisor is
entitled to recover Franchisor'sreasonableattorneys' fees, and all otherreasonablecosts and expenses
incurred in defending agamst same, and to have such an amount awarded as part of the judgment in the
proceeding.
^ VARIANCES
Developer acknowledges^Fra^
chaoges fiom the uniform standards of the System in Franchisor's ahsointe sole discretion, which
Franchisor deems desirahle or necessary nnder particular circnmstances. Developer understands that he
has no righttoohject to or automatically obtain suchvariances, and any exceptionor change must he
approved in advance from Franchisor in writing. Developerunderstandsexisting Developers may operate
under different forms ofagreements and that the rights and ohhgationsofexisting Developers may d i ^
materially from this Agreement.
^ BINDING EEEECT
This Agreement is binding upon the parties of this Agreement and their respecdve executors,
administrators, heirs, assigns and successorsin interest, and shallnot be modified except by written
agreementsigned by both Developerand Franchisor
GD GONSTRUGTIONÎNTEGRATION CLAUSE
This Agreement, all exhibits to this Agreement and all ancillary agreements executed
contemporaneousfy with this Agreement constitute the entire agreement between the parties with
reference to the subject matter of this Agreement and supersede any and alt prior negodations,
undertal^ngs, representations, and agreements. Nothing in this Agreement or in any related ag
however,isintended todiscfaim therepresentations Franchisor madeintheFDD thatFranchisor
furnished to Developer. Developer acknowledges that Developer is entering into this Agreement, and all
ancdlary agreements executed contemporaneousfy with this Agreement, asaresult of Developer's own
independent investigation of tbe franchised business and not asaresuft of any representations about
Franchisor madebyFranchisor'sshareholders,of^cers,directors,empioyees,agents,representatives,
independent contractors, attorneys, or Developers, which are contrary to the terms set fbrdt inthis
^
c ^ ^ ^ ^ u ^
Agreement or ofany ftanehrse diselosnre doenment, offering eireniar, prospeetns, or other similar
doenmentreqniredorpermittedtohegiventoDeve^
Developer hereby aelôwledges and further represents and warmnts to Franehisor^
L Deveioperhasplaeednorehaneeonanyoraiorwrittenstatements, whether
referêdto as representations, warranties, indneements,orodierwise,whieh are not contained
Agreement or in the Franchise Disefosure Document;
2 Developer has entered into this Agreement affer making an independent

investigation ofFranchisor'soperadons and the Systems
^ Franchisor has not made any guarantee or provided any assnrance thatthe
business locadon wilt he successful or profitable regardless of whether Franchisor may have approved of
theftanchiseor site location;
4. Developer has (a) read this Agreement in its entirety and understands its
contents; (b)been given the opportunity to clarify any provisions that Developer did not understand and
(c) had the opportunity to consult with professional advisors regarding the operation and effect of the
Agreement and the operation of theSystem;
^ Developer has, together with its advisors, sufficient knowledge and experiencein
fmancial and business matters to make an informed decision with respect to the ftanchise offered by
Franchisor; and
^ Developer has receivedacopy of the Franchise Disclosure Document not later

than tbe first personal meeting held to discuss the sale ofaftanchise, or fourteen (14) calendar days
before execution of this Agreement or fourteen (14) calendar days before any payment of any
consideration.
Except as may have been disclosed at fternl^ of Franchisor's Franchise Disclosure Document,
Developer represents and warrants to Franchisor that no claims, representations, or warranties regarding
the earnings, sales, profits, success or failure ofthefianchisedbusiness have been made to Developer and
no such claims, representations orwarranties have induced Developerto enter into this Agreement
Except for those changes permitted to be made unilaterady by Franchisor,no amendment, change
or variance fiom this Agreement is binding on either party unless mutually agreed to by the parties and
executed by their authorized officers or agents in writing.
^ CAVEAT
A. The success of the business venture contemplated to be undertaken by this Agreement is

speculative and depends, toalarge extent, upon the ability of the Developer as an independent business
person, and the acdve participation of Developer in the dady affairs of the business as well as other
factors. Franchisor does not make any representation or warranty, express or implied, as to the potential
success of the business venture contemplated hereby.
8. Developer acknowledges that ithas entered into this Agreement afier making an
independent invesdgationofFranchisor's operations and not opon any representation as to gross sales,
volume, potential earnings or profits which Developer in particular might be expected to realize, nor has
^
c^p^r^ûoA
anyone made any other represemado^
Developer to aeeept thisftanehiseand exeente this Agreement.
C Developer represents and acknowledges that he has reeeivedaeopy of this Agreement,

with ad hianks fitted in, trom Franchisor at least seven (7) calendar days hefbre the date of exe^
this Agreement Developer fnrtherrepresents that he understands the terms, conditions and obligations of
this Agreement and agrees to be bound.
^ MISCELLANEOUS
A. Except as otherwise expressly provided, nothinginthis Agreement is intended, nor shall

be deemed, to confer any rights or remedies upon any person or legal entity who is notapartytothis
Agreement.
8. The headings of the several sections and paragraphs are for convenience only and do not
define, limit orconstrue the contents of secdonsorparagraphs.
C. The "Developer" as usedinthis Agreement is applicabie to one ( f ) or more personsâ

corporation orapartnership or limited parmership or hmited liability company as the case may be, and
the singular usage includes the plurai and the masculine and neuter usages include the other and the
feminine f f t w o ^ o r more persons are at any time Developer under this Agreement, their obligations
and liabilities to Franchisor shall be joint and several References to "Developer" and"Assignee" which
are applicabte to an individual or individuals shall mean the owner or owners of the equity or operating
control ofDeveloper or the Assignee, ifDeveloper or the Assignee isacorporation, partnership, limited
parmership or limited liability company.
This Agreement shad be executed in multiple copies, each ofwhich shall be deemed an original
INWITNESSWHEIÔE, the p ^ e s hereto h^veduly executed thisAgêe^^^

d^te^stwr^tte^^boveD
FRANCHISOR: DEVELOPER:
By: IF AN INDIVIDUAL:
Print Name: By:
Title: Print Name:
Date: Date:
Spouse Signature:
Spouse Name:
Date:
IF A PARTNERSHIP, CORPORATION, OR
OTHER ENTITY:
^
CLUB PILATES MUDA
By:
Print Name:
Title:
Date:
^
CLUB PILATES MUDA
ATTACHMENT TO DEVELOPMENT AGREEMENT
GUARANTY AND ASSUMPTION OF OBLIGATIONS
THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given this _ _ day of _

, 20 , by , (each a "Guarantor").
In consideration of, and as an inducement to, the execution of that certain Area Development
Agreement (the "Area Development Agreement") by and between Club Pilates Franchise, LLC (the
"Franchisor"), and ("Developer"), each ofthe undersigned (each, a "Guarantor")
hereby personally and unconditionally (a) guarantees to Franchisor, and its successor and assigns, for the
term of the Area Development Agreement and as provided in the Area Development Agreement, that
Developer shall punctually pay and perform each and every undertaking, agreement and covenant set
forth in the Area Development Agreement; and (b) agrees to be personally bound by, and personally
liable for the breach of, each and every obligation of Developer under the the Area Development
Agreement, both monetary obligations and non-monetary in nature, including without limitation, those
obligations related to: confidentiality and non-disclosure; indemnification; the Proprietary Marks; the in-
term and post-term covenants against competition, as well as all other restrictive covenants; and the
governing law, venue, attorneys' fees and other dispute resolution provisions set forth in the Area
Development Agreement (that shall also apply to this Guaranty and Assumption of Obligations).
Each Guarantor hereby waives: (1) acceptance and notice of acceptance by Franchisor of the
foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any
obligations guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or
nonperformance ofany obligations guaranteed; (4) any right Guarantor may have to require that an acdon
be brought against Developer or any other person as a condition of liability; and (5) the defense of the
statute of limitations in any action hereunder or for the collection of any indebtedness or the performance
ofany obligation hereby guaranteed.
Each Guarantor hereby consents and agrees that: (1) such Guarantor's undertaking shall be direct,
immediate and independent of the liability of, and shall be joint and several with, Developer and any
other Guarantors; (2) Guarantor shall render any payment or performance required under the Area
Development Agreement upon demand if Developer fails or refuses punctually to do so; (3) Guarantor's
liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against
Developer or any other person; (4) Guarantor's liability shall not be diminished, relieved or otherwise
affected by any extension oftime,credit or other indulgence which Franchisor may grant to Developer or
to any other person, including the acceptance of any partial payment or performance, or the compromise
or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be
continuing and irrevocable during the term of the Area Development Agreement; (5) this undertaking will
continue unchanged by the occuirence of any bankruptcy with respect to Developer or any assignee or
successor of Developer or by any abandonment of the Area Development Agreement by a trustee of
Developer; (6) neither the Guarantor's obligations to make payment or render performance in accordance
with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed,
released or limited in any manner whatsoever by any impairment, modification, change, release or
limitation of the liability of Developer or its estate in bankruptcy or of any remedy for enforcement,
resulting from the operation ofany present or future provision ofthe U.S. Bankruptcy Act or other statute,
or from the decision of any court or agency; (7) Franchisor may proceed against Guarantor and Developer
jointly and severally, or Franchisor may, at its option, proceed against Guarantor, without having
commenced any action, or having obtained any judgment against Developer; and (8) Guarantor shall pay
all reasonable attorneys' fees and all costs and other expenses incurred, in any collection or attempt to
030442017 Club Pilates Franchise, LLC

3W42017 Development Agreement - Exhibits
collect amounts due pursuant to this undertaking or any negotiations relative to the obligations hereby
guaranteed or in enforcing this undertaking against Guarantor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Guaranty on the
date stated on the first page hereof.
PERSONAL GUARANTORS
[Insert Name of Guarantor] [Insert Name of Spouse]
€00442017 Club Pilates Franchise, LLC

2W420I7 Development Agreement - Exhibits
EXHIBIT A TO THE AREA DEVELOPMENT AGREEMENT
DEVELOPMENT AREA
The development rights and obligations of Developer, , to timely
develop and open CLUB PILATES Studios shall be within the following described area:
DEVELOPER FRANCHISOR
By: By:
Shaun Grove, President
Name:
Title:

30442017 Development Agreement - Exhibits
EXHIBIT B TO AREA DEVELOPMENT AGREEMENT
DEVELOPMENT SCHEDULE
1. Development Schedule
Developer, agrees to timely open CLUB PILATES Studios in

compliance with the following development schedule (the "Development Schedule"). Developer further
agrees that failure to timely open the Studios in compliance with the Development Schedule shall cause
the rights of exclusivity granted to Developer regarding the geographic area defined in Exhibit A to be
forfeited.
The Development Schedule is as follows:
Expiration of Development Number of New Unit Franchises that Number of Unit Franchises
Period Must be Opened and Commence that Must be Open and
Operations Within Development Operating by the Expiration of
Period the Development Period
2. Forfeiture of Rights of Exclusivity
Developer's failure to comply with the Development Schedule in any manner shall be grounds for
Franchisor to (a) terminate the Development Agreement to which this Development Schedule is attached
as an Exhibit, or (b) in lieu of such termination, terminate any exclusive or other territorial rights that
Developer may have within the Development Area or otherwise under the Development Agreement.
APPROVED:
By: By:
Name:
Title:
©3OW2017 Club Pilates Franchise, LLC

EXHIBIT C TO AREA DEVELOPMENT AGREEMENT
FRANCHISE AGREEMENT

EXHIBIT D TO AREA DEVELOPMENT AGREEMENT
STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS
A. The following is a list of shareholders, partners, members or other investors in Developer,

including all investors who own or hold a direct or indirect interest in Developer, and a
description of the nature of their interest:
Name Percentage of Ownership/Nature of Interest
B. The following is a list of all of Principals described in and designated pursuant to this Area
Development Agreement, each of whom shall execute the Confidentiality Agreement and
Ancillary Covenants Not to Compete substantially in the form set forth in Exhibit E of this Area
Development Agreement:
By: By:
Name:
Title:

ExmBITETOAREADEVELOPMENT AGREEMENT
GONEIDENTIAEITY AGREEMENT AND

ANGIEEARYGOVENANTSNOTTOCOMPETE
This Agreement is made and enured mtothis day of , 20 , between CLUB

ELATES F R A N C H I ^ LLC, a Delaware limited liability company ^Franebisor^
^("Developersand ("Covenantors
RECITALS
WHElÂS, Erancbisorbas obtained tbe rigbt to developanniqne system (tbe "Systems for tbe
development and operation of CLUB ElLATESStndiosnnder tbe name and marks CLUB PILATES
("Stndios'ând
WHEREAS, tbeSystem inclndes,bntisnot limited to, certain tradenames, servicemarks,

trademarks, logos, emblems and indicia of origin, inclnding, bnt not limited to, tbe marks CLUB
ELATES and otber trade names, service marks, trademarks, logos, insignia, slogans, emblems, designs
and conmêrcial symbols as Erancbisor may develop in tbe future to identify for tbe public tbe sonre^
services and products marketed under tbe marks and under tbe System and representing tbe System'sbigb
standards of quality, appearance, service and all infbrmation relating to tbe System and to tbe
development and operation of tbe Studio, including, without limitation, the operating manual,
Erancbisor'straining program, members and supplier lists, or other information or k n o w b o w d i s t ^
toaCLUBPfLATESStudioâllof which Eranchisor may change, improve and further develop and
which Eranchisor uses in connection with the operation of the System (collectively, the "Confidential
Informations and
WHEREAS, the Proprietary Marks and Confidential Information provide economic advantages to
Eranchisorandarenotgenerally knownto, andarenotreadilyascertainableby proper means by,
Pranchisor's competitors who could obtain economic value from knowledge and use ofthe Confidential
Information; and
WHEREAS,Pranchisorhas taken and intends totake allreasonable steps tomaintain the

confidentiality and secrecy ofthe Confidential Information; and
WHEREAS,Erancbisorbas granted Developer the limited right to developaCLUB PILATES

Studio using the System, the Proprietary Marks and the Confidential Information, pursuant to an
DevelopmentAgreement entered into on ,20 ("Area Development
Agreement"), by and between Prancbisor and Developer; and
WHEREAS, Pranchisor and Developer have agreed in the Area Development Agreement on tbe
importance toPranchisor and to Developer and other licensed users of the System of restricting the use,
access and dissemination ofthe Confidential Information; and
WHEIÂS, it is necessary for certain employees, agents,independentcontractors,officers,

directors and equity interest holders ofDeveloper, or any entity having an interest in Developer
("Covenantor")to have access toand to use someof all of the Confidential Information in the
managementand operation ofDevelopeBsCLUB PILATES Studiousingthe System; and
WHEREAS, Developer has agreed to obtain from those covenantors written agreements
protecting the Confidential Information and the System against unfair competition; and
© 3 ^ 2 0 1 7 ^ 1 ^ Pilate F r a n c h i ^ , ^
Development Agreement Exhibit
WHEREAS, Covenant wishestorem^
Developerand
WHEREAS, Covenantor wishes and needs toreceiveand use the Confidential Info
course ofhis employment or association in order to efieetively perform dê services for Dev^^^
WHEREAS, Covenantoracknowledges that receiptor and theright tonse the Confidential

Information constitutes independent vafuahle consideration for the representations, promises and
covenants made hy Covenantor.
NOW,THEREEORE,inconsiderationofthemutualcovenantand obligations contained in this

Agreement, the parties agree as follows:
Confidentiality Agreement
I Franchisor andôr Developer shall disclose to Covenantor some or all of the Confidential
Informationrelatingto the System. All information and materials, including, without limitation, manuals,
drawings, specifications, techniques and compilations of data which Franchisor provides to Developer
andôr Covenantor are deemed Confidential Information forthe purposes ofthis Agreement
2. Covenantor shall receive the Confidential Infbrmationinconfidenceandmust, at all

times, maintain them in confidence, and use them only in the course of his employment or association
withaDeveloper and then onlyinconnection with the devefopmentandôr operation hy Developer ofa
CEDB FILATES Studio for so long as Developer is licensed hy Franchisor to use the System.
3. Covenantor shall not at any time make copies of any documents or compilations
containmg some or all ofthe Confidential Information w i ^
4. Covenantor shall not at any time disclose or permit the disclosure of the Confidential
Information except to other employees ofDeveloper and only to the limited extent necessary to train or
assist otheremployeesofDeveloperin the development or operation ofaCEUB FILATES Studio
^ Covenantor must surrender any material containing some or all of the Confidential
Information to Developer or Franchisor, upon request, or upon termination of employment byDeveloper,
oruponconclusion of theuse for which the information or material may have beenfumished to
Covenantor.
^. Covenantor shall not at any time, direcdy or indirectly, do any act that would or would
likely be usurious or prûdicial to the goodwill associated with the Confidential Information and
System.
7. Franchisor loans all manuals to Developer for limited purposes only and they remain the
property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written
consent.
CovenantsNottoCompete
I. In ordertoprotectthegoodwid and unique qualities ofthe System and the confidentiality

and value of the Confidential Information during the term of this Agreement, andinconsiderationfo^
disclosure to Covenantor of the Confidential Information,Covenantor further agrees and covenants as
follows:
©30+42017 Club Pilates Franchise, LLC

30+42017 Development Agreement - Exhibits
a Not to divert, or a ^ m p t t o d i v ^ d ^
opportumty,or customer of tho Studios to any competitor;
h. Not to employ, or seek to employ, any person who is at the time or was within
the preceding one hundred eighty ( t o d a y s employed hy Franchisor, its affiliate or any Developer of
Franchisor,or otherwise directly or indirectly induce such person toleave that person's employment
except as may occur in connection with Developer's employment ofthat person ifpermitted under the
Area Development Agreement; and
c. Except with respect toStudiosoperatedunderavahdandexisting Franchise

Agreement between Developer(orDeveloper'saffiliates)and Franchisor, own, maintain, operate, engage
in, or have any financial or beneficial interest in (including any interest in corporations, partners
trusts, lin^tedliabihty companies, unincorporated associations orjoint ventures), advise, assi^^
loans to, any Competing Business (as defined below) orabusiness tbat is ofacharacter and concept
similar toaCEUBFIEATFS Studio. Forpurposes of this Agreement,a"Competing Business" Is defined
as any business that (I)derives at teast ten percent (10^) of its revenue fiom sales generated from the
provision of any Filates instruction or other Approved Services and Approved Products that are offered at
aCEUBFIEATFS Studio, or (2) grants franchises or hcenses to others to operate the type ofbusiness
described in subpart ( f ) o f this Section.
2. fn further consideration for the disclosure to Covenantor of the Confidential fnfo^nation

and to protect tbe uniqueness of the System,Covenantor agrees and covenants that for two (2) years
following dêearher of the expiration,termination or transfer of allDeveloper's interest int^^
Development Agreement or the termination of his association with or employment by Developer,
Covenantorwill not withoutthepriorwritten consent ofFranchisor:
a Divert or attempt to divert, directly or indirectly, any business, business

opportunity or customer of the Studios to any competitor;
b. Empfoy,or seek to employ, any person who is at the time or was withinthe
preceding one hundred eighty (fÔ) days employed by Franchisor,its affiliate or any franchisee of
franchisor, orotherwise directly orindirecdy induce such persons to leave that person's employment; and
c. Except with respect to Studios operated under Franchise Agreements between

Developer and its affiliates,and Franchisor or its affiliate or any
operate, engage in, or have any financial or beneficial interest in (including any interestincorporations,
partnerships,trusts,hmited liability companies, unincorporated associations or joint vent^re^^
assist or make foans to, any Competing Business orabusiness that is ofacbaracter and concept similar to
aCEUBFfEATES Studio (i) within the Development Area granted to Developer; or (ii)withinafbrty
(4^) mile radius of the perimeter of the Development Area being granted to Developer or any other
designated territory or development area ficensed by Franchisor toaCEUBFfEATES Studio as of the
date ofexpiration, termination or transfer ofall Developer's interest in the Area Development Agreement
or the termination of Covenantor'sassociation with or employment by Developer.
Miscellaneous
f. Developer shall make ad commercially reasonable efforts to ensure that Covenantor acts
as required by this Agreement.
2. Covenantoragreesthatintheeventofabreach ofthis Agreement, Franchisor would be

irreparably injured and be without an adequate remedy at taw. Therefore, in the event ofabreacb, or
©3^^7CI^Î^F^^,LLC
3044^7 D e ^ p m ^ A ^ m ^ E x b ^
threatened or tempted breach of anyo^
this Agreement and is endded,maddidootoao^
ineinding the right to terminate the Area Development Agreement,toatemporaryan^
injunction andadeeree for the specific performance of the terms of this Agreement, widiout
ofshowingactnai or threatened harm and without heingrequiredto fnrnishahond or other security.
3. Covenantor agrees to pay ali expenses (including court costs and reasonable attorneys'
feesîncurred by Franchisor and Developer in enforcing tbis Agreement.
4. Any failure by Franchisor to object to or take action with respect to any breach of this
Agreement by Covenantor shall not operate or be construed asawaiver of or consent to that breach or
any subsequent breach by Covenantor.
^ THfS AGREEMENT SHALE BE GOVERNED BV AND CONSTRUED AND

ENFORCED f N ACCORDANCE WfTH THE LAWS OF THE STATE OF INSERT STATE WHERE
THE STUBIG IS LOCATED^ AND COVENANTOR HEREBY fRREVOCABEV SUBMITS
HIMSELF TO THE lURfSDICTfON OF THE STATE COURT CLOSEST TO FRANCHISOR'S
THENCURÊNTHEADÛARTERSOR,IFAFFROFRIATE,THEUNITED STATES DISTRICT
COURT FORTHE DISTRICT FOR [INSERT STATE WHERE THE STUDIO IS LOCATED]
COVENANTORHEREBVWAIVESALLÛESTIONSOFFERSONALÛRISDICTION OR VENUE
FORTHEFURFOSEOFCARRVINGOUTTHIS PROVISION COVENANTOR HEREBY AGREES
THAT SERVICE OF PROCESS M A Y B E MADE UFON HIM IN ANY PROCEEDING RELATING
TO OR ARISING UNDER THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS
AGREEMENT BY ANY MEANS ALLOWED BY [INSERT STATE WHERE THE STUDIO IS
LOCATEDIOR FEDERAL LAW COVENANTOR FURTHER AGREES THAT VENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE ONE OF
THE COURTS DESCRIBED ABOVE IN THIS SECTION; PROVIDED, HOWEVER, WITH
RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER
EXTRAORDINARY RELIEF,FRANCHISORMAYBRING SUCH ACTION IN ANY COURT IN
ANY STATEWHICHHAS JURISDICTION
^. The parties acknowledge and agree that each o f t h e covenants contained in this
Agreement are reasonable limitations as to time, geographical area, and scope of activity to be restrained
and do not imposeagreater restraint than is necessary to protect the goodwill or other business interests
ofFranchisor The parties agree tbat each ofthe foregoing covenants shall be construed as independent of
any other covenant or provision of this Agreement. If all or any portion ofacovenant in this Agreement
is held unreasonable or unenforceable byacourt or agency having valid jurisdiction in any unappealed
finaldecisionto which Franchisor isapart,Covenantor expressly agrees tobeboundbyany lesser
covenant subsumed within tbe terms ofthe covenant that imposes the maximum duty permitted by law as
if the resulting covenantwere separately stated in andmadeapart ofthis Agreement.
7. This Agreement contains the entire agreement of the partiesregardingthe subject matter
of this Agreement. This Agreement may be modified only byaduly authorized writing executed by all
parties.
8. All notices and demands required to be given must beinwriting and sent by personal
delivery,expediteddelive^y service, certified or registered mail, retumreceiptrequested, firstclass
postage prepaid, facsimile or electronic mail, (provided that the sender confirms the facsimile or
electronic mail, by sending an original confirmation copy by certified or registered mail or expedited
delivery service withinthree(^business days after transmission), totbe respective partiesat the
17 Club Pilates Franchise, LLC

2W420I7 Development Agreement - Exhibits
following addresses unless and until a different address has been designated by written notice to the other
parties.
If directed to Franchisor, the notice shall be addressed to

Attn: Shaun Grove
3185 Pullman Street
Costa Mesa, California 92626
If directed to Developer, the notice shall be addressed to:
Attention:
If directed to Covenantor, the notice shall be addressed to:
Attention:
Any notices sent by personal delivery shall be deemed given upon receipt. Any notices given by
facsimile or electronic mail shall be deemed given upon transmission, provided confmnation is made as
provided above. Any nodce sent by expedited delivery service or registered or certified mail shall be
deemed given three (3) business days after the time of mailing. Any change in the foregoing addresses
shall be effected by giving fifteen (15) days written notice of such change to the other parties. Business
day for the purpose of this Agreement excludes Saturday, Sunday and the following national holidays:
New Year's Day, Martin Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving and Christmas.
9. The rights and remedies of Franchisor under this Agreement are fully assignable and
transferable and inure to the benefit of its respective parent, successor and assigns. The respective
obligations of Developer and Covenantor hereunder may not be assigned by Developer or Covenantor
without the prior written consent of Franchisor.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as witnessed by their
signatures below.
CLUB PILATES FRANCHISE, LLC (If Developer is a corporation)
Name of Corporation
By: By: _
Title: Title:

(If Developer is an individual owner,
COVENANTOR: Developer must sign below; if a partnership,
all partners must sign
below)
Printed Name:
Developer
Developer
Developer
Developer
(IfDeveloper is a Limited Liability Company)
Name of Limited Liability Company
By: _
Title:
©2W420I7 Club Pilates Franchise, LLC

3W42017 Development Agreement - Exhibits
Exhibit K
RECEIPTS
ITEM 23
RECEIPT
This Disclosure Document summarizes provisions of the franchise agreement and other information in plain
language. Read this Disclosure Document and all agreements carefully.
If Club Pilates Franchise, LLC offers you a franchise, it must provide this Disclosure Document to you 14 calendar
days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection
with the proposed franchise sale.
New York, Oklahoma and Rhode Island require that we give you this Disclosure Document at the earlier of the
first personal meeting or 10 business days before the execution ofthe franchise agreement, or other agreement,
or the payment of any consideration that relates to the franchise relationship.
Michigan, Oregon and Wisconsin require that we give you this Disclosure Document at least 10 business days
before the execution of any binding franchise agreement, or other agreement, or the payment of any
consideration, whichever comes first.
If Club Pilates Franchise, LLC does not deliver this Disclosure Document on time or if it contains a false or
misleading statement, or a material omission, a violation of federal and state law may have occurred and should
be reported to The Federal Trade Commission, Washington D.C. 20580 and the appropriate State Agency
identified on Exhibit B.
The franchisor is Club Pilates Franchise, LLC located at 3185 Pullman Street, Costa Mesa, CA 92626. The name,
principal business address, and telephone number of each Franchise Seller offering the Franchise are: Anthony
Geisler and Shaun Grove. 3185 Pullman Street, Costa Mesa, CA 92626, (949) 346-9794; Lance Freeman. St.
Gregory Development Group, LLC, 7720 Montgomery Rd., Suite 200, Cincinnati, OH 45236, (513) 264-6940.
| Issuance Date: April 20, 201627, 2017. The effective date in each state is listed on the State Cover Page. Club
Pilates Franchise, LLC authorizes the agents listed in Exhibit B to receive service of process for it.
I have received a Franchise Disclosure Document dated April 20, 201627, 2017. This Disclosure Document
included the following Exhibits:
E. TABLE OF CONTENTS OF THE OPERATIONS MANUAL
F. GENERAL RELEASE OF ALL CLAIMS
G. STATE-SPECIFIC ADDENDA
I. LIST OF FRANCHISEES WHO CEASED TO DO BUSINESS UNDER THE FRANCHISE AGREEMENT
J. MULTI-UNIT DEVELOPMENT AGREEMENT
K. RECEIPTS
(Print Name) (Signature)
Date
Keep this copy for your records.

ITEM 23
RECEIPT
New York, Oklahoma and Rhode Island require that we give you this Disclosure Document at the earlier ofthe
first personal meeting or 10 business days before the execution of the franchise agreement, or other agreement,
Geisler and Shaun Grove. 3185 Pullman Street, Costa Mesa, CA 92626, (949) 346-9794; Lance Freeman, St.
Issuance Date: April 20, 201627, 2017. The effective date in each state is listed on the State Cover Page. Club
Pilates Franchise, LLC authorizes the agents listed in Exhibit B to receive service of process for it.
I have received a Franchise Disclosure Document dated April 20, 201627, 2017. This Disclosure Document
included the following Exhibits:
K. RECEIPTS
Date
Please sign this copy of the receipt, date your signature, and return this form to us as described in Item 23.
©3Oi42017 Club Pilates Franchise, LLC

III
4/2%/^/^
(A FisherZucker
RECE/VED
BUSINESS LAWYERS
May 4,2017
W 0 5 2017
ViaUPSOvernizht
Mr. Daniel Sexton
,h
85 7 PI E, Suite 500
MAILROOM
Lane Fisher* St. Paul, MN 55101-2198
Jeffrey Zucker*
Re: Club Pilates Franchise, LLC: File No. 7774: 2017 Pre-Effecrive
F. Joseph Dunn*
Amendment Filing
David ]. Allsman*
Dear Mr. Sexton:
FrankA-Reino*
William Graefe, Jr.* As you know, this office represents Club Pilates Franchise, LLC (the "Franchisor"). I
Priya Vimalassery*
am writing to follow up on Franchisor's 2017 renewal application dated April 27. 20 i 7 that
was timely submitted to your office. Since that time, certain actions have taken place that
Max Staplin* required Franchisor to amend its 2017 FDD.
larina Duffy*
Accordingly, enclosed please find the following materials comprising Franchisor's
Eli Bensignor*
pre-effective amendment with respect to the original 2017 FDD we submitted with
Minerva Pinto* Franchisor's 2017 renewal application:
•member PA and N) bars
+rnemberPA.NIandWIbars
1. Uniform Franchise Registration Application (for a pre-effective amendment);
2. Certification Page;
3. Accountant's Consent form with respect to 2016 audit (which Franchisor may
have inadvertently left out of its renewal application package);
4. Two (2) hard copies of Franchisor's amended 2017 FDD (one clean and one
red-lined against the Company's original 2017 FDD previously submitted) for
use in the State of Minnesota; and
5. One CD-ROM containing the materials above, including two (2) copies ofthe
amended FDD (one clean and one red-lined) in pdf format. The Company
represents and warrants that the information contained on this CD-ROM is
identical to the hard copies enclosed herewith.
Please call me if you have any questions regarding this amendment or Franchisor's
application generally. I look forward to receiving notification of your acceptance.
Very truly yours,

21 S. 21st Street
Philadelphia, PA 19103 FISHER ZUCKER LLC
P: 215.825.3100
F: 215.825.3101
811 Church Road

Suite 105 Willia
Cherry HilL N) 08002
www.fisherzucker.com
P: 856.665.5253
F: 856.488.2108 A limited liability company formed in the Commonwealth
UNIFORM FRANCHISE REGISTRATION APPLICATION
File No. 7774

(Insert file number of immediately
preceding filing of Applicant)
State: State of Minnesota Fee: $0
APPLICATION FOR (Check only one):
INITIAL REGISTRATION OF AN OFFER AND SALE OF FRANCHISES
RENEWAL APPLICATION OR ANNUAL REPORT
X PRE-EFFECTIVE AMENDMENT
POST-EFFECTIVE MATERIAL AMENDMENT
1. Full legal name ofFranchisor: Club Pilates Franchise, LLC
2. Name of the franchise offering: Club Pilates
3. Franchisor's principal business address:
3185 Pullman Street

4. Name and address of Franchisor's agent in this State authorized to receive service
of process:

th
85 7 Place East, Suite 500
St. Paul, MN 55101-2198
5. The states in which this application is or will be shortly on file:
California, Florida, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota,

Nebraska, New York, North Dakota, Rhode Island, South Dakota, Texas, Utah,
Virginia, Washington, and Wisconsin.
Form A (cont'd) - Uniform Franchise Registration Application Page 2
6. Name, address, telephone and facsimile numbers, and e-mail address of person to
whom communications regarding this application should be directed:
Lane Fisher, Esq.

Fisher Zucker, LLC
21 South 21=' Street
Telephone: (215)825-3100
Facsimile No: (215) 825-3101
Email: 1 fisher^ fisherzucker.com; bgraefe@fishei zucker.com
We respectfully request that all correspondence be submitted via mail and email.
Certification
I certify and swear under penalty of law that I have read and know the contents of this application, J
including the Franchise Disclosure Document with an issuance date of ^ f V v l Z,?^ 261? j ow^wt^y
3 ^ TJb\^\ , attached as an exhibit, and that all material facts stated in all those
documents are accurate and those documents do not contain any material omissions. I further
certify that I am duly authorized to make this certification on behalf of the Franchisor and that I do
so upon my personal knowledge.
Signed at C^^KJ Mts* , CA Mty 3 o

2
Franchisor:
CLUB P CHISE, LLC
Name: Shaun Grove
Title: President
CERTIFICATION PAGE
I certify under penalty of law that I have read this application and the exhibits attached hereto and
incorporated herein by reference, and know the contents thereof and that the statements therein are true
and correct.
Executed on .,20 IT"
CLUB PILATES F SE, LLC
ST, OF
COUNTY O
Personally appearechb^fore me this day of , 20 , the above-named, Shaun

Grove, to me known to be the pbrsgn who executed the foregoing application (as President the above-
named applicant) and being first dul^sôm, stated upon oath that said application, and all exhibits
submitted herewith, are true and correct.
(Notary's Seal)
Notary^,
A nowy p M c or oihitr cffov wmpfcting cwfificttt Mftfto o A r j t a ' . . '

Uvtfity of t » WhriduH who Hgrmii tta documbni to w W * W i o w t i f l e » ^
•ttoctwd. end not tha truMutrwu. Kcuraey. or vtfldttjr of tWdoeumom..
State of CaWbmia, County of _ wmL q?

Subscribed and sworn to (or affirmed) before me on this.
/VM 2J>l9 ** ^/Ma>) . ££i>v£
proved to.me on the basis or evidence to be the
pefsontsjwhb
.(seal)
JUDI LOWENTHAL j
COMM. # 2095215
NOTARY PUBLIC-CALIFORNIA W
COUHTT OF ORAKOE —
MTCQMM, S^. JAN, 26,30161
1
Ki
c :- •n I -1 R r.- ••• >:• s 1.1 c *\ C c o u H T t ••; T :•.
12526 High Bluff Drive. Suite 300. San Diego, CA 92130 • Direct 858.623.2786 • Fax 858.408.2457
www.ortegacpa.net
CONSENT
Ortega & Konrad, LLP consents to the use in the Franchise Disclosure Document issued by Club
Pilates Franchise, LLC ("Franchisor") on A p r i l 27 ,2017, as it may be amended, of our report dated
March 1, 2017, relating to the financial statements ofFranchisor for the year ending December 31,2016.
<5ô f frrnuuC, LLT

FRANCHISE DISCLOSURE DOCUMENT
Club Pilates Franchise, LLC,
a Delaware fe.'k-^d liability company
3185 Pullman Street
(949) 346-9794
sales@clubpilates.com
www.clubpilates.com
Club Pilates Franchise, LLC ("we," "us/' or "our") offers for sale a franchise to establish and operate
a fitness studio that provides Pilates and other exercise classes under the "CLUB PILATES" marks ("CLUB
PILATES Studio" or "Studio").
The total estimated investment necessary to begin operations of a CLUB PILATES Studio franchise
ranges from $180,595 to $249,295. This amount includes $143,995 to $156,295 that must be paid to the
franchisor or its affiliate prior to opening.
The total investment necessary to operate multiple CLUB PILATES Studios under our form of area
development agreement depends on the number of franchises we grant you the right to open. The total
investment necessary to enter into a development agreement for the right to develop three (3) CLUB PILATES
Studios is $256,095 to $324,795 which includes (a) $219,495 to $231,795 that is paid to us or our affiliates
prior to opening, and (b) the total estimated initial investment to begin operation ofyour initial CLUB PILATES
Studio.
This Disclosure Document summarizes certain provisions of your Franchise Agreement and other
information in plain English. Read the disclosure document and all accompanying agreements carefully. You
must receive this disclosure document at least 14 calendar days before you sign a binding agreement with,
or make any payments to the Franchisor or an affiliate in connection with the proposed franchise sale. Note,
however, that no government agency has verified the information contained in this document.
You may wish to receive your Disclosure Document in another format that is more convenient for
you. To discuss the availability of disclosures in different formats, contact Shaun Grove at Club Pilates
Franchise, LLC, 3185 Pullman Street, Costa Mesa, CA 92626, and at (949) 346-9794.
The terms of your contract will govern your franchise relationship. Don't rely on the disclosure
document alone to understand your contract. Read all of your contract carefully. Show your contract and this
disclosure document to an advisor, like a lawyer or accountant.
Buying a franchise is a complex investment. The information in this disclosure document can help you
make up your mind. Information about comparisons of franchisors is available. More information on
franchising, such as "A Consumer's Guide to Buying a Franchise." which can help you understand how to use
this Disclosure Document, is available from the Federal Trade Commission. You can contact the FTC at 1-877-
FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit
the FTC's home page at www.ftc.fiov for additional information. There may also be laws on franchising in your
state. Call your state agency listed on Exhibit B or visit your public library for other sources of information on
franchising.
THE ISSUANCE DATE OF THIS DISCLOSURE DOCUMENT IS: APRIL 27, 2017,. AS AMENDED MAY 3. 2017.

STATE COVER PAGE
Your state may have a franchise law that requires a franchisor to register or file with a state franchise
administrator before offering or selling in your state. REGISTRATION OF THIS FRANCHISE WITH A STATE
DOES NOT MEAN THAT THE STATE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION IN THIS
DISCLOSURE DOCUMENT.
Call the state franchise administrator listed on Exhibit B for information about the franchisor, or
about franchising in your state. If you learn that anything in this disclosure document is untrue, contact the
Federal Trade Commission and the state administrators listed on Exhibit B.
MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE
INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND
CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT
RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT
IN ORDER TO RENEW.
Please consider the following RISK FACTORS before you buy this franchise:
1. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT CONTAIN A MANDATORY

BINDING ARBITRATION CLAUSE GOVERNING NEARLY ALL DISPUTES BETWEEN YOU AND US. THE
BINDING ARBITRATION (AND ANY LITIGATION) AND ANY ARBITRATION APPEAL WILL TAKE PLACE
IN THE COUNTY IN WHICH OUR THEN-CURRENT HEADQUARTERS IS LOCATED, CURRENTLY,
COSTA MESA, CALIFORNIA, AND THAT MAY COST YOU MORE (AND BE LESS CONVENIENT) THAN
IF THOSE PROCEEDINGS TOOK PLACE NEAR YOUR RESIDENCE OR BUSINESS. COSTS OF THE
ARBITRATION AND ANY ARBITRATION APPEAL MAY BE GREATER THAN IN LITIGATION. YOU AND
WE WILL GENERALLY BEAR EACH OF OUR OWN COSTS IN ANY DISPUTE, BUT THE ARBITRATOR
CAN ASSESS COSTS (BUT NOT ATTORNEY'S FEES) AGAINST A LOSING PARTY.
2. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT PROVIDE THAT THE LAWS OF
THE STATE OF CALIFORNIA GOVERN THE AGREEMENTS AND THAT LAW MAY NOT PROVIDE YOU
WITH THE SAME RIGHTS AND PROTECTIONS AS YOUR LOCAL LAW. YOU MAY WANT TO CONSULT
AN ATTORNEY REGARDING COMPARISON OF THESE LAWS.
3. IF YOU ARE AN INDIVIDUAL, YOUR SPOUSE MUST SIGN A PERSONAL GUARANTY. IF THE
FRANCHISEE IS A BUSINESS ENTITY, EACH OF THE ENTITY'S OWNERS, PARTNERS, MEMBERS,
OFFICERS, DIRECTORS, TRUSTEES AND BENEFICIARIES (AS APPLICABLE), AS WELL AS THEIR
RESPECTIVE SPOUSES, MUST SIGN A PERSONAL GUARANTY. THOSE WHO SIGN A PERSONAL
GUARANTY WILL BE JOINTLY AND SEVERALLY LIABLE FOR ALL DEBTS AND OBLIGATIONS OF THE
FRANCHISEE WHETHER OR NOT THEY ARE INVOLVED IN THE OPERATION OF THE FRANCHISE
BUSINESS. THESE INDIVIDUALS WILL ALSO HAVE THEIR PERSONAL ASSETS AT RISK.
4. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
We use the services of one or more FRANCHISE BROKERS or referral sources to assist us in selling our franchise.
A franchise broker or referral source represents us, not vou. We pay this person a fee for selling our franchise
or referring vou to us. You should moke sure to do vour own investiaotion ofthe fronchise.
Effective Date: See the next page for state effective dates.

STATE EFFECTIVE DATES
The following states require that the Franchise Disclosure Documents be registered or filed with the state
or be exempt from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New
York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.
This Franchise Disclosure Document is registered, on file or exempt from registration in the following
states having franchise registration and disclosure laws, with the following effective dates:
STATE EFFECTIVE DATE
CALIFORNIA Pending Registration
FLORIDA Effective
HAWAII Pending Registration
ILLINOIS April 28, 2017Prior Version of FDD Effective
INDIANA Effective
KENTUCKY Not Registered
MARYLAND Pending Registration
MICHIGAN Effective
MINNESOTA Pending Registration
NEBRASKA Effective
NEW YORK Pending Registration
NORTH DAKOTA Pending Registration
RHODE ISLAND Pending Registration
SOUTH DAKOTA Pending Registration
TEXAS Effective
UTAH Effective
VIRGINIA Pending Registration
WASHINGTON Pending Registration
WISCONSIN Effective

TABLE OF CONTENTS
PAGE
ITEM 1 THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES 1
ITEM 2 BUSINESS EXPERIENCE 4
ITEM 3 LITIGATION 6
ITEM 4 BANKRUPTCY 6
ITEM 5 INITIAL FEES 6
ITEM 6 OTHER FEES 8
ITEM 7 ESTIMATED INITIAL INVESTMENT 13
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES 19
ITEM 9 FRANCHISEE'S OBLIGATIONS 22
ITEM 10 FINANCING 24
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING 24
ITEM 12 TERRITORY 36
ITEM 13 TRADEMARKS 39
ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION 42
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS .... 43
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL 43
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION 44
ITEM 18 PUBLIC FIGURES 54
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS 54
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION 62
ITEM 21 FINANCIAL STATEMENTS 67
ITEM 22 CONTRACTS 67
ITEM 23 RECEIPTS 67
Exhibits

E. TABLE OF CONTENTS OF MANUAL
F. FORM OF GENERAL RELEASE
G. STATE SPECIFIC ADDENDA
I. LIST OF FRANCHISEE WHO CEASED TO DO BUSINESS UNDER THE FRANCHISE AGREEMENT
J. DEVELOPMENT AGREEMENT
K. RECEIPTS

ITEM 1 THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language, this disclosure document uses "we," "us," "our," "Franchisor" or "Club Pilates"
to mean Club Pilates Franchise, LLC, the franchisor. "You" means the person, corporation, partnership or other
entity that buys the franchise. Terms not defined in this Disclosure Document (including various capitalized
terms) are defined in the Franchise Agreement attached as Exhibit A to this Disclosure Document (the "Franchise
Agreement").
Franchisor
We do business under the name Club Pilates Franchise, LLC, or in some cases, simply as "Club Pilates."
We do not do business under any other name. Our principal business address is 3185 Pullman Street, Costa
Mesa, CA 92626, and our business phone number is (949) 346-9794. We are a Delaware limited liability company
formed on March 12, 2015.
Except as provided in this Item, we do not offer franchises in any other line of business and we are not
otherwise involved in any substantive business activity.
Acquisition, Prodoi AffiliatosTransactions, Related Entities and Other Information
On March 12, 2015, we completed a transaction under which we acquired all rights, title and interest in
and to the CLUB PILATES franchise system and marks from our predecessor, Club Pilates Global, LLC ("CP
Global"). Please see additional disclosures regarding CP Global below. As part of that same transaction, we also
obtained the ownership rights to five (5) CLUB PILATES Studios that were open and operating in and around San
Diego, California from our affiliate Club Pilates, LLC ("CP"). CP Global and CP's principal business address is the
same as ours. Our affiliate CP does not engage in any other business activities, and CP has never offered
franchises in any line of business. From 2007 to March, 2015, our affiliate, CP operated the five (5) non-
franchised Club Pilates Studios described above. Our predecessor CP Global offered and sold franchises for CLUB
PILATES Studios before the transaction above was completed from September 2012 through March 12, 2015,
but CP Global does not currently offer franchises in any line of business or engage in any other business activities.
On May 2, 2017, TPG Growth III Fitness, LP ("TPG Fitness") acquired membership interests in
us. Accordingly, TPG Fitness is our parent and its principal business address is c/o TPG Global, LLC, 301
Commerce Street, Suite 3300, Fort Worth, Texas 76102. In turn, TPG Fitness is owned by a series of
entities. These include the following entities controlled bv TPG Holdings II, LP: TPG Growth I Media Finance,
LP., TPG Growth III DE AIV Gen Par, LP, and TPG Growth III DE AIV Gen Par Advisors, LLC; alshare the same
address as TPG Fitness.
Through common ownership, we are an affiliate of Taco Bueno Franchise Company, L.P. ("TBFC"). TBFC's
current address is 1605 LBJ Freeway, Suite 800, Farmers Branch, Texas 75234. TBFC does not provide products
or services to our franchisees and has never operated, nor offered franchises for a similar type of business as
the Franchised Business. However, TBFC currently offers franchises for Taco Bueno" restaurants and has done
so since September 2004. As of April 30, 2017, TBFC has 41 franchised Taco Bueno® restaurants. TBFC does not
currently own anv Taco Bueno® restaurants.
Except as disclosed above, we currently have no parents, predecessors or affiliates that wo are required
to includobe disclosed in this Item.

Ag^^S^ceofôc^
Our agents for servê of process are d^losed in Exh^t 8.
The Business We Offer
We offer for saieafranchise to operateadistinctiveCLOBP^T55 Studio (eae^^

Business"), which is operated pursuant to the terms of our franchise agreement a t t a c h
Documentas5xhihitA(the "Franchise Agreement
shopping center, and this franchise offering assumes thatthe size ofatypicai Studio wiii he at ieast 1,500 square
feet in size (a 25 ft. hy 60 ft. rectangles We may,however,consider alternative sites, onacasehycasehasis.
Under the Franchise Agreement, we wiii also grant you the right to operate your Franchised Business withina
designated geographical area wherein you will also he ahle to actively promote the Franchised Business and
solicit new clientele (the "DesignatedTerritory").
if you own an existing fitness facility and meet our other qualifications, you may convert your existing
business toaCLUBPiLAT55 Studio. AconvertedStudiowiliiikelyencounteriower investment requirements
than those of astart-up Studio. 5ach Studio will offer Pilates and other exercise programs through iive
instructional group and individual classes, including, hut not limited to, Pilates Reformer exercises^ ^
usingaPilates Ballet Bar,Spring Board, 5X0 Chair,and other Pilates'apparatuses^ strength training; stret^^
exercises;ateacher training program; and any other services that we authorize (collectively, the "Approved
Services"). All classes will he paid for and scheduled online via the Internet, and taught hy highly trained
instructors who have completedaminimum of 500 hours of customized instructortraining.
The Studiosare established and operated underacomprehensivedesign that includesspacious interior,

asignificantnumberofexerciseequipmentâpparatuses,specifications, and procedures for operations; quality
customer service; management and financial control; training and assistance; and advertising and promotional
programs (collectively, the " C ^
procedures (collectively,the"System Standards") are described in our confidential operations manual(t^^
"Manual"). The CLUB PILAT5S System and the Manual may be changed, improved and further developed by us.
The Franchise Agreement is signed by us, by you, and by those of your principals whom we designate as
the principal franchiseeoperator(s) (the "Designated Operator(s)") ofyour Franchised Business.The Oes^^^
Operator(s) (there may be up to two such individuals, but only one address to which we communicate in regards
to the franchise) named has the authority to act for you in all matters relating to the Club Pilates Franchise,
includingvoting responsibilities. By signing the Franchise Agreement, you and the Designated Operato^^
to be individually bound by certain obligations in the Franchise Agreement, including covenants concerning
confidentiality and noncompetition, and to personally guaranteeyour performance under the Franchise
Agreement. Depending on the type of business activities, which must be fully disclosed prior to signing this
document, in which you oryour Designated Operator(s) may be involved, we may requireyouoryourDesignated
Operator(s)to sign additional confidentiality and noncompetition agreements.
You (or, if you are an entity, one of your Designated Operators) must at least complete the
ownerôperator module (the "OwnerÔperator Module") of our proprietary initial training program
Training Program") priortotheopeningofthe Franchised Business.
You will also need to have at least one (l)instructor^which may be your Designated Operator or
another individual^that has completed: (i) all requirements to beacertified Pilates instructor, m^^
accumulating at least 450 hours of Pilates instructs
2
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P^tes Requirements ( e a c ^ o ^ e ^
Studioinaceordanee with ourSystem standardsand specific
instructor may compete the Orientation Program at our headquarters atthe
of our initiaiTraining Program or,with our approval may compete the Orientation Pr^^
wehinar^video instruction before taking the Orientation Program test.
Piease note that our standard franchise offering assumes that at ieastoneôf your Designated
Operator(s)andôr another individual you engage to serve as the initial instructor at your Franchised Busm^
will heaCertified Pilates Instructor, and thatthis Certified Pilates instructors^
component of the InitialTraining Program.We do offer,and will permit ourfranchisees to offer,afull^^
training" course that provides hoth (a) the instruction necessary to comply with the Certified Pilates
Requirements, and (h) our Orientation Program^col^
franchiseoffering doesassumethatnoonewillneedthefullTeacherTraining Program priortoopening.^
the initial instructor and subsequent instructors at your Studio will already he Certified Pilates Ins^
that such individuals will only be required to complete our Orientation Program before they can commence
working at your Franchised Business.
Molt^nltOffermg
We also offer qualified individuals and entities the right to open and operate t h r e e ^ o r more
Franchised Businesses withinadesignated geographical area (the "DevelopmentArea") under our current for^
of development agreement that^ is attached to this Disclosure Document as 5xhibitJ(the"Oevelopment
Agreement"), which will also outlineascheduleordefined period oftimeinwhich you must open and commence
operating each Franchised Business (a "Development Schedule").
You will be required to signaFranchise Agreement forthe initial Franchised Business we grant you the
right to open within the Development Area at the same time you sign your Development Agreement, and you
will need to sign ourthen-currentformoffranchise agreement for each ofthe Franchised Businesses you open
under the Development Schedule.
You will be required to pay usaonetime development fee that will be calculated based on the number
of Franchised Businesses we grant you the right to open under the Development Agreement (the "Development
Fee"), but you will not be required to pay any other initial franchise fee atthe time you execute your franchise
agreements for each Franchised Business we permit you to open under your Development Agreement.
Marêtand Competition
The market for fitness services and studios is crowded. You will face competition for members from
other Pilates studios, gyms, personal trainers, yoga studios, fitnessêxercise centers and studios, health ciu^
barre based studios, and even other CLUB PILAT5S franchisees.
Applicable Regulations
Somestatesrequire that health^fitnessfacilities haveastaff person availableduringall hoursof

operation that is certified in basic cardiopulmonary resuscitation or other specialized medical trainm^^ Some
state orlocal laws mayalso require that health^fitness facilities have an automated external d e ^ ^
otherfirst aid equipment on the premises. Ataminimum,yourStudio will be subêctto various federal,state and
local laws, and regulations affecting the business, including laws relating to zoning, access for the disab^^
3
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b e ^ e y o o b e g m o p e ^ o ^ ^ a d d ^ o n , there may be local êosmg and e m ^ o y m e n t r ^ ^
workers compensation insurance requirements You should examine these and other laws before purchaslnga
franchise.
Y o u s h o u l d c o n s u l t w l t h y o u r a t t o r n e y , a n d local andstateagenclesâuthorlties, b e f o r e b u y l n g a
Franchise to determine If there are any specific regulations you must comply with as It relates to offering the
Studio products and services to consumers In your state, and consider the effects on you and the cost of
compliance.These requirements can affectabroad scope ofyour operations, including location selection, a
hiring of personnel, among otherthings.lt is your sole responsibility to investigate any regulations in your ar^^
including those related to the establishment and operation ofaCLU8PILAT5S Studio generally.
Wemakenorepresentations or assurances as to the specific licenses, permits,authorizationsor

otherwisethat may be required for operatingyourStudio, which can varysignificantlybyvenue and changeover
time. It is your responsibilityto investigate and ensure thatyou are in compliance with all local, state, p r o v ^ ^ ^
and federal business, retail sales, zoning, and other regulations and licensing requirements, and any app^^^^
laws and regulations, and to identify and obtain all authorizations necessaryto operate your Studio. Please be
advised that you must investigate and comply with all of these applicable laws and regulations.You alone are
responsible for complying with all applicable laws and regulations, despite any advice or information that we
may give you. We have not researched any of these laws to determine their applicability to your Franchised
Business.
IT5M2 BUSIN5SS5XP5RI5NC5
Founder: Allison Beardslev

Ms. Beardsley was the founder of Club Pilates Global, Inc. and held the positions of and President of this
entityfromJune 2012 to M a r c h e s , in OelMar,California. Since December 2007,she has been the managing
memberofouraffiliate. Club Pilates, LLC, also located in Del Mar,California.
Chlef5xecutlveOfflcer:AnthonyGelsler
Mr.GeislerhasbeenourChief5xecutiveOfficersinceourinceptioninMarch201S.Mr.GeislerwasthePres^
of LIFC GymFranchise Company from January2013 to February2014 in Santa Ana,California. Mr.Geisler
created LA Boxing Franchise Company in February 2004 and served as President until he sold his venture in
December 2012 in Santa Ana, California.
Presidents General CounsehShaun Grove

Mr.Grove has been our President and General Counsel since our inception in March 201S. Mr.Grovewasthe
General Counsel for LIFC Gym Franchise Companyfrom January 2013 toJune 2014, in Santa Ana, California. Mr.
GrovewastheGeneralCounselforLABoxingFranchiseCorporationfrom March 2009toDecember2012, in
Santa Ana, California. Mr.Grovehasownedandoperatedthree(3)LIFCGymfranchise locations in Southern
California since January 2012.
Chief Financial Officer Scott LaRose

Mr.LaRose has been our Chief Financial Officer since June 2015. Mr.LaRose was the Chief Financial Officerfor
LIFC Gym Franchise CompanyfromJanuary 2013 toJune 2015 in Santa Ana, California. Mr.LaPose was the Chief
Financial Officer for LA Boxing Franchise Corporation from January 2010 to December2012,in Santa Ana,
California.
© 2 0 1 7 O o b ^ l ^ F ^ ^ ^
2017^nê0ôêOocum^
Managed M a ^ G r a b o w ^
M^Grabow^wasoooomted 95 o n o ^ o f o o r Managed on M a v ^ 2 0 1 ^ M^Grabows^ has also beeno

Pawnor at TPG Growthôcated in NewYor^ since S 6 O ^ m b ^ 2 0 1 ^ P ^ ^
served asManagingOirectoratCatteronPa^^
in Greenwich, CT^rom January 2007 to August 2016.
Managed Scott Gilbertson
Mr.Giibertson was appointed asoneôfourManagerson May 2,2017.Mr.Giibertson has a i s o ^

at TPG Growth, based in San Francisco, Caiifornia, since 2007.
Managed Frederick Paulenich
Mr.Pauienichwasappointedasone(l)ofourManagersonMay2,2017. Mr.PauienichhasaisoheenaPartner
at TPG Growth,based in San Francisco, Caiifornia, since March 2014. Priorto joining TPG Growth,Mr.Pau^
wastheSeniorVice President ofHumanResourcesforWaim^
toMarch2014,aisobased in San Francisco, Caiifornia.
Manager^StephenStar
Mr.Star was appointed as one (1) of our Managers on May 2, 2017.Mr.Star has aiso served as Vice President
at TPG Growth, based in San Francisco, Caiifornia,since August 201S.Prior to joining TPG Growth, Mr.Starheid
the foiiowingpositions:^Graduate Associate with the Corporate Strategy and Business Oeyeiopment Group of
The Wait 0isneyCompanyfromJune2014toAugust2014, based in Burbank, Caiifornia; and (ii)Assoc^
Hiii Capital Partners from July 2010to May 2013, based in Menio Park, Caiifornia.
Vice President Real Estates Richard Feinberg

Mr.Feinberg has been our Vice President Real Estate since our inception in March 201S. Mr.Feinbergwasthe
Director of Reai Estate for UFC Gym Franchise Company from January2013toMarch201Sin Santa Ana,
Caiifornia. Mr.Feinberg was the Director of Real Estate for LA Boxing Franchise Corporation from November
2006 to December 2012, in Santa Ana, Caiifornia.
National SaiesDirector^Sarah Luna

Ms. Luna became our National Sales Director in Juiy201S. Ms.LunaisacomprehensiyelycertifiedPilates
instructor and from February 2013 to July 201S,operated2Pilates studios as EQUiNO^sPiiatesCoordina^^
Irvine, CAand Hawthorne, CA. Ms.Luna attended Chapman University in Orange, CA from 2011 to March 2013,
where she received herMBA in entrepreneurship.
DirectorofTeacherTraining: Vanessa Huffman

Ms. Huffman has been our Director ofTeacherTraining since October2015. Ms.Huffmanhasbeenan
independent Pilates instructor in Los Angeies, California area since Aprii 2003.
Vice President of Retail Sales^Rudv Flores

Mr.Fiores has been our Vice President of Retail Sales since June 2016.From January 2013 to May 2016, Mr.
Flores worked as the Product Saies Director for UFC Gym Franchise Company in Santa Ana, California. From
October 2010toJanuary 2013, Mr.Fiores worked as the ProductSaiesDirectorfor LA Boxing Franchise Company
in Santa Ana, Caiifornia.
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Vice President of Marketing: Vanessa Hobson
Ms. Hobson has been our Vice President of Marketing since January 2017. Ms. Hobson was an Account Director
for Epsilon from July 2014 to January 2017 in San Diego, California. Prior to that, she was a Senior Manager on
the 24 Hour Fitness corporate marketing team from August 2001 to 2013 at their headquarters in Carlsbad,
California.
Vice President of Finance: Megan Moen

Ms. Moen has been our Vice President of Finance since January 2016. Ms. Moen was a Senior Director for the
Valuation and Financial Advisory Services practice of FTI Consulting, Inc., located in Los Angeles, California, -from
June 2013 to 2016.
Director of Bridge Training: Melody Ward

Ms. Ward has been our Director of Bridge Training since January 2017. Ms. Ward has been an instructor, Master
Trainer and Regional Manager with Club Pilates franchise locations since 2009 in Los Angeles, California.
Liz Cooper: Vice President of Operations

Ms. Cooper has been our Studio Operations Manager since March 2016. From January 2015 to March 2016, she
worked at Henri Bendel, located in Costa Mesa, CA, as the Visual Merchandising Coordinator. From January
2012 to December 2014, she worked at Fresh, located in Costa Mesa, CA, as the Visual Merchandising
Coordinator.
Carlv Simms: Director of Recruiting

Ms. Simms joined Club Pilates as the Director of Recruiting and HR in January 2017. Ms. Simms managed her
own recruiting consulting practice. Hummingbird Recruiting, in Irvine, CA from July 2016 to January 2017. She
worked at the Irvine Company in Newport Beach, CA as its Talent Advisor from March 2016 until July 2016. She
worked for Signature Analytics in San Diego, CA as its Recruiting Manager from June 2015 to March 2016. She
worked for Special Counsel, located in San Diego, CA, as its Placement Director from July 2012 to June 2015.
ITEM 3 LITIGATION
No litigation is required to be disclosed in this Item.
ITEM 4 BANKRUPTCY
No bankruptcy information is required to be disclosed in this Item.
ITEM 5 INITIAL FEES
Franchise Agreement
Initial Franchise Fee

You must pay to us a lump sum initial franchise fee of $49,500 (the "Initial Franchise Fee") to establish
a single Studio under a Franchise Agreement (whether a start-up or conversion). The Initial Franchise Fee is due
upon the signing o f t h e Franchise Agreement. The Initial Franchise Fee shall be fully earned by Franchisor upon
payment and is not refundable, in whole or in part, under any circumstance. Except as disclosed in this Item, we
uniformly impose the Initial Franchise Fee on all parties that are purchasing a single Franchised Business.
Initial FFE Package
You must purchase an initial package of furniture, fixtures and equipment that is designed to provide
you with the majority of these items that you will need in connection with outfitting, equipping and otherwise
building out your Studio (the "Initial FFE Package"), and includes the cost of shipping and installation. As of the
Issue Date of this Disclosure Document, the Initial FFE Package costs approximately between $89,495 and
$101,795 and contains (a) 13 Pilates reformers and various related equipment/supplies for use in connection
with the provision of the Approved Services, (b) a Studio fixture package comprised of a desk, displays and
display rack, storage cubbies, pedestals and 1 Barre package, and (c) certain other equipment used in connection
with the Studio (e.g., Pilates mini-balls, massage balls, foam rollers and yoga blocks). Currently, you must
purchase the Initial FFE Package from us but we reserve to designate another approved supplier in our sole
discretion. You must purchase the Initial FFE Package prior to opening your CLUB PILATES Studio and the Initial
FFE Package is non-refundable under any circumstances.
Proprietary Initial Inventory Kit
Prior to opening your CLUB PILATES Studio, you must purchase opening inventory from us in the amount
of $5,000 ("Proprietary Initial Inventory Kit"), which includes CLUB PILATES apparel, including t-shirts, yoga
pants, toe socks and related accessories. The amount paid for the Proprietary Initial Inventory Kit is non-
refundable under any circumstances.
Development Agreement
If we grant you the right to open three (3) or more Franchised Businesses under a Development
Agreement, you must pay us a one-time Development Fee upon executing your Development Agreement. Your
Development Fee will depend on the number of Franchised Businesses we grant you the right to open within
the Development Area and is calculated as follows: (i) $125,000 for the right to open three Franchised
Businesses, plus an additional $40,000 for the right to open each additional Franchised Business (up to a total of
five); (ii) $35,000 per Franchised Business if you agree to open and operate between six and nine Franchised
Businesses; and (iii) $30,000 per Franchised Business if you agree to open and operate 10 or more Franchised
Businesses.
You will be required to enter into our then-current form of franchise agreement for each Franchised
Business you wish to open under your Development Agreement, but you will not be required to pay any
additional Initial Franchise Fee at the time you execute each of these franchise agreements. If you enter into a
Development Agreement, you must execute our current form of Franchise Agreement for the first CLUB PILATES
Studio we grant you the right to open within your Development Area concurrently with the Development
Agreement.

Your Development Fee will be deemed fully earned upon payment, and is not refundable under any
circumstances. The Development Fee described above is calculated and applied uniformly to all of our
franchisees.
ITEM 6 OTHER FEES
Royalty 6% of Gross Sales 1

Payable weekly based You will be required to start paying your
on the Gross Sales of Royalty once your Franchised Business
your Franchised begins collecting revenue from
Business during the operations. We reserve the right to
preceding business collect your Royalty on a different
week interval (for example, monthly).
Marketing Fund Currently, 2% of Payable weekly at the Your Marketing Fund Contributions will
1
Gross Sales same time and in the begin when the Studio begins collecting
same manner as the revenue from operations.
Royalty
Orientation Costs and As incurred Each instructor that provides Approved
Program Expenses (if you or Services from your Franchised Business
your instructor must (a) be a Certified Pilates Instructor,
decide to attend and (b) complete our Orientation
the Orientation Program.
Program as part of
our Initial Training Your initial instructors) may attend our
Program). Orientation Program at the same time
they attend the rest of our Initial Training
Program (and we will not charge such
attendees any training fee or tuition
provided they attend at the same time).
If you have a Certified Pilates Instructor

that needs (or requests) the Orientation
Program after you have completed the
Initial Training Program, then these
instructors may also have the ability to
participate in and complete our
Orientation Program remotely via
webinar/video instruction, but they will
be required to pass the Orientation
Program test before providing any
instruction at your Studio.

Once a Certified Pilates Instructor working

at your Studio completes the Orientation
Program, that individual may assist in the
provision of the Orientation Program (and
related test) to other instructors at your
Studio.
Please see Item 11 for additional

information.
Teacher Training $2,000 per person. Prior to training. This fee is only payable to us in connection
Program Fee with each individual that is not a Certified
Pilates Instructor, but wishes to obtain
instruction necessary to (a) comply with
the Certified Pilates Requirements, and
(b) complete our Orientation Program.
If an individual wishes to attend the

Teacher Training Program at your Studio,
then they will pay a single fee to our
approved third-party provider of $4,750,
with (a) $2,000 going to us for certain
materials that we provide in connection
with this training (including the "Webinar
Training" described in Item 11 of this
FDD), and (b) the balance of $2,750 going
to your Franchised Business (or the
appropriate Studio that will be providing
the in-person instruction).
In order to provide the Teacher Training

Program at your Studio, such training will
need to be provided by an instructor that
(a) is a Certified Pilates Instructor that has
completed our Orientation Program, and
(b) is otherwise approved by us as a
"Master Instructor". Please note that our
then-current criteria and conditions for a
Certified Pilates Instructor that has
completed the Orientation Program to
also become a Master Instructor will be
set forth in our Operations Manual.
If you are not able to provide the Teacher

Training Program, then we will advise you

of the Studio closest to your Franchised

Business that can provide such instruction
to interested clientele.
Ongoing/Refresher Then-current Priorto training. This fee is paid in connection with
Training training fee, which additional training/instruction that we
is currently $500/ may provide on an ongoing basis in
day per trainer. connection with the overall operation and
development of your Studio.
We will only charge this fee in connection

with training that (a) you request we
provide, or (b) we are required to provide
on-site at your Franchised Business. We
will not charge this fee in connection with
training that we require you to attend at
our corporate headquarters or other
training facility we designate.
We will not charge any training fee in

connection with minor, day-to-day
assistance that we provide remotely over
the phone or via email, subject to our
availability.
In addition to our then-current training

fee, you will always be responsible for the
costs and expenses that are incurred in
connection with you and your personnel
attending training.
Renewal Fee $10,000 At time of renewal. You must renovate and reimage the
Studio at your expense at the time of
Renewal to conform to our then-current
standards and image.
Transfer Fee under $10,000 Before the transfer. Payable when you sell the Studio. No
Franchise charge if the Studio is transferred to a
Agreement corporation or other entity that you
control.
Assignment Fee $10,000 On submitting Payable when you want to sell/transfer
under Development application for the rights under your Development
Agreement consent to Agreement.
assignment
3
Insurance Policies Amount of unpaid Must have the Payable only if you fail to maintain
premium. policies within 60 required insurance coverage and we
calendar days after elect to obtain coverage for you.
10
Our estimate for3 signingthe Franchise

mos.ofthe Agreement, but no
minimum required laterthan the time
insurance is that you acquire an
$500 $^000 interest in the real
property from which
you will operate the
Studio.
Audit Fee^ $500 $2,500 Within 15 calendar Payable onâuditshows on

days after receipt of understatement
audit report.
Late Fees The greater ofthe Upon demand. Appliesto all amounts not paid when due,
highest applicable until paid Infull. We may also require you
legal rate for open to pay an administrative fee of $50 for
account business each late payment or late report.
credit, or 1.5^ per
month.
Penalty Fee Then current fee Upon demand. Payable only in the event you fail to
charged by us comply with your material obligations
underyour Franchise Agreement by (a)
Currently,$100for permitting any instructor atyourStudio to
each day of non provide Pilates instruction or other
compliance. Approved Services before they complete
theOrientation Program, or(b) offering or
selling any unauthorized products or
services at your Studio. The Penalty Fee
will be incurred during each day of non
compliance.
Costof All costs including Upon settlement or You will reimburse us for all costs in
Enforcement or attorneys'fees conclusion of claim or enforcing our obligations concerningthe
Defense action. Franchise Agreement if we prevail.
Indemnification All costs including Upon settlement or You will defend suits at your own cost
attorneys'fees conclusion of claim or and hold us harmless against suits
action. involving damages resulting from your
operation of the Studio.
Alternative $1,500 per dayfor Attime of request. Additionally, you must reimbursement us
Supplier Approvals personnel engaged foranytravel, accommodations, and
inevaluatinga meal expenses.
supplier.
11
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Type of Fee Amount Due Date Remaps
Business Then current fee Payahieevery4 Plê 5^ 8 80^ 11 Of

Management charged hy our weeks, as agreed. 0^050^ O O O ^ ^ t f^r 8 d ^ 0 ^
Software Fee^ Approved ^ f o r ^ t i o o oo App^v^d Soppli^
Suppiier,whichis 8nd^f^
currently $269
Regional As the Cooperative As the Cooperative W e m a y ^ b ^ ^ o ^ c o o p e ^ v e s

Cooperative determines determines comprised of Studios that are within a
given geographical area (each, a
"Cooperatives if a Cooperative is
established where your Studio is located,
you will he required to participate in that
Cooperative and contribute to that
Cooperative in the amounts the
Cooperative determines.
Liquidated $10,000 As incurred. If you in any way compromise the secure
Damages access to the online version of the
Manual, including, but not limited to,
allowing unauthorized users access to the
Manual and its confidential contents, you
will be required to pay us liquidated
damages in theamount of $10,000, to
compensate us forthe breach and related
damage to the System.
All fees are imposed by and are payable to us, unless otherwise noted. No other fees or payments are
to be paid to us, nor do we impose or collect any otherfees or payments for anythird party. Anyfees paid to us
are non-refundable unless otherwise noted. Fees payable to third parties may be refundable based on your
individual arrangements.
Notes to Chart for Franchise Agreement:
^ Gross Sales. Except as provided below, the term "Gross Sales" means the total revenues you derive,
directly or indirectlyfrom all business conducted upon, from or in connection with the Studio, less sales taxes or
similar taxes imposed by governmental authorities. (See Section 5.3 of the Franchise Agreement foramore
complete definition.^Please note that we exclude revenue generated from the provision oftheTeacherTrain^
ProgramatyourStudiofromthedefinitionofGrossSalesbecauseyou are required to pay usaflatfee of $2,000
for each individual that received the required training (as described more fully in the Chart above). You must
participate in our then-current electronic funds transfer and reporting program(s). (See 5xhibit2and Exhibits
of the Franchise Agreement.) All fees owed and any other amounts designated by us must be received or
credited to our account by pre authorized bank debit by 5:00 p.m. on or before the applicable due date. Your
franchised business may be located inajurisdiction whose taxing authority will subject us to tax assessments
on paymentsyou submitto usforthe Royalty Feeand Marketing Fund contributions. Undersuch
circumstances, you will be required to adjust, or"gross up" your payment to us to account for these taxes.
12
©2017Ciob^l^s^nê,^
2017ôch^0^loêOocumeot
^MarketrngFund. W e h a v e e ^ a b ^ h e d a n ^ o n o l a d v e ^
Fund") and you w ^ be required to make a weekly contribution towards s u c b f u n d ("Marketing Fund
Contribution")beginning tbe date your Studio begins collecting revenue from business operations. Tbe
Marketing Fund may be used for (among otbertbings) product development; signage; creation, production and
distribution of marketing, advertising, public relationsand other materials inany medium, i n c ^ ^
social media; administration expenses; brand/image campaigns; media; national, regional and other marketing
programs; activitiesto promotecurrent and/orfutureStudios and tbeCLUB PILAT5S brand; agency and
consulting services; research and any expenses approved by us and associated with your Studio. Wewillbave
sole discretion o v e r ^ m a t t e r s relating to tbe Marketing Fund. You must pay for your own local advertising.
3
Insurance Policies. The minimum limits for coverage under many policies will vary depending on
several factors, including tbe size of your Studio, and whether you offer classes. See I t e m B o f this Disclosure
Document for our minimum insurance requirements.
^ Audit Fees. Inthe eventthat an audit discloses an understatement ofGrossSalesor other discrepancy,
in addition to the cost of the audit,you will be required to pay the marketing due on the amount of such
understatement, plus late fees and interest.
Âlternative Supplier Aooroval. You may reouest the approval of an item, product, service or suoolier.
W e m a y require you to pre-pay any reasonable charges connected with our review and evaluation of any
proposal.
EBusiness Management Software Fee. We will make available to youabusiness management software
program that you will use in the operation of your Studio. Currently, the approved and required software for
use in the Studio is "ClubReady,"anonline/webbased business management program. You will pay the third-
party vendor directly for all fees associated with the use of the software. We have the right to access any and
all information stored in the program that pertains to the Studio through file transfer protocol or p o l l i n g t h ^
the Internet, at our discretion.
ITEM 7 ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT

A. Franchise Agreement
1
MADE
2
Initial Franchise Fee $49,500 Lump sum, in At signing of Us
cash, certified Franchise
check or bank Agreement
wire
Initial Training Program $0 N/A N/A
3
(Fees) N / A
Travel and Living Expenses $500 - $3,000 As arranged As incurred Transportation

While Training 3
Carriers, Hotel
Facilities, Etc.
13
4
Real Estate/Lease $7,000 -$21,000 As arranged As incurred Landlord
5
Leasehold Improvements $10,000 -$33,000 As arranged As incurred Approved Suppliers,
Architects and
Contractors
6
Signage $7,000-$14,000 As arranged As incurred Approved Suppliers
7
Insurance $900-$1,000 As Arranged Before Opening Insurance Carrier
Pilates and Other Exercise $75,000-$80,000 As required Before Opening Us
8
Equipment
Proprietary Initial $5,000 Lump Sum Before Opening Us
9
j Inventory Kit
10
| Utility Deposits $0-$1,000 As arranged As incurred Utility Suppliers
11
Licenses and Permits $0 - $3,000 As arranged As arranged Local, State or
Federal Government
Furniture, Fixtures and $8,000-$11,000 As arranged As incurred Us
12
Related Supplies
Computer System and $1,200-$2,000 As arranged As arranged Approved Suppliers
13
related equipment and Vendors
14
Shipping $2,500-$6,800 As arranged Before Opening Us
Installation $3,995 As arranged Before Opening Us
Additional Funds- $10,000-$15,000 As arranged As incurred Employees, Vendors,
3 months 15
Utilities
TOTAL ESTIMATED INITIAL $180,595 to $249,295

16
j INVESTMENT
All amounts are non-refundable unless otherwise noted.
Notes to Table A:
1
General. The initial investment table shows certain expenditures required to establish and operate a
Studio. Note that these amounts may vary widely, and the amounts you have to spend or invest may be higher
or lower than the estimated amounts, depending on location, size of the Studio, marketing conditions and other
factors. We strongly recommend that you verify actual costs in your area, and for your intended location, and
prepare a business plan and have it reviewed by your own independent adviser, like an accountant, before
making any commitments to us or anyone else. Due to legal restrictions, we will not prepare, review or comment
on any business plan for a prospective Franchisee.
All amounts payable to us are nonrefundable, unless otherwise noted. Amounts payable to
estimates of the range of your initial costs in the first 3 months of operation only. Leasing and financing is
available for many ofthe above expenses. We do not offer direct or indirect financing, but we may assist you in
obtaining working capital through other sources. See Items 5 and 6, and other parts of this Disclosure Document,
for more information regarding Initial Franchise Fees and other costs.
14
ô^ôch^^The^^
Sô^$4^500. Wedonotprovi^
^Travel and Uviog Expenses Wh^Tramm^ A s p ^ o u ^ v d ^ o s e d ^ ^ m s l a o d ^ o f ^ O ^ o s u r o

Oocument, you(oîfyou are an e n t ^ your Designated Operator and, o n ^
(^Certified Pilates instructor ( w h ^
initiaiTrainingPrograrn.This Prograrn is comprised of two^moduies,nam^^
(which must be attended by you and/or your Designated Operator) and our Orientation Pro^
your instructors, whom we assume wiii already be Certified Piiates instructors as part of o^^
offering).We wiii not chargeany tuition ortraining fee in connection with the initiaiTraining^
aii individuals attend at the same time. The estimate in the Chart above assumes that you (oryour Designated
Operator), aiongwith your initial instructors
You will be responsible forthe costs and expenses associated with attending our initialTraining Program
(e.g., transportation, meals, lodging and other expenses). The amount you wili spend while training will depend
on several factors, including the number of persons attending, the distance you must travel and the type of
accommodations you choose, if any are needed. The low estimate assumes that your Studio is located in fairly
close proximity to one (1) of our designated training facilities, and that the two (2) individ^^^^
InitialTrainingProgramwillnotberequiredto incur costs associated with flying to one of these faci^
California.The high estimate assumes that the two (2) individuals will need to fly to the InitialTra^
(coach class) and will need to secure lodging while attending the program.
^RealEstateBLease. If vou do not own adequate Studio space, vou must lease suitable oremises.These
figuresassumethattheleasedpremiseswillbeatleastl,S00squarefeet(a2S'x60'rectangle). The figures
assumeabase monthly rental rate estimated in the range of $1.20 per square foot to $3.50 per square foot.
Landlords may also vary the base rental rate and charge rent based onapercentage of gross sales. In addition
to base rent^ the lease may require you to pay common area maintenance charges ("CAM Charges"), your pro
rata share ofthe real estate taxes and insurance, and yourpro rata share of HVAC and trash removal.The actual
amount you pay under the lease will vary depending on the size of the Studio, the types of charges that are
allocated to tenants under the lease, your ability to negotiate with landlords, and the prevailing rental r a ^
the geographic area. You may also be required to payasecurity deposit equal toamonth'srent. The estimate
covers the first^months of operation, andlmonth'srentasasecurity deposit.
Since rental, improvement and other realestaterelated costs can vary significantly by area, it'syour
responsibilityto (1) independently research all applicable laws and regulations, and real estate market
conditionsandcosts,whereyou plan to locate and operate yourfacility,and(2)obtain appropriate advice from
your own accountant, attorney and real estate professional, before signing any binding documents or making
any investments or other commitments, whether to us or anyone else.
leasehold Improvements.The cost of leasehold improvements will vary depending on: (i) the size and
configurationof the premises; (ii)preconstruction costs (e.g.,demolition of existing walls andremoval of
existing improvements and fixtures); and (iii) cost or materials and labor which may vary based on geography
and location. You must adapt our prototypical plans and specifications forthe construction and finishout ofthe
Studio, including approved flooring, mirrors and paint. These amounts may vary substantially based on local
conditions, includingthe availability and pricesoflabor and materials. These amounts may also vary
on whether certain of these costs will be incurred by the landlord and allocated over the term of the lease. For
clarity, the estimates presented herein are net of tenant improvement amounts incurred by the landlord. The
lowend of the range reflects modest improvements toasmaller location, and the high end reflects significant
physical improvements toalargerStudio.
15
©2017Clob^^^8^^,^
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^Signog^ You w^ need to purchase The cost of
your signage may he more or less than this estima^^
you choose. 5ach landlord has different restrictions it piaces on interior and exterior signage that may affect
your costs.
însurance.This estimate is for^months ofyour minimum reouiredinsurance.The actual cost mav he

more than shown here.You will need to check with your insurance carrierfor actual premium quotes and costs,
and forthe actual amount of deposit, insurance costs can yarywidely,hased on the area in which your business
is located,your experience with the insurance carrier,theioss experience of the carrier,the amount of
deductibles and of coverage, and otherfactors beyond our control. You shouid obtain appropriate advice from
your own insurance professional before signing any binding documents or making any investments or other
commitments, whetherto us or anyone else.
^Pilates and Other Exercise 5ouioment. The initial required amount of Pilates and other exercise
equipmentforastandard Studio is approximately 13 P ^
13 5X0 Chairs, 13 TRX units and smaller pieces of related exercise equipment (e.g., balls, mats, etc^
may raise or lower this requirement depending on the size of your Studio,which is included in the Initial PP5
Package you must purchase from us. Financing for the equipment may be available. Ifyou chose to finance the
equipment,your initial costs will be less than the range provided in the chart above; however,your overall
payments may be higher.
^Proprietary Initial Inventory Kit.The inventory does not fluctuate asafunction of seasonal sale^
typical forsale items held in opening inventory are Club Pilates apparel, includingtshirts, yoga pant^^
and related accessories.
Ûtility Oeposits. Typically,autility deposit will be required only if you areanew customer ofthe utility
company.
11
Licenses and Permits. The range of costs covers the expense to acquire the required local business
permits. We make no representations or assurances as to what (if any) licenses, permits, authorizations or
otherwise may be required in connection with your Studio. Our estimated costs include building permits, fire
inspection, salestax permit, and retail sales permits. If an electrical permit is necessary,thecosts ma
You should investigate applicable requirements in your area and the related costs, including receiving adv^
from regulatory agenciesand your own lawyer,before making any commitments, whetherto us or anyone else.
^Furniture, Fixtures and Supplies.Thisisarange of expenses that will be incurred when decorating and
furnishing the Studio, including (a)suryeillance cameras and office expenses, and (b)the Initial FF5P
you must purchase from us.You are required to have at least one(l) surveillance camera installed in the Studio
You may be required to purchase the camera(s) and related accessories from an Approved Supplier (see ItemB
of this Disclosure Document). The camera(s) must be web accessible. You will use the camera to monitor
teacher performance, quality assurance and safety. We have an absolute right to also review and monitor the
camera(s) for the same purposes as you, and to ensure compliance with the Club Pilates System. You are
responsible for ensuring customer consent and for any failure to obtain such consent. You must indemnify us
for any breaches of privacy from your use of any surveillance camera. Both the low-end and the high-end
numbers representastraight purchase of all furniture, fixtures and related supplies (rather than leasing or
making installment payments on these items).
13
Computer System and Related Fouipment. You must acquireapersonal computer andaPoint of Sale
system ("POS") for use in theoperation ofthe Studio.Yourcomputersystem must be equipped withahigh speed
16
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connoôotothe^^tand
tO y O O a c e ^ O b u ^ O e S S m a n a g e m e n t 5^
Yoow^paythethi^partyveodordireet^foraêes associated
of this Oisciosure Document for the fee amount and more details on the softwares You can expect initial cash
outlays to he lower if the items can he leased rather than purchased. These costs are paid to suppliers, when
incurred, hefore beginning business and are usually not refundable. Please see I t e m l l o f this Disclosure
Document for more information on the Computer System. In addition, this estimate includes certain re^^
equipment (e.g. tablets, etc.) recommended for use in your Studio.
^Shiooing. We arrange forthe shiooing of all ofyour

mayvary based upon the location of your Studio.
Âdditional Funds. 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 employee
wages, management compensation (but not any draw or salary for you), ongoing purchases of equipment and
supplies, marketing fees, continuing improvement of the Studio's physical features, local adve^
repairs and maintenance. Your cost will depend upon your management skill, experience and business acumen;
local economic conditions; the prevailing wage rate^
estimate is based onthe experience of us and our affiliates in owning and operating Club PilatesStudios for more
than^years.
Thisestimatedoesnotguaranteethatyouwill reach, and we'reunabletoreliablyestimatewhen(ifever)

you might reach,"breakeven" or any other financial position. You will need capital to support on-going costs
of your business, such as taxes, loan payments and other expenses, to the extent that revenues do not cover
business costs. New businesses (franchised or not) often have larger expenses than revenues.
This amount is only an estimate. We cannot guarantee that the amounts specified will be adequate and
you may need additional funds to open and operate. We do not furnish, or authorize anyone else, to furnish
estimatesastothe capital or other reservefundsnecessaryto reach "break-even^ or anyotherfinancial position,
or when or if you may be profitable, nor should you rely on any such estimates. In addition, the estimates
presented relate only to costs associated with the franchised business and do not cover any personal,"living,^
unrelated business or other expenses you may have.
The availabilityand terms offinancing to you will depend upon factors such as the availability offinancing
in general, your credit worthiness, the collateral security that you may have, and policies of lending inst^^
concerning the type of business you operate. This estimate does not include any finance charge, interest, or
debt service obligation.
^Total Estimated Initial Investment. All of the above figures are estimates of certain initial start up
expenses. As noted above, it is notall inclusive, and wecannotguaranteeyou will not have additional expenses
in starting or operating the Studio. The total listed above does not include compensation for yourtime or labor
or any return on your investment. Your costs will vary depending on such factors as: how closely you follow the
Club Pilates System; your management and marketing skills, experience and general business ability; and local
and general economic conditions, including disposable income. You should review these figures carefully with
abusiness advisor (such as an accountant) before making any commitments. In preparing the figures in this
chart, we relied on our affiliates'experience in owning and operating Club Pilates Studios.
17
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B. Development Agreement
1
MADE
2
Development Fee $125,000 Lump sum, in At signing of Us
cash, certified the
check or bank Development
wire Agreement.
Initial Investment to Open $131,095 to $199,795 See Chart A of this Item 7.
3
Initial Franchisee! Business
TOTAL ESTIMATED INITIAL $256,095 to $324,795.
; This is the total estimated initial investment to enter
16
INVESTMENT into a Development Agreement for the right to own a
total of three Franchised Businesses, as well as the
costs to open and commence operating your initial
Franchised Business for the first-three months (as
described more fully in Chart A of this Item 7). See
Note 3.
Notes to Table B:
1
General. All amounts payable to us are nonrefundable, unless otherwise noted. Amounts payable to
estimates ofthe range ofyour initial costs in the first three (3) months of operating the initial Franchised Business
you are granted under your Development Agreement only. We do not offer direct or indirect financing, but we
may assist you in obtaining working capital through other sources. See Items 5 and 6, and other parts of this
Disclosure Document, for more information regarding Initial Franchise Fees and other costs.
2
Development Fee. The Development Fee is non-refundable. The Development Fee is described in
greater detail in Item 5 of this Disclosure Document, and this Development Fee is for the right to open and
operate a total of three Franchised Businesses (provided you comply with your development obligations under
the Development Agreement). Ifyou choose to open more than three Franchised Businesses, your Development
Fee will be calculated as follows: (i) $125,000 for the right to open three CLUB PILATES Studios, plus an additional
$40,000 for the right to open each additional CLUB PILATES Studio (up to a total of five); (ii) $35,000 per CLUB
PILATES Studio if you agree to open and operate between six and nine Franchised Businesses; and (iii) $30,000
per Franchised Business ifyou agree to open and operate 10 or more Franchised Businesses.
18
^ o ^ ^ ^ m e n t f o r F ^ F ^
mvestment requêd to open the initial Franchised Businessyou agreed to open and operate under the
Development Agreement.You wiii he required to enter into our thencurrent form o
the initial Franchised Business you open under your Development Agreement, most likely once you have found
aPremises forthe business that we approve.The range includes all the items outlined in C h a r t ^ A . of this item,
except for the $49,500 initial Franchise Fee (because you are not required to pay any Initial Franchise F^^
those Franchised Businesses you open underthe Development Agreements It does not include any of the costs
you will incur in opening any additional Franchised Business(es) that you are granted the right to open and
operate under your Development Agreement.
ITEMB R5ST^CTION50N50URC550FPRODUCT5AND^V^
You must operate all aspects of your Franchised Business in strict conformance with the methods,
standards and specifications of our System. Our methods, standards, and specifications will be communicate^
toyou in writingthrough our confidential Manualsandotherproprietaryguidelinesandwritingsthatwepr^^
for your use in connection with the Franchised Business and System. We may periodically change our System
standardsand specifications from time to time, as we deem appropriate or necessary in our sole discretion,and
you will be solely responsible for costs associated with complying with any modifications to the System.
Approved Produce and Se^ces
Yoo may only marked o f f e ^ s e ^ a n d p r o ^

and other prodo^thatFranchisorauthorizesfor sale in e o n j o n c t l o n w ^
Prodoets") at your Franchised Business inamannerthat meets ourSystem standardsand s p e ^ ^
provide you w i t h a l i s t of our thencurrent Approved Products and Services, along with th^^
specifications, as part of the Manuals or otherwise in writing prior to the opening of your Franchised Busines
We may update or modifythis list in writing at any time.
ifyou wishtoofferanyproductorserviceinyourFranchisedBusinessotherthan ourApprovedProducts

and Services, or use any item in connection with your Franchised Business that does not meet our System
standards and specifications, then you must ohtain our prior written approval as described more fuiiy in this
Item
ApprovedSuppliers
We havetherighttorequireyoutopurchaseanyitemsorservicesnecessarytooperateyour Franchised
Business fromasupplier that we approve or designate(each,an"Approved Suppliers, which may include us or
our affiliate(s).We will provide you w i t h a l i s t of our Approved Suppliers in writing as part of the Manuals or
otherwise in writing, and we may update or modify this list as we deem appropriate.
Currently, we have Approved Suppliers for the following items that you must purchase in connection
with the establishment and/or operation ofyour Franchised Business^!) Proprietary Initial Inventory
Initial FFFPackageîii) certain other exercise equipment/suppliesîv) interior grap
insurance coverage; (vi) shippingand installation services; (vii) trainingmaterials, including t h e " W e b i n a r
Training"associatedwiththeTeacherTrainingProgram;and(viii) proprietary p o i n t o f s a l ^
System") and then current software we require you to use in connection with that POS System and your Studio.
W e m a y developproprietary products for use i n y o u r Franchised Business,includingprivatelabel

19
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products that bear our Marks, and r^
Ifyou wish to purchaseaproduct or s e r v i c e d

from an alternate source, then you must ohtain our prior written approval as outiine^
We may provide our standards and specifications for ourApprovedProducts and Services directly to
Approved Suppliers, and may provide these standards and specifications to an alternative supplier you propose
i f ^ i ) we approve the supplier in writing as outlined more fully in this Item; and (ii)thealternativesu
to signour prescribed form of non-disclosure agreement with respect to any confidentialinformation we
disclose.
As ofthe date ofthis Disclosure Document: (i) besides the Proprietary Initial Inventory Kit, Initial FFE Kit,
Teacher Training materials, neither we nor any of our affiliates are an Approved Supplier for any items you are
required to purchase in connection with your Franchised Business; and (ii) none of our officers own an interest
in any of our Approved Suppliers other than us.
We reserve the right to designate us or any of our affiliates as an Approved Supplier with respect to any
item you must purchase in connection with your Franchised Business in the future.
Required Purchases and Right to Derive Revenue
The products or services we require you to purchase or lease from an Approved Supplier, or purchase
or lease in accordance with our standards and specifications, are referred to collectively as your "Required
Purchases." We estimate that your required purchases, purchases from Approved Suppliers and purchases that
must meet our specifications in total will be about 70% -95% of your total purchases to establish the Studio and
about 10% - 20% of your purchases to continue the operation of the Studio. Please be advised that these
percentages do not include the lease payments that you make in connection with your Premises (as defined in
Item 11).
We reserve the right to derive revenue from any of the purchases (items or services) that our System
franchisees are required to make in connection with the Franchised Business. For the calendar year ending
December 31, 2016, we derived $3,928,245 or 40.8% of our total revenue of $9,640,000 from our franchisees'
required purchases.
Non-Approved Product/Service and Alternate Supplier Approval
We may, but are not obligated to, grant your request to: (i) offer any products or services in connection
with your Franchised Business that are not Approved Products and Services; or (ii) purchase any item or service
we require you to purchase from an Approved Supplier from an alternative supplier.
If you wish to undertake either of these actions, you must request and obtain our approval in writing
before: (i) using or offering the non-approved product or service in connection with your Franchised Business;
or (ii) purchasing from a non-approved supplier. You must pay our then-current supplier or non-approved
product evaluation fee when submitting your request, as well as cover our costs incurred in evaluating your
request. We may ask you to submit samples or information so that we can make an informed decision whether
the goods, equipment, supplies or supplier meet our specifications and quality standards. In evaluating a supplier
thatyou propose to us, we consider not only the quality ofthe particular product at issue, but also the supplier's
production and delivery capability, overall business reputation and financial condition. We may provide any
20
ornate supper you propose w ^
supplierto supply, provided the supp^
wespecify.Wemay^somspectaproposedsupplier's^^ties^
thatyou reimburse our actual costs ossociated with the testmg/iosp
We wiii notify you in writing within 30 days aêr we receive ail necessary informational
ourinspectionortestingtoadviseyou if we approve or disapprove the proposed item and/orsuppiier.The
criteria we use in approving or rejecting new suppliers is proprietary,hutwe may (although are not r e ^
makeitavaiiahletoyou upon request. 5achsuppiierthatweapprovemustcomplywithourusuaiand customary
requirementsregardinginsurance,indemnificationand non-disclosure. If we approve any supplier^we will not
guarantee your performance of any supply contract with that supplier under any circumstances.We may re
inspectand/orrevokeourapprovalofasupplieroritem at any time and for any reason to protect the hest
interestsand goodwill of our System and Marks. The revocation ofapreviously approved product or alternative
supplier is effective immediately when you receive written notice from us of revocation and, following receipt
of our notice, you may not place any new orders forthe revoked product, or with the revoked supplier.
Purchasing Cooperatives and Right to Receive Compensation
We may, when appropriate, negotiate purchase arrangements, including price terms, with designated
and Approved Suppliers on behalf of the System. We may establish strategic alliances or preferred vendor
programs with suppliers that are willing to supply some products, equipment, or services to some or all of the
CLU8 PILATES Studios in our System. If we do establish those types of alliances or programs, we may: (i) limit
the number of approved suppliers with whom you may deal; (ii) designate sources that you must use for some
or all products, equipment and services; and (iii) refuse to approve proposals from franchisees to add new
suppliers if we believe that approval would not be in the best interests ofthe System.
Weand/orouraffiliate(s)mayreceivepaymentsorothercompensationfromApprovedSuppliersorany
othersuppliersonaccountofthesesuppliers'dealingswithus,you,orotherEranchised Businesses in the
System,such as rebates, commissions orotherforms of compensation.We mayuseanyamountsthatwe receive
from suppliers for any purpose that we deem appropriate. We and/or our affiliates may negotiate supply
contracts with our suppliers under which we are able to purchase products, equipment, supplies, services and
other items ataprice that will benefit us and ourfranchisees
We reserve the right to create additional purchasing cooperatives in the future. We may negotiate
volume purchase agreements with some vendors or Approved Suppliers forthe purchase of goods and equipment
needed to operate the Studio.
Franchisee Compliance
When determining whether to grant new or additional franchises, we consider many factors, including
your compliance with the requirements described in this Item 8.You do not receive any further benefit asa
result ofyour compliance with these requirements.
Insurance
You are obligated to obtain and maintain, at your sole expense, all of the insurance coverages that we
require. Your policy or policies must be written by an insurance company licensed in the state in which you
operate the Studio.The insurance company must have at least an"A" Rating Classification as indicated in A ^
Best'sKev Rating Guide, in accordance with standards and specifications set forth in the Manual.The standards
21
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mayv^depeodmgontheêofy^
yoortypeioyoora^botwe^p^
Cov^ge Mimmom^môfCove^ge
Ge^Âgg^ê $5,000,000
Produ^/Comp^tedOpeôos Aggregate $5,000,000
Personal and Advertising lûry $1,000,000
EaehOeeurrence $1,000,000
Participant Legal Liability $1,000,000
Medical Expense (any one person) $5,000
Otber current insurance requirements include: (i)"ALLRI5K"or special form property coverage of no 1^^^
current replacement cost of tbe Studio's equipment, fixtures and leasehold improvements (tenant
improvements) sufficient in tbe amountto restore tbe Studio to full operations (with glass coverage no less tba^
alimit of $25,000 and sign coverage no less tbanalimit of $10,000 in addition to equipment, fixtures and
leasehold improvements); (ii) Business interruption insurance with coverage for at least twelve(12) months f^^
actual losses; (iii) if you are usingavehicle in connection with your Studio operations. Auto Liability (H^^
Non-ownedautos)witha$l,000,000 CombinedSingleLimit Each Accident for Bodily Injury andProperty
Damage; and (iv) Employment Practices Liability withalimit no less than $1,000,000 per claim and $1,000,000
aggregate per location (and the retention may not exceed $1,000).
Ali insurance policies must name us and any of our affiliates as additional insured parties.
ComputerSystem
You must purchase the computer system that we specify,including computer hardware, software, point
of sale system,inventory control systems,and highspeednetworkconnections(collectively,the"Computer
System"). The component parts of the Computer System must be purchased from approved suppliers. Ifwe
require you to use any proprietary software orto purchase any software fromadesignatedvendor,you must sign
anysoftwarelicenseagreementsthatweorthelicensorof the softwarerequireand any related software
maintenance agreements. The Computer System is described in more detail i n l t e m l l o f this Disclosure
Document.
ITEM9 ERANCHISEE^SOBLIOATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you
find more detailedinformation about your obligations in these agreements and in other items of the
Disclosure Document.
22
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t ^ Obligation I Development .-.A"' Document
Agreement
Agreement Item
a. Site Selection and Sections 1.2, 6.1, 6.2, 7.2 Section 8 Items 11 and 12
acquisition/lease and 7.3 of Franchise
Agreement
b. Pre-opening Sections 6.1, 6.2,7.2, 7.3 Section 8 Items 5, 7 and 8
purchases/leases and 8.4 of Franchise
Agreement
c. Site development and Sections 6.1, 6.2, 7.1 and Section 3 Items 6, 7 and 11
other pre-opening 7.3 of Franchise
requirements Agreement
d. Initial and ongoing Sections 5.5 and 6.3 of Not Applicable Items 6, 7 and 11
training Franchise Agreement
e. Opening Sections 2.2 and 6.9 of Section 3, Exhibit B Item 11
Franchise Agreement
f. Fees Sections 3.2.F., 5, 9.1 and Section 9 Items 5 and 6
14.2 of
Franchise Agreement
g. Compliance with Sections 1.2, 2.2,4.2, 6.4, Section 3 Item 11
standards and policies 6.6, 6.7,7.1, 7.3, 7.4, 8.7
/Operating Manual and 9.3 of Franchise
Agreement
h. Trademarks and Sections 1.1,4,12.1,15.1 Section 13 Items 13 and 14
proprietary and 15.3 of Franchise
information Agreement
i. Restrictions on Sections 1.3,2.1,2.2,7.1, Not Applicable Items 8 and 16
products/services 8.1 and 8.4 of Franchise
offered Agreement
j . Warranty and Section 8.3 of Franchise Not Applicable Not Applicable
customer service Agreement
requirements
k. Territorial Sections 1.3 and 8.8 of Section 1, 3, and Item 12
development and Franchise Agreement Exhibit B
sales quotas
1. Ongoing Sections 8.4 and 10.3 of Not Applicable Items 8 and 11
product/service Franchise Agreement
purchases
m. Maintenance, Sections 3.2.0. and 7.4 of Not Applicable Items 6 and 17
appearance and Franchise Agreement
remodeling
requirements
23
[i
i Section in Disclosure
Agreement
Agreement Item
n. Insurance Section 10.4 of Franchise Not Applicable Items 6, 7 and 8

Agreement
o. Advertising and Sections 5.6 and 9 of Not Applicable Items 6 and 11
Marketing Fund Franchise Agreement
p. Indemnification Section 11.2 of Not Applicable Item 6
Franchise Agreement
q. Owner's participation/ Sections 8.3 and 8.6 of Section 7 Item 15
management/staffing Franchise Agreement
r. Records and reports Sections 10.1 and 10.3 of Not Applicable Item 11
Franchise Agreement
s. Inspections and audits Sections 8.2 and 10.2 of Not Applicable Items 11
Franchise Agreement
t. Transfer Section 14 of Franchise Section 16 Items 6 and 17
Agreement
u. Renewal Section 3.2 of Franchise Not Applicable Item 17
Agreement
v. Post-termination Sections 13.1 and 15.3 of Sections 14,15 Item 17
obligations Franchise Agreement
w. Non-competition Sections 12.2 and 13 of Section 11 Item 17
covenants Franchise Agreement
x. Dispute resolution Section 16 of Sections 21, 22 Item 17
Franchise Agreement
ITEM 10 FINANCING
We do not offer direct or indirect financing for any amount due under the Franchise Agreement or
Development Agreement. We do not guarantee your note, lease or any other obligation.
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
A. Pre-Opening Assistance
Franchise Agreement
Before you open the Studio:
1. We will provide you (or, ifyou are an entity, your Designated Operator), as well as your Designated
Manager (if appointed) and any initial instructors of your Studio you designate, with our proprietary Initial Training
Program, that at least you (or, if appropriate, your Designated Operator) will need to complete prior to opening
24
yourSô.Wew^^c^
30 days preceding your Studio
trainingpersonnei.Wewiii provide this initiaiTraining Program at ou^
faciiitywedesignate,andthisinitiaitraining(asweiiasothertrainm^
is described more fuiiyheiow in this item underthe heading "Trainings
2. if the Authorised Location for your Studio has not been identified at the time the Franchise
Agreement is signed, we wiii work with you to designateageographicai area within which you mu^
Authorised Location foryourStudio ("Designated MarketArea"). (Franchise Agreement, S e c t i o n s
comply with our obligations with respect to site selection assistance and site approval as set forth more fuiiy
below in this Item under the heading "Site Selection Assistance and Time to Open".
3. Concurrently with the execution of your Franchise Agreement, we will loan you one copy of the
Manual, which contains mandatory and suggested specifications, standards and procedures. The Manual is
confidential and remains our property. We may modify the Manual. (Franchise Agreement, Section 6.4). The
T a b l e o f C o n t e n t s o f t h e Manual is attached to this Disclosure Document as ExhlbltE.The Manual currently
consists of 317 pages.
4. Within30calendardaysofexecutionofyourFranchiseAgreement,wewillprovideyou (through
the Manual or otherwise) with specifications for the layout and design of the Studio (Franchise Agreement,
Sections6.2,7Btand73)
5. Within 30calendardaysofexecution ofyourFranchiseAgreement,wewillprovideyou (through

the Manual or otherwise) w i t h a l i s t of the Pilates fitness equipment and gear,standard fixtures, furnish^
supplies, and signs to be used in the Studio, as well asalist of Approved Suppliers (Franchise Agreement, Section
66)
6. We will license you the use of ourtrademarks (Franchise Agreement, Section4.2).
7. We will consult and advise you on the advertising, marketing and promotion for the Grand
OpeningoftheStudio.(FranchiseAgreement, Section 6.9).
8. If you enter a Development Agreement, we will designate your Development Area.

(Development Agreement, Sectionland Exhibit A).
We are not required to provide any other service or assistance to you before the opening of the Studio.
B. Site Selection Assistance and Time to Open
êêctônA^tonce
You must assume all costs, liabilities, expensesand responsibility in connection with: (i) l o c a t e
and developingaPremises for your FranchisedBusiness; and (ii)constructing,equipping,remodelingand/or
building out the Premises for use asaFranchised Business, all in accordance with our System standards and
specifications. If the AuthoriêdLocationfor your Studio hasnot been identified at the time theFranchise
Agreement is signed, we will assign youaDesignated Market Area as previously disclosed in this Item.(Franchise
25
We may provide you w i t ^ ^ o u r ^ ^
arempiaceândanyotherêseieetioneou^^
information of any ioeai real estate broker that we have an exiting r e l a t e
confidential site seiection/evaiuation criteria, if we know any such brokers in or aroun
Areayouareassigned^FranchiseAgreement,5ections^ând6^
Our guidelines for site selection may require that you conduct, at your expense, an evaluation of the
demographics ofthe marketarea forthe location.Ideaiiy,the Authorised Location ofyourStudio will beama^^
national tenant, anchored commercial retail center that meets our then current requirements for population
density,demographics, available parking, trafficflow and entrance/exitfrom the site. The
at least 1,500 square feet and be inarectangular shape of 25 feet by 60 feet, franchise Agreement, Section
^
If you locateasite, we will approve or disapprove ofthe site within 30 days after we receive any and all
reasonably requested information regardingyour proposed site from you. franchise Agreement, Section
We useasoftware program to evaluate the demographics ofamarket area for site selection approval. Ifwe
cannot agree onasite, we may extend the time for you to obtainasite, or we may cancel the Franchise
Agreement.
We must also have the opportunity to review and approve/reject any lease or purchase agreement fora
proposed location before you enter into such an agreement.We may condition our approval onanumber of
conditions, including^!) the inclusion of the terms outlined in 5ection7.2of the Franchise Agreement
5to the Franchise Agreement in the lease for the location; and (ii)receivingawritten representation from th^
landlord of the Premises that you will have the right to operate the Studio, including offering and selling the
ApprovedProducts and Services,throughout the term of your Franchise Agreement.^Franchise Agreement,
Sections22ând72, and Exhibits)
You mustsecureanAuthoriêd Location thatweapprovewithinsix(6) months of executingyourFranchise

Agreement for that Franchised Business or we may terminate that Franchise Agreement. (Franchise Agreement,
Section!^)
^meôOpe^.^ro^cêAêeme^t
We will authorise the opening of your Studio when (i) all of your pre opening obligations have been
fulfilled, (ii) pre-opening training has been completed, (iii) all amounts due us have been paid, (iv) cop
insurance policies (and payment of premiums) and all other required documents have been received by us, and
(v) all permits have been approved. (Franchise Agreement, Sections 5.4, 5.5, 6.3 and 10.4).
The typical length of time between the signing of the Franchise Agreement and the time you open your
Studio is approximately three (3)to six (6) months. Your total timeframe may be shorter or longer depending on
the time necessary to obtain an acceptable Premises, to obtain financing, to obtain the permits and licenses fo^
the construction and operation of the Franchised Business, to complete construction or remodeling as it may be
affected by weather conditions, shortages, delivery schedules and other similar factors, to complete the i n t e ^
and exterior of the Franchised Business, including decorating, purchasing and installing fixtu^^
signs, and to complete preparation for operating the Franchised Business, including purchasing any invent
supplies needed priorto opening.
You are required to open your Franchised Business within six (6) months of executing your Franchise
Agreement, but we may agree in writing to provide you with an additionalthree (3) months to open your Studio if
26
©2017Clob^^ôo^^
2017^nê0^0êOo^me^
you^haveoôdy secured on
continuous efforts to buildoo^^
month period following the execution of your Fronchise Agreement. If you do not open your Studio within the
time period setforth in the Fronchise Agreement, wewill hove the option to terminote your Fronchise Agreement.
(Fronchise Agreement, Sections 1.2 ond 2.2).
^metoOê^.êve^menÂêemen^^p^coê^
if you have entered intooOevelopment Agreement to open ondoperote three (3) or more Fronchised
Businesses, your Development Agreement will inciudeoOeveiopment Schedule contoiningodeodlinehy which
you must hove eoch of your Fronchised Businesses open ondoperoting. (DevelopmentAgreement, Exhibit A).
C. Our Ohligotions During the Operation ofthe Franchised Business
^ro^cê Agreement
Duringtheoperotion ofthe fronchised business:
1. Wewill specify or approve certain equipmentondsuppliersto be used in thefronchised business

(Fronchise Agreement, Sections 6.6 and^.l).
2. We will provide additional training to you and any of your employees at your request. You are
responsible for any and all costs associated with such additional training (Franchise Agreement, Section 6.3).
3. Ifyou do not obtain and maintain appropriate insurance coverage, we may procure the
coverage on your behalf. We will pass the cost onto you. (Franchise Agreement, Section 10.4.D.)
4. Wemay institute various programs for auditingcustomer satisfaction and/or other quality
control measures (Franchise Agreement, Section B.2).
5. We will maintain and administer the marketing fund (the "Marketing Fund") (Franchise
ê^rêt^g^cB
The Marketing Fund was established in 2014topromoteClubPiiatesStudios and the Brand onaNational
level. Franchisee will be required to makeacontribution ("Marketing Fund Contribution") of two percent (2%)
of itsmonthly Gross Sales to the MarketingFund. Such MarketingFundContribution will bepayableto
Franchisor,weekly, from the day the Studio is first opened for business or Franchisee receives payments from
members, whichever occurs first. Franchisor will give Franchisee at least sixty (60) days written notice before
any such increase will be instituted. (Franchise Agreement, Section 9.1).
The Marketing Fund is administered by us with the advice provided bythe Marketing Fund Committee(the
"MFC") pursuanttoacharter agreement among usand the membersoftheMFC.Underthecurrentcharter,which
is subjectto change, Club Pilates franchisees elect or appoint2members to the MFC to serve foraoneyearterm
corresponding to the colendoryeorond we select2members to serve foraone-year term corresponding to the
calendaryear.The^member MFC will, byamajorityvote, assist us in determiningthe selection and placement
of regional and national advertising. Each MFCmemberhasonevote. Ifthe MFC isdeadlocked,ourPresidentwill
breakthedeadlockwith the decidingvote, which shall be binding.The Marketing Fund is maintained and operated
27
^ O ^ C ^ ^ ^ F ^ ^ ^
2017^nê0^loêOo^meot
byUSW^the055i5t80CeoftheMFCtOmeet^
promôn^^v^wh^
only. W i t h t h e o s s ^ o n o e o f t h e M ^ w e w ^ d ^ ^ ^ p o b ^ r ^
d i s c ^ o n over the message creative concept m a t e r s
and aiioeatioo thereof We have the p o w e ^
from the Marketing Food. The Marketing Fond oontrihotions may he osed for traditional advertising a ^
sueh as wehsite developments sociai media, pohiic relations, advertising campaigns ( t e i e v ^
other media), or other promotionswhich will raise awareness oftheCLU8PII^T5Shrand.(Fran^
Sections 6.8 and 9.1).
We are not obligated to ensure that Marketing Fund activities or doiiars are spent equaiiy,onapro rata
basis, either on yourStudio, or all Studios inanarea.Ahriefstatementregardingthe availability ofCLU^
franchises may be included in advertising and other items produced using the Marketing Fund, but we will not
otherwise use the Marketing Fund to pay forfranchise sales or solicitations.
Reasonable disbursements from the Marketing Fund will be made solely for the payment of expenses
incurredinconnection with the generalpromotionof theMarks and theSystem, including the costof
formulating, developingand implementing advertising and promotional campaigns; and the reasonable costs of
administering the Marketing Fund, including accounting expenses and the actual costs of salaries and fringe
benefits paid to our employees engaged in administration of the Marketing Fund. The Marketing Fund is nota
trust or escrow account, and we have no fiduciary obligations regarding the Marketing Fund. We will retain
independent certified public accountants to prepare an annual audit of the Marketing Fund, at the expense of
the MarketingFund,andsendacopyoftheaudittofranchiseesupon written request. Our company-owned or
affiliate owned Studios will contribute to the Marketing Fund at the rate provided in our Franchise Oisclosu^
Document. Should the advertising contribution fortheSystem decrease atanytime, we havetherightto reduce
our contribution from company-owned or affiliate-owned Studios to the rate specified for franchised locations.
We are not required to spend all Marketing Fund contributions in tbefiscalyearthey are received.
You agree to participate in all Marketing Fund programs. The Marketing Fund may furnish you with
marketing,advertisingand promotional materials; however,we may require thatyou pay the cost of producing,
shipping and handling for such materials.
During the fiscal year ended on December 31, 2016, the Marketing Fund spent 25% of its contributions
on production, 25% of its contributions on media and public relations, 35% ofits contributions on administra^^
expenses,andl5%ofitscontributionson internet related matters.
A^vert^ngGenero^BLocoBA^
You are responsible for local marketing activities to attract members to your Studio. We require you to
submit samples of all advertising and promotional materials (and any use of the Marks and/or other forms of
commercial identification)for any media, including the Internet, World Wide Web or otherwise. You must first
obtain our advanced writtenapproval beforeanyformof co-branding, oradvertisingwithother brands,
products or services. (Franchise Agreement, Section 9.2)
You must strictly follow the social media guidelines, code of conduct, and etiquette as set forth in the
Manual regarding social media activities. Any use of Social Media by you pertaining to the Studio must be in
goodtasteand not linked to controversial, unethical, immoral, illegalor inappropriate content. You will
28
©2017Clob^8^^80^^^
2017ôê0^loso^0ocom^
prompt modify or remove any onlme^
Franchise Agreement or the ManoaL^ranehise Agreement Seetion^)
As part of yoor material obligations underyour Franchise Agreement, you must expend at ieast $1,5^^
per month on marketing and advertising materials that we approve in connection with the promotion of yo^^
Studiowithinyour DesignatedTerritory (your "Local Adveîsing Requirements Upon o
provide us with an accounting of your monthly expenditures associated with your Local Advertising
Requirement, along with invoices and other relevant documentation to support those expenditures. Please he
advisedthatthe Local Advertising Requirement is onlythe minimum amountyou must expend each month, and
we encourage you to expend additional amounts on the local promotion of your Studio.
We have not yet estahlishedalocal or regional advertising cooperative. We may,in the future, decide
to form one or more associations and/orsuh-associations of Cluh Pilates Studios to conduct various marketing
related activities onacooperative basis (a "Co-Op"). If one or more CoOps (local, regional and/^^
formed coveringyour area, then you must join and activelyparticipate.You may be required to contribute such
amounts as aredetermined from time to time by such CoOps.(Franchise Agreement, Section 9.4)
0 Training
^ t ^ T r o ^ g o ^ Programs
Prior to opening your Franchised Business, you must ensure that: (i) you (or,if you are an entity, your
Designated Operator) completestheOwner/Operator Module ofthe InitialTrainingP^^
last 2-3 business days at our corporate headquarters or another training facility we designate (most likely in
California); (ii) your Designated Manager (if appointed) attend and complete the Designated ManagerTrainin^
Program; and (iii) at your option and ifyou wish, one (1) or more individuals that are Certified Pilates Instru^^
and that will be responsible for providing the Approved Services at your Franchised Business may participate and
complete the Orientation Program component of our InitialTraining Program, which typically lastslbusine
andis designed to provide advancedinstructiononhow to provide Pilates instruction, as well as the other
Approved Services, in accordance with ourSystem standards and specifications.While there is no specific deadline
by which you must complete the InitialTraining Program, you must complete all of your training obligations
toopeningyourCLUBPILATFSStudio.
Please note thatyou may electto have certain ofyour initial instructors and any subsequent instructors of
yourStudio participate in completingthe Orientation Program component of ourlnitialTraining Programs
via webinar/video instruction.With that said, we recommend that at least one(l) of your initial instructors
to the InitialTraining Program with you (or your Designated Principal or Designated Manager,as applicable) an
complete the entire initialTrainingProgram(including the Orientation Programcomponent) at the training
facility(ies) we designate.
Intheeventyou are the owner of multiple Studios or otherwise wish to appointathird-party individual to
manage the day-to-day operations of your Franchised Business, then that individual (a "Designated Manager")
must (a)attend and complete at leastthe Owner/Operator Module
and wishes to provide the Approved Services, the Orientation Program), and (b) otherwise be approved by us,
before assuming any management responsibility atyour Franchised Business. (Franchise Agreement, Sections S.S
and63)
We do not chargeatuition or training fee for you or your designated trainees (Designated Operator,
Designated Manager (if appropriate) or initial instructor(s)) to attend the appropriate training p
29
^ O ^ O u b ^ ^ F ^ ^ ^
2017Fr80îseOi5olo5oreOocome^
provided these individuals attend at the same time prior to the opening of your Studio. You will be responsible for
the costs and expenses associated with these individuals attending our Initial Training Program. (Franchise
Agreement Section 5.5).
Our primary initial training programs as ofthe Issue Date ofthis Disclosure Document are described below:
TRAINING PROGRAM
.n • , .. ; Owner/Operator Module ... ' '. i .; ] l} • •

Hours of Hours of
Subject Location
History and Philosophy 1 0
Office-Costa Mesa, CA
Real Estate 2 0
Office-Costa Mesa, CA
Construction 1.5 0
Expectations and Club Pilates Corporate
Obligations 1 0 Office - Costa Mesa, CA
Studio and Equipment Set- Club Pilates Corporate
up and Support 1 0 Office - Costa Mesa, CA
Club Pilates Training Studio
Pilates Class 0 1 - Costa Mesa, CA
Products 1.5 0 Office - Costa Mesa, CA
Intro to Studio Club Pilates Corporate
Management Software 1.5 0 Office - Costa Mesa, CA
Sales and Operations 3.5 0 Office - Costa Mesa, CA
Finance 3 0 Office - Costa Mesa, CA
Club Pilates Training Studio
Pilates Class 0 1 - Costa Mesa, CA
Staffing and HR Support 1 0 Office - Costa Mesa, CA
Marketing 3 0 Office - Costa Mesa, CA
Training Re-Cap and Club Pilates Corporate
Summation 1 0 Office - Costa Mesa, CA
Test 1 0 Office - Costa Mesa, CA
TOTAL 22 2
30
DESIGNATED MANAGER TRAINING PROGRAM
Designated Manager Training Program

Hours of ; Hours of
• : subject' /• •' Classroom Training ' : On-The-Job Training
Location i
Ingredients of a Successful
1 0 At our corporate headquarters.
GM
Club Ready Software 3 0 At our corporate headquarters.
Prospect Generation 2 0 At our corporate headquarters.
Pre-Sale, Soft Open, and

1 0 At our corporate headquarters.
Grand Open
Retail Sales At our corporate headquarters.

1 0
Teacher Training Sales and At our corporate headquarters.
Program 1 0
Sales Process: Demo Classes At our corporate headquarters.

and Memberships 4 0
Marketing At our corporate headquarters.

2 0
Private Training Sales corporate

1 0
Sales: Roll-Play & Agreement At our corporate headquarters.
Write-Up 2 0
Club Pilates Signature Class At our corporate training center.

1 0
"What Not to Do" At our corporate headquarters.

1 0
Comprehension Exam At our corporate headquarters.

1 0
TOTAL 22 0
Club Pilates Bridge Training is an instructor onboarding training. It is for all instructors hired to work at
a Club Pilates franchise location. Bridge Training is not a Pilates certification nor is it meant to fill in gaps for non-
comprehensive instructors. We normally conduct Bridge Training monthly at corporate training centers and, as
needed for new locations. Our primary instruction is through videos, hands-on training, and a training manual
prepared specifically for the Club Pilates Bridge Training.
31
1 :
' " : -! :: : •'-><-y. . Bridge Training . • °' Utb:" : t "'^ ; -• • i _ ^ i
:
Hours of Hoursof
Subject Location
VIDEO TOPICS: (Watch Prior to Day 1)
0
History & Culture 15 mins Option 3: Hosted at your Studio
0
Sales & DEMO Classes 1 hour Option 3: Hosted at your Studio
0
Retail 15 mins Option 3: Hosted at your Studio
0
Social Media 15 mins Option 3: Hosted at your Studio
0
ClubReady 30 mins Option 3: Hosted at your Studio
0
CP Flow Programming 15 mins Option 3: Hosted at your Studio
0
Hot topics 5 mins Option 3: Hosted at your Studio
0
TRX 45 mins Option 3: Hosted at your Studio
0
Barre 45 mins Option 3: Hosted at your Studio
0
Trigger Point 45 mins Option 3: Hosted at your Studio
DAY 1: In-Studio PRACTICAL LEARNING

0
Introductions 15-20 mins Option 3: Hosted at your Studio
32
Quick review of videos- 0 Costa Mesa, CA or Studio nearby
time for questions 20 mins Option 2: Hosted at your Studio
Club Pilates Equipment 0 Costa Mesa, CA or Studio nearby
Overview 20 mins Option 2: Hosted at your Studio
The CP way + Large Groups 0 Costa Mesa, CA or Studio nearby
& Mixed Levels 30 mins Option 2: Hosted at your Studio
Flow (Progressions + Option 1: Club Pilates Corporate Office in
Transitions + Creative 0 Costa Mesa, CA or Studio nearby
Sequencing) 1 hour Option 2: Hosted at your Studio
0 Costa Mesa, CA or Studio nearby
Level Appropriateness 1 hour Option 2: Hosted at your Studio
Spring Settings (cheat 0 Costa Mesa, CA or Studio nearby
sheet) 30 mins Option 2: Hosted at your Studio
Lunch 1 hour Option 2: Hosted at your Studio
Review New Modalities and Option 1: Club Pilates Corporate Office in
class examples (TRX, Barre, 0 Costa Mesa, CA or Studio nearby
Trigger Point) 3 hours Option 2: Hosted at your Studio
CP Classes 45 mins Option 2: Hosted at your Studio
Teaching Demos 30 mins Option 2: Hosted at your Studio
Private Training 0 Costa Mesa, CA or Studio nearby
Assessments 30 mins Option 2: Hosted at your Studio
DAY 2: In-Studio "Teach-Backs"

Review any questions as 0 Costa Mesa, CA or Studio nearby
needed 1 Option 2: Hosted at your Studio
Teach Full Class for Score 50 minutes Option 2: Hosted at your Studio
Interactive Feedback for 0 Costa Mesa, CA or Studio nearby
each Instructor lOmm&esminutes Option 2: Hosted at your Studio
Vanessa Huffman, whose biography is listed in Item 2, will oversee the initial training program. She has
13 years of experience in the fitness industry and has been with us or our affiliates since October 2015. Melody
Ward, whose biography is listed in Item 2, is in charge of the Bridge Training Program and has been with us or
our affiliates since 2009. We normally conduct our training monthly, as needed, but we reserve the right to
change this schedule based on (a) demand, and (b) the availability of our instructors. Our primary instruction is
33
through haodôoîomg^^
ôrmoreofthemit^traim^
certompa^ of the OwnerBOperator Module or Orôtation^ butthesemd^duo^willhove^
completed theoppropriote portion ofthe ImtialTraim^
On^teGronÔpen^gA^tonce^screôno^
Aroundthe time you first open yourStudlo, we maysendoneôr more represeotatl^

to^provlde assistance and recommendations regordmgyouropemng and
additional or refreshertraining associated with the Owner/Operator Module and/or Orientation
deem appropriate in our discretion. If we determine to provide such on site assistance, it will typically
hetweenl^husinessdays.
OêntoônProgrom^^nstr^c^s-Ongo^ng
In the event you have o n e ^ o r more instructors at your Studio that have completed the Orientation
Program, then those individuals may assist in the provision ofthe Orientation Program (including review
gradingthetestassociatedwiththeOrientationProgram)toanyotherCertified Pilates Instruc^^
to engagetoserveas instructors atyourStudio.(PranchiseAgreement, Section 6.^.
Teoc^Tro^ngProgrom^êeson^^nvoêmento^^roncôr
As partoftheApprovedServices,wewillpermityoutoprovidetheTeacherTraining Program atyour

Franchised Business, provided you haveaCertified Pilates Instructor that has (a) completed our Orientation
Program, and (h) otherwise met our then-current criteria to serve asa"Masterlnstructor"ofthe^
Training Program (which, as previously disclosed, will he set forth in the Operations Manual or supplementary
Manuals).TheTeacherTrainingProgramtypically involves approximately4S0to500hours of instruction,
including: (i) 12 days ofonline "classroom/wehinar" training (the "WehinarTraining^t^
remotely(at home or at your Franchised Business or other local Studio that is authorised to provide the Teacher
Training Programs and (ii) approximately 40 days of practical,"handson" training, some of w h ^
completed at home and some ofwhich must he completed ataStudio that is authorised to provide the Teacher
Training Program. (Franchise Agreement, Section 6^).
Presently, the Studios in our System typically chargeafee of $4,750 for an individual that signs up to
attend theTeacherTraining Program. As disclosed in Item 6, we receive $2,000 of that $4,7S0fee as
consideration forthat individual to have access to our proprietary WehinarTraining (and any other materials we
determine appropriate in connection with theTeacherTraining Program).The remaining $2,750 is paid to the
Studiowhere the individual obtains the restoftheTeacherTraining Program instruction,which may he your
Franchised Business (provided we have approved one of your instructors asa^Master Instructor" or you retain
the services ofaCluh Pilates "Master Instructor in your areas to conductTeacherTraining at your Studio).
While you could technically hire individuals to serve as instructors and have them go through the entire
TeacherTrainingProgram,we expect and strongly recommend that youinsteadhire only CertifiedPilates
Instructors that willonly need to complete our Orientation Program before they can begin providing the
Approved Services at your Studio.
Our standard franchise offering assumes that your initial instructor(s) will already be Certified P ^
Instructors. Please note, however,that:(i) we will describe the proprietary TeacherTrainingProgr^^
34
© ^ 7 ^ ^ ^ F ^ ^ ^
2017^8och^0^loso^0ocum^
be provided o s ^ o f o ^ o d i o ^
provide to yoo;8nd^we may permit yoo to ^
Program wbiie you ore securing on approved premises foryour Studio and otherwise devei^^^
opening (but tbis may invoiveabigber investment than our standard franchise offering described i^
A^ô^Tro^ng^nCo^necônwÔperoô^c^êô^
We may aiso provide, and require tbat you (and your Designated Operator and Designated Manager, as
appropriate) attend, up to five (5) days of additional training each year at our designated training fac^^
not charge any troiningfee in connection with such training that we require you to attend. (Franchise Agreemen^^
Sections).
You mayrequestthatweprovidecertain additional or refreshertrainingtoyou, either at one(l)ofourdesignat^^

training facilities or on-site at your Franchised Business.We reserve the right to cha^
trainingfee based on the numberof days ofsuch trainingthatwe provide atyour request(regardiess of location).
You will be responsible for the costs and expenses associated with you and your designated personnel
attending any such additional training described in this Item. (Franchise Agreement, Sections S.S and 6.3).
E. ComputerSystem-Hardwareand Software
You mustacquireacomputerfor use in the operation ofthe Studio.You must record all ofyourreceipts,
expenses, invoices, memberlists,classandemployeeschedules, and otherbusiness information promptly in the
computer system and use the software that we specify or otherwise approve. Currently, the approved and
required software for use in the Studio is "ClubReadyB'anonline/webbased business management program
used for class scheduling, processing member credit and debit card payments, keeping your business records
and generating business reports among other things. Atthistime,we have approved no other compatible
program but we reserve the right to do so at our sole discretion. If the approved supplier for the required
software changes, you must migrate your operations to the new required software at our direction. The details
of these standards and requirements willhe described in the Manual or otherwisein writing andmay be
modified in response to changes in marketing conditions, business operating needs, or technology. (Franchise
Agreement, SectionsS.4,S.7 and 10.3).
You must allow our approved suppiierto upgrade the proprietary database configuration ofthe required
software for the computer in your Studio as we determine necessary. Our approved supplier may provide you
periodic updates to maintain the software and may chargeafee for preparing the updates and maintaining the
software. There are no limitations on the frequency and cost of the updates. The system is designed to enable
ustohaveimmediate, independent access totheinformation monitored bythesystem,and thereisno
contractual limitation on our independent access or use of the information we obtain. (Franchise Agreement
Sections S.4 and 10.3).
You must purchase or lease, and thereafter maintain, such computer hardware and software, dedicated
high speed communicationsequipment and services, dedicatedtelephoneandpowerlines,modem(s),speakers,
and other computerrelated accessories or peripheral equipment as we may specify,for the purpose of, among
other functions, recording Studio sales, scheduling classes, and other functions that we require. Youmust
provide such assistance as may be required to connect your computer system withacomputer system used by
us. We will have the right, on an occasional or regular basis, to retrieve such data and information from your
computer system as we, in our sole and exclusive discretion, consistent with consumer privacy laws, deem
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necessa^ You must operate your computer system
u^ which may be modified at our discretion from time to time, in view of the interconnection of computer
systems and the necessity that such systems he compatible with each other, you expressiy agree that you wiii
strictiycompiywith our standards and specifications for aiiitem(s)associated with your computer system, and
wiii otherwise operate your computer system in accordance with our standards and specifications, franchise
Agreement, Sections 5.4 and 10.3).
To ensurefuii operational efficiency and optimal communication capability between and among
computer systems installed by you, us, and other Club Piiates franchisees, you agree, at your expense, to keep
your computer system ingood maintenance and repair, and foilowingour determination that it will be
economical or otherwise beneficial to the System to promptly install such additions, changes, m o d i f ^ ^ ^
substitutions and/or replacement to your computer hardware, software,communications equipment and
services, telephone and power lines, and other computer related facilities, as we direct.
We reserve the right to require you to update or upgrade any computer hardware or software during
the term ofthe franchise, and if we choose to do so, there are no limitations on the cost and frequency of this
obligation. The approximate cost of the Computer System includingacomputer or tablet computer,hardware
and software isapproximately$l,200 but ourApprovedSuppliermaypermityou to paythis out over 12 months.
There is no initial fee to obtain the software. The approximate cost of any annual maintenance upgrades or
updates or maintenance support contracts varies widely from $0 to $800, which does not include the software
fee of around $269 per month. We have no obligation to provide ongoing maintenance, repairs, upgrades or
updates, and any such obligations would be those of the software licensors.
IT5M12 TERRITORY
FranchlseAgreement:AuthorlzedLocatlonandOeslgnatedTerrltory
You will operate the Studio ataspecificlocationapprovedby us (referred to as your "Authorised

Location"). Once you have secured your Authorised Location, we will provide youaOesignatedTerritory within
which you will have certain protected rights.Your OesignatedTerritorywillcontainamaximum of 50,000 people
which will be approximatelyatwomile radius around your Studio, unless your Studio is located inamajor
metropolitan downtownareaor similarly situated/populatedcentral business district (a "Central Business
District").If your Studio is located inaCentral Business District, your DesignatedTerritory wi^^
people but may be limited toageographic area comprised of anywhere fromaradiusoftwo blocks to two miles
around your Studio, as we deem appropriate in our discretion.The siê of your DesignatedTerritory may vary
from the territory granted to other franchisees based on the location and demographics surrounding your
Studio
The boundaries ofyour DesignatedTerritory may be described in terms of Opcodes, streets, landmarks
(both natural and manmade) or county lines, or otherwise delineated onamap.The sources we use to
determine the population within your DesignatedTerritory will be publicly available population i n ^
(such as data published by the LI.S. Census Bureau or other governmental agencies and commercial sources).
If you have been grantedaDesignatedTerritory,neither we nor our affiliates will operate or establish,
or authorise another Club Pilates franchisee to operate or establish,aStudio within your DesignatedTerr^^
For this reason, your DesignatedTerritory is deemed"exclusive" under applicable franchise disclosure laws ^
please note our reserved rights described later in this Item).
36
Except as e x p r e ^ y p r o v i d e d i o t h e ^ ^
impose conditions on the l o c a t e
brands or Marks that we now,or in the future, may offer, and we may operate or license 5 t ^
channeisofanytype,iicensed,franchisedorcompany owned, regardless of their location or proximity to the
Premises and whether or not they provide services similar to those that you offer. You do not have any rights
with respecttootherand/or related businesses, products and/orservices, in which we may he involved, now or
in the future.
While you and other Club Pilates Studios will be able to provide the Approved Services to any potential
client that visits or otherwise reaches out to your Studio, you will not be permitted to actively solicit or recruit
clients outside your DesignatedTerritory,unless we provide our prior written consent. Likewise, o ^
franchisees are not permitted to solicit and/or recruit prospective clientele within your D e s i g n a t e d T e ^
You will not be permitted to advertise and promote your Franchised Business via advertising that is directed at
t h o s e o u t s i d e y o u r O e s i g n a t e d T e r r i t o r y w i t h o u t o u r p r i o r w r i t t e n c o n s e n t , w h i c h we will not unreasonably
withhold provided (a) the area you wish to advertise in is contiguous to your OesignatedTerritory,and(b)that
area has not beengranted t o a n y third party in connection with a Club Pilates Studio(or Development
Agreement) of any kind.
Wemaychoose,inoursolediscretion,toevaluateyourStudioforcompliancewiththeSystemStandards
using various methods(including, but not limited to, inspections,fieldservice visits, surveillancecamera
monitoring, member comments/surveys, and secret shopper reports). You must meet minimum standards for
cleanliness, equipmentcondition, repairand function, and customer service. Youremployees, including
independent contractors, must meet minimum standards for courteousness and customer service. (Franchise
Agreement, Section B.BA)
Unless waived by Franchisor due to unique market conditions, Franchisee must meetacertain Minimum
Monthly Gross Revenue Ouota. If Franchisee fails to achieve and maintain average monthly gross revenues of
$30,000 b y t h e l ^ y e a r anniversary o f t h e opening ofthe Studioand average monthly gross revenues of $40,000
bythe end o f t h e ^ y e a r a n n i v e r s a r y a n d each succeedingyearthereafter,Franchisor may instituteacorrective
training program and/or require Franchisee to perform additional local marketing. If Franchisee fails to meet
the Minimum Monthly Gross Revenue O u o t a f o r 3 6 consecutive months at any time during the term of the
Franchise Agreement, Franchisor may instituteamandatory corrective training program or terminate the
Franchise Agreement upon notice to you.
Oevelooment Agreement
Ifyouaregrantedthe rightto open three or more Franchised Businessesunderourform of Development

Agreement, then we will provide you withaDevelopment Area upon execution of this agreement.Thesiê of
your Development Area will substantially vary from other Systemdevelopers based o n : ( i ) the number of
Franchised Businesses we grantyou the right to open and operate; and (ii) the location and demographics ofthe
generalareawherewemutuallyagreeyouwill beopeningthese locations.The boundariesofyour Development
Area may be described in terms of Opcodes, streets, landmarks (both natural and manmade) or county lines,
or otherwise delineated o n a m a p attached to the Data Sheet.
Each Franchised Businessyoutimelyopen and commence operating under our then current form of
franchise agreementwill be operated: (i)fromadistinct5ite located w i t h i n t h e D e v e l o p m e n t A r e a ; a n d ( i i ) w ^
its own DesignatedTerritorythat we will define once the site f o r t h a t Franchised Business has been approved.
37
Wewill not own or oporote, or ^ 0 0 0 5 0 8 ^
Marks and S y ^ m w ^ i n ^ O ^ ^
T e r r i t o r y o f ^ f i n a l Franchised Business you were g r a n ^ d t h e r ^ ^
Agreement ^ ^ the expiration or termination of the Oeveiopment Agreement for any reason. Your
Oeveiopment Area wiii he exclusive during this time period.
Upon the occurrence of any one of the events described in the preceding paragraph, your territorial
rights within the Development Area will he terminated, except that each Franchised Business that you have
opened and are continuously operating as of the date of such occurrence will continue to enjoy the territorial
rights within their respective DesignatedTerritories that were granted under the franchise agre^
entered intoforthose Franchised Business(es).
You mustcomplywith your development obligations underthe DevelopmentAgreement, includingyour

Development Schedule, in order to maintain your exclusive rights within the Development Area. If you do not
comply with your Development Schedule,we may terminate your Development Agreement and any further
development rightsyou have underthatagreement. Otherwise, we will not modifythesiê ofyour Development
Area except by mutual written agreement signed by both parties.
Reserved Rights
We and our oarentBaffiliates reserve the exclusive right to conduct the following activities under the
Franchise Agreement and/or Development Agreement (as appropriate^êstablish and operate, and license
anythirdpartytherightto establish and operate, other Studios and Franchised Businesses using the Marks
System at any location outside of your Designated Territory(ies) and, if applicable. Development Area; (^^^
market, offer and sell products and services that are similar to the products and services offered by the
Franchised Business underadifferenttrademarkortrademarksatany location, within or outsidethe Designated
Territory(ies) and, if applicable, the Development Area; (iii) use the Marks and System, as well as other su
marks we designate, todistributeanyApproved Products and/orServicesinany alternative channel of
distribution,withinoroutsidetheTerritory(ies)and Development Area (including the 1^^^
catalog sales,toll free numbers, wholesale stores, etc.), as further described below; (iv) to acquis
or otherwise affiliate with, and after that own and operate, and franchise or license others to own and operate,
any business of any kind, including, without limitation, any business that offers products or services the same as
or similarto the Approved Productsand Services (but under different marks), within or outside your Designated
Territory(ies) and, if applicable. Development Area; and (v) use the Marks and System, and license others to use
the Marks and System, to engage in any other activities not expressly prohibited in your Franchise Agreement
and, if applicable, your Development Agreement.
Neitherthe Franchise Agreement nor Development Agreement grants you any right to engage in any of
the activities outlinedin the preceding paragraph,or to share in any of the proceeds receivedbyus,our
oarent/affiliates or anvthirdoartvfrom these activities unless we otherwise agree in w r ^ ^
no obligation to provide you any compensation for soliciting or accepting orders (via alternate channels of
distribution)withinyourTerritory.
InternetSalesBAIternatlve Channels of Commerce
We may sell products and services to members located anywhere, even if such products and services
are similar to what we sell to you and what you offer at your Studio. We may use the internet or alternative
channels of commerce to sell CLUB PILATFS brand products and services. You may only sell the products and
servicesfromyourapproved Studio location, and may only use the internet or alternative channelsof commerce
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to offer orse^the produce and s e r ^ Wemay
require you to submit samples ofall a d v e r t s
otberformsofoommeroiaiidentification)forany media, including tbe internetwork^
We retain tbe rigbtto approve or disapprove of sucb advertising, in our sole discretion. Any use o f s o ^
byyou pertaining to tbe Studio must be in good taste and not im^
or inappropriate content. We reserve tbe rigbt to ôccupy^ any social media websites/pages and be the sole
provider of information regarding tbeStudio on sucbwebsites/pages(e.g.,asystem-wide Facebook page). At
our request, you will promptly modify or remove any online communication pertaining to tbe Studio tbat does
not complywith tbe Franchise Agreement ortbe Manual. You are not probibitedfrom obtaining members over
thelnternet provided your Internet presence and content comply with the requirements of the Franchise
Agreement.
Additional Disclosures
Neitherthe Franchise Agreement northe DevelopmentAgreement provides you with any right or option
to open and operate additional Franchised Businesses (other than as specifically provided for in your
DevelopmentAgreement i f y o u are granted multi-unit development rights). Regardless, each Franchised
Business you are granted the right to open and operate must be governed by its own specific form of Franchise
Agreement.
We have notestabiished other franchises or companyowned outlets or another distribution channel

offering or selling similar products or services underadifferent trademark. We have not established, nor do we
presently intend to establish, other franchised or company owned businesses that are similar to the Franchised
BusinessandthatsellourApproved Products and Services underadifferent trade name or trademark, but we
reserve the right to do so in the future without your consent.
ITEM 13 TRADEMARKS
We grant you the right to operate a Studio under the following Marks; we may authorize you to use
ancillary Marks as well. The following Marks are registered and owned by us on the Principal Register or the
Supplemental Register of the United States Patent and Trademark Office:
Mark Registration Registration or Class

Application/Filing Date
CLUB PILATES Reg. No. 4255517 Reg. Date: December 4, 2012 41
(Word Mark) (Supplemental Register)
Reg. No. 4190273 Reg. Date: August 14, 2012 41

39
Mark Registration Registration or Class
Application/Filing Date
CLUB FILATES Reg. No. 4406173 Reg. Date: September 24, 2013 41
Reg. No. 5090777 Reg. Date: November 29, 2016 41
B
In addition, the following Marks are pending on the Principal Register of the United States Patent and
Trademark Office:
Mark Serial No. Application/Filing Date Class
CLUB PILATES Serial No. 87015270 Filing date: April 26, 2016 41
Do PILATES. Do LIFE. Serial No. 87006969 Filing date: April 20, 2016 41
DO DILATES. Serial No. 87008564

Filing Date: April 20, 2016 41
DO LIFE.
DO PILATES. DO LIFE. Serial No. 87010187
Filing Date: April 22, 2016 41
Serial No. 87008581 Filing Date: April 20, 2016 41
BSfl
CLUB PILATES
Serial No. 87008677 Filing Date: April 21, 2016 41

CLUB ( £ » PILATES (Principal Register)
40
We expect and intend to submit a ^
above. We assert common iaw rights with
therespeetivemarks.AregistrationontbeSoppiementaiRegistergrantsustberigbttouse
symboiwben tbe mark is used witb tbe CiobPiiates Studio and any related products and services, it wiii also
biockiater-fiied applications from using confusingly similar marks for related goods. Aregistrationontbe
SupplementaiRegister does not provide all tbe protections ofaregistration on tbe Principal Register. For
exampleâSupplemental Registration does not convey tbe presumptions of validity,ownersbip and exclusive
rights to use tbe mark tbat attach witbaregistration on tbe Principal Register. ASuppiementai Registration
cannotbeusedtostopimportationofcounterfeitproducts.Aiso,aSuppiemental Registration can neverbecome
incontestable.
There are no presently effective determinations of the United States Patent andTrademark Office, the
Trademark Administrator of any State, or any court, nor any pending material litigation involving any of the
Marks which are relevant to their use in any State. There are no pending interference actions or opposition or
cancellation proceedings that significantly limit our rights to use or license the use of the Marks in any manner
material to the System. We have filed all required affidavits for the Marks and will continue to do so. None of
the Marks'registrations have come up for renewal at this point so we have not yet renewed any ofthe Marks'
registrations.
You must follow our rules when you use the Marks. You cannot use our name or any ofthe Marks as
part ofacorporate name or with modifying words, designs or symbols except for those which we license
to you. You may not use the Marks in connection with the sale of an unauthorized product or service or in
amanner not authorized in writing by us. You must not use any other trade names or trademarks in the
operation of the Studio without first obtaining our written consent. Youmustnotestablishawebsiteonthe
Internet using any domain name containing the Marks or any variation thereof without our written consent. We
retain the sole right to advertise on the Internet and createawebsite using the Marks as domain names.
If it becomes advisable, in our sole discretion, for us to modify or discontinue use of any of the Marks,
or use one or more additional or substitute Mark, you must comply with our directions to modify or otherwise
discontinue the use of such Mark withinareasonabie time after notice by us. We will not be obligated to
compensate you for any costs you incur in connection with any such modification or discontinuance.
You cannot seek to register,reregister,assert claim to ownership of, license or allow others to use or
otherwise appropriate to itself any ofthe Marksor any mark or name confusingly similarto them, except insofar
as such action inures to the benefit of Franchisor and has our prior written approval. Upon the termination or
cancellation of the Franchise Agreement,you must discontinue use of the Marks, remove copies,replicas,
reproductions or simulations thereof from the premises and take all necessary steps to assign,transfer,or
surrender to us all Marks which you may have used in connection with the Franchise Agreement.
You must immediately notify us of any apparent infringement of or challenge to your use of the
mark. Although not obligated to do so, we will take any action deemed appropriate and will control any
litigation or proceeding.Youmustcooperate with any litigation relating to the Marks which we or ouraff^^
or the Licensor,might undertake.
We are not aware of any prior superior rights or infringing uses that would materially affect your use of
theMarks. But, there is alwaysapossibility that there might be one or more businesses, similarto the business
covered bythe Franchise, operating in or nearthearea(s) where you may do business, usinganame, trademark
and/or trade dress similar to the Marks and with superior rights to the name and/or trademark. We strongly
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u ^ e y o u t o ^ e a ^ ^ p o ^ ^
any money, sign any doooments or m a k e ^ i f y o u do not research the possibility of
othertrademarks in this business, you may be at risk.
There are no agreements currently in effect, which significantly limit our rights to use or l i c e n s e d
o f t h e Marks.
PAT5NT^COÎGHTSANOPROPRI5TAÎNFORMATION
you do not receive the right to use any item covered b y a p a t e n t or copyright, but you can use the
proprietary information in the Manual. The Manuals are described in Item 11. item 11 aiso describes the
limitations on the use o f t h e Manual by you and your employees.
We have no registered copyrights, nor are there any pending patent applications that are material to
thefranchise. However,weclaimcopyrightsoncertainforms,advertisements, promotional materials, software
source code and other Confidential Information as defined below.
There currently are no effective determinations of the Copyright Office (or any court regarding any of
the copyrighted materials. There are no agreements in effect which significantly limit our right to use or licen^
the copyrighted materials. Finally,there are no infringing uses actually known to us that could materially affect
youruseofthe copyrighted materialsinanystate.Noagreement requires us to protect or defend any copyrights
or you in connection with any copyrights.
In general, our proprietary information includes "Confidential Information" as defined in Section 12

the Franchise Agreement, some of which is contained in our Manual, and includes, among other things, all
information (current and future) relating to the operation of the Studio or the System, including, among other
things,all:(i)manuals,training,techniques,processes,policies,procedures,systems,dataand know how
regarding the development, marketing, operation and franchising of the Studios; (ii) designs, specificate^
information about products and services and (iii) all information regarding membersand suppliers, including
statistical and/or financial information and all lists. We disclose to you Confidential Information needed for the
operationofaClubPilatesfranchise,andyoumaylearn additional information duringthetermofyourfranchis^^
We have all rights to the Confidential Information and your only interest in the Confidential Information is t h ^
right to use it under your Franchise Agreement.
Both during and afterthe term ofyour Franchise Agreement, you must use the Confidential Information
only for the operation of your Studio underaClub Pilates Franchise Agreement; maintain the confidentiality^^
the Confidential Information; not make or distribute, or permit to be made or distributed, any unautho
copies of any portion o f t h e Confidential Information; and (iii) follow all prescribed procedures for prevent
unauthorized use or disclosure of the Confidential Information. (Franchise Agreement, Section 12)
We have the right to use and authorize others to use all ideas, techniques, methods and processes
relating to the Studio that you or your employees conceive or develop.
You also agree to fullyand promptly discloseall ideas, techniquesand other similar information relating
to the franchise business that are conceived or developed by you and/or your employees. W e w i l l h a v e a
perpetual right to use, and t o a u t h o r i z e o t h e r s t o u s e , those ideas, etc. without compensation o r o t h e r
obligation.
42
^5M15 O^GAÔNTOPART^P^
^nder the Fronchise Agreement we do not r e q o i ^ but do recomm^

Operator) personam supervise the Studio. You moyoppointoOesignotedMonoger
o p e r a t i o n s o f y o u r S t u d i o . W e w i i i not unreasonahiy withhold our approval of any Designated Manager you
propose, provided the individual has successfully c o ^
Program and, ifthatindividual will he providingany Approved Services, theOrientation P r o g r a m s
the fullTeacherTraining Program).Once approved, your Designated Manager may assist in the direct, day-to-
day supervision of the operations of the Studio, or to he the onpremises supervisor if you choose not to
personally supervise the Studio. If you a r e a h u s i n e s s e n t i t y , y o u r DesignatedManager need not hold an
ownership interest in the business to he the on premises supervisor.
You are solely responsible for the hiring and management of the Studio employees, for the terms of
their employment and for ensuring their compliance with anytraining or other requirements established by us.
You will keep us advised, in writing, of any Designated Manager involved in the operation of the Studio and their
contact information. Your Franchised Business must, at all times, be managed by and staffed with at least one
(îndividual who has successfully completed the Owner/Operator Module of our InitialTraining Program.
You and your managers and employees must comply with the confidentiality provisions described in Item
14. You must executeapersonal guaranty concurrentlywith the signing ofthe Franchise Agreement. Ifyou area
legalentity, having more than one owner,all owners, shareholders, partners, ôint venturers, and any other
person who directly or indirectly o w n s a l O % or greater interest in the franchised business must executea
personal guaranty.
R5STRICTIONSONÂTT^5FRANÎS55MAyS5^
You must offer for sale and sell, only and all those Approved Products and Services, and deal only with
those suppliers,thatweauthorizeor require, and have auth^
purchase the amount and type of equipment, including Pilates Reformers,aPilates Ballet Bar,Spring Boards,
FXOChairs,TRX equipment and other Pilates apparatuses and exercise equipment, and offer only those types
of Pilates and exercise classes that we authorize. Failure to comply with our purchasing restrictions may result
in the termination of your Franchise Agreement. We may supplement, revise and/or modify our Approved
ProductsandServicesas w e d e e m a p p r o p r i a t e f r o m t i m e t o time, as well a s o u r System standardsand
specifications associated with the provision of these products/services. These changes will be outlined in our
Manuals or otherwise in writing, and there are no contractual limitations on our right to make these types of
changes.
If we discontinue any Approved Product or Service offered by the Franchised Business, then you must
cease offering or selling such product/service withinareasonabie time, unless such product/service
ahealth or safety hazard (in which case you must immediately comply upon receipt of notice from us).You may
not use the location of your Franchised Business for any other business purpose other than the operation of
your Franchised Business.
You may not advertise, offer for sale or sell, any products and/or services that we have not authorized.
We reserve the right to change the types of authorized products and services at any time in our discretion. You
agree to promptly undertake all changes as we require from time to time,without limit, except we will not
require you to thoroughly modernize or remodel the Studio any more often than once everySyears. You will
not make any material alterations to your Studio or its appearance as originally approved by us without our prior
writtenapproval.
43
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You must refrain from any merchandising, advertising, or promotional practice that is unethical or may be
injurious to our business and/or other franchised businesses or to the goodwill associated with the Marks
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
THE FRANCHISE RELATIONSHIP
This table lists certain important provisions of the franchise and related agreements. You should read
these provisions in the agreements attached to this Disclosure Document.
Paragraph In
Provision Summary
Agreement
a. Length o f t h e franchise Franchise Agreement: The term is 10 years from the date the Franchise
term Paragraph 3.1 Agreement is signed.
b. Renewal or extension of Franchise Agreement: You have the option to extend the term for two
term Paragraph 3.2 consecutive 5 year periods.
c. Requirements for renewal Franchise Agreement: You have complied with all of the Franchise
or extension Paragraphs 3.2, 3.3, and Agreement provisions; you are not in default of
3.4 the Franchise Agreement; you have brought the
Studio into compliance with our current
standards; you have given us notice of renewal
no less than 90 days nor more than 180 days
prior to the end of the initial term; you have
signed a then-current form of Franchise
Agreement, which may contain materially
different terms than the ones contained in your
Franchise Agreement; you have signed a general
release in substantially the form of Exhibit F to
this Disclosure Document; and you pay us a
renewal fee equal to $10,000.
d. Termination by franchisee Franchise Agreement: Not applicable.

NotApplicable
e. Termination by franchisor Franchise Agreement: The Franchise Agreement does not provide for
without cause Not Applicable termination without cause.
f. Termination by franchisor Franchise Agreement: We may terminate the Franchise Agreement

with cause Paragraph 15.1 upon delivery of notice to you if you default
under the terms of the Franchise Agreement, as
further outlined below.
g. "Cause" defined - curable Franchise Agreement: The following constitute curable defaults: you
defaults Paragraph 15.IB fail to comply with the Performance Standards;
44
Paragraph In
Provision Summary
Agreement
or refuse to make payments due and do not cure

within 10 business days; or fail to comply with
any provision of the Franchise Agreement not
otherwise mentioned in (h.) below or any
mandatory specification and do not cure within
the applicable cure period. Some defaults have
10 calendar day cure periods and some have 30
calendar day cure periods.
h. "Cause" d e f i n e d - Franchise Agreement: The following events constitute non-curable

non-curable defaults Paragraph 15.1A defaults: failure to properly establish and equip
the premises; failure to complete training; make
a material misrepresentation or omission in the
application for the franchise; conviction or plea
of no contest to a felony, or other crime or
offense that can adversely affect the reputation
of you, us or the Studio; make unauthorized
disclosure of confidential information;
abandonment of the business for 5 consecutive
days unless otherwise approved; surrender of
control of the business; unauthorized transfer;
you are adjudicated bankrupt, insolvent or make
a general assignment for the benefit of
creditors; your misuse ofthe Marks; failure on 3
occasions within any 12 consecutive month
period, or 4 occasions in any 24 consecutive
month period to pay amounts due, or otherwise
to comply with the Franchise Agreement; violate
any health, safety or sanitation law or conduct
your operation in a manner creating a safety
hazard; or violating the rights and restrictions of
your territory; operating a competing business.
i. Franchisee's obligation on Franchise Agreement: Your obligations include: stop operations of the
termination/non-renewal Paragraphs 12,13 and Studio; stop using the Marks and items bearing
15.3 the Marks; stop using "CLUB PILATES" in any
form as part of your corporate name; assign any
assumed names to Company; de-identify the
premises from any confusingly similar
decoration, design or other imitation of a Studio;
stop advertising as a Club Pilates franchise; pay
all sums owed; pay all damages and costs we
incur in enforcing the termination provisions of
the Franchise Agreement; return the Manual
and other confidential information to us; return
all signs to us; assign your telephone and
facsimile numbers, electronic mail and internet
45
Paragraph in
Proton Summary
Agreement
addresses to us; seii to us, a t o u r option, aii

assets of the Studio, including inventory,
equipment, supplies and items bearing tbe
Marks; and comply with the covenants not to
compete.
^ Assignment of contact by Franchise Agreement: We mayseil or assign some oraii of our business
franebisor Paragraphia to any subsidiary or affiliate of Club Pilates, any
purchaser of Club Pilates,or any purchaser of
the Marksand related business.
k. "Transfer byfranebisee Franchise Agreement: You may sell or assign your business, but only
definition Paragraphs! with our approval. We have sole discretion over
whether to approve or disapprove an
assignment.
L Francbisorapprovaiof Franchise Agreement: We have the right to approve all your transfers.
transfer by franchisee Paragraphsl^landl^ We may place reasonable conditions on our
approval of any transfer.
Conditionsforfrancbisor Franchise Agreement: You must be in compliance with all agreements,

approval oftransfer Sections t h e M a n u a l , a l l contracts w i t h a n y p a r t y , a n d
transferee must assume all obligations under
theseagreements;transfereemeet our then-
current requirements and complete or agree to
complete our training program for new
franchisees; all sums due must be paid; all
obligations to third parties must be satisfied; the
Studio must be in full compliance with the
Manual and standards and specifications for
new Club Pilates Studios; the transferee must
satisfactorily complete training; and the
transferor must paya$10,000 transfer fee.
n. Francbisor'srigbttoacquire None There is no right for us to acquire your Studio

franchisees business except as outlined below.
o. FranchisoBsoptionto Franchise Agreement: Wehavetheoptionêxercisable b y g i v i n g ^ O

purchase franchisee's Section 1 5 3 i days written notice to purchase any and all
business inventory, equipment, furniture, fixtures, signs,
sundriesandsuppliesowned byyou and used in
theStudio, a t t h e lesser of ( i ) y o u r c o s t less
depreciation computed onareasonable straight
line basis (as determined in accordance with
generally accepted accounting principles and
consistent with industry standardsand customs)
or (ii) fair market value of such assets, less (in
either case) any outstanding liabilities o f t h e
Studio. In addition, we have the option to
46
Paragraphs
Proton Summary
Agreement
assume your lease for tho lease location of the

Studio, or If an assignment Is prohibited, a
subleaseforthefull remainingterm on thesame
terms and conditions as your lease.
^ Oeathord^bôf Franchise Agreement: Must be transferred within s l x ^ m o n t h s .

ânchisee Paragraphia
q. Non-competôo covenant Franchise Agreement: You must not have any interest in any
during the term o f t h e Paragraphs competitive business specializing, in whole or in
franchise part, in the sale of franchises or products that
are the sameas or similar to any productor
service provided through the Studio.
Additionally,you must not employ or seek to
employ any person employed by us or by any of
our other franchisees, or otherwise directly or
indirectly induce or seek to induce such person
to leave his or her employment during the term
of the Franchise Agreement, without first
obtaining our consent or any other franchisee.
r. Non competition covenants Franchise Agreement: You must not operatearetail Studio similar to
after the franchise is Paragraphs the CLUB PILAT5S Studio from the premises for
terminated or expires 2years after termination w i t h i n a l O mile radius
of any Club Pilates brand Studio. Additionally,
f o r a p e r i o d o f ^ y e a r s after termination of the
Franchise Agreement, you must not shall not (i)
solicit business from customers of your former
Studio, (ii) contact any of our suppliers or
vendors for any competitive business purpose,
or (iii) solicit any of our other employees, or the
employees of FranchisoBsaffiliates or any other
System franchisee, to discontinue employment.
s. Modification ofthe Franchise Agreement: The Franchise Agreement can be modified only
Franchise Agreement Paragraphs by written agreement between us and you. We
can modify or change the System through
changes in the Manual.
t. integration/mergerciause Franchise Agreement: Only the terms of the Franchise Agreement are
Paragraphs binding(subjecttoapplicablestatelaw)andmay
only be modified to the extent required by an
appropriate court to make the Franchise
Agreement enforceable. Any representations
or promises outside ofthis Disclosure Document
and other agreements may not be enforceable.
Oispute resolution hy Franchise Agreement: You must first submit all dispute and
arbitration or mediation Paragraphs controversies arising under the Franchise
47
©20^Club^^ôc^,^
2017^nê0ôêOocument
Paragraph In
- .Provision , 1 , Summary
Agreement:'

of the Franchise Agreement must be submitted
to non-binding mediation, which will take place
at our then-current headquarters. If the matter
is mediated, the parties will split the mediator's
fees and bear all of their other respective costs
ofthe mediation.

otherwise described above, any claim arising out
of or relating to the Franchise Agreement or the
relationship of the parties, and any controversy
regarding the establishment of the fair market
value of assets of the Studio will be resolved in
binding arbitration before a single arbitrator in
Orange County, California (subject to applicable
state law).
v. Choice of forum Franchise Agreement: Any action that is not subject to arbitration must
Paragraph 17.4 be brought in state or federal court in Orange
law).
w. Choice of law Franchise Agreement: The Franchise Agreement is governed by the
Paragraph 17.3 laws of the state of California without reference
involving any non-competition covenants,
including the interpretation and enforcement
thereof, must be governed by the law of the
state where the Studio is located.
[Remainder of Page Intentionally Left Blank]
48
This table lists certain important provisions ofthe Development Agreement and related agreements.
You should read these provisions in the agreements attached to this disclosure document.
SECTION IN
DEVELOPMENT
rnuvoiuiv SUMMARY
: AGREEMENT OR
OTHER AGREEMENTS
a. Length of the term of the Section 1(B), Exhibit B The Development Schedule will dictate the
Development Agreement amount of time you have to open a specific
number of franchises, which will differ for each
Developer and will be specified in Exhibit B of
the Development Agreement.
b. Renewal or extension of the Not Applicable Not Applicable
term
c. Requirements for developer to Not Applicable Not Applicable
renew or extend
d. Termination by developer Not Applicable Not Applicable
e. Termination by franchisor Not Applicable Not Applicable
without cause
f. Termination by franchisor with Section 14 We may terminate your Development
cause Agreement with cause as described in (g)-(h) of
this Item 17 Chart.
g. "Cause" defined - curable Section 14(B) We may terminate your Development
defaults Agreement after providing notice and a 30-day
cure period (unless a different cure period is
specified below) if: you fail to meet the
Development Schedule; you fail to develop,
open, and operate each Studio and execute
each Franchise Agreement in compliance with
the Development Agreement; you
misappropriate or misuse the Marks or impair
the goodwill of the Marks or System; fail to
make monetary payment under the
Development Agreement or any Franchise
Agreement to us or our affiliate, and fail to cure
within 14 days of receiving written notice from
us; fail to correct a deficiency of a health,
sanitation, or safety issue identified by a local,
state or federal agency or regulatory authority;
or you fail to comply with any other material
term or material condition of the Development
Agreement or any Franchise Agreement.
h. "Cause" defined - non-curable Section 14(A) We may terminate your Development
49
SECTION IN
DEVELOPMENT
PROVISION SUMMARY:
AGREEMENT OR
OTHER AGREEMENTS
defaults Agreement automatically upon written notice if:
you become insolvent or make a general
assignment for the benefit of creditors; file a
bankruptcy petition or are adjudicated
bankrupt; a bill in equity or appointment of
receivership is filed in connection with you; a
receiver or custodian of your assets of property
is appointed; a proceeding for a composition of
creditors is initiated against you; a final
judgment is entered against you and not
satisfied within 30 days; if you are dissolved,
execution is levied against you; a suit to
foreclose any lien or mortgage against any of
your Studios is levied; the real or personal
property of a Studio is sold after being levied
upon; you fail to comply with the non-
competition covenants of the Development
Agreement; you or your principal discloses the
contents of the Manuals or other confidential
information; an immediate threat or danger to
public health or safety results from the
operation of a Studio operated by you; you or
your Principal has made a material
misrepresentation in the franchise application;
you fail on 3 or more occasions within a one (1)
year period to comply with a provision of the
Development Agreement; or you fail to comply
with the transfer conditions ofthe Development
Agreement.
i. Developer's obligations on Section 14(D), Section Upon termination, you have no right to establish
termination/ non-renewal 15 or operate any Studio for which an individual
Franchise Agreement has not been executed by
us and delivered to you at the time of
termination. All of your obligations under the
Development Agreement which expressly or by
their nature survive the expiration or
termination of the Agreement (including the
non-competition covenants of Section 11),
continue in full force and effect until they are
satisfied or by their nature expire.
j. Assignment of contract by Section 16(A) We have the absolute right to transfer or assign
franchisor the Development Agreement and all or any part
of its rights, duties or obligations to any person
50
SECTION IN
DEVELOPMENT
PROTON SUMMARY
AGREEMENT OR
OTHERAGREEMENTS
or legal entity without your consent.
k. ^ a n s f e ^ by developer Sections) A transfer includes voluntarily, involuntarily,
defined directly or indirectly, assigning, selling,
conveying, pledging, sub-franchising or
otherwise transferring any of tbe rights created
by the Development Agreement or any
ownership interest in you.
L Franchisor approval of transfer Section l ^ C ) We must approve all transfers, but we will not
by developer unreasonablewithholdourapproval ifyou meet
our conditions.
Conditionsforfranebisor Sections) Our conditions for approvingatransfer include:
approval of transfer all of you and your affiliates^ money obligations
must be satisfied; you and your affiliates must
not be in material default of the Development
Agreement or any Franchise Agreement;you
must executeageneral release in ourfavor; the
transferee must meet our then-current criteria
for Developers; the transferee must sign a
writtenassumption agreement assuming your
liabilitiesunderthe DevelopmentAgreement;
you must our then-currentTransferFee;and
you must pay any referral fees or commissions
that may be due to any franchise broker,sales
agent, or any otherthird party.
n. Francbisor'srigbt of first refusal Sections) Except in certain circumstances

to acquire developer'sbusiness (death/disability or transfer from individual
franchisee to business entity), you must provide
us w i t h a p e r i o d of 30 days to match any third
party offer to purchase any ownership interest
in theDevelopment Agreement. If we do not
exercise this right, then you will have 60 days to
effectuate the transfer to the thirdparty that
madethe offer on those exact t e r m s - i f the
transfer does not occur or the proposed terms
oftheofferchangeinanyway,then we will have
another30 days to exercise our right of first
refusal.
o. Francbisor'soption to purchase NotApplicable NotApplicable

developer'sbusiness
p. Oeatb or disability of developer Section l ^ F ) You will have a period of 90 days t o f i n d a

suitable legal representative that weapprove to
continue the operation of your Franchised
51
©2017Club elates F ^ c h l ^ LLC
2017 F r a n c e O^losoreOocumeot
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
Business, provided that person completes our
training program and executes either a personal
guaranty or a new Development Agreement.
During this 90-day period, we may step in and

operate the Franchised Business on your behalf
and pay ourselves a reasonable amount to
reimburse our costs associated with this
operation on your behalf. We are not under any
obligation to step in and operate your business
during this period.
Non-competition covenants Section 11(B)(1) Neither you, your principals, guarantors, owners
during the term of the franchise or key employees, nor any immediate family
member of you, your principals, guarantors,
owners or key employees, may: (i) own,
operate, or otherwise be involved with.
Competing Business (as defined in the
Development Agreement); (ii) employ or seek to
employ any employees of us, our affiliates or
any other System franchisee/developer or
induce such persons to leave their employment;
or (iii) divert, or attempt to divert, any
prospective customer to a Competing Business.
Non-competition covenants Section 11(B)(2) For a period of two (2) years after the
after the franchise is terminated termination/expiration/transfer of your
or expires Development Agreement, neither you, your
operate or otherwise be involved with any
business that competes with us and is involved
in the licensing or franchising, or establishing of
joint ventures for the operation, of Competing
Businesses.
Section 11(B)(3) For a period of two (2) years after the

termination/expiration/transfer of your
Franchise Agreement, neither you, your
operate or otherwise be involved with and
Competing Business: (i) within the Development
Area; (ii) within a 40-mile radius of your
52
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
Development Area or any other designated
territory or designated area licensed by us to a
Studio as of the date of expiration/termination
of the Development Agreement through the
date you attempt to engage in any competitive
activity prohibited by this Section.
During this two-year period, these parties are

also prohibited from: (i) soliciting business from
customers of your former Studios; (ii) contacting
any of our suppliers/vendors for a competitive
business purpose; or (iii) soliciting any
employees of us, our affiliates or any other
System franchisee or developer to discontinue
their employment.
s. Modification o f t h e Section 23(F) Your Development Agreement may not be
Development Agreement modified, except by a writing signed by both
parties.
t. Integration/ merger/clause Section 23(G) Only the terms of the Development Agreement
(and ancillary agreements) and this Disclosure
Document are binding (subject to state law).
Any representations or promises outside of the
Disclosure Document and this Agreement may
not be enforceable. Nothing in this Agreement
or any related agreement is intended to disclaim
the representations made in this Disclosure
Document.
u. Dispute resolution by arbitration Sections 22(A)-(C) You must first submit all dispute and
or mediation controversies arising under the Development

of the Development Agreement must be
submitted to non-binding mediation, which will
take place at our then-current headquarters. If
the matter is mediated, the parties will split the
mediator's fees and bear all of their other
respective costs of the mediation.

otherwise described above, any claim arising
53
SECTION IN
DEVELOPMENT
PROVISION SUMMARY
AGREEMENT OR
OTHER AGREEMENTS
out of or relating to the Development
Agreement or the relationship of the parties,
and any controversy regarding the
establishment of the fair market value of assets
of the Studio will be resolved in binding
arbitration before a single arbitrator in Orange
law).
v. Choice of forum Section 22(A) Any action that is not subject to arbitration must
be brought in state or federal court in Orange
law).
w. Choice of law Section 21(A) The Development Agreement is governed by the
laws of the state of California without reference
involving any non-competition covenants set
forth in any agreement with us, including the
interpretation and enforcement thereof, must
be governed by the law of the state where the
Studio is located.
Applicable state law may require additional disclosures related to the information in this Disclosure Document.
These additional disclosures appear in Exhibit G, entitled State Specific Addenda, to this Disclosure Document.
We do not currently use any public figure or personality to promote the franchise.
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial
performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information,
and if the information is included in the disclosure document. Financial performance information that differs
from that included in Item 19 may be given only if (1) a franchisor provides the actual records of an existing
outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for
example, by providing information about possible performance at a particular location or under particular
circumstances.
BACKGROUND
This Item 19 discloses the historical financial information regarding the 18 Studios that were (a) open and
operating for the entire 2016 calendar year (the "Measurement Period"), (b) operating utilizing at least 12
reformers as required by our current franchise offering and System, and (c) operating utilizing the designated
54
software providerforthe POS System
Measurement Period ( c o ^ e c ^
Please be advised that 16 of the Representative Studios were owned and operated
the Measurement Period (whiehineiudes two Representative Studios that were previously operated hy us an
sold toafranchisee), with the remaining^Representative Studios owned and operated hy us. Ofthe 77 Studios
we had operating as December 31, 2016, we excluded the information of (a) 38 Studios from this item on the
grounds that they were not open and operating throughout the entire Measurement Period (either because
they opened or closed at some point in 2016), (b) 13 additional Studios from this item on the grounds that they
did not utilize at least 12 reformers in their operations as required under our current System standards and
specifications (and as part of our standard franchise offered under this Disclosure Document), and (c) eight (8)
additional Studios from this Item on the grounds that they did not utilize the designated software provider for
the POS System as required by our current franchise offering and System f o r t h e entire Measurement Period.
Partlofthis Item discloses the average gross revenue amongst(a)the2company-owned Representative Studios
over the Measurement Period, ( b ) t h e l 6 franchisee-owned Representative Studios over the Measurement
Period, and (c) the two (2) franchisee-owned New Model Representative Studios (as explained in the Notes in
Part I) over the Measurement Period.
Part II of this Item containsamore detailed Chart disclosing certain information that we were able to obtain
regardingeachof t h e 2 RepresentativeStudios tbat were o w n e d a n d o p e r a t e d b y t h i s a f f i l i a t e o v e r t h e
Measurement Period, namely (a) the composition of the revenue figures described in P a r t l o f this Item, (b)
certain operatingcoststhateachofthese Representative Studiosincurred overthe MeasurementPeriod,(c)the
remaining revenue generated by each of these Representative Studios over the Measurement Period after
deducting the operating expenses described above, and (d) the average amongst these affiliate owned
Representative Studios with respect to each of the items described in this paragraph. We did not require our
franchisees that own the other 16 Representative Studios to provide us with their operating cost i n f o r m a t ^ ^
and we did not otherwise have access to this information as of the Issue Date of this Disclosure Document-as
such, we are not able to present such data for these franchised Representative Studios in Part II.
Written substantiation of the data used in preparing this information will be made available upon reasonable
request, but please note thatthis information was providedto us bythe respective ownersofthe Representative
Studios (except for the companyowned Studios). W e h a v e n o t audited this informationor independently
verified this information.
The Representative Studios described above have sold and expended the amounts set forth in this Item below.
There is no guarantee or assurance that your Franchised Business will sell as much or spend as much as the
Representative Studios disclosed in this Item.
It is important that you review the Explanatory Notes following each Table and General Notes at the end of this
Item 19, including those notes that may disclose actual or potential differences between the operation of one
(1) or more Representative Studios and the operation o f a n e w Franchised Business, as part of your evaluation
of ourfranchise offering.
SS
©2017Oub^l8^^c^,^
2017^8Och^0^loêDocomeot
PART I: AVERAGE GROSS REVENUE AMONGST REPRESENTATIVE STUDIOS OVER THE MEASUREMENT PERIOD
Average Gross Revenue $447,051.86 Of the two (2) company-owned Representative Studios,
for Company-Owned one (1) (or 50%) of the Representative Studios generated
1
the Average Gross Revenue of $447,051.86.
Average Gross Revenue $342,346.06 Ofthe 16 franchisee-owned Representative Studios, seven
for Franchisee-Owned (7) (or 43.6%) of the Representative Studios generated
1
the Average Gross Revenue of $342,346.06
Average Gross Revenue $585,242.27 Of the 2 franchisee-owned New Model Representative
for Franchisee-Owned Studios, one (1) (or 50%) of the Representative Studios
Representative Studios - generated higher Gross Revenue over the Measurement
2
New Model Period than the Average Gross Revenue of $585,242.27
Explanatory Notes to Part I ofthis Item 19
1. Gross Revenue. The term "Gross Revenue" means the total revenue generated by each Representative
Studio over the Measurement Period, including all membership and class packages revenue, retail sales
and "teacher training" income (described in Explanatory Note No. 2 following the Chart in Part II below).
Gross Revenue may not include certain income that each Representative Studio may have generated
from third-party vendors such as Groupon by virtue of promotions ran by the Representative Studios
through those third-party vendors because these vendors were not able to provide us with the full
reports detailing the income at issue as of the Issue Date of this Disclosure Document.
2. New Model. The term "New Model" as used herein refers to Studios where (a) the franchise owner was
selected and signed by new Club Pilates management post acquisition in 2015; and (b) the Studio was
opened and operated in accordance with the new Club Pilates studio model created by new
management post acquisition in 2015. For clarity, these 2 New Model Representative Studios are a
subset of the 16 franchisee-owned Representative Studios.
56
PART II: CERTAIN OPERATING EXPENSES AND RELATED INFORMATION REGARDING COMPANY-OWNED
REPRESENTATIVESTUDIOS
19
Rep Studio No. 1 Rep Studio No. 2 Average
%of
% of Total Total % of Total
Amount Revenue Amount Revenue Amount Revenue
1
Total Revenue $470,731.75 100.00% $423,371.96 100.00% $447,051.86 100.00%
Teacher Training
2
Revenue $20,850.00 4.43% $12,600.00 2.98% $16725.00 3.74%
3
Traditional Revenue $449,881.75 95.57% $410,771.96 97.02% $430,326.86 96.26%
4
Certain Operating Expenses
Estimated Royalty (on
in-Studio Revenue
5
Only) $26,992.91 5.73% $24,646.32 5.82% $25,819.61 5.78%
Estimated Fees Paid in
Connection with
Teacher Training
6
Revenue $8,778.95 1.86% $5,305.26 1.25% $7,042.11 1.58%
7
Marketing Fund $8,997.64 1.91% $8,215.44 1.94% $8,606.54 1.93%
8
Rent $42,360.36 9.00% $57,965.29 13.69% $50,162.83 11.22%
Merchandise Costs 9
$46,311.94 9.84% $49,819.52 11.77% $48,065.73 10.75%
10
Advertising/Promotion $19,896.61 4.23% $26,890.37 6.35% $23,393.49 5.23%
Merchant Account
Services 11
$16,419.69 3.49% $14,409.97 3.40% $15,414.83 3.45%
12
Cleaning $4,254.25 0.90% $4,012.51 0.95% $4,133.38 0.92%
13
Insurance $2,784.96 0.59% $2,421.00 0.57% $2,602.98 0.58%
Water 14
$1,259.24 0.27% $ 1,608.30 0.38% $1,433.77 0.32%
Total of Certain Operating
Expenses
1 16 17
(excl. Payroll) *' - $178,056.54 37.83% $195,293.98 46.13% $186,675.26 41.76%
Total Revenue Less
Certain Operating
Expenses (excl. Payroll) 18
$292,675.21 62.17% $228,077.98 53.87% $260,376.60 58.24%
Explanatory Notes to Part II of this Item 19
1. Total Revenue. For each Representative Studio, the term "Total Revenue" means the total revenue
generated through the offer, sale and provision of all services and products at, from or through that
Studio over the Measurement Period.
2. Teacher Training Revenue. For each Representative Studio, the term "Teacher Training Revenue" means
the revenue generated by that Studio over the Measurement Period in connection with the sale and
provision of our proprietary Pilates instructor training program to its clientele (the "Teacher Training
Program"), which (a) is designed to provide education to third-party clientele in order for such clientele
to take the certifications necessary to become a Pilates instructor, (b) the company-owned
57
R e p r e s e n t e e Studios made a v a ^
price of $ 4 7 5 0 / t r a m e e , a n d ^ ^
provided you complete our initiaiTraining Program.Piease aiso see 5xpianato
additional information onthecostsassociated with theTeacherTraining Program.
3. T r ^ ^ o ^ ^ e y e n ^ e . Foreach RepresentativeStudio, the term "Traditional Revenue" means the

revenue generated at that Studio over the Measurement Period from the sale of memherships, class
hasedpackagesand all other Approved Products and Servicesthatthese Studios are authorized to offer
and sell, otherthan the revenue generated hythatStudio'sprovision o f t h e TeacherTraining Program
(which is detailed in Explanatory Note No.2ahove).
4. C e ^ n O p e r o t ^ E x p e n ^ . The term "Certain OperatingExpenses" meansthespecific operating

expenses identified on the profit and loss statement for each company-owned Representative Studio
overthe Measurement Period (which a r e s e t f o r t h i n t h e rows immediatelyfollowingthis heading in the
Chartsetforth in Part II ofthis I t e m l ^
5. ^ m o t e c ^ ^ o ^ o ^ . For each Representative Studio, the term "Estimated Royalty means the Royal^^
we would have had to pay us over the Measurement Period if that Studio was owned hyafranchisee
and governed hy our current form of Franchise Agreement (attached to this FOO as Exhibit A), which
would amount to six percent (6%) oftheTraditional Revenue o f t h a t Studio over the Measurement
Period.
a. It is important to note that the "Estimated Royalty" figures provided for each company owned
Representative Studio in this Part II Chart are only an estimate. For clarification purposes, we
did not actually pay us this amount because they are not required to pay us any Royalty in
connection with operating its Studios. We included an Estimated Royalty in this Chart for each
Representative Studio amounting to six percent(6%) that Studio'sTraditional Revenue over the
Measurement Period(i) because that is t h e a m o u n t you will be required to pay to us in
connectionwiththeTraditionalRevenueyougenerateatyourFranchised Business, and (b)ina
good faith effortto provide you with an accurate picture ofthe type of expenses you mightincur
in connection with your franchised Studio(s).
b. Under your Franchise Agreement, the Royalty described in I t e m ^ o f this Disclosure Document
will only applytoyourTraditional Revenue.You will be required to pay us the flat fee described
in Explanatory Note N o . 6 i n connection with each client to whom your Studio provides the
TeacherTraining Program.
6. ^stô^êesPo^^nCo^necôn^t^êocêr^ro^n^^^
you will be required to pay usaflat fee amounting to $2,000 in connection with each client you sign up
to attend the TeacherTraining Program.Like the Estimated Royalty described in Explanatory Note No.S
above, however,the figures that are provided for each Representative Studio as the "Estimated Fees
Paid in Connection With Teacher Training Revenue" is only an estimate that is (a) calculated based on
the number of clients to whom that Studio provided the Teacher Training Program over the
Measurement Period, and (b)designed to provide you with an accurate picture of the type of expenses
you might incur in connection with your franchised Studio.Tobeclear,we did not actually pay the fee
amounts disclosed in this Part II Chartforthis line item expense^we do not have an agreement with
ourselves that requires payment of these fees, but you will be required to pay such fees under your
S8
©2017ClobP^s^chi^^
2017ô^5e0^lo5UÔocumeot
7. ^ o ^ t ^ ^ ^ For each R e p r ^
by that Studio asacontribotion to th^
P^T5S brand, Marks and System (as described more fuiiy in item
Specificaiiy,eacbaîiiate-owned Representative Studio p a i d a c o n t r i b u ^
two percent (2%) oftbeTraditionai Revenue generated by tbat Studio overtbe Measurement Periods
wbicbistbeamountwecurrentiy require our franchisees topay under tbeir respective franchise
agreements.
8. ê^.For each Representative Studio,theterm"Rent"means the cumulative amount that Studio

expended on rent, common area maintenance and other amounts due undertheieaseforthe premises
of that Studio over the Measurement Period. Piease note that: (i) none of the Representative Studios
received any "free rent" or "deferred rent" overthe Measurement Period; and (ii) given that each ofthe
Representative Studios described in this Part ii were open for some time as of the commencement of
the Measurement Period, none of these locations were required to pay their respective iandiord any
security deposit or other amounts that might typically be due at the beginning ofaiandlord-tenant
relationship.
9. êrcôn^seCost^. For each Representative Studio, the term "Merchandise Costs" means the amount
expended by that Studio over the Measurement Period in connection with merchandise that is sold to
clientele in connection with classes and memberships.
10. A^vert^nônc^Promotion. ForeachRepresentativeStudio,theterm"Advertisingand Promotion"

means that amount expended by that Studio over the Measurement Period in connection with other
advertising and promotional materials and efforts.
11. êrcônt Account Servês.ForeachRepresentativeStudio,theterm"Merchant Account Services"

means the amounts expended by that Studio overthe Measurement Period on fees charged in
connection with credit card processing by the designated software provider for the POS System that is
used bythat Studio (and which you are required to use in connection with yourfranchised Studio as of
the Issue Oate ofthis Disclosure Document).
12. Cêon^. For each Representative Studio, the term "Cleaning" means the reported amount the owner
of that Studio expended on cleaning services at that Studio over the Measurement Period.
13. ^ns^ror^ce. For each Representative Studio, the term "Insurance" means the amount expended by that
Studio over the Measurement Period in order to maintain the proper levels and coverages of insurance
required to operate that Studio. Please note that each of the Representative Studios disclosed in this
Part II Chart purchase insurance (i) from the same thirdparty supplier that, as ofthe Issue Date of this
Disclosure Document,has been designated to serve as the supplier for our franchisees'respective
insurance coverages required under our Franchise Agreement and/or current Manuals; and (ii) in
amountsthat are similartothatwhich you will be required to purchase underyour Franchise Agreement
14. ^Boter.For each Representative Studio, the term "Water" means the amount expended by that Studio
over the Measurement Period in connection with having running water on site at its premises.
15. T o t o ^ C e r t o ^ O p e r o t ^ ^ p e ^ e s . This figure is calculated by taking the su

items detailing specific operating expenses over the Measurement Period, which are discussed more
fully in Explanatory Note Nos.5through23above.lt is important to note thatthis figure may not include
(a)everysingleitemthatcouldbeconsideredan "operating cost"of the Representative Studios over
the Measurement Period, or (b)all the costs of goods you will incur in connection with the operation of
59
©2017C^â^5^8o^5e,^
2017ânch^^5cloêOocum^
onowFronchisedBusioe^ Specie
under CertamOpeîog 5 x ^ 5 ^ ^
owner of each Representee S t u d ^ ^ c o m p e o s a ^
Studios;^mealsand expenses incurred hytheowner in connects
Studiosîâutomohiie/vehicieexpenses^^thirdparty cleaning servi^^
the Measurement Period;^certain taxes an^
none of the Representative Studios in Part ii incurred such expenses) or ceii phone charges for the
owner/manageroftheRepresentativeStudios^viii)feesthat might hechargedhyathird-par^
inconnectionwithpayroii processing;^) hankservicefees^x)officesuppiies^xi)generaisu
as cleaning supplies; (xii) computer and internet expenses; (xiii) professional fees; (xiv) costs for repairs
and maintenance; (xv)towel services; (xvi) utilities; or (xvii) miscellaneous costs such as trav^^
and/oruniformexpenses(as ofthe Issue Oate ofthis Disclosure Document wedo not have any branded
uniform requirements, hut we reserve the right to implement such uniform policies in the future).
16. ô^nstr^ctor Expense. Please he advised that the Part II Chart does not include any compensation paid
to Instructors and other personnel at the Studio.
l ^ W e strongly recommend thatyou speak to your business advisors to identify all types of operating costs
and expenses,including those related tomarketing and advertising your Franchised Business,and
discussthemwithyourbusinessadvisorbeforeentering into any agreement with us to purchasea
franchise.
IB.TotoêverûeLes^Cert^nOperot^ Expenses. For each Representative Studio, this fi^^

by taking the Total Revenue figure set forth in the Part II Chart for that Studio and deducting the Total
ofCertainOperating5xpensesfigureforthatStudioalsosetforth in thatChart. This calculation is subject
to the figures in the Chart and the various Explanatory Notes set forth in this portion of Item 19.
19. Averoê. Each line item in the Part II Chart has an"Average" column, which is calculated as follows:
a. "Average Amount" for each revenue and operating cost line item disclosed in the Part II Chart is
calculated by taking the sum of all two (2) Representative Studios'amount for that given line
item, and then dividing that cumulative figure bytwo (2); and
b. "Avg.ôfTotal Revenue" for each line item is calculated by taking the sum of all two (2)
RepresentativeStudios'amountforthatgivenlineitem, and then dividing that figure bythe
cumulativeTotal Revenue of these two(2) Representative StudiosovertheMeasurement
Period.
Note Regarding Representative Studios and Item 19 Generally
1. When reviewing this Item 19 and evaluating our franchise offering generally,it is very important to
note the following characteristics of Representative Studios described in this Item 19 (as compared
toanew Franchised Business):
a. The territory whereineach companyowned RepresentativeStudiooperatesislocated

within the State of California, where the CLUB PILATES brand has likely obtained more ofa
reputation and garnered goodwill amongst the relevant target audience (as compared to
another region of the United States where there are no Studio locations);
60
© 2 0 1 7 ^ ^ I ^ F r ^ ^ , L ^
2017Fraoohê0^losure document
b. ThecompanyDowoedRepênt^
êosoogreementwith Franchisor hot each oftheso locate
ii of this item) does otiiize the Marks and System inamannersi^^^
required to use such inteiiectuai property in the operation ofanew Franchisee Business;
c. Thecompany-ownedRepresentativeStudioswerenotrequiredtopayusoranyotherparty
an initial Franchise Fee or the other initial fees described in itemSof this Disclosure
Document. Atthesametime, none ofthe company-owned Representative Studios incurred
the various other pre opening costs and expenses over the Measurement Period that you
are likely to incur in connection with the development ofanew Franchised Business^this
is because these Studios were all open and operating for some time as of the date the
Measurement Period commenced;
d. PleasenotethatbothofthecompanyownedRepresentativeStudiosaresmallerthan^SOO
square feet in size.You will recall that our standard franchise offering expects that your
Franchised Business will be approximately 1,500 square feet in size; and
e. Certain aspects ofthe company-owned Representative Studios are primarily managed ona
day-to-day basis by a single individual that is engaged by the company owned
RepresentativeStudios. While this engagement would be similar to you engaging a
"Designated Manager" or other third party to assist in managing certain aspects of your
Franchised Business,wedonotexpectthatyouwill be engagingsuchathird party at the
outset of operating your new Franchised Business(unless you areamulti-unit owner).
2. Some outlets have sold and earned this amount.Your individual results may differ.There is no
assurance you'll sell or earn as much. Your results may vary upon the location of your Franchised
Business.Your results may also vary because you willhe establishing and operatingastartup
business.
3. The analysis above in this Item may not contain complete information concerning the operating
costs and expenses that you will incur in operating your Franchised Business. Operating costs and
expenses may vary substantially from business to business.
4. The figures provided in this Item exclude certain tax liabilities forwhich you will be responsi^^^
5. The figures disclosed in this Item may not include all the professional fees or other administrative
expenses that you might incur in connection with opening and commencing operations of your
Franchised Business, including legal and accounting fees.
6. Interest expense, interest income, depreciation, amortization and other income or expenses will
vary substantially from business to business, depending on the amount and kind of financing you
obtain to establish your Franchised Business. You should consult with your tax advisor regarding
depreciation and amortization schedules and the period over which assets of your Franchised
Business may be amortized or depreciated, as well as the effect, if any,of any recent or proposed
tax legislation. Please note that the figures set forth in this Item 19 do not involve any depreciation
or amortization.
7. Expenses andcosts, as well as the actual accounting and operationalmethods employed bya
franchisee, may significantly impact profits realized in any particular operation. Actual results w^
51
© 2 0 1 7 O ^ ^ ^ ^ 8 0 ^ ^ , ^
2017^nê0^cô^0o^m^
vary from Fraochised Business to F ^
partiouiar Franchised Business. Th^
hy many factors, sueh as:(a) your Designated Territory's geographic location population
demographics;^) advertising effectiveness hased on market saturation;^) whether you operate
thehusiness personaiiyorhireathird partyto serve as your Designated Manager; (d) your product
and service pricing; (e) vendor prices on materials, supplies and inventory; (f) personnel saiariesand
benefits (life and heaith insurance, etc.); (g) insurance costs; (h) weather conditions;^) ability to
generate customers;^) customer loyalty; (k) employment conditions in the market; and (1) the
efforts you and your personnel put into your Franchised Business.
B. We suggest strongly that you consult your financial advisor or personal accountant concerning
financial projections and federal, state and local income taxes and any other applicable taxes that
you may incur in operatingaFranchised Business.
Otherthantheprecedingfinancial performance representation,we do not make any financial performance

representations. We also do not authorize our employees or representatives to make any such representations
either orally or in writing. Ifyou are purchasing an exis^^^
with the actual records of that outlet. If you receive any other financial performance information or projections
of your future income, you should report it to the our management by contacting Shaun Grove at Club Pilates
Franchise, LLC, 31BS Pullman Street, Costa Mesa, CA 92526 orviateiephone at (949) 3 4 6 9 ^ ^
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION
TABLE 1
SYSTEMWIDE OUTLET SUMMARY
FOR YEARS 2014 TO 2016
OUTLETS AT THE OUTLETS AT THE END

OUTLET TYPE YEAR NET CHANGE
START OF THE YEAR OF THE YEAR
2014 10 19 +9
FRANCHISED 2015 19 39 +20
2016 39 74 +35
2014 5 5 0
COMPANY-OWNED 2015 5 4 -1
2016 4 3 -1
2014 15 24 +9
TOTAL OUTLETS 2015 24 43 +19
2016 43 77 +34
62
TABLE 2
TRANSFER OF OUTLETS FROM FRANCHISEES TO NEW OWNERS
(OTHER THAN CLUB PILATES FRANCHISE, LLC)
FOR THE YEARS 2014 TO 2016
STATE YEAR NUMBER OF TRANSFERS

2014 0
TOTAL OUTLETS 2015 0
2016 0
TABLE 3
STATUS OF SINGLE UNIT FRANCHISE OUTLETS
CEASED OUTLETS
OUTLETS REACQUIRED
OPENED NATIONS RENEWALS -OTHER OF THE
OF YEAR FRANCHISOR
REASONS YEAR
2014 0 0 0 0 0 0 0
AL 2015 0 1 0 0 0 0 1
2016 1 0 0 0 0 0 1
2014 1 0 0 0 0 0 1
AZ 2015 1 1 0 0 0 0 2
2016 2 2 1 0 0 0 3
2014 8 7 0 0 0 0 15
CA 2015 15 14 6 0 0 0 23
2016 23 13 2 0 0 0 34
2014 0 1 0 0 0 0 1
CO 2015 1 2 0 0 0 0 3
2016 3 3 0 0 0 0 6
2014 0 0 0 0 0 0 0
FL 2015 0 1 0 0 0 0 1
2016 1 1 0 0 0 0 2
2014 0 0 0 0 0 0 0
GA 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
IL 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
63
CEASED OUTLETS
OUTLETS REACQUIRED
STATE YEAR ATSTART BY
OF YEAR FRANCHISOR
REASONS YEAR
2014 0 0 0 0 0 0 0
IN 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
KS 2015 0 1 0 0 0 0 1
2016 1 0 0 0 0 0 1
2014 0 0 0 0 0 0 0
MD 2015 0 1 0 0 0 0 1
2016 1 1 0 0 0 0 2
2014 1 0 0 0 0 0 1
Ml 2015 1 0 0 0 0 0 1
2016 1 1 0 0 0 0 2
2014 0 0 0 0 0 0 0
MN 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
MO 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
MT 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
NJ " 2015 0 0 0 0 0 0 0
2016 0 4 0 0 0 0 4
2014 0 0 0 0 0 0 0
NV 2015 0 2 0 0 0 0 2
2016 2 1 0 0 0 0 3
2014 0 0 0 0 0 0 0
OR 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
2015 0 0 0 0 0 0 0
TN
2016 0 1 0 0 0 0 1
64
CEASED OUTLETS
OUTLETS REACQUIRED
STATE YEAR ATSTART BY
OF YEAR FRANCHISOR
; REASONS YEAR
2014 0 0 0 0 0 0 0
TX 2015 0 1 0 0 0 0 1
2016 1 3 0 0 0 0 4
2014 0 0 0 0 0 0 0
VA 2015 0 0 0 0 0 0 0
2016 0 1 0 0 0 0 1
2014 0 0 0 0 0 0 0
WA 2015 0 2 0 0 0 0 2
2016 2 0 0 0 0 0 2
2014 0 1 0 0 0 0 1
WI 2015 1 0 0 0 0 0 1
2016 1 0 0 0 0 0 1
2014 10 9 0 0 0 0 19
TOTAL 2015 19 26 6 0 0 0 39
2016 39 38 3 0 0 0 74
TABLE 4
STATUS OF COMPANY-OWNED OUTLETS
STATE YEAR OUTLETS OUTLETS OUTLETS OUTLETS OUTLETS OUTLETS AT

AT START OPENED REACQUIRED CLOSED SOLD TO END OF THE
OF YEAR FROM FRANCHISEE YEAR
FRANCHISEE
CA 2014 5 0 0 0 0 5
2015 5 0 0 0 1 4
2016 4 1 0 0 2 3
TOTAL 2014 5 0 0 0 0 5
2015 5 0 0 0 1 4
2016 4 1 0 0 2 3
65
TABLE 5
PROJECTED OPENINGS AS OF DECEMBER 31, 2016
PROJECTED NEW
FRANCHISED OUTLETS
IN THE NEXT FISCAL
YEAR
AL 1 0 0
AZ 6 6 0
CA 30 13 0
CO 4 3 0
CT 1 1 0
FL 10 10 0
GA 4 3 0
ID 2 0 0
IL 5 5 0
IN 1 1 0
MA 1 1 0
MD 4 1 0
Ml 2 2 0 |
MN 4 2 0 "|
MO 1 1 0
NC 4 3 0
NJ 6 5 0 |
NV 2 0 o 1
NY 6 3 0 |,
OH 1 1 0
OK 1 0 0
OR 2 2 0
TN
TX
2
. 14 8
2
0
1
UT
VA
2
2 2
2
0
1
WA 2 1 0
WI 3 1 o
TOTAL 123 79 0
66
Aôfthenomeôdd^âod^^
OôsureOocumeot is c a c h e d as E x h ^ H .
A i i s t o f t h e n a m e s , addresses and teiephooe numbers of ourfranchise^

canceled, not renewed or otherwise voiuntariiy or invoiuntariiy ceased to do b u ^ ^
agreement during tbe most recently competed fiscai year or wbo have not communicated witb us wi^^^
weeks o f t h e issuance date ofthis franchise disclosure document, is attached as ExbibitL
In the last three fiscai years, none of our franchisees have entered any confidentiality agreements that r e s t ^ ^
their ability to speak openly about their experience with ourfranchise system.
There are no trademark specific franchisee organizations.
Ifyou buythe franchise offered in this disclosure document, your contact information may be disclosed to other
buyers when you leave the franchise system.
IT5M^ FINANC^STAT5M5NTS
We have not been in business for three years or more and cannot include aii the financial statements
required by the Rule for our last three fiscal years. Attached to this disclosure document as 5xhlbltCare our
audited financials for our fiscal years ending 0 e c e m b e r 3 ^ 2016 and December 31, 2015, and (ii) unaudited
interim balance sheet as of March 31^ 2017 and unaudited profit and loss statement for the period beînnin^
Januarvl,2017andendinîyiarch31, 2017.Ourfiscal year ends on December 31 of each year.
IT5M22 CONTRACTS
The following agreements are attached to this Disclosure Document:
5xhibitA Franchise Agreement and Exhibits

5 x h i b i t l Authorized Location Addendum
5xhibit25lectronicFundsTransfer Agreement
Fxhibit3 Electronic Debit Authorization
Exhibits Guarantee
Exhibits Addendum to Lease
ExhibitD Statement of Prospective Franchisee
ExhibitF Form of General Release
ExhibitG State SpecificAddenda
Exhibits DevelopmentAgreement
IT5iyi23 R5C5IRTS
Exhibit K to this Franchise Disclosure Document contains a detachable document, in duplicate,

acknowledging receipt of this Franchise Disclosure Document byaprospective franchisee. You should sign both
copies of the Receipt. You should retain one signed copy for your records and return the other signed copy to
our Chief Operating Officer at the following address: Shaun Grove at Club Pilates Franchise, LLC, 318S Pullman
Street, Costa Mesa, C A 9 2 6 2 6 , a n d a t ( ^ 3 4 6 9 7 9 ^
67
© 2 0 1 7 C I ^ ^ ^ ^ 8 ^ 5 e , ^ 0
2017^nê0ôê0ocum5Ot
Exhibit A

Exhibit B
LIST OF STATE AGENTS FOR SERVICE OF PROCESS

AND STATE ADMINISTRATORS

2017 Franchise Disclosure Document — Exhibits

TABLE OF CONTENTS
ARTICLE PAGE
1. GRANT OF FRANCHISE; LOCATION 2

2. ACCEPTANCE BY FRANCHISEE 3
3« TER^^ AND RENEWAL ............4
4. TRADEMARK STANDARDS 6
5. FEES 7
6* F R - ^ V ^ f C - H I S ^ ^ R S E j ^ l \ ^ K _ > . l l / S * * * * * * s * * s a * > * a > * * > * a * > a a * a a a * a a a •••••••••••••••••••••••••••«••«••••••••• ••••••••>••••••*••• 1 1
7. FACILITY STANDARDS, LEASE AND CONSTRUCTION 16

8. STUDIO IMAGE AND OPERATING STANDARDS 18
9. ADVERTISING AND MARKETING 23
REQUIREMENTS 25
11. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION 28
12. CONFIDENTIAL INFORMATION 29
13. COVENANTS NOT TO COMPETE 30
15. DEFAULT AND TERMINATION OF AGREEMENT 33
16. RESOLUTION OF DISPUTES 39
17. MISCELLANEOUS PROVISIONS 43
18. ACKNOWLEDGMENTS 46
19. ENTIRE AGREEMENT 47
EXHIBITS
EXHIBIT 1 AUTHORIZED LOCATION ADDENDUM

EXHIBIT 2 ELECTRONIC FUNDS TRANSFER AGREEMENT
EXHIBIT 3 ELECTRONIC DEBIT AUTHORIZATION
EXHIBIT 4 GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGEMENT
EXHIBIT 5 ADDENDUM TO LEASE

CLUB PILATES
FRANCHISE AGREEMENT
In a number of places in this Franchise Agreement, you are asked to initial certain items to
show that they have been fully discussed with you, and read, understood and agreed to by
you. Initialing those areas does not lessen the importance of other areas or mean they are
not fully enforceable.
This Club Pilates Franchise Agreement (this "Agreement") is entered into as of the
day of , 20 between Club Pilates Franchise, LLC, a Delaware
limited liability company, doing business as "Club Pilates" ("Franchisor") and
, or his/her/their assignee, i f a partnership,
corporation or limited liability company is later formed ("Franchisee"), upon the following terms,
conditions, covenants and agreements:
RECITALS
A. Club Pilates Franchise, LLC, a Delaware limited liability company ("Licensor"), owns and
has developed and administers a system and franchise opportunity, including various fitness and
exercise techniques and methods, trade secrets, copyrights, confidential and proprietary
information and other intellectual property rights (collectively, the "System") for the establishment
and operation of Pilates fitness studios ("Club Pilates Studios") identified by the "Club Pilates"
trade name and other trademarks and service marks licensed hereunder (the "Marks").
B. The System includes the Marks and trade secrets, proprietary methods and information and
procedures for the establishment and operation of Club Pilates Studios, including, without
limitation, confidential manuals (collectively, the "Manual"), training methods, fitness equipment,
furniture and fixtures, marketing, advertising and sales promotions, cost controls, accounting and
reporting procedures, personnel management, distinctive interior design and display procedures,
and color scheme and decor (collectively, the "Trade Dress").
C. Franchisor grants to qualified persons who are willing to undertake the required
investment and effort, a franchise to own and operate a Club Pilates Studio offering (a) Pilates
instruction and related services that Franchisor authorizes (collectively, the "Approved Services"),
and (b) certain merchandise and other products Franchisor authorizes for sale in conjunction with
the Approved Services and Studio operations (collectively, the "Approved Products"), all while
utilizing the System and Marks.
D. Franchisee desires to obtain afranchiseto use the System and Marks in the development
and operation of a Club Pilates Studio at the location specified in this Agreement (the "Studio").
E. Franchisee has independently investigated the business contemplated by this Agreement,

and recognizes that the nature of the business may change over time, that an investment in a Club
Pilates brand Studio involves business risks, and that the venture's success depends primarily upon
Franchisee's business abilities and efforts.
©2017 Club Pilates Franchise, LLC A-l

NOW, THEREFORE, in consideration of the foregoing, the fees and other sums payable
by Franchisee and of the mutual covenants contained in this Agreement, the parties agree as
follows:
1. GRANT OF FRANCHISE; LOCATION
1.1 Grant. You agree at all times faithfully, honestly and diligently to perform your
obligations under this Agreement and to use your best efforts to promote Club Pilates and your
Studio. Accordingly, Franchisor grants to Franchisee the non-exclusive right and license to:
A. Establish and operate a single Club Pilates Studio utilizing only the System and the
Club Pilates Marks, at a location that has been authorized by Franchisor (the "Authorized
Location"), in accordance with the provisions and for the term specified in this Agreement;
B. Use only the Marks ofFranchisor under the terms of this Agreement to identify and
promote the Studio offered hereunder; and
C. Use the proprietary fitness and exercise methods and know-how, as set forth
periodically in Franchisor's operations manual, other manuals, training programs, or otherwise
communicated to Franchisee.
1.2 Site Approval Process. Franchisor will assist Franchisee in connection with site selection
by: (i) providing Franchisee with its then-current site selection criteria, to the extent such criteria
has been reduced to writing; and (ii) providing Franchisee with access to a local real estate broker
that is familiar with Franchisor's confidential site evaluation criteria, to the extent Franchisor has
established relationships with such brokers in or around the Designated Market Area (as defined
in Section 1.3 below). Franchisor will use commercially reasonable efforts to approve or reject a
proposal for an Authorized Location within 30 days of the date Franchisor receives all reasonably-
requested information regarding the proposed site. Franchisor's approval of the proposed site shall
be deemed to be a binding addendum to this Agreement upon Franchisor and Franchisee's
execution of Exhibit 1, which is attached hereto and incorporated herein by reference, and which
will set forth the Authorized Location. Franchisor agrees not to unreasonably withhold approval
of a site that meets its site criteria. Franchisee acknowledges that Franchisor's approval of a
proposed site is permission only and not an assurance or guaranty to Franchisee of the availability,
suitability or success of a location, and cannot create a liability for Franchisor. While Franchisor
will provide site selection assistance as specified in Section 6.1 herein, Franchisee alone is
ultimately responsible for selecting and developing an acceptable location for the Studio.
Franchisee agrees to hold Franchisor harmless with respect to the selection of the Authorized
Location by Franchisee. Franchisee must obtain lawful possession of an Authorized Location by
lease, purchase or other method and open for regular, continuous business within six (6) months
of the date that Franchisor accepts this Agreement. The opening date may be extended an
additional three (3) months in certain instances, as explained in Section 2.2D, below. Franchisor
has the right to terminate this Agreement if Franchisee fails to select a site for the Studio that meets
Franchisor's approval, within the time period allotted above.

L3 A u t b o ^ e d L o c a ^ o n ^ D e ^ n a ^ T e r r ^ ^ I f ^ A u t h o r i ^ d Location has not been
identified at the time this Agreement is signed, Franchisee m ^
Franchisor within the fbiiowing geographical area:
("Designated Market Area"). Once the Authorized Location for the Stndio has been identified in
the Authorized Location Addendum, attached hereto as Fxhibitl^Franchisor agrees that, so long
as Franchisee is in good standing, neither it nor its affiliates will operate or establish, or a u ^
another Club Pilatesfranchiseeto operate or establish,aStudio using the Club Filates
Marks withinacertaingeographical areasurrounding the Authorized Location("Designatcd
Territory"). The DesignatedTerritorv.if anv. will be defined in Exhibitl^hercto.
1.4 Rights Reserved to Franchisor. Notwithstanding anything contained in this Agreement,

Franchisor and its affiliatesaffiliatc^parent(s)hcrebv reserve the exclusive
operate, and license third parties the right to open or operate, other Studios utilizing theMarks
System outside the DesignatedTerritory; (ii) market, offer and sell products and serviced
to those offered by the Franchised Business and other Studios(such as private label products that
Franchisor may develop)through alternate channels of distribution, including without l i m ^
via the Internet and other c^commercc channels, catalog sales, direct mailor wholesale, at any
location; (iii)acquire, or beacquiredby,anycompany,includingacompany operating oneormore
businesses offering products or services similar to those offered byaStudio, located within or
outside your DesignatedTerritory, and subsequently operate(orlicenseathird party the right to
opcratc)theselocations; (iv)open and operate, or license third parties the rightto open or operated
businesses that offer products and services similar to the Franchised Business under marks other
than the Marks at any location; and (v) use, and license others the right to use, the Marks and
System to engage in any other activity not expressly prohibited by this Agreement.

Your Initials: /
2. ACCEPTANCE BY FRANCHISEE
2.1 Acceptance bv Franchisee. Franchisee accepts this Agreement and the license granted
herein and agrees to develop and operate the Studio on the terms and conditions specified herein.
Franchisee agrees to follow the System requirements in the operation of its Studio, including,
without limitation, its facilities, staff, advertising, operations, and all other aspects of Franchisor's
business and the System now in effect and changed periodically. Franchisee (or, if Franchisee is
an entity, one of its operating principals) and its proposed Designated Manager (as defined in
Section 5.5(B) of this Agreement) must attend and complete the appropriate initial training to
Franchisor's satisfaction, as set forth in Section 6.3 of this Agreement.
2.2 Conditions. The rights being licensed herein are subject, without limitation, to the
following conditions:

A. Franchisee's business and the Studio shall be identified only by those Marks
approved in writing by Franchisor with at least one exterior sign as designated by Franchisor.
B. Concurrently, with the signing of this Agreement, Franchisee must execute a

personal guaranty in the form attached hereto as Exhibit 4 ("Personal Guaranty"). In the event
Franchisee is a legal entity having more than one owner, all owners, shareholders, partners, joint
venturers, and any other person who directly or indirectly owns a 10% or greater interest in
Franchisee (the "Owners") must execute the Personal Guaranty. Any person or entity that at any
time after the date of this Agreement becomes an Owner, pursuant to Section 14 or otherwise,
shall, as a condition of becoming an Owner, execute Franchisor's then-current form of Personal
Guaranty.
C. Franchisee shall submit the lease for the Studio to Franchisor for its written consent
before Franchisee executes the lease for the Authorized Location. The lease must contain the
provisions outlined in Section 7.2 and Exhibit 5 ("Lease Addendum").
D. Franchisee agrees that it shall open the Studio for regular, continuous business no
later than six (6) months after this Agreement is signed by Franchisor. If, through no fault of
Franchisee, the Studio has not opened after six (6) months, Franchisor may agree in writing to
provide Franchisee with an additional three (3) months to open its Studio if Franchisee (a) has
already secured an approved premises for its Studio, and (b) is otherwise making diligent and
continuous efforts to buildout and otherwise prepare its Franchised Business for opening
throughout the six (6) month period following the execution of this Agreement.
E. Franchisee agrees at all times to comply with the Manual, standards, operating
systems, and other aspects of the System (collectively, the "System Standards") prescribed by
Franchisor, which are subject to change at Franchisor's discretion.

Your Initials: /
3. TERM AND RENEWAL
3.1 Term. The term of this Agreement shall be for a period of ten (10) years beginning on the
date this Agreement is accepted by Franchisor, unless sooner terminated under Section 15. The
conditions to obtain a renewal Club Pilates franchise agreement are those stated below in Section
3.2.
3.2 Renewal. Unless terminated at an earlier date, upon the expiration of the initial term,
Franchisee shall have the right to renew this Agreement for two (2) consecutive additional five (5)
year terms, subject to satisfaction of each of the following conditions:
A. Prior to each such renewal, Franchisee shall execute Franchisor's standard form of
franchise agreement being offered at the time of each such renewal. The provisions of each such
renewsfranchiseagreement may
meindmg, without imitation, eh^
pay the renewal fee speeifredinSeetion ^ F . , instead of the i n ^ ^ Franchisee's
failure or refusal to execute and return Franchisor's then-current standard form Franchise
Agreement toFranchisor within thirty (30)daysafrerreceipthyFranchiseeshall constitute
Franchisee'selection not to renew;
B. Franchisee shall demonstrate that it has the right to remain in possession of the
Authorized Location for the duration ofthe renewal term,or that it has heenahle to secure and
develop an alternative site acceptable to Franchisor;
C In consideration of each such renewal of thefranchise,Franchisee shall executea

general release in the f o ^ and substance satisfactory to Franchisor, releasing any and ah
against Franchisor and its affiliates, officers, directors, employees and agents;
Franchisee shall have completed or made arrangements to make, at Franchisee's

expense, such renovation and modernization ofthe Studio, including the interior and exterior of
the building, grounds, leasehold improvements, signs, furnishings, fixtures, equipment,
surveillancecameras, and decor as Franchisorreasonablyrequires so the Studio conforms w i t h ^
then-current standards and image ofFranchisor;
E. Franchisee, during the term of this Agreement, shall have substantially complied
with all ofthe provisions ofthis Agreementand all other agreements withFranchisor,and shall be
in compliancewiththeManualandwithFranchisor'spolicies, standards and specifications on the
date ofthe notice ofrenewal and at the expiration ofthe initial term;
F. Franchisee shall pay to Franchisorarenewal fee equal to ^10,000 forasuccessor

franchise; and
C Franchisee shall have given Franchisor written notice of renewal no less than 90
days or more thanlÔ days before expiration of the initial term.
3.3 Franchisors Refusal to RenewFrancbise. Franchisormayrefuse to renewthe franchise

ifFranchisee is in default under this Agreement, or any other agreement with Franchisor or an
afiiliate ofFranchisor, or ifFranchisee fails to satisfy any ofthe foregoing condit^^ Subject to
theabove,Franchisorwill not unreasonably deny renewal ofaFranchise.
3.4 Notice ofFxnirationReoniredbv Law. If applicable law requires thatFranchisor givea

longerperiodofnotice to Franchisee than herein provided priorto the expiration ofthe initials
or any additional term, Franchisor will give such additional required notice. IfFranchisordoes
notgivesuchrequiredadditionalnotice,thisAgreementshall remain in effect onamonth-to-
month basis until Franchisee has received such required notice.
Your Initials: /

^TRADEMARKSTANDARDS
4.1 Name and Ownersbm. Franchisee aelôwledges the v a l ^

andallotherMar^thatnoworinthefutêareorwihhepartoftheSys^
recognizes that thêMar^ are the sole and e ^ ^
Franchisor. Franchisee f^heraclôwledges that Franchisee's right to use the Marl^ is der^^
solely from this Agreementandis limited to the conduct ofaStudio pursuant to and inc
with this Agreement and all applicable standards, specifications and operating procedures
prescribed hy Franchisor from time to time. Any unauthorized use of the Marks by Franchisee
shall beabreachofthisAgreementandan infringement oftherightsofFranchisoranditsaîliates.
Franchisee's use of the Marks inures to the benefit ofFranchisor,which owns all goodwill now
and hereafrer associated with the Marks. Franchisee agrees not to contest ownership or registration
ofthe Marks. Franchisor(andôritsafriliates)owns all right, title and interest in an^
andFranchisee has and acquires hereby only the qualified license granted in this Agreement.
Franchisor represents and warrants thatFranchisor or its affiliates own the Marksfreeand clear of
any liens or encumbrances, and that Franchisor has the right to license the use of the Marks, and
the licenseconveyedbythisAgreementdoesnotinfringe any valid orenforceabletrademark rights
owned by any other party. Franchisor agrees to indemnify Franchisee from any claims, costs or
fees associated with any violation ofthis provision, sulêct to the requirement that Franchisor
immediatelynotifiedofanythirdpartychallengetoFranchisee'sauthorizeduse ofany Mark under
this Agreement, and Franchisor has the right to control any related litigation.
42 Use
A. Franchiseeshallnot use any Markas part of any corporate or business name

with any prefix, suffix or other modifying words, terms, designs or symbols, or in any modified
form.Franchiseeshalldisplay anduse theMarks only inthe manner andformprescribedor
authorized by Franchisor and shall conduct no other business than that prescribed by Franchisor.
Franchisee shail notuse any othermark, name, commercial symbol or logotype in connection with
the operationof theStudio and shall not market any product relating totheStudiowithout
Franchisor'swritten consent, and i f such consent is granted, such product must be marketed ina
manner acceptable to Franchisor. Franchisor may also permit Franchisee to use from time to time
other trademarks, service marks, trade names and commercial symbols as may be designated by
Franchisor in writing.
B. Franchiseeagrees togive suchnoticesoftrademarkand servicemark

registrations and copyrights as Franchisor specifies and to obtain such fictitious or assumed name
registrations as may be required under applicable law.
C Franchisee is prohibited from using the Marks in advertising, promotion or

otherwise, without the appropriate or (copyright and registration marks) or the
designations"^"or"^"(trademarkand servicemark), where applicable.
©2017^bâtesFranc^5e,^ A^
2017Franohê Agreement
4.3 L i ^ a ^ o n . Franchisee agrees to notify Franchi^
aware that any person who is notaiieensee ofFranchisor is nsing or infringing npon any o f ^
Marks. Franchisee may not commnnicate with any person other than Franchisor and its counsel
in connection with any such use or infringement. Franchisor will have discretion to determine
whatsteps, if anyâre to he taken in any instance of unauthorized use orinfringement of any ofits
Marks and wih have complete control ofany litigation or settlement in connection with any ciaim
ofan infringementorunfaircompetitionorunauthorizedusewithrespectto the Marks.Franchisee
will execute any and all instruments and documents and will assist and cooperate with any suit or
other action undertaken hy Franchisor with respect to such unauthorized use or infringement such
ashy giving testimony or furnishing documents or other evidence. Franchisor will he responsible
for legal expenses incurredhy Franchisor in connection with any litigation or other legal
proceeding involving such third party. Franchisor shall not he liable for any legal expenses of
Franchisee unless approved in writing by Franchisor in its discretion.
44 Modifications Discontinuance or Substitution. Franchisor reserves the right, i f

necessary in Franchisor's sole judgment,to change the principal Mark(s) of the System ona
nationalorregionalbasis,anduponreasonablenotice,Franchisee sball at its expense adoptanew
principalMark(s) designated byFranchisor to identify the Studio. Franchisor shall haveno
liability or obligation whatsoever with respect to Franchisee'schange of any Mark.
4.5 Franchisors Revenues Franchisoranditsaffiliatesmayofferto sell to Franchisee ata

reasonableprofitvariousgoodsand services, andreservetherighttoreceivefees orother
consideration in connection with sales promotion and advertising programs associated with the
Marks orfromSystemvendors.
1 have read Article 4, understand it, and agree to

comply with each ofits Sections.
Your Initials: /
5. FEES
5.1 Initial Franchise Fee. Franchisee agrees to pay Franchisor an initial franchise fee in the
sum of Forty-Nine Thousand Five-Hundred Dollars ($49,500) for a single Studio upon execution
ofthis Agreement (the "Initial Franchise Fee") in the form of a cashier's check or bank wire. The
Initial Franchise Fee shall be fully earned by Franchisor upon payment and is not refundable under
any circumstance.
5.2 Royalty Fee. Beginning on the day the Studio starts generating revenue from its business
operations, and continuing during the Term of this Agreement, Franchisee agrees to pay
Franchisor, weekly, without setoff, credit or deduction of any nature, a royalty fee equal to six
percent (6%) of the Gross Sales (as that term is defined in Section 5.3, below) generated by the
Studio over the immediately preceding week (the "Royalty" or "Royalty Fee").
5.3 Gross Sales. Gross Sales means the total revenue generated by the Studio, including all
revenue generated from the sale and provision of any and all gift cards and other approved products

andservicesatorôugh^Stu^
re^dtothenonDopîonof^
credit charge account baêr or exchang^"Gross Sales" d ^
equivalent taxes that are collected by Franchisee for or oo beh^^
authority and paid thereto, (h) the value of any allowance Issued or granted to any c l ^ ^
Studio that is credited in good faith byFranchisee
approved products or services offered in connection with the Studio, or(c)the provision of the
Teacher TrainingFrogram at the Studio.
5.4 Initial FFE Package and Prooêtarvlmtial Inventory Kit: Studio Manage
Software.
A. Friortoopeningthe Studiogovemed bythis Agreement, Franchisee mustpurchase:

(i) an initial package of f ^ i t u r e , fixtures and equipment that is designed to provide Fran^
with certain items needed in connection with outfitting, equipping and otherwise building out of
the Studio (the "Initial FEE Package"^ and (ii) opening inventory comprised of certain bra^^^
and other inventorythat may be resold atthe Studio (the "Proprietary hîtial Inventory
the term ofthis Agreement, Franchisee will beresponsiblefor(a)maintainingandôrreplac^
itemscomprisingthelnitialFFEFackage,and(b)maintainingcertain levels of inventory with
respect to those items comprising the Proprietary initial inventory Kit, as set forth mor^
this Agreement.
B. Franchisee further agrees to install at its expense and use the membership
accounting, cost control, point ofsale ("POS") and inventory control systems through the supplier
Franchisordesignates.Thedesignated,orapproved,supplier(s)for these services will be updated
in the Manuals as changes are made. Over the term ofthis Agreement, Franchisee will also be
required to pay Franchisor's thencurrent designated provider for the software that Franchisor
prescribes for use in connection with the Studio and the POS(the "Software Fee"), which may be
modified upon reasonable written notice to Franchisee.
5.5 Overview ofTrainin^ Programs and Fees. The parties a^ree and acknowledge that: (i)
Franclusee or, ifFranchisee is an entity,at least one(l)ofFranchisee's operating principals(an
"Operating Principal") must complete the "OwnerÔperator" Module and Franchisor'sproprietary
initialtrainingprogram(the"hîtialTrainingProgram"), as described more fully in S
below; and (ii) each instructorthatFranchisee engages to provide any ofthe Approved Services at
its Studio must(a) have at least 450 hours ofPilates instruction and meet certain other standard
criteria in the industry to become a certified Pilates instructor (the "Certified Pilates
Requirements"), and (b) complete Franchisor's proprietary "BridgeTraining P r o g r a m " ^
designed toprovide instructors withadditional guidelines and instruction for providing the
Approved Services in accordance with the Systemic "Bridge Training Program").The followm^
fees are associated with the foregoing training and any additional training that Franchisor o
designee might provide in connection with the Studio.
A. Franchisee will not be required to pay anytrainm^

tuition in connection with individuals that
ofthe Studio, provided such individuals all attend at the same time.For those individuals that wish
Ô^^bâtesâochise,^ A8
to compê the Inifial Timing ^
its Operating Prineipai) attends the Initial Training Program, Franchisor may charge snch
individnais its then^cnrrent training lee (the "Training Fee"). Franchisor may
thirdparty individual that it approvestomanagetheday^dayoperationsof theStudio (a
"Designated Manager"),hut any suchindividualmust at leastcomplete the OwnerÔperator
Module ofthe Initial Training Program prior to assuming any management responsibilities at the
Studio(with Franchisee paying the TrainingFees associated therewith, if any)..
B. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
(1) IfFranchisee(orone ofits operating principal is not

the Stndio during normal business honrs to manage the day to day operations of it^
Franchisee must appoint an individual to serve as the designated manager o f t h e Studio
("Designated Managers I f Franchisee is the owner of multiple open Studios, then France
must ensure that either (a) Franchisee (or one of its operating principals),or(h)aDesignated
Manager, is on-site at the Studio during business hours to manage the day to day operations of
each such Studio.
(2) The Designated Manager must attend and complete, to Franchisor's

satisfaction, the designated manager training program that takes place at Franchisor'scorporate
officepriortotheopening ofthe Studio(the "DesignatedManager Training Frogram'^Franchisee
is responsible f^r all costs associated with the Designated Manager's attendance at the training
program including, travel, food, lodging and wage costs. Franchisor does not chargeatraining fee
in connection with such training.
C 7 ^ ^ ^ ^ ^ ^ Fach and every instructor that provides any ofthe

Approved Services at Franchisee's Studio must: (i) meet the Certified Filates Requirements and
otherwise be certified to provide Filates instruction(each,a"Certified Filates
subsequently complete the BridgeTraining Program,which may be completed (a) at the Initial
Training Program i f t h e instructor is in attendance (at no additional cost to Franchisee or
instructor),or(b)atany timeafterFrancbisee(or, i f appropriate, its Operating Principalor
Designated Manager) attends the Initial Training Program via remote instruction (video or
webinar)or,ifdeterminedappropriateby the parties, via inpersoninstruction at Franchisor's
headquarters or the Studio.There are no training or other fees associated with the BridgeTraining
Program other than the costs and expenses, including instructor wages, that Franchisee will be
responsible for in connection with ensuring that its instructors attend and complete such Bridge
Training Program prior to providing any Approved Services at the Studio (whether as part ofthe
InitialTraining Program or otherwise).
D. Franchisee will have the option of p r o v i d i n g a ^

"teacher training"coursetoclientele ofthe Studio which includes both: (i) the instruction
necessary to comply with the CertifiedPilates Requirements; and (ii) the Bridge TrainingPro^
(collectively,the"TeacherTraining Program''). I f an individualwishes to attend theTeacher
Training Program at the Studio, that individual w
being paid out to Franchisor for certain materials that it provides in connection with this trainm^^
©^7^bâtesânchi5e,^ A^
and (b) the balance of $2,750 paid out to Franchisee's Studio (or other Studio that is actually
providing the instruction to the client). In order to provide the Teacher Training Program at the
Studio, such training will need to be provided by an instructor that (a) is a Certified Pilates
Instructor that has completed the Bridge Training Program, and (b) is otherwise approved by
Franchisor as a "Master Instructor" (the criteria for which will be set forth in the Manual or
otherwise in writing by Franchisor).
E. Ongoing/Refresher Training. Franchisor may provide or request that Franchisee

and certain of its management personnel attend and complete up to five (5) days of
additional/refresher training each year, but Franchisor will not charge Franchisee any Training Fee
in connection with such required training (but Franchisee will be responsible for the costs
associated with attending training at Franchisor's designated training facility).
F. No Training Fee for Minor, Day-to-Day Assistance. Franchisor will not charge
Franchisee any fees in connection with minor, day-to-day assistance that Franchisor provides
remotely over the phone, vip email/fax or other electronic channel of communication, which
Franchisee understands and acknowledges will be provided subject to the availability of
Franchisor's personnel.
G. Costs and Expenses. Franchisee will be required to pay all costs and expenses
incurred in connection with any training that Franchisee or its personnel attends in connection with
Studio, including those costs related to travel, lodging, meals and (if appropriate) wages.
H. Training Fee for Certain Training. Franchisor reserves the right to charge its then-
current training fee in connection with training that (a) Franchisee requests Franchisor provide
(other than in connection with Bridge Training Training that is provided by Franchisor personnel
at Franchisor's headquarters), or (b) Franchisor provides on-site at Franchisee's Studio ("Training
Fee").
5.6 Fund Contribution. Franchisor has established a creative brand fund to promote the
System, Marks and CLUB PILATES brand generally (the "Fund"), Franchisee is required to
contribute up to two percent (2%) of the Gross Sales of its Studio to this Fund (the "Fund
Contribution"), commencing once the Studio opens for operations. The Fund Contribution will
typically be paid in the same manner and at the same interval that the Royalty Fee is collected
(based on the Gross Sales of the Studio over the immediately preceding reporting period).
5.7 Electronic Transfer; Right to Modify Collection Interval.
A. The Royalty Fee, Fund Contribution and any other fees owed to Franchisor or its
affiliates, will be automatically debited from Franchisee's point-of-sale operating account
administered by the designated supplier of point-of-sale services on a weekly basis throughout the
Term, unless Franchisor provides reasonable written notice that Franchisor is modifying the
collection interval {e.g., notifying Franchisee that Franchisor will be collecting Royalty Fee, Fund
Contribution and other recurring amounts due on a monthly rather than weekly basis, with such
monthly fees based on the Gross Sales of the Studio over the preceding calendar month).

B. Ah amounts due to Franchisor forthe
are due upon receipt of an invoice from Franchisor. Any payment or report not ac^
hy Franchisor on or before the due date is overdue.
C Franchisee agrees to complete and execute an "Fiectronic Funds Transfer

Agreement" (attached as F x h i h ^ to this Agreement) and any other fo
limitation, an "Fiectronic Debit A u t h o r
purpose ofauthorizing an electronic debit, and to submit any information required by Franch^
for such authorization.
D. Franchiseeisrequiredtouseonly theFOS systemprovidedby thedesignated

supplier and will pay the designated provider directly for all fees associated with the use ofthe
designated provider'ssofrware. Franchisee is not allowed to use an unapproved external terminal
to process transactions.
5.8 Interestan^Late Charges. Amounts due toFranchisor (except interestonunpaid

amounts due)not paid when due shall bear interest from the date due until paid at the lesser of one
and one-half percent(1.5%)per month, or the highest rate ofinterest allowed by law. Franchisor
may also recover its reasonable attorneys'fees, costs and other expenses incurred in collecting
amounts owed by Franchisee.
Ibave read A ^ ^ ^ u n d e r ^ a n d ^ a n d agree to

comply with each ofitsSeetions
Yourlmtla^ ^
^FRANCIHSORSERVICES
6.1 Site Selection and Lease Negotiations. Although Franchisor wlllprovlde the site
selection assistance described In Sections
for locating, obtaining and evaluating the sultahlhty and prospects ofthe St^^
review and negotiation ofits lease, and f^r hiring an attorney or other advisor to review
negotiate the lease. The Authorized Location must meet Franchisor's then-current System
standards and specifications, as set forth in the Manuals or otherwise in writing by Franchisor.
Franchisor reserves the right to chargeareasonable fee for performing any Franchisee-request^^
on site evaluation to cover incurred expenses, including, but not limited to, travel, lodging, meals
and wages. Franchisoragreesnotto unreasonably withholdapprovalofasitethatmeets its site
criteria.
6.2 Unit Development. Franchisor sha^ll consult and advise Franchisee on the orooer display
of theMarks,layout and design,procurement of Filates^fitness equipment, refi^rmers, spring
boards, chairs and other equipment, fiirniture, fixtures, surveillance cameras with audio, i n i ^
inventories, recruiting personnel, and managing construction or remodeling ofthe Studio. Afier
Franchisee has executedalease forthe Authorized Location, Franchisorshalldeliverto Franchisee
specifications and standards for building, equipment, fîshings, fixtures, surveil^
with audio, layout, design and signs relating to the Authorized Location and shall provide
reasonable consultation in connection with the development ofthe Studio. Franchisee'sarchitect
©2017^bâtesâncbise,^ All
2017Fraocbise Agreement
must make any layout design and s p e ^ Franchisee
agrees to make no changes, alterations or m o d i f i ^
design without obtaining prior written consent from Franchisor.
6.3 Trainm^Related Programs and Oblations. Franchisee agrees and acknowledges^^

the allowing training obligations and requirements must he strictly complied with and a ^
at all times during theTerm:
A B ^ ^ T ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
L Prior to opening the Studio, Franchisee must ensure that: ^

if an entity, its Operating Principal completes the ownerôperator module of Franchisor's
proprietary hutialTrainingProgram(the"^
(^husinessdaysatFranchisor's corporate headquarters or another training facility Franc^^^
designates; and (ii) at Franchisee's option, one ( l ) o r more individuals that are Certified ^^^^
h^tructor(s)andthatwillheresponsihle for providing the Approved Services at S ^
andcompletethe Bridge TrainingFrogram component ofthe InitialTraining Program.
2. IfFranchisee hasaOesignatedManagerasdescrihedinSection5.5(B)ofthis
Agreement, Franchiseemust ensurethatsuchOesignatedManager completes theOesignated
Manager TrainingFrogram, which will typically lastthree(3)husiness daysat Franchisor's
corporate headquarters or another training facility Franchisor designates.
3. Ifany ofthe individualsdescrihed inthis Sectionfailtosuccessfully complete

the applicable training required hy this Section before the time Franchisee is required to open the
Studio hereunder, Franchisormayterminate this Agreement.
B.
(1) Any individual that wishes to provide Pilates instruction or any ofthe other
Approved ServicesattheStudiomustfirst(a) demonstrate that he/she has met all Certified Pilates
Requirements and is otherwiseaCertified Pilates Instructor, and (b)complete the BridgeTrainm^
Program(either as part ofthe InitialTraining Program or at some pointthere^frervia the inst^
materials and testthat is part oftheSystem standards and specifications)..Franchisormay terminate
this Agreement upon written notice to Franchisee in the event Franchisee permits the Approved
Services to be provided by any individual thatdoesnotmeetthecriteria in this Section. IfFranchi^^^
failstocomply,FranchisorreservestherighttochargeFranchisee its then-current penalty fee
("Penalty Fee'') for each day that Franchisee permitsanon-certifiedBtrained Pilates instr^
has not completed Franchisor's required training program to provide Pilates instruction or any of
theotherApproved Services atthe Studio.
(2) Franchisee may elect to have certain o f i t s initial instructors and any
subsequent instructorsthatwishtoprovide the Approved Services atthe Studioparticipate in
completingtheBridgeTrainingProgram component of our Initial Training Program remotely via
©2017Oubâtesânchise,^ A^
2017Franchise Agreement
webma^videom^cfi^
mifi^m^c^cometothe^
Principe as apphcab^) and compete the e n ^ e l n ^
Training Program components
(3) In the event an mdividnai wishes to completed

atthe Stndioratherthanaspartofthehiitiai Training Program, then Pranehisee(or^
Manager)wih he responsible lor aeenrateiy grading the test and ensuring that the indiv^^
passed the test in accordance with System standards.
(4) The Studio most have at least one (1) individual that isaCertified Pilates
Instructorand thathascompletedthe Bridge TrainingProgramon-siteattheStudioatall times wh^
any Approved Services are heing provided.
(5) OnceaCertified Pilates Instructor has successfully completed the Bridge

Training Program, that individual may assistmth^
otherindividualsatthe Studio inthefuture(aswell as provide the other Approved Services). It
to Pranchiseewhetherornotitwill charge CertifiedPilates Instructors thatwishtoohtain^^
TrainingProgram,hutPranchiseemustensurethatFranchiseedoesnotdiscloseor otherwise use the
BridgeTrainingProgrammaterials that Franchisor provides (including the test i t s e l f ) ^
purpose otherthan the Bridge Training Program that is held on-site at the Studio.
(6) Franchisee must otherwise ensure that: (i) any BridgeTrainingnProgram

held at the Studio is performed in accordance with System standards and specifications; (ii) any
individualthatparticipatesintheBridge TrainingFrogram successfully completes thatprogr^^
passes any test that is provided in connection with the program; and (iii) no personnel provides
Pilates instructionor other Approved ServicesattheStudiounlessanduntil suchpersonnel
successfully completes the BridgeTraining Program and passes the corresponding test. Franchisee
agrees that Franchisor,aspart of its right to inspect and audit the operations of the Franchised
Business on an ongoing basis, may require that Franchisee demonstrate that all required personnel
has participated in and successfully completed the Bridge Training Program and corresponding test.
C Around the time the Studio is opening,F

may send one (1) or more representatives to the Studio to (i) provide assistance and
recommendations regarding the opening and initial operations ofthe Studio, andôr(ii) provide
additional or refresher training associated w i t h ^
Training Program, allasFranchisor determines appropriate in its discretion (collectively,t^^
"Discretionary On-Site Assistance"). In the event Franchisor notifies Franchisee that it will be
providing the Discretionary On-Site Assistance, such assistance typically lasts one ( l ) t o two (2)
days and Franchisee must ensure that Franchisee (or its Operating Principal) and all other
management personnel are in attendance at the Studio during those days.
D. 7 ^ ^ ^ 7 ^ ^ ^ ^ ^ ^ ^ ^ ^ v ^ v ^ ^ ^ ^ ^ ^ ^ ^ Franchisee will be
permittedtoprovidetheTeacherTrainingProgramatthe Studio as part of the Approved Services,
provided Franchisee hasaCertified Pilates Instructor that(a) has completed our BridgeTraining
Program, and (b) otherwise meets Franchisor's then-current criteria to serve as a "Master
©2017 Club Pilates Fraochlse,^

In^ructoôftheTeacherTraim^
wri^ndirecfive from Franchisor
(1) ThcTcachcrTraimngFrogramtypica^ymvoivcsappro^^^
hours of mstrncfion,mcindm^^ccrtamonhnc"c^^^
framing") friat can he compiled r^
Studio that is authorized to provide theTeacher TrainingFrogram^^
of practica^"hands-on"fraining, some of which can he completed at home and some ofwhich
must he completed ataStudio that is authorized to provide theTeacherTraining Frogram.The
Teacher TrainingFrogram also includes the Bridge TrainingFrogram rcmotcoricntationmatcrial^
(2) Any individuals that wish to provide Approved Services at the Studio that
have not completed the Certified Filates Require
thcTcachcrTrainingFrogram,or(h)othcrwisehccomcaCcrtificdFilatcs Instructors^
the Bridge Training Program (as described in Soction 6 ^ B ( l ) o f this Agreements all hefor^
individual can provide any Approved Services at tho Studio.Any violation ofthis Section will he
grounds for tormination ofthis Agreement upon written notice hy Franchisor.
(3) Franchisee agrees and acknowledges that Franchisor is entitled to and will
receive the amounts described in Scction5.5.C in connoction with each individual that attends tho
TeacherTraining Program atFranchisco'sSt^dio, which is considerationfr^rtho Webinar Training
materials and proprietary content developed therein. This amount, once remitted to Franchisor, is
deemed fully earned and is not rofrmdablo under any circumstances.
(4) Franchisee acknowledges that Franchisor's standard franchise offering

assumes that the initial instructor(s)will already boCortifiodPilato Instructors^
may permit Franchisee to have ono(l)ormoro instructors complete thoToachor Training Program
while Franchisee is securing an approved promises for, and otherwise developing, the Studio fo^
opening. Franchisee specifically acknowledges, however, that ifFranchisee chooses to take tho
forcgoingaction,thismayinvolvoahighor investment than Franchisor'sstandard franchise
offering described in I t o m ^ o f tho Franchise Disclosure Document that Franchisor timely and
properly disclosed to Franchisee prior to this Agroomont being executed (tho "FDD").
F. ^ ^ ^ B ^ ^ ^ ^ ^ ^ ^ . Franchisor may provide, and r c ^ ^ ^

as woil as any of its management personnel attend, up to fivo (5) days of additional training oach
yearatatrainingfacilitythatFranchisordesignates (without charging Franchisee any Tram^^
as described in Section 5.5 ofthis Agreement). Franchisee may also request that Franchisor provide
certain additional or refresher training to Franchisee, either at one (l)ofFranchisor's designated
training facilities or on-site at Franchisee's Studio,but Franchisor reserves tho right to ch^
Franchisee its thoncurrentTrainingFoebased on thenumberof days ofsuch trainingthat Franchisor
provides atFranchisee'srequest.
F. C ^ ^ ^ ^ ^ ^ ^ ^ ^ . Franchisee will heresponsible for thecosts andexpenses

associated with Franchisee and its personnel attending and completing all ofthe training described
in this Section,including without limitation, any costs related to travel,lodging,^
appropriate)wages^compensation for personnel.
©2017 Club âtes Franchise,^

6.4 QperaônsManua^ Franchisor wdlgrantFranchiseeonhneaccess to ancicctronic
version ofthe Manual during the term ofthis Agreement. The Manual is anticipated to codify
existing mandatory and suggested specifications, standards and operating procedures current
prescribed hyFranchisor.Franchiscc acknowledges thatFranchisor mayfromtime to time revise
its Systems as well as the contents ofthe Manual,and Franchisee agrees to comply with each new
or changed standard and specification upon noticefromFranchisor. The Manual shall remain the
sole property ofFranchisor and shall he kept confidential byFranchisee hoth during theTerm of
this Agreement and subsequent to the termination, expiration, or non renewal of this Agreement.
IfFranchisee, intentionally or otherwise through itsgross negligence, compromises the secure
access to the online version of the Manual(or any hard copy of the Manual), including, but not
limitedto, allowing unauthorizedusers access to theManual and its confidential contents,
Franchisee will be required to pay Franchisor liquidated damages in the amount of$10,000, to
compensate Franchisor forthebreachandrelateddamageto the System.
6.5 Continuing Services. Franchisor shall provide such continuing advisory assistance and
information to Franchisee in the development and operation of the Studio as Franchisor deems
advisableinits discretion. Such assistance may be provided, in Franchisor's discretion,by
Franchisor's directives,Systembulletins, meetings and seminars,telephone,computer,email,
fax, personal visits, newsletters ormanuals.
6.6 Annroved Lists Franchisor shall provide andfromtime to time, add to, alter or delete, at
Franchisor'sdiscretion, listsof specifications, approveddistributorsand suppliers, approved
services and products, including, but not limited to, Filatesfitnessequipment and gear, and other
materials and supplies usedintheoperation ofthe Studio. Franchisor,oranaffiliateofFranchisor,
maybeadesignatedorapprovedsupplierofcertainequipment,gear,merchandise, apparel and
supplies.
6.7 Pricing.Club Filates has developed an image that is based in part on affordable prices fo^
Filates classes offered by the System. Topromoteaconsistent consumer experience, and to
maximizethe valueoftheproductsandservicesStudiosoffer, Franchisormay requirefixed
minimum prices for any products or services offered by the System and Franchisee. Franchisee
is obligated to use the pricing required by Franchisor, unless Franchisor consents to changes in
local pricing offered by Franchisee in order to (i) allow Franchisee to respond to unique, local,
marketing conditions, competition, or expenses; or (ii) comply with changes or inte^ret^tions in
state or federal anti-trust laws. Consistent with state or federal law,Franchisor reserves the right
to change or eliminate its pricing program in the future, or to move from a required to
recommended pricing structure.
6.^ Fund. As detailedinSection^.l of this Agreement, the Fundîf an when established^

willbe maintained and administered by Franchisor with the assistance of the marketing fund
committee ("MFC") to meet the costs of conducting regional and national advertising and
promotionalactivities (including the cost ofadvertisingcampaigns,testmarketing,marketing
surveys, public relations activities and marketing materials)which Franchisor and the MFC deem
beneficial to the System.

6.9 Grand Opening Advertising Assistance. Franchisor shall consult and advise Franchisee
on the advertising, marketing and promotion for the grand opening of the Studio.

Your Initials: /
7. FACILITY STANDARDS, LEASE AND CONSTRUCTION
7.1 Facility Specifications. Franchisee's Studio shall meet the following conditions:
A. The Studio shall be laid out, designed, constructed or improved, equipped and
furnished in accordance with Franchisor's standards and specifications. Equipment, furnishings,
fixtures, surveillance cameras with audio, decor and signs for the Studio shall be purchased from
suppliers approved or designated by Franchisor. Franchisee may remodel or alter the Studio, or
change its equipment, furniture or fixtures, only with Franchisor's consent. Franchisee must obtain
necessary permits, licenses and other legal or architectural requirements. The Studio shall contain
or display only signage that has been specifically approved or designed by Franchisor.
B. The Studio and all fimess equipment shall be maintained in accordance with
standards and specifications established by Franchisor or prescribed after inspection ofthe Studio.
Franchisee shall promptly repair or replace defective or obsolete equipment, signage, fixtures or
any other item of the interior or exterior that is in need of repair, refurbishing or redecorating in
accordance with such standards established (and updated from time to time) by Franchisor or as
may be required by Franchisee's lease.
C. Franchisee recognizes that the System will evolve. The fitness industry must
respond to new fads, new forms of exercise, new equipment and new training techniques. The
Club Pilates System must change to meet customer demands. Franchisee further understands that
Pilates fitness equipment and other equipment wears out, breaks down, or becomes obsolete.
Consequently, from time to time, as Franchisor requires, Franchisee must modernize and/or
replace items of the Trade Dress or Studio equipment as may be necessary for the Studio to
conform to the standards for new Studios. Further, Franchisee will be required to thoroughly
modernize or remodel the Studio when requested by Franchisor, but no more than once every 5
years. This may include replacing Pilates/fitness equipment and gear, and other updates and
improvements. Franchisee acknowledges that this obligation could result in Franchisee making
extensive structural changes to, and significantly remodeling and renovating the Studio, and
Franchisee agrees to incur, without limitation, any capital expenditures required in order to comply
with this obligation and Franchisor's requirements. Within 60 days after receiving written notice
from Franchisor, Franchisee shall have plans prepared according to the standards and
specifications that Franchisor prescribes and Franchisee must submit those plans to Franchisor for

its approve Franchisee agrees to compieto aii wor^
approves within the time period that Franchisor reasonably specifies and in aeeor^^
Agreement.Franchisor,oritsAfiihate, wiii hold themselves, and the Studios they operate (if^^
to the same high standard, and samefrequencyfor replacement and renovation as is expected of
Franchisee.
The Studio shall contain signage prominently identifyingFranchiseehy name as an

independently owned and operatedfranchiseeofFranchisor.
E. The Studio must have a surveillance camera with audio purchased from a
designated approved supplier installed at the Studio. The camera(s)must he weh accessible. The
camera(s) willbe used byFranchisee to monitor teacher performance,quality assurance and
safety. Franchisor has an absolute right to also review and monitor the camera(s) for the same
purposes as Franchisee, and to ensure compliance with the Club Filates System. Franchisee is
responsible for ensuring customer consent and for any failure to obtain such consent. Franchisee
agrees to indemnify Franchisor for any breaches of privacy from Franchisee's use of any
surveillancecamera.
7.2 Lease. Franchiseeissolelyresponsiblefbrpurchasingorleasingasuitable site for

theStudio. Franchisee must utilize one ofthe designated retail real estate attorneys listed in the
Manual, orotherwisecommunicated to Franchisee, t o r e ^
Franchisee must submit theleasefortheStudiotoFranchisor for its writtenconsent before
Franchisee executes the lease for the Authorized Location. Franchisor will not withhold consent
arbitrarily; however,any lease must contain substantias
premises will be used only for the operation ofaClub Filates Franchise;" (2) "The employees of
Franchisor will have the right to enter the leased premises to make any modifications necessary to
protect the System and proprietary marks thereof;"^"Lessee agrees that Lessor may, upon
request of Franchisor disclose to said Franchisor all reports,informationordatain Lessor's
possessionwithrespecttosalesmadein,uponorfrom the leased premises;" andâconditional
assignment clause to be contained inalease rider inaform approved by Franchisor,which shall
provide that Franchisor (or its designee) may, upon termination, expiration, non-renewal or
proposed assignmentof this Agreement, atFranchisor'ssoleoption, takean assignment of
Franchisee's interest thereunder,without the consent of the Lessor or property owner,without
liability for accrued obligations, payment ofadditional consideration or increase in rent, ^
time thereafter, reassign the lease toanewfranchisee.Franchisor'sexecution of this Agreement
is conditioned upon the above-referenced lease addendum in the form attached hereto, as Exhibit
5("LeaseAddendum"),which shall be signed by Franchisee and attached and made part of the
lease for the Studio. Franchisee acknowledges that it has been advised to have any lease reviewed
by Franchisee'sown legal counsel.
7.3 Unit Development. Franchisee agrees that afrer obtaining possession of the Authorized
Location, Franchisee will promptly,atFranchisee'ssole expense:
A. Obtain any standard plans andBor specificationsfromFranchisor;

B. Employaquahfiedhcensedar^
ah drawings designs plans and specificafions^the
reviewand approval priorto commencing construcfion;
G Complete the construction or remodeling

with plans and specifications approved hyFranchisor,andincompliance with all applicable
ordinances, building codes and permit requirements;
Purchase orlease, inaccordancewithFranchisor'sstandardsand specifications, all

fitness equipment,fixtures,inventory,supplies and signs required forthe Studio;
E. Hire and train the initial operating personnel according to Franchisor's standards
and specifications; and
F. Complete development ofand have the Studio open for business not later than six
(^months afterthedatethatFranchisoraccepts this Agreement.
7.4 Franchisees Responsibibty. AlthoughFranchisormayprovide Franchisee with various

standard orsample plans and specifications with respect to constructing and equipping the Studio,
it is Franchisee's sole responsibility to construct and equip the Studio in compliance with all
apphcable federal, state and local laws and regulations, including, without limitation, all bui^^^
codes, fire and safety codes, environmental laws, Occupational Safety and Health Administration
laws, health laws, sanitation laws, Americans with Disabilities Act and all other requirement
may be prescribed by any federal, state or local governmental agency. Franchisee further
acknowledges and agrees that Franchisee is, and will continue to he at all times during the Term,
solely responsible for all employment decisions and to comply with all state, federal, and local
hiring laws and factions ofthe Smdio, including without limitation, those related to h i ^
training, wageandhourrequirements, compensation, promotion, record-keeping, supervision,^^
disciplineofemployees,paidor unpaid, full or part-time. Franchisee's employeesmustbe
competent, conscientious, andproperly trained. Franchiseeacknowledgesthat nothing inthis
Agreement shall, or may be construed to, create any type of employer or joint employer
relationship between (a) Franchisee or any ofFranchisee's personnel,and (h) Franchisor in any
matter.

comply with each ofits sub-sections.
Your Initials: /
8. STUDIO IMAGE AND OPERATING STANDARDS
8.1 Compliance. Franchisee acknowledges and agrees that every detail regarding the
appearance and operation of the Studio is important to Franchisor, Franchisee, the System and
other Club Pilates franchisees in order to maintain high and uniform operating standards, to
increase demand for the classes sold by all franchisees, and to protect Franchisor's reputation and
goodwill, and, accordingly, Franchisee agrees to comply strictly at all times with the requirements
of this Agreement and Franchisor's standards and specifications (whether contained in the Manual

oranyotherwênoro^commum
or operafionof tho Studio. Frauchisoo aokuowiodgosthatothor Studios may oporatouudor
difforout forms ofagroomout with Frauohisor,aud that tho rights an^
othoragroomouts may difror from thosohorouudor.
8.2 Franobiso^s Right to Inspootion. TodotormiuowhothorFranohisooisoompiymgwith

this Agroomont and Frauohisor's standards audspooifioations,Frauohisorrosorvo
suporviso,dotormino and approvo tho standards of appoaranoo^quahty and sorvioopo^^
Studio inoiuding^without limitation, tho right at any roasonahiotimo and without prior n^
Franohisoo to: (i)inspoot and oxamino tho husinoss promises, fitnoss oquipmont,faoihtiosa^^
operation oftho Studio in person or hywohaooossihiosurvoiiianoooamoras with audio, whioh are
required to he instahed in eaoh classroom in the Smdio; (2) interview Franehisee and Franehisee's
employees, includingany independent contractors; (3) interviewFranchisee'smemhers and
customers, suppliers and any other person with whom Franchisee does husiness; (4) confer with
memhers and staffofgovemment agencies with authority over Franchisee ahout matters relevant
to the Studio; and(5) use "mystery shoppers,"who may pose as customers and evaluate Franchisee
andFranchisee'soperations.
8.3 Personnel Franchisee agrees to employ in the operation of the Studio only persons of
high character and ability who maintain and exhibit traits of enthusiasm, cleanliness, neatness,
friendliness, honesty and loyalty,it being recognized by Franchisee thatsuch persons are necessary
in ordortopromoteand maintain customersatisfaction and the goodwill ofthe System. Franchisee
agrees to staff the Studio at all times withasufficient number of qualified, competent personnel
who have been trained in accordance withFranchisor'sstandards. Franchisee shall be considered
the employer of all employees and independent contractors of tho Studio, ft is the sole
responsibilityof Franchisee to hire,discipline,discharge and establish wages, hours,benefits,
employment policiesandother terms andconditions of employment for itsemployees and
independent contractors. Franchisee is responsible for obtaining its own independent legal advice
regardingtheemploymontofemployeesand independent contractors, and complyingwith any and
all applicable laws pertaining thereto. Franchisor shall have no responsibility for the terms and
conditions of Franchisee's relationship with Franchisee's employees and/or independent
contractors. Franchisee shall engage in no discriminatory employmentpractices and shall in every
way comply with all applicable laws, rules and regulations offederal, state and local governmental
agencies, including, without limitation, all wage-hour, civil rights, immigration, employee sa^^^
and related employment and payroll related laws. Franchisee shall make all necessary filings with,
and pay all taxes and fees due to, the Internal Revenue Service and all other federal, state and local
governmental agencies or entities to which filings and payments are required.
8.4 Products and Services to be Offered for Sale.
A. Franchisee acknowledges thatthe presentation ofauniform imago to the public and

theofferingofuniformservicesandproductsisanessential element ofasuccessful franchise
system, fnorderto insure consistency,quality and uniformity throughout the System, Franchisee
agrees ( l ) t o sell or offer for sale only the services or products that have been expressly approved
forsalebyFranchisor; (2)to sell or offer for sale all services and products required by Franchis^^
(3) not to deviate from Franchisor's standards and specifications; and(4) to discontinue selling
©2017 C^b Pilate Fraochis^LLC Al^

and offermg for sale any services^
anyfimc Franchisor shah supply F r a n o h i ^ w i t h a ^ o f s n p p l ^
required to purchase fitness equipment, Filates items, products or services for the Studio.
Franchisor may change this list from time to time, and upon notification to Franchisee, Franchisee
shall onlypurchascfrtncss equipment, Filates items, products or services from approved suppliers
as specified on the changed list. Franchisor, or an achate ofFranchisor, may headesignated or
approved supplier of certain equipment, gear, merchandise, apparel and supplies. Franchisee
agrccstokccpthcStudioandfrtncsscquipmcntinclcancondition, with allcquipmcnt well
maintained and operational, and he ahlc at all times during business hours to provide memhers
with all services and products specified hy Franchisor.
13. Franchisee agrees that all exercise equipment must he purchased exclusively from
approved suppliers, must he maintained according to manufacturer or Franchisor specifications,
as applicable.
C Franchisee andthoscitcmploysmusttcachClubFilatcsclasscs exactly as specified

in the Manual and in othcrtrainingmatcrials provided by Franchisor. Franchisee agreesnotto add
any exercises, strctchcs,chorcography, orpositions that arcnot approvedby Franchisor, and
Franchisee agrees not to leave out any exercises, stretches, choreography, or positions that arc
required hy Franchisor.
D. ffFranchisee proposes to offer for sale any products, classes or services that have
not been approved by Franchisor, Franchisee shall first notify Franchisor in writing and submit
sufficient information, specifications and samples concerning such product, classes and/or supplier
and/orserviceforadeterminationbytheFranchisorwhethersuchproduct, classes or supplier of
service complieswiththeFranchisor'sspecifications and standards and/or whether such supplier
meets the Franchisor'sapproved supplier criteria. Franchisorshall, within ninety (90)days,noti^
Franchisee in writing whether or not such proposed product, class and/or supplier or service is
approved, as determined in Franchisor's discretion. Franchisor reserves the right to charge
Franchisee reasonable costs in connection with Franchisor's review, evaluation and approval of
alternativesuppliers.These charges may includereimbursementfortravel, accommodations, meal
expenses, ^nd personnel wages. Franchisor may from time to time prescribe procedures for the
submission ofrequests for approved products and/or suppliers or services and obligations that
approved suppliers must assume(which may be incorporated inawritten agreement to be executed
by approved suppliers). Franchisor reserves the right to revokeitsapprovalofapreviously
authorizedsupplier,product, classorservicewhen Franchisor determines in its discretion tbatsuch
supplier, product, class or service is not meeting the specifications and standards established by
Franchisor. ffFranchisor modifies its list ofapproved products, classes and/or suppliers and/or
services, Franchisee shall not, afrer receipt in writing ofsuch modification, reorder any product or
utilize any supplier, product, class or service that is no longer approved.
F. FranchiseeacknowledgesandagreesthatFranchisoris(ormayatanytime in future
become)anapproved or designated supplierfor certain Filates/fitnessequipment,otherequipment,
products, logo items, signage and artwork; that Franchisor may derive income from the sale of
such items, and that the price charged by Franchisor may reflect an ordinary and reasonable profit
consistentwithabusinessofthekindthatproducesand/orsupplies such items.
©2017OubâtesFranchise,^
2017Francbise Agreement
F. Franchisee acôwledges and agrees^
to members located anywhere, even ifsnehprodnets and services are similar
sehs to Franchisee and what Franchisee offers at the Stndio. Franchisor may nse the internet or
alternative channels of commerceto seii Ciuh Filates hrandproducts and services. Franchisee may
only sell the products and services from the Studio's approved location, and may only nse the
internet or alternative channels ofcommerce to offer or sell the products and services, as permitted
hy Franchisor, in order to register members for classes. Nothing in the foregoing shall prohibit
Franchisee from obtaining members over the Internet providedFranchisee'sintemet presence and
content comply with the requirements ofthis Agreement.
G. Unless Franchisor agrees otherwise, Franchisee may not actively solicit potential
members or customers, or otherwisepromote the Franchised Business through any targeted
advertising/marketing, outside ofthe Oesigna
shall prohibit Franchisee from servicing members and other customers that contact Franchisee or
the Studio, regardless ofwhere those memhers/customers reside or work.
H. Unless Franchisor directs or agrees otherwise in writing, Franchisee agrees not to

sell vitamins, supplements or other nutritional products or food items, including bottled water, at
theStudio.
I. Franchisorreserves the rightto charge its then-current per day Penalty Fee for each
day Franchisee offers or sells unauthorized products or services from the Studio.
8.5 CompbancewitbLawsD Franchisee agrees to comply with all federal, state and local
laws, rules, and regulations and shall as soon as practicable, but in any event prior to the opening
for business ofthe Studio, obtain all municipal and state permits, certificates or licenses necessary
to operate the Studio and shall file and publish, if required by applicable law,acertificate of doing
business(whetherunderafictitious name or otherwise).Franchisee acknowledges and agrees that
ithas the soleresponsibility to investigate and complywith any applicable laws inthe state where
the Studio is located thatare specific to the operation ofahealth/fitnessstudio.For example, some
states require that health/fitness facilities haveastaff person available during all hours of operate
that is certified in basic cardiopulmonary resuscitation or other specialized medical training. Some
state or local laws may also require that health/fitness facilities have an automated external
defibrillator and/or other first aid equipment on thepremises. Franchisee shall operate and
maintain the Studio in strict compliance with all employment laws, building codes, fire and safety
codes, environmental laws, Occupational Safety andFlealth Administration laws, health and safe^
laws, sanitation laws, Americans with Disabilities Act and any other requirements that may he
prescribed by any federal, state or local governmental agency. Franchisee agrees to immediately
provide Franchisor w i t h a c o p y o f any notice received by Franchisee from any state, local or
governmental agency pertaining to compliance with any codes or requirements, or the failure to
comply with any codes or requirements, at the Studio. Franchisee hereby certifies and represents
that Franchisee, and any ofits affiliates, any ofits parmers, members, shareholders or other equity
owners, and theirrespective employees, officers, directors representatives or agents, are not acting,
directlyor indirectly,for or onhehalfof any person,group,entityor nation namedby any
Executive Order or the United StatesTreasury D e p a r t
Ô^^bâtesFraocb^^C A^
2017Francbise Agreement
Nations and Blocked PônB'or^
pnrsnanttoanylaôrde^^leorre^
Foreign Asse^Controh Franchiseeherehy agrees todefend, indemnify andhoidharmiess
Franchisor from and against any and ah claims, damages, losses, risks, hahihties and expenses
(inclnding attorneys'fees and costsârising from or related to any hreach of the certificati^^
forth in this paragraph.
8.6 OperationalEfforts.Franchisee may anoom^

day-today, snpervisionof theoperationsof the Stndio, providedthat Designated Manager
snccessfhllycompletestheDesignatedManagerTrainingFrogrampriortocommencingany
management responsihilitiesat die Stndio.FranchiseeagreestokeepFranchisor advised, in
writing, ofany manager and all teachers involved in the operation ofthefranchisedhnsiness and
their contact information. Franchisee agrees to keep the Stndio open for the honrs stated in the
Manual andasdeemed appropriatehy Franchisor. IfFranchiseedoesnothave aDesignated
Manager, then Franchisee(or its Operating Frincipal, as applicahle)mnst he on-site at the Studio
during normal business hours to manage day to day operations.
8.7 Good Standmg.Franchisee will he considered in "Good Standing" ifFranchisee is not in

default of any obligation to Franchisor or any ofFranchisor'saffrliates,whether arising under this
Agreement or any other agreement between Franchisee and Franchisor(orany of Franchisor's
affiliates), the Manual or other System requirements.
8.8 Performance Standards FranchiseeandFranchisorhaveashared interest in the Studio

performingatorabovetheSystem Standards. Franchisorwouldnothaveentered into this franchise
relationshipif Franchisor had anticipatedthat Franchisee would not meet theseFerformance
Standards.
A. Franchisor may choose, in its sole discretion,to evaluate the

Studioforcompliancewiththe System Standardsusingvariousmethods (including, butnot limited
to, inspections, freld service visits, surveillance camera monitoring, member comments/surveys,
and secret shopper reports.)Franchisee must meet minimum standards for cleanliness, equipment
condition,repair and function, and customer service. Franchisee's employees,including any
independent contractors, must meet minimum standards for courteousness and customer service.
B. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ v ^ ^ ^ ^ Unless wîvedby Franchisor due to

unique marketconditions,Franchisee must meetacertain Minimum Monthly OrossRevenue
ûota. IfFranchisee âils to achieve and maintain average monthly gross revenuesof$30,000 by
the l^year anniversary ofthe opening ofthe Studio and average monthly gross revenues of
$40,000hytheendofthe2^yearanniversary and each succeeding yearthereafrer,thenFranchisor
may instituteacorrective training program and/or require Franchisee to perform addition
marketing. If Franchiseefails to meet theMinimum Monthly OrossRevenueûotafor36
consecutivemonthsatanytimeduringtheTermof this Agreement, Franchisor, at its sole
discretion,may instituteamandatory corrective training programor terminate this Agreement
upon written notice to Franchisee.

9. ADVERTING AND MARKETING
91 Fund
A. Franchisee will bo required to pay^

as described in Section 5.6 of tbis Agreement. In tbe event Franchisor increases the Fund
Contribution from what it is as of the date this Agreement is signed, Franchisor will provide at
least 60 days'written notice ofsuch increase in the Fund Contribution.
B. The Fund is administeredhyFranchisorwith the assistance and advice provided by
the Fund Committee (the"MFC") pursuant toacharter agreement among Franchisor and the
members ofthe MFC, which serves in an advisory capacity only. Under the current charter, which
is subject to change. Franchisorfranchiseeselect^members to the MFC to serve foraone-year
term corresponding to the calendar year and Franchisor selects^members to serve foraone-year
term corresponding to the calendar year. The4-memberMFC will, byamajority vote, assist us
in determining the selection and placement of regional and national advertising. FachMFC
member has one vote. Ifthe MFC is deadlocked, our President will break the deadlock with the
deciding vote,which shall be binding. The Fund is maintained and operated by Franchisor with
the assistance ofthe MFC to meet the costs ofconducting regional and national advertising and
promotional activities which are deemed most henefrcial to the System.
C. The MFC shall represent Franchisee and advise Franchisor with regard to all
advertising, marketingandpublicrelationsprogr^
the creative concepts, materials and endorsements used and the geographic market, media
placement and allocation. The MFC will he purely advisory in nature and will have no operational
or ultimate decision-making authority. You agree that the Fund may he used to pay the costs of
preparing and producing associated materials and programs as Franchisor may determine,
including theuse of social media; video, audio and written advertising materials employing
advertising agencies; sponsorship ofsporting, charitable or similar events; administering regional,
nationalandmulti-regional advertisingprograms inciudingpurchasingdirect maii and othermedia
advertising,websitedevelopment/operation^ndtop
number, and other charges, fees and/or expenses, including employing advertising agencies to
assist with marketing efforts; and supporting public relations, market research and other
advertising, promotional and marketing activities. Abrief statement regarding the avaiiabiiity of
Club Filatesfranchisesmay be included in advertising and other items produced using the Fund.
D. Franchisor may spend in any calendar year more or less than the total Advertising
Contributions to the Fund in that year. Franchisor may cause the Fund to invest any surplus for
future use by the Fund. Franchisor may borrowfromFranchisor or other lenders on behalf of the
Fund to cover deficits ofthe Fund.

E. FranchisorandBor any FranchisorReêd Fôns/Enfifies can provide goods,
services, materials, etc. ( i n c ^
scrviccs)and be compcnsatcdand/orrcimhnrscd forthe same by die Fnnd, provided diat^^
compensationmnst be reasonable in amount. Franchisor can arrange for goods, services,
materials, etc. (including administrative services) to be provided by independent
persons/companies and all related costs, fees, etc. will be paid bythe Fund.
F. TheFund willbe accounted for separately from Franchisor's other funds and
Franchisor will not use the Fund for its general operating expenses. All taxes ofany kind incurred
in connection with orrelated to the Fund, its activities, contributions to the Fund andBor any other
Fund aspect, whether imposed on Franchisor, the Fund or any other related party, will he the sole
responsibility of the Fund. Franchisor will retain independent certified public accountants to
prepare an annual audit of the Fund, at the expense of the Fund, and sendacopy of the audit to
Franchisee upon written request. All interest earned on monies contributed to, or held in, the Fund
will beremittedtotheFund and will besubjecttotherestrictionsof the relevant Franchise
Agreement(s).
C You acknowledge that the Fund Contributions are intended to maximize general
public recognition ofand the acceptance ofthe Intellectual Property for the benefit ofthe
asawhole. Notwithstanding the foregoing, Franchisor undertakes no obligation, in administering
the Fund Contributions to make expenditures for you that are equivalent or proportionate to your
contribution, orto insurethatanyparticularClubFilates business benefits directly o r ^ ^ ^ ^
from advertising orpromotion conducted with the Fund Contributions.
H. Franchisor maintains the right to terminate the collection and disbursement of the
Fund Contributions and theFund. Upon termination, Franchisorwill disburse the remaining funds
for the purposes authorized under this Agreement.
I. In the eventFranchisor or any Affiliate ofFranchisor owns and operatesaStudio

utilizing the System, these "company-owned" Studios will contribute to the Fund on the same
basis that franchised Studios in the System are required to contribute.
92 Local Marketing Activities.
A. Franchisee is responsible for local advertising and marketing activities to attract

members to the Studio.Franchisee must expend at least^l,500 per month on approved local
advertising and marketing activities designed to promote the Studio within the Designated
Territory. Upon Franchisor's written request, Franchisee must provide Franchisor with an
accounting ofall expenditures made by Franchisee to comply with this Section, along with any
invoices or other documentation to support such expenditures.
B. Franchisee's advertising willbeingood taste andconformtoethicalandlegal

standards and our requirements. Franchisor may require Franchisee to submit samples of all
advertising and promotional materials(andanyuse ofthe Marks and/or other forms of commer^^^
identification) for any media, including the Internetworld Wide Web or otherwise. Franchisor

rotams the right to approve or Franchisee
agrees nottonse anymaterials orprograms disapproved hy Franchisor.
C Franchisormnstapproveany form of co-hranding,oradvertisingwith other hrands,

products or services,inwriting, in advance.
9.3 Social Media Activities. As used in this Agreement, the term "Social Media" is
defined asanetwork of services,inclnding,hnt not limited to,hlogs,microhlogs, and soc
networking sites (such as Facehook,Linkedln and MySpace),video-sharing and photo-sharing
sites(snch asYonTnhe and Flickr), review sites(snchasYelp and Urhanspoon^marketplaces
(such as eBay and Craigslist),Wikis, chat rooms and virtual worlds, that allows participants to
communicate online and form conûnities around shared interests and experiences. While it can
heavery ef^ctive tool for huildinghrand awareness, it can also he devastating toahrand if used
improperly. Therefore, Franchisee must strictly follow the Social Mediaguidelines,code of
conduct, and etiquette as set forth in the Manual. Any use of Social Mediahy Franchisee
pertaining to the Studio must he in good taste and not linked to controversial, unethical, immoral,
illegalor inappropriate content. Franchisor reserves the right to"occupy"any Social Media
wehsites/pages and he the sole provider of information regarding the Studio on such
wehsites/pages (e.g.,asystem-wideFacehook page). At Franchisor's request, Franchisee will
promptly modifyor remove any online communicationpertainingtotheStudiothat does not
comply with this Agreement or the Manual.
9.4 Franchisee Marketing Groupfs)^ Co-Ops ^ Franchisor may decide to form one or
more associations andBorsuh-associations of Cluh Filates Studios to conduct various marketing-
related activities onacooperativehasis(a"Co-Op").ff one or more Co-Ops (local, regional and/or
national) are formed covering Franchisee's area, then Franchisee must join and actively
participate. Fach Studio will he entitled to one(l)vote, hut in order to vote the Studio must he in
Good Standing. Franchisee may he required to contribute such amounts as are determined from
time to time hy such Co-Ops.

Your Initials: /

REQUIREMENTS
10.1 Records and Reports. Franchisee shall maintain and preserve for four (4) years or such
period as may be required by law (whichever is greater) from the date of their preparation such
financial information relating to the Studio as Franchisor may periodically require, including
without limitation, Franchisee's sales and use tax returns, register tapes and reports, sales reports,
purchase records, and full, complete and accurate books, records and accounts prepared in
accordance with generally accepted accounting principles and in the form and manner prescribed
by Franchisor. Franchisee agrees that its financial records shall be accurate and up-to-date at all

fimes. Franchisee agrees toprompfiyfrirn^
records and returns, reding to the Studio to Franchisor on r^^
10.2 Right to Conduct Audit or Review. Franchisor shah have the right, in its soie
determination,torequireareviewhysuchrepresentative(s)asFranchisorshah choose, of ah
information pertaining to the S t u d i o s
returns, papers, and business management software programs of Franchisee at any time during
normal business hours withoutpriornoticeft^rthepurpose of accurately trackingunitand^^^
wide sales, sales increases or decreases, effectiveness ofadvertising and promotions, and for other
reasonable business purposes. Such review will take place at the Studio or Franchisees head
office (if different), or both, and Franchisee agrees to provide all information pertainm^
Studio requested by Franchisor during its review, if the review is done because ofafailure by
Franchisee to f ^ i s h reports, supporting records or other required information or to f ^ i s h the
reports and information onatimely basis, Franchisee shall reimburse Franchisor for all costs of
the audit or review including,withoutlimitation,travel,lodging,wage expense and reasonable
accounting and legal expense. The foregoing remedies shall he in addition to any other remedies
Franchisor may have under this Agreement or applicable law.
10.3 Computer System and Software. Franchisee mustacquireacomputerfor use in the

operation ofthe Studio.Franchisee agrees to record all ofits receipts, expenses, invoices, member
lists, class and employee schedules and other business information promptly in the computer
system and use the software that Franchisor specifies or otherwise approves. Franchisor reserves
the rightto change the computersystem, and theaccounting, business operations, customerservice
and other software at any time. Data, including names, addresses, contact information, and credit
card orpayment information ofmembers ofthe Studio will be captured on the required software,
and will become the joint property ofFranchisee and Franchisor during the Term ofthis
Agreement. Franchisee willprovideFranchisorwithany passwordsnecessary to access the
business information for the Studio that is stored on the required software and online. Franchisor
may use such information to communicate directly to the members ofthe Studio, and to provide
updates, information, newsletters, and special offers to the members. Franchisee must upgrade
and maintain the computer system and software in the Studio, as required by Franchisor from time
to time, and pay any fees associated with such upgrades. Upon expiration or termination ofthis
Agreement, Franchisee shall have nofurther access or rights to the member information and
Franchisor shall be the sole owner ofsuch information.
10.4 insurance.
A. FriortoopeningtheStudiofor business and throughout the entire term of this

Agreement, Franchisee will keep in force at Franchisee'sown expense and by advance payment
ofthe premium,the following insurance coverages:
(1) Workers'Compensation and Fmployer'sLiabilityfnsuranceas well as such

other insurance, with statutory limits, as required by law in the jurisdiction where the ftanchi^^
business is located. Employers Liability or "Stop Cap"insurance,withlimits of not less than
$1,000,000 e^ch accident;

(2) Commerce Gene^Liabih^^
l o t i o n or p ^ e c t a g g r e g ^ ^
habih^ broad form property damage c o n t r a c t
and advertising injury; aodproduets/eompleted operations m
liability; insnringyon andns against all claims, suits, obligations, liabilities anddamages,
including attorneys' fees,baseduponorarisingout of actualor alleged personal injuries or
property damage resulting from or occurring in tbe course of^ or on or about or otherwise relating
to tbe Franchised Business including general aggregate coverage in tbe following limits:
Required Coverage Mmimum Limits of Coverage

General Aggregate $5,000,000
Froducts/Completed Operations Aggregate $5,000,000
Personal andAdvertising injury $1,000,000
ParticipantLegal Liability $1,000,000
Employee Benefits Liability (peremployee) $1,000,000
Employee Benefits Liahility^ggregate) $2,000,000
Medical Expense(any one person) $5,000
(3) "ALL RISK"or specie form proper

replaoemeot cost of the Studio's equipment, fixtures and icaschoid improvements (tenant
improvcmcnts)sufficicnt in the amount to restore the Studio to fuii operations. Giass coverage no
icssthanaiimit of $25,000 and signcovcragcnoicssthanaiimit of $i0,000 in addition to
equipment, fixtures and leasehold improvements;
(4) Business interruption insurance withcovcragefor at least twclvc(12)

monthsforactuallosscs. (For purposes of this Agrccmcnt,"GrossSalcs"shallincludc any
proceeds received hy Franchisee in connection witha"husincss interruption" insurance claim);
(5) Auto Liability (Hired and Nonowncdautos)witha$l,000,000Oomhincd

Single LimitFachAccidcntforBodilylnjuryand Property Damage, ifFranchisee utilizcsa
in connection with the operation ofthe Studio; and
(6) Employment Practices Liability withalimit no less than$l,000,000 per

claim and$l,000,000 aggregate per location. The retention may not cxcccd$l,000.
B. All insurance policies must be written by an insurance company liccnscdinthc

state in which Franchisee operates its Studio. The insurance company must have at least an"A"
RatingClassification as indicated in A.M.Best'sKev Rating Guide.
G. Franchisor reserves the right, from time to time, in its discretion, to upgrade the
insurance requirements or lower the required amounts as to policy limits, deductibles, scope of
coverage, or rating ofcarriers in response to current industry standards, market conditions and/or
©2017^bâte5âoc^^
2017Francbê Agreement
landlord requirement Widnnslxty(60) days of receipt of n o ^
agrees to revise Its coverage, as specified In any notice from Franchisor.
D. Franchisee's obligation to obtain and maintain insurance shall not he limited hy

reason ofany insurance that may be maintained by Franchisor nor relieve Franchisee ofliability
under the indemnity provisions set forth in this Agreement. All insurance shall name Franchisor
as an additional insured, waive any subrogation rights or otherrights to assertaclaim back against
Franchisor and shall containaclause requiring notice to Franchisorthirty(30)days in advance of
anycancellationormaterialchange or cancellationto any such policy. Franchisee shallgive
Franchisor certificates ofcoverage at least annually. Failure to obtain or the lapse ofany ofthe
required insurance coverage shall he grounds for the immediate termination of this Agreement
pursuant to Section 15.1, and Franchisee agrees that any losses, claims or causes of action arising
afrerthe lapse ofor termination ofinsurance coverage will be the sole responsibility ofFranchisee
and that Franchisee will hold Franchisor harmless from all such losses, claims andBor causes of
action. In addition, but not to the exclusion ofthe foregoing remedy,ifFranchisee fails to procure
ormaintaintherequired insurance, Franchisor shall have the right and authority,but not the
obligation, to procure immediately the insurance andFranchiseeshall reimburse Franchisorfor the
cost of the insurance plus reasonable expenses immediately upon written notice. Franchisee is
requiredto submit toFranchisoracopyofaCertificate of Insurance,with Franchisor as an
additional insured, showing compliance with the foregoing requirements at least thirty (30)^
before Franchisee commences operation ofthe Studio. Franchisor shall haveasecurity interest
in all insurance proceeds to the extent Franchisee has any outstanding obligations to Franchisor.
Ibave read A ^ l e ^ u n d e ^ a n d ^ a n d agree to

eomplywitbeaebofitsSeetions
Yourlmtia^ /
IL ^LATIONSHIPOFTHEPART^
Independent Contraetor The only relationship between Franchisor and Franchisee

created hythis Agreement is thatofindependent
is completely separate andapart from any business thatmay he operated hy Franchisor and nothing
inthis Agreement shall createafrdnciary relationship between them or constitute either party a
agent, leg^l representative, suhsidiary,joint venturer, parmer, employee, servant or fiduciary
the other party for any purpose whatsoever. Franchisee shall hold itself out to the public as an
independent contractor operating the business pursuant to a license from Franchisor, and
Franchisee agrees to take such action including exhibitinganotice to that efrect in such contents
form and place as Franchisor may specify. It is further specifically agreed that Franchisee is not
an affiliate of Franchisor and that neither party shall have authority to act for the other in any
manner to create any obligations or indebtedness that would he binding upon the other party.
Neitherparty shall be in any way responsible for any acts andBor omissions ofthe other,its agents,
servants or employees and no representation to anyone will be made by either party that would
create an implied or apparent agency or other similar relationship hy and between the parties.
11.2 Indemnification.Franchisee.asamaterialoartof the considerationtobe rendered to

Franchisor, agrees to indemnify, defend and hold Franchisor, as well as Franchisor's directors,
©20^Clobâtes Franchise,^ A^
2017Franchi5e Agreement
officers, principals/owners, managers, shareholders, affiliates, subsidiaries, employees, servants,
agents, successors and assignees (collectively, the "Indemnitees"), harmless from and against any
and all losses, damage, claims, demands, liabilities and causes of actions of every kind or character
and nature, as well as costs and expenses incident thereto (including reasonable attorneys' fees and
court costs), that are brought against any of the Indemnitees (collectively, the "Claims") that arise
out of or are otherwise related to Franchisee's (a) breach or attempted breach of, or
misrepresentation under, this Agreement or in connection with the offer/sale of the Studio prior to
the execution of this Agreement, and/or (b) ownership, construction, development, management,
or operation ofthe Studio in any manner. Notwithstanding the foregoing, at Franchisor's option,
Franchisor may choose to engage counsel and defend against any such Claim and may require
immediate reimbursement from the Franchisee of all expenses and fees incurred in connection
with such defense
Your Initials: /
12. CONFIDENTIAL INFORMATION
12.1 Franchisor's Confidential Information.
A. Franchisee acknowledges and agrees that all information relating to the System and
to the development and operation of the Studio, including, without limitation, the Manual,
Franchisor's training program, members and supplier lists, or other information or know-how
distinctive to a Club Pilates Franchise (all of the preceding information is referred to herein as the
"Confidential Information") are considered to be proprietary and trade secrets of Franchisor.
Franchisee agrees that all Confidential Information is to be held in the strictest of confidence
during and after the term of this Agreement and is not to be divulged to anyone directly or
indirectly at any time, except to Franchisee's Studio employees, including any independent
contractors, with a need to know the information in order to operate the Studio. Upon Franchisor's
request. Franchisee shall require the Studio's employees and any independent contractors to
execute a nondisclosure and non-competition agreement in a form satisfactory to Franchisor.
Franchisee shall not acquire any interest in the Confidential Information other than the right to
utilize it in the Studio and agrees not to copy, duplicate, record or otherwise reproduce any
Confidential Information, in whole or in part, nor otherwise make them available to any
unauthorized person, nor use them in any other business or in any manner not specifically
authorized or approved in writing by Franchisor. Franchisee shall adopt and implement all
reasonable procedures to prevent unauthorized use, duplication or disclosure of Franchisor's
Confidential Information. IfFranchisee or Franchisee's employees or any independent contractors
learn about an unauthorized use of any trade secret or confidential materials, Franchisee must
promptly notify Franchisor. Franchisor is not obligated to take any action, but will respond to the
information as it deems appropriate. If Franchisee at any time conducts, owns, consults with, is
employed by or otherwise assists a similar or competitive business to thatfranchisedhereunder,
the doctrine of "inevitable disclosure" will apply, and it will be presumed that Franchisee is in
violation of this covenant; and in such case, it shall be Franchisee's burden to prove that Franchisee
is not in violation of this covenant.

B. Franchisee agrees that any new concept
or promotion ofthe Studio developed hy or on hehaif ofFranchisee thatreiatest^
Cinh Filates Operating System, or any aspect ofFranchisor's business, shah he the sole property
ofFranchisor, and Franchisee shall promptly notify Franchisor and shall provide Franchisor with
allnecessary information and execute allnecessary documents with respect thereto, without
compensatiomFranchiseeaclôwledgesthatFranchisormay utilize or disclose such information
to other Franchisees.
12.2 No Other Interests. Franchisee further acknowledges that Franchisor would he unahle to
protect its Confidential hiformation against unauthorized use or disclosure and would he unahle
encourage a free exchange of ideas and information among CluhFilates franchisees i f its
franchisees were permitted to hold an interest in other fitness or Filates Studio businesses and
otherwise to compete with Franchisor. Therefore, during tbe term ofthis Agreement, Franchisee
must comply with the competitive covenant provisions of Article 13herein.
12.3 Injunctive Rebef. Franchisee expressly agrees that the existence of any claims it may
have againstFranchisor, whether ornotarising out ofthis Agreement, shall not constituteadefense
to the enforcement of this Articlel2. Franchisee acknowledges and agrees that any failure to
comply with the requirements ofthis Article 12will cause Franchisor irreparable injury for which
no adequate remedy at law is available, andFranchisee accordingly agrees that Franchisorshali be
entitled to injunctive relief as specified in Sectionl6.2 herein to enforce the terms o f t h i s ^
12. Franchisee shall pay all costs and expenses, including, without limitation, reasonable
attorneys'fees, incurred by Fmnchisor in connection with the enforcement ofthis Article 1^ The
foregoing remedies shall be in addition to any other remedies Franchisor may have under this
Agreement or applicable law.
Ihave read A r t ^ d ^ understandsand agree to

eomply with eaeb of its Sections.
Your initials: /
f^ COVENANTS NOTTOCOMPETE
131 NonDComnetition Covenants ofEranebisee.
A. ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Neither Franchisee, Its prm^^

guarantors, nor any Immediate family ofFranchisee, Its principals, owners, or guarantors
("Restricted Fartles"), may, directly or ^
conjunction with any other person, parmership or corporation own, maintain, engage in, he
employedorserve as an officer, director, orprincipal of^ lendmoney or extendcreditto,
lease/suhleasespaceto, orhave any interest i n o r involvement withanyfitnessor exercise
business, any fimess or exercise marketing or consulting husiness, any business offering products
ofasimilar nature to those of the Studio, or in any business or entity which franchises, licenses or
otherwisegrantsto others the right to operate suchaforementionedbusinesses("Competing
Business"). Furthermore, the Restricted Parties shall not divert, or attempt to divert, any
prospective customer toaCompeting Business in any manner.
©2017 Oub^lates Franchise,^ A30

2017Francbi5e Agreement
c ^ ^ ^ ^ ^ ^ ^ B ^ ^ ^ ^ F ^
ornon^newal^yFranchisororby Franchisooforany
Franchisee h a s a s s i g n e d ^ m ^ ^ m ^ A g r e e m ^ t h o R ^ ^
maintain, engage in, he employed as an officer, d i r e c t or
creditto,iease/snhieasespaceto,orhaveanymteres^
Business withinaten (10) mile radins of any CinhFiiateshrandStndio whether fra
owned hy Franchisor or any ofFranchisor'saffiliates.
13 2 Non Sobcitôn Covenants.
A ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Franchisee agrees not to employ or seek to

employ anyperson employed hy Franchisor or hy any otherfranchiseeofFranchisor, or otherwise
directly or indirectly induce or seek to induce such person to leave his or her employment during
the term of this Agreement, without firstohtainingtheconsentofFranchisoror any other
franchiseeofFranchisor. Instructorsandsalesstaffmay workatmore than one Studio. Franchisee
acknowledgesthatFranchisorhastherighttooffertosell orto sellaCluh Filatesfranchiseto any
employee ofFranchisee.
B. ^ ^ ^ 7 ^ ^ ^ ^ ^ g ^ ^ ^ ^ F o r t w o ( 2 ) y e a r s a f r e r t h e expiration, termination
or non-renewal(hy Franchisor or hyFranchiseefor any reason)of this Agreementor afrer
Franchisee has assigned its interest in this Agreement, the Restricted Parties shah not (i) solicit
husiness from customers ofFranchisee'sformer Studio, (ii) contact any ofFranchisor'ssuppliers
or vendors for any competitivehusinesspurpose, or (iii) solicit any of Franchisor's other
employees, or the employees of Franchisor's affiliates or any other System franchisee, to
discontinue employment.
13.3 Enforcement of Covenants.
A. Franchisee expressly agrees that the existence ofany claims it may have against
Franchisor,whether or not arising out of this Agreement, shall not constituteadefense to the
enforcement ofthe covenants in this Article 13. Franchisee acknowledges and agrees that in view
ofthe nature ofthe System and the husinessofFranchisor,the restrictions contained in this A ^
13 are reasonable and necessary to protect the legitimate interests ofthe System and Franchisor.
Franchisee further acknowledges and agrees thatFranchise
13 wih cause irreparable iûry to Franchisor for which no adequate remedy at law is available,
^nd Franchisee accordingly agrees thatFranchisor shall be entitled to preliminary and permanent
injunctiverelief and damages, as well as, unequitable accounting of all earnings, profits, and other
benefits arising from such violation,which remedies shall be cumulative and in addition to any
other rights or remedies to which Franchisor shall be entitled. Franchisee agrees to waive any
bondthatmayherequiredorimposedinconnectionwiththeissuance of any preliminary or
provisional relief Franchisee shall pay allcosts and expenses,including,without limitation,
reasonable attorneys'fees, incurred byFranchisor in connection with the enforcement of this
Article 13. IfFranchisee violates any restriction contained in this Article 13,^nd it is necessary
for Franchisorto seek equitable reliefs the restrictions contained herein shall remain in eff^
two (2) years afrer such reliefis granted. IfFranchisee contests the enforcement ofArticle 13 and
enforcement is delayed pending litigation, and i f Franchisor prevails, the period of non-
©Ô^^bâtesâncb^^C A31
2017 Fraocbise Agreement
compefifion shah he extended^
ofthis Arfiele 13 is delayed
B. Franchisee agrees that the provisions of this covenant not to compete are
reasonahie. ^however,anyconrtshonidfindthisArticie 13 or any portion of this Article 13 to
he nnenforceahleand/ornnreasonahle, the conrt is authorized and directed to reduced
dnration(orhoth)oftheprovision(s)in issue to theextentnecessarytorenderitenforceahlean^
reasonable and to enforce the provision so revised.
C Franchisor shall have the right, in Franchisor's discretion, to reduce the scope of
any covenant not to compete set forth in this Agreement, or any portion thereof without
Franchisee'sconsent,efrectiveimmediatelyuponreceipthy Franchisee of written notice thereof
and Franchisee shall comply with any covenant as so modified.

Your Initials: /
14. TRANSFER OF INTEREST
14.1 Franchisor's Approval Required. All rights and interests ofFranchisee arising from this
Agreement are personal to Franchisee and except as otherwise provided in this Article 14,
Franchisee shall not, without Franchisor's prior written consent, voluntarily or involuntarily, by
operation of law or otherwise, sell, assign, transfer, pledge or encumber its interest in this
Agreement, in the license granted hereby, in the assets of the Studio, any of its rights hereunder,
or in the lease for the premises at which the Studio is located, and any purported sale, assignment,
transfer, pledge or encumbrances shall be null and void. I f Franchisee is a corporation, limited
liability, partnership, or an individual or group of individuals, any assignment (or new issuance),
directly or indirectly, occurring as a result of a single transaction or a series of transactions that
alters the Percentage of Ownership Interest reflected in Section 17.5 of this Agreement must
promptly be reported to Franchisor and is a "transfer" within the meaning of this Article 14.
14.2 Conditions for Approval of Transfer. Franchisor shall not unreasonably withhold its
approval of a proposed transfer, provided that the prospective transferee, in Franchisor's
reasonable judgment, is of good moral character and reputation, has no conflicting interests, has a
good credit rating and sufficient and competent business experience, aptitude and financial
resources acceptable to Franchisor's then-current standards forfranchisees;and that the following
conditions are met: (1) Franchisee pays Franchisor a transfer fee in an amount equal to $10,000;
(2) Franchisee signs a general release of all claims in Franchisor's standard form; (3) the Studio
and equipment must be upgraded, refurbished or repaired if Franchisor, in its sole discretion,
decides it is necessary; and (4) the transferee (a) completes (or has its Operating Principal
complete) the Owner/Operator Module and has its Designated Manager complete the Designated
Manager Training Program, and (b) has at least one (1) Certified Pilates Instructor that has
completed the Bridge Training Program - or an individual that has completed the Teacher
Training Program - prior to resuming the provision of Approved Services at the Studio.

Permed T r a n s ^ t o a C o r p o ^ IfF^chiîs
an individual or partnership, and desires to assign
underthis Agreement toaeorporationoriimitediiahiiity company that is who^^
Franchisee and formed for the convenience of ownership, it may do so without approval from
Franchisor, and without payment ofatransfer fee, so long as the terms and conditions of this
Agreement remain unchanged, and the Franchisee shall own and control all of the equity and
voting power ofall issued and outstanding stock ofthe transferee corporation or all ofthe equity
and voting power ofthe limited liahility company and, ifFranchisee is more than one individual,
each individual shall have the same proportionate ownership interest in the corporation or limited
liahility company as he or she had in Franchisee prior to the transfer.
14.4 Death or Disahibtv ofFranchisee In the event ofthe death or disahility ofFranchisee,
ifanindividual, or ofastockholder ofacorporate Franchisee, or ofapartnerofaFranchisee which
isapartnership, oramemherofaFranchisee which isalimited liahility company,the transfer of
Franchisee's or the deceased stockholder's, partner's or memher's interest in this Agreement to
his or her heirs, trust, personal representative or conservators, as applicable, must occur within six
(^months of the death or disahility,hut, shall not he deemedatransfer byFranchisee (provided
that the responsible management employees or agents of Franchisee havebeen satisfactorily
trainedat Franchisor's initial Training) nor obligate Franchisee to pay any transfer fee. If
Franchisor determines (i) there is no imminent transfer toaqualified successor or (ii) there is no
heir or other principal person capable ofoperating the Studio, Franchisor shall have the right, but
nottheobligation, to immediately appointamanagerandcommenceoperatingtheStudioon behalf
ofFranchisee. Franchisee shall he obligated to, and shall pay to Franchisor all reasonable costs
andexpensesforsuchmanagementassistance, including without limitation, the manager'ssalary,
roomandboard,travelexpenses and allother relatedexpenses of theFranchisor appointed
manager. Operation ofthe Studio during any such period shall he for and on behalf ofFranchisee,
provided that Franchisor shall only haveaduty to utilize reasonable efforts and shall not be liable
to Franchisee or its owners for any debts, loses or obligations incurred by the Studio, or to any
creditor of Franchiseefor any supplies, inventory, equipment, furniture, fixturesorservices
purchased hy the Studio during any period in which it is managed hyaFranchisor appointed
manager. Franchisor may,initssolediscretion,extendthesix(6)monthperiodoftimefor
completingatransfer contemplated by this Section.
14.5 Relocation Except in cases when Franchisee is in default of its lease, Franchisee may
identifyanewAuthorized Location within the same site selection area in which the Studio was
located, subject to the written consent and approval ofFranchisor.
14.6 Transfer by Franchisor Franchisor shah have the right to transfer or assign all or any
partofitsrightsor obligations herein toanyperson or legal entity,directlyorindirectly,by mergers
assignment, pledge or other means.

Your Initials: /
15. DEFAULT AND TERMINATION OF AGREEMENT

1^1 TermmafionofFranch^bvFrancbô^ Franchisor shah have the right to termmô
this Agreement for "goodeanse^npondehveringnotieeofterminafi^^ For
purposes of this Agreemen^^goodeanse" shah ineinde, without limitations
of this Agreement or any other agreement between Franchisee and Franchisor or any of
Franchisor's affiliates, (ii) intentional,repeated or continuous breach ofany provision o f ^
Agreement or any other agreement between Franchisee and Franchisor or any of Franchisor's
affiliates, and (iii) the breaches set forth below:
A. Immediate Termination Franchisee shall be deemed to be in default and

Franchisormayterminate this Agreementand all rights granted hereunder,without affording
Franchisee any opportunity to cure the default, effective immediately upon receipt of n o t ^
Franchisee, and such termination shall be for good cause where the grounds for termination are:
(1) Franchisee has made any material misrepresentation or omission in

applying fbrthefranchiseorin executingorperformingunder this Agreement or any other
agreement between Franchisee and Franchisor or any ofFranchisor's affiliates;
(2) FranchiseebecomesinsolventbyreasonofFranchisee'sinability topay

debts as they become due,or makes an assignment for the benefit of creditors or makes an
admission ofFranchisee'sinability to pay obligations as they become due;
(3) Franchisee files apetition inbankruptcy, or an involuntary petition in

banl^ptcyis filed againstFranchiseeorareceiveris appointed for Franchisee's business, ora
finaljudgment remainsunsatisfied or of recordfor 30 days or longer; or ifFranchisee is a
corporation, limited liability company or partnership. Franchisee is dissolved;
(4) Franchisee voluntarily or otherwise abandons the Studio. For purposes of

this Agreement, the term "abandon''means: (i) failure to actively operate the Studio fo^
two (2) business days without Franchisor'sprior written consent; or (ii) any other conduct on the
part of Franchisee or itsprincipals that Franchisor determinesindicatesadesire or intent to
discontinue operating the Studio in accordance with this Agreement or the Manual;
(5) Franchisee or any of its principal officers, directors, partners or managing

members is convicted of or pleads no contest toafelony or other crime or offense that adversely
affect the reputation ofthe System or the goodwill associated with the Marks;
(6) Franchiseemakes an unauthorized direct or indirecttransferorattempted or

purported transferof this Agreement,ormakesanunaothorizeddirector indirect transferor
attempted or purported transfer of an ownership interest in the Franchise,or fails or refuses to
transfertheFranchiseorthe interest in the Franchise ofadeceased or disabled controlling owner
thereof as required;
(7) Franchisee falsifies any financial reports or records required to be provided

by Franchisee to Franchisorunderthis Agreement;

(8) Franchisoe^^diôsuû^
System, the Manual or other p r o ^
contrary to the provisions ofthis Agreement; or (h) material misuse of ^
not expressly authorized hy Franchisor;
(9) Franchisee violates any health or safety law,ordinance or regulation or

operatesthe Studio inamannerthatpresentsahealth or safety hazard to its members or to the
public;
(10) Franchisee fails to obtain lawful possession ofan acceptable location and to
openforbusinessasaClub Filates Studio within six(6) months after this Agreement is accepted
by Franchisor, unless Franchisor agrees otherwise in writing;
(11) Franchisee defaults under the lease agreement or otherwise loses the right
to possess the premises at the location at which the Studio is located;
(12) Franchisee fails to comply with the covenants not to compete as required in
Article l^herein; or
(13) Franchisee,aftercuringadefaultpursuanttoSectionl51Bherein, commits

the same act of defaultagain within any twelve(12)consecutivemonth period whether ornot such
default is cured after notice thereofis delivered to Franchisee, or ifFranchisee received three (3)
or more default noticesftomFranchisor within any twelve (12) consecutivemonthly period
whether or not such defaults were related to the same problem or were cured after notice thereof
was delivered to Franchisee.
B. Termination with Notice, inadditiontotheprovisions of Section 15.1A, i f

Franchisee shah be in defaultunderthe terms ofthis Agreement and the default shall not be cured
or remedied (to Franchisor's satisfaction) within thirty (30) days after receipt of written n o t ^
from Franchisor(orlOdays'prior notice in the event ofadefault that is described in Subsections
(6), (7) or (8) below), in addition to all other remedies available to Franchisor at law or in equity,
Franchisormay immediateiy terminate this Agreement. Ifany such default is not cured within tbe
specified cure period, this Agreementshall terminate without furthernotice to Franchisee e f ^
immediately upon expiration ofthe cure period. Franchisee shall be in default, and each of the
following shall constitute good cause for termination under this Agreement:
(1) Failure, refusal orneglect by Franchisee to obtainFranchisor'sprior written

approval or consent any time such approval or consent is required by this Agreement;
(2) Franchisee's failure to comply with any provision ofthis Agreement that
does not otherwise provide for immediate termination, or Franchisee's had faith in carrying
the terms ofthis Agreement;
(3) Failure by Franchisee to maintain books and financial records forthe Studio
suitable for proper financial audit or failure by Franchisee to permit Franchisor to carry
rights to conduct an inspection or audit as provided in this Agreement or failure by Franchisee to
©2017^bâtesâncb^^ A35
2017âncbê Agreement
submitas^qufredbyÂg^^
franchised business
(4) Franchisee, or ifFranchiseehaseiectednot to directly snperviseôn-

premises" the day-to-day Stndio operations, then Franchisee's management e m p ^
complete, toFranchisor'ssatisfaction,the initial trainingprogramasprovided in this
(5) Franchisee fails to pay when dne any amount owing toFranchisor or its
affiliates under this Agreement or any other agreement, or is unahle to ohtain adequate financing
to cover all costs ofdeveloping, opening and operating the Studio;
(6) Franchisee fails to pay when due any amounts owing to any person or entity
in connection with the construction, leasing,financing,operation or supply ofthe Studio;
(7) Franchiseeclosesanyhankaccountwithoutcompleting all ofthe following

afrer such closings!) inmêdiately notifying Franchisor in writing, (ii)immedi^^^
another hankaccount, and (iii) executing and delivering to Franchisor all documents necessary for
Franchisortohegin and continue mal^g withdrawals from such hank account hy electronic fhnds
transfer as Fxhihit^ to this Agreement permits;
(8) Franchisee fails to maintain or suffers cancellation of any insurance

coverage required underthis Agreement;
(9) Franchisee allows classes to he taught or training to he conductedhy

teachers who have not successfully completed the CluhFilatesTeacherTraining Program or our
Bridge Training Program;
(10) Any transfer or attempted transfer hy Franchisee or any partner,memher or

shareholder in Franchisee of any rights or obligations under this Agreement to any third party
without the prior written consent ofFranchisor;
(11) Franchisee offers in conjunction with the operation ofthe Studio products
or services that have not heen approved hy Franchisor;
(12) Franchisee fails to abide by the pertinent marketing and advertising

requirements and procedures and participate in marketing programs forthe business as estabhshed
by Franchisor; or
(13) Franchisee fails to comply with the Performance Standards as set forth in
the provisions ofthis Agreement, as prescribed by Franchisor, or in the Manual,including, but not
hmited to, the Minimum Monthly Gross Revenue Quota foraperiodof36 consecutive months,
System Standards for cleanliness, customer service, equipment maintenance, and any other System
Standards which effect or enhance the memher experience at the Studio.
15.2 Gross-Default. Ifthere are now, or hereafrer shall be, other franchise agreements or any
otheragreementsineffectbetweenFranchiseeandFranchisorand/oranyofFranchisor'saffiliates^
©20^^bâtesânchise,^
adefauh byFranchisee under tho tor^^
at the optionofFranehisor, eonstitnteadefanh under ah such agreernents.
15 3 Ohbgations of Franehtsee upon Terminations Expiration or Non-Renewal

immediatelyupontermination, expiration or non-renewal ofthis Agreements
A. All rights, privileges and licenses granted hy Franchisor to Franchisee shall

immediately cease and he null and void and ofnohirther force and effect, and all such rights,
privileges and licenses shall immediately revert to Franchisor;
B. Franchisee shall cease to he an authorized Cluh Filates franchise owner, and shall
immediately,at its own expense, remove all signs, obliterate or remove all letterheads, labels or
any other item or form of identification that would in any way link or associate Franchisee,its
goods andBor services with Franchisor, and shall immediately cease to use, in any manner, the
Marl^, System and any other copyrighted information ormaterials or any confidential informa
Franchisee obtained asaresult ofthefranchisegranted to Franchisee;
C Franchisee shall inmiediately terminate all advertising and promotional efforts and
any other act that would in any way indicate that Franchisee is or was ever an authorized Club
Filates franchisee;
D. Franchisee shall cancel any assumed name ofFranchisee or equivalent registration

that contains any Proprietary Mark, andFranchisee shall furnish Franchisor with evidence
satisfactoryto Franchisor of compliance with this obligation within five(5) days afrerterm^
expiration or non-renewal ofthis Agreement;
F. Franchisee agrees not touse any reproduction,counterfeit,copy, or colorable

imitation ofthe Marks that is likely to cause confr^sion, mistake or deception,or that is likely
dilute Franchisor's rights in and to the Marks, and further agrees not to nse any trade dress or
designation of origin or description or representation that falsely suggests or represents an
association or connection with Franchisor;
F. Franchisee shall p^y all sums owing to Franchisor and its approved suppliers for
outstanding amounts owed under the Franchise Agreement and otherwise in connection with the
Studio. In the event oftermination for any default ofFranchisee, such sums shall include all
damages, costs and expenses, including reasonable legal fees, incurred by Franchisor asaresult of
the default;
C Franchisee shall comply with the covenants set forth in Articlesl2andl3 of this
Agreement; and
H. Franchisee shall,at Franchisor's option,assigntoFranchisorany interest that

Franchisee has in any lease for the premises ofthe Studio;
I. Franchisorshallhavethe option, exercisable by giving written notice thereofwithin

thirty (30) days from the date ofsuch termination, expiration or non-renewal to purchase any and
©2017 Club elates Franch^^C A37

2017Franchê Agreement
ah equipment furmtu^ fixture
the Studio, atthe ^ e r o f ^ F r a ^ ^
line hasis (as determined in aeeordanee with generahy accepted acconntingprincipies and
consistent with industry standards and customs) or (h) fair market value of
eithercase)any outstanding hahihties ofthe Studio, fn addition, Franchisor shah have the option
to assume Franchisee'siease forthe lease location ofth^
asuhlease forthe full remaining term on the same terms and conditions as Franchisee'slease.N^
value will he attrihuted to the value ofthe Marks or the System or to the assignment ofthe lease
(or sublease) for the premises or the assignment ofany other assets used in conjunction with the
Studio,andFranchisorwillnotherequiredtopay any separate considerationfor any such
assignment or sublease.
f f the parties cannot agree on fair market value within thirty (30) days of
Franchisor'snoticeofintenttopurchase,fairmarketvalueshall he determined hy an experienced,
professional and impartial third party appraiserwithout regard to goodwill or going concern value,
designated by Franchisor and acceptable to Franchisee,whose determination shall be final and
binding on both parties. The cost of such appraisal shall be home equally by Franchisor and
Franchisee. Ifthe parties cannot agree upon an appraiser one shall be appointed by the American
Arbitration Association, upon petition of either party.
Franchisor shall have the right to withhold from the purchase price funds sufficient
to pay all outstanding debts and liabilities ofFranchisee and the Studio and to pay such debts and
liabilities from such funds.
L Termination, expiration or non-renewal ofthis Agreement shall not affect, modify

or discharge any claims, rights, causes ofaction or remedies, which Franchisor may have against
Franchisee,whether under this Agreement or otherwise, for any reason whatsoever,whether such
claims or rights arise before or afrertermination.
15 4 Franchisor's Rights and Remedies in Addition to Termination.
A I f Franchisee shall be in default in the performance of any of its obligations or

breach any term or condition ofthis Agreement, in addition to Franchisor'sright to terminate thi^
Agreement, and without limiting any other rights or remedies to whichFranchisor may be entitled
at law or in equity, Franchisor may, at its election, immediately or at any time thereafrer, and
without notice to Franchisee cure such default for the account of and on behalf of Franchisee
including,without limitation, entering upon and taking possession of the Studio and to taking in
the name ofFranchisee, all other actions necessary to effect the provisions ofthis Agreement and
anysuchentryorotheractionshallnotbedeemedatrespassorotherillegal act, and Franchisor
shall not be liable in any manner to Franchisee for so doing, and Franchisee shall pay the entire
cost thereofto Franchisor on demand, including reasonable compensation to Franchisor for the
management ofthe Studio.
B. As an alternative to Franchisor'sexercising its rights under Section 15.5A, above,

and only in theevent of apremature termination ofthis Agreement, Franchisee shall pay
Franchisor liquidated damages in an amount equal to the sum ofthe royalties paid to Franchisor
© 2 0 1 7 ^ b elates Franchise^LC
forthe twenty four (24) months p ^
exercise ofthis right shah not preclude Franchise
Section 16^Franchisee's payment toFranchisor wouidnotheapenaityforhreaching this
Franchise Agreement, hut ratherareasonahie estimate ofthe losses Franchisor would incur in the
event ofthe closure ofFranchisee's franchised business. Should Franchisor elect to enforce its
rightto liquidated damages underthis Section, Franchisee'sohligation to pay such damages would
heinadditiontoFranchisee'sohligationsto(i)payallamountsstill owed to Franchisor, and (ii)
adhere toFranchisee'sotherpost-terminationohligations. Franchisor'srighttopaymentof
liquidateddamageswouldheinadditiontoallother post-termination remediesavailahleto
Franchisorunderthelaw.

Your Initials: /
16. RESOLUTION OF DISPUTES
16.1 Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without reference to this state's conflict of laws principles.
Notwithstanding the foregoing, the parties specifically agree and acknowledge that all claims,
causes of actions or disputes related to Franchisee's covenants not to compete set forth in Section
13 of this Agreement, including the interpretation, validity and enforcement thereof, shall be
governed by the laws of the state where the Studio is located.
16.2 Internal Dispute Resolution. Franchisee must first bring any claim or dispute between
Franchisee and Franchisor to Franchisor's management and make every effort to resolve the
dispute internally. Franchisee must exhaust this internal dispute resolution procedure before
Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt
resolution of disputes internally shall survive termination or expiration of this Agreement.
16.3 Mediation. At Franchisor's option, all claims or disputes between Franchisee and
Franchisor (or its affiliates) arising out of, or in any way relating to, this Agreement or any other
agreement by and between Franchisee and Franchisor (or its affiliates), or any of the parties'
respective rights and obligations arisingfromsuch agreement, which are not first resolved through
the internal dispute resolution procedure set forth in Section 16.1 above, will be submitted first to
mediation to take place at Franchisor's then-current corporate headquarters under the auspices of
the American Arbitration Association ("AAA"), in accordance with AAA's Commercial
Mediation Rules then in effect. Before commencing any legal action against Franchisor or its
affiliates with respect to any such claim or dispute. Franchisee must submit a notice to Franchisor,
which specifies, in detail, the precise nature and grounds of such claim or dispute. Franchisor will
have a period of thirty (30) days following receipt of such notice within which to notify Franchisee
as to whether Franchisor or its affiliates elects to exercise its option to submit such claim or dispute
to mediation. Franchisee may not commence any action against Franchisor or its affiliates with
respect to any such claim or dispute in any court unless Franchisor fails to exercise its option to
submit such claim or dispute to mediation, or such mediation proceedings have been terminated
either: (i) as the result of a written declaration of the mediator(s) that further mediation efforts are

notwo^whhôr(ii)asaresuhofa^ Fraôhisor's rights to
mediation as sot for^ herein, may he specificahyen^
own eost of mediation and Franchisor and Franchisee wih share mediator fees eq^^ This
agreement to mediate wiii survive any termination or e ^
wih not he required to first attempt to mediateacontroversy,dispute, or ciaim through m e ^
if such controversy,dispute, or ciaim concerns an ahegationthataparty has vioiatedôrthreatens
to violate, orposes an imminent risk of vioiating^(a)anyfederahy protected inteiiectuaip^^^
rights in the Marks, the System, or in any Confidential Information or other confidential
information;(h)any of the restrictive covenantscontainedin this Agreement;and(c)anyof
Franchisee'spaymentohligations underthis Agreement.
16.4 Mandatory Binding Arbitration.Fxcent as provided in Section 16.5 ofthis Agreements

Franchisee and Franchisor agree that any claim, dispute, suit, action, controversy, or proceeding
ofanytype whatsoever including any claim for equitable reliefand/orwhere either party is actm^
asa"privateattomeygeneral,"suingpursuanttoastatutory claim orotherwise,hetweenor
involving Franchisee and Franchisor on whatever theory and/or facts based, and whether or not
arising out ofthis Agreement, ("Claim^will be processed in the followingmanner:
A. Franchisee andFranchisor each expressly waives all rights to any court proceeding,
except as expressly provided in Section 16.5 below;
13. All Claims shall be submitted to and resolved by binding arbitration that will take
place at Franchisor'sheadquarters or other location that Franchisor designates in Orange County,
California, before and in accordance with the arbitration rules of the American Arbitration
Association, judgment upon the award rendered bythe arbitrator shall he entered in any Court
havingjurisdiction thereof
C. Franchisor and Franchisee agree tbat any arbitration between Franchisor and
FranchiseeshallbeofFranchisee'sindividual claim and that the claim subject to arbitration shall
not be arbitrated onaclass-wide basis.
O. This arbitration provision shall be deemed to be selfêxecuting, and in the event

eitherpartyfailstoappearatanyproperly noticed arbitration proceeding, an award may be entered
against such party notwithstanding said failure to appear
F. In no event shall Franchisor be liable to Franchisee for punitive damages in any

action arisingoutofor relating tothisAgreement,oranybreach,terminationor cancellation
hereof
F. Any arbitrationproceedinginvolving this Agreement or theStudiogenerally,

including all demands, other filings and evidence submitted in connection with such proceeding,
must be kept strictly confidential byFranchisee and its representatives, unless Franchisor agrees
otherwise in writing.
16.5 Other Proceedings (Rigbt to ininnctiveReiief^. Franchisee acknowledges and agrees

that irreparable harm could be caused to Franchisor by Franchisee'sviolation of certain provisions
©2017^bâtesânch^^ A40
ofthis Agreement a n ^ a s s u c ^ m ^
shah he entitled to obtain in any eonrto
or temporary or permanent injunctions in order to enforce, among other items, the p r o ^
this Agreement relating to: (i)Franchlsee'suse of theMarksandConfidential Information
(inclnding any proprietary software used in connection with the Stndio^(ii) the ^
not to compete,aswellas any other violations of the restrictive covenants set ft^rthinthis
Agreement;(iii)Franchisee'sohligationsontermm^
disputes and controversies based on or arising under the Lanham Act, or otherwise involving the
Marks, asnoworhereafteramended;(v)disputes and controversies involving enforcement of the
Franclusor'srights with respect to confidentiality under this Agreement; and(vi) the prohibifi^
of any act or omission byFranchisee or its employees that constitutesaviolation of applicable
law, threatens Franchisor's franchise system or threatens other franchisees ofFranchisor.
Franchisee'sonly remedy if such an injunction is entered will be the dissolution ofthe injunction,
ifappropriate, and Franchisee waives all damage claims ifthe injunction is wrongfully issued.
166 Choice ofFomm.
A. Franchisee acknowledges and agrees that this Agreement is entered into in

California and that, except for those actions described in Section 16.5 above, any action b r o u ^
by either party against the other for the purpose of enforcing the terms and provisions of this
Agreement (provided such action is not subject to the arbitration proceeding pursuant to the terms
of this Agreement or applicable law) shall he instituted solely inastate or federal court having
subject matter jurisdiction thereof only in Calif^^
its principal place of business and in no other court and that Franchisee irrevocably waives any
objection Franchisee may have to the exclusivejurisdiction or the exclusive venue ofsuch court.
13. IfFranchisee institutes any arbitration or other legal proceedings in any venue or
other court other than those specified, Franchiseeshallassumeall of Franchisor's costs in
connection therewith, including, without limitation,reasonahleattomeyfeesregardlessof the
outcome ofsuch arbitration or legal proceedings.
C. Franchisee acknowledges that Franchisor may bring an action in any other court of
competent jurisdiction to seek and obtain injunctive relief as set forth in Section 16.5ahove,
including to enforce Franchisee'snon-compete obligations hereunder.
16.7 Waiver ofPunitive Damages.Franchisee herebvwaives to the fullest extentnermittedbv

law,anyrightto or claim for anypunitive,exemplary,incidental, indirect, special or conseque
damages (including,without limitation, lost profits)against Franchisor arising out of any cause
whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or
otherwise)and agrees that in the event ofadispute, that Franchisee'srecovery is limited to actual
damages, ff any other term of this Agreement is found or determined to be unconscionable or
unenforceablefor any reason,theforegoing provisions sh
including, without limitation, the waiver of any rightto claim any consequential damages. N o ^
in this Section or any other provision ofthis Agreement shall be construed to prevent Franchisor
from claiming and obtaining expectation or consequential damages, including lost future royalties

forthe bianco o f ^ t e r m ofthis A^
the parties agree and a e ^ o w i e d g e ^
168 WAIVER OF ^ R Y T I H A L THEPARTfES HEREBY AGREE TO

BY ^ ^ Y f N A l ^ ACTION, PRO0EED1NO OR G O ^ T E R G E A ^ W H
OREQUITY,REOARDEEÔEWHICHPARTYBR^
APPEYTO ANY i^TTERWHATSOEVERBETWEENTHEPARTfES HERETO WHICH
A R I S E S O U T O E O R I S R E E A T E D I N A N Y W A Y T O T H I S AOREEMENT,THE
PEREORMANCEOEEITHER PARTY, AND/ORERANCHISEE'SRURCHASEEROM
FRANCHISOR OETHEERANCHISEANO/ORANYCOOOSORSERVICES
169 WAIVER OF CLASS ACTIONS THE PARTIES AGREE THAT ALE

PROCEEDINGS ARISING OUT OP ORREEATED TO THIS AGREEMENT,OR THE SALE
OETHEERANCHISED BUSINESS, WIEEBECONDUCT^^
CEASS WIDE BASIS, AND THAT ANY PROCEEDING BETWEEN FRANCHISEE,
FRANCHISEE'S GUARANTORS AND FRANCHISOR OR ITS
AFFIEIATES/OFFICERS/EMFEOYEES MAY NOT BE CONSOLIDATED WITH ANY
OTHERPROCEEDINGBETWEENFRANCHISORAND ANY OTHER THIRDPARTY
16.10 Aftorneys'Fees and Costs.
A. Iflegal action or arbitration is necessary to e n ^

Agreement, the prevailing party shall he entitled to recover reasonable compensation for
preparation, investigation, conrt costs, arbitration costs (if applicable)and reasonable atto
fees, from the non-prevailing party as fixed hy an arbitrator or court of competent jnrisdicti^^
B. Separate and distinct from the right ofaprevailing party to recover expenses, costs
and fees in connection with any legal proceeding or arbitration, the prevailing party shall also
entitled to receive all expenses, costs and reasonable attorneys'fees incurred in connection with
the enforcement ofany arbitration award or judgment entered. Furthermore, the right to recover
post-arbitration award and post-judgment expenses, costs and attorneys'fees shall be severable
and shall survive any award orjudgment and shall not be deemed merged into such judgment.
16.11 No Witbboldingof Payments. Franchisee shall notwithholdalloranypartofany

payment to Franchisor or any of its affiliates on the grounds of Franchisor's alleged
nonperformance or as an offset against any amount Franchisor or any of Franchisor'saffiliates
allegedly may owe Franchisee under this Agreement or any related agreements.
16.12 Limitation ofActions.Franchisee further agrees that no cause ofaction arising out of or
under this Agreement may be maintained by Franchisee againstFranchisor unless brought before
the expiration of one (I)year afrer the act, transaction or occurrence upon which such action is
based or the expiration ofone year afrer the Franchisee becomes aware offacts or circumstances
reasonably indicating that Franchisee may haveaclaim against Franchisor hereunder, whichever
occurs sooner, and that any action not brought within this period shall be barred asaclaim,
counterclaim, defense, or set-off. Franchisee hereby waives the right to obtain any remedy based
on alleged fraud, misrepresentation, or deceit hy Franchisor, including, without limitation,
©2017^bâtesFraocbê,^
2017Fraocbise Agreement
rescission of this Agreement, in any mediation, judicial, or other adjudicatory proceeding arising
hereunder, except upon a ground expressly provided in this Agreement, or pursuant to any right
expressly granted by any applicable statute expressly regulating the sale of franchises, or any
regulation or rules promulgated thereunder.
16.13 Third Party Beneficiaries. Franchisor's officers, directors, shareholders, agents and/or
employees are express third-party beneficiaries of the provisions of this Agreement, including the
dispute resolution provisions set forth in this Section 21, each having authority to specifically
enforce the right to mediate/arbitrate claims asserted against such person(s) by Franchisee.

Your Initials: /
17. MISCELLANEOUS PROVISIONS
17.1 Severability. Except as provided in Section 13.4, each article, section, paragraph, term
and provision of this Agreement, or any portion thereof, shall be considered severable and if, for
any reason, any such portion of this Agreement is held by an arbitrator or by a court of competent
jurisdiction to be unenforceable due to any applicable existing or future law or regulation, such
portion shall not impair the operation of or have any effect upon, the remaining portions of this
Agreement which will remain in full force and effect. No right or remedy conferred upon or
reserved to Franchisor or Franchisee by this Agreement is intended to be, nor shall be deemed,
exclusive of any other right or remedy herein or by law or equity provided or permitted, but, each
shall be cumulative of every other right or remedy.
17.2 Waiver and Delay. No failure, refusal or neglect of Franchisor to exercise any right,
power, remedy or option reserved to it under this Agreement, or to insist upon strict compliance
by Franchisee with any obligation, condition, specification, standard or operating procedure in this
Agreement, shall constitute a waiver of any provision of this Agreement and the right ofFranchisor
to demand exact compliance with this Agreement, or to declare any subsequent breach or default
or nullify the effectiveness of any provision of this Agreement. Subsequent acceptance by
Franchisor of any payment(s) due it under this Agreement shall not be deemed to be a waiver by
Franchisor of any preceding breach by Franchisee ofany terms, covenants or conditions of this
Agreement.
17.3 Designation of Responsible Parties. Franchisee represents and warrants to Franchisor

that the list below states: (i) the name, mailing address and equity interest of each person holding
any shares or other form of ownership, or security interest convertible into an equity interest, in
Franchisee, showing percentage of ownership held by each and (ii) the name and mailing address
of the individual(s) who will be the Operating Principal(s) ofthe Studio. Each Operating Principal
named below has the authority to act for Franchisee in all matters relating to thefranchisedStudio
granted hereunder, including voting responsibilities. Only those individuals who are party to this
Agreement and have an ownership interest in thefranchiseentity may be listed as an Operating
Principal. Franchisee shall promptly notify Franchisor of any change in any such information.
Any change in the Operating Principal(s), or in ownership information ofFranchisee, is subject to
Article 14 and the training requirements of this Agreement:
Franchisee is a • , organized under the laws of

, or • Franchisee is an individual or group of individuals, and
hereby represents and warrants that the information stated below is true and accurate as of the date
set forth below:
Shareholder, Partner, Member Percentage of

or Individual Name and Address Ownership Interest
Operating Principal (may also be referred to as the "Designated Operator" in

the FDD):
17.4 Franchisor's Discretion. Except as otherwise specifically referenced herein, all acts,
decisions, determinations, specifications, prescriptions, authorizations, approvals, consents and
similar acts by Franchisor may be taken or exercised in the sole and absolute discretion of
Franchisor, regardless of the impact upon Franchisee. Franchisee acknowledges and agrees that
when Franchisor exercises its discretion or judgment, its decisions may be for the benefit of
Franchisor or the Club Pilatesfranchisenetwork and may not be in the best interest of Franchisee
as an individualfranchiseowner.
17.5 Notices.
A. All notices which the parties hereto may be required or permitted to give under this
Agreement shall be in writing and shall be personally delivered or mailed by certified or registered
mail, return receipt requested, postage paid, or by reliable overnight delivery service, addressed as
follows:
If to Franchisor:
3185 Pullman Street
Attention: Shaun Grove
I f to Franchisee:

B. Tho addressees h e r o m g i v e n ^ n ^
hy written nofiee given to moodier party as herein provide Notices delivered hy certified or
registered maii shah he deemed to have heen given three^hnsiness days afier postmark hy
United StatesPostai Service, orthenexthnsinessdayafrerdepositwithrehahieovernight
service orwhen delivered hy hand.
1^ 6 No Recourse Agamst Nonparty A b a t e s . All claims, obligations, liahilities, or causes

of action (whether in contract or in tort, in law or in eqnity,or granted hy statute) that may he
based upon, in respect o^ arise under, out or hy reason o^ he connected with, or relate in any
manner to this Agreement, orthe negotiation, execution, or performance ofthis Agreement
(including any representation orwarranty made in, in connection with, or as an inducement to this
Agreement, but not including separate undertakings such as guarantees of performance, personal
guaranties, orcorporateguarantees), may bemadeonlyagainst(andarethosesolely of) theentities
that are expressly identified as parties in the preamble to this Agreement ("Contracting Parti^^^^
No Person who is notaContracting Party, including without limitation any director, o ^
employee, mcorporator,member,partner,manager, stockholder, affiliate,agent,attomey, or
representativeofândany financialadvisororlenderto,any oftheforegoing("Nonparty
Affiliates"), shall have any liability (whether in contract or in tort, in law or in e q u i t y , o r ^
hystamte) for any claims, causes of action, obligations, or liabilities arising under, ^
connection with, orrelated in anymannerto this Agreement or based on, in respect of, or hyreason
of this Agreement or its negotiation, execution, performance, or breach; and, to the maximum
extent permitted by law, each Contracting Party hereby waives and releases all such l i a b ^ ^ ^
claims, causesof action, andobligationsagainst any suchNonparty Affiliates, unless such
liabilities, claims, causes of action, and obligations arise from deliberately fraudulent acts.
Without limiting the foregoing, to the maximum extent permitted by law, (a) each C o n ^ ^
Party herebywaivesandreleases any and all rights, claims, demands or causes ofaction that may
otherwise be available at law or in equity, or granted hy statute, to avoid or disregard the entity
form ofaContracting Party or otherwise impose liahility ofaContracting Party on any Nonpar
Affiliate, whether granted by statute or based on theories of equity, agency, control,
instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil,
unfairness, undercapitalization, orotherwise^
upon any Nonparty Affiliates with to the performance ofthis Agreement or any representation or
warranty made in, in connection with, or as an inducement to this Agreement. Nothing herein is
intendedtopreventaContractingPartyfiompursuinganydistinctlegal rights it may have against
aNonparty Affiliate which arise fromaseparate document, such asaguaranty of performance,
personal guaranty,corporate guaranty orsimilaragreement Notwithstanding any otherprovisi^^
ofthis Agreement which limits the right ofprospective Third Party Beneficiaries, any Nonparty
Affiliate may rely on this provision and enforce it against any Contracting Party or other Person
or entity.


Yourlmtia^
1^ ACKNOWLEDGMENTS
181 THE SUBMISSION OF THIS AGREEMENTDOES NOT CONSTITUTE AN OFFE^

AND THIS AGREEMENT SHALE BECOME EFFECTIVE ONEYUFON THE EXECUTION
H E I ^ O F B Y T H E F I L ^ C H I S O R A N D T H E F I ^ C H I S E E THEDATE OF E X E C U T E
BYTHEFRANCHISORSHALLBECONSIDEREDTOBETHEDATEOFEXECUTIONOF
THIS AGREEMENT
18 2 THIS AGREEMENT SHALL NOT BE BINDING ON THE FRANCHISOR UNLESS

AND UNTIL IT SHALL HAVE BEEN ACCEFTED AND SIGNED BY AN AUTHORIZED
OFFICER OFTHEFRANCHISOR
183 FRANCHISEE ACKNOWLEDGES THAT IT RECEIVEDACOMFLETECOFY OF

THIS AGREEMENTFORAFERIODNOTLESS THAN FOURTEEN ( ^ C A L E N D A R
DAYS, DURING WHICH TIME FRANCHISEE CONDUCTED AN INDEPENDENT
INVESTIGATION OF THE BUSINESS LICENSED HEREUNDER TO THE EXTENT OF
FRANCHISEE'S DESIRE TO DO SO FRANCHISEE RECOGNIZES AND
ACKNOWLEDGES THAT THE BUSINESS VENTURE CONTEMPLATED BY THIS
AGREEMENTINVOLVESBUSINESSRISKS, A N D T H A T I T S SUCCESS W I L L B E
LARGELY DEPENDENT UPON THE ABILITY OF THE FRANCHISEE AS AN
INDEPENDENTBUSINESSPERSON FRANCHISOREXPRESSLY DISCLAIMS THE
MAKING OF,AND FRANCHISEE ACKNOWLEDGES THAT IT HAS NOT RECEIVED,
ANYWARRANTYORGUARANTEE,EXPRESSORIMPLIED,THATFRANCHISEEWILL
BE SUCCESSFUL IN THIS VENTURE OR THAT THE BUSINESS WILL ATTAIN ANY
LEVELOFSALESVOLUME,PROFITS,ORSUCCESSFRANCHISEE ACKNOWLEDGES
THATTHIS AGREEMENT, THE FRANCHISE DISCLOSURE DOCUMENT ("FDD^, AND
THE EXHIBITS HERETO CONSTITUTE THE ENTIRE AGREEMENT OF THEPARTIES
THIS AGREEMENTTERMINATES AND SUPERSEDES ANYPRIOR AGREEMENT
BETWEENTHEPARTIESCONCERNINGTHESAMESUBÊCTMATTER
184 FRANCHISEEAGREESAND ACKNOWLEDGES THATFULFILLMENT OF ANY

AND ALL OF FRANCHISOR'S OBLIGATIONS WRITTEN IN THIS AGREEMENT OR
BASED ON ANY ORALCOMMUNICATIONSWHICHMAYBE RULED TO BE BINDING
INACOURTOFLAWSHALLBEFRANCHISOR'S SOLE RESPONSIBILITY AND NONE
OF FRANCHISOR'S AGENTS, REPRESENTATIVES, NOR ANY INDIVIDUALS
ASSOCIATEDWITHFRANCHISOR'SFRANCHISECOMPANYSHALLBEPERSONALLY
LIABLETOFRANCHISEEFORANYREASON THISISANIMPORTANTPARTOFTHIS
AGREEMENT FRANCHISEEAGREESTHATNOTHINGTHATFRANCHISEEBELIEVES
FRANCHISEE HAS BEEN TOLD BY FRANCHISOR OR FRANCHISOR'S
REPRESENTATIVES SHALL BE BINDING UNLESS IT IS WRITTEN IN THIS
AGREEMENT THIS IS AN IMPORTANTPART OF THIS AGREEMENT DO NOT SIGN
THIS AGREEMENT IF THERE IS ANY QUESTION CONCERNING ITS CONTENTS OR
ANYREPRESENTATIONSMADE
© 2 0 1 7 ^ ^ ^ ^ ^ ^ ^
2017 Fronchise Agreement
Your Initials: /
19. ENTIRE AGREEMENT
This Agreement, the documents referred to herein, and the exhibits hereto, constitute the entire
and only agreement between the parties concerning the granting, awarding and licensing of
Franchisee as an authorized Club Pilates Franchisee at the Studio location, and supersede all prior
and contemporaneous agreements. There are no representations, inducements, promises,
agreements, arrangements or undertakings, oral or written, between the parties other than those set
forth herein. Except for those permitted to be made unilaterally by Franchisor hereunder, no
amendment, change or variance from this Agreement shall be binding on either party unless
mutually agreed to by the parties and executed by their authorized officers or agents in writing.
This Agreement does not alter agreements between Franchisor and Franchisee for other locations.
Nothing in this Agreement or in any related agreement, however, is intended to disclaim the
representations Franchisor made in the FDD that Franchisor furnished to Franchisee.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below
to be effective upon execution by Franchisor.
[THE REST OF THIS PAGE HAS BEEN LEFTINTENTIONALL Y BLANK

SIGNATUBES ON THE FOLLOWING PAGE]

"FRANCHISOR" "FRANCHISEE"
IfFranchisee is an individual:
By: Signature:
Date:
Title:
Signature:
Accepted: Date:
[Signatures continued on next page.]
IfFranchisee is a corporation or other entity:
[Name ofFranchisee]
By:
Title:
Date:
By: _
Title:
Date:

EXHIBIT 1 TO
AUTHORIZED LOCATION ADDENDUM
This Addendum is made to the Club Pilates Franchise Agreement (the "Franchise Agreement") between
Club Pilates Franchise, LLC ("Franchisor"), and ("Franchisee"), dated
, 20_.
1. Preservation of Agreement. Except as specifically set forth in this Addendum, the Franchise
Agreement shall remain in full force and effect in accordance with its terms and conditions. This
Addendum is attached to and upon execution becomes an integral part of the Franchise Agreement.
2. Authorized Location. The parties hereto agree that the Authorized Location referred to in
Section 1.3 of the Franchise Agreement shall be the following:
3. Designated Territory, if any. Pursuant to Section 1.3 of the Franchise Agreement, Franchisee's
Designated Territory will be defined as follows (if identified on a map, please attach map and reference
attachment below):
This Addendum is agreed to and accepted by the parties this day of , 20
FRANCHISOR:
By:
Title:
FRANCHISEE:
By:
Title:
By:
Title:

EXHIBIT 2 TO THE
ELECTRONIC FUNDS TRANSFER AGREEMENT
This Electronic Funds Transfer Agreement (the "Agreement") is made on this day of
, 2 0 _ by and between Club Pilates Franchise, LLC. ("Franchisor"),
and or their assignee, i f a partnership, corporation or limited
liability company is later formed ("Franchisee").
Whereas, Franchisor and Franchisee are parties to a Club Pilates Franchise Agreement executed
on even date herewith (the "Franchise Agreement") and desire to enter into an Addendum to the
Franchise Agreement;
Now, therefore in consideration of the mutual promises contained herein and as an inducement
to Franchisor to execute the Franchise Agreement, the parties agree as follows:
A. Franchisee shall pay any and all fees and other charges in connection with this Addendum and
the Franchise Agreement (including, without limitation, the Royalty Fees, contributions to the Fund and
any other payments due to Franchisor by Franchisee, and any applicable late fees and interest charges)
by electronic, computer, wire, automated transfer, ACH debiting, and bank clearing services
(collectively "electronic funds transfers" or "EFT"'), and Franchisee shall undertake all action necessary
to accomplish such transfers.
B. Upon execution and delivery of this Agreement, Franchisee shall execute and deliver two (2)
originals of the "Electronic Debit Authorization" attached as Exhibit 3 to the Franchise Agreement,
which authorizes Franchisee's bank or other financial institution to accept debit originations, electronic
debit entries, or other EFT, and electronically deposit fees and contributions owing Franchisor directly
to Franchisor's bank account(s). Upon Franchisor's request, Franchisee shall deliver to Franchisor all
additional information that Franchisor deems necessary (including, without limitation, financial
institution of origin and relevant accounts and AB A/transit numbers for any new bank accounts that
Franchisee opens after the date of this Addendum) in connection with such EFT.
C. By executing this Addendum, Franchisee authorizes Franchisor to withdraw funds at such days
and times as Franchisor shall determine via EFT from Franchisee's bank account for all fees and other
charges in connection with the Franchise Agreement and this Addendum, as described in the first
sentence ofthis paragraph. Franchisee authorizes weekly ACH debits via EFT based on an amount equal
to the total weekly amount due Franchisor, as set forth in Section 5 of the Franchise Agreement.
D. Franchisee is responsible for paying all service charges and other fees imposed or otherwise
resulting from action by Franchisee's bank in connection with EFT by Franchisor, including, without
limitation, any and all service charges and other fees arising in connection with any EFT by Franchisor
not being honored or processed by Franchisee's bank for any reason and a Fifty Dollar ($50) charge by
Franchisor for processing the EFT. Upon written notice by Franchisor to Franchisee, Franchisee may
be required to pay any amount(s) due under the Franchise Agreement and/or this Addendum directly to
Franchisor by check or other non-electronic means in lieu of EFT at Franchisor's discretion. It shall be

a non-curable event of default under Article 15 of the Franchise Agreement i f Franchisee closes any
bank account without completing all of the following forthwith after such closing: (1) immediately
notifying Franchisor thereof in writing, (2) immediately establishing another bank account, and (3)
executing and delivering to Franchisor all documents necessary for Franchisor to begin and continue
making withdrawals from such bank account by EFT as this Addendum permits.
E. Except as specifically set forth in this Addendum, the Franchise Agreement shall remain in full
force and effect in accordance with its terms and conditions. This Addendum is attached to and upon
execution becomes an integral part of the Franchise Agreement.
F. Wherefore, the parties have set forth their hand and seal on the day and date first above written.
FRANCHISOR:
By:
Title:
FRANCHISEE:
By:
Title:
By:
Title:

EXHIBIT 3 TO THE
ELECTRONIC DEBIT AUTHORIZATION

[SAMPLE -MAY OBTAIN INFORMA TION IN DIFFERENT MANNER]
FRANCHISOR: Club Pilates Franchise, LLC
FRANCHISOR ID NUMBER:
The undersigned hereby authorizes Club Pilates Franchise, LLC (the "Franchisor"), to initiate debit
entries to the undersigned's checking account indicated below and the depository named below (the
"Depository"), to debit the same to such account.
Depository Name:
Branch:
City State and Zip Code:
Transit/ABA No.:
Account Number:
This authority is to remain in full force and effect until the underlying obligations under the Franchise
Agreement have been satisfied in full or released in writing by Franchisor.
This authorization further confirms my understanding of Exhibit 2 to the Franchise Agreement signed
by me/us in which l/we expressly agree that this authorization shall apply to any and all Depositories
and bank accounts with which l/we open accounts during the term of the Franchisee Agreement and any
renewals. Without limiting the generality of the forgoing, l/we understand that if l/we close any bank
account, l/we are obligated immediately to: (i) notify Franchisor thereof in writing, (ii) establish another
bank account, and (iii) execute and deliver to Franchisor all documents necessary for Franchisor to begin
and continue making withdrawals from such bank account/depository by ACH debiting or other
electronic means. I/we specifically agree and declare that this Authorization shall be the only written
authorization needed from me/us in order to initiate debit entries/ACH debit originations to my/our bank
account(s) established with any Depository in the future.
DATE:
ID NUMBER:
PRINT NAME(S): SIGNATURE(S):

EXHIBIT^TOTHE
CLUB PILATES FRANCHISEAGREEMENT
CUAI^NTEE,INBEMNIEICATIONANBACÔWLEBCEMENT
For value receive andmconsiderafionând as an m^

^Franchisors to execute the Club Pilates Franchise Agreement^^^
date herewith, hy and hetween Franchisor and or his assignee, i f a
partnership, corporation or limited liahility company is later formed (the "Franchisees,
(the "Cuarantor(s^, jointly and severally,herehy unconditionally
guarantee to Franchisor and its successors and assigns the tull and timely performance hy Franchise
each obligation undertaken hy Franchisee under the terms ofthe Franchise Agreement, including all of
Franchisee'smonetaryohligationsarisingunderorhy virtue ofthe Franchise Agreement.
UpondemandhyFranchisor,Cuarantor(s)willimmediatelymake each payment required ofFranchisee

under theFranchise Agreement. Cuarantor(s)herehy waive any righttorequireFranchisor to: (a)
proceed against Franchisee for any payment required under theFranchise Agreement;(h) proceed
against or exhaust any security from Franchisee; or(c)pursue or exhaust any remedy,including any
legal orequitahlereliefâgainstFranchisee. Without affecting the obligations ofCuarant^^^
Cuarantee,lndemnification and Aclôwledgment,Franchisor may, without notice to Cuaranto^^
extend,modify,orreleaseanyindebtednessorobligationofFranchisee, or settle, adjust or compromise
any claims against Franchisee.
Cuarantor(s) waive notice of amendment of tbe Franchise Agreement and notice of demand for
payment by Franchisee, and agree to be bonnd by any and aii sncb amendments and changes to
tbe Franchise Agreement.
Cuarantor(s)hereby agree to defend, indenmify and holdFranchisor harmless against any andall 1^^^
damages, liabilities, costs, and expenses (including, without hmitation, reasonable attorneys' fees,
reasonable costsof investigations, courtcosts, and arbitration fees andexpenses)resultingfrom,
consisting of^ or arising out ofor in connection with any failure by Franchisee to perform any o b l ^ ^
ofFranchisee under the Franchise Agreement, any amendment, or any other agreement executed by
Franchisee referred to therein.
Cuarantor(s)herehy acknowledge and agree to he individually bound hy all obligations and covenants
of Franchisee contained in the Franchise Agreement, including those related to non-competition and
confidentiality.
This Guarantee shall terminate upon the expiration or termination ofthe Franchise Agreement, except
that all obligations and liabilities ofGuarantor(s) that arise from events that occurred on or b e f o r e ^
effective date ofsuch termination shall remain in frill force and effect until satisfied or di^^
Guarantor(s), and all covenants that by their terms continue in force afrer termination or e x p ^ ^
the FranchiseAgreementshall remain in force accordingtotheirterms. Upon the death ofan individual
Guarantor,the estate of such Guarantor will be hound by this Guarantee, but only for defaults and
obligations existing at the time ofdeatb,and the obligations ofthe other Guarantor(s) will contm^
full force and effect.
©2017^bâtesFraochise,^
The vahdity o f t h i s G u a r a n ^ a n d t h e ^
termmated, reacted, d h n ^
take or he forced to take against Franchisee, or hyreason of any
rights or remedies reserved to Franchisor in the Franchise Agreement or otherwise.
The useofthesingniarhereinshahincindethepinrahFach term nsed in this Guaranteed

defined herein, shaii have the same meaning as when used in the Franchise Agreement.
This Guarantee is to he performed in Grange Gonnty,Gahfornia and shah he governed hy and const^
in accordance with the iaws ofthe State of Gahfomia. Notwithstanding the foregoing, the undersigned
specificahy agree and acknowledge thatany claims, causes ofaction or disputes arising out of or related
to Franchisee'sor any of Guarantor'scovenants not to compete (set forth in the Franchise Agreement
and now incorporated hyreference as i f f u l l y set forth in this Guaranty), i n c l u d i n g ^
validity and enforcement thereof shall he governed hy the laws where the Studios is located.
Guarantor(s) specifically agree that the provision of the Franchise Agreement related to dispute
resolution (internal dispute resolution, non-hinding mediation and arbitration), i n ^
attorneys'fees and other enforcement ofthe Franchise Agreement shall apply equally with respect to all
claims or causes ofaction arisingoutofor related to this Guaranty in any manner (including the
interpretation thereof).Franchisor and Guarantor(s)agree that any dispute under this Guarantee sh^^^
resolved hy arbitration as set forth in the Franchise Agreement (subject to the exceptions describe
therein).
In connection therewith, each ofthe undersigned hereby appoints the Secretary ofState for the St^^^
California as his agent for service ofprocess to receive summons issued by the court in connection with
any such litigation. Franchisor and Guarantor(s)agree that any dispute under this Guarantee shall be
resolved hy arbitration pursuant to Articlelôfthe Franchise Agreement(except as otherwise provided
in Article l ^ o f the Franchise Agreement).
fN WITNESS WHFf^GF,each of the undersigned has signed this Guarantee as of the date of the
WITNESS: GUARANTOR(S)
By:
By:

EXH^T5TOTHE
CLUB^LATESFRANCHÊAGREEMENT
ADDENDUMTO LEASE
This Addendum to Lease (this "Addendum^ modifies and supplements that certain lease dated
and entered into hyTenant and Landlord concerning the Location at
(the^Lease")
Landlord andTenantîntendingthatCluh Pilates Franchise, LLC,aDelaware limited

("Franchisor^(and its successors and assigns)heathird-partyheneficiaiy of this Addendum, a
follows:
(1) Landlord shall,during the term ofthe Lease and thereafter, provide Franchisor all sales
andotherinft^rmation it may have, whether provided hyTenant or otherwise, related to the operati^^
Tenant'sStudio as Franchisor may reasonably request;
(2) Tenant may display the trademarks, service marks and other commercial symbols owned
by Franchisor and used to identify the service and/or products of^red at the Studio, including
"Club Filates,"the Studio design and image developed and owned byFranchisor, as it currently exists
and as it may be revised and fibber developed by Franchisor from time to time, and certain associated
logos in accordance with the specifications required by the ClubFilates Manual, subject only to the
provisions ofapplicable law and in accordance with provisions in the Lease no less favorable than those
applied to othertenantsofLandlord;
(3) Tenant shall not, and the Landlord shall not permit the tenant to, sublease or assign all or
any part of the Lease or the Premises, or extend the term or renew the Lease,withoutFranchisor'sprior
writtenconsent;
(4) Landlord shall concurrently provide Franchisor withacopyof any written default notice
sent toTenant and thereupon grant Franchisor the right (but not the obligation)to cure any deficiency or
default underthe Lease, shouldTenant fail to do so, within five(5) days afterthe expiration ofthe period
in whichTenant may cure the default;
(5) ThePremisesshallheusedonlyfortheoperationofaClub Pilates Studio;
(6) Tenant may, without Landlord'sconsent (but subject to providing Landlord with written
noticethereof),atany time assignthisLeaseorsubleasethe whole or any part of thePremisesto
Franchisor or any successor, subsidiary or affiliate ofFranchisor;
(7) fn the event ofan assignment of theLease to Franchisor as described in (6) above,
Franchisormay furtherassign this Lease, subjectto Landlord's consent, such consent nottohe
unreasonably withheld basedontheremainingobligationsofassigneeundertheLease,toaduly
©2017^bâtesâocbise,^
2017âncbise Agreement
authorized franchisee ofFranchisor, and thereupon Franchisor shall be released from any further liability
under the Lease;
(8) Until changed by Franchisor, notice to Franchisor shall be sent as follows:

3185 Pullman Street
Attn: Shaun Grove
(9) None of the provisions in this Addendum or any rights granted Franchisor hereunder,
may be amended absent Franchisor's prior written consent.
(10)
AGREED:
TENANT LANDLORD
By: By:
Its: Its:
Date: Date:

LIST OF STATE ADMINISTRATORS AND AGENTS FOR SERVICE OF PROCESS
CALIFORNIA ILLINOIS
Commissioner of Business Oversight Franchise Bureau
One Sansome Street Illinois Attorney General
Suite 600 500 South Second Street
San Francisco, CA 94104 Springfield, Illinois 62706
Tel: (415) 972-8559 (217) 782-4465
Fax: (415) 972-8590
Toll Free: (866) 275-2677 INDIANA
CONNECTICUT Indiana Secretary of State
Department of Banking 201 State House
Securities and Business Investments Division Indianapolis, Indiana 46204
260 Constitution Plaza
Hartford, Connecticut 06103-1800 (state agency)
Tel: (860) 240-8230 Securities Commissioner
Indiana Secretary of State
FLORIDA Securities Division, Franchise Section
Tom Kenny, Regulatory Consultant 302 West Washington Street,
Department of Agriculture & Consumer Services Room E - l l l
Division of Consumer Services Indianapolis, Indiana 46204
P.O. Box 6700 Tel: (317) 232-6681
Tallahassee, Florida 32314
Tel: (850) 488-2221 IOWA
Fax: (850) 410-3804 Dennis Britson
Director of Regulated Industries Unit
HAWAII Iowa Securities Bureau
(for service of process) 340 Maple
Commissioner of Securities of the State of Hawaii Des Moines, Iowa 50319-0066
Department of Commerce and Consumer Affairs Tel: (515) 281-4441
Business Registration Division Fax: (515) 281-3059
Securities Compliance Branch email: iowasec@iid.state.ia.us
335 Merchant Street, Room 203
Honolulu, Hawaii 96813 MARYLAND
(state agency) Maryland Securities Commissioner
Department of Commerce & Division of Securities
Consumer Affairs 200 St. Paul Place
King Kalakaua Building Baltimore, Maryland 21202-2020
335 Merchant Street, Rm 203
Honolulu, Hawaii 96813 (state agency)
Tel: (808)586-2722 Office of the Attorney General
Fax: (808) 587-7559 Division of Securities
200 St. Paul Place
Baltimore, Maryland 21202-2020
Tel: (410) 576-6360

MICHIGAN NEW YORK
(for service of process) (state agency)
Michigan Department of Consumer and Industry Services Office of the New York State Attorney
Bureau of Commercial Services General
Corporations Division Investor Protection Bureau
PO Box 30054 Franchise Section
Lansing, Michigan 48909 120 Broadway, 23rd Floor
Tel: (517) 241-6470 New York, NY 10271-0332
(212) 416-8236 Phone
MICHIGAN (212)416-6042 Fax
(state agency)
Department of the Attorney General NORTH DAKOTA
Consumer Protection Division (for service of process)
Antitrust and Franchise Section North Dakota Securities Commissioner
670 Law Building North Dakota Securities Department
Lansing, Ml 48913 600 East Boulevard, 5th Floor
Tel: (517) 373-7117 Bismarck, North Dakota 58505-0510
MINNESOTA {state agency)

Commissioner of Commerce North Dakota Securities Department
85 Seventh Place East, Suite 500 600 East Boulevard, 5th Floor
St. Paul, MN 55101-2198 Bismarck, North Dakota 58505-0510
Tel: (651) 539-1600 Tel: (701) 328-2910
NEBRASKA OREGON
Gene Schenkelberg, Securities Analyst Director, Department of Consumer &
Department of Banking & Finance Business Services
1200 N. Street, Suite 311 Division of Finance & Corporate Securities
P.O. Box 95006 Labor and Industries Building
Lincoln, Nebraska 68509 Salem, Oregon 97310
Tel: (402) 417-3445 Tel: (503) 378-4140
Fax: (503) 947-7862
NEW YORK Email: dcbs.dfcsmail@state.or.us
Attention: New York Secretary of State RHODE ISLAND
New York Department of State Director
One Commerce Plaza, Securities Division
99 Washington Avenue, 6 Floorth
Department of Business Regulation,
Albany, NY 12231-0001 Building 69, First Floor
(518) 473-2492 John 0. Pastore Center
1511 Pontiac Avenue,
Cranston, Rhode Island 02920
Tel: (401) 462 9582

V TEXAS SOUTH DAKOTA
Statutory Document Section Division of Securities
Secretary of State Department of Labor & Regulation
1719 Brazos 124 5. Euclid, Suite 104
Austin, Texas 78701 Pierre, South Dakota 57501
Attn: Dorothy Wilson (605) 773-4823
Tel: (512) 475-1769
WASHINGTON
UTAH (state agency)
Director, Division of Consumer Protection Administrator
Utah Dept. of Commerce Department of Financial Institutions
160 East Three Hundred South Securities Division
SM Box 146704 P.O. Box 9033
Salt Lake City, Utah 84114-6704 Olympia, Washington 98507-9033
Tel: (801) 530-6601 Tel: (360) 902-8760
Fax: (801) 530-6001 Fax: (360) 902-0524
VIRGINIA WISCONSIN
(for service of process) Commissioner of Securities
Clerk o f t h e State Corporation Commission Department of Financial Institutions
1300 East Main Street, 1st Floor P.O. Box 1768
Richmond, Virginia 23219 Madison, Wisconsin 53701-1768
Tel: (608) 266-2801
(state agency)
Director
State Corporation Commission
Division of Securities and Retail Franchising
1300 East Main Street, 9th Floor
Tel: (804) 371-9051
WASHINGTON
Administrator
Department of Financial Institutions
Securities Division
150 Israel Road SW
Tumwater, Washington 98501

Exhibit C
FINANCIAL STATEMENTS

THE BALANCE SHEET AS OF MARCH 31, 2017 AND PROFIT AND LOSS STATEMENT FOR THE
INTERIM PERIOD BEGINNING JANUARY L 2017 AND ENDING MARCH 31,2017 ARE PREPARED
WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES OR SELLERS OF FRANCHISES SHOULD
BE ADVISED THAT NO CERTIFIED PUBLIC ACCOUNTANT HAS AUDITED THESE FIGURES OR
EXPRESSED HIS/HER OPINION WITH REGARD TO THE CONTENT OR FORM.

Balance Sheet
As of March 31,2017
Total
ASSETS
Current Assets
Bank Accounts
Cal United 1593 526,021.20
Cat United MFC 8947 44.201.43
Cash Undeposlted 0.00
Citizens Business Bank 1167 0.00
Money Market 24.66
Total Bank Accounts 570,247.29
Accounts Receivable
Accounts Receivable 4,215,523.90
Total Accounts Receivable 4,215,523.90
Other Current Assets
Accounts Rec Franchise Fee 0.00
Accounts Rec Royalties 3.00
Accounts Receivable - MFC 178,688.00
Accounts Receivable - Pilates S 0.00
Credit Card Receivables 0.00
Employee Advances 0.00
Inventory Asset 656,460.61
Note Receivable 1,000,000.00
Other Receivables 455,970.61
Prepaid Expenses 49.766.80
Prepaid Expenses - GAAP Adj 0.00
Prepaid Insurance 15,017.49
Teacher Training Receivable 105,994.34
Undeposited Funds 5.358.33
Total Other Current Assets 2,467,259.18
Total Current Assets 7,253,030.37
Fixed Assets
Accumulated Depreciation -137,386.79
Autos and Trucks 17,000.00
Computer Equip, and Programming 56,038.69
Computers 9,666.02
Furniture and Equipment 687,027.12
Leasehold Improvements 175,952.69
Video Production and Materials 125,009.36
Web Design & Domain 35,988.75
Total Fixed Assets 969,295.84
Other Assets
Deposits 26,600.00
Intangible Assets
Goodwill 5,782,162.02
Territory Rights 0.00
Trademark 25,000.00
Accumulated Amortization -3,012.67
Total Trademark $ 21,987.33
Total Intangible Assets $ 5,804,149.35
Total Other Assets $ 5,830,749.35
TOTAL ASSETS $ 14,053,075.56
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 807,169.38
Total Accounts Payable $ 807,169.38
Credit Cards
Credit Card 0.00
Total Credit Cards $ 0.00
Other Current Liabilities
Accrued Development Costs 0.00
Accrued Expenses 8,881,372.42
Accrued Expenses - GAAP Adj -6,275,609.10
Accrued Interest 58,749.96
CA Department of Revenue Payable 1.16
Deferred Product Sales 376,036.12
Due to Related Party 0.00
Due to Club Pilates Global 0.00
Due to Club Pilates, LLC 0.00
Total Due to Related Party $ 0.00
Marketing Reserve 44,201.43
Note Payable - LAG Fit 0.00
Sales Tax Agency Payable 0.00
Sales Tax Liability 1,527.12
Sales Tax Payable 0.00
Sales Tax Payable - Sales Tax 38,697.44
Vouchers Unredeemed -4,025.27
Total Other Current Liabilities $ 3,120,951.28
Total Current Liabilities $ 3,928,120.66
Long-Term Liabilities
Deferred Revenues
Deferred area development fee 0.00
Deferred Costs -8,291,201.07
Deferred Prepaid Classes 74,213.20
Deferred Revenue - Equipment Sales 2,483,721.89
Deferred Revenue-Franchise Fees 11,301,165.31
Total Deferred Revenues $ 5,567,899.33
Note Payable • Club Pilates Global 2,025,000.00
Note Payable - Club Pilates LLC 225,000.00
Total Long-Term Liabilities 7,817,899.33
Total Liabilities 11,746,019.99
Equity
Common Units 666,667.00
Member Capital Contribution 0.00
Member Distributions -2,650.000.00
Opening Balance Equity -353,695.00
Preferred Units 945.095.00
Retained Earnings 328.367.95
Net Income 3.370,620.62
Total Equity 2,307,055.57
TOTAL LIABILITIES AND EQUITY 14,053,075.56
Profit and Loss
January 1, 2017 to March 31, 2017
Total
Income
Franchise Revenues
Franchise Territory Fees 3,116,500.00
Licensing Revenues 150.000.00
Royalties 653,660.49
Total Franchise Revenues $ 3,920,160.49
Other Income 49,479.52
Sales
Equipment Sales 5,132,654.27
Freight Income 576,160.05
Product Sales 637,718.35
Total Sales $ 6,346,532.67
Studio Revenues
Revenues - EFT 229,822.91
Revenues - NMS 103,192.01
Revenues - Private Sessions 11,968.45
Revenues - Product Sales 23,260.94
Revenues - Refunds / Returns -11,224.31
Revenues- Collections 994.00
Total Studio Revenues $ 358,014.00
Teacher Training - net revenues 266,396.00
Total Income s 10,940,582.68
Cost of Goods Sold

Cost of Goods Sold
Equipment Costs 4,150,831.30
Equipment Discounts and Allowances -8.289.31
Franchise Development Fees 1,928,450.00
Freight 15.215.81
Marketing Fund Contributions 8,463.83
Products 423,419.64
Royalty Expense 20,218.74
Transaction Fees 16,130.07
Total Cost of Goods Sold $ 6,554,440.08

Total Cost of Goods Sold $ 6,554,440.08
Gross Profit $ 4,386,142.60
Expenses
Advertising and Promotion 2,316.96
Convention 27,000.00
Franchise Marketing 190.216.51
Other Advertising and Promotion 34,411.80
Recruiting 18,214.69
Total Advertising and Promotion $ 272,159.96
Automobile Expense 3,404.61
Bank and Merchant fees 7.317.43
Business Licenses and Permits 95.00
Comp/Phone/lntemet Expenses 24,173.45
Dues and Subscriptions 23,754.15
Franchise Salaries and Wages 369,981 29
Insurance Expense 10,805.76
Janitorial Expense 5,572.50
Meals and Entertainment 2,044.24
Office Expense 19,412.00
Professional Fees
Accounting and Auditing 15,000.00
Legal Fees 22,777.89
Other Professional Fees 18,574.98
Total Professional Fees $ 56,352.87
Promotional Discounts 19,590.54
Purified Water for Client Use 700.19
Rent Expense 117,225.23
Repairs and Maintenance 1,117.85
Security Alarm 394.77
Studio Salaries and Wages 206,681.23
Suspense 0.00
Taxes - Property 1,498.06
Towel Service 1,344.16
Training Expenses 107,335.52
Travel Expense 21,240.34
Utilities 1.524.22
Total Expenses $ 1,273,725.37
Net Operating Income $ 3,112,417.23
Other Expenses
Depreciation and Amortization 19,800.00
Equipment Lease Payments 3,153.58
Interest Expense 58,750.00

Other Expense 28,769.49
Transaction Costs 22,783.80

Total Other Expense $ 51,553.29
Sale of Assets -391,460.26
Total Other Expenses $ 258,203.39
Net Other Income $ 258,203.39
Net Income $ 3,370,620.62
Year Ended December 31, 2016 and the

Period March 12, 2015 (Date of Inception)
Contents
Balance sheets 3
Statements of income 4
Statements of changes in members' equity 5
Statements of cash flows 6-7

KB
CCRTIHED PUBLIC ACCOUNTANTS
12526 High Bluff Drive, Suite 300. San Diego. CA 92150 • Direct 858.623.2786 • Fax 858.408.24S7
www.ortegacpa.ne:
To the Member of
Liability Company), which comprise the balance sheets as of December 31, 2016 and 2015, and the
related statements of income, changes in members' equity and cash flows for the year ended
December 31, 2016 and for the period of inception (March 12, 2015) to December 31, 2015, and the
related notes to the financial statements.
Management is responsible for the preparation and fair presentation of these financial statements in
presentation of financial statements that arefreeof material misstatements, whether due tofraudor
error.
about whether the financial statements arefreeof material misstatement.
assessment of the risks of material misstatement of thefinancialstatements, whether due tofraudor
error. In making thoseriskassessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
Opinion
financial positions of Club Pilates Franchise, LLC, as of December 31, 2016 and 2015, and the
results of operations and cash flows for the year ended December 31, 2016 and for the period of
inception (March 12, 2015) to December 31, 2015 in accordance with accounting principles
generally accepted in the United States of America.
* /T~vuu^ LLP
March 1,2017
Balance Sheets
Assets 2016 2015

Current Assets
Cash $ 1,870,109 $ 1,330,215
Accounts receivable 680,233 167,534
Inventory 1,235,106 319,199
Prepaid expenses 68,662 88,081
Other current assets 192,168 -
Note receivable - related party 1,000,000 -
Total current assets 5,046,278 1,905,029
Property and Equipment 632,173 563,458
Other Assets
Intangible assets 5,804,149 5,805,816
Deposits 25,400 20,400
Total other assets 5,829,549 5,826,216
Total assets $ 11,508,000 $ 8,294,703
Liabilities and Members' Equity

Current Liabilities
Current portion of long-term debt $ 108,333 $ -
Marketing fund 44,201 710
Due to related parties - 135,400
Total current liabilities 5,428,676 1,710,774
Long-Term Debt 2,291,667 2,500,000
Total other long-term liabilities 2,201,222 357,185
Total liabilities 9,921,565 4,567,959
Members' Equity 1,586,435 3,726,744
Total liabilities and members' equity $ 11,508,000 $ 8,294,703

Statements of Income
Revenue 2016 2015

Franchise revenues
Franchise initiation fees $ 1,359,751 $ 276,667
Franchise royalty fees 739,190 105,506
Developmentfranchiseagreement 115,936 86,949
Product and equipment sales 5,264,423 978,832
Other 624,935 129,434
Studio revenues 1,535,776 1,349,642
Total revenues 9,640,011 2,927,030
Cost of Revenues
Cost offranchiserevenues 4,999,957 885,875
Cost of studio revenues 1,131,892 561,956
Total cost of revenues 6,131,849 1,447,831
Gross Profit 3,508,162 1,479,199
Franchise expenses 2,951,590 1,336,448
Studio expenses 316,340 359,427
Total selling, general & administrative expenses 3,267,930 1,695,875
Income (Loss) From Operations 240,232 (216,676)
Gainfromsale of assets 320,020 450,544
Interest expense (251,371) (211,991)
Interest income 17,000 -
Total other income (expense) 85,649 238,553
Net Income Before Provision of LLC Tax 325,881 21,877
Provision for LLC Tax (12,590) (6,800)
Net Income $ 313,291 $ 15,077

Statements of Changes in Members' Equity
Additional
Common Preferred Paid-in Member Retained
Units Units Capital Distributions Earnings Total
Opening Balance, March 12,2015 $ - $ - $ - $ - $ - $ -

Issuance of666,667 Common Units 666,667 - 666,667
Issuance of2,000,000 Preferred Units - 2,000,000 - - - 2,000,000
Capital contribution - - 1,045,000 - 1,045,000
Net Income - - - - 15,077 15,077
Balance, DecemberSl, 2015 666,667 2,000,000 1,045,000 - 15,077 3,726,744
Capital contribution - - -
Member distributions - (1,054,905) (1,045,000) (353,695) - (2,453,600)
Net Income - - - - 313,291 313,291
Balance, DecemberSl, 2016 $666,667 $ 945,095 $ - $ (353,695) $ 328,368 $1,586,435

Statements of Cash Flows
2016 2015
Net Income $ 313,291 $ 15,077
Depreciation & amortization 92,592 46,737
Bad debt expense 20,000 -
Gainfromsale of assets (320,020) (450,544)
Accounts receivables (532,699) (147,534)
Inventory (942,619) (319,199)
Prepaid expenses 19,419 (88,081)
Other current assets (192,168) -
Deposits (5,000) (20,400)
Marketing fund 43,491 (8,805)
Net cash provided by operating activities 3,965,258 120,368
Proceedsfromsale of assets 443,005 424,103
Purchases of property and equipment (279,369) (402,884)
Issuance of note receivable -relatedparty (1,000,000) .
Net cash (used) provided by investing activities (836,364) 21,219
Cash (IOHS fromfinancingactivities
Proceedsfromrelated party loans - 260,400
Marketing funds contributed as part of member unit issuance - 8,228
Payments on loanfromrelated party (135,400) (125,000)
Member capital contribution - 1,045,000
Member distributions (2,453,600) -
Net cash (used) provided byfinancingactivities (2,589,000) 1,188,628
Net increase in cash and cash equivalents 539,894 1,330,215
Cash and cash equivalents at beginning of year 1,330,215 _
Cash and cash equivalents at end of year $ 1,870,109 $ 1,330,215

Statements of Cash Flows (Continued)
^^^gHg^g
2016 2015
Notes payable to Club Pilates Global, Inc and Club Pilates, LLC
was reduced by $100,000 in exchangeforfranchiseequipment 100,000 $

Marketing fund cash 8,228
Marketing fund liability assumed (9,514)
Deferred revenues assumed
Net assets acquired $ - $ 5,166,667
Long-term debt issued $ - S (2,500,000)
Total noncash source used to acquire net assets $ - $ (5,166,667)

Interest expense $ 188,871 $ 211,476
Income taxes $ 6,800 $ -

7

(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
The Company is a Delaware Limited Liability Company. The Company owns a
Pilates Fitness and Training system ("Club Pilates") that is proprietary to the
Company also owns and operates three Club Pilates studio franchises as of
December 31,2016 and four as of December 31,2015.
On March 12, 2015, the Company acquired the assets, certain liabilities and the
operations of Club Pilates Global, Inc. ("Global") and Club Pilates, LLC ("Pilates
LLC"). Global owned and operated the studio training system "Club Pilates" and
operated by the same shareholders/members.
Nature of Services and Revenue Recognition
The Company offers two types of franchise agreements: A single-unit franchise
agreement and a multi-unit development agreement which gives the franchisee the
right to open two or more units in a particular geographic area.
$49,500 (single unit) to $300,000 (ten units) and is paid to the Company when a
franchisee signs the franchise agreement. In return for the initial franchise fee, the
Company provides site location assistance, training and the other services. The
initial franchise fee is non-refundable and is recognized once the franchise location
is open. Unrecognized franchise fees and related direct costs are deferred until
earned.
8
c^bp^^F^ch^LLC
Notes to Fmanâl Statement
Dumber 3^^6and2015
Note^ Summary ofSignêant Accounting Ponies (Continued)

^ ^ ^ ^ ^ ^
Once the franchisee has completed training and selected a franchise site, the
franchisee pays the Oompanyalnmp-sum nonrefundable payment ranging from
$^000 to $107,000 for the start up package The start up package includes
equipment, fl^mres, height, installation and retail inventory for the new ân^
site, revenue is recognized upon installation and build out of the franchise
location Unearned start-up package revenues and related direct costs are deferred
until earned or incurred.
^ ^ ^ ^ ^ B ^ ^ B ^ ^ ^ ^
The Company assumedafive year Development Agent Agreement from Global

which was entered into on March^l,2014. lnretumfbrafeeof$250,000, Global
granted the developer, the exclusive right to development Club Pilates franchises in
Under the terms of the modified agreement, the developer is to receivelOO^ of all
franchise fees fbrlocationsitdevelops (maximum twenty-si^ locations)during the
periodof March 31, 2014 toDecember 31, 2016. Thedevelopment fee was
initially recorded asdeferredrevenueandhasbeenamortizedandrecognizedas
revenue over the term ofthe agreement.
^ ^ ^ C ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
monthly memberships that provide four, eight, or unlimited credits each month.
Class packages are nonrefundable and revenue is deferred untilthe classes have
been used. Monthly passes are nonrefundable and are recognized as revenue when
received.
The Company offersaClubPilatesTeacher Training Program. The non-refundable
programfeeincludestrainingandmaterialsand isrecognizedasrevenueupon
receipt and delivery of materials. Additional payments are paid to the franchisee
studio that conducts the teacher training Club PilatesTeacherTraining Program
income is included in other revenues.
^ ^ ^ ^ ^ ^
Included inother revenues are referralfeeseamedfromunaffiliated vendors or
other entities to which the Company refers franchisees, referral fees are recognized
as income when earned, referral fees receivable are estimated by management
based on information received from the vendors from whom the fee is due. Actual
amounts received could differ from these estimates, however any such differences
would be immaterial to the financial statements.

Deferred Revenue
Total deferred revenues at December 31, 2016 and 2015 are as follows:
2016 2015
Deferred initiationfranchisefees $ 11,301,165 $ 1,086,916

Deferred start-up packages 2,441,722 465,260
Deferred devefopment agent agreement - 115,936
Deferred product sales 418,036 -
Deferred Pilates classes & training 74,213 115,007
Deferred Costs (8,047,401) (562,350)
Deferred Revenue $ 6,187,735 $ 1,220,769
Short-term $ 3,986,513 $ 863,584

Long-term 2,201,222 357,185
$ 6,187,735 $ 1,220,769
Franchisees are charged a royalty ranging from four (4%) to six (6%) percent
(depending upon when they signed their franchise agreement) of the franchisees'
Under the franchise agreement the franchisees are charged two percent (2%) of
monthly gross revenues for national advertising and marketing services. The
agreement establishes a fund used for qualified advertising and promotional costs.
The balance of the fund is presented as a marketing fund liability on the balance
sheet.
Accounts receivable
debt experience and a review of existing receivables. As of December 31, 2016 and
2015, there were no allowances and all accounts receivable are considered to be
collectible. Bad debt expense for the year ended December 31, 2016 and for the
period ended December 31, 2015 was $20,000 and $0, respectively.
10
c^hp^^F^nch^LLC
Notes to ^ n a n c ^ Statement
December 3^^6and2015
Notel^ Summary ofSigmtieantAeeoun^ngPoheies(Contmued)
Inventory eonsists primarily of finisbed goods and is sta^

eostormarkeL Tbe Company uses average eosts for charging to cost of sales.
^ ^ ^ ^ C ^ ^
Advertising costs are expensed as incurred. For tbe year ended December^!,2016
and for tbe period of Marcbl2,2015to December 31,2015, advertising expense
was $843,012 and $240,948, respectively
^ ^ ^ ^ ^ ^ ^
Tbepreparation offinancialstatementsinconfbrmity with accounting principles
generally accepted in tbe United States of America requires management to make
estimates and assumptions tbat affect tbe reported amounts ofassets and liabilities
and disclosure of contingent assets and liabilities at tbe date of tbe financial
statements and tbe reported amounts ofrevenues and expenses during tbe reporting
^ ^ ^ ^
Goodwill represents the excess ofpurchase price over the fair market value of net
assets acquired in the purchase ofthe Company's operations from Global and
Filates LUC. Goodwill has an indefinite life and is not amortized. Alternatively,
aperiod of fifteen years.
^ ^ ^ ^ ^ ^ ^ ^
Property andequipment arecarried at cost. Depreciation is provided usingthe
straight-line method for financial reporting purposes at rates based on the following
êb design and domain 5tol5years
^

Franchise Stores
2016 2015
Stores at beginning of period 40 29
New stores opened 38 17
Stores closed (4) (6)
Stores at end of year 74 40

Income Taxes
Subsequent Events
12

Property and equipment at December 31, 2016 and 2015 consisted of the following:
2016 2015
Furniture & equipment $ 395,165 $ 394,013

Computers 28,084 28,039
Autos 17,000 17,000
Leasehold improvements 148,896 71,474
Video production and materials 125,009 55,497
Web design and domain 35,606 36,922
749,760 602,945
Less: accumulated depreciation 117,587 39,487
$ 632,173 $ 563,458
Depreciation expense for the year ended December 31, 2016 and for the period of
Intangible assets at December 31, 2016 and 2015 consisted of the following:
2016 2015
Goodwill $ 5,782,162 $ 5,782,162

Intangible assets with indefinite life 5,782,162 5,782,162
Trademarks 25,000 25,000

Less accumulated amortization 3,013 1,346
Intangible assets with defined life 21,987 23,654
Total intangible assets $ 5,804,149 $ 5,805,816
Amortization expense for the year ended December 31, 2016 and for the period of
13
c^bp^^Franch^LLC
Notes to Fmanâl Statement
D^mber^2016and^5
Note^ LongTermDebt
Longêrm debt conned ofthe ^lowmg: 2016 2015
Note payable to C^b Pistes Global Ine ^s $2,160,000 $2,250,000

amendedNovember 2016), interest aeerues at
10^ per annum, requires quarterly interest only
payments starting Mareb 31, 2015 until
September 12, 2017 when tbe note requires
quarterly principal installment payments of
$187,500 plus accrued interest until fully paid
ûne 30, 2020. Subject to subordination of
Senior Debt, as defined in tbe agreement, tbe
note is secured by all assets of tbe company.
Note is related to tbe Company's acquisition of
its operations on March 12,2015.
Note payable to Club Pilates, LLC (as amended 240,000 250,000

November 2016), interest accrues at 10^ per
annum, requires quarterly interest only payments
starting March 31, 2015 until September 12,
2017 when the note requires quarterly principal
installmentpayments of $20,833 plus accrued
interest until fully paid ûne 30, 2020. Subject to
subordination of Senior Debt, as defined in the
agreement, the note is secured by all assets ofthe
acquisition ofits operations on March 12,2015.
2,400,000 2,500,000
Less: current maturities 108,333
Total longterm debt $2,291,667 $2,500,000
Aggregate maturities oflong-term debt are as follows:

Year ended December31,
2017 $ 108,333
2018 833,334
2019 833,334
2020 624,999
Thereafter ^
^

Lease Commitments
The Company assumed and entered into various building leases that are classified
as operating leases.
Total rent expense for the year ended December 31, 2016 and for the period of
March 12, 2015 to December 31, 2015 was $ 341,422 and $290,931, respectively.
2017 $349,769
2018 266,815
2019 116,779
2020 51,612
Thereafter
members/shareholders, collectively owned a 25% membership interest in the
Company up to November 3, 2016, at which point all common unit shares were
sold to LAG Fit, Inc.. As of December 31, 2016 and 2015, the Company has two
notes payable to Club Pilates, LLC and Club Pilates Global, Inc. for a total of
$2,400,000 and $2,500,000 respectively (See Note 4). For the year ended
December 31, 2016 and for the period of March 12, 2015 to December 31, 2015
the Company paid interest on these notes of $187,500 and $211,476, respectively.
LAG Fit, Inc. (LAG Fit), 100% holder of preferred units and 100% owner of all
common units as of November 3, 2016, advanced the Company $135,000 during
the 2015 year at a rate of 10%. The loan was repaid in full in March, 2016.
Interest paid on this loan in 2016 was $3,514 and $0 in 2015. As of December 31,
2016 and 2015 the Company owed LAG Fit $0 and $135,000 respectively.
As of December 31, 2016, the Company has a note receivable from LAG Fit in the
amount of $1,000,000. The note bears interest of 3.5% and matures on July 7,
2017. As of December 31, 2016, the Company has accrued $16,670 in interest
income related to this note.
15
Note 7. Members' Equity

classes of ownership interest. Common Units and Preferred Units.
There were 2,000,000 issued Preferred Units as of December 31, 2015. The
Preferred Units are non-voting with a 10% preferred return. When the Company
declares distributions or liquidates, Preferred Units have preferred distribution and
liquidation preference equal to the amount of unpaid return plus the original
capital ($2,000,000) and are not entitled to any further distribution. During the
year ended December 31, 2016, the Company made distributions totaling
$2,453,600 of which $353,695 paid the accumulated Preferred Units' 10%
preferred return, $1,054,905 paid down the 2,000,000 Preferred Units' original
capital, $1,045,000 paid back the Additional Paid-in Capital. As of December 31,
2016, there are 945,000 preferred units outstanding with $2,330 in cumulative
preferred returns in arrears.
16
The Period
March 12, 2015 (Date of Inception)
Contents
Balance sheet 3
Statement of income 4
Statement of changes in members' equity 5
Statement of cash flows 6-7

KB
CERTIFIED PUBLIC ACCOUNTANTS
5151 Shoreham Place, Suite 1 0 0 , San Diego. CA 92122 • Direct 858.623.2786 • Fax 858.408.2457
www.ortegacpa.net
To the Members of
Liability Company), which comprise the balance sheet as of December 31, 2015, and the related
statements of income, changes in members' equity and cash flows for the period of inception (March
12, 2015) to December 31,2015, and the related notes to the financial statements.
Management is responsible for the preparation and fair presentation of these financial statements in
presentation of financial statements that are free of material misstatements, whether due to fraud or
error.
about whether the financial statements arefreeof material misstatement.
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
preparation and fair presentation of the financial statements in order to design audit procedures that
Opinion
In our opinion thefinancialstatements referred to above present fairly, in all material respects, the
financial positions of Club Pilates Franchise, LLC, as of December 31, 2015, and the results of
operations and cash flows for the period of inception (March 12, 2015) to December 31, 2015 in
accordance with accounting principles generally accepted in the United States of America.
* HcwL, LLP
March 1,2016
Balance Sheet
December 31, 2015
Assets
Current Assets
Cash 1,330,215
Inventory 319,199
i it-jjaiu t A p t i o t a 00,UOA
Total current assets 1,905,029
Property and Equipment 563,458

Other Assets
Deposits 20,400
Total other assets 5,826,216
Total assets $ 8,294,703
Liabilities and Members* Equity

Current Liabilities
Accounts payable $ 574,970
Marketing fund 710
Due to related parties 135,400
Total current liabilities 1,710,774
Long-Term Debt 2,500,000
Total liabilities 4,567,959
Members' Equity 3,726,744
Total liabilities and members' equity $ 8,294,703

Statement of Income
Revenue
Franchise revenues
Franchise initiation fees $ 276,667
Franchise royalty fees 105,506
Developmentfranchiseagreement 86,949
Product and equipment sales 978,832
Other 129,434
Studio revenues 1,349,642
Total revenues 2,927,030
Cost of Revenues
Cost offranchiserevenues 885,875
Cost of studio revenues 561,956
Total cost of revenues 1,447,831
Gross Profit 1,479,199
Franchise expenses 1,336,472
Studio expenses 359,403
Total selling, general & administrative expenses 1,695,875
Loss From Operations (216,676)
Gainfromsale of assets 450,544
Interest expense (211,991)
Total other income (expense) 238,553

Net Income Before Provision of LLC Tax 21,877
Provision for LLC Tax (6,800)
Net Income $ 15,077

Additional
Common Preferred Paid-in Accumulated
Units Units Capital (Deficit) Total
Opening Balance, March 12, 2015 $ - $

Issuance of666,667 Common Units 666,667 666,667
Issuance of2,000,000 Preferred Units 2,000,000 2,000,000
Capital contribution 1,045,000 1,045,000
Net Income 15,077 15,077
Balance, Deceniber31, 2015 $666,667 $2,000,000 $1,045,000 $ 15,077 $3,726,744

Statement of Cash Flows

Net Income $ 15,077
Depreciation & amortization 46,737
Gainfromsale of assets (450,544)
Inventory (319,199)
Prepaid expenses (88,081)
Deposits (20,400)
Accounts payable 574,970
Marketing fimd (8,805)
Proceedsfromsate ofassets 424,103
Purchases of property and equ^ment (402,884)
Net cash provided by investing activities 21,219
Gash flows fromfinancingactivities
Proceedsfromrelated party 135,400
Proceedsfromrelated party loans 125,000
Marketing funds contributed as part of member unit issuance 8,228
Payments on loanfromrelated party (125,000)
Net cash provided byfinancingactivities 1,188,628
Cash and cash equivalents at beginning of year -
Cash and cash equivalents at end of year $ 1,330,215


Accounts receivable $ 20,000
Property & equ^ment 250,991
Marketingfondcash 8,228
Marketingfondliability assumed (9,514)
Deferred revenues assumed (910,199)
Net assets acquired $ 5,166,667
Total noncash source used to acquire net assets $ (5,166,667)
Interest expense $ 211,476
Income taxes $ -

7
Club ^ ^ F r a n c h ^ LLC
ôtes to Fmandal Statement
D^mber^^s
NoteL Summary of Sigm^cant Accounting Pohdes

This summa^ of significant a c c o ^
(the Company) is presented to assist innndcrstanding the Company's financial
statements. The financial statements and notes arc representations of the
^ ^ r ^ ^ ^ ^ ^ ^
The Company isaDclawarc Limited Liability Company. The Company ownsa
Pilates studio and training system (^Club Pilates") that is proprietary to the
Company also owns andoperates five (four as of year-end) ClubPilates studio
franchises.
Cn March 12,2015,the Company acquired the assets^certain liabilitiesand the
operations ofClub Pilates Global, Inc^
LLC"). Global owned and operated the studio training system ^Club Pilates" and
operated by the same shareholders^members.
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ B ^ ^ ^ ^
TheCompany offers two types of franchise agreements: Asingle-unit franchise

agreementandamulti-unitdevelopmentagreementwhich gives the franchisee the
right to open three or more units inaparticular geographic area.
^49,500 (single unit) to ^210,000 (six units) and is paid to the Company whena
franchisee signs the franchise agreement. In return for tbe initial franchise fee, the
Company provides sitelocationassistance,training and the other services. The
initial franchise fee is non-refundable and is recognised once the franchise location
isopen. Unrecogniêdfranchisefees andrelateddirect costs aredeferred until
earned.
^
c^bp^^Franch^LLC
ôtes to Fmanâl Statement
D^mb^^2015
NoteL Summary ofSignânt Accounting Pohe^(Gon^nu^^

^ ^ ^ ^ ^ ^ ^
Once the franchisee has completed teaming and selected a franchise site, the
franchisccpaysthcCompanyaltm^p-stm^nomcfundahlc payment tanging from
^ , 0 0 0 to ^7,000 forthe startup package. The startuppackagc includes
equipment,fixtures,freight,installation and inventoryfr^rthe new franchises!^
revenue isrecogni^cdupon installationandhuildout of thefranchiselocation.
Unearned start-uppackagcrcvcnucsandrclatcd direct costs arc dcfcrrcduntil
catucd or incurred.
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
The Company assumcdafivc year Development Agent Agreement from Olohal
which was entered into on March^l,2014 fn return fbrafccof^250,000,Clohal
granted the developer, the exclusive right to development Cluh Pilatesfranchisesin
Under the terms ofthe modified agreement, the developer is to receive 100^ ofall
franchise fees for locations it develops (maximum twenty-six locations) during the
period ofMarch^l,2014 to December 31,2016. The development fee has heen
recorded as deferred revenue and is heing amortized and recognised as revenue
over the term ofthe agreement.
^ ^ ^ C ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
monthly memberships that provide four,eight,orunlimitedcredits each month.
Class packages are nonrefundable and revenue is deferred until the classes have
been used. Monthly passes are nonrefundable and are recognised as revenue when
received.
The Company offersaClub PilatesTeacherTraining Program. The program fee is
^4,750 and includes training and materials. Theprogramfeeincludesa^2,000
nonrefundable deposit for purchase ofmaterials and is recognised as revenue upon
receipt and delivery of materials. The remaining balance of^2,750 is paid to the
franchisee studio that conducts the teaching training.
December 31, 2015

Deferred Revenue
Total deferred revenues at December 31, 2015 as follows:
Deferred initiationfranchisefees $1,086,916

Deferred start-up packages 465,260
Deferred Costs (562,350)
Deferred Revenue $1,220,769
Long-term 357,185
$1,220,769
Franchisees are charged a royalty ranging from two (2%) to six (6%) percent
(depending upon when they signed theirfranchiseagreement) of the franchisees'
Under thefranchiseagreement thefranchiseesare charged one percent (1%), two
percent (2%) effective January 2016, of monthly gross revenues for national
advertising and marketing services. The agreement establishes an agency
relationship between the Company and the franchisees, and the fees are recorded as
a liability and qualified advertising and promotional costs are charged against it.
The liability is presented as marketing fund liability on the balance sheet.
Accounts receivable
debt experience and a review of existing receivables. As of December 31, 2015,
there are no allowances and all accounts receivable are considered to be collectible.
Inventory
Inventory consists primarily of finished goods and is stated at the lower of average
10
c^bp^^Franch^LLC
Notes to Fmandal Statement
Dêmber^^^
NoteL Summary ofSigmêant Accounting Pohcies (Continued)

^^r^^G^^
Advertising costs arc expensed asincnrrcd. For the period of March i ^ 2 0 i 5 t o
Dcccmhcr3i,20i5,advertising expense was $240,948.
^ ^ ^ ^ ^ ^ ^
Thcprcparationoffinanciaistatcmcntsinconfbrmity withaccountingprincip^
generally accepted in d^c United States ofAmcrica requires management to make
and disclosure of contingent assets and liabilities at the date ofthe financial
statements and the reported amounts ofrevenues and expenses during the reporting
^ ^ ^ ^
Goodwill represents the excess ofpurchase price over the fair market value of net
Filates LUC. Goodwill has an indefinite life and is not amortized. Alternatively,
aperiod of fifteen years.
^ ^ ^ ^ ^ ^ ^ ^
Property andequipment are carried at cost Depreciationisprovided using the
straight-line method for financial reporting purposes at rates based on the following
êb design and domain 5tol5years
^^^^^^r^
Stores at beginning of period 29

New stores opened 17
Stores closed (6)
Stores at end ofyear 40
^
December 31,2015

Income Taxes
Subsequent Events
which thefinancialstatements were available to be issued.
Property and equipment at December 31, 2015 consisted of the following:
Furniture & equipment $394,013
Computers 28,039
Autos 17,000
Leasehold improvements 71,474
Video production and materials 55,497
Web design and domain 36.922
602,945
Less: accumulated depreciation 39,487
$563,458
Depreciation expense for the period of March 12, 2015 to December 31, 2015 was
$39,487.
12
December 31,2015

Intangible assets at December 31, 2015 consisted of the following:
Goodwill $ 5.782.162
Intangible assets with indefinite life 5,782,162
Trademarks 25,000
Less accumulated amortization 1,346
Intangible assets with define life 23,654
Total intangible assets $ 5.805.816
Amortization expense for period of March 12, 2015 to December 31, 2015 was
$1,346.
Note payable to Club Pilates Global, Inc., interest $2,250,000

Note payable to Club Pilates, LLC, interest 250,000

2,500,000
Less: current maturities
Total long term debt $2,500,000

2016 ' $
2017 2,500,000
Thereafter
$2,500,000
13
December 31,2015

Lease Commitments
The Company assumed various building leases that are classified as operating
leases.
Total rent expense was $290,931 for the period of March 12, 2015 to December 31,
2015.
2016 $434,207
2017 327,769
2018 236,215
2019 116,779
2020 51,612
Thereafter
December 31, 2015, the Company has two notes payable to Club Pilates, LLC and
Club Pilates Global, Inc. for a total of $2,500,000 (See Note 4). For period of
March 12, 2015 to December 31, 2015 the Company paid $211,476 in interest on
these notes.
During the period of March 12, 2015 to December 31, 2015, Club Pilates, LLC
and Club Pilates Global, Inc. had collectively advanced the Company $38,404 in
cash. As of December 31, 2015, the advances had been paid in full.
The Club Pilates, LLC and Club Pilates Global, Inc shareholders, own and operate
a Company franchise. The following is a summary of transactions that occurred
between the Company and the majority shareholder's owned franchises.
Product and equipment sales to shareholder
owned franchise $ 3,472
14
c^bp^sF^C^LLC
Notes to Finance sêments
December 3^2015
Note^ Related PartyTransaetions(Gentinued)

LAOFi4ê ( L A G F ^ ^
ownership oftbe Company, loaned dê Company $125,000 d u r i n g ^
rateofl0% ForperiodofMareh 12,2015 toDeeember^l,2015 theCompany
paid$ll,648mlnterest on this loan. As ofDeeemher^l,2015,the loan had heen
paldmfhll.
In December 2015,LAC FltadvaneedtheCompany$135,000. The advance bears
interest atl0% and Is payable on demand. Tbe amount is reflected on the balance
sheet as ^due to related parties".
Note^ Members^qulty
The limited liability company operating agreement, as amended Marchl,2015,
authorizes theCompany toissneinterest inthe Company inthefbrm of two
classes ofownership interest, Common L^nits and Preferred L^nits.
Thereare666,667authorizedandissuedCommon^nits. CommonL^nitsare
entitled to their allocable interest of profits and losses as well as alldistributions
from the Company. Common l^nits have voting rights.
There are 2,000,000 issued Preferred Llnits. The Preferred Llnits are nonvoting
with a 10% preferred return. When the Company declares distributions or
liquidates,Preferred^nitshavepreferreddistributionandliquidationpreference
equal to the amount ofunpaid return plus the original Capital ($2,000,000) and is
notentitled toany further distribution.. AsofDecember31,2015, there was
approximately$161,000 in cumulative preferred returns in arrears on the Preferred
Llnits, and no distributions have been declared by the Company.
^
Exhibit D

CLUB PILATES
[Note: Dates and Answers Must Be Completed

in the Prospective Franchisee's Own Handwriting.]
Since the Prospective Franchisee (also called "me/' " o u r " "us/' "we" and/or " I " in this document) and
Club Pilates {also called the "Franchisor" or "CLUB PILATES") both have an interest in making sure that no
misunderstandings exist between them, and to verify that no violations of law might have occurred, and
understanding that the Franchisor is relying on the statements l/we make in this document, l/we assure the
Franchisor as follows:
A. The following dates and information are true and correct:
1. , 20 The date on which l/we received a Uniform Franchise Disclosure

Document about a Franchise.
Initials
2. , 20 The date when l/we received a fully completed copy (other than
signatures) of the Franchise Agreement, Development
Initials Agreement (if appropriate) and all other documents l/we later
signed.
3. , 20 The earliest date on which l/we signed the Franchise Agreement,

Development Agreement or any other binding document (not
Initials including any Letter or other Acknowledgment of Receipt.)
4. , 20 The earliest date on which l/we delivered cash, check or other

consideration to the Franchisor, or any other person or company.
Initials
B. Representations and Other Matters:
1. No oral, written, visual or other promises, agreements, commitments, representations, understandings,

"side deals," options, rights-of-first-refusal or otherwise of any type (collectively, the "representations"),
including, but not limited to, any which expanded upon or were inconsistent with the Disclosure Document, the
Franchise Agreement, or any other written documents, have been made to or with me/us with respect to any
matter (including, but not limited to, advertising, marketing, site location and/or development, operational,
marketing or administrative assistance, exclusive rights or exclusive or protected territory or otherwise) nor have
l/we relied in any way on any such representations, except as expressly set forth in the Franchise Agreement, or
a written Addendum thereto signed by the Prospective Franchisee and the Franchisor, except as follows:
2. No oral, written, visual or other claim, guarantee or representation (including, but not limited to, charts,

tables, spreadsheets or mathematical calculations to demonstrate actual or possible results based on a
combination of variables, such as multiples of price and quantity to reflect gross sales, or otherwise), which
stated or suggested any specific level or range of actual or potential sales, costs, income, expenses, profits, cash
flow, tax effects or otherwise (or from which such items might be ascertained), from franchised or non-
franchised units, was made to me/us by Franchisor, its affiliates or agents/representatives, nor have l/we relied
in any way on any such, except for information (if any) expressly set forth in Item 19 ofthe Franchisor's Disclosure
Document (or an exhibit referred to therein), except as follows:
3. No contingency, prerequisite, reservation or otherwise exists with respect to any matter (including, but
not limited to, the Prospective Franchisee obtaining any financing, the Prospective Franchisee's selection,
purchase, lease or otherwise of a location, any operational matters or otherwise) or the Prospective Franchisee
fully performing any of the Prospective Franchisee's obligations, nor is the Prospective Franchisee relying on the
Franchisor or any other entity to provide or arrange financing of any type, nor have l/we relied in any way on
such, except as expressly set forth in the Franchise Agreement, Development Agreement (if and as appropriate)
or a written Addendum thereto signed by the Prospective Franchisee and the Franchisor, except as follows:
4. The individuals signing for the "Prospective Franchisee" constitute all of the executive officers, partners,
shareholders, investors and/or principals of the Prospective Franchisee and each of such individuals has received
the Uniform Franchise Disclosure Document and all exhibits and carefully read, discussed, understands and
agrees to the Franchise Agreement, Development Agreement (if and as appropriate), each written Addendum
and any Personal Guarantees.
5. l/we have had an opportunity to consult with an independent professional advisor, such as an attorney
or accountant, prior to signing any binding documents or paying any sums, and the Franchisor has strongly
recommended that l/we obtain such independent professional advice, l/we have also been strongly advised by
the Franchisor to discuss my/our proposed purchase of, or investment in, a CLUB PILATES Studio Franchise with
existing Franchisees prior to signing any binding documents or paying any sums and l/we have been supplied
with a list of existing CLUB PILATES Studio Franchisees.
6. I confirm that, as advised, I've spoken with past and/or existing CLUB PILATES Studio Franchisees, and
that I made the decision as to which, and how many, CLUB PILATES Studio Franchisees to speak with.
7. l/we understand that: entry into any business venture necessarily involves some unavoidable risk of loss
or failure, the purchase of a CLUB PILATES Franchise for anv other) is a speculative investment, an investment
beyond that outlined in the Disclosure Document may be required to succeed, there exists no guaranty against
possible loss or failure in this or anv other business and the most important factors in the success of anv CLUB

PILATES Franchise, including the one to be operated bv me/us, are mv/our personal business, marketine, sales,
management, judgment and other skills.
If there are anv matters inconsistent with the statements in this document, or if anyone has suggested
that I sign this document without all of its statements being true, correct and complete, l/we will fa) immediately
inform the President of Club Pilates Franchise, LLC (949/346-9794), and fb) make a written statement regarding
such next to my signature below so that the Franchisor may address and resolve anv such issuefs) at this time
and before either party goes forward.
l/we understand and agree that the Franchisor does not furnish or endorse, or authorize its salespersons
or others to furnish or endorse, any oral, written or other information concerning actual or potential sales, costs,
income, expenses, profits, cash flow, tax effects or otherwise (or from which such items might be ascertained),
from franchised or non-franchised units, that such information (if any) not expressly set forth in Item 19 of the
Franchisor's Disclosure Document (or an exhibit referred to therein) is not reliable and that l/we have not relied
on it, that no such results can be assured or estimated and that actual results will vary from unit to unit, franchise
to franchise, and may vary significantly.
l/we understand and agree to all of the foregoing and represent and warrant that all of the above
statements are true, correct and complete.
Date:
PROSPECTIVE FRANCHISEE (Individual) PROSPECTIVE FRANCHISEE (Corp., LLC or Partnership)

[Must be accompanied by appropriate personal
guarantee(s)]
Signature
Legal Name of Entity

Printed Name
a
State of incorporation, formation, etc.
Signature
By:
Name
Printed Name
Signature
Title:

2017 Franchise Disclosure Document —Exhibits
Exhibit E
TABLE OF CONTENTS OF THE OPERATIONS MANUAL

CLUB PILATES
OPERATIONS MANUAL
TABLE OF CONTENTS
1 ...
Cumulative Pages per
Chapter Section Page# Section
1 Real Estate 1 20 .
2 Getting Your Business Started 21 9
3 Construction & Build out 30 65
4 Sales 95 62
5 Teacher training 157 15
6 CP Training, Services & Classes 172 16
7 Day to Day operations 188 48
8 Markeing 236 49 i
9 Retail 285 j
9
10 Accounting & Finance 294 11
11 Resale, Transfer, Renewal & Closing 305 3
12 Recruiting
- J
308 10
! i
Total ! 317
!
\

Exhibit F

(FRANCHISEE") and , an individual ("GUARANTOR") enter

into this General Release on , with reference to the following facts:
1. On , Club Pilates Franchise, LLC, a Delaware limited liability company

("FRANCHISOR"), and FRANCHISEE entered into a Franchise Agreement (the "Franchise Agreement") to operate a
CLUB PILATES Franchised Business located at (the "Premises"). GUARANTOR
guaranteed FRANCHISEE'S performance under the Franchise Agreement pursuant to a Guarantee and Assumption of
Obligations (the "Guarantee"). In consideration of FRANCHISOR'S processing and approval of
, the Franchise Agreement provides that
FRANCHISEE must sign this General Release as a condition to such . All capitalized terms not otherwise
defined in this General Release shall have the same meaning as in the Franchise Agreement and/or the Guarantee.
2. For valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
FRANCHISEE and GUARANTOR hereby release and forever discharge FRANCHISOR, its parents and subsidiaries and
the directors, officers, employees, attorneys and agents of said corporations, and each of them, from any and all
claims, obligations, liabilities, demands, costs, expenses, damages, actions and causes of action, of whatever nature,
character or description, known or unknown (collectively "Damages"), which arose on or before the date of this
General Release, including any Damages with respect to the Franchise Agreement, the Franchised Business, the
Premises and the Guarantee. FRANCHISEE waives any right or benefit which FRANCHISEE or GUARANTOR may have
under Section 1542 of the California Civil Code or any equivalent law or statute of any other state. Section 1542 of the
California Civil Code reads as follows:
"Section 1542. Certain claims not affected by general release. A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the time of executing this
release, which if know by him must have materially affected his settlement with the debtor."
3. This General Release sets forth the entire agreement and understanding of the parties regarding the
subject matter of this General Release and any agreement, representation or understanding, express or implied,
heretofore made by any party or exchanged between the parties are hereby waived and canceled.
4. This Agreement shall be binding upon each ofthe parties to this General Release and their respective
heirs, executors, administrators, personal representatives, successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year set forth
above.
FRANCHISEE:
By:
Print Name:
Title:
GUARANTOR:
, an individual

Exhibit G
STATE SPECIFIC ADDENDA

ADDITIONAL STATE DISCLOSURES
If the franchise is located in or if franchisee is a resident of any of the following states, then the designated
provisions in the Uniform Franchise Disclosure Document ("Disclosure Document") and Franchise Agreement will
be amended as follows:
CALIFORNIA
California Corporations Code, Section 31125 requires the franchisor to give the franchisee a disclosure
document, approved by the Department of Business Oversight, prior to a solicitation of a proposed material
modification ofan existing franchise.
Our website has not been reviewed or approved by the California Department of Business Oversight.
Any complaints concerning the content ofthis website may be directed to the California Department of Business
Oversight at www.dbo.ca.gov.
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS
RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
1. The following language is added to the end of Item 3 of the Disclosure Document:
Neither Club Pilates Franchise, LLC, nor any person identified in Item 2, or an affiliate or
franchise broker offering franchises under our principal trademark is subject to any currently
effective order of any national securities association or national securities exchange, as defined in
the Securities and Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such
person from membership in such association or exchange.
2. The following paragraphs are added at the end of Item 17 of the Disclosure Document:
The Franchise Agreement requires franchisee to execute a general release of claims upon
renewal or transfer of the Franchise Agreement. California Corporations Code Section 31512
provides that any condition, stipulation or provision purporting to bind any person acquiring any
franchise to waive compliance with any provision of that law or any rule or order thereunder is
void.
California Business and Professions Code Sections 20000 through 20043 provide rights to
franchisees concerning termination or non-renewal of a franchise. If the Franchise Agreement
contains a provision that is inconsistent with the law, the law will control.
The Franchise Agreement provides for termination upon bankruptcy. This provision may
not be enforceable under federal bankruptcy law (11 U.S.C.A. Sec. 101 et seq.).
The Franchise Agreement contains a covenant not to compete which extends beyond the
termination ofthe franchise. This provision may not be enforceable under California law but we
will enforce it to the extent enforceable.

The Franchise Agreement requires a ^
is located This provision may not he enforceable under Caiiforniaia^^
the extent enforceable.
The Franchise Agreement requires binding arbitration. The arbitration will occur in
Orange County, California, with the costs being born^
party shall be entitled torecoverreasonablecompensationforexpenses, costs and feesin
connection with arbitration, including reasonable attorney's fees. Prospective franchisees are
encouragedtoconsultprivatelegalcounseltodeterminetheapplicabilityofCaliforniaandfederal
laws(suchas8usinessandProfessionsCode5ection20040.5CodeofCivilProcedureSectionl281,
andtheFederalArbitrationAct^to any provisions ofafranchise agreement restricting venue toa
forum outside the State of California.
© 2 0 1 7 ^ ^ ^ ^ ^ e , t ^
2 0 1 7 ^ ^ ^ 0 ^ o s o ^ O o c u m e o t —5xh^5
HAWAII
These franchises will be/ have been filed under the Franchise Investment Law ofthe State of Hawaii. Filing
does not constitute approval, recommendation or endorsement by the Director of Commerce and Consumer
Affairs or a finding by the Director of Commerce and Consumer Affairs that the information provided herein is true,
complete, and not misleading.
The Franchise Investment Law makes it unlawful to offer or sell any franchise in this state without first
providing to the prospective franchisee, or subfranchisor, at least seven days prior to the execution by the
prospective franchisee of any binding franchise or other agreement, or at least seven days prior to the payment of
any consideration by the franchisee, or subfranchisor, whichever occurs first, a copy of the Disclosure Document,
together with an copy of all proposed agreements relating to the sale of the franchise.
This Disclosure Document contains a summary only of certain material provisions of the franchise
agreement. The contract or agreement should be referred to for a statement of all rights, conditions, restrictions
and obligations of both the franchisor and the franchisee.

ILLINOIS
1. The "Summary" section of Item 17(v), entitled Choice of forum, is deleted in its entirety.
2. The "Summary" section of Item 17(w), entitled Choice of law, is deleted and replaced with the following:
Illinois law applies.
3. Illinois law governs the agreements) between the parties to this franchise.
4. Any provision in a franchise agreement that designates jurisdiction or venue in a forum outside of Illinois
is void, provided that arbitration may take place outside of Illinois. 815 ILCS 705/4 (West 2010)
5. Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive
compliance with any provision of the Illinois Franchise Disclosure Act or any other law of Illinois is void. 815 ILCS
705/41 (West 2010)

ILLINOIS
The Franchise Agreement and Development Agreement are specifically amended as follows:
In recognition of the requirements of the Illinois Franchise Disclosure Act of 1987 (as amended), the parties
to the attached Franchise Agreement ("Agreement") agree as follows:
1. Governing Law.
a. Section 16.7 of the Franchise Agreement, "CHOICE OF LAWS," is deleted in its entirety and replaced
with the following:
EXCEPT TO THE EXTENT GOVERNED BY THE UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT,
15 U.S.C. SECTIONS 1051 ET SEQ.), THE FEDERAL ARBITRATION ACT, OR OTHER FEDERAL LAW, THIS
AGREEMENT ANDTHE RIGHTS OF THE PARTIES HEREUNDER SHALL BE INTERPRETED AND CONSTRUED
UNDER THE LAWS OF THE STATE OF ILLINOIS.
b. Section 21(A) of the Development Agreement is hereby amended to provide that Illinois law governs
the agreements between the parties to this franchise.
3. Section 4 of the Illinois Franchise Disclosure Act provides that any provision in a franchise
agreement/development agreement that designates jurisdiction or venue outside of the State of Illinois
is void. However, a franchise agreement/development agreement may provide for arbitration in a venue
outside of Illinois.
4. Section 41 of the Illinois Franchise Disclosure Act provide that any condition, stipulation or provision
purporting to bind any person acquiring any franchise to waive compliance with the Illinois Franchise
Disclosure Act or any other law of Illinois is void. Accordingly, insofar as the Franchise Agreement
requires you to waive your rights under the Illinois franchise law, these requirements are deleted from
the Franchise Agreement. This provision will not prevent the franchisor from requiring you to sign a
general release of claims as part of a negotiated settlement of a dispute or actual lawsuit filed under any
of the provisions of the Act, nor shall it prevent the arbitration of any claim pursuant to the provisions
of Title 9 o f t h e United States Code.
Club Pilates Franchise, LLC Franchisee:,
By: By:
Title: Title:

MARYLAND
1. The "Summary" section of Item 17(c) entitled Requirements for vou to renew or extend, and the
"Summary" section of Item 17(m) entitled Conditions for our approval of transfer, is amended by adding the
following:
Any general release you sign shall not apply to the extent prohibited by the Maryland Franchise
2. The "Summary" section of Item 17(h) entitled "Cause" defined (defaults which cannot be cured), is
amended by adding the following:
The Franchise Agreement provides for termination upon your bankruptcy. This provision might
not be enforceable under federal bankruptcy law (11 U.S.C. Sections 101 et seq.), but we will
enforce it to the extent enforceable.
3. The following are added to the end of the chart in Item 17:
Despite any contradicting provision in the Franchise Agreement, you have 3 years from the date
on which we grant you the franchise to bring a claim under the Maryland Franchise Registration
and Disclosure Law.
A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise

MARYLAND
Any provision requiring Franchisee to execute a general release of any and all claims against Franchisor shall not
apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
Termination upon bankruptcy ofthe Franchisee might not be enforceable under federal bankruptcy law (11 U.S.C.
Sections 101 et seq.), but Franchisor intends to enforce it to the extent enforceable.
Sections 17.3 and 17.4 shall be supplemented by the following additional language:
PROVIDED, HOWEVER, THAT THIS LIMITATION OF CLAIMS SHALL NOT ACT TO REDUCE
THE THREE (3) YEAR STATUTE OF LIMITATIONS AFFORDED FRANCHISEE FOR BRINGING
A CLAIM UNDER THE MARYLAND FRANCHISE REGISTRATION AND DISCLOSURE LAW.
Section 14-226 of the Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a
prospective franchisee to assent to any release, estoppel, or waiver of liability as a condition of purchasing a
franchise. Any provision of this Franchise Agreement which requires a prospective franchisee to disclaim the
occurrence and/or non-occurrence of acts that would constitute a violation of the Maryland Franchise Registration
and Disclosure Law in order to purchase a franchise are not intended to, nor shall they act as a release, estoppel
or waiver of any liability incurred under the Maryland Franchise Registration and Disclosure Law.
Club Pilates Franchise, LLC Franchisee:.
By: By:
Title: Title:

MARYLAND
AMENDMENT TO DISCLOSURE QUESTIONNAIRE
The Franchisee Disclosure Questionnaire is specifically amended as follows:
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law (as
amended), Md. Code Bus. Reg. Sections 14-201 through 14-233, the following paragraph is added to the Franchisee
Disclosure Questionnaire:
Maryland Franchise Registration and Disclosure Law prohibits a franchisor from requiring a
prospective franchisee to assent to any release, estoppel, or waiver of liability as a condition of
purchasing a franchise. Representations in this questionnaire are not intended to nor shall they
act as a release, estoppel, or waiver of any liability incurred under the Maryland Franchise
Name of Franchisee/Applicant
Date:
Signature
Name and Title of Person Signing

MÎGAN
A005N0UMTO0ÔSUR50OC0M5NT
The l o w i n g d ^ o s u ^ a ^ ^ q u ^ d bythe State of M ^
1 TH5STAT2 0 F M ^ G A N P R O H ^ T S C 5 R T ^ N U N ^ P ^ ^
DOCUMENTS ^ A N Y O F T H 5 F O ^
AR5VOIOANOCANNOTB5 5NEORC50A^NSTYOU
5ach of the f o l l o w s p r o v i ^ o n s i s v o ^ and onenfoêahleifcontainedm

franchise:
A. Aprohihitionontherightofafranchiseetojoman association of franchisees.
B. Arequirementthatafranchisee assent toareiease, assignment, novation,waiver or e s t o p s

whichdeprivesafranchiseeofrightsand protections provided inthe Michigan
notpreciudeafranchisee,afterenteringintoafranchiseagreement,from settling any and aii ciai^^^
C. Aprovisionthatpermitsafranchisortoterminateafranchise prior to the expiration of this

except for good cause.Good cause shaii include the failure ofthe franchisee to comply with any iawfuip
of the franchise agreement and to cure such failure after heing given written notice thereof andareasonahl^
opportunity, which in no event need he more than 30 days, to cure such failure.
0. ^provision that permitsafranchisor to refuse to renewafranchise without fairly compensating

the franchisee hyrepurchaseorothermeans forthe fair marketvalue atthe timeof expiration ofthe franchisee
inventory, supplies, equipment, fixtures and furnishings. Personalized materials which have no value to the
franchisor and inventory,supplies, equipment, fixtures and furnishings not reasonably r e q u i r e d ^
thefranchisebusinessarenotsubjecttocompensation.Thissubsectionappliesonlyif:^thetermof^
is less thanSyears, and (ii) the franchisee is prohibited by the franchise or other agreement from continue
conductsubstantiallythesamebusinessunderanothertrademark, servicemark, tradename, l o g o t y p e , a d v e ^
or other commercial symbol in thesame area subsequentto the expiration ofthe franchise orthe franchisee does
notreceiveatleast^monthsadvance notice of franchisoBsintent not to renew the franchise.
5. Aprovisionthat permits the franchisortorefuse to renewafranchise on terms generally available

to otherfranchisees ofthe same class ortypeundersimilarcircumstances.This section does not requirearenewal
provision.
F. ^provision requiring that arbitration or litigation be conducted outside this state. This shall not
preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct a r b ^ ^
location outside thisstate.
G. ^provision which permitsafranchisorto refuse to permitatransfer of ownership ofafranchise,

except for good cause. The subdivision does not preventafranchisor from exercisingaright of first refusal to
purchase the franchise.Good cause shall include, but is not limited to:
©2017 C ^ b P ^ s ^ o ^ e , LLC
2017^8^^ O ^ l o ^ e O o c u m ^ - ^ ^
1) The failure of the proposed transferee to meet the franchisor's then-current reasonable
qualifications or standards.
2) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
3) The unwillingness of the proposed transferee to agree in writing to comply with all lawful
obligations.
4) The failure of the franchisee or proposed transferee to pay any sums owing to the
franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.
H. A provision that requires the franchisee to resell to the franchisor items that are not uniquely
identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of
first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing
and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right
to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached
the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in
subdivision (C).
I. A provision which permits the franchisor to directly or indirectly convey, assign or otherwise
transfer its obligations to fulfill contractual obligations to the franchisee unless a provision has been made for
providing the required contractual services.
2. If the franchisor's most recent financial statements are unaudited and show a net worth of less than
$100,000.00 the franchisor shall, at the request of a franchisee, arrange for the escrow of initial investment and
other funds paid by the franchisee until the obligations to provide real estate, improvements, equipment,
inventory, training or other items included in the franchise offering are fulfilled. At the option of the franchisor, a
surety bond may be provided in place of escrow.
3. THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT
CONSTITUTE APPROVAL, RECOMMENDATION OR ENFORCEMENT BY THE ATTORNEY GENERAL.
Any questions regarding this notice should be direct to:
State of Michigan
Consumer Protection Division
Attention: Franchise
670 G. Mennen Williams Building
525 West Ottawa
Lansing, Ml 48933
(517) 373-1160
Note: Despite paragraph F above, we intend to enforce fully the provisions of the arbitration section
contained in the Franchise Agreement. We believe that paragraph F is unconstitutional and cannot preclude us
from enforcing our arbitration section. You acknowledge that we will seek to enforce this section as well.

MINNESOTA
In accordance with the requirements ofthe state of Minnesota the following disclosure should be read in
conjunction with the Disclosure Document. Any inconsistency with the information contained in the Disclosure
Document will be resolved in favor of this Minnesota Addendum.
1. Item 13 Trademarks is amended by adding the following:
As required by the Minnesota Franchise Act, Minn. Stat. Sec. 80C12(g), we will reimburse you for
any of your costs incurred in the defense of your right to use the Marks, so long as you were using
the Marks in the manner authorized by us, and so long as we are timely notified of the claim and
are given the right to manage the defense of the claim including the right to compromise, settle
or otherwise resolve the claim, and to determine whether to appeal a final determination of the
claim.
2. Item 17 Renewal. Termination. Transfer and Dispute Resolution is amended by adding the following:
A. Renewal and Termination

With respect to franchises governed by Minnesota law, we will comply with Minn. Stat.
Sec. 80C.14, Subds. 3,4 and 5 which require, except in certain specified cases, that you be
given 90 days' notice of termination (with 60 days to cure) and 180 days' notice for non-
renewal of the Agreement.
B. Choice of Forum
Nothing in the Disclosure Document or Agreement can abrogate or reduce any of your
rights as provided for in Minnesota Statutes 1984, Chapter 80C, or your rights to any
procedure, forum, or remedies provided for by the laws of the jurisdiction.
C. Releases
A general release shall not relieve any person from liability imposed by the Minnesota
Franchise Law, Minn. Stat., Chapter 80C, Sections 80C.22.
These franchises have been registered under the Minnesota Franchise Act, registration does not
constitute approval, recommendation, or endorsement by the Commissioner of Commerce of Minnesota or a
finding by the Commissioner that the information provided herein is true, complete, and not misleading.
The Minnesota Franchise Act makes it unlawful to offer or sell any franchise in this state which is subject
to registration without first providing to the franchisee, at least 7 days prior to the execution by the prospective
franchisee of any binding franchise or other agreement, or at least 7 days prior to the payment of any
consideration, by the franchisee, whichever occurs first, a copy of this Disclosure Document, together with a
copy of all proposed agreements relating to the franchise. This Disclosure Document contains a summary only
of certain material provisions of the Franchise Agreement. The contract or agreement should be referred to for
an understanding of all rights and obligations of both the franchisor and the franchisee.

MINNESOTA
In recognition ofthe Minnesota Franchise Law, Minn. Stat., Chapter 80C, Sections 80C.01 through 80C.22, and the
Rules and Regulations promulgated pursuant thereto by the Minnesota Commission of Securities, Minnesota Rule
2860.4400, et seq., the parties to the attached Franchise Agreement ("Agreement") agree as follows:
With respect to franchises governed by Minnesota law. Franchisor will comply with Minn. Stat. Sec
Agreement.
As required by Minnesota Franchise Act, Minn. Stat. Sec. 80C. 12(g), Franchisor will reimburse
Franchisee for any costs incurred by Franchisee in the defense of Franchisee's right to use the Marks,
so long as Franchisee was using the Marks in the manner authorized by Franchisor, and so long as
Franchisor is timely notified of the claim and is given the right to manage the defense of the claim
including the right to compromise, settle or otherwise resolve the claim, and to determine whether
to appeal a final determination of the claim.
With respect to franchises governed by Minnesota law. Franchisor will complywith Minn. Stat. Sec.
Agreement.
A general release shall not relieve any person from liability imposed by the Minnesota Franchise
Law, Minn. Stat., Chapter 80C, Section 80C.22.
Nothing in the Disclosure Document or Agreement can abrogate or reduce any of your rights as
provided for in Minnesota Statutes 1984, Chapter 80C, or your rights to any procedure, forum, or
remedies provided for bythe laws of the jurisdiction.
Any claims brought pursuant to the Minnesota Franchises Act, § 80.C.01 et seq. must be brought
within 3 years after the cause of action accrues. To the extent that any provision of the Franchise
Agreement imposes a different limitations period, the provision of the Act shall control.
By: By:
Title: Title:

N5WY0^
Tho DiôsoreOooument is amended as f o ^ w s :
L preferences made herein toaOisolosureOooomentshaii he amended to Offer^^
2. Thefoiiowing paragraphs are added to the Oisoiosure Document Cover Page:
ÔRMATIONCOMPA^NG^NCÔRSÂVA^8^^
5^B0ÔRYOORPU8^C^RARYFORSOURC5SOFI^^^
O ^ O S O R 5 0 0 C U M 5 N T ^ U N T ^ C O N T A C T T H 5 ^ 0 E ^ TRADED
05PARTM5NTOF^W,8UR5AO^
N5WYO^N5WYO^10^^3^
WE M A ^ ^ W E CHOOSE NEGOTIATE WITH YOU ABOUT IT5MSCOV5R5^

HOWEVER WE CANNOT USETHE NEGOTIATING PROCESSTO PREVAIL UPONAPROSPECTIVEE^
ACCEPTTERMSWHICHARELE5SEAVORABLETHANTHOSESETEORTHINTHI5 PROSPECTUS.
3. i t e m ^ L l t l g a t ^ i s a m e n d e d h y t h e a d d i t i o n o f the following language: Neither the franchisor, its

predecessor,apersonidentifiedinitem 2, or an affiliate offering franchises under the franchisor's p r ^
trademark:
A. Has an administrative, criminal or civil action pending against that person alleging:afelony^
violation of a franchise, antitrust or securities law, fraud, emhezzlement, fraudulent conversion,
misappropriation of property, unfair or deceptive practices or comparable civil or misdemeanor
allegations, or has pending actions, other than routine litigation incidental to the business,^
significant in the context of the number of franchisees and the size, nature or financial condition of the
franchise system or its business operations.
B. Has been convicted ofafelony or pleaded nolo contendere toafelony charge or,within the ten
year period immediately preceding the application for registration, has been convicted o f a o r pleaded
nolo contendere toamisdemeanor charge or has been the subject ofacivil action alleging: violation ofa
franchise, antifraud or securities law, fraud, embezzlement, fraudulent conversion or misappropriation of
property,or unfair or deceptive practices or comparable allegations.
C. Is subject toacurrently effective injunctive or restrictive order or decree relating to the franchise,
orunderaFederal,StateorCanadian franchise, securities, antitrust, trade regulationortra^^
resulting fromaconcluded or pending action or proceeding brought byapublicagency^, or is subject to
any currently effective order of any national securities association or national securities exchange, as
defined in the Securities and Exchange Act of 1934, suspending or expellingsuch person from membership
in such association or exchanged or is subjecttoacurrently effective injunctive or restrictive order relating
to any other business activity asaresult of an action brought byapublicagency or department, including,
without limitation, actionsaffectingalicenseasareal estate broker or salesagent.
^ O ^ O u b ^ t ^ F ^ ^ ^ C
^ 2 0 1 7 ^ n ^ e 0 ^ o ^ e O o c u m ^ —Exh^s
4. The l o w i n g paragraph is
its aâte,^predeces5or,oêr5,pr general partner has durm^
pfthe peering areolar:
(a) filed asdebtprforhadêdagainst^

(h) ohtainedadischarge of its dehts underthe hankroptcycode^pr
{c) wasaprincipai officer ofacompanypragen^ral partner inapartnership that either filed asa
dehtorforhadfiledagainstit)apetitiontosta^
adischargeofitsdehts underthe ^ 5 . BankruptcyCodeduringorwithinlyearaftertheoff^^
partnerofthefranchisor held this position in the compandor partnership.
5. Thefoliowing language is added to theendofitemSloâlFraochise Fee:
Theinitial franchisefeeshall reused tocompensateus for ourcostsin providing training

materials, evaluating the site, and other services we provide to you prior to and as you hegin
operating your business.
6. Item^loitiallnvestmeot is amended hv the addition ofthe following language:
There are no other direct or indirect payments to us in conjunction with the purchase of the
franchise.
7. The "Summary" section of Item l^s) entitled Modification ofthe Franchise Agreement will he amen
hy adding the following language:
We have the right to modify or revise lists of specifications, the Confidential Operations^
part of the System, provided that any revisions or modifications will not unreasonably increase your
obligation or place an excessive and unreasonable economic burden on your operations.
8. The "Summary"section of Items l^c) entitled Reouirements for you to renew or extent and 17fm)
entitled Conditionsforouraoorovaioftransferwillbeamended by addingthefollowing language:
All rightsenjoyed bythe Franchisee and any causes ofaction arising in itsfavorfrom the provisions
of Article 33 of the of the State of New York and the regulations issued thereunder shall
remain in forced it beingthe intent ofthis provision that the nonwaiver provisions of GBLSection
^7.4and587Sbesatisfied
9. iteml^Renewai.Termination: The "Summary" section ofltems entitledTermination. will

be amended by adding the following language:
The franchisee may terminate the franchise agreement or multi-unit development agreement on
any grounds available by law.
10. item 17, Renewal, Termination, etcB The "Summary''section of Items l ^ i ) , entitled Assignment
of contract hvfranchisor, will be amended by adding the following language:
Flowever,noassignmentwill be made bythe franchisor exceptto an assignee who, in the good faith and
judgment ofthe franchisor,is willing and financially able to assume the franchisor'sobligations underthe
franchise or multi unit development agreement.
^ O t ^ C ^ b ^ ^ ^ n ^ e , ^
2 0 1 7 ^ o ^ e O ^ l o ^ e O o c u m e o t —5xh^5
11. Item 17, Renewal. Termination: The "Summary" section of Items 17(w), entitled Choice of law.
will be amended by adding the following language:
The forgoing choice of law should not be considered a waiver of any right conferred upon the
franchisor or upon the franchisee or upon the multi-unit developer by Article 33 of the General
Business law of the State of New York.
WE REPRESENT THAT THIS PROSPECTUS DOES NOT KNOWINGLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT.

NORTH DAKOTA
AODENDOMTOOÔSUR500CUM5NT
L The l o w i n g longoage is added to the "Sommary" section of ^

r e o e w o r e ^ e o d o n d item l ^ m ) entitled Cooditloos for o o r a o o r o v ^ o f a t r a o s f e ^
The execution ofagenerol release upon r e n e w o i ^ s s ^

tofranchlsesoperatingunderthe North Oakota Fronchise Investment Law.
2. Theopplicohieportlonof the"Summ8ry"sectlonof Item d i s e n t i t l e d Your o h ^ a t i o n s on

terminatiooBnon-renewal is amended to read os follows:
if we orevoli in onv enforcement action vou will oov oil domoges and costs we incur in
enforcing the termination provisions ofthe Fronchise Agreement
3. The foliowing is odded to the "Summorv"section of item l ^ u ) entitled Dispute resolution bv

arbitration or mediatiom
To the extent r e q u i r e d h y t h e N o r t h D a k o t a FranchiselnvestmentLawfunlesssuch

requirementispreemptedhytheFederalArhitrationAct^ arbitration will he a t a s i t e to
which we and you mutually agree.
4. The following is added to the "Summary" section of Item l ^ r ) entitled Non-competition

covenantsafterthefranchise is terminated or expires:

provided by law.
5. The following is added to the "Summary" section of Item l ^ v ) entitled Choice o f f o r u m :
However, totheextentallowed bythe North Dakota Franchise Investment Law, you may
commenceanycauseofaction against us in any court of competent jurisdiction, including
the state orfederalcourtsof North Dakota.
©2017C^^8t^Fr80î5^^
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NORTH DAKOTA
1. The following is added to Section 3.2, "RENEWAL" and Section 14 "TRANSFER OF INTEREST":
The execution of a general release upon renewal, assignment or termination will be

inapplicable to franchises operating under the North Dakota Franchise Investment Law.
2. The following is added to Section 17.4, "CHOICE OF FORUM":
However, to the extent allows by the North Dakota Franchise investment Law, Franchisee may
commence any cause of action against Franchisor in any court of competent jurisdiction, including
3. The following is added to Section 16.1, "MANDATORY BINDING ARBITRATION"
which Franchisor and Franchisee mutually agree.
4. Section 18, "ACKNOWLEDGMENTS" is amended by the addition of the following language to the original
language that appears therein to read as follows:
Franchisee acknowledges that Franchisee received a copy of this Agreement, the

attachments hereto, if any, and agreements relating thereto, if any, at least seven (7) days
prior to the date on which this Agreement was executed.
5. Section 13.1 (regarding post-term restrictions) is amended by the addition of the following language to the
original language that appears therein:

provided by law.
By: By:
Title: Title:

RHODE ISLAND
The following language is added to Item 17(v) entitled Choice of forum:
, except as otherwise required by the Rhode Island Franchise Investment Act

RHODE ISLAND
In recognition of the requirements of the Rhode Island Franchise Investment Act (Section 19-28.1-14), the
parties to the attached Franchise Agreement agree as follows:
Section 17.4, "CHOICE OF FORUM" is amended by adding the following:
§19-24.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a
franchise agreement restricting jurisdiction or venue to a forum outside this state or
requiring the application of the laws of another state is void with respect to a claim
otherwise enforceable under this Act."
By: By:
Title: Title:

VIRGINIA
In recognition ofthe restrictions contained in Section 13.1-564 o f t h e Virginia Retail Franchising Act, the
Franchise Disclosure Document for Club Pilates Franchise, LLC for use in the Commonwealth of Virginia shall be
amended as follows:
The following statement is added to Item 17.h:
"Pursuant to Section 13.1-564 ofthe Virginia Retail Franchising Act, it is unlawful for a franchisor
to cancel a franchise without reasonable cause. If any ground for default or termination stated in the
franchise agreement does not constitute "reasonable cause", as that term may be defined in the Virginia
Retail Franchising Act or the laws of Virginia, that provision may not be enforceable."

WAS^NGTON
AOOENOUMTOOÔSUÔOCOMENT
^ r e c o g n ^ o n o f the requirementsof the Washington Franchise investment Protection Act (ROW

I ^ I O O ^ O ) , the Franchise Disclosure Document is revised as foiiows:
1. The foiiowing disclosure is added to item 5:
Due to our financial condition, please he advised that we have securedasuretyhond in the
amount of $100,000 to demonstrate ourfinanciai capability to fulfill our preopeningohiigation^
to franchisees/developers underthe Franchise Agreement and the DeveiopmentAgreementthat
are subjectto the jurisdiction ofthe Washington Franchise investment Protection Act, which is on
file with the Securities Division of the Washington Department of Financial institutions.
2. The following paragraphs are added at the end of Item 17:
T h e s t a t e o f W a s h i n g t o n h a s a s t a t u t e , RCW 19.100.180,which may supersede the Franchise

Agreement in your relationship with thefranchisor includingthe areasoftermination and renewal
of your franchise. There may also b e c o u r t decisions which may supersede thefranchise
agreement in yourrelationshipwith the franchisor includingthe areasoftermination and renewal
ofyour franchise.
Inanyarbitration invoivingafranchise purchased in Washington, thearbitrationsiteshallbeeither

in the state ofWashington, or inaplace mutually agreed upon atthe time ofthe arbitration, or as
determined by the arbitrator.
In the event of a conflict of laws, the provisions of the Washington Franchise Investment
A r e l e a s e o r w a i v e r o f rights executed by a f r a n c h i s e e s h a i l n o t i n c l u d e r i g h t s u n d e r t h e
Washington Franchise Investment Protection Act except when executed pursuant toanegotiated
settlementaftertheagreementis in effect and wherethepartiesare represented hyindependent
period for claims underthe Act, rights or remedies under the Act such asarighttoajurytrial may
not be enforceable.
Transfer fees are collectable to the extent that they reflect the franchisor'sreasonable estimated
©20t7Clob^8^^8^5e,^C
2017^nch^0^1oêOocumeot—Exh^s
WASHINGTON
AM5NOMENTTO^NCHIS5AG^MENTAN005V5LOPM5NT AGREEMENT
^ recognition o f t h e requirements ofthe Washington Franchise investment Protection Act (RCW

l^lOOBtBO^ the parties to the attach^^
Ouetoourfinanciaicondition, piease he advised that we have securedasuretyhond inthe

amount of $100,000 to demonstrate ourfinanciaicapahiiity to fuifiii our pre o p e n i n g o ^
to franchisees/deveiopers underthe Franchise Agreementand the OeveiopmentAgreementthat
are suhjectto the jurisdiction ofthe Washington Franchise investment Protection Act, which is on
fiie with the Securities Division ofthe Washington Department of Financial institutions.
ThestateofWashingtonhasastatute,RCW19.100.180,which may supersede the Franchise

Agreement in your relationship withthefranchisorinciudingtheareasoftermination and renewal
of your franchise. There may aiso hecourt decisions which may supersedethefranchise
agreementinyourreiationshipwiththefranchisorinciudingtheareasoftermination and renewal
of your franchise.
In anyarhitration invoivingafranchise purchased in Washington, thearhitrationsiteshallheeither

in the state ofWashington, or inaplace mutually agreed upon atthe time ofthe arbitration, or as
determined hy the arbitrator.
In the event of a conflict of laws, the provisions ofthe Washington Franchise Investment
A release or waiver of rights executed bya franchisee shall not include rights underthe
Washington Franchise Investment Protection Act except when executed pursuanttoanegotiated
settlementafterthe agreement is in effect and where the parties are represented by independent
period for claims underthe Act, rights or remedies underthe Act such asarighttoajurytrial may
not be enforceable.
Transferfees are collectable to the extentthattheyreflectthefranchisor'sreasonable estimated

IN WITNESS WHEREOF,each of the undersigned hereby acknowledges having read this Amendment,
understands and consents to be bound by all ofits terms.
^ 8y:
Title: Title:

Exhibit H
LIST OF FRANCHISEES AND THEIR OUTLETS

AS OF THE ORIGINAL ISSUE DATE OF THE DISCLOSURE DOCUMENT

LIST OF FRANCHISEES AS OF DECEMBER 31, 2016 AND THEIR FRANCHISED STUDIOS

Name Name
3169 Green Valley
Lindsay Booker Road Birmingham AL 35243 205.777.7976 cahabaheights@clubpilates.com
1825 East
Guadalupe Ste F-
Bill/Jennifer Guzick 102 Tempe AZ 85283 480.566.0335 tempe@clubpilates.com
20329 North 59th
Jennifer Marrinan Avenue Ste A l Glendale AZ 85308 480.372.8100 arrowhead@clubpilates.com
111 W. Monroe downtownphoenix@clubpilates.c
Jennifer Marrinan #128 Phoenix AZ 85003 480.372.8100 om
1354 E Colorado
Rebecca Bailey St, Suite A Glendale CA 91205 818.724.9977 glendale@clubpilates.com
18037 Chatsworth Granada
Robert Bereny Street Hills CA 91344 (818) 210-3288 granadahills@clubpilates.com
2820 Townsgate Thousand
Robert Bereny Rd #107 Oaks CA 91361 805.556.7070 westlakevillage@clubpilates.com
1525 Mesa Verde
Brittany Borga Dr. E. Costa Mesa CA 92626 949-791-7184 costamesa@clubpilates.com
7012 #103 Edinger Huntington huntingtonbeach@clubpjlate5.co
Brittany Borga Ave Beach CA 92647 657.464.4696 m
4901 Morena Blvd.
Chris Clements Suite 210 San Diego CA 92117 858.914.1459 morena@clubpilates.com
Davies/ 9460 Mira Mesa
Carolyn/Dave Hays Blvd, Unit P San Diego CA 92126 858-254-3326 miramesa@clubpilates.com
Davies/ 861 Harold Place,
Carolyn/Dave Hays Suite 305 Chula Vista CA 91914 619-392-2572 chulavista@clubpilates.com
Dumaw
Arielle Whitman 555 2nd St. Suite 2 Encinitas CA 92024 760-529-6706 encinitas@clubpilates.com
Dumaw 904 W San Marcos
Arielle Whitman Blvd, Suite 5 San Marcos CA 92078 760-201-3070 sanmarcos@clubpilates.com
Dumaw 1820 Marron Road,
Arielle Whitman Suite 100 Carlsbad CA 92008 760-201-3374 carlsbad@clubpilates.com
562 E. El Camino
Lewis Gonzalez Real Sunnyvale CA 94087 408.675.9071 sunnyvale@clubpilates.com
17767 Santiago
Emily Hammett Blvd., Suite 610 Villa Park CA 92861 714.202.6404 villapark@clubpilates.com
21612 Piano
Trabuco Road, Trabuco
Emily Hammett Suite A Canyon CA 92679 949.534.2023 RSM@clubpilates.com
2760 5th Ave, Suite
Megan Hughes 110 San Diego CA 92103 858-531-2348 bankershill@clubpilates.com
Jones Jones 730 N. La Brea Ave. Los Angeles CA 90038 323-774-2701 hollywood@clubpilates.com
1119 S. Hope
Derek Jones Street Los Angeles CA 90015 213-204-6900 dtla@clubpilates.com
1720 West Sunset
Jones Jones Blvd Echo Park CA 90026 323-505-4355 echopark@clubpilates.com
Kendall/ 1330 21st Street
Linda/Rebecca Holden Ste 101 Sacramento CA 95811 916-347-0304 midtownsac@clubpilates.com

Name Name
14410 Big Basin
Ken/Jessie Ko/Wu Way, STE E Saratoga CA 95070 669.256.5200 saratoga@clubpilates.com
Renata and 50 El Camino Real,
Sean Lance #50 San Carlos CA 94070 650-722-4710 sancarlos@clubpilates.com
1921 Douglas
Renata and Boulevard, Suite
Sean Lance 104 Roseville CA 95661 916.318.9908 roseville@clubpilates.com
Katie Mann 5907 Severin Drive La Mesa CA 91942 858-531-2348 lamesa@dubpilates.com
6690 Mission
Katie Mann Gorge Road San Diego CA 92120 619-786-2300 missionvalley@clubpilates.com
3959 30th Street,
Katie Mann Suite 101 San Diego CA 92104 619-677-1500 northpark@clubpilates.com
225 Town Center
Katie Mann Parkway, Suite C Santee CA 92071 619-485-1800 santee@clubpilates.com
5077 Lankershim North
Sarkis/Esther Ovakmian Boulevard Suite F Hollywood CA 91601 818-2103422 NoHo@clubpilates.com
Robert / 6766 Bernal Ave.
Jessica Shiraki Suite 530 Pleasonton CA 94566 925.255.0880 pleasanton@clubpilates.com
903N.Sepulveda Manhattan manhattanbeach@clubpilates.co
Chris Suder Blvd. Beach CA 90266 310-921-8004 m
Chris Suder 1313 S Harbor Blvd Fullerton CA 92832 714.519.3841 fullerton@clubpilates.com
Amy/ 13920 City Center
Anthony Truong Drive Suite 4010 Chino Mills CA 91709 909.529.1041 chinohills@clubpilates.com
27184 Ortega Hwy San Juan
Keeiy Watson Suite 206 Capistrano CA 92675 949-257-2292 Sjc@clubpilates.com
25800 Jeronimo Mission
Keeiy Watson Road Ste 404 Viejo CA 92691 949-446-8243 missionviejo@clubpilates.com
30100 Town
Center Drive, Suite Laguna
Keeiy Watson B-l Niguel CA 92677 949-257-2292 lagunaniguel@clubpilates.com
3000 E.3rd Ave,
Mary Busse Suite 20 & 21 Denver CO 80206 720-361-9995 cherrycreek@clubpilates.com
2229 Wildcat Highlands highlandsranchwest@clubpilates.
Mary Busse Reserve Parkway Ranch CO 80129 720.557.9606 com
1931-V Sheridan
Jennifer Carlson Blvd. Edgewater CO 80214 720.446.9777 edgewater@clubpilates.com
437 S Wadsworth
Kevin Easterly Blvd, Suite F Lakewood CO 80226 720-789-1011 belmar@clubpilates.com
11757 West Ken
Caryl Avenue, Suite
Kevin Easterly G Littleton CO 80127 720.579.7285 kencaryl@clubpilates.com
700 Ken Pratt
Joe Hendricks Boulevard Longmont CO 80501 720.442.8385 longmont@clubpilates.com
1203 Town Center
Amanda Gomez Drive, Unit 107 Jupiter FL 33458 561-449-8161 abacoa@clubpilate5.com
Maria 117 SW 10th Ste
Tania Peck Gutierrez #103 Miami FL 33130 786.509.9831 Brickell@clubpilates.com
2960 Shallowford
Stephanie Little Rd #200 Marietta GA 30066 678.647.6220 eastcobb@clubpilates.com

Name Name
2047 N. Clybourn
Abby Phelps Ave Chicago IL 60614 312.734.1069 lincolnpark@clubpilates.com
2482 E. 146th
Ralph /Julie Thorpe Street Carmel IN 46033 317) 565-4828 carmel@clubpilates.com
Overland
Andrea O'Dell 6601 W 119th St Park KS 66209 913.562.9570 overlandpark@clubpilates.com
454 B Governor Severna
Laura Cutchall Ritchie Highway Park MD 21146 410.648.4400 severnapark@clubpilates.com
2661 Riva Road Ste
Laura Cutchall 625 Annapolis MD 21401 240.324.7474 annapolis@clubpilates.com
39799 Grand River
Kristen Cronin Avenue Novi Ml 48375 248-410-7700 novi@clubpilates.com
31255 Southfield
Kristen Cronin Road Beverly Hills Ml 48025 248.878.9905 beverlyhills@clubpilates.com
11660 Fountains Maple
Brent Ras Dr Grove MN 55369 763.219.4880 ArborLakes@clubpilates.com
122 Hilltown
Andrea Schade Village Center Chesterfield MO 63017 636.556.0526 chesterfield@clubpilates.com
1707 W. Oak
Ashlie Thomison Street, Suite C Bozeman MT 59715 406.404.1922 bozeman@clubpilates.com
Dimitrios/
Helen/
Angelis / Arnold/
DeGarcia Amy 225 Broad Ave Westfield NJ 07090 908.233.0950 westfield@clubpilates.com
875 Route 17
South, Ramsey
Joan Mokray Center Ramsey NJ 07446 551.264.9222 ramsey@clubpilates.com
Allison/Chris Sapka 525 Cedar Hill Ave Wyckoff NJ 07481 201.447.2500 wyckoff@clubpilates.com
437 Old Hook Road
Allison Warner Unit #5 Emerson NJ 07630 201.949.7222 emerson@clubpilates.com
6815 Sierra Center
Allison Beardsley Parkway, Suite 500 Reno NV 89511 775-298-1678 reno@clubpilates.com
8665 W. Flamingo
Victoria/Emil Rechester Rd., Suite 118 Las Vegas NV 89147 702-608-1396 springvalley@clubpilates.com
10525 S. Eastern
Victoria/Emil Rechester Ave. Ste 140 Henderson NV 89052 702.907.2758 henderson@clubpilates.com
12305 SW Horizon
Dan / Debra Wynkoop Blvd Suite J207 Beaverton OR 97007 (503) 605-1453 progre5sridge@clubpilates.com
6300 Poplar Ave ^
Tara & Philip Barnes Ste 103 Memphis TN 38119 901.646.5054 EastMemphis@clubpilates.com
Fichaud/ 7316 Louetta Road
Chris / Susan Bryan #6302 Spring TX 77379 (281) 607-2485 klein@clubpilates.com
2951 Ranch
Susan Martinez Road620 S Lakeway TX 78738 575.937.0479 lakeway@clubpilates.com
Scott/Elisa/Na Pontone/ 14129 Memorial
te Hunt Drive Houston TX 77079 281.661.3114 houston@clubpilates.com
Scott/Elisa/Na Pontone/ 10705 Spring
te Hunt Green Blvd., #200, Katy TX 77494 832.913.1847 Katy@clubpilates.com
43670 Greenway
Ryan Ask Corporate Drive Ashburn VA 20147 703.828.0779 ashburn@clubpilates.com

Name Name
Nikki Adams 143 106th Ave NE Bellevue WA 98004 253-709-1446 bellevue@clubpilates.com
Nikki Adams 124 4th Ave South Kent WA 98032 253.709.1446 kent@clubpilates.com
6077 W. Mequon
Megan Sinnen Rd Mequon WI 53092 414-939-3644 mequon@clubpilates.com
FRANCHISEES THAT HAVE SIGNED FRANCHISE AGREEMENTS BUT ARE NOT YET OPEN
AS OF DECEMBER 31, 2016 (INCLUDING DEVELOPERS THAT HAVE NOT YET OPENED THEIR FIRST STUDIO)
First Name Last Name Phone State
Lindsay Booker (205) 451-2482 AL

Doug & Maggie Anderson 480.388.1852 AZ
Kathy Garrison 520.444.0163 AZ
Don & Emma Gatzemeier 602.663.2049 AZ
480.826.4181;
Bill & Jennifer Guzick 480.695.7116 AZ
Keith Jacobs 910-274-8201 AZ
Jennifer Marrinan (619) 200-2992 AZ
Julianne (Juli) Attaway (619) 248-5891 CA
Rebecca Bailey (323) 898-8244 CA
Ken & Allison Bloore 818.917.8114 CA
Janani (Jan) Siva Darrel Swift 520.289.0439 CA
Ronnie Sarwar Fizzah Raza 615.364.1690 CA
Jim Griffin 224.436.0647 CA
Emily Hammett (626)233-9220 CA
Brian Holmes 661.332.2233 CA
Fernando Hoyos 619.831.1086 CA
Megan Hughes 619-204-9090 CA
916-205-1470; (916)990-
Linda/Rebecca Kendall/Holden 4224 CA
Ken & Jessie K o & Wu 408.641.1511 CA
Renata and Sean Lance (650) 759-3283 CA
Jerry & Melissa Miller 510.919.4484 CA
Chandra Mohan 408.887.0000 CA
Bora Park 213.840.2203 CA
Johnny & Ronnie Peng 510.739.0836 CA
Natalie Poletti 650.302.1285 CA
Michael & Alyssa Rubin 562.754.4204 CA
Robert & Jessica Shiraki 650.766.5900 CA
Am it & Seema Srivastava 408.202.9619 CA
Katya Stromblad 818.257.3047 CA
Chris Suder (760)908-9257 CA

Shahin Teranchi 951.237.2379 CA
Joni /Tiffany Thomas / Davis 773.320.0921 CA
Sheri Tooley 818.384.3035 CA
Amy & Anthony Truong 949.278.7719 CA
Hema & Anathan Venkat 208.863.0943 CA
Keeiy/Ed Watson / Lombard! (619) 261-5898 CA
Chris Clements 619-203-8538 CA
George & Julie Borrego 720.278.3084 CO
Mary Busse (760) 801-9416 CO
Kevin Easterly 760.845.5686 CO
Joe Hendricks 303-513-4498 CO
Scott Ackerman 917.692.8894 CT
Ed / Christina Elgaressta / Harper 305.606.6198 FL
Christine Goldman 321.231.5262 FL
Rick & Dawn Graham 210.559.1732 FL
Heath Johnson 508.725.2108 FL
Kelly Kennedy 305.389.5399 FL
Tania Peck Maria Gutierrez 786.218.3572 FL
Mochon /
Daniela / Horacio Rosentgberg 786.301.2759 FL
Nathan Philyaw 904.635.0298 FL
Jamie Sackett 305.301.2050 FL
Chris Wilson 732.803.0226 FL
Sheetal and Sandeep Dube 503.780.6302 GA
Mandy Ledford 828.925.3263 GA
Kellen Stennett 404.456.4110 GA
Mark Worley 678.488.0785 GA
Hieu & T h y Le 208.890.1770 ID
Laura Louis 208.841.0247 ID
Janet Asbury 773.983.8165 IL
Abby Phelps 312.399.3256 IL
Steve & Robin Schlichting 815.985.1337 IL
Allison & Aaron Smith 630.337.6350 IL
Eric Smith 630.362.9593 IL
Ralph/Julie Thorpe 317.696.4600 IN
Mike & Tammy Miller 860.817.8995 MA
Laura Cutchall (858) 603-3360 MD
Jan & Chuck Grover 240.578.0093 MD
Ed Horan 845.764.1943 MD
Karla / Liana Kay / Bateman 717.825.6150 MD
Kristen Cronin 248-410-4259 Ml
Nick Vogel 989.992.8422 Ml
Steve & Angela Bounds 303.883.4605 MN

David Kodet 612.877.0764 MN
Topher Nelson 612.723.6075 MN
Brent Ras 612.385.0588 MN
Andrea Schade 775-771-9606 MO
John Pennypacker 980.240.1792 NC
David/Jon/Joe Schuck/Smith/Ruggieri 336.404.7871 NC
Doug Harris 704.491.6717 NC
Aleshka Cleveland 828-774-9405 NC/SC
Caroline & Dennis Collins 917.796.9618 NJ
Dimitrios/Helen/ 914.772.9973;
Angelis / DeGarcia Arnold/Amy 917.921.2595 NJ
Emese Horvath 770.910.2934 NJ
201.916.3359;
Allison / Chris Sapka 973.951.2074 NJ
Richard Uku 917.670.7396 NJ
Scott Untener 914.261.1219 NJ
Allison Beardsley 775-298-1678 NV
Victoria/Emil Rechester (323) 899-7083 NV
Isaac Chu 646.610.0389 NY
Sarah Gevinski 646.425.8244 NY
Louisa Goldenberg 646.729.3230 NY
David Lo 646.379.0824 NY
Heather Rhyu 310.972.8786 NY
David Wolk 914.260.7489 NY
Bob Pallatroni 513.225.4475 OH
Curt Clark 918.740.0777 OK
Scott & Misty Sander 971.998.0279 OR
Dan / Debra Wynkoop 503-720-9556 OR
Tara & Philip Barnes 901.628.8004 TN
Tom Fielder 615.579.3070 TN
Lance & Sara Becker 512.787.3703 TX
Chris and Nathalie Buck 214.770.5525 TX
Ivan Canga 832.868.5973 TX
Chris & Susan Fichaud / Bryan 713-254-0213 TX
Theresa & Glenn Fraser 858.750.8595 TX
Bret Gowens 832.659.4501 TX
Hector/Molly Hernandez/Lindner 512.593.3652 TX
Pam Heslop 281.497.4557 TX
Todd & Debi Martin 972.977.7277 TX
Jodi&Shahid Mehmood 682.553.8173 TX
Scott& Elisa/Nate Pontone/Hunt (858) 212-6787 TX
Delma / Rick Schriever 281.840.0864 TX
Bobby Springer 615.268.9432 TX

Daniela & David Wells 832.923.0228 TX
Mike & Becky/Scott & Karie Edmonds/Miller 801.707.5530 UT
Travis/Heidi Sanger 701.866.5036 UT
Vince Black 703.307.9085 VA
Michael Grams 703-949-0378 VA
Nikki Adams (253) 709-1446 WA
Sheetal Guttigoli 425.829.8733 WA
Nathan & Erica Baldwin 608.609.5152 WI
Megan Sinnen (414) 315-5765 WI
Robert & Beth Tsuchiyama 404.307.5634 WI

Exhibit I
LIST OF FRANCHISEES THAT LEFT THE SYSTEM

AT SOME POINT DURING OUR PAST FISCAL YEAR (2016)
First Name Last Name Address State Phone Number
1702 E Prince #120, Tucson, AZ AZ

Mary Beardsley 85719 (520) 241-4743
24239 Hawthorne Blvd. #104, CA
Liuba Stephanie Lerro- Parraway Torrance, CA 90505 619-518-3338
19720 Ventura Blvd Suite 101/102, CA
Nikkita Weerasinghe Woodland Hills, CA 91364 (818) 339-7057

Exhibit j

DEVELOPER
DATE OF AGREEMENT
©20] 7 Club Pilates Franchise, LLC

TABLE OF CONTENTS
1. REFERENCES AND DEFINITIONS 2

2. USE OF SYSTEM 3
3. GRANT OF DEVELOPMENT RIGHTS 3
4. DEVELOPMENT RIGHTS AND OBLIGATIONS 4
5. STUDIO CLOSINGS 6
6. PROCEDURE FOR EXERCISING DEVELOPMENT RIGHTS 6
7. DUTIES OF DEVELOPER 7
8. SITE SELECTION, LEASES, FRANCHISE AGREEMENT 8
9. DEVELOPMENT FEE 9
10. SUPERIORITY OF INDIVIDUAL FRANCHISE AGREEMENT 9
11. COVENANTS 10
12. RELATIONSHIP OF THE PARTIES 12
13. PROPRIETARY MARKS 13
14. TERMINATION 14
15. EFFECT OF TERMINATION AND EXPIRATION 16
17. APPROVALS 20
18. NONWAIVER 20
19. DEVELOPER'S RECORDS AND REPORTS 21
20. NOTICES AND PAYMENTS 21
21. GOVERNING LAW 24
22. ARBITRATION AND OTHER DISPUTE RESOLUTION PROVISIONS 24
23. ENFORCEMENT 24
24. CAVEAT 27
25. MISCELLANEOUS 27
EXHIBITS
ATTACHMENT: GUARANTY AND ASSUMPTION OF OBLIGATIONS

EXHIBIT A - DEVELOPMENT AREA
EXHIBIT B - DEVELOPMENT SCHEDULE
EXHIBIT C - FRANCHISE AGREEMENT
EXHIBIT D - STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS
EXHIBIT E - CONFIDENTIALITY AGREEMENT AND ANCILLARY COVENANTS NOT TO
COMPETE

THIS AREA DEVELOPMENT AGREEMENT (the "Agreement"), is made and entered into
this day of , 20 , by and between: (i) Club Pilates Franchise, LLC, a limited
liability company formed and operating under the laws ofthe State of Delaware whose principal business
address is 3185 Pul Iman Street, Costa Mesa, California 92626 (the "Franchisor"); and (ii) , a/n
with a business address at (the "Developer").
WITNESSETH:
WHEREAS, as the result of the expenditure of time, effort and expense. Franchisor has created a
unique and distinctive proprietary system (hereinafter the "System") for the establishment, development
and operation of a CLUB PILATES Studio (each, a "Studio") that provides Studio offering (a) Pilates
instruction and related services that Franchisor authorizes (collectively, the "Approved Services"), and (b)
certain merchandise and other products Franchisor authorizes for sale in conjunction with the Approved
Services and Studio operations (collectively, the "Approved Products"), to the general public and/or
through a membership-based program, under the mark CLUB PILATES.
WHEREAS, Franchisor owns the System and the right to use the Proprietary Marks (as defined
below), and grants the right and license to others to use the System and the Proprietary Marks;
WHEREAS, the distinguishing characteristics of the System include, without limitation,

proprietary methodology and procedures for the establishment and operating procedures, site selection
guidance and criteria, specifications for the design, layout and construction of the interior of the Studio,
standards and specifications for the furniture, fixtures and equipment located within a Studio, established
relationships with approved or designated suppliers for certain products and services, and standards and
specifications for advertising, bookkeeping, sales and other aspects of operating a Studio.
WHEREAS, Franchisor identifies the System and licenses the use of certain trade names, service
marks, trademarks, emblems and indicia of origin, including the mark CLUB PILATES and other trade
names, service marks and trademarks as are now designated and may hereafter be designated by
Franchisor in writing for use with the System (the "Proprietary Marks");
WHEREAS, Developer desires the right to develop, own and operate multiple CLUB PILATES
Studios under the System in a defined geographic area under a Development Schedule (the "Development
Schedule") set forth in this Agreement; and
WHEREAS, Developer acknowledges that Developer has conducted an independent investigation

of the business contemplated by this Agreement and recognizes that, like any other business, the nature of
the business conducted as a CLUB PILATES Studio may evolve and change over time, that an
investment in a CLUB PILATES Studio involves a business risk and the success of the venture is largely
dependent upon Developer's business abilities and efforts.
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, agree as
follows

L REFERENCES AND D E F ^ T I O N S
A^ DEVEEOFMENTAREA
"Devôpment Area" means the geographic area describedmExh^
^ DEVEEOFMENFSCHEDUEEÊVEEORMENTFERIOD
"Development Schedule" means the schedule for Developer to openand operate a specific
cumulative numher of CLUBPILATES Studios as set f o r t h i n E x h i h i t B t o this Agreement. Each
"DevelopmentFeriod"isaperiod of time set forth in the Development Schedule wherein Developer must
meet each specific development obligations.
CD ERANCHISEAGREEMENT
Except for the royalty fee and the advertising contrihutions^which shall remain the same in each
franchise agreement executed pursuant to this Agreement and any extensions ofthis Agreement, the term
"Franchise Agreement" means the thencurrent form of agreements (including the franchise agreem
and any exhibits, riders, collateral assignments of leases or subleases, shareholder guarantees and
preliminary agreements)that Franchisor customarily
andoperationofaCEUBFlEATES Studio.
Concurrent with the execution of this Agreement, Developer shall execute the Franchise
Agreement for the first Studio that Developer is granted the right to open within the Development Area
hereunder. Franchisor, in its sole discretion, but subject to the express provisions contained herein, may
modify or amend in any respect the standard form ofFranchise Agreement it customarily uses in granting
afranchiseforaCEUB FILATES Studio
The parties agree and acknowledge that: (i) Developer must timely execute Franchisors then^
current form ofFranchise Agreement for each CLUB FILATES Studio that Developer is required to open
and commence operating pursuant to the Development Schedule; and (ii) Franchisor may, in its
discretion, modify or amendthe form ofFranchise Agreement that Franchisor is using as of the date this
Agreementisexecutedas itdeemsappropriate fbr(a) use in the CLUB FILATES System generally,and
(b)execution by the parties in connection with the Studios that Developer must subsequently open and
commence operating under this Agreement.
DD FRINCIFALS
The term "Principals" includes, collectively and individually, Developers owners; i f D e v e ^

is an entity,any officers and directors of Developer (including the officers and directors of any general
partner of Developer) and any person and of any entity directly owning andôr controlling ten percent
(10^) or more of Developer, oramanaging member or manager ofalimited liahility company. The
initial Principals shall be listed in ExhibitD.The Principals must execute an agreement in substantially
the form of the attached Guaranty and Assumption of Obligations (immediately following this
Agreement)undertakingtobeboundjointlyandseverallytoall provisionsofthis Agreement.

^ USEOF^TEM
Developer aôêdges, and does not e o ^ ^ F r a n c h i s ^ ^

eaeh and every aspeet ofthe System. Developers right to developer Studios is speeifieatly limited to the
Development Area, as Bellas the terms and conditions of this Agreement and Franchise Agreements
executed pursuantthereto.
^ GRANT OFDEVELOPMENTRIGHTS
A^ GRANT ANDTERM
In reliance on the representations and warranties of Developer and its Principals, F r a n c h ^
grantstoDeveloper, and Developer herehy accepts the right and ohligationtodevelop,adesignated
number ofCLUB PILATES Studios within the Development Aêa in tull compliance îth the ter^^
this Agreement, including the timely development obligations to openaspecific cumulative number of
CLUBP1LATES Studios over prescribed periods of time as established in the Development Schedule;
andinfullcompliance îth all obligations and provisions under theform(s) of Franchise Agreement
entered into for the right to o^vn and operate each individual CLUB PILATES Studio.
The term of this Agreement shall commence upon full execution of this Agreement and, unless
earlier terminated by Franchisor pursuant to the terms hereof, this Agreement shall expire upon the e a r ^
of: (i)thedateDeveloper timely opens the last CLUB PILATES Studio it isrequired toopenand
commence operations within the Development Area pursuant to this Agreement; or (ii) the last day ofthe
last Development Period on the Development ScheduleD Developer acquires no rights under this
Agreementto developCLUB PILATES Studiosoutside theDevelopment Area. Upon expirationor
tenninationof this Agreement for any reason,Developerîll havenorightsv^hatsoever within the
Development Area (other than any territorial rights that Franchisor has granted to Developer in
connection ^vith any CLUB PILATES Studio(s)that Developer has timely opened pursuant toaFranchise
Agreement as required by the Development Schedule prior to the date this Agreement is terminated or
expires).
BD COMMTPMENTOFDEVELOPFR
Franchisorhasgrantedtheserightsinrelianceonthebusiness skill, financial capability,personal

character and expectations ofperfbrmance by the Developer and its Principals. This Agreement is for the
purpose ofdeveloping and operating the CLUB PILATES Studios, and is not for the purpose of reselling
the rights granted by this Agreement
CD DFVFLOPMENTPLAN
The following conditions and approvals are conditions precedent before the right ofDeveloper to
develop each CLUB PILATES Studio becomes effective. At the time Developer selectsasite for each
CLUB PILATES Studio, Developer must satisfy the operational, financial and training requirements, set
forth belo^v:
(1) Operational: Developer must be in substantial compliance vîth the material terms
andconditionsofthis Agreement and allPranchiseAgreementsgrantedDeveloper For eachCLUB
PILATES Studio operated by Developer, Developer must be in substantial compliance ^vith the standards,
specifications, and procedures set forth and described in the Manuals (defined in the Franchise
Agreement).
© ^ C l ^ P i l ^ ^ ^ e , ^
2017OevelopmemAêm^
(2) Financial Developer and the Prineipals must satisfy Franchisors financial
criteria for Developers and Principals withrespect to Developer's operation o f i t s existing CLUB
PILATES Studios, ifanyândtheproposedCLUBPfLATBS Studio. Developer must he in compliance
and not heen in default during the twelve (12) months preceding Developer's request for approval, of
monetary obligations ofDeveloper to Pranchisor or its affiliate under any Franchise Agreement granted
under this Agreement
DD EXECUTION OFPRANCmSEAGREEMENT
This Agreement is notaPranchise Agreement and does notgrant Developer any right or license
to operateaCLUB PILATES Studio, or to provide services, or to distribute goods, or any right or license
in theProprietaryMarks^ Developer must timelyexeeute Franchisor's thencurrent f b r m o f Franchise
Agreement for each CLUB PILATES Studio that Developer is required to open under the Development
Schedule.
^ DEVELOPMENTRIGHTSANDOBLIGATIONS
AD RESERVATION OERIOHTS
Franchisor(on behalf of itself and its affiliate^sâren^

in its sole discretion and without granting any rights to Developer: ( l ) t o itself operate, or to grant other
persons theright to operate, CLUB PILATES Studios at locations and on terms Franchisor deems
appropriate outside the Development Area granted Developer, and (2) to sell the products and services
authorized for CLUB PILATES Studios under the Proprietary Marks or under other trademarks, service
marks and commercial symbols through dissimilar channels of distribution and under terms Franchisor
deems appropriate within and outside the Development Area, including, but not limited to, by electronic
means,suchasthelntemet,andby websites establishedbyFranchisor,asvêdetermine, inoursole
discretion.
In addition, Pranchisor, any other developer and any other authorized person or entity shall have
the right, atany time, to advertise andpromote the System, inthe Development Area. Developer
acknowledges and agrees that Developer is only granted the right to develop and operate CLUB
PILATES Studios^vithintheDevelopment Area. Accordingly,îthinandoutsidetheDevelopment
Area, Franchisor and its affiliate and its subsidiaries may also offer and sell, and may authorize others to
offer and sell products and services identified by the Proprietary Marks (including memberships and gift
cards)at or from any location.
Franchisor and its affiliatesaffiliate(s^parent(s) further reserve the right t o : ^ ) ^

and license others the right to open and operate, Studios using the Proprietary Marks and System at any
location outside ofyour Development Area; (ii) open and operate, and license others the right to open and
operate, businesses that operate under marks other than the Proprietary Marks the offer similar products
andservicesthatareofferedbyaCLUB PILATES Studio, regardless
ofter and sell products and services that are similar to the products and services offered byaStudio under
adifferent trademark or trademarks, regardless oflocation;(iv)use the Proprietary Marl^ and Systems
^vell asother suchmarksvê designate, todistributeanyApprovedProductsandôrServicesinany
alternative channel of distribution at any location, including via the Internet, mail order, catalog s a ^
toll^ftee numbers, wholesale stores, etc.); (v)to acquire, merge vîth, or otherwise a f f i ^ ^
thato^vn and operate, and franchise or license others to o^vn and operate,anybusiness of anykind,
including,îthout limitation, any business that offers products or services the same as or similars
Approved Products andServices (but under different marks),regardless of location; and(vi)usethe

Proprietary M a r a u d System,
any other aetivities not expresstyprohibited by this Agreement.
Pranehisor may he acquired whether through acquisition of assets, ownership interests or

otherwise, regardless of the form of transaction, hyahusiness providing products and si^^^
those provided ataCLUBPILATESStudio,orhy another husiness,even i f suchhusiness operates,
ftanchisesandôrhcensescompetitivehusinessesîthintheDeveiopmentAreagrantedhy the Area
DevetopmentAgreementandîthintheDesignatedTerritory granted hyaPranchise Agreement.
Pranchisor has the right to o^vn, operate and license others to o^n and operate other business
concepts in and outside the Development Area consistent vîth the terms ofthis Section.
Pranchisor has no obligation and vîll not pay Developer if it exercises any of the rights specified
above within the Development Area granted by the Area Development Agreement or within the
DesignatedTerritory granted byaPranchise Agreement.
^ RIGHTSDURINGDEVELOPMENTPERIODS
Subjectto Section4(A)andtheothertermsofthisAgreement,ifDeveloper(i) is in compliance

vîth the material terms and conditions containedinthis Agreement including the timely development
obligations to openaspecific cumulative number of CLUB PILATES Studios over prescribed periods of
timeasestablishedinPxhibitB(the"DevelopmentSchedule^, and (ii) is insubstantial complia^
all material obligations under Franchise Agreements executed by Developer for individual CLUB
PILATES Studios under this Agreement;thenduring theDevelopment Schedule, Pranchisor: ( i ) ^ i l l
grant Developer the right to o^vn and operate CLUB PILATES Studios located within the Development
Area pursuant to the terms of this Agreement; and ( i i ) ^ i l l not operate(directly or through its a ^
norgrantatranchisetbrthelocationof,anyCLUBPfLATESStudioîthintheDevelopmentArea,
except for franchises granted to Developer under this Agreement.
IfDeveloper, for any reason within his control, fails to complywith the Development Schedule,
this failure constitutesamaterial default of this Agreement, and Pranchisor has the right to t^
Agreement pursuant to Sectionlôf this Agreement. In the event Developer fails to cure the noticed
default within the time allowed under Section 14, Pranchisor may terminate this Agreement and grant
individual orareadevelopmentfranchises^vithin theDevelopment Area tothirdpartiesoro^vnand
operate Studios o^vned by Pranchisor or by the affiliate of Pranchisor Pranchisor and Developer agree
that the timely development ofStudios hyDeveloperincompliance^vith the Development Schedule ^vill
control the rightsgranted Developer by this Agreement, regardless ofthe time period granted Developer
to open a Studio pursuant to a Franchise Agreement for such Studio. Upon termination of this
Agreement, all rights granted Developer revert to Pranchisor, ^vho is free to franchise any other person to
usetheSystemvîthmtheDevelopmentAreaortoitselfo^vnand operate CLUBP1LATES Studios
within the Development Area.
Notwithstanding anything contained inthis Se^^

one-time reasonable extension of time not to exceed 90 days to comply t i t b i t s development obligations
in any one of the Development Period as set forth in the Development Schedule(seeExhibitB), provided:
(i) Developerhasalreadyexecutedalease for, or otherwise obtained,aPremises thatFranchisor approves
for any CLUB PILATES Studio(s)it is required to open and operate during that Development Period; and
(ii) Developer notifiesFranchisor ofits need for such an extension no less than 30 days prior to expiration
of that Development Period.The parties agree and acknowledge that Franchisor's grant of this one-time
extension under this Section ^ i l l not extend, modify or otherwise affect the expiration of any of
Developer'ssubsequent Development Periods or subsequent development obligations.
©^17Cl^Fil^Fraî^LLC
2017O^lopmÂêm^ 5
^ DEVELOPMENT OBLIGATIONS
Developer v ^ a t ^ f i m e s f a i t h s
Agreement and îlleonfinuously exert his best efforts to timely prom^
CLUBPILATES StudiosîthmtheDevelopment Area. Developeragreestoopen andoperatethe
enmulative number o f C L L ^ PILATES Studios at the end ofeaeh Development Period set forth in th^
Development Schedule (see Exhibit B). Developer agrees that eomplianee vîth the Development
Schedule is the essence ofthis Agreement.
D EXPIRATIONORTERMINATION
After this Agreement expires or terminates for any reason, Pranchisor shall have the absolute
right to o^vn and operate, or license other parties the right to o^vn and operate CLUB PILATES
STUDIOS, in the Development Area, except in those DesignatedTerritories granted under each Franchise
Agreement that Developer enters into pursuant to this Agreement.
SD STUDIOCLOSINGS
If during the term of this Agreement, Developer ceases to operate any CLUB PILATES Studio
developedunderthisAgreementfbranyreason, Developer must developareplacement CLUB PILATES
Studiotofulftll Developers obligation to have open and in operation the required number of CLUB
PILATES Studios upon the expiration ofeach Development Period. The replacement CLUB PILATES
Studio must be open and in operation within nine (9) months after Developer ceases to operate the CLUB
PILATES Studio to be replaced or Developer willbe in material breach of this Agreement. If, during the
termofthis Agreement, Developer,in accordance vîththetermsofany Franchise Agreement f o r a
CLUB PILATES Studio developed under this Agreement, transfers its interests in that CLUB PILATES
Studio,atransferredCLUBPILATES Studio shall continue to be counted in determining whether the
Developer has complied ^vith the Development Schedule so long as it continues to be operated asaCLUB
PILATES Studio IfthetransferredCLUBPILATES Studio ceases to be operated asaCLUB PILATES
Studio, it vîll not count toward Developer'scompliance^vith the Development Schedule.
^ PROCEDURE FOR EXERCISING DEVELOPMENTRIGHTS
Developer shall enter into a separate Franchise Agreement vîth Franchisor for eachCLUB
PILATES Studio developed pursuant to this Agreement.The Franchise Agreement to be executed for the
first CLUB PILATES Studio to be developed by Developer under this Agreement must be executed and
delivered to Franchisor concurrently ^vith the execution and delivery ofthis Agreement. All subsequent
CLUBPILATES Studios developed under this Agreement must be established and operated under the
thencurrent form ofFranchise Agreement then being used by Franchisor for CLUBPILATES Studios
under the System. The thencurrent form ofFranchise Agreement may differ from the form attached as
ExhibitC; however, the provisions regarding royalty fees and advertising contributions shall remain as
established in Exhibit C. Developer must execute the thencurrent form ofFranchise Agreement for each
CLUB PILATES Studioto be developed underthis Agreement
Developer acknowledges that the projected opening dates for each CLUB PILATES Studio set
forth in the Development Schedule are reasonable requirements. Developer mustexecuteaFranchise
Agreement for each Studio by the earlier of: (i) fifteen (15) days from the datealease is signed f b r a
location thatFranchisorapproves forthe CLUB PILATES Studio at issue; and (ii) the date necessary fb^
Developer to otherwise comply t i t b i t s development obligations under this Agreement.

^ DUTÔFDEVELOPER
^ O R G A N ^ A T I O N OFDEVELOPER
Developer makes the following representations, warranties and covenants and accepts the
following continuing obligations:
(1) IfDeveloper is a corporation, limited liahility company or a partnership,

Developer represents,ârrants and covenants that: (i) Developer is duly organized and validly existing
under the state la^v of its formation; (ii) Developer is duly qualified and is authorized to do business in
each jurisdiction ^hich requires such qualification; (iii) the execution and p e r f b ^
are within Developer's corporate poêr, i f Developer isacorporation or if Developer isapartnership
permitted under Developer's written partnership agreement, or ifDeveloper is a limited liability
company,permitted under the management agreement;
(2) IfDeveloper isacorporation, copies ofits articles ofincorporation, bylaws, other

governing documents, any amendments, resolutions ofthe Board ofDirectors authorizing entry into
performance of this Agreement, shall be promptly furnished to Franchisor. IfDeveloper isapartnership,
copies of Developers written partnership agreement and other governing documents shall be promptly
furnished toFranchisorbefbre theexecutionof this Agreement. IfDeveloper is a limited liability
company,copies ofDeveloper'sorganizational documents and management agreement shall be promptly
furnished to Franchisor;
(3) I f Developer isacorporation,partnership, limitedliability company,orother

form of legal entity other than an individual. Developer shall maintain at all timesacurrent list of all
ovêrs ofrecord and all beneficial owners ofany class ofvoting securities in Developer or, ifDeveloper
isapartnership. Developer shall maintain at all timesacurrent list of all owners of an interest in the
partnership, or, if Developer isalimited liability company, it shall maintain at all timesacurrent list of
managers and members ofthe limited liability company;
(4) If, after the execution ofthis Agreement, any person ceases to qualify as one of
the Developer's Frincipal's(as defined in Section 1), or ifDeveloper believes in the event any individual
later qualifies as one of Principals, Developer shall promptly noti^Franchisor and that person shall
execute any documents (including, as applicable, this Agreement)as Pranchisor may reasonably require;
(5) IfDeveloper isacorporation, Developer must maintain stoptransfer instructions

against the transfer ofits records ofany equity security and each stock certificate ofthe corporation shall
haveconspicuouslyendorseduponitastatementinafbrmsatisfactorytoFranchisorthat it is held subject
to all restrictions imposed upon assignments by this Agreement; provided, however, that the requirements
of this Section^shall not apply toapublicly held corporation. IfDeveloper isapartnership, its written
partnership agreement shall provide that ownership ofan interest in the partnership is held subject to and
that further assigrmênt or transfer is subject to restrictions imposed on assignments by this Agreement. I f
Developer is a limited liability company, i^s articles of organization and operating agreement must
provide that o^vnershipinterests are subject to restrictions on transfersimposed on assignmentsby this
Agreement;
(6) Developer agrees to maintain at all times throughout the term ofthis Agreement,
sufficient forking capital to fulfill its obligations under this Agreement; and
(7) Each Principal ^vho has right, title, or interest of ten p e r c e n t ( l ^ ) o r more in the
ownership of Developer, must each execute and bind themselves to the confidentiality and
©2017Cl^Pil^Fraî^LLC
2017Developm^ Agreeme 7
nonCOmpefifion C O V e n a ^
Compete ( E x h i b i t s The Prmeip^s agree to jointly and severely guarantee the perfb
Developerôhhgations, under the terms of this Agreement, exeept the ohhgation to open S^
BD REOUIREMENTSOFREPRESENTATIVE
Upon the execution o f t h i s Agreement, Developer must designate and retain an individual
throughout the term ofthis Agreement to aet on hehalfofDeveloper in all transactions ^ i t h Developer
concerning Developer^sohligationsunder this Agreement (the^Representative"^ IfDeveloper is an
individual, Developer must perform all obligations
reasonable ef^rts to do the ^lloîng, during the entire period he serves in that capacity: (l)main^
direct or indirect ownership interest in the Developer;^
the supervision and conduct ofthe business contemplated by this Agreement and execute this Agreement
as one of the Principals; a n d ^ m e e t Franchisor's standards and criteria foraRepresentative as set forth
in the Manuals or otherwise in writing by Pranchisor. Ifthe Representative or any designee is not able to
continue to serve in the capacity ofRepresentative or no longer qualities. Developer must promptly notify
Pranchisor and designateareplacement.
CD
Developer must use his best ef^rts to substantially complywith all requirements of federal,state
and local rules, regulations and orders
^ ^TESELECTIO^LEASE^PRANCHÊAGREEMENT
AD SELECTION OPSITE BYDEVELOPER
Developerassumes all costs, liabilities, expensesandresponsibilities for locating, obtaining,

financing and developing sites for CLUB PILATES Studios, and for constructing and equipping CLUB
PILATES Studios at those sites.The selection ofasite and the development ofaStudio at any site is the
responsibility ofDeveloper. The selection ofasite by Developer is subject to our approval and must be
in compliance ^vith Franchisor's site selection procedures and its standards for demographic
characteristics,parking,traffic patterns and the predominantcharacter of the neighborhood, andother
commercial characteristics ofthe site and any other factors Franchisor may consider relevant in reviewing
asiteselected by Developer. Developer must not enter intoabinding commitment withaprospective
seller or lessor of real estate withrespect tothesitefbraStudio until Franchisor has approved the
proposed site. Developer specifically acknowledges that the selection of a site by Developer in
compliance ^vith Franchisor's site selection procedures and the approval ofasite by Franchisor does not
constitutearepresentation,promiseorguaranteebyFranchisorthatthesiteandthe Studio to be operated
at that site willbe profitable or successful. Developer acknowledges that factors governing the success of
a CLUB PILATES Studio are unpredictable and beyond Franchisors control. Franchisor is not
responsible to Developer or to any other person or entity i f a s i t e approved by Franchisor fails to meet
Developer'sexpectations for revenue or operational criteria.
BD PEMOORAPHIC INFORMATION
Before acquiringasite for any Studio by lease or purchase. Developer must locateasite for the
Studio that satisfies the site selection guidelines Franchisor provides to Developer and must submit to
Franchisor,inthefbrm Franchisor specifies,adescription of the site,ademographic study and other
information and materials Franchisor may reasonably require and shall represent in writing that
Developer has the option or other firm commitment to obtain the site. Franchisor ^ i l l review informat^

provided b y D e v ^ o p e r ^ t h e ^ e ^ ^ ^
oharaeter o f t h e neighborhood, household income, ingress and egress, and trade area. I f onsite
evaluations hy Franchisor are requested hy Developer o
Franchisor or its designee vîll, at Franchisor's expense, provideasingle onsite inspection in connection
^vith each Studio that Developer is required to open hereunder at Franchisor's expense. Developer must
reimburse Franchisor for the reasonable expenses Franchisor incurs for any additional on-site evaluafi^
including, but not limited to, the cost of travel, lodging, meals and ^vagesofFranchisor'srepresentatives
and employees.
^ LEASE ORFURCHASEOFSITE
Developer shall not make any binding commitment to purchase or lease real estate foraproposed
site for a CLUB FILATES Studio until the proposed sitehas been approved by Franchisor and a
Franchise Agreement has been executed by Franchisor and Developer(or its affiliate)fbraStudio at such
site.Developer sballprovideFranchisor w i t h a c o p y o f either êproposedcontractofsale orlease
relating to the site before the Franchise Agreement is executed. Developer must comply ^vith the
conditions set forth in the Franchise Agreement at issue in connection vîth the signing of suchalease,
including ensuring thatboth Developer andthelandlordfbr the proposed site executeFranchisor's
prescribedfromof Collateral Assignmentof Lease.Developer must use any approvedordesignated
suppliers thatFranchisor designates in connection ^vith the site selection and acquisition process.
DD FRANCHISEAGREEMENT
Franchisor ^vill deliver a Franchise Agreement, in the thencurrent form, to Developer for
execution by Developer (or its affiliate). With the execution of this Agreement, Developer must
concurrently execute the Franchise Agreement establishing Developer'sfirst CLUB FILATES Studio and
return both this Agreement and the Franchise Agreement to Franchisor. IfDeveloper fails to execute the
FranchiseAgreement,Franchisormay,atitssolediseretion,revokeitsapproval of the site and its offer to
grant Developerafranchise to operateaCLUB FILATES Studio at the site.
^ DEVELOFMENTFEE
Concurrently ^vith the execution of this Agreement, Developer must pay to Franchisor a
nonrefundable area development fee equal to ^ (the "Development Fee"). The
Development Fee is deemed fully earned by Franchisor upon execution of this Agreement in
consideration of lost development opportunities and is nonrefundable under any circumstances.
Developer ^ i l l not be required to pay any additional initial franchise fee for each Studio opened pursuant
tothis Agreement upon executingaFranchise Agreement for that Studio.
^ SUFERIORITYOFIND^DUALFRANCmSEACREEMENT
Developer understands and agrees that any and all individual Franchise Agreements executed by
Developer and Franchisor for CLUB FILATES Studios within the Development Area are independent of
this Agreement. The continued effectiveness of any Franchise Agreement does not depend on the
continued effectiveness ofthis Area Development Agreement. Ifany conflict arises ^vith this Agreement
andany FranchiseAgreement, the Franchise Agreement controls, has precedence and superiority(except
withrespect to the opening deadline for each CLUB FILATES Studio Developer is granted the right to
open under this Agreement).

IL COVENANTS
A. Develops a n d ^ R e p r e ^ a ^
except as o ^ ^ i s e a p p r o v e d m
substantia time, energy and best e ^ ^
required under tbis Agreement.
B. Developer aeô^ledges tbat, asapartieipant in Franebisor'sSystem, Developer vîti

receive proprietary and confidentialinformation and materials,trade secrets, and tbe unique
procedures and tecbniques tbat Erancbisorbas developed. As sucb, Developer agrees to the covenants in
tbis Section to protect Franchisor, tbe System, Proprietary Marl^ and Erancbisor'sotberfiâncbisees and
developers.
(1) During tbe termortbis Agreement,neitberDeveloper, itsPrincipals,o^ners,

officers or guarantors, nor any immediate family ofDeveloper, its Principals, owners, officers or
guarantors, may,directly or indirectly,fbr themselves or through, on bebalf of, or in conjunction ^ i t ^
other person, partnership or corporation:
(a) O^vn, maintain, engage in, be employed or serve as an officer, director,

or principal of, lend money or extend credit to or have any interest in or involvement îth, any fitness or
exercise business, any fitness or exercise marketing or consulting business, any business offering products
ofasimilar naturetothose of theStudio,or in any business or entity ^hichfranchises,licenses or
otherîsegrants toothers theright tooperatesuch afbrementionedbusinesses(eacb, a"Competing
Business"), or (h)offers or grants licenses or fi^chises, or establishes joint ventures, f b r ^
operation ofaCompeting Business. Por purposes of this Agreement,aCompeting Business does not
include: (i) any business operated by DeveloperunderaFranchise Agreement ^vith Franchisor; or (ii) any
businessoperatedbyapublicly^tradedentityin^hichDevelopero^nslessthant^vo percent ( 2 ^ ) legal
or beneficial interest
(b) Employ or seek to employ any person ^bo is at tbat time employed by
Pranchisor, Franchisor's affiliates or any other System franchisee or developer, or otherwise direct^^
indirectly induce or seek to induce such person to leave his or her employment thereat; or
(c) Divert,or attempt to divert, any prospective customer toaCompeting

Business in any manner.
(2) Foraperiodoftô(2)yearsaftertheexpiration and nonrenewal, transferor

termination ofthis Agreement, regardless ofthe cause, neither Developer, its Principals, owners, o ^
and guarantors, nor any member ofthe immediate family ofDeveloper, its Principals, owners, officers or
guarantors, may,directly or indirectly,fbr themselves or through, on behalf of, or in conjunction îtha^^
other person, partnership or corporation, be involved ^vith any business tbat competes in ^vhole or in part
îthFranchisorbyofferingorgrantinglicensesorfrancbises,orestablisbing joint ventures, forthe
ownership or operation ofaCompetingBusiness.Fbe geographic scope of the covenant contained inthis
Section is any location ^here Franchisor can demonstrate it has offered or sold franchises as of tbe date
this Agreement is terminated or expires.
(3) Foraperiodof t^vo(2)years after tbeexpirationand nonrenewal, transferor

termination ofthis Agreement, regardless ofthe cause, neither Developer, its Principals, owners, officers
and guarantors, nor any member ofthe immediate family ofDeveloper, its Principals, owners, officers or
guarantors, may,direetly or indirectly,fbr themselves or through, on behalf of, or in conjunction îtb
other person, partnership or corporation:
©20^Cl^Fil^F^^,LLC
2017DevelopmÂg^m^ 10
^ O^m, mamtam, engage in, be employed as an officer, director, or
principal of, lend money to, extend credn to or bav^
Competing Business:(i)îtbintbeDevelopment^
perimeter of tbe Development Area being granted hereunder or any other designated territory or
development area licensed by Franchisor toaCLUB PILATES Studio whether franchised or company^
o^vnedâtany time fromthedateofexpirationor termination of this Agreement through thedate
Franchisee attempts to undertake the competitive activity at issue
(b) Solicit business from customers ofDeveloper's former Studios or contact

any of Franchisor's suppliers or vendors tor any competitive business purpose, nor solicit any of
Franchisor's otheremployees, orthe employeesofFrancbisoBsaffiliates or any other System franchisee
or developer to discontinue employment.
C It is the parties'intent that the provisions of this Sectionllbe judicially enforced to the
fullest extent permissible under applicable la^v. Aecordmgly,tbe parties agree that any reduction in scope
or modification ofany part ofthe noncompetition provisions contained herein shall not render any other
partunenfbrceable. In the event ofthe actual orthreatened breach ofthis SectionllbyDeveloper,any of
Developer's Principals, or any member ofthe immediate family of Developer or Developer's Principals,
Pranchisor shall be entitled to an injunction restraining such person from any such actual or threatened
breach. Developer acknowledges that the covenants contained herein are necessary to protect the
goodwill ofother System ftanchisees and developers, and the System. Developer further acknowledges
that covenants contained in this Sectionll are necessary to protect Franchisor's procedures and kno^v
ho^v transmitted during tbe term of this Agreement. Developer agrees that in the event of the actual or
threatened breach of this Section 11,Franchisor's barm willbe irreparable and tbat Franchisor has no
adequate remedy at la^v to prevent such barm. Developer and the Principals agree to pay all costs and
expenses (including reasonable attorneys' fees) incurred by Franchisor in connection vîtb the
enforcement ofthis Section 11. Developer acknowledges and agrees on Developer'so^vn behalf and on
behalfof the personsv^hoareliableunder this Section 11 thateachhaspreviously ^vorkedorbeen
gainfully employed in other careers and that the provisions of tbis Sectionllin no ^vay prevent any such
person from eamingaliving. Developer further acknowledges and agrees that the time limitation ofthis
Sectionllshall be tolled during any default under tbis Sectionll
D. Developer must ensure that all management personnelofDeveloper'sStudios opened

under this Agreement, as Bellas any officers or directors ofDeveloper,executeFrancbisor'sthen^current
formofConfidentialityandNonCompetition Agreement Developer must furnish Franchisoracopy
each executed agreement
F. DeveloperherebyagreesthattheexistenceofanyclaimDeveloper may have agamst

Franchisor,^bether or not arising from this Agreement, shall not constituteadefense toFranchisor's
enforcement of the covenants contained in this Sectionll.Developer agrees to pay all costs and expenses
(including reasonable attorneys'fees) that Franchisor incurs in connection îtb the enforcement of
Sectionll.
F. Notwithstanding thefbregoing,Franchisor reserves the right,inits sole discretion,to

reduce tbe period of time or geographic scope of the non competition covenants set forth in tbis Section
Hand in ExhibitF, by written notice to Developer.

2017 Development Agreement 11
12 RELATIONSmpoFTHEPART^
AD The paries agree t h a t ^ A g r e e m e n t does not c r e a ^ a f i d u c i a r y r ^ ^

them, that Developer is an independent eontraetor and must at a^ times rep^^
eontraetor. This Agreement does not ereate either party as an agent, legal representative, suhsidiary,joint
venturer,partner, employee orjoint employer. Developer shall hold itself out to the puhlie as an
independent eontraetor operating pursuant to this Agreement. Developer agrees to take any action
necessary to that end, including without limitation, exhihitinganotiee on signage and memher contracts,
as required hy Franchisor as to content and manner of disclosure.
B. Developerunderstands and agreesthatnothing inthis Agreement authorizes Developerto

makeanycontract, agreement,ârranty or representation on Franchisor's hehalf, or to incur any deht or
other obligation in Franchisor's name and that Franchisor shallin no event assumeliahility tor, or he
deemed liable underthis Agreement as aresult of any such action, or tor any act or omission of
Developer in the conduct of its business pursuant to this Agreement or any claim or judgment arising
therefrom.
C Developer and eachoftbeFrincipals shall,at all times,indemnify and hold harmless

Franchisor and its affiliate, successors and assigns and tbe officers, directors, shareholders, agents,
representatives and employees ofeach ofthem ("Indemnitees") from all losses and expenses incurredin
connection ^ i t h any formal or informal action, suit, proceeding, claim, demand, investigation or inqm
or any settlement thereof,^hieh arises out of or is based upon the action or negligence of Developer or
any Principal in any ofthe following:
(1) Tbe infringement, alleged infringement, or any other violation or alleged

violation ofany Proprietary Mark or other proprietary right ov^ned by Franchisor;
(2) Claims ofsexualbarassmentordiscriminationbyDeveloper'semployees or bya

guest at the Studio;
(3) The violation ofany federal, stateor local la^v, regulation, rule, standard or
directive, or any industry standard, including without limitation, health, s a n ^
regulations;
(4) Libel, slander or any other formofdefamationof Franchisor or the System,by

Developer or tbe Principals;
(5) Tbe violation or breach by Developer or any of tbe Principals of any warranty,
representation, agreement or obligation ofthis Agreement or any Franchise Agreement; and
(6) Acts, errors or omissions ofDeveloper or any ofits agents, servants, employees,
contractors, partners, affiliates or representatives.
Notwithstanding anything contained in tbis Section 12(C), Developer ^vill not be required to
indemnify, defend or hold Pranchisor harmless for any claims or causes ofaction tbat arise solely out of
Franchisor'sgross negligence or^villful misconduct.
D. Developer and each of the Principals agree to give Franchisor immediate notice of any
such action, suit, proceeding, claim, demand, inquiry or investigation.

E. Franchisor may, at any time and without notice, as it, in its reasonable discretion,
consent, or agree to settlement, or take such other remedial or corrective action as it deems expedient vît^
respect to the action, suit, proceeding, claim, demand, inquiry or investigation.
F All losses and expenses incurred under this Section 12 shall he chargeable to and shall he
paid by Developer or any ofthe Principals pursuant to tbis Section 12, regardless ofany actions, act^^^
ordefenseundertakenbyFranchisorortbesubsequentsuccessorfailure ofsuch actions, activity or
defense. However, Franchisor ^ i l l indemnify Developer from losses or expenses resulting from the direct
result ofFranchisor'snegligence or intentional acts.
G. Fhe phrase "losses and expenses" sball include,îthout limitation, all monetary losses,
compensatory,exemplary orpunitivedamages, fines, actual costs, expenses, lost profits, reasonable
attorneys' fees, court costs, settlement amounts, judgments, damages to Franchisor's reputation and
goodwill, costs of financing or advertising material and media costs and all expenses of recall, refimds,
compensation, public notices and such other amounts incurred in connection ^vith the matters described.
H. Developer must give Franchisor notice of any such action immediately upon Developer
having received notice ofany such action,claim or proceeding.
I. Under no circumstances sball Indemnitees be required or obligated to seek recovery from

thirdpartiesorotherîsemitigatetheirlosses in order to maintainaclaim against Developer. Developer
and theFrincipals agree that thefailure of Pranchisor topursue recovery or mitigateloss from th^
parties ^vill in no ^vay reduce tbe amounts recoverable from Developer or tbe Principals.
1. Developerand tbe Principals expressly agree tbat tbe termsof this Section 12 shall
continue in full forceandeffect after thetermination,expirationortransferof this Agreement or any
interest herein.
1^ PROPRIETARY MAR^S
A. Developer acknowledges tbat Developer basno interest inortotheProprietary Marks

andDeveloper's right touse the Proprietary Marks is derived solely from the individual Franchise
Agreements entered into between Developer and Franchisor for the purpose of operating CLUB
PILAFFS Studios. Developeragrees that allusage of theProprietaryMarksby Developer and any
goodwill established exclusively benefits Pranchisor. Developer agrees that after termination or
expirationofthis Agreement,Developerîllnot, except^vitbrespecttoCLUB PILAFFS Studios
operatedbyDeveloperunderindividual Franchise Agreements, directly or indirectly,at any time or in
any manner identify itself or any business asaDeveloper or former Developer of, or otherwise associated
^vith, Franchisor or use in any manner or for any purpose anyProprietaryMark or other indicia o f a
CLUB PILAFFS Studio or any colorable imitation.
B. Developer must not use any Proprietary Mark as part of any corporate or trade names or
îth any prefix, suffix, or other modifying vôrds, terms, designs, or symbols, or in any modified f b ^
nor may Developer use any Proprietary Mark in connection vîth any business or activity, other than the
business conducted by Developer under Franchise Agreements entered into between Developer and
Franchisor, or in any other manner not explicitly authorized in writing by Franchisor.
C. Developer must immediately notify Franchisor in writing ofany apparent infringement of

or challenge to Developer's use of anyProprietaryMark, or claim by any person of any rights in any
Proprietary Mark or similar trade name, trademark, or service mark of^vhicb Developer becomes a^vare.
Developer must not communicate vîth any person other than Franchisor and its counsel regarding any
©2017Cl^Pil^Fra^hi^LLC
2017O^lopmÂêm^ 1^
mftmgemen^ c h a n g e or claim. Franchisor has sole discretion to t ^
the right to exclusively control anyiitigation,U.S.Patent and Tradema
administrative proceeding arising out ofany infringement, challenge, or claim or otherwise re^^
Proprietary Mark.
O. Pranchisor has registered the domain name v^v^.cluhpilatesstudio.eom. Developer

aclô^ledgesthatPranchisoris the lawful and sole o^ner of this domain name,^vhich incorporates the
trademark CLUB PILATES. Developer agrees not to register the trademark CLUB PALATES or any of
the Proprietary Marks no^v or hereafter o^vnedhy Pranchisor or any ahhreviation, acronym or variation of
the Proprietary Marks, or any other name that could he deemed confusingly similar, as Internet domain
names, including, hut not limited to, generic and country code top level domain names available at the
present time or in the future.
E. Developer agrees and acknowledges that this Agreement does not grant Developer any
rights whatsoever to use any Proprietary Mark, and that such rights are only granted through Developer's
timely execution ofaEranchiseAgreementthat^vill govern the operation o f a C L U B PILATES Studio
that Developer is required to open pursuant to the Development Schedule
1^ TERMINATION
A. Pranchisor may terminate this Agreement for amaterial default ofthis Agreementhy
Developer and all rights granted herein shall automatically terminate upon written notice to Developer,
upon the occurrence ofany ofthe tbllo^ving:
(1) I f Developer becomes insolvent, makesageneral assignment for the benefit of

creditors; ftlesavoluntary petition in bankruptcy, or an involuntary petition is filed a g a ^
bankruptcy; orDeveloper isadjudicatedbankrupt;or i f a b i l l inequity orother proceedingfbr the
appointment ofareceiver ofDeveloper or other custodian for Developer or assets is filed and consented
to by Developer; or ifareceiver or other custodian (permanent or temporary) of Developer's assets or
property,or any part thereof, is appointed byacourt of competent jurisdiction; or ifaproceedingfora
composition of creditors under any state or federal la^ should be initiated against Developer; or ifafinal
judgment remains unsatisfied or of recordfbr thirty (30) days orlonger,(unlesssupersedeasbondis
filed); or ifDeveloper is dissolved; or if execution is levied against Developer; or ifasuit to foreclose any
lien or mortgage against the premises or Studio is levied; or ifthe real or personal property of Studio is
sold after levy thereon by any sheriff, marshal or la^v officer;
(2) IfDeveloper or any of its Principals fail to comply vîtb Section 11 of this
Agreement;
(3) IfDeveloper or a Principal discloses the contents of the Manuals or other

confidential information contrary to this Agreement;
(4) I f an immediate threat or danger topublic healthor safety results from the
operation ofaStudio operated by Developer underaPrancbise Agreement;
(5) IfDeveloperoraPrincipal has madematerial misrepresentations in connection

t i t b i t s application for tbe franchise;
(6) IfDeveloper fails on three (3) or more occasions within any one (l)year period
to comply ^ i t b o n e ( l ) o r more provisions of this Agreement,^betber or not such failures to comply are
cured after notice thereofis delivered to Developer; or
©2017^1^ P i l ^ F r a o c ^ LLC
2017Developmem Agreement 14
(7) Failure to comply ^ h t h e o o n d i ^ ^
required ofthis Agreement.
B. Franchisor may terminate this Agreement and alt rights granted herein, upon thir^
days written notice to Developer, or a less time as specified helo^v, for amaterial default of this
Agreement,^hich shall constitute good cause for termination and the failure of Developer to cure th^
good cause for termination within the notice period. Good cause for termination shall he the occurrence
ofany one ofthe following events of default:
(1) I f Developer fails to meet the development requirements set forth in the
Development Schedule;
(2) I f Developer fails to develop,open and operate each Studio and execute each
Franchise Agreement in compliance îth this Agreement;
(3) IfDeveloper fails to designateaqualified replacement Representative;
(4) I f Developer misappropriates, misuses or makes any unauthorized use of the

Proprietary Marks or materially impairs the goodwill assoc
System and does not cure such default following written notice from Franchisor;
(5) IfDeveloper, fails, refuses or is unahle to promptly pay ^vhen due any monetary
obligation to Franchisor or its affiliate required hy this Agreement, or hy any Franchise Agreement or any
other agreement hetêen the parties and does not cure the monetary default within fourteen (14) days
following written notice from Pranchisor;
(6) IfDeveloperfailstocorrectadeficiencyofahealth, sanitation, or safety issue

after notice of such deficiency is issued hyalocal,state, or federal agency orregulatory authority; or
(7) I f Developer fails to complywith any other material term or material condition
imposed hy this Agreement or any Pranchise Agreement executed pursuant thereto.
G. Failure of Developer to cure the default within the specified time, oralonger period of
time as applicable la^v may require, vîll result in Developer's rights under this Agreement to be
terminated effective on tbe expiration ofthe notice period, and without further notice to Develop^^^
D. Upon termination of this Agreement, Developer has no right to establish or operate any
Studio for v^hicb an individual Franchise Agreement has not already been executed by both Franchisor
andDeveloper,asêllasdehvered to Developer,as ofthe date oftermination.Pranchisor, effective upon
termination of this Agreement, shall have the absolute rigbt and is entitled to establish, and tolicense
others to establisb,GLUBPlLAFFSStudios in theDevelopment Area,except as may be otherwise
provided under any Franchise Agreement ^vhich is then in effect between Franchisor and Developer
F. No default under this Agreement shall constitute a default under any Franchise
Agreement between tbe parties, unless Developer's acts or omissions also violate the terms and
conditions ofthe applicable Franchise Agreement.
P. No right or remedy herein conferred upon or reserved to tbe Pranchisor is exclusive of

any other right or remedy provided or permitted by la^v or in equity

1^ EFFECTOFTERMINATION AND EXPIRATION
AôbhgafionsofPranchisorandD^
nature survive the expiration or termmafionofthisAgreem^
expiration or termination ofthis Agreement and until they are satisfied in full or h^
16 TRANSEEROEINTEREST
A 8YERANCHISOR
Franchisor has the absolute right to transfer or assign this Agreement and all or any part of its
rights, duties or obligations to any person or legal entity without the consent of or notice to Developer.
Tbis Agreement shall inure to tbe benefit of, and be binding on the successors and assigns ofFranchisor
^ DEVELOPER MAY NOT ASSIGN WITHOUT APPROVAL OP THE

PRANCHISOR
Developer understands and acknowledges that the rights and duties created by this Agreement are
personal to Developer and its owners and thatFranchisor has granted these rights to Developer in reliance
upon tbe individual or collective character, sl^ll, aptitude, attitude, business ability and financial^
of Developer andôr its owners. Unless otherwise provided withrespect to an assignment to an entity
controlled by Developer as provided in Section 16(D), none ofthese rights nor any oêrship interest in
Developer rnay be voluntarily,involuntarily,directly or indirectly, assigned, sold,conveyed,pledged,
sub^franchised or otherwise transferred by Developer or its oêrs (including by merger or consolidati^^^
by issuance ofadditional securities representingan ownership interestinDeveloper, by conversion o f a
general partnership toalimited partnership, by transfer or creation of an interest asageneral partner ofa
partnership, by transfer of an interest in Developer or in this Agreement inadivorce proceeding, or i f
Developer or an o^vner of Developer dies, by ^vill, declaration of or transferintrust or the la^vs of the
intestate succession) without the approval ofFranchisor. Any attempted assignment or transfer without
such approval vîllconstituteabreacb of this Agreement and vîll not transfer any rights or interests to
such assignee or transferee.
CD CONDITIONSFORAPPROVALOF ASSIGNMENT
IfDeveloper is in substantial compliance ^vith this Agreement, Franchisor sball not unreasonably
withhold its approval of an assignment or transfer contemplated by Section 16(B)so long as the proposed
assignee or transferer has good and moral character, sufficient business experience and aptitude to
develop and o^vn and operate Studios, and otherwise meets Franchisor's thencurrent standards for
developers and System franchisees. Franchisor may require that any one or more ofthe following
conditions be met before, or concurrently îth, tbe effective date ofany such assignment or transfer:
(1) All tbe accrued monetary obligations ofDeveloper or any ofits affiliates and all
other outstanding obligations to Franchisor or its affiliate arising under this Agreement or any Franchise
Agreement or other agreement between them and all trade accounts and any other debts to Franchisor, of
whatsoever nature, prior to tbe transfer becoming effective shall be satisfied;
(2) Developer and its affiliates are not in material default of any substantive
provision of this Agreement, any amendment hereof or successor hereto, or any Franchise Agreement
granted pursuant to its terms, or other agreement between Developer or any ofits affiliates and Franchisor
or its affiliate;

(3) Developer andi^Prmcipa^ as ap^^
inaform safisfaetory to Franeh^
affiliate and their respective past and present partners, the past and present officers, directors,
shareholders, partners, agents, representatives, independent contractors, servants and employees of each
ofthem, in their corporate and individual capacities, including, without limitation, claims
related to this Agreement and any other agreements hetvêen Developer andFranchisor, or under federal,
state or local la^vs, rules, and regulations or orders;
(4) The transferee shall demonstrate to Franchisor's satisfaction that the transferee
meetsthe criteria considered hyFranchisor^henrevievîngaprospective developer's applicationfor
development rights, including, hut not limited to, Franchisor's managerial and business experience
standards, that the transferee possesses good moral character, business reputation and credit rating; that
the transferee has the aptitude,financialresources and capital committed for the operation ofthe b
andthegeographicproximity ofother territories withrespect to ^hichtransfereehasbeengrante^
development rights or ofother CLUB FfLATFS Studios operated by transferee, if any;
(5) Tbetransferee shall signa^vritten assumption agreement, inaform prescribed by

Franchisor, assuming full, unconditional, joint and several liability from the date of th^
obligations, covenants and agreements ofDeveloper in this Agreement; and, if transferee isacorporation,
limited liability company oraparmership,transferee'sshareholders, parmers, members or other inv^^^
as applicable, shall also execute such agreement;
(6) Developershallpayatransferfeeequal to of the Development Fee to

Franchisor at the time oftransfer, unless the transfer is being made: (i) to an immediate family member of
Developer that Franchisor approves pursuant to Sectionl6(F); or (ii) in the form of an encumbrance of
theassetsofanyFranchisedBusmess(orasubordinatingFranebisor'ssecurity interest in such assets)as
anecessary condition to obtain SBAortraditional bank financing;
(7) Developer acknowledges and agrees that each condition,^hich must he met by
the transferee, is reasonable and necessary; and
(8) Developer must pay any referralfees or commissionsthat may he due to any
franchise broker,sales agent or other third party upon the occurrence of such assignment
Franchisor's consent to a transfer of any interest in Developer described herein shall not
constituteawaiver of any claims it may have against the transferring party, nor shall it be deemeda
waiver ofFranchisor'sright to demand exact compliance ^vitb any of the terms of this Agreement by the
transferee. UponanapprovedtransferundertbisSection,Developerîllonlybeboundby,and liable in
connection ^vitb, its post^term obligations under this Agreement.
DD ASSIGNMENFTOACOÔRAFION ORLIMITED L A B I L I T Y COMFA^^
(1) Notwithstanding the provisions of this Section 16of tbis Agreement, upon thirty
(30) days'prior written notice to Franchisor, and without payment ofatransfer fee. Developer may assign
this Agreement toacorporation or limited liability company that conducts no business other than the
development andôr operation of CLUBFfFAFFS Studios. Developer sball be the o^vner o f a l l tbe
votingstockorinterestofthecorporationorlimited liability company,or i f Developer is more than one
individual, each individual shall have the same proportionate ownership interest i n ^ e corporation as be
bad in Developer before the transfer. Developer and each of its Principals, as applicable, may transfer,
sell or assign their respective interests in Developer, by and amongst themselves ^vitb Franchisor's prior
written consent, ^vhich consent shall not be unreasonably withheld; but may be conditioned on
©^17CluhFil^Fraî^LLC
2017DevelopmÂg^m^ 17
comphance^hSecfionlêx^
combing i n ^ ^ m D e v e l o p ^
(2) Any person v^ho is or becomesashareholder or member of Develops

requires b e n e f i t ownership of any shares of stoek equal to or greyer tbante^
interest in Developer most execute an agreement in substantially tbe form of tbe attae
Assumptionof Obligations undertaking tobeboundjointlyandseverallytoallprovisionsof tbis
Agreement.Developer must fîsbPranebisor at anytime upon requestaeertified copy oftbeart^^
ineorporationorartielesoforganizationandalist, inatbrm Franchisor requires, ofall ^
members of recordandall personshavingbeneficial ownership of shares of stock, reflecting their
respective interests in Developer.
^ RIGHT OFFIRSTREFUSAL
IfDeveloper receives and desires to accept any bona tide offer to transfer an ownership interest in
this Agreement ftomathird party, then tbe Developer shall promptly notify Franchisor in ^ r i t i n g ^
send Franchisor an executed copy ofthe contract of transfer. Franchisor shall have the right and option,
exercisable within thirty (30) days after actual receipt ofsuch notification or ofthe executed contract of
transfer v^bich shall describe the terms of the offer, to send bitten notice to Developer that Franchi^^
intends to purchase the Developer's interest on the same terms and conditions offered by the third party^
Closing on the purchase must occur within sixty (60) days from tbe date ofnotice by Franchisor to tbe
Developer of Franchisor's election to purchase.lf Franchisor elects not to accept the offer within the
thirty (30) day period, Developer shall baveaperiod not to exceed sixty(60) days to complete the transfer
subject to the conditions for approval set forth in Section 16(C) ofthis Agreement Any material change
in the terms of any offer before closing shall constitute
refusalby Franchisor asinthe case ofaninitialoffer. Failure of Franchisor to exercisetheoption
afforded by this Section 16sball not constituteawaiver of any other provision of this Agreement, ifthe
offer from a thirdparty provides for payment of consideration other than cash or involves certain
intangible benefits. Franchisor may elect to purchase the interest proposed to be sold for the reasonable
cash equivalent, or any publicly^traded securities, including its o^n, or intangible benefits similar to t^^
being offered. Ifthe parties cannot agree withinareasonabie time on the reasonable cash equivalent of
thenoncashpartoftbeoffer, then such amount shallbedeterminedby an independent appraiser
designated hyFrancbisor,and bis determination sball be binding.
FD DFAFHORDISARILIFY
Upon the death or permanent disahility of Developer(or the managing shareholder, managing
member orpartner), theexecutor,administrator, conservator or other personalrepresentative ofthat
person, or the remaining shareholders, partners or members, must appointacompetent manager tbat is
approved by Franchisor within ninety (90) days from tbe date of death or permanent disability (tbe"90
Day Feriod"). Before the end of the 90 Day Feriod, the appointed manager must attend and successfully
complete Franchisor's training program and must either execute Franchisor's tben current form of area
development agreement for the unexpired term of tbis Agreement, or fumishapersonal guaranty of any
partnership, corporate or limited liability company Developer'sobligations to Franchisor and Franchisor's
affiliates. I f the Studiois not being managed hyaFranchisor approved manager during tbe 90Day
Feriod, Franchisor is authorized, but is not required, to immediately appointamanager to maintain the
operations ofDeveloper's Studios for and on behalfofDeveloper until an approved assignee is able to
assume the management andoperation of theStudio. Franchisor's appointment ofamanager of tbe
Studio does not relieve Developer ofhis obligations, and Franchisor is not liable for any debts, losses,
costsor expensesincurred in reoperations ofthe Studio orto any creditor of Developer forany
products, materials, supplies or services purchased by the Studio during any period in ^vbich it is managed
©2017Ci^Pii8^Fraî^LLC
2017Developm^ Agreeme 1^
by Franchi^sappom^d manage Franchisor has tbe rigbt to cbargeareasonab^êfbr management
services and to eease to provide management services at any time. Franebisor's rigbt of firs^
fortb in Seetioni6(F)îii not appiytoatransfernnder tbis Section if tbe transferee is an immed
family member ofDeveloper tbat Franchisor approves.
G FU^CORFÂTEOFF^NGS
(1) Developer acknowledges tbat tbe^vritten information used toraiseor secure

funds can reflect upon Franchisor. Developer agrees to submit any written information intended to be
used for tbat purpose to Franchisor before its inclusion in any registration statement, prospect
offeringcircular or memorandum. Fhis requirement appliesunder the fbllo^vingconditions: (i) if
Developer attempts to raise or seeurefunds by tbe sale of seeuritiesin Developer or any affiliate of
Developer (including common or preferred stock,bonds,debentures or generalorlimitedpartnership
interest) and (ii)ifany ofits oêrs attempt to raise or secure fi^ds by the sale ofsecurities in Developer
or any affiliate of Developer (including conôn or preferred stock,bonds,debentures or generalor
limited partnership interests) Developer (or any of its ovêrs) agrees not to use tbe written materials
submitted to Franchisor or any other v^rinen materials to raise or secure funds unless and until Franchi^^
approves of tbe languageD No information respecting Franchisor or its affiliate shall be included in any
securitiesdisclosuredoeument,unlesstbat infbrmationhasbeen fumishedtoFranchisor, in^vriting,
pursuant to the written request of tbe Developer. Fhe written request shall state the specific purpose for
v^hieh the information is to be used. Should Franchisor,mits sole discretion, object to any reference to
Franchisor or its affiliate or any oftheir businesses in the offering literature or prospectus, thelites
prospectus sball not be used unless and untilthe objections ofFranchisor are vîthdrav^n. Franchisor
assumes no responsibility for the offering whatsoever. Developermustpay Franchisorapublic offering
fee of Fhree Thousand Five Hundred Dollars (^3,500) for tbe costs to Franchisor to review the
information. The written consent ofFranchisor pursuant to this FaragrapbGdoes not imply or constitute
the approval ofFranchisor withrespect to the method offinancing, tbe offering literature submitted to
Franchisor or any other aspect ofthe offering.
(2) The prospectus or other literature utilized in any offering must contain the
following language in bold^face type on tbe first textual page:
^NEFFHER CLUB FILATES F ^

ANY OF ITS AFFILIATE S SUBSIDIARIES IS DIRECTLY OR INDIRECTLY
THE ISSUER OF THE SECURITIES OFFERED^ NEITHER CLUB FILATES
FRANCHISEE LLC NOR ITS AFFILIATE NOR ANYOF ITS AFFILIATES
SUBSIDIARIES ASSUMES ANY RESPONSIBILITY WITH RESFECT TO THIS
OFFERING ANDÔR THE ADEQUACY OR ACCURACY OF THE
INFORMATION SET FORTH, INCLUDING ANY STATEMENTS MADE WITH
RESFECTTOANYOFTHEMD NEITHER CLUB FILATES FRANCHISE, LLC
NOR ITS AFFILIATE NOR ANY OF ITS AFFILIATE S SUBSIDIARIES
ENDORSESORMAIÊSANYRECOMMENDATIONWITHRESFECTTOTHE
INVESTMENTCONTEMFLATEDBYTHISOFFERINGB^
(3) Developer and each of its owners agrees to indemnify, defend and bold harmless
Franchisor and its affiliate, and their respective officers, directors, employees and agents, from any and all
claims, demands, liabilities, and all costs and expenses (including reasonable attorneys'fees)incurred by
Franchisor as the result of tbe of^r or sale of securities. Tbis Agreement applies to any and all claims,
demands, liabilities, andall costs andexpenses (includingreasonable attorneys' fees) assertedby a
purchaser of any security or byagovemmental agency. Franchisor has tbe right (but not tbe obligation)
to defend any claims, demands or liabilities andôr to participate in tbe defense of any action to ^vhich
©^17ClobPil^Frano^LLC
2017D^l8pmÂ^m^ 1^
Franchisor o r ^ a f f i h a t e or any of ^
party
HD NOTICE TO FRANCHISOR
Provided Developer is not thenapuhhc company, if any person holding an ^

(other than Developer o r a I ^ n c l p a l , ^ h i c h parties shallhe subject to the provisions set fbrt^
transferssuchinterest^thenDevelopershallpromptlynotifyFranchisorofsuchproposed transfer
writing and provide information as Franchisor may reasonably request before the t r a n s ^ Tbe transferee
may not be one ofFrancbisor's competitors. Tbe transferee must executeaConfidentialityAgreement
and Ancillary Covenants Not to Compete in the form then required by Franchisor,^bich form shall b^
substantially the same form attached hereto as Exhibit F. Franchisor also reserves the right to designate
the transferee as one ofthe Principals. IfDeveloper isapublic company,this provision applies only to
transfers in interest by Principals or to any person or entity controlling more than ten percent ( 1 0 ^
Developer'svoting stock.
1^ APPROVALS
A. Wherever this Agreement requires the prior approval or consent ofFranchisor, Developer
shall makeatimelyv^rittenrequesttoFranchisorfbrsuch approval or consent.
B. Pranchisor makes no warranties or guarantees upon v^hicb Developer may rely and
assumes no liability or obligation to Developer or to any third party to ^bicb it ^vould not otherwise be
subject, by providing any waiver, approval, advise, consent, or services to Developer in connection ^vitb
this Agreement, or by any reason ofneglect, delay or denial ofany request therefor.
1^ NONWAIVER
A. No failure of Franchisor to exercise any povêr reserved to it by this Agreement, or to

insist upon strict compliance by Developer or Principals ^vith any obligation or condition hereunder, and
no custom or practice of the parties at variance îtb tbe terms hereof, shall constituteawaiver or estoppel
ofFrancbisor's right to demand exact compliance ^vitb any ofthe terms herein and Developer and the
Principals warrant and undertake tbat it shall not rely on such failure, custom or practice. Waiver by
Francbisorofany particular defaultby Developer or any of tbePrincipals shallnot affector impair
Franchisor's rights withrespect to any subsequent default of the same, similar or different nature, nor
sball delay, forbearance, oromission of Franchisor toexercise any po^ver orright arisingout of any
breach or default by its other developers or by Developer of any of tbe terms, provisions, or covenants
hereof, affectorimpairFrancbisor'srighttoexercisethesame,norsball such constituteawaiver by
Franchisor ofany right hereunder, or tbe rigbt to declare any subsequent breach or default and to
terminate tbis Agreement prior to tbe expiration of its term. Subsequent acceptance by Franchisor of any
paymentsduetoitbereundershall not be deemed to bea^vaiver by Franchisor of any preceding hreach
by Developer ofany terms, covenants or conditions ofthis Agreement.
B. All rights and remedies of tbe parties hereto sball be cumulative and not alternative, in
addition to and not exclusive ofany other rights or remedies ^vhich are provided for herein or whichmay
be available at la^ or in equity in case of any breach, failure or default or threatened breach, failure or
default ofany term, provision or condition ofthis Agreement, the rights and remedies ofthe parties hereto
shall be continuing and shall not be exhausted by any one or more uses thereof, and may be exercised at
any time or from time to time as often as may be expedient; and any option or election to enforce any
such right or remedy may be exercised or taken at any time and from time to time. The expiration or
early termination ofthis Agreement shall not discharge or release Developer from any liability or
©2017Cl^Pil^Fraî^LLC
2017OevelopmÂg^m^ 20
obhgafion then accrued or any 1 ^
or early termination ofthis Agreement
1^ DEVELOPERSRECOROSAND REPORTS
A. Developer must keep aeeurate records eoneermng all transactions and written
communications hetêen Pranchisor and Developer relating to the development and operation of Studios
in the Development Area. Pranchisor'sduly authorized representative has the right, following reasonable
notice, at all reasonable hours of the day to examine all Developer'srecords withrespect to the suhject
matter of this Agreement, and has full and ftee access to records for that purpose and tor the purpose of
making extracts. All records must be kept available tor at least three (3)years after preparation.
B. Developermust furnish toPranchisor monthly writtenreports regarding Developer's

progress on the development ofCLUBPfLATES Studios underthis Agreement.
2^ NOTICES ANDPAYMENTS
All written notices and reports permitted or required to be delivered by the provisions of tbis
Agreement or of the Manuals shall be deemed so delivered at the time delivered by band or byemail
îth receipt confirmed by the receiving party or one(l) business day after sending by overnight courier
vîth delivery confirmed and addressed to the party to be notified at its most current address of ^vbich tbe
notifying party has been notified. The following addresses for the parties sball be used unless and untila
different address has been designated by written notice to the otberparty:
Notices to Franchisor:

Attn: Shaun Crove
31^Pullman Street
With an additional copy to:
Fisher mucker, LLC

Attn: Lane Fisher
21South21^Street
Philadelphia,PA 19103
Notice to Developer:
ATTN:
21. GOVERNING LAW
A. This Agreement shall be governed by and construed in accordance with the laws of the
State of California, without reference to the state's conflict of laws principles, except that any disputes or
actions involving any non-competition covenants set forth in any Franchise Agreement, including the

interpâfionanden^cem^
locate
2^ AÎTRATIONANDOTHERD^PUTE^SOLUTIONPROVIÔ^
A. Dôp^mu^fi^bringany^^
Franchisor management and make every e ^ r t to resolve the ^
this internal dispute resolution procedure hefore Developer may hringDeveiope^^^
party. This agreementto first attempt resolution of disputes internally shall survive tennination or
expiration ofthis Agreement.
B. At Franchisor's option, all claims or disputes between Developer and Franchisor(orits

affiliates)arising out of, or in any way relating to, this Agreement or any other agreementhy and between
Developer and Franchisorfor its affiliates), or any of the parties'respective rights and obligations ari^^
ftomsucbagreement,wbicharenotfirstresolvedthrougbtbeinternal dispute resolution procedure sent
forth in Seetion22(A)above, willbesubmitted first tomediationtotakeplace at Franchisor's then
current headquarters under the auspices of tbe American Arbitration AssociationÂAA''), in accordance
with AAA's Commercial Mediation Rules thenineftect. Before commencing any legal action against
Franchisor or its affiliates with respect to any such claim or dispute. Developer must submitanotice to
Franchisor, which specifies, in detail, the precise nature and grounds ofsuch claim or dispute. Franchisor
will baveaperiod of thirty (30) days following receipt of such notice witbin which to notify Developer as
to whether Franchisor or its affiliates elects to exercise its option to submit sucbclaimor dispute to
mediation. Developer may not commence any action against Franchisor or its affiliates with respect to
any such claim or dispute in any court unless Franchisor fails to exercise its option to submit such claim
or dispute to mediation, or such mediation proceedings have been terminated either: (i) as tbe result o f a
written declaration of tbe mediator(s)tbat^rtber mediation efforts are not worthwhile; or
ofawrittendeclarationby Franchisor. Franchisor's rigbtsto mediation, as set forth berein,may be
specifically enforced by Franchisor. Fach party will bear its own cost of mediation and Franchisor and
Developer will share mediator fees equally. This agreement to mediate will survive any termination or
expiration of tbis Agreement.The parties will not be required to first attempt to mediateacontroversy,
dispute,orclaimthrougbmediationassetfbrtbintbis Section22(B)if suchcontroversy,dispute, or
claim concerns an allegation tbataparty has violated(or threatens to violate, or poses an imminent risk of
violating): (i) any federally protected intellectual property rights in tbe Proprietary M
in any confidential information; (ii) any ofthe restrictive covenants contained in tbis Agreement; and
anyofDeveloper'spaymentohligations underthis Agreement.
C Developer and Franchisor believe tbat it is important to resolve any disputes amicably,
quickly,cost effectively andprofessionally,andtoretumtobusiness as soon aspossible Subjectto
Sections 22(D)^(F) of tbis Agreement, Developer and Franchisor have agreed tbat tbe provisions of tbis
Article 22 support these mutual objectives and, therefore, agree tbat any litigation, claim, disput^^
action, controversy,or proceeding of any type whatsoever including any claim for equitable relief andôr
whereeitber party is actingas a"privateattomey general," suingpursuant to astatutory claim or
otherwise, between or involving Developer and Franchisor on whatever theory andôr facts based, and
whether or not arising out ofthis Agreement, ("Claim") will be processed in tbe following manner:
a. Developer and Franchisor each expressly waives all rights to any court proceeding,
except as expressly provided in Sections 22(B)and 22(C), below.
b. All Claims sball be submitted to and resolved by binding arbitration in Orange County,
California, before and in accordance with tbe arbitration rules of the American

ArbiîonAssociafio^ judgment upon the award rendered by tbe a r b i ^ o r shall be
entered in any Court bavingjnrisdietion thereof
e. Franehisor and Developer agree that any arbitration between Franchisor and Developer
shall be ofDeveloper's individual claim and tbat the elairnsubieet to arbitration sball not
be arbitratedonaclass^wide basis.
d. This arbitration provision sball be deemed to be selfêxecuting, and in tbe event either
party fails to appear at any properly noticed arbitration proceeding, an award may be
entered against such party notwithstanding said failure to appear.
e. In no event shall Franchisor be liable to Developer for punitive damages in any action
arising out of or relating to this Agreement, or any breach, termination or cancellation
hereof.
f. Any arbitration proceeding conducted under this Section, including all demands, filings
and evidence submitted in connection therewith, must be kept strictly confidential, unless
Franchisor agrees otherwise in writing.
D. Developer acknowledges and agrees tbat irreparable harm could be caused to Franchisor
by Developer's violation ofcertain provisions ofthis Agreement and, as such, in addition to any other
relief available at law or equity, Franchisor shall be entitled to obtain in any court of competent
jurisdiction,witbout bond, restraining orders or temporary or permanent injunctions in order to enfb^
among other items, tbe provisions ofthis Agreement relating to: (i) Developer's use ofthe Proprietary
Marks and confidential information; (ii) tbe interm covenantnottocompete, as well as any other
violations o f t h e restrictive covenants set forth in this Agreement; (iii) Developer's obligations on
termination or expiration of this Agreement; (iv)disputes and controversies based on or arising under tbe
Lanbam Act, as now or hereafter amended; (v) disputes and controversies involving enforcement of the
Franchisor's rights with respect to confidentiality under tbis Agreement; and (vi) to prohibit any act or
omission by Developer or its employees tbat constitutes a violation of applicable law, threatens
Franchisor's franchise system or threatens other franchisees of Franchisor. Developer's only remedy if
such an injunctionis entered willbethedissolutionoftheinjunction, i f appropriate,and Developer
waives all damage claims ifthe injunction is wrongfully issued.
F. Franchisor's officers, directors, shareholders, agents andôr employees are express third
party beneficiaries of the provisions of this Agreement, including tbe dispute resolution provisions s
forth in Section 22 ofthis Agreement, each having authority to specifically enforce tbe right to mediate
claims asserted against such person(s)hy Developer.
F Asacondition precedent to commencing an action for damages or for violation or breach

of this Agreement, Developer must notify Franchisor within thirty (30) days after tbe occurrence of the
violation or breach, and failure to timely give such notice shall preclude any claim for damages.
C Developer sball not withhold all or any part of any payment to Franchisor or any of its
affiliatesonthegrounds of Franchisor'salleged nonperformance or asanoffset against any amount
Franchisor or any of Franchisor's affiliates allegedly may owe Developer under this Agreement or any
related agreements.
H. Developer further agrees that no cause of action arising out of or under this Agreement
may be maintained by Developer against Franchisor unless brought before tbe expiration of one(l)year
after tbe act, transaction or occurrence upon wbicb such action is based or the expiration ofone year after
©2017ClubPil^Fraî^LLC
2017D^lopmÂ^m^ 2^
the Developer becomes aware of facts or
claim agamst Franchisor hereunder, whic^^
period shall he harred asaclaim, counterclaim, defense, or set-off. Developer hereby waives the right to
obtain any remedy based on alleged fraud, misrepresentation, or deceit by Franchisor, including,witbout
limitation,rescissionof this Agreement, inany mediation, judicial, orother adjudicatory proceeding
arisingbereunder,exceptuponagroundexpresslyprovided in tbis Agreement, or pursuant to any rigbt
expressly granted by any applicable statute expressly regulating the sale of franchises, or any regulation
orrules promulgated thereunder.
f Developer hereby waives to the fullest extent permitted by law,any rigbt to or claim for
any punitive, exemplary, incidental, indirect, special or consequential damages (including, without
limitation, lost profits) against Franchisor arising out of any cause whatsoever (whether such cause be
based in contract, negligence, strict liability, other tort or otherwise) and agrees tbat in the event o f a
dispute, that Developer's recovery is limited to actual damages. I f any other term of this Agreement is
found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions
continueinfull fbrceandeffeet, including, withoutlimitation,tbe waiver of any rigbt to claim any
consequential damages. Nothing in this Section or any other provision o f t h i s Agreement sball be
construed toprevent Franchisor from claimingandobtainingexpeetation or consequential damages,
including lost future royalties for tbe balance of the term of tbis Agreement i f it is terminated due t^
Developer's default, wbicb tbe parties agree and acknowledge Franchisor may claim under tbis
Agreement.
L FHFFARFIFSHFI^BYAGRFF TO W A l V F F R l A L B Y l U R Y f N ANY ACTION,

FROOFFDfNOOROOUNTFROLAfM, W H F T H F R A T L A W O R F ^ U f T Y , R F O A R D L F S S O F
WHfOH FARTY BRfNOS SUIT THfS WAFBFR SHALL AFFLY TO ANY MATTER
WHATSOFVFR8FTWFFNTHFFART1FSHFRFTOWH10HAR1SFSOL1TOF ORIS RELATED
fNANYWAYTOTHlSAOREEMENTORTHEFERFORMANCEOFElTHERFARTY
^ THE PARTIES AOREE THAT ALL FROCEED1NOS ARiSfNO OUT OE OR

RELATED TO THIS AOREEMENTW1LL8E0ONDU0TEDON AN INDIVIDUAL, NOTAOLASS
WIDE 8AS1S, AND THAT ANY FROOEEDfNO BETWEEN DEVELOFER, DEVELOPER'S
GUARANTORS AND FRANCHISOR OR ITS AFFILIATESÔFFICERSÊMFLOYEESMAYNOT
BE CONSOLIDATED WITH ANY OTHER FROCEEDINC BETWEEN FRANCHISOR AND ANY
OTHER THIRDFARTY
23. ENFORCEMENT
AD SEVERABILITY AND SUBSTITUTION O F V A L I D PROVISIONS
(1) Except as expressly provided totbe contrary inthis Agreement,each section,

paragraph, term and provisionof this Agreement,is considered severable a n d i f , f o r any reason,any
portion ofthis Agreement is held to be invalid, contrary to, or in conflict with any applicable present or
futurelaworregulationinafinal,unappealablerulingissuedby any court,agency or tribunal with
competent jurisdiction inaproceeding to wbicb Pranchisor isaparty,tbat ruling shall not impair tbe
operation of, or have any other effect upon, other portions of tbis Agreement as may remain otherwise
intelligible,which shall continue to be given full force and effect and bind the parties tothis
although any portion held to be invalid sball be deemed not to beapart of tbis Agreement from tbe date
tbe time for appeal expires, ifDeveloper isaparty,otberwise upon Developer'sreceiptofanotice of non
enforcement from Franchisor

(2) I f any apphcable and binding lawo^
prior notice of tbe tenmnationo^
otberaetionnotrequiredôrifunderanyappbeabieandbindinglaworruie of any jurisdiction, any
provision oftbis Agreement or any specification, standard or operating procedure Franchisor prescri^^
invalid or unenforceable, tbe prior notice andôrotb^
for tbe comparable provisions, and Erancbisorbas tbe rigbt, in its sole discretion, to modify tbe m^
unenforceable provision, specification, standard or operating procedure to tbe extent required to be vab^
and enforceable. Developer agrees to be bound by any promise or covenant imposing tbe maximum duty
permitted by law wbicb is prescribed witbin tbe terms of any provision of tbis Agreement, a
were separately articulated in andmadeapart of tbis Agreement, tbat may result from striking from any
of tbe provisions, or any specification, standard or operating procedure Franchisor prescribes, any portion
or portions whichacourt may hold to be unenforceable inafinal decision to which Franchisor isaparty,
or from reducing the scope of any promise or covenant to the extent required to comply with acourt
order. Modifications tothis Agreement shallbe effective only inthatjurisdiction,unlessFranchisor
elects to give them greater applicability, and this Agreement shall be enforced as originally made and
entered into in all other jurisdictions.
8. FXCEFFIONS
Neither Franchisor nor Developer are liable for loss or damage or deemed to be in breach ofthis
Agreement i f its failure to perform its obligations results from:(l)transportationsbortages,inadequat^
supply of labor, material or energy, or tbe voluntary foregoing of the rigbt to acquire or use any of tbe
foregoing in order to accommodate or comply with the orders, requests, regulations, recommendations or
instructions of any federal, state or municipal government or any department or agency;êompliance
withanylaw,rulmg,order,regulation,requirementorinstructionofany federal, state,or municipal
government or any department or agency;âcts of G o d ; ^ a c t s or omissions of tbe other party;^)
fires, strikes, embargoes,war or riot; o r ^ a n y other similar event or cause. Any delay resulting from
any oftbese causes shall extend performance accordingly or excuse performance, in whole or in part, as
may be reasonable.
^ RIGHTSOFFARFIESARFCUMULATIVF
Fbe rights ofFranchisor and Developer under this Agreement are cumulative and no exercise or
enforcement by Franchisor or Developer ofany rigbt or remedy precludes tbe exercise or enforcement by
Franchisor or Developer ofany other right or remedy which Franchisor or Developer is entitled by law to
enforce.
DD COSFSANDAFFORNFYSFEFS
If Developer is inbreachordefaultof any monetary or nonmonetary obligation underthis

Agreement or any related agreement between Developer and Franchisor andôrFrancbisor's affiliates,
and Franchisor engages an attorney to enforce Franchisor's rights (whether or not formal judicial
proceedings are initiated). Developer must reimburse Franchisor for all costsêxpenses incurred in
connection with enforcing its rights under this Agreement including all reasonable attorneys'fees, court
costs and arbitration expenses. IfDeveloper institutes any legal action to interpret or enforce the terms of
tbis Agreement, and Developer'sclaim in such action is denied or tbe action is dismissed. Franchisor is
entitled to recover Franchisor's reasonable attorneys'fees, and all other reasonable costs and expenses
incurred in defending against same, and to have such an amount awarded as part of tbe judgment in tbe
proceeding.

E. VARIANCES
Developer acôwledges that F r a n ^

ehanges ftomêuniforms^d^dsofthe System mFranehisoBs absolutesolediseretion, whieh
Franehisor deems desirable or necessary under partieulareireumstan^^ Developer understands tbat be
bas no rigbt to object to or automatically obtain snebvarlanees, and any exception or ebange must be
approved in advance from Franchisor in writing. Developer understands existing Developers may operate
under different forms ofagreements and tbat tbe rights and obligations of existing Developers m^
materially ftom this Agreement.
FD E N D I N G FFFFCF
Fhis Agreement isbinding upon tbe parties of this Agreement and their respective executors,
admimstrators,heirs,assigns and successors ininteres4andsballnotbemodifiedexceptby written
agreement signed by both Developer and Franchisor.
CD CONSFRUCTIONBINFECRAFION CLAUSE
Fhis Agreement, all exhibits to this Agreement and all ancillary agreements executed
contemporaneously with this Agreement constitute tbe entire agreement between tbe parties with
reference to the subject matter of tbis Agreement and supersede any and all prior negotiations,
undertakings, representations, and agreements. Nothing in this Agreement or in any related agreement,
however, is intended to disclaim tbe representations Franchisor made in tbe FDD that Franchisor
furnished to Developer. Developer acknowledges that Developer is entering into this Agreement, and all
ancillary agreements executed contemporaneously with this Agreement, asaresult of Developer's own
independent mvestigationofthefrancbisedbusinessand not asaresultofany representations about
Franchisor madebyFrancbisor'sshareholders, officers,directors, employees, agents,representatives,
independent contractors, attorneys, or Developers, which are contrary to tbe terms set forth in tbis
Agreement or ofany franchise disclosure document, offering circular, prospectus, or other similar
document required or permitted to be given to Developer pursuant to applicable law.
Developer hereby acknowledges and further represents and warrants to Franchisor that:
1. Developer has placed no reliance on any oral or written statements, whether

referredtoasrepresentations, warranties,inducements,or otherwise, wbicbare notcontainedinthis
Agreement or in the Franchise Disclosure Document;
2. Developer has entered into tbis Agreement after making an independent

investigation ofFranchisor'soperations and tbe System;
3. Franchisor has not made any guarantee or provided any assurance tbat the
business location will be successful or profitable regardless ofwbether Franchisor may have approved of
the franchise or site location;
4. Developer has (a) read this Agreement in its entirety and understands its
contents; (b) been given the opportunity to clarify any provisions that Developer did not understand and
(c) had the opportunity to consult with professional advisors regarding tbe operation and effect of tbe
Agreement and tbe operation ofthe System;
©^17Cl^Pi^Fraî^LLC
2017OevelopmÂêm^ 26
5. Developer has, together with its a d v ^
finaneial and business matters to make an i n ^
Franehisor;and
6. Developer has reeeivedaeopy of the Franchise Disclosure Document not later

than thefirst personal meeting held to discuss the sale ofaftanchiseôr fourteen (14) calendar days
hefore execution of this Agreement or fourteen (14) calendar days hefore any payment of any
consideration.
Except as may have heen disclosed at ItemlôfFranchisor's Franchise Disclosure Document,

Developer represents and warrants to Franchisor that no claims, representations, or warranties regarding
the earnings, sales, profits, success or failure of the franchised business have heen made to Developer and
no such claims, representations or warranties have induced Developer to enter into this Agreement.
Except for those changes permitted to he made unilaterally hyFranchisor,no amendment, change
or variance from this Agreement is binding on either party unless mutually agreed to hy the parties and
executed by their authorized officers or agents in writing.
24. CAVFAT
A. Fhe success ofthe business venture contemplated to be undertaken by tbis Agreement is

speculative and depends, toalarge extent, upon the ability of the Developer as an independentbusiness
person, and tbe active participation of Developer inthe daily affairs of tbebusiness as well as other
factors. Franchisor does not make any representation or warranty, express or implied, as to the potential
success ofthe business venture contemplated hereby.
B. Developer acknowledges that it has entered into tbis Agreement after making an
independent investigation of Franchisor's operations and not upon any representation as to gross sales,
volume, potential earnings or profits which Developer in particular might be expected to realize, nor has
anyone made any other representation which is not expressly set forth in this Agreement, to induce the
Developer to accept this franchise and execute this Agreement.
C. Developer represents and acknowledges that he has receivedacopy of this Agreement,

with all hlanks filled in, from Franchisor at least seven (7) calendar days before the date of execution of
this Agreement. Developer further represents that he understands the terms, conditions and obligations of
tbis Agreement and agrees to be bound.
25. MISCFLLANFOUS
A. Except as otherwise expressly provided, nothing in tbis Agreement is intended, nor sball
bedeemed,toconferanyrigbtsorremediesuponanypersonorlegal entity who is notaparty to this
Agreement.
B. Fhe headings ofthe several sections and paragraphs are for convenience only and do not
define, limit or construe tbe contents ofsections or paragraphs.
C. Fbe "Developer" as used in tbis Agreement is applicable to one ( l ) o r more persons,a

corporation orapartnersbip or limitedpartnershiporlimited liability company as tbe case may be, and
tbe singular usageincludesthepluralandtbe masculine and neuter usagesinclude the other andthe
feminine. I f t w o (2) or more persons are at any time Developer under tbis Agreement, their obligations
and liabilities to Franchisor shall be joint and several. References to "Developer" and"Assignee" which

are applicable to an individual or individuals shall mean the owner or owners ofthe equity or operating
control of Developer or the Assignee, if Developer or the Assignee is a corporation, partnership, limited
partnership or limited liability company.
This Agreement shall be executed in multiple copies, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement under seal on the
date first written above.
CLUB PILATES FRANCHISE, L L C
By: IF AN INDIVIDUAL:
Print Name: By:
Title: Print Name:
Date: Date:
Spouse Signature:
Spouse Name:
Date:
IF A PARTNERSHIP, CORPORATION, OR
OTHER ENTITY:
By:
Print Name:
Title:
Date:

ATTACHMENT TO DEVELOPMENT AGREEMENT
GUARANTY AND ASSUMPTION OF OBLIGATIONS
THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given this day of _

, 20 , by , (each a "Guarantor").
In consideration of, and as an inducement to, the execution of that certain Area Development
Agreement (the "Area Development Agreement") by and between Club Pilates Franchise, LLC (the
"Franchisor"), and ("Developer"), each of the undersigned (each, a "Guarantor")
hereby personally and unconditionally (a) guarantees to Franchisor, and its successor and assigns, for the
term of the Area Development Agreement and as provided in the Area Development Agreement, that
Developer shall punctually pay and perform each and every undertaking, agreement and covenant set
forth in the Area Development Agreement; and (b) agrees to be personally bound by, and personally
liable for the breach of, each and every obligation of Developer under the the Area Development
Agreement, both monetary obligations and non-monetary in nature, including without limitation, those
obligations related to: confidentiality and non-disclosure; indemnification; the Proprietary Marks; the in-
term and post-term covenants against competition, as well as all other restrictive covenants; and the
governing law, venue, attorneys* fees and other dispute resolution provisions set forth in the Area
Development Agreement (that shall also apply to this Guaranty and Assumption of Obligations).
Each Guarantor hereby waives: (1) acceptance and notice of acceptance by Franchisor of the
foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any
obligations guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or
nonperformance of any obligations guaranteed; (4) any right Guarantor may have to require that an action
be brought against Developer or any other person as a condition of liability; and (5) the defense of the
statute of limitations in any action hereunder or for the collection of any indebtedness or the performance
of any obligation hereby guaranteed.
Each Guarantor hereby consents and agrees that: (1) such Guarantor's undertaking shall be direct,
immediate and independent of the liability of, and shall be joint and several with, Developer and any
other Guarantors; (2) Guarantor shall render any payment or performance required under the Area
Development Agreement upon demand ifDeveloper fails or refuses punctually to do so; (3) Guarantor's
liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against
Developer or any other person; (4) Guarantor's liability shall not be diminished, relieved or otherwise
affected by any extension of time, credit or other indulgence which Franchisor may grant to Developer or
to any other person, including the acceptance of any partial payment or performance, or the compromise
or release ofany claims, none of which shall in any way modify or amend this guaranty, which shall be
continuing and irrevocable during the term of the Area Development Agreement; (5) this undertaking will
continue unchanged by the occurrence of any bankruptcy with respect to Developer or any assignee or
successor of Developer or by any abandonment of the Area Development Agreement by a trustee of
Developer; (6) neither the Guarantor's obligations to make payment or render performance in accordance
with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed,
released or limited in any manner whatsoever by any impairment, modification, change, release or
limitation of the liability of Developer or its estate in bankruptcy or of any remedy for enforcement,
resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute,
or from the decision of any court or agency; (7) Franchisor may proceed against Guarantor and Developer
jointly and severally, or Franchisor may, at its option, proceed against Guarantor, without having
commenced any action, or having obtained any judgment against Developer; and (8) Guarantor shall pay
all reasonable attorneys' fees and all costs and other expenses incurred in any collection or attempt to

collect amounts due pursuant to this undertaking or any negotiations relative to the obligations hereby
guaranteed or in enforcing this undertaking against Guarantor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Guaranty on the
date stated on the first page hereof.
PERSONAL GUARANTORS
[Insert Name of Guarantor] [Inseit Name of Spouse]

EXHIBIT A TO THE AREA DEVELOPMENT AGREEMENT
DEVELOPMENT AREA
The development rights and obligations of Developer, , to timely

develop and open CLUB PILATES Studios shall be within the following described area:
By: : By:
Name:
Title:

EXHIBIT B TO AREA DEVELOPMENT AGREEMENT
DEVELOPMENT SCHEDULE
]. Development Schedule
Developer, _, agrees to timely open CLUB PILATES Studios in

compliance with the following development schedule (the "Development Schedule"). Developer further
agrees that failure to timely open the Studios in compliance with the Development Schedule shall cause
the rights of exclusivity granted to Developer regarding the geographic area defined in Exhibit A to be
forfeited.
The Development Schedule is as follows:
Expiration of Development Number of New Unit Franchises that Number of Unit Franchises
Period Must be Opened and Commence that Must be Open and
Operations Within Development Operating by the Expiration of
Period the Development Period
2. Forfeiture of Rights of Exclusivity
Developer's failure to comply with the Development Schedule in any manner shall be grounds for
Franchisor to (a) terminate the Development Agreement to which this Development Schedule is attached
as an Exhibit, or (b) in lieu of such termination, terminate any exclusive or other territorial rights that
Developer may have within tbe Development Area or otherwise under the Development Agreement.
APPROVED:
By: By:
Name:
Title:

EXHIBIT C TO AREA DEVELOPMENT AGREEMENT
FRANCHISE AGREEMENT

EXHIBIT D TO AREA DEVELOPMENT AGREEMENT
STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS
A. The following is a list of shareholders, partners, members or other investors in Developer,

including all investors who own or hold a direct or indirect interest in Developer, and a
description of the nature of their interest:
Name Percentage of Ownership/Nature of Interest
B. The following is a list of all of Principals described in and designated pursuant to this Area
Development Agreement, each of whom shall execute the Confidentiality Agreement and
Ancillary Covenants Not to Compete substantially in the form set forth in Exhibit E of this Area
Development Agreement:
By: By:
Name:_
Title:

E x m B I T E T O A R E A D E V E L O P M E N T AGREEMENT
GGNEIDENTIAEITY AGREEMENT AND

ANGIEEARYGOVENANTSNGTTGGGMPETE
This Agreement is made and entered mtothis day of , 20 , between CLUB

ELATES FRANCHISE, EEC, a Delaware limited liability company ("Eranehisor^
("Developersand ("Covenantors
RECITALS
WHEREAS, Franchisor has obtained the rigbt to developaunique system (tbe "System") for the
development and operation of CLDBP1LATES Studios under tbe name and marks CLUBFILATES
("Studios"); and
WHEREAS, the System includes, but isnot limitedto, certain trade names, servicemarks,
trademarks, logos,emblemsandindiciaoforigin, including,but not limitedto, themarks CLUB
PILATES and other trade names, service marks, trademarks, logos, insignia, slogans, emblems, designs
and commercial symbols as Franchisor may develop in tbe future to identify for the public tbe source
services and products marketed under tbe marks and under tbe System and representing tbe System'shigb
standards of quality, appearance, service and all information relating to the System and to tbe
development and operation of the Studio, including, without limitation, tbe operating manual.
Franchisor's training program, members and supplier lists, or other information or know bowdistm^^
toaCLUBFlLATESStudio; all of which Franchisor may change,improve and further develop and
which Franchisor usesin connection with the operation of tbe System (collectively,the"Confidential
Information"); and
WHEREAS, tbe Proprietary Marks and Confidential Information provide economic advantages to
Franchisor and are not generally known to, and are not readily ascertainable by proper means by,
Franchisor's competitors who could obtain economic value from knowledge and use of tbe Confidential
Information; and
WHEREAS, Franchisor has taken and intends to take all reasonable steps to maintain the
confidentiality and secrecy ofthe Confidential Information; and
WHEREAS, Franchisor has granted Developer the limited rigbt to developaCLUB PILATES
Studio using tbe System, the Proprietary Marks and the Confidential Information, pursuant to an Area
Development Agreement entered into on ,20 ("Area Development
Agreement"), by and betweenFranchisorand Developer; and
WHEREAS, Franchisor and Developer have agreed in tbe Area Development Agreement on the
importance to Franchisor and to Developer and other licensed users of the System of restricting tbe use,
access and dissemination ofthe Confidential Information; and
WHEREAS, it is necessary for certain employees, agents, independent contractors, officers,

directors and equity interest holders ofDeveloper, or any entity having an interest in Developer
("Covenantor") to have access to and to use some of all o f t h e Confidential Information in tbe
management and operation ofDeveloper'sCLUB PILATES Studio using tbe System; and
WHEREAS, Developer has agreed to obtain from those covenantors written agreements
protecting tbe Confidential Information and tbe System against unfair competition; and

WHEREAS, Covenant wishes to rema^
Developerand
WHEREAS, Covenantor wishes and needs to receive and use the Confidential I n ^ r ^
course ofhis employment or association in order to effectively perform the services fi^rD^
WHEREAS, Covenantor acknowledges thatreceipt of and the rightto use the Confidential
Information constitutes independent valuable consideration for the representations, promises and
covenants made hy Covenantor.
NCW,THEREEORE, in consideration of the mutual covenant and obligations contained in this

Agreement, the parties agree as follows:
Confidentiality Agreement
1. Franchisor andôr Developer sball disclose to Covenantor some or all ofthe Confidential
Information relating to the System. All information and materials, including, without limitation, manuals,
drawings, specifications, techniques and compilations of data which Franchisor provides toDeveloper
andôr Covenantor are deemed Confidential Information for tbe purposes ofthis Agreement.
2. Covenantorshallreceive tbe Confidential lnformationinconfidenceandmust,atall

times, maintain them in confidence, and use them only in the course of his employment or association
withaDeveloperandthenonlyinconnection with the development andôr operation by Developer o f a
CEUBFIEAFES Studio for so long as Developer is licensed by Franchisor to use tbe System.
3. Covenantor sball not at any time make copies of any documents or compilations
containing some or all ofthe Confidential Information
4. Covenantor shall not at any time disclose or permit tbe disclosure of tbe Confidential
Information except to other employees of Developer and only to the limited extent necessary to train or
assistotheremployees ofDeveloper inthe developmentoroperationofaCEUBFlEAFES Studio.
5. Covenantor must surrender any material containing some or all o f t h e Confidential

Information to Developer or Franchisor, upon request, or upon termination ofemployment by Developer,
or upon conclusion of tbe use for which tbe information or material may have been furnished to
Covenantor.
6. Covenantor sball not at any time, directly or indirectly,do any act tbat would or would
likely be injurious or prejudicialto the goodwill associated with the Confidential Information a n d ^
System.
7. Franchisor loans all manuals to Developer for limited purposes only and they remain the
property ofEranchisorandmay not be reproduced,in whole orinpart, without Franchisor's written
consent.
Covenants Not to Compete
1. In order to protect tbe goodwill and unique qualities ofthe System and the confidentiality
and value ofthe Confidential Information during tbe term ofthis Agreement, and in considerations
disclosure to Covenantor of tbe Confidential Information, Covenantor further agrees and covenants as
follows:

^ Nottodiver4or^mpttodiver4d^
opportuni^ or customer ofthe Studios to any c o m p e f i ^
h. Not to employ, or seek to employ, any person who is at the time or was within
the preceding one hundred eighty (180) days employed hy Franchisor, its achate or any Developer o^
Franchisor,or otherwise directlyor indirectly induce suehpersontoleave that person's employment
except as may occur in connection with Developer's employment of that person i f permitted under the
Area Development Agreement; and
c. Except with respect to Studiosoperatedunderavalidandexisting Franchise

Agreement between Developer(orDeveloper'satfiliates)and Franchisor, own, maintain, operate, engage
m,or have any financial or heneficialinterest in (including any interest in corporations,parmer^^^
trusts, limited liahility companies, unincorporated associations or joint ventures), advised
loans to, any Competing Business (as defined helow)orahusiness that is ofacharacter and concept
similartoaCEUBFfEAFFS Studio. For purposes of this Agreement,a"Competing Business" is defined
as any business that (1) derives at least ten percent (10^) ofits revenue from sales generated trom the
provision ofany Filates instruction or other Approved Services and Approved Products that are offered at
aCEUBFlEAFFS Studio, or (2) grants franchises or licenses to others to operate the type of business
described in subpart(l)of tbis Section.
2. fnfrirther consideration tor tbe disclosure to Covenantor ofthe Confidential Information

and to protect tbe uniqueness of tbe System,Covenantor agrees and covenants tbat tor two (2) years
following the earlier of the expiration,termina
Development Agreement or the termination of his association with or employment by Developer,
Covenantor will not without the prior written consent ofFranchisor:
a. Divert or attempt to divert, directly or indirectly, any business, business

opportunity or customer ofthe Studios to any competitor;
b. Fmploy,or seek to employ, any person whois at tbe time or was witbintbe
precedingone bundredeighty (180)days employedby Franchisor, itsaffiliate orany franchisee of
franchisor, or otherwise directly or indirectly induce such persons to leave tbat person'semployment; and
c. Except with respect toStudiosoperatedunderPranchise Agreements between

Developerand itsaffiliates, andErancbisoror itsaffiliateorany of itssubsidiaries,own, maintain,
operate, engage in, or have any financial or beneficial interest in (including any interest in corporations,
partnersbips,trusts,limitedliabilitycompanies,unincorporated associations or joint ventu^^
assist or make loans to, any Competing Business orabusiness tbat is ofacharacter and concept similar to
aCEUBPlEAFES Studio (i) within the Development Area granted to Developer; or (ii)withinafbrty
(40)mileradiusoftbeperimeteroftheDevelopmentAreabeinggrantedtoDeveloper or any other
designated territory or development area licensed by Franchisor toaCEDBPlEAFES Studio as of the
date ofexpiration, termination or transfer ofall Developer's interest in the Area Development Agreement
or tbe termination of Covenantor'sassociation with or employment by Developer.
Miscellaneous
1. Developer sball make all commercially reasonable efforts to ensure tbat Covenantor acts
as required by tbis Agreement.
2. Covenantor agrees tbat in the event ofabreacb of this Agreement, Pranchisor would be
irreparably injured and be without an adequate remedy at law Fberefbre, in the event ofabreacb, or
©^17ClobPil^Frano^LLC
2017Developmeot^gêment-Exhib^
threaded or tempted breach ofany of ^
this Agreementand is enhtiedînaddinonto any other remedies availah^
inetnding the right toterminatethe Area Development Agreement^toatemporaryandôrpe^
injunction andadeeree for the specific performance of the terms ofthis Agreement, without
ofshowingactuaiorthreatenedharmandwithoutheingrequiredtofi^rnishahond or other security.
3. Covenantor agrees to pay all expenses (including court costs and reasonable attorneys'
teesîncurred by Pranchisor and Developer in enforcing this Agreement.
4. Any failure by Pranchisor to object to or take action with respect to any breach of this
Agreement by Covenantor shall not operate or be construed asawaiver of or consent to that breach or
any subsequent breach by Covenantor.
5 THIS ACPFEMENT SHALL 8P COVPRNED BY AND CONSTRUED AND

ENFORCED IN ACCCRDANCEWITHTHELAWSCPTHPSTATPOP^NSERTSTATEWHERE
THE STUDIO IS LOCATED! COVENANTOR HEREBY IRREVOCABLY SUBMITS
HIMSELF TO THE JURISDICTION OE THE STATE COURT CLOSEST TO FRANCHISOR'S
THFNCURRENTHEADÛARTERS OR, IFAPPROPRIATE, THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT FOR [INSERT STATE WHERE THE STUDIO IS LOCATED^
COVENANTORHEREBYWAIVESALLÛESTIONSOFPFRSONALÛRISDICTION OR VENUE
FORTHE PURPOSEOF CARRYING OUTTHIS PROVISION COVENANTOR HEREBY AGREES
THATSERVICE OP PROCESS M A Y B E MADE UPON HIM IN ANY PROCEEDING RELATING
TO OR ARISING UNDER THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS
AGREEMENT B Y A N Y MEANS ALLOWED BY [INSERT STATE WHERE THE STUDIO IS
LOCATED[OR FEDERAL LAWCOVENANTOR FURTHER AGREES THATVENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE ONE OF
THE COURTS DESCRIBED ABOVE IN THIS SECTION; PROVIDED, HOWEVER, WITH
RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER
EXTRAORDINARY RELIEF,FRANCHISOR MAY BRING SUCH ACTION IN ANY COURT IN
ANYSTATEWHICHHASÛRISDICTION
^. Tbe parties acknowledge and agree tbat each of the covenants contained in this
Agreement are reasonable limitations as to time, geographical area, and scope ofactivity to be restrained
and do not imposeagreater restraint than is necessary to protect the goodwill or other business interests
ofFranchisor. Tbe parties agree that each ofthe foregoing covenants sball be construed as independent of
any other covenant or provision of this Agreement. Ifall or any portion ofacovenant in tbis Agreement
is held unreasonable or unenforceable byacourt or agency having valid jurisdiction in ^nyunappealed
finaldecisionto whichFranchisor isapart,Covenantor expressly agreestobeboundby any lesser
covenant subsumed witbin tbe terms ofthe covenant tbat imposes tbe maximum duty permitted by law as
if tbe resulting covenant were separately stated in andmadeapart of this Agreement.
7. Tbis Agreement contains tbe entire agreement ofthe parties regarding the subject matter
ofthis Agreement. This Agreement may be modified only byaduly authorized writing executed by all
parties.
8. All notices and demands required to be given must be in writing and sent by personal
delivery, expedited delivery service, certified or registered mail, return receipt requested, first-class
postage prepaid, facsimile or electronic mail, (provided that tbe sender confirms tbe facsimile or
electronic mail,by sending an originalconfirmationcopy by certified or registered mailor expedited
delivery service witbin three (3) business days after transmission), to tbe respective parties at the

following addresses unless and until a different address has been designated by written notice to the other
parties.
If directed to Franchisor, the notice shall be addressed to

Attn: Shaun Grove
3185 Pullman Street
Costa Mesa, California 92626
If directed to Developer, the notice shall be addressed to:
Attention:
If directed to Covenantor, the notice shall be addressed to:
Attention:
Any notices sent by personal delivery shall be deemed given upon receipt. Any notices given by
facsimile or electronic mail shall be deemed given upon transmission, provided confirmation is made as
provided above. Any notice sent by expedited delivery service or registered or certified mail shall be
deemed given three (3) business days after the time of mailing. Any change in the foregoing addresses
shall be effected by giving fifteen (15) days written notice of such change to the other parties. Business
day for the purpose of this Agreement excludes Saturday, Sunday and the following national holidays:
New Year's Day, Martin Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving and Christmas.
9. The rights and remedies of Franchisor under this Agreement are fully assignable and
transferable and inure to the benefit of its respective parent, successor and assigns. The respective
obligations of Developer and Covenantor hereunder may not be assigned by Developer or Covenantor
without the prior written consent of Franchisor.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as witnessed by their
signatures below.
CLUB PILATES FRANCHISE, LLC (IfDeveloper is a corporation)
Name of Corporation
By: By: _
Title: Title:

(If Developer is an individual owner.
COVENANTOR: Developer must sign below; i f a partnership,
all partners must sign
below)
Printed Name:
Developer
Developer
Developer
Developer
(IfDeveloper is a Limited Liability Company)
Name of Limited Liability Company
By: _
Title:

Exhibit K
RECEIPTS
ITEM 23
RECEIPT
first personal meeting or 10 business days before the execution of the franchise agreement, or other agreement,
Geisler and Shaun Grove, 3185 Pullman Street, Costa Mesa, CA 92626, (949) 346-9794; Lance Freeman, St.
Issuance Date: April 27, 2017T, as amended May 3, 2017. The effective date in each state is listed on the State
Cover Page. Club Pilates Franchise, LLC authorizes the agents listed in Exhibit B to receive service of process for
it.
I have received a Franchise Disclosure Document dated April 27, 2Ol7-, as amended May 3,2017. This Disclosure
Document included the following Exhibits:
A. FRANCHISE AGREEMENTAND EXHIBITS
K. RECEIPTS
Date
Keep this copy for your records.

ITEM 23
RECEIPT
language. .Read this Disclosure Document and all agreements carefully.
first personal meeting or 10 business days before the execution ofthe franchise agreement, or other agreement,
misleading statement, or a material omission, a violation offederal and state law may have occurred and should
Geisler and Shaun Grove. 3185 Pullman Street, Costa Mesa, CA 92626, (949) 346-9794; Lance Freeman. St.
Issuance Date: April 27, 2017T, as amended May 3. 2017. The effective date in each state is listed on the State
Cover Page. Club Pilates Franchise, LLC authorizes the agents listed in Exhibit B to receive service of process for
it.
I have received a Franchise Disclosure Document dated April 27, 2017?, as amended May 3.2017. This Disclosure
Document included the following Exhibits:
A. FRANCHISE AGREEMENTAND EXHIBITS
K. RECEIPTS
Date
Please sign this copy of the receipt, date your signature, and return this form to us as described in Item 23.


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Carlson, Greg (COMM)

From: Carlson, Greg (COMM)

May 31, 2017

LANE FISHER, ESQ.

May 31, 2017

LANE FISHER, ESQ.

File No. 7774

INITIAL REGISTRATION OF AN OFFER AND SALE OF FRANCHISES

X RENEWAL APPLICATION OR ANNUAL REPORT

POST EFFECTIVE MATERIAL AMENDMENT

1. Full legal name of Franchisor: Club Pilates Franchise, LLC

2. Name of the franchise offering: Club Pilates

3. Franchisor's principal business address:

3185 Pullman Street

Minnesota Department of Commerce

5. The states in which this application is or will be shortly on file:

California, Florida, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota,

Lane Fisher, Esq.

Signed at C»st*-s Mt*-*-. Ayttl k .,20 11-

CLUB PILATES FRANCHISE, LLC

Name: Shaun Grove

Executed on y-b .20 IT-

CLUB PIL^fES FRANCHISE, LLC

Personally appeared Bfcfore me this day of , 20 , the above-named, Shaun

April 27, 2017

Priya Vimalassery* 1. Check in the amount of $200.00;

Minerva Pinto* 4. Uniform Franchise Consent to Service of Process;

•member PA and N) bars

7. Franchise Seller Disclosure Form(s);

9. One CD-ROM containing the complete franchise renewal application,

Very truly yours,

811 Church Road

FRANCHISOR'S COSTS AND SOURCE OF FUNDS

Other Items; S 500

California: Commissioner of the _ Rhode Island: Director,

X Indiana: Secretary of State .Virginia: Clerk, Virginia State

Lane Fisher, Esq.

Notarial Seal: Noiariitl

On 4 M I L ^ £oi7 before me, Judi Lowenthal, Notary Public

personally appeared Stim*) &?0l/£

WITNESS my hand and official seal. v JUOI LOWENTHAL £

ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM

©m€2017 Club Pilates Franchise, LLC

©30162017 Club Pilates Franchise, LLC

1. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT CONTAIN A MANDATORY

©30462017 Club Pilates Franchise, LLC

WJHERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

©30342017 Club Pilates Franchise, LLC

STATE EFFECTIVE DATE

HAWAII Pending Registration

ILLINOIS Pendine ReeistrationADril 22. 2016

INDIANA April 22, 2016Effective

KENTUCKY Not Registered

MARYLAND Pending Registration

MINNESOTA Pending Registration

NEW YORK Pending Registration

NORTH DAKOTA Pending Registration

RHODE ISLAND Pending Registration

SOUTH DAKOTA Pending Registration

VIRGINIA April 22, 2016Pendine Registration

WASHINGTON Juno 22, 2016Pending Registration

WISCONSIN April 20,20162017

©33162017 Club Pilates Franchise, LLC .

ITFM A BANKRUPTCY. n ,„„

ITEM 6 OTHER FEES

ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING . 24

ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION 44

Signed at C»st-s Mt-*-. Ayttl k .,20 11-