Body and Brain Center

FRANCHISE DISCLOSURE DOCUMENT

Body and Brain Center, LLC an Arizona limited liability company 3651 East Baseline Road, Suite 223 Gilbert, Arizona 85234 Phone: (480) 664-2194 Fax: (866) 324-4805 E-Mail: support@bodynbrain.com Website: www.bodynbrain.com

Body and Brain Center, LLC offers franchises for the operation of a home-based business that provides holistic health and healing programs to individuals and small groups and sells related products and subscription services. The total investment necessary to begin operation of a Body & Brain home-based franchise ranges from $21,880 to $37,300. This includes an amount ranging from $14,300 to $14,500 that must be paid to us and our affiliates.
This Disclosure Document summarizes certain provisions of your franchise agreement and other information in plain English. Read this 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 payment to, the franchisor or an affiliate for 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 the franchisor at 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234 or call (480) 664-2194.
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. More information on franchising, for instance “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 (the “FTC”). 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. Call your state agency or visit your public library for other sources of information on franchising.
There may also be laws on franchising in your state. Ask your state agencies about them. Issuance Date: February 11, 2015 (amended March 10, 2015)

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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 A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.
Call the state franchise administrator listed in EXHIBIT "A" for information about the franchisor, or about franchising in your state.
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 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 TO RENEW.
Please consider the following RISK FACTORS before you buy this franchise:

ALL DISAGREEMENTS MUST BE SETTLED BY MEDIATION, ARBITRATION OR LITIGATION IN ARIZONA. OUT-OF-STATE MEDIATION, ARBITRATION OR LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO MEDIATE, ARBITRATE OR LITIGATE WITH US IN ARIZONA THAN IN YOUR HOME STATE.
THE FRANCHISE AGREEMENT STATES THAT ARIZONA LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.
THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Effective Date: __________________, 2015

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ITEM 1 ITEM 2 ITEM 3 ITEM 4 ITEM 5 ITEM 6 ITEM 7 ITEM 8 ITEM 9 ITEM 10 ITEM 11
ITEM 12 ITEM 13 ITEM 14 ITEM 15
ITEM 16 ITEM 17 ITEM 18 ITEM 19 ITEM 20 ITEM 21 ITEM 22 ITEM 23

TABLE OF CONTENTS
FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES.....................1 BUSINESS EXPERIENCE ......................................................................................................... 3 LITIGA TION .............................................................................................................................. 4 BANKRUPTCY .......................................................................................................................... 4 INITIAL FEES ............................................................................................................................ 4 OTHER FEES ............................................................................................................................. 5 ESTIMA TED INITIAL INVESTMENT .................................................................................... 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES....................................10 FRANCHISEE’S OBLIGA TIONS ........................................................................................... 12 FINANCING ............................................................................................................................. 13 FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING................................................................................................................................ 14 TERRITORY ............................................................................................................................. 21 TRADEMARKS ....................................................................................................................... 23 PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION................................... 24 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS ................................................................................................................................ 25 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL ............................................ 25 RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION .....................25 PUBLIC FIGURES ................................................................................................................... 28 FINANCIAL PERFORMANCE REPRESENTATIONS ......................................................... 28 OUTLETS AND FRANCHISEE INFORMA TION ................................................................. 29 FINANCIAL STATEMENTS................................................................................................... 31 CONTRACTS ........................................................................................................................... 31 RECEIPT ................................................................................................................................... 31

EXHIBIT "A" EXHIBIT "B" EXHIBIT "C" EXHIBIT "D" EXHIBIT "E" EXHIBIT "F" EXHIBIT "G" EXHIBIT "H" EXHIBIT "I" EXHIBIT "J" EXHIBIT "K" EXHIBIT "L" EXHIBIT "M"

STATE AGENCIES AND ADMINISTRATORS FRANCHISORS AGENT FOR SERVICE OF PROCESS FRANCHISE AGREEMENT
TRAINING AGREEMENT
GENERAL RELEASE
REFERRAL AGREEMENT
SOFTWARE SERVICE AGREEMENT
TABLE OF CONTENTS OF OPERATING MANUALS
STATE ADDENDUM
LIST OF FRANCHISEES
FINANCIAL STATEMENTS FOR BODY AND BRAIN CENTER, LLC FRANCHISEE DISCLOSURE QUESTIONNAIRE
RECEIPTS

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ITEM 1 FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES
Definitions
To simplify the language in this Disclosure Document, “we,” “us” and “the Company” mean Body and Brain Center, LLC - the franchisor. “You” means the person or persons who buy a Body & Brain home- based franchise and act as the franchisee.
Corporate Information
Body and Brain Center, LLC is an Arizona limited liability company that was organized on December 12, 2007. Our principal business address is located at 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234 and our telephone number is (480) 664-2194. Our agent for service of process is disclosed in EXHIBIT "B" to this Disclosure Document. We do not do business under any names other than “Body and Brain Center, LLC”.
Business History
We began offering the Body & Brain home-based franchise offered under this Disclosure Document in February 2015.
We began offering our brick and mortar Body & Brain Center franchise in February 2008. The two variations include Body & Brain Center 2 (for retail based centers of 400 square feet or less) and Body & Brain Center 3 (for retail based centers of more than 400 square feet). The Body & Brain Center franchise is offered under a separate Franchise Disclosure Document. These franchises require a dedicated commercial retail space from which Body & Brain products and services are offered. As of the date of this Disclosure Document, we have sold a total of 99 Body & Brain Center franchises. We do not offer franchises in any line of business other than (i) the Body & Brain home-based franchise offered under this Disclosure Document and (ii) the Body & Bran Center franchises offered under a separate Disclosure Document.
We are not engaged in any business other than offering Body & Brain franchises and administering the franchise system. We have not operated a business similar to the Body & Brain home-based business offered under this franchise.
Parents, Affiliates and Predecessors
Our parent company is Body & Brain Yoga and Health Centers, Inc. (“BBYHC”) (formerly named Dahn Yoga and Health Centers, Inc.) and its principal business address is 3651 East Baseline Road, Suite 228, Gilbert, Arizona 85234. BBYHC is owned by its parent company, Dahn World Co., Ltd (“Dahn World”), which has a principal business address of 277-20 Nonhuyn Building, Nonhyun Kangnam, Seoul Korea. BBYHC operates approximately 66 Body & Brain Centers in the United States (formerly Dahn Yoga Centers) and Dahn World operates approximately 240 Dahn Yoga Centers outside the United States. BBYHC provides certain training to our franchisees as further discussed below under “Franchisee Qualifications.” Neither BBYHC nor Dahn World has offered franchises in this or any other line of business.
We do not have any predecessors. Except as disclosed above, we do not have any affiliates that provide goods or services to our franchisees or that have offered franchises in this or any other line of business.

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Franchisee Qualifications
We only consider offering franchises to individuals who have completed: (i) at least 6 months of regular classes held at a Dahn Yoga Center or Body and Brain Center; (ii) the Shim Sung workshop provided by BBYHC; (iii) the Qualified Instructor Training provided by BBYHC; and (iv) Health Coaching Training provided by our designated vocational school (currently the Institute of Brain Education).
Description of Franchised Business
Under your Body & Brain home-based franchise (referred to in this Disclosure Document as your “Business”), you will serve as a health coach and/or yoga instructor that provides holistic health and natural healing programs to individuals and small groups. You will utilize integrative lifestyle coaching to help people develop a healthy lifestyle using certain tools, such as counseling, exercise, media content and related products. You will utilize the Solar Body Method, which is a systemized training method that strengthens the body’s natural healing capacity.
Body & Brain home-based franchises offer coaching, online courses, private classes, outreach classes, worksite wellness classes and workshop registrations. Franchisees also have the option, but not the obligation, to sell certain approved products, including books, CDs, DVDs, subscriptions to online programs (including changeyourenergy.com and life particle television) and various devices that assist with the health and healing programs.
The franchise offered under this Disclosure Document is a home-based opportunity. You will not operate from a commercial office or retail space. Instead, you will conduct your Business at your clients’ homes and business locations (i.e., “on-site”). You may also utilize temporary space where you may offer classes, such as space made available to you at a church or community center. You may not establish a dedicated retail space or utilize any signage at any location where you conduct your Business.
As part of your Business, you will also have the opportunity to receive referral fees if you refer your clients to certain of our affiliated companies (including BBYHC) and they participate in a workshop, retreat, or other program offered by the affiliated company. These affiliated companies may include companies under common ownership with us or third parties operating under a license granted by us or one of our affiliates. In order to take advantage of these referral programs, you must sign the Referral Agreement that is attached to this Disclosure Document as EXHIBIT "F".
We will grant you a license to use certain trademarks, service marks, logos, trade dress and trade names, including the service marks “Body & Brain” (collectively, the “Marks”) in the operation of your Business. You must sign a franchise agreement (the “Franchise Agreement”) and conduct your Business in accordance with the terms of the Franchise Agreement. The form of Franchise Agreement is attached to this Disclosure Document as EXHIBIT "C". Before you attend training, you must sign either the Franchise Agreement or the form of Training Agreement that is attached to this Disclosure Document as EXHIBIT "D" (the “Training Agreement”). Under the terms of the Training Agreement, you will have a period of 180 days after successfully completing training to sign the Franchise Agreement. If you do not sign the Franchise Agreement within that period of time, we will have no further obligation to grant you a franchise.
We have developed a unique system (the “System”) for Body & Brain home-based franchises. Distinctive characteristics of the System include logo, trade secrets, concept, proprietary programs and products, confidential operations manuals, marketing techniques and strategies, Solar Body Method of systemized training, coaching system (including specially developed media content and merchandise) and operating system. The operational aspects of a Body & Brain home-based franchise are contained within our

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confidential Operating Manual (the “Manual”). You will conduct your Business as an independent business using the Marks, the System, the Body & Brain name, as well as the support, guidance and other methods and materials provided or developed by us.
Market and Competition
The primary target market for Body & Brain home-based franchise customers includes individuals who want to develop their brain potential and create a healthier lifestyle. The alternative health industry is large, well developed, and highly competitive. A Body & Brain franchisee competes primarily with other businesses that provide healing and relaxation services, for instance life coaching, massage therapy, physical therapy and Yoga, as well as businesses that provide alternative medicine, for instance acupuncture, chiropractic services, homeopathy, herbs and energy therapies. Some of these businesses operate through franchises.
Laws and Regulations
There are no laws or regulations that are specific to this industry. However, in certain states, “health clubs” are subject to special laws and regulations and some of these laws may apply to your Business if it is deemed to be a health club. Among other things, these laws and regulations may impose requirements relating to the consumer contracts that your members will sign. The federal Truth in Lending Act may also require you to provide certain disclosures in these consumer contracts to the extent that you offer financing. You must hire an attorney to review the form of membership agreement and other consumer contracts that you use to ensure they comply with the laws of your state. You must comply with all federal and state licensing and other regulatory requirements for the operation of your Business. There may be other local, state and/or federal laws or regulations pertaining to your Business with which you must comply.
ITEM 2 BUSINESS EXPERIENCE
Joung Yoon – President and Member of the Board of Managers
Joung Yoon has been our President since March of 2012. Mr. Yoon also served as our Operations Manager from December of 2010 through February of 2012. From April of 2004 through April of 2012, Mr. Yoon served as a Senior Trainer for our parent company, BBYHC, in Mesa, Arizona.
Jung Ae Kim – Operations Manager
Jung Ae Kim has been our Operations Manager since January of 2014. Ms. Kim has also served as a Regional Director for our parent company, BBYHC, since August of 2013 in Oceanside, California. From May of 2012 through July of 2013, she was a Manager of the Sales Department for our parent company, BBYHC, in Gilbert, Arizona. From August of 2010 through April of 2012, she was a Regional Director for our parent company, BBYHC, in Albuquerque, New Mexico. From March of 2010 to July of 2010 she was spending time with her family and not actively employed. From November of 2008 through February of 2010, she was the Center Manager for our parent company, BBYHC, in Moraga, California.
Chaesik Jeong – Member of the Board of Managers
Chaesik Jeong was appointed to our Board of Managers in March of 2012. Mr. Jeong has also served as a Manager and Senior Trainer for our parent company, BBYHC, since January of 2007 in Mesa, Arizona.

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Hyung Jin Cho – Member of the Board of Managers
Hyung Jin Cho was appointed to our Board of Managers in March of 2012. Mr. Cho has also served as a Manager and Senior Trainer for our parent company, BBYHC, since April of 2014 in Mesa, Arizona and most recently Kirkland, Washington. From March of 2007 through March of 2014, he served as Manager and Senior Trainer for our parent company, BBYHC, in Mesa, Arizona.
ITEM 3 LITIGATION
The People of the State of Illinois v. Body and Brain Center, LLC (Case No. 09CH925)
On October 22, 2009, the Attorney General of the State of Illinois filed a Complaint against us in the Circuit Court of the Seventh Judicial Circuit in Sangamon County, Illinois. The Complaint alleged that we violated the franchise fee deferral condition imposed by the State of Illinois because our parent, BBYHC, accepted franchise fees from Illinois franchisees before they opened their businesses. Without admitting any liability, we entered into a Final Judgment and Consent Decree to settle these claims. The Final Judgment and Consent Decree, which was filed with the Court simultaneously with the Complaint on October 22, 2009, required us to pay $15,000 to the State of Illinois for penalties and costs. The Final Judgment and Consent Decree also prohibited us (and our parent companies, affiliates and other related parties) from collecting franchise fees from Illinois franchisees before opening as long as the franchise offering remains subject to deferral by the State of Illinois.
Other than the 1 action listed above, no litigation is required to be disclosed in this Item.
ITEM 4 BANKRUPTCY
No bankruptcies are required to be disclosed in this Item.
ITEM 5 INITIAL FEES
Initial Training Fee
You must pay us an initial training fee of $10,000 before attending our initial franchise training program. Specifically, the training fee is due at the time you sign the Franchise Agreement (or Training Agreement, if applicable). You must pay us a separate $10,000 initial training fee for each person that attends initial training (we do not anticipate that any Body & Brain home-based franchisees will have more than 1 owner or will employ a manager during the initial phase of developing their business). The initial training fee is uniformly imposed on all Body & Brain home-based franchisees. We will refund the entire training fee if you notify us that you wish to cancel the franchise before you begin training. The initial training fee is not refundable under any other circumstances.
If you fail to successfully complete our initial training program, you must retake training and pay us a retraining fee of $400 for each instance where you must retake training. The retraining fee, which is due prior to attending the retraining session, is uniformly imposed and nonrefundable.
Shim Sung Workshop
Before you apply for the franchise, you must attend the Shim Sung workshop provided by BBYHC. You must pay BBYHC a fee ranging from $250 to $400 to attend the Shim Sung workshop. This fee is payable at the time you sign up for the Shim Sung workshop. The fee for the Shim Sung worship is uniform. The entire fee is refundable if you notify BBYHC that you will not attend the training program

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before training begins. However, if you provide this notice within 30 days of training, BBYHC may retain an administrative fee of up to $50.
Qualified Instructor Training
Before you apply for the franchise, all Owners must complete the Qualified Instructor Training program provided by BBYHC. You must pay BBYHC a fee of $3,900 to attend the training. This fee is payable at the time you sign up for the training. The Qualified Instructor Training fee is uniform. The entire fee is refundable if you notify BBYHC that you will not attend the training program before training begins. However, if you provide this notice within 30 days of training, BBYHC may retain an administrative fee of up to $50.
We do not charge an initial franchise fee.
ITEM 6 OTHER FEES

TYPE OF FEE	AMOUNT	DUE DATE	REMARKS
Royalty Fee 1	10% of monthly Program Sales 2	Payable on or before 5th day of month for prior month’s operations	None
Additional Training Fee 1	Up to $150 per hour plus food, lodging and travel expenses	As invoiced	See Note 3.
Initial Training Fee	$10,000 for first session, $400 for “retraining”	Before training	See Note 4.
Advertising Fund Fee 1	0.5% of Program Sales 2	Payable on the 5th day of month for prior month’s operations	See Note 5.
Cooperative Advertising Fee	Up to 0.5% of Program Sales 2	Payable on the 5th day of month for prior month’s operations	See Note 6.
National Conference Fee 1	Up to $100 per person per day	As invoiced	See Note 7.
Software Fee 1	Currently $50 per month (not to exceed $100 per month)	Payable on the 5th day of month	See Note 8.
Audit Fee 1	Actual cost of audit plus $2,500; you must also pay travel and lodging expenses for the audit team	Upon completion of audit	See Note 9.
Successor Fee 1	$500	Before renewal	None.
Transfer Fee 1	Our costs incurred as part of transfer, up to maximum of $2,500	Before consummation of transfer	See Note 10.
Fines 1	Up to $500 per incident (maximum of $2,500 for same violation)	10 days after billing	See Note 11.

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TYPE OF FEE	AMOUNT	DUE DATE	REMARKS
Late Fee 1	Lesser of 18% of amount past due or highest rate allowed by applicable law	10 days after billing	See Note 12.
Attorneys’ Fees and Costs	Will vary with circumstances	Upon demand	You must reimburse us for all attorneys’ fees and other costs we incur relating to your breach of any term of the Franchise Agreement or any other agreement with us or our affiliates.
Indemnification 1	Will vary with circumstances	As incurred	You must reimburse us if we are sued for claims from the operation of your Business or for damages or expenses that we incur due to your breach of the Franchise Agreement.
Insurance 1	Actual cost of premiums, plus our costs and expenses	As incurred	If you fail to obtain and maintain the insurance we require, and we elect to do so on your behalf, you must reimburse us.

NOTES:

(1) All fees are imposed by and are payable to us other than the Software License Fee, which is paid to BBYHC. All fees are non-refundable and uniformly imposed on Body & Brain home-based franchisees. You must sign an ACH Authorization Form (attached to the Franchise Agreement as Attachment "B"), permitting us to electronically debit your designated bank account for payment of all fees payable to us as well as any amounts that you owe to us or our affiliates for the purchase of goods or services. You must deposit all revenues derived from the operation of your Business into the bank account and ensure that there are sufficient funds available for withdrawal before each due date. You must pay us all taxes that are imposed upon us or that we are required to collect and pay by reason of the furnishing of products, intangible property (including trademarks) or services to you.
(2) “Program Sales” means all gross sums that you receive from all services that you sell (including private class fees, outreach class fees, worksite class fees and referral fees). “Program Sales” do not include (i) revenues from product sales, (ii) amounts refunded to customers or (iii) sales and use taxes. Any amounts that are included in Program Sales for 1 reporting period but are subsequently refunded will be deducted from your Program Sales for the next reporting period. You must provide us with reports of your Program Sales as well as your product sales. You must record all sales information on the same day that the sale takes place.
(3) We may, but need not, offer periodic additional training programs. These programs are optional, but if you choose to attend, we may charge you the additional training fee. Upon your request, we may provide additional training that you request. We are not required to provide this training, but if we agree to do so, you must pay us the additional training fee. You are also responsible for all food, lodging and travel costs associated with additional training. If we travel to you to provide the training, you must reimburse us for all food, lodging and travel expenses that we incur.

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(4) You will pay us the $10,000 initial training fee disclosed in Item 5 for each person who attends our initial training program. If you add a new owner or hire a manager after opening, you must pay us the $10,000 initial training fee to train that person. If that person fails training on the initial attempt, you must pay us the $400 retraining fee for each subsequent attempt. We expect that most franchisees will not have multiple owners and will not hire a manager.
(5) We have established and maintain an advertising fund for marketing, advertising and promotional materials, public and consumer relations, publicity, and other programs that we may deem necessary or appropriate in our sole discretion. You will have no voting rights pertaining to the administration of the advertising fund, the creation and placement of the marketing materials or the amount of the advertising fund fee.
(6) We may establish regional advertising cooperatives for purposes of pooling advertising funds to be used in discrete regions. We will collect the cooperative advertising fees and remit these fees to the applicable advertising cooperative (unless we administer the advertising cooperative ourselves). The amount of the cooperative advertising fee may be adjusted (or temporarily suspended) upon the majority vote of all franchisees within the advertising cooperative. Any Body & Brain home-based franchise that we operate will have the same voting power as third party franchisees. If we own the majority of Body & Brain home-based franchises within an advertising cooperative, we will not increase the cooperative advertising fee without the consent of a majority of all third-party franchisees within the advertising cooperative. All cooperative advertising fees will be uniformly imposed on all franchisees within the advertising cooperative, including any Body & Brain home-based franchise that we operate.
(7) We may hold periodic national conferences. These conferences are mandatory, unless you cannot attend due to circumstances beyond your control. We may also waive the attendance requirement in our sole discretion. We may charge you the national conference fee if you attend. These conferences will likely be held in Arizona or New York, although we can select any location within the continental United States. In addition to the fee, you are responsible for all food, lodging and travel costs that you incur in attending a national conference. We may also conduct national conferences by telephone or a web-based conference.
(8) You must utilize BBYHC’s proprietary web-based operations software, BRMNet. You will sign the Software Service Agreement attached to this Disclosure Document as EXHIBIT "G". You must pay BBYHC a software fee of $50 per month for use of this software (the fee includes technical support, updates and upgrades to the software). We reserve the right to change the software that you must use at any time. If we require that you use software that is licensed from us, we may require that you sign a software license agreement with us and we may charge you commercially reasonable initial and ongoing licensing fees. Alternatively, we may enter into other software license agreements with the licensors of the software and then sublicense the software to you. If this occurs, we may charge you for all amounts that we must pay to the licensor(s) based on your use of the software.
(9) The audit fee must be paid only if (i) we find, after an audit, that you have understated any amount due to us by at least 3% for any monthly period or (ii) the examination or audit is required due to your failure to furnish required information or reports to us in a timely manner or record sales properly. In addition to the audit fee, you must pay us all past due amounts, together with any applicable late fee.
(10) The transfer fee is only paid if you transfer or sell your franchise. We will not charge you the transfer fee if you transfer the franchise to an entity that you control. The transferee must also pay

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us $10,000 to provide initial training, unless the transferee has previously completed our franchise training program.

(11) We may impose a fine only if (i) you do not comply with our standards and you fail to correct the noncompliance within the required corrective period or (ii) you receive a customer complaint and fail to follow our complaint resolution process. All fines will be deposited into the advertising fund.
(12) We may charge the late fee on all overdue amounts under the Franchise Agreement. If the Franchise Agreement does not specify a due date, interest begins to accrue 10 days after billing. If there are sufficient funds in your designated checking account to cover all amounts due us as these amounts become due and you provide us with reports of Program Sales and record sales on a timely basis, you will not be charged a late fee.

ITEM 7 ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT
TYPE OF EXPENDITURE	AMOUNT 1	METHOD OF PAYMENT	WHEN DUE	TO WHOM PAYMENT IS TO BE MADE
Initial Training Fee	$10,000	1 installment by electronic debit, cashier’s check or personal check	Before attending training	Us
Shim Sung Workshop	$250 to $400	Lump sum	Before attending workshop	BBYHC (we may collect and pay to BBYHC at our option)
Qualified Instructor Training	$3,900	Lump sum	Before attending training	BBYHC (we may collect and pay to BBYHC at our option)
Health Coaching Training	$1,000	Lump sum	Before attending training	Institute of Brain Education (or other designated vocational school)
Training Expenses (food, travel and lodging) 2	$1,500 to $3,300	As incurred	Before and during training	Airlines, restaurants and lodging facilities
Computer System	$1,100 to $2,700	Lump sum	Before opening	Suppliers
Initial Supply of Inventory 3	$250 to $1,000	Lump sum	Before opening	Suppliers
Home Office Supplies	$0 to $300	As incurred	Before opening	Suppliers
Pre-opening Marketing	$1,000 to $1,500	Lump sum	Before opening	Newspaper, Yellow Pages, ad printers, other media
Music License Fees (for 1 year)	$300 to $600	Lump sum	Before opening	Music licensing company

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YOUR ESTIMATED INITIAL INVESTMENT
TYPE OF EXPENDITURE	AMOUNT 1	METHOD OF PAYMENT	WHEN DUE	TO WHOM PAYMENT IS TO BE MADE
Business License	$30 to $500	Lump sum	Before opening	Government agencies
Incorporation Fee 4	$200 to $700	Lump sum	Before opening	Government agencies
Professional Fees	$300 to $3,000	Lump sum	Before opening	Accountants & lawyers
Insurance (premium for 1 year)	$500 to $900	Lump sum	Time and manner required by insurance companies	Insurance companies
Additional Funds – 3 months 5	$1,550 to $7,500	As incurred	As incurred	Suppliers and BBYHC
Total Estimated Initial Investment 6	$21,880 to $37,300

NOTES:

(1) We do not offer direct or indirect financing to franchisees for any of these items. We will refund the entire training fee if you notify us that you wish to cancel the franchise before you begin training. No other fees payable to us are refundable. BBYHC will refund the training fee for Shim Sung Workshop and Qualified Instructor Training if you notify BBYHC you will not attend before training begins. However, if you provide this notice within 30 days of training, BBYHC may retain an administrative fee of up to $50. In addition, the fee for Health Coaching Training is refundable in part if you cancel training before completing 50% of training (in which case the fee is refunded in proportion to the percentage of training completed). We are unaware of any other fees payable to third party suppliers that are refundable.
(2) You must pay all travel, food and lodging costs associated with attending the franchise training program as well as the Shim Workshop, Qualified Instructor Training and Health Coaching Training.
(3) You have the option of purchasing approved inventory items for resale.
(4) We recommend, but do not require, that you form a corporation or limited liability company to act as franchisee under the Franchise Agreement and to operate your Business.
(5) This estimates your expenses during the first 3 months of operation. These expenses include monthly software fees (paid to us or BBYHC), advertising costs, utilities, postal costs, additional inventory and office supplies, gas cost, and other miscellaneous expenses.
(6) These figures are estimates based on the past experience of our parent companies and franchisees in operating their Dahn Yoga Centers and Body & Brain Centers. Because we have not previously operated or franchised the Body & Brain home-based franchise, these are merely rough estimates of the costs you may incur. You may have additional expenses starting your Business. Your costs will depend on a variety of factors, including how closely you follow our

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methods and procedures as well as your management skills, experience and knowledge. We strongly recommend that you have independent estimates on all of your start up and continuing operation costs for your Business.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Source Restricted Purchases and Leases – Generally
We require that you purchase or lease certain “source restricted” goods and services for the development and ongoing operation of your Business. By “source restricted,” we mean that the good or service must meet our specifications and/or must be purchased from an approved or designated supplier (in some cases, an exclusive designated supplier, which may be us or an affiliate). Our specifications and list of approved and designated suppliers are contained in the Manual. We will notify you within 30 days of any changes to our specifications or list of approved or designated suppliers. We may notify you of these changes in various ways, including written or electronic correspondence, verbal or telephonic notification, amendments or updates to the Manual, bulletins, or other means of communication.
Supplier Criteria
Our criteria for evaluating a supplier include standards for quality, delivery, performance, design, appearance and price of the product or service as well as the dependability, reputation and financial viability of the supplier. Upon your request, we will provide you with any objective specifications pertaining to our evaluation of a supplier, although certain important subjective criteria (e.g., product appearance, design, functionality, etc.) are important to our evaluation but cannot be described in writing.
If you want to purchase or lease a source restricted item from a non-approved supplier, you must send us a written request for approval and submit any additional information that we request. We may require that you send us samples from the supplier for testing. We may also require that we be allowed to inspect the supplier’s facilities. We will notify you of our approval or disapproval within 60 days after we receive your request for approval plus all additional information and samples that we require. We may, at our option, re-inspect the facilities and products of any approved supplier and revoke our approval if the supplier fails to meet any of our then-current criteria.
Current Source Restricted Items
As described below in more detail, we require that you purchase the following source restricted goods and services for use in the development and ongoing operation of your Business: all inventory, marketing materials, computer system, training, music and insurance policies. We estimate that between 85% and 95% of the total purchases that will be required to establish and operate your Business will consist of source restricted goods or services.
Inventory
You are not required to purchase any inventory for resale although you have the option to do so. All inventory that you purchase must meet our standards and specifications and must be purchased only from designated or approved suppliers.
Marketing Materials
All of your marketing materials must comply with our standards and requirements. We must approve all of your marketing materials before you use them. You may purchase marketing materials from any

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supplier of your choosing.
Computer System
Your computer system (including software and hardware) must meet our standards and specifications. You may purchase your computer from any supplier of your choosing. You must also utilize the web- based point of sale system that we specify (currently, BRMNet Software), which you will license from our affiliate BBYHC.
Training
In addition to the required training provided by us and our affiliates, you must also attend and complete Health Coaching Training, which is currently conducted by the Institute of Brain Education (we may change the designated vocational school).
Music
You may only play the music that we authorize from time to time relating to the operation of your Business.
Insurance
You must obtain the insurance coverage that we require from time to time (whether in the Franchise Agreement or in the Manual). You must purchase these policies from a carrier with an A.M. Best’s rating of A or better. The required coverage currently includes professional liability insurance in the minimum amount of $1,000,000 combined single limit per occurrence and $2,000,000 in the aggregate (with a maximum deductible of $1,000 per claim); and any other limits and coverage that we periodically require in Manual. The required coverage and policies are subject to change. All insurance policies must: (i) name us (and our members, officers, directors, and employees) as additional insureds; (ii) contain a waiver by the insurance carrier of all subrogation rights against us; and (iii) provide that we receive 10 days’ prior written notice of the termination, expiration, cancellation or modification of the policy. These are just our minimum insurance requirements and you may wish to purchase additional coverage.
Purchase Agreements
At this time, we do not negotiate purchase agreements with suppliers. However, we may in the future try to establish relationships with suppliers to enable our affiliates and franchisees to purchase certain items at discounted prices. If we succeed, you will be able to purchase these items at the discounted prices that we negotiate (less any rebates or other consideration paid to us). Alternatively, we reserve the right to purchase the items in bulk and resell them to you at our cost plus a reasonable markup (your total cost to purchase the items from us will not exceed your total cost to purchase the items directly from the supplier without the benefit of our group purchasing power). There are no purchasing cooperatives, although we reserve the right to establish one or more purchasing cooperatives in the future. You do not receive any material benefits for using designated or approved suppliers other than having access to any discounted pricing that we negotiate.
Franchisor & Affiliate Revenues from Source Restricted Purchases
Although we are not currently an approved or designated supplier for any source restricted items, we reserve the right to designate ourselves as an approved or designated supplier in the future, in which case we may generate revenues from these purchases. We may receive rebates, payments or other material

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benefits from vendors based on franchisee purchases. We will deposit all rebates and payments from suppliers into the Advertising Fund. In the fiscal year ended December 31, 2014, we did not receive any revenues based on Body & Brain home-based franchisee purchases from approved or designated suppliers.
Our parent, BBYHC, is the exclusive licensor of the web-based point of sale system you must use (BRMNet Software). You must pay BBYHC a monthly fee of $50 per month for use of this system. BBYHC is also the exclusive provider of the required Shim Sung Workshops and Qualified Instructor Training programs. BBYHC and our other affiliates may be approved or designated suppliers for other goods or services in the future. During the fiscal year ended December 31, 2014, BBYHC did not receive any revenues based on Body & Brain home-based franchisee purchases from approved or designated suppliers.
There are no approved or designated suppliers in which any of our officers owns an interest.
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 other items in this Disclosure Document.

OBLIGATION	SECTION IN FRANCHISE AGREEMENT (“FA”) OR SOFTWARE SERVICE AGREEMENT (“SSA”)	DISCLOSURE DOCUMENT ITEM
a. Site selection and acquisition/lease	FA: Not Applicable SSA: Not Applicable	Item 7 & 11
b. Pre opening purchases/leases	FA: Section 9.4, 9.5 & 14.1 SSA: Not Applicable	Item 5, 7, 8 & 11
c. Site development and other pre opening requirements	FA: Section 6 SSA: Not Applicable	Item 6, 7 & 11
d. Initial and ongoing training	FA: Section 4 SSA: Not Applicable	Item 6 & 11
e. Opening	FA: Section 6 SSA: Not Applicable	Item 11
f. Fees	FA: Section 3.2, 4.6, 8.1, 8.4, 9.5, 9.6, 9.7, 12 & 18.2 [Also see Section 3 of the Training Agreement] SSA: Section 3.1	Item 5 & 6
g. Compliance with standards and policies/Operating Manuals	FA:Section 5.1, 8.3 & 9 SSA: Section 3.2	Item 11
h . Trademarks and proprietary information	FA: Section 16 [Also see Section 5 of the Training Agreement] SSA: Section 4 & 5	Item 13 & 14
i. Restrictions on products/services offered	FA: Section 9.3 & 16.1 SSA: Not Applicable	Item 16

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OBLIGATION	SECTION IN FRANCHISE AGREEMENT (“FA”) OR SOFTWARE SERVICE AGREEMENT (“SSA”)	DISCLOSURE DOCUMENT ITEM
j. Warranty and client service requirements	Section 9.6 SSA: Not Applicable	Item 6
k. Territorial development and sales quotas	FA: Not Applicable SSA: Not Applicable	Item 12
l. Ongoing product/service purchases	FA: Section 9.2, 9.4 & 9.5 SSA: Not Applicable	Item 8
m. Maintenance, appearance and remodeling requirements	FA: Non Applicable SSA: Not Applicable	Item 11
n. Insurance	FA: Section 14.1 SSA: Not Applicable	Item 6 & 7
o. Advertising	FA: Section 8 SSA: Not Applicable	Item 6, 7 & 11
p. Indemnification	FA: Section 17 SSA: Section 7	Item 6
q. Owner’s participation/ management/staffing	FA: Section 7 SSA: Not Applicable	Item 11 & 15
r. Records/reports	FA: Section 14.2, 14.3 & 14.4 SSA: Not Applicable	Item 6
s. Inspections/audits	FA: Section 15 SSA: Not Applicable	Item 6 & 11
t. Transfer	FA: Section 18 SSA: Section 4.2 & 10.3	Item 17
u. Renewal	FA: Section 3 SSA: Section 1.1	Item 17
v. Post termination obligations	FA: Section 20 [Also see Section 5 of the Training Agreement] SSA: Not Applicable	Item 17
w. Non competition covenants	FA: Section 13 & 20(iii) [Also see Section 5 of the Training Agreement] SSA: Not Applicable	Item 17
x. Dispute resolution	FA: Section 21 SSA: Section 9	Item 17

ITEM 10 FINANCING
We do not offer direct or indirect financing. We do not guarantee any of your notes, leases or obligations.

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ITEM 11 FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING
Except as listed below, we are not required to provide you with any assistance. Before you open your Business, we will:

License you the Marks necessary to begin operating your Business. (Section 2)
Provide you with written specifications for the goods and services you must purchase to establish your Business, as well as a written list of approved and/or designated suppliers for purposes of acquiring these goods and services. We do not deliver or install any of the items that you must purchase. (Section 9.2 & 9.4)
Loan you 1 copy of the Manual, which will help you establish and operate your Business. See Section below entitled “Manual” for additional information. (Section 5.1 & 9.2)
Provide an initial marketing plan for your Business. (Section 8.2)
Provide an initial training program. See Section below entitled “Training Program” for additional information. (Section 4.1)

During the operation of your Business, we will:

Give you ongoing guidance and recommendations on ways to improve the marketing and operation of your Business. (Section 5.2)
Maintain an Internet website that will include a list of all of the Body & Brain home- based franchisees that are in good standing with us. We will also establish an intranet for our franchisees to provide operational support. We can modify the content of and/or discontinue the website at any time in our sole discretion. (Section 5.4)
Administer the Advertising Fund described in Item6. See Section below entitled “Advertising Fund” for additional information. (Section 8.1)

During the operation of your Business, we may, but need not:

1.
2. 3.
4.

Provide periodic training programs or conduct additional training that you request. See Section below entitled “Training Program” for additional information. (Section 4)
Develop new products or services for sale by Body & Brain franchisees. (Section 5.5)
Hold periodic national conferences to discuss business and operational issues affecting Body & Brain franchisees, including industry changes, new services and/or merchandise, marketing strategies and the like. (Section 4.5)
Create a franchise advisory council. See Section below entitled “Advisory Council” for additional information. (Section 10)

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Training Program (Section 4 and Training Agreement) Overview
We will provide you with an initial training program that will last approximately 8 days. All of your owners and manager must successfully complete the initial training program to our satisfaction. We expect that most franchisees will not have multiple owners and will not hire managers. You are not required to attend or complete training within any minimum period of time after signing the Franchise Agreement or prior to opening. However, you cannot begin operating your Business until you have successfully completed training (you must open your Business within 180 days after signing the Franchise Agreement).
The initial training program will likely take place at a resort in Sedona, Arizona (currently Sedona Mago Retreat Center) or Ellenville, New York (currently Honor’s Haven Resort & Spa). Currently, we intend to offer the initial training program at least 4 times per year.
Training Topics
The initial training program consists of the following:

TRAINING PROGRAM
SUBJECT	HOURS OF CLASSROOM TRAINING	HOURS ON THE JOB TRAINING	LOCATION
Orientation / Reflection/ Sharing	2	0	Sedona, Arizona or Ellenville, New York
Background of the Franchisor	2	0	Sedona, Arizona or Ellenville, New York
Center Management	1.5	0	Sedona, Arizona or Ellenville, New York
Monthly Plan / Goal	1.5	0	Sedona, Arizona or Ellenville, New York
Marketing	1.5	0	Sedona, Arizona or Ellenville, New York
Accounting	1.5	0	Sedona, Arizona or Ellenville, New York
Center Opening	2	0	Sedona, Arizona or Ellenville, New York
Solar Body	8.5	0	Sedona, Arizona or Ellenville, New York
Merchandise Intro	2	0	Sedona, Arizona or Ellenville, New York
Intro Session	3.5	0	Sedona, Arizona or Ellenville, New York
Regular Class	6	0	Sedona, Arizona or Ellenville, New York

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TRAINING PROGRAM
SUBJECT	HOURS OF CLASSROOM TRAINING	HOURS ON THE JOB TRAINING	LOCATION
Open Workshop	1.5	0	Sedona, Arizona or Ellenville, New York
Private Session	3.5	0	Sedona, Arizona or Ellenville, New York
Aura Reading	1.5	0	Sedona, Arizona or Ellenville, New York
Consultation	1.5	0	Sedona, Arizona or Ellenville, New York
Ownership / Leadership	2	0	Sedona, Arizona or Ellenville, New York
Management and Leadership	2	0	Sedona, Arizona or Ellenville, New York
BBC CEO Sharing	2	0	Sedona, Arizona or Ellenville, New York
Member Care	3	0	Sedona, Arizona or Ellenville, New York
Vision Training	2	0	Sedona, Arizona or Ellenville, New York
Self Management	1.5	0	Sedona, Arizona or Ellenville, New York
Business Plan	1.5	0	Sedona, Arizona or Ellenville, New York
Graduation Ceremony	2	0	Sedona, Arizona or Ellenville, New York
Total	56

Training Materials
The training materials include the Manual, Merchandise Book and lectures. You will not be charged an additional fee for any of the training materials.
Instructor
Jung Ae Kim is in charge of our training program. Our other instructors include Ann Mooney and Chaesik Jeong.
Jung Ae Kim joined us in January 2014 as our Operations Manager. She served in a number of different capacities with our parent company, BBYHC since 2008, including as a Center Manager from November 2008 to February 2010 (for a Dahn Yoga Center located in Moraga, California), Regional Director from August 2010 to April 2012, Sales Department Manager from May 2012 to July 2013 and Regional Director from August 2013 through the present. She has more than 4 years of experience in the field.
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Ann Mooney has been employed by our parent company, BBYHC, as a member of the Body & Brain support team since October 2007. She has more than 7 years of experience in the field.
Chaesik Jeong was appointed to our Board of Managers in March of 2012. Mr. Jeong has also served as a Manager and Senior Trainer for our parent company, BBYHC, since January of 2007 in Mesa, Arizona. He has 8 years of experience in the field.
Training Agreement
If you choose to attend training prior to signing the Franchise Agreement, you must sign the Training Agreement, the form of which is attached to this Disclosure Document as EXHIBIT "D". In that case, you must pay us the $10,000 initial training fee when you sign the Training Agreement (prior to training).
Supplemental Training Programs
As further discussed in Item 5, each Owner is also required to attend the Shim Sung Workshop and Qualified Instructor Training provided by BBYHC as well as Health Coaching Training which currently is provided by the Institute of Brain Education. The Shim Sung Workshop is held from time to time in numerous cities across the country. Usually, the training facility is located near a Body & Brain Center. The Qualified Instructor Training usually takes place in Arizona or New York. Health Coaching Training currently takes place in Sedona, Arizona. You must complete these training programs before you apply for the franchise.
Ongoing Training
To maintain the uniformity and high standard of goods and services provided by Body & Brain franchisees or to modify these goods or services, we may, but need not, offer periodic additional training programs for franchisees. Attendance at these training programs is optional. You may also request that we provide optional additional training. We are not required to provide this training, but may do so in our discretion.
Training Fees and Costs
You must pay us a $10,000 training fee for each owner and manager that attends our initial training program. We do not expect franchisees to have more than 1 owner or hire managers. Any person who fails initial training must retake training and you must pay us a retraining fee of $400 for each instance the person retakes training. You must pay our parent company $250 to $400 for the Shim Sung Workshop and $3,900 for the Qualified Instructor Training. You must pay the Institute of Brain Education $1,000 for Health Coaching Training.
You must pay all food, lodging and travel costs that you incur while attending training programs. We may charge you an Additional Training Fee of up to $150 per hour for: (i) any optional ongoing training programs you choose to attend; and (ii) any special training that you request and we agree to provide. If we travel to you to provide the requested training, you must reimburse us for our food, lodging and travel costs.
Manual (Section 5.1 & 9.2)
We will lend you our Manual in text or electronic form for the term of your Franchise Agreement. The Manual may include, among other things, (i) a description of the authorized goods and services that you may offer; (ii) mandatory and suggested specifications, operating procedures, and quality standards for

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products, services and procedures that we prescribe from time to time for Body & Brain franchisees; (iii) mandatory reporting and insurance requirements; and (iv) a written list of goods and services (or specifications for goods and services) you must purchase for the development and operation of your Business and a list of any designated or approved suppliers for these goods or services. All mandatory provisions contained in the Manual are binding upon you. The Manual is confidential and remains our property. We may modify the Manual upon 30 day’s prior notice, but the modification(s) will not alter your status or fundamental rights under the Franchise Agreement. The Manual contains a total of 160 pages. A copy of the Table of Contents to the Manual is attached to this Disclosure Document as EXHIBIT "H".
Advertising Fund (Sections 8.1)
We have established and administer an advertising fund. We administer a single advertising fund for Body & Brain home-based franchisees and Body & Brain Center franchisees. The advertising fund will be used for local, regional or national marketing, advertising, sales promotion and promotional materials, public and consumer relations, publicity, website development, search engine optimization and any other programs that we deem necessary or appropriate. Currently, we intend to use the advertising fund to further develop the publicly accessible Body & Brain website to promote the brand and Body & Brain Centers and Body & Brain home-based franchises. The advertising fund may also be used to pay for the creation of marketing materials that our franchisees may use for local marketing purposes.
Advertising fund fees will be kept in a separate account and revenues received will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs and overhead as we may incur in activities reasonably related to the administration or direction of the advertising fund and its local, regional or national advertising programs (which may include, without limitation: conducting market research, preparing and conducting television, radio, magazine, billboard, Internet, newspaper, digital advertising and other media programs and activities and employing advertising agencies to assist therewith, collecting and accounting for contributions to the advertising fund, and paying for the preparation and distribution of marketing materials and financial accountings of the advertising fund). None of the advertising fund fees will be used for advertisements principally directed at selling additional franchises. All funds deposited into the advertising fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of funds in the advertising fund may be invested and we may lend money to the advertising fund if there is a deficit. During the fiscal year ended December 31, 2014, we spent the advertising fund fees in the following manner: 26.1% for production; 0% for media placement; 9.5% for administrative expenses; and 64.4% for other purposes (bodynbrain.com website renewal and maintenance, monthly subscription to newsletters provided by BBYHC).
You must pay us an advertising fund fee equal to 0.5% of your Program Sales (defined in Item 6). We will deposit into the advertising fund all: (i) advertising fund fees paid by you and other franchisees (unless we allocate the fees to an advertising cooperative); (ii) fines paid by you and other franchisees; (iii) rebates or other payments we receive from suppliers based on franchisee purchases; and (iv) Online Payment Proceeds (defined below under Local Advertising). The amount of Online Payment Proceeds we collect for sessions you conduct will be credited against your advertising fund fee. Any company-owned Body & Brain Center or Body & Brain home-based franchise will contribute to the advertising fund on the same basis as our Body & Brain home-based franchisees (0.5% of Program Sales). However, if we modify the amount or timing of the contributions that must be made to the advertising fund, any company-owned Body & Brain Center or Body & Brain home-based franchise that is established or acquired after the modification may contribute to the advertising fund utilizing the modified amount or timing. Except as stated in this paragraph, we have no obligation to expend our own funds or resources for any marketing activities in your area.

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Our administration of the advertising fund is intended to maximize general public recognition and patronage of the Body & Brain System for the benefit of us and all Body & Brain franchisees and we will use our best efforts to apportion advertising to obtain the greatest benefit for all franchisees. We will direct and have complete control and discretion over all advertising programs, including the creative concepts, materials, endorsements and media used for the programs, and the placement and allocation of the programs. We anticipate that the advertising will primarily consist of Internet ads and brochures. We assume no direct or indirect liability or obligation to you with respect to the maintenance, direction or administration of the advertising fund. The advertising fund will not be a trust and we will have no fiduciary obligations with respect to our administration of the advertising fund. An unaudited financial accounting of the operations of the advertising fund will be prepared annually and made available to you upon request.
Local Advertising (Section 8.3 & 8.5)
We do not require that you spend any minimum amount on local advertising. We will provide you with standardized marketing plans and advertising, promotional and marketing materials. Alternatively, we may enter into relationships with approved or designated suppliers who will create advertising or marketing materials that must be purchased and utilized by Body & Brain franchisees. You will also have an opportunity to create advertising for your own use, provided we approve it in advance. You may not use any advertising materials that have not been approved by us. You must submit to us any advertising materials prepared by you and we will have 5 business days to review and either approve or reject the materials. If we fail to respond within the 5 day period, the materials are deemed approved. We may later disapprove of materials that we previously approved.
We began administering an online payment program in 2013. Under the program, potential customers can purchase and pay for Introductory Class sessions (introductory one-on-one sessions) and Trial Class sessions (introductory group class) offered by franchisees through our website. By participating, you agree that: (i) we will list you on our website as a Body and Brain home-based franchise that is participating in the Online Payment Program; (ii) we will allow new potential customers of yours to purchase an Introductory Class session or Trial Class session through our website by electronic payment; and (iii) we may offer a discount for online payment, provided that the minimum required payment will be equal to or exceed 50% of our then-current suggested retail pricing for Introductory Class sessions or Trial Class sessions, as applicable. The payments we collect are referred to as “Online Payment Proceeds”. We will deposit all Online Payment Proceeds that we collect from this program into the advertising fund and all Online Payment Proceeds for sessions that you conduct will be credited towards your advertising fund fee.
You are not allowed to develop or maintain your own website. We will list your information on our website. You are permitted to engage in online advertising as long as we approve the content of the advertisement and means of communication in advance. You also may advertise through approved social media sites. At all times you must comply with any social media policy that we develop.
You agree to participate in all coupon deals that we specify, such as Groupon. You agree that we may enter into agreements with these companies on behalf of you and other franchisees and we have the right to collect the funds generated through the program and distribute them to franchisees based on where the services are redeemed. You also agree to participate in all discount and referral programs that we specify, such as Beneplace. In these arrangements, a third party refers potential customers to franchisees and the customers receive a discounted rate. Under these programs, you may be required to pay commissions to the party referring the customers to you and you must honor the discounted rate that we negotiate.
All proceeds from coupon deals or discount and referral programs will be credited towards your

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obligation to pay royalty fees. To the extent these proceeds for a given month exceed your required royalty fee for that month, the excess amount will be carried forward and applied against your required royalty fee in the subsequent month. If your Franchise Agreement expires and, as of the expiration date, the amount of the proceeds exceeds the total credits you have received for your required royalty fees, the excess amounts will be refunded to you within 30 days after the expiration of the Franchise Agreement. We will notify you of all coupon or discount and referral transactions pertaining to your Business in a timely manner.
Advertising Cooperatives (Section 8.4)
We may, but need not, form one or more advertising cooperatives for the benefit of all Body & Brain home-based franchisees located within a particular region. If you operate within a region subject to an advertising cooperative (determined by whether your home office is located in the cooperative area), you must pay the cooperative advertising fee, which will not exceed 0.5% of Program Sales. We have the right to allocate any portion of the advertising fund fees to an advertising cooperative. We also have the right to determine the composition of all geographic territories and market areas for the implementation of each advertising cooperative. Generally, the boundaries of an advertising cooperative will coincide with a city’s metropolitan area.
If we implement an advertising cooperative in a particular region, we have the right to establish an advertising council to self-administer the cooperative or we can administer the cooperative ourselves. You must participate in the council according to the council’s rules and procedures and you must abide by the council’s decisions. Advertising cooperatives are not required to operate from written governing documents. Advertising cooperatives will prepare annual or periodic financial statements. These financial statements will be made available to franchisees within the advertising cooperative upon request. We reserve the right to form, change, merge or dissolve advertising cooperatives in our discretion.
Advisory Council (Section 10)
We may create an Advisory Council to provide us with suggestions to improve the System, including matters such as marketing, operations and new product or service suggestions. We would consider all suggestions from the advisory council in good faith, but we would not be bound by any such suggestions. The Advisory Council would be established and operated according to rules and regulations we periodically approve, including procedures governing the selection of representatives of the Advisory Council to communicate with us on matters raised by the Advisory Council. You would have the right to be a member of the Advisory Council as long as you are not in default under the Franchise Agreement and you do not act in a disruptive, abusive or counterproductive manner, as determined by us in our discretion. As a member, you would be entitled to all voting rights and privileges granted to other members of the Advisory Council. We would not have any members on the Advisory Council. Each member would be granted one vote on all matters on which members would be authorized to vote. If established, we may require that the Advisory Council for Body & Brain home-based franchisees be separate and distinct from the Advisory Council for Body & Brain Center franchisees. We would reserve the power to form, change or dissolve the Advisory Council in our discretion.
Computer System (Section 9.5)
You must purchase a computer system that meets our standards and specifications. Your computer system must include a computer with the most current version of MS Windows XP or Vista 7 or 8, Microsoft Office Suite (which must include Excel, Word and PowerPoint), high speed internet connection, printer/copy machine and webcam. Your computer system may also include an optional usb magnetic/barcode reader and thermal receipt printer. You must also purchase a web-based point of sale

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system and use the software that we specify (currently the web-based operations software, BRMNet). Your computer system will be used for accounting, tracking sales and managing and storing information about your members. We will have independent access to the data entered into BRMNet, although we will not have independent access to any other information generated or stored on your computer system.
We estimate that the cost of your Computer System will range from $1,100 to $2,700. You must maintain the computer system and other equipment in good working order at your cost. During the term of your franchise, you may be required to change, upgrade or update your computer system to conform to our then-current specifications. There are no contractual limitations on the frequency or cost of these changes, updates or upgrades.
You must pay our parent, BBYHC, a monthly fee of $50 per month ($600 per year) for use of BRMNet. In exchange for this fee, BBYHC will provide all ongoing maintenance, support, upgrades and updates for the associated software. Most new computers come with a limited warranty where the manufacturer is obligated to provide certain ongoing services, such as support and repairs, for a limited period of time. Except as otherwise disclosed above: (i) neither we nor any other party has any obligation to provide ongoing maintenance, repairs, upgrades or updates to your computer system; and (ii) we are not aware of any optional or required maintenance, updating, upgrading or support contracts relating to your computer system.
If we develop any proprietary software (or we license software from a licensor and then sublicense the software to you), you must enter into a software license agreement with us that will govern the terms according to which you may use the software. If we do so, we may require that you pay us commercially reasonable initial and ongoing license fees.
Opening Requirements (Section 6)
You may not begin operating your Business until you have successfully completed the initial training program to our satisfaction. We anticipate that a typical Body & Brain home-based franchisee will begin operating their business within 90 to 180 days after signing the Franchise Agreement (or Training Agreement, if applicable). The primary factors affecting this time are completion of training and obtaining the required insurance and business licenses. Unless we agree to the contrary, you must begin operating your Business within 180 days after you sign the Franchise Agreement. Your failure to open within the 180-day period (or any approved extension period) constitutes an event of default under your Franchise Agreement.
ITEM 12 TERRITORY
Business Location
The franchise offered under this Disclosure Document is a home-based business. You will provide Body & Brain products and services “on-site” at the customer’s location (such as a home or office). You may also offer Body & Brain products from “temporary space” such as a church or community center. However, you may not operate from a dedicated retail space. You do not need our approval of the location of your home office or any other site where you offer Body & Brain products and services. However, you must: (i) notify us of your home office address (and any changes); and (ii) only operate within the state in which your home office is located (unless we authorize you in writing to operate outside of your state). There are no restrictions on your right to relocate your Business, except you may not relocate to another state without our approval. We would approve the relocation as long as we are authorized to offer and sell franchises in that state, or if the relocation would not trigger the new state’s franchise registration or disclosure laws.

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No Exclusive Territory
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
There are no restrictions on our ability to solicit customers or sell competitive or identical goods or services in your area. We may solicit customers and sell competitive or identical goods or services through alternative channels of distribution, including under the Marks or under any other trademark. Examples of alternative channels of distribution include sales over the Internet, catalog sales, telemarketing and other direct marketing. We are not required to pay you any compensation if we sell any competitive or identical goods or services to customers located in your area.
Restrictions on Your Sales and Marketing Activities
You are not granted a territory or restricted to operating your Business within any defined geographic area (other than the state in which your home office is located). You cannot develop or maintain your own website. You are permitted to engage in online advertising as long as we approve the content of the advertisement and means of communication in advance. You also may advertise through approved social media sites. At all times you must comply with any social media policy that we develop. You can market and sell through any other channel of distribution (other than through a website, as we exclusively control the marketing and sale of Body & Brain products and services through a website). You cannot solicit, or sell products or services to, any person who is a current member of another franchisee or company-owned franchised business without the consent of the owner of the business with whom the person is a member. There are no other restrictions on your right to solicit customers, whether from inside or outside of your market area.
Additional Territories
You are not granted any options, rights of first refusal or similar rights to acquire additional territories or franchises. However, you have the option to upgrade from a Body & Brain home-based franchise to a Body & Brain Center franchisee if: (i) you have substantially complied with the terms of your Franchise Agreement; (ii) you pay the then-current upgrade fee for a Body & Brain Center franchise ($5,000 to convert to a Body & Brain Center 2 and $10,000 to convert to a Body & Brain Center 3); (iii) you complete the Leadership Training program that we specify; and (iv) you sign our then current form of franchise agreement for a Body & Brain Center franchise.
Competitive Businesses Under Different Marks
We also offer franchises for Body & Brain Centers, including Body & Brain Center 2 (for centers that are 400 square feet or less) and Body & Brain Center 3 (for centers more than 400 square feet). Body & Brain Centers operate under the same Marks and offer similar services. However, they also offer special trainings and group class memberships that Body & Brain home-based franchisees cannot offer. Body & Brain Centers can only offer products and services from a dedicated location that is branded with Body & Brain signage. There are both company-owned and franchised Body & Brain Centers. Body & Brain Centers may solicit and sell to customers located in your area. We do not anticipate any conflicts between Body & Brain home-based franchisees and Body & Brain Center franchisees regarding franchise support or territories. However, Body & Brain home-based franchisees may not solicit or sell to members of a Body & Brain Center or members of another Body & Brain home-based franchisee. Similarly, Body & Brain Center franchisees may not divert customers from other franchisees, including Body & Brain home- based franchisees. We would mediate any dispute in order to promote the best interests of the customers and the Body & Brain brand as a whole.

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Our parent company and affiliates currently operate approximately 71 Dahn Yoga Centers in the United States (66 operated by BBYHC and 5 operated by CGI, Inc., which is a subsidiary of Dahn World). BBYHC’s principal business address is 3651 East Baseline Road, Suite 228, Gilbert, Arizona 85234. CGI, Inc.’s principal business address is 111 Homans Ave., Closter, New Jersey 07624. None of the Dahn Yoga Centers are franchises. In the past, Dahn Yoga Centers have not operated under the Body & Brain Center Mark. Instead, they have operated under the mark “Dahn Yoga Center.” However, it is currently anticipated that all Dahn Yoga Centers operated by our parent company and affiliates will rebrand to Body & Brain Centers in 2015. Dahn Yoga Centers sell goods and services that are similar or identical to the goods and services sold by Body & Brain franchisees, including physical exercise and meditation training. They also offer products and services that are different from, but complementary to, the products and services offered by Body & Brain Centers.
ITEM 13 TRADEMARKS
BR Consulting, Inc. (“BR Consulting”) is a New Jersey corporation that owns the Marks that we will sublicense to you. BR Consulting, registered the following trademarks on the United States Patent and Trademark Office:
The word mark is registered on the Supplemental Register and the design mark is registered on the Principal Register. All required affidavits for the registered Marks have been filed.
In addition to the primary Marks listed above, you will also be granted a limited license to use DAHN YOGA for purposes of advertising that your Business offers Dahn Yoga classes. The DAHN YOGA mark was registered on the Principal Register at the USPTO on September 12, 2006 under the registration number 3,141,495. BR Consulting is also the owner of the DAHN YOGA mark.
On March 24, 2010, we entered into an Amended and Restated License Agreement (the “License Agreement”) with BR Consulting. Under the terms of the License Agreement, BR Consulting granted us the right to use the Marks in the Body & Brain System and to sublicense the Marks to our franchisees. The term of the License Agreement automatically renews annually, unless it is terminated in accordance with its terms or unless either party provides notice that it does not intend to renew. BR Consulting is permitted to terminate the Trademark License Agreement only if we declare bankruptcy or become insolvent or if we commit a default under the License Agreement and fail to cure within the required period of time. We are obligated to pay a portion of all initial franchise fees and royalty fees that we receive to BR Consulting. If the License Agreement is terminated, the agreement states that all sublicenses granted by us to our franchisees will continue in full force and effect until the expiration or termination of the applicable franchise agreement. We and BR Consulting may amend the License Agreement at any time. Except for the License Agreement, no agreements limit our right to use or
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REGISTERED MARK
MARK	REGISTRATION NUMBER	REGISTRATION DATE (RENEWAL DATE)
BODY & BRAIN CENTER [Word Mark]	3,494,285	August 26, 2008
	3,599,767	March 31, 2009
	3,848,216	September 14, 2010

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sublicense the use of the Marks.
We grant you the right to operate a franchise under the name “Body & Brain” shown on the cover page of this Disclosure Document and identify yourself as a Body & Brain franchisee. By trademark, we mean trade names, trademarks, service marks, and logotypes used to identify your Business or the products or services that you sell. We may change the trademarks you must use from time to time (including by discontinuing use of the Marks listed in this Item 13) and you must comply with any such change at your expense.
You must follow our rules when using the Marks. You cannot use our name or mark as part of a corporate name or with modifying words, designs, or symbols unless you receive our prior written consent. You may not use the Body & Brain name in the sale of any product or service that is not previously authorized by us in writing.
You must notify us immediately when you learn about an infringing or challenging use of the Marks. We will take the action we think appropriate, but we are not required to take any action if we do not feel it is warranted. We may require your assistance, but you are not permitted to control any proceeding or litigation involving our Marks. You must modify or discontinue the use of any Mark licensed to you if we are required to modify or discontinue use of the Mark as a result of litigation. If this happens, we will reimburse you for your tangible costs of compliance (e.g., changing brochures, business cards, etc.). You must not directly or indirectly contest our or BR Consulting’s right to the Marks. Except as disclosed above, we are not required under the Franchise Agreement to: (i) protect your right to use the Marks or protect you against claims of infringement or unfair competition arising out of your use of the Marks; or (ii) participate in your defense or indemnify you for expenses or damages you incur if you are a party to an administrative or judicial proceeding involving our marks or if the proceeding is resolved in a manner that is unfavorable to you.
There are no currently effective material determinations of the USPTO, the Trademark Trial and Appeal Board, the trademark administrator of this state or any court; no other pending infringements, oppositions or cancellations; and no other pending material litigation involving any of the Marks. We do not know of any infringing uses that could materially affect your use of the Marks.
ITEM 14 PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION
No patents or patent applications are material to the franchise. Although we have not filed any applications for copyright registration, we do claim common law copyright to the Manual, our website and all marketing materials that we prepare. During the term of your Franchise Agreement, we will allow you to use our proprietary information relating to the development, marketing and operation of a Body & Brain home-based franchise, including operating methods, specifications, techniques, procedures, marketing strategies and information comprising the System and the Manual.
You are required to maintain the confidentiality of all of our proprietary information and use it only in strict accordance with the terms of the Franchise Agreement and the Manual. You must promptly tell us when you learn about unauthorized use of our proprietary information. We are not obligated to act, but will respond to this information as we deem appropriate. You are not permitted to control any proceeding or litigation alleging the unauthorized use of any of our proprietary information. We have no obligation to indemnify you for any expenses or damages arising from any proceeding or litigation involving our proprietary information. There are no infringements that are known by us at this time.
We will own all data pertaining to the services offered by you under your Business. We will also own all customer files, accounts and contracts, all of which must be assigned to us (upon our request) following

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the expiration, termination or transfer of your Franchise Agreement. In addition, if one of your members switches their membership to another Body & Brain franchisee or company-owned business, we may transfer the account and all data pertaining to that member to the Body & Brain franchisee or company- owned business to which the membership was transferred.
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
You (the franchise owner) must be directly involved in the day-to-day management and supervision of your on a full time basis. Each owner must successfully complete the initial training program. We anticipate that most franchisees will only have 1 owner. By signing the Franchise Agreement, each owner agrees to be bound by all of its terms.
You have the right, but not the obligation to hire a manager to assist you with the operation of your Business. Each manager must: (i) be approved by us (we have the right to require that the manager visit our headquarters for an interview); (ii) successfully complete the initial training program (and you pay us the $10,000 initial training fee); and (iii) sign a Brand Protection Agreement, the form of which is attached to the Franchise Agreement as Attachment "C". We do not require that the manager own any equity interest in franchisee if the franchisee is an entity.
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
All products and services that you sell must be approved by us in advance. You must offer all services that we specify, but you are not required to offer inventory for resale. You may not sell any products or services that we have disapproved. We have the unrestricted right to change the products and/or services that you may sell. You may not sell to any person who is a current member of another franchisee or company-owned Body & Brain outlet without the consent of the person with whom the person is a member. To the extent permitted by law, we may establish maximum or minimum pricing for certain Body & Brain products and services.
ITEM 17 RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION
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.
In the table below, the “Franchise Agreement” sections are referred to as “FA” and the “Software Service Agreement” sections are referred to as “SSA”.

THE FRANCHISE RELATIONSHIP
PROVISION	SECTIONS IN AGREEMENT	SUMMARY
a. Length of the franchise term	FA: Section 3.1	Term is equal to 3 years.
a. Length of the franchise term	SSA: Section 1.1	Term is 1 month and automatically continues for 1 month periods until either party terminates.
b. Renewal or extension of the term	FA: Section 3.1 & 3.2	If you are in good standing, you can enter into a successor franchise agreement for 4 additional consecutive 3-year successor terms.

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THE FRANCHISE RELATIONSHIP
PROVISION	SECTIONS IN AGREEMENT	SUMMARY
	SSA: Section 1.1	The term automatically renews on a month-to-month basis until either party terminates.
c. Requirements for you to renew or extend	FA: Section 3.2	You must: not be in default; give us timely notice; sign our then current form of franchise agreement and related documents; sign a general release; and pay renewal fee. If you renew, you may be required to sign a contract with materially different terms and conditions than the original contract.
c. Requirements for you to renew or extend	Not Applicable	The contract imposes no requirements in order to renew.
d. Termination by you	FA: Section 19.1	You can terminate at any time prior to attending training by providing written notice. You may also terminate if we fail to cure a material default or if you and we mutually agree to terminate.
d. Termination by you	SSA: Section 1.2	You can terminate only if BBYHC fails to cure a default or if you and BBYHC mutually agree to terminate. Either party can terminate upon 30 days’ notice but you are required by the Franchise Agreement to use the BRMNet software.
e. Termination by us without cause	FA: Section 19.4	We may not terminate without cause unless you and we mutually agree to terminate.
e. Termination by us without cause	SSA: Section 1.1 & 1.2	BBYHC may terminate upon 30 days’ prior notice. It may also terminate upon 10 days notice if you fail to cure a default.
f. Termination by us with cause	FA: Section 19.2 & 19.3	We can terminate only if you default.
f. Termination by us with cause	SSA: Section 1.1	BBYHC may terminate upon 30 days’ prior notice without cause.
g. “Cause” defined - curable defaults	FA: Section 19.3	You have 30 days to cure any default other than defaults described below under “non-curable defaults.”
g. “Cause” defined - curable defaults	SSA: Section 1.2	All defaults have a 10 day cure period.
h. “Cause” defined - non-curable defaults	FA: Section 19.2	The following defaults cannot be cured: failure to open in required time; insolvency, bankruptcy or seizure of assets; abandonment of franchise; failure to maintain required license or permit; conviction of certain types of crimes or subject of certain administrative actions; failure to comply with material law; commission of act that may adversely affect reputation of System or Marks; health or safety hazards; material misrepresentations; failure to pay us or affiliate within 5 days after demand; 2nd underreporting of any amount due by at least 3%; unauthorized transfers; unauthorized use of our intellectual property; violation of a brand protection covenant; termination of any other agreement between you and us or an affiliate due to your default.
h. “Cause” defined - non-curable defaults	SSA: Not Applicable	No defaults are listed as non-curable under the SSA.

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THE FRANCHISE RELATIONSHIP
PROVISION	SECTIONS IN AGREEMENT	SUMMARY
i. Your obligations on termination/non renewal	FA: Section 20	Obligations include complete return of Manuals and all branded materials, assignment of telephone numbers, listings and domain names, assignment of member agreements and customer data to us, cancellation of fictitious names, and payment of amounts due (also see “r”, below).
i. Your obligations on termination/non renewal	SSA: Not Applicable	No obligations specified
j. Assignment of contract by us	FA: Section 18.1	No restriction on our right to assign.
j. Assignment of contract by us	SSA: 10.3	SSA does not restrict ability of BBYHC to assign.
k. “Transfer” by you – definition	FA: Section 18.2	Includes transfer of contract or assets, or ownership change.
k. “Transfer” by you – definition	SSA: Section 10.3	Includes assignment of rights, delegation of duties, hypothecation, transfer, mortgage, sublet, license or encumbrance of rights, duties or other interests in SSA.
l. Our approval of transfer by you	FA: Section 18.2 & 18.3	If certain conditions are met, you may transfer to a newly- formed entity owned exclusively by you. We have the right to approve all other transfers (including the addition of new owners) but will not unreasonably withhold approval.
l. Our approval of transfer by you	SSA: Section 10.3	BBYHC must approve transfer in writing.
m. Conditions for our approval of transfer	FA: Section 18.2	Transferee must meet our qualifications, successfully complete training (and pay initial training fee), obtain all required licenses and permits, and sign a new franchise agreement for the remainder of the term. You must be compliant with your Franchise Agreement, pay us transfer fee and sign a general release.
m. Conditions for our approval of transfer	SSA: Section 10.3	Must obtain BBYHC’s approval in writing.
n. Our right of first refusal to acquire your business	FA: Not Applicable	Not Applicable
n. Our right of first refusal to acquire your business	SSA: Not Applicable	Not Applicable
o. Our option to purchase your business	FA: Not Applicable	Not Applicable
o. Our option to purchase your business	SSA: Not Applicable	Not Applicable
p. Your death or disability	FA: Section 18.4	Within 6 months, franchise must be assigned by estate to an assignee in compliance with conditions for other transfers.
p. Your death or disability	SSA: Not Applicable	Not Applicable
q. Non-competition covenants during the term of the franchise	FA: Section 13.2 & 13.3	No involvement in competing business; comply with non- solicitation and non-disclosure covenants.
	SSA: Section 4.4	May not reverse engineer, decompile, reproduce, publish, sell, sublicense, transfer, rent or distribute the software.
r. Non competition covenants after the franchise is terminated or expires	FA: Section 13.4 [See also Section 5 of Training Agreement]	No involvement for 2 years in competing business within 15 miles of any Body & Brain Center or Dahn Yoga Center; comply with non-solicitation and non-disclosure covenants; cease use of know-how and trade secrets. If you sign a Training Agreement but do not sign a Franchise Agreement, you will be subject to similar obligations under Section 5 of the Training Agreement.

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THE FRANCHISE RELATIONSHIP
PROVISION	SECTIONS IN AGREEMENT	SUMMARY
	SSA: Section 4.4	May not reverse engineer, decompile, reproduce, publish, sell, sublicense, transfer, rent or distribute the software.
s. Modification of the agreement	FA: Section 23.8	Requires writing signed by both parties. Other modifications primarily to comply with various states laws.
s. Modification of the agreement	SSA: Section 10.7	Requires writing signed by both parties. Other modifications primarily to comply with various states laws.
t. Integration/merger clause	FA: Section 23.8	Only the terms of the Franchise Agreement and attachments to Franchise Agreement are binding (subject to state law). Any representations or promises made outside the Disclosure Document and Franchise Agreement may not be enforceable. Nothing in the Franchise Agreement or any related agreements is intended to disclaim any of the representations we made in this Disclosure Document.
t. Integration/merger clause	SSA: Section 10.7	Only the terms of the SSA and attachments to Franchise Agreement are binding (subject to state law). Any representations or promises made outside the Disclosure Document and SSA may not be enforceable. Nothing in the SSA or any related agreements is intended to disclaim any of the representations we made in this Disclosure Document.
u. Dispute resolution by arbitration or mediation	FA: Section 21	Except for certain claims, all disputes must be arbitrated or mediated (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).
u. Dispute resolution by arbitration or mediation	SSA: Section 9.1	All disputes must be mediated and then arbitrated (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).
v. Choice of forum	FA: Section 21	Arizona (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).
v. Choice of forum	SSA: Section 9	Arizona (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).
w. Choice of law	FA: Section 23.1	Arizona law (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).
w. Choice of law	SSA: Section 10.4	Arizona law (except as otherwise disclosed in EXHIBIT "I" to this Disclosure Document).

ITEM 18 PUBLIC FIGURES
We do not use any public figures to promote our 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

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at a particular location or under particular circumstances.
We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make these representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you 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 Federal Trade Commission, the appropriate state regulatory agencies, and our management by contacting our franchisee support at 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234 or by phone at (480) 664-2194.
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION

TABLE 1 - SYSTEM-WIDE OUTLET SUMMARY FOR YEARS 2012 TO 2014
Outlet Type	Y ear	Outlets at the Start of the Year	Outlets at the End of the Year	Net Change
Franchised	2012	0	0	0
	2013	0	0	0
	2014	0	0	0
Company-Owned	2012	0	0	0
	2013	0	0	0
	2014	0	0	0
Total Outlets	2012	0	0	0
	2013	0	0	0
	2014	0	0	0

TABLE 2 - TRANSFERS OF OUTLETS FROM FRANCHISEES TO NEW OWNERS (OTHER THAN THE FRANCHISOR) FOR YEARS 2012 TO 204
State	Y ear	Number of Transfers
Total	2012	0
	2013	0
	2014	0

TABLE 3 - STATUS OF FRANCHISED OUTLETS FOR YEARS 2012 TO 2014
State	Y ear	Outlets at Start of Y ear	Outlets Opened	Termin- ations	Non- Renewals	Reacquired by Franchisor	Ceased Operations - Other Reasons	Outlets at End of Y ear
Totals	2012	0	0	0	0	0	0	0
	2013	0	0	0	0	0	0	0
	2014	0	0	0	0	0	0	0

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TABLE 4 - STATUS OF COMPANY-OWNED OUTLETS FOR YEARS 2012 TO 2014
State	Y ear	Outlets at Start of Year	Outlets Opened	Outlets Reacquired From Franchisee	Outlets Closed	Outlets Sold to Franchisee	Outlets at End of Year
Totals	2012	0	0	0	0	0	0
	2013	0	0	0	0	0	0
	2014	0	0	0	0	0	0

TABLE 5 - PROJECTED OPENINGS AS OF DECEMBER 31, 2014
State	Franchise Agreements Signed But Outlet Not Opened	Projected New Franchised Outlets in the Next Fiscal Y ear	Projected New Company- Owned Outlets in the Next Fiscal Year
Arizona	0	1	0
California	0	4	0
Colorado	0	1	0
Florida	0	1	0
Georgia	0	1	0
Hawaii	0	1	0
Illinois	0	3	0
Maryland	0	1	0
Massachusetts	0	1	0
Nevada	0	1	0
New Jersey	0	1	0
New Mexico	0	1	0
New York	0	4	0
Texas	0	3	0
Virginia	0	1	0
Washington	0	2	0
Total	0	27	0

Notes:
1. Our fiscal year ends on December 31. All references to years in these Tables refer to December 31 of that year. The outlets listed in Tables 1 through 4 only refer to outlets that are open on the relevant date.
2. The transfers listed in Table 2 only refer to outlets that were transferred after opening. No franchisees transferred their franchise agreements for unopened outlets in 2012, 2013 or 2014.
3. The transactions listed in Table 3 only refer to franchisees that left the system after opening their outlets. No franchisees left the system prior to opening in 2012, 2013 or 2014.

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4. The outlets listed in the 2nd column in Table 5 (“Franchise Agreements Signed But Outlet Not Opened”) include all franchise agreements that were signed for unopened centers as of December 31, 2014. The outlets listed in the 3rd column in Table 5 (“Projected New Franchised Outlets in the Next Fiscal Year”) include all outlets that we expect to open during the current fiscal year, including any outlets listed in the 2nd column that we expect to open this fiscal year.
A list of all current Body & Brain home-based franchisees is attached to this Disclosure Document as EXHIBIT "J" (Part A), including their names and the addresses and telephone numbers of their outlets as of December 31, 2014. In addition, EXHIBIT "J" (Part B) lists the name, city and state, and the current business telephone number (or, if unknown, the last known home telephone number) of every franchisee who had an outlet terminated, canceled, not renewed, or otherwise voluntarily or involuntarily ceased to do business under the franchise agreement during our most recently completed fiscal year or who has not communicated with us within 10 weeks of the issuance date of this Disclosure Document. If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.
During the last 3 fiscal years, no current or former Body & Brain home-based franchisees have signed confidentiality clauses that restrict them from discussing with you their experience as a franchisee in our franchise system. There are no: (i) trademark-specific franchisee organization associated with the franchise system offered that we have created, sponsored or endorsed; or (ii) independent franchisee organizations that have asked to be included in this Disclosure Document.
ITEM 21 FINANCIAL STATEMENTS
Audited financial statements of Body and Brain Center, LLC for the years ended December 31, 2014, December 31, 2013 and December 31, 2012 are attached to this Disclosure Document as EXHIBIT "K".
ITEM 22 CONTRACTS
Attached to this Disclosure Document (or the Franchise Agreement attached to this Disclosure Document) are copies of the following franchise and other contracts or agreements proposed for use or in use in this state:
Exhibits to Disclosure Document

EXHIBIT "C" EXHIBIT "D" EXHIBIT "E" EXHIBIT "F" EXHIBIT "G" EXHIBIT "L"

Franchise Agreement
Training Agreement
General Release
Referral Agreement
Software Service Agreement Franchisee Disclosure Questionnaire

Attachments to Franchise Agreement
ATTACHMENT "B" ACH Authorization Form Attachment "D"State Addendum
ITEM 23 RECEIPT
EXHIBIT "M" to this Disclosure Document are detachable receipts. You are to sign both, keep one copy and return the other copy to us.

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EXHIBIT "A"
TO DISCLOSURE DOCUMENT STATE AGENCIES AND ADMINISTRATORS

CALIFORNIA
Commissioner of Business Oversight
Department of Business Oversight 320 West 4th Street, #750
Los Angeles, CA 90013
(213) 576-7500
1-866-275-2677
HAWAII
Commissioner of Securities of the State of Hawaii
335 Merchant Street, Room 203 Honolulu, Hawaii 96813
(808) 586-2722
Agents for Service of Process: Commissioner of Securities of the State of Hawaii
Department of Commerce and Consumer Affairs
Business Registration Division 335 Merchant Street, Room 203 Honolulu, Hawaii 96813
(808) 586-2722
ILLINOIS
Illinois Attorney General Chief, Franchise Division 500 South Second Street Springfield, IL 62706 (217) 782-4465 INDIANA
Secretary of State
Securities Division
Room E-018
302 West Washington Street Indianapolis, IN 46204 (317) 232-6681

MARYLAND
Office of the Attorney General Securities Division
200 St. Paul Place
Baltimore, Maryland 21202 (410) 576-6360
MICHIGAN
Franchise Administrator
Consumer Protection Division
670 Law Building
Lansing, MI 48913
(517) 373-7117
MINNESOTA
Department of Commerce
Director of Registration
85 Seventh Place East, #500
St. Paul, MN 55101-3165
(651) 296-4026
NEW YORK
New York Attorney General
Investor Protection & Securities Bureau
Franchise Section
120 Broadway, 23rd Floor
New York, NY 10271
(212) 416-8236
NORTH DAKOTA
North Dakota Securities Department State Capitol, Fifth Floor, Dept 414 600 East Boulevard Avenue
Bismarck, North Dakota 58505-0510 (701) 328-4712

RHODE ISLAND
Department of Franchise Regulation 233 Richmond Street, #232 Providence, Rhode Island 02903 (401) 222-3048
SOUTH DAKOTA
Department of Labor and Regulation Division of Securities
445 E Capitol Avenue
Pierre, South Dakota 57501
(605) 773-4823
VIRGINIA
State Corporation Commission
Division of Securities and Retail Franchising
1st Floor (service of process) 9th Floor (administrator) 1300 East Main Street Richmond, VA 23219
(804) 371-9051
W ASHINGTON
Department of Financial Institutions Securities Division
150 Israel Road SW
Tumwater, WA 98501
(360) 902-8760
WISCONSIN
Department of Financial Institutions Division of Securities
201 West Washington Avenue Madison, Wisconsin 53703
(608) 261-9555

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EXHIBIT "B"
TO DISCLOSURE DOCUMENT FRANCHISOR’S AGENT FOR SERVICE OF PROCESS
Commissioner of Commerce 85 Seventh Place East, #500 St. Paul, MN 55101-3165

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EXHIBIT "C"
TO DISCLOSURE DOCUMENT FRANCHISE AGREEMENT
[See Attached]

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Body and Brain Center, LLC Franchise Agreement

TABLE OF CONTENTS

Page

DEFINITIONS ............................................................................................................................ 1
GRANT OF FRANCHISE .......................................................................................................... 1
TERM AND RENEWAL............................................................................................................1
TRAINING, WORKSHOPS AND CONFERENCES. ............................................................... 1
OTHER FRANCHISOR ASSISTANCE. ................................................................................... 2
OPENING. .................................................................................................................................. 2
MANAGEMENT OF BUSINESS. ............................................................................................. 2
ADVERTISING & MARKETING. ............................................................................................ 3
OPERATING STANDARDS. .................................................................................................... 5
FRANCHISE ADVISORY COUNCIL ...................................................................................... 6
FRANCHISEE AS ENTITY ....................................................................................................... 7
FEES............................................................................................................................................ 7
BRAND PROTECTION COVENANTS. ................................................................................... 8
YOUR OTHER RESPONSIBILITIES ....................................................................................... 9
INSPECTION AND AUDIT ..................................................................................................... 10
INTELLECTUAL PROPERTY ................................................................................................ 11
INDEMNITY ............................................................................................................................ 12
TRANSFERS ............................................................................................................................ 12
TERMINA TION ....................................................................................................................... 13
POST-TERM OBLIGA TIONS. ................................................................................................ 15
DISPUTE RESOLUTION......................................................................................................... 16
YOUR REPRESENTATIONS.................................................................................................. 16
GENERAL PROVISIONS ........................................................................................................ 16

Attachments
Attachment "A" Definitions
Attachment "B" ACH Authorization Form Attachment "C" Brand Protection Agreement Attachment "D" State Addendum

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BODY & BRAIN FRANCHISE AGREEMENT

This Franchise Agreement (this “Agreement”) is entered into this ___ day of _______________, 201__ (the “Effective Date”) between Body and Brain Center, LLC, an Arizona limited liability company (“we” or “us”), with principal offices at 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234 and the franchisee signing this Agreement below (“you”).
1. DEFINITIONS. Capitalized terms used in this Agreement are defined either in the body of this Agreement or in Attachment "A". For capitalized terms that are defined in the body of this Agreement, Attachment "A" lists the Sections of this Agreement in which such terms are defined.
2. GRANT OF FRANCHISE. We hereby grant you a license to own and operate a Body & Brain home-based franchise (your “Business) using our Intellectual Property. You are not granted any territory and have no exclusive or protected territorial rights. You are not restricted to operating in any defined area, although you may not operate outside the state in which your home office is located without our prior written approval. We reserve all rights not expressly granted to you under this Agreement.
3. TERM AND RENEWAL.
3.1 Generally. The term of this Agreement will begin on the Effective Date and expire three (3) years thereafter (the “Term”). If this Agreement is the initial franchise agreement for your Business, you may enter into a maximum of four (4) successor Body & Brain franchise agreements as long as you meet the conditions for renewal specified below. Each successor franchise agreement shall be the current form of franchise agreement that we use in granting Body & Brain home-based franchises as of the expiration of the Term or renewal term, as applicable. The terms and conditions of each successor franchise agreement may vary materially and substantially from the terms and conditions of this Agreement. Each renewal term will be for three (3) years, for a maximum total term of 15 years. You will have no further right to operate your Business following the expiration of the fourth (4th) renewal term unless we grant you another franchise in our sole discretion. If this Agreement is a successor franchise agreement, the renewal provisions in your original franchise agreement will govern your remaining renewal rights, if any.
3.2 Renewal Requirements. In order to enter into a successor franchise agreement, you and the Owners (as applicable) must: (i) notify us in writing of your desire to enter into a successor franchise agreement not less than 180 days nor more than 360 days before the expiration of the Term or renewal term, as applicable; (ii) not be in default under this Agreement or any other agreement with us or any affiliate of ours at the time you send the renewal notice or the time you sign the successor franchise agreement; (iii) sign the successor franchise agreement and all ancillary documents that we require franchisees to sign; (iv) sign a General Release; (v) pay us a $500 renewal fee; and (vi) take any additional action that we reasonably require.
4. TRAINING, WORKSHOPS AND CONFERENCES.
4.1 Initial Training Program. All of your Owners and managers must attend successfully
complete our initial training program before you may sign this Agreement.
4.2 Optional Periodic Training. From time to time, we may offer refresher or additional training courses. Attendance at these training programs is optional.
4.3 Other Initial Training Programs. Before you open your Business, each of your Owners must complete the Shim Sung workshop and Qualified Instructor Training provided by Body & Brain Yoga and Health Centers, Inc. as well as the Health Coaching Training provided by our designated vocational school (currently Institute of Brain Education).

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4.4 Additional Training Upon Request. Upon your written request, we may provide additional training to you at a mutually convenient time. We are not required to provide this training.
4.5 National Conferences. We may hold periodic national conferences to discuss various business issues and operational and general business concerns affecting Body & Brain franchisees. Attendance at these conferences is mandatory unless: (i) an Owner or manager cannot attend due to circumstances beyond his or her control; or (ii) we provide our prior written consent that the Owner or manager is not required to attend.
4.6 Training Fees and Expenses. You are responsible for all food, lodging and travel costs that your Owners and managers incur while attending any training program, workshop or conference. You must pay us an initial training fee of $10,000 for each person that attends our initial training program, whether before or after signing this Agreement. The initial training fee is due before training begins. We may charge a $400 retraining fee for any person who must retake training after failing to successfully complete initial training on a prior attempt. You must pay the applicable fees to each provider of Shim Sung workshop, Qualified Instructor Training and Health Coaching Training. If you choose to attend any optional periodic training program, or if we agree to provide any special training that you request, then you agree to pay us a training fee of $150 per hour, which is due as invoiced. If we agree to travel to you to provide any training, you must also reimburse us for all costs that we incur for food, lodging and travel, which amounts are due as invoiced. We may charge you a conference registration fee of $100 per day for each person that attends our national conference, which is due as invoiced.
5. OTHER FRANCHISOR ASSISTANCE.
5.1 Manual. We will lend you our confidential Operating Manual (the “Manual”) in text or electronic form for the duration of the Term. The Manual will help you establish and operate your Business. The information in the Manual is confidential and proprietary and may not be disclosed to third parties without our prior approval.
5.2 General Guidance. Based upon our periodic inspections of your operations or reports that you submit to us, we will provide our guidance and recommendations on ways to improve the marketing and/or operation of your Business.
5.3 Marketing Assistance. As further described in Section 8.1 and Section 8.2, we will administer the advertising fund and provide you with other marketing assistance during the Term.
5.4 Website. We will maintain the corporate website for Body & Brain franchisees that will include the information about your Business that we deem appropriate. We will also establish an intranet with our franchisees to provide operational support. We may modify the content of and/or discontinue the website and intranet at any time in our sole discretion.
5.5 Private Label Goods. We may, but need not, develop Body & Brain private label products for you to sell. You are not required to sell any of these products.
6. OPENING.
You must open your Business to the public within 180 days after the Effective Date. You may not open your Business before: (i) at least one Owner successfully completes the initial training program; (ii) you purchase all required insurance; and (iii) you obtain all required licenses, permits and other governmental approvals. You must send us a written notice identifying your opening date immediately upon opening. You must also notify us of the address of your home office and any changes to that address.
7. MANAGEMENT OF BUSINESS.

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7.1 Owner Participation. You acknowledge that a major requirement for the success of your Business is the active, continuing, and substantial personal involvement and hands-on supervision by your Owners. Each Owner must at all times be actively involved in the operation and management of the Business on a full time basis. Any new Owner that we approve must successfully complete the initial training program pursuant to Section 4.1. By signing the Franchise Agreement, each Owner agrees to be personally bound by all of its terms, even if the franchisee is an entity.
7.2 Managers. You may, but need not, engage a manager to assist you with the operation of your Business. Each manager must: (i) be approved by us (we have the right to require that the manager visit our headquarters for an interview); (ii) successfully complete the initial training program; and (iii) sign a Brand Protection Agreement.
7.3 Employees. We do not anticipate that you will hire any employees. If you do, you must pay all wages, commissions, fringe benefits, worker’s compensation premiums and payroll taxes (and other withholdings required by law) due for your employees. These employees will be employees of yours and not of ours. You may give your employees only the minimum amount of information and material from the Manual that is necessary. You must ensure that your employees do not make or retain any copies of the Manual or any portion of the Manual. We do not control, or have the right to control, the hiring, firing, training, discipline or day-to-day activities of your employees.
8. ADVERTISING & MARKETING. 8.1 Advertising Fund.
(a) Administration. We have established and maintain an advertising fund, which may be used for marketing, advertising, sales promotion and promotional materials, public and consumer relations, publicity, website development, search engine optimization and any other programs that we deem necessary or appropriate (“Advertising Campaigns”). We have sole discretion in determining the content, concepts, materials, media, endorsements, frequency, placement, location and all other matters pertaining to any Advertising Campaign. We will not use advertising fund fees to defray any of our general operating expenses, except for such reasonable salaries, administrative costs and overhead as we may incur in activities reasonably related to the administration of the advertising fund and the Advertising Campaigns (which may include, without limitation: conducting market research, preparing and conducting television, radio, magazine, billboard, newspaper, digital advertising and other media programs and activities and employing advertising agencies, collecting and accounting for contributions to the advertising fund, and paying for the preparation and distribution of financial accountings and marketing materials). Any surplus of funds in the advertising fund may be invested and we may lend money to the advertising fund if there is a deficit. The advertising fund is not a trust and we have no fiduciary obligations to you with respect to our administration of the advertising fund. A financial accounting of the operations of the advertising fund, including deposits into and disbursements from the advertising fund, will be prepared annually and made available to you upon request.
(b) Contributions from You and Us. On the fifth (5th) day of each month, you must pay us an advertising fund fee equal to 0.5% of your Program Sales for the prior month’s operations. We will deposit into the advertising fund all: (i) advertising fund fees paid by you and other franchisees (unless we allocate the fees to an advertising cooperative); (ii) fines paid by you and other franchisees; and (iii) rebates or other payments we receive from suppliers based on franchisee purchases. Any company-owned Body & Brain Center or Body & Brain home-based franchise will contribute to the advertising fund on the same basis as our Body & Brain home-based franchisees. However, if we modify the amount or timing of the contributions that must be made to the advertising fund, any company-owned Body & Brain Center or Body & Brain home-based franchise that is established or acquired after the modification may contribute to the advertising fund utilizing the modified amount or timing. Except as stated in this Section, we have no obligation to expend our own funds or resources for any Advertising

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Campaign.

8.2 Marketing Assistance From Us. We will provide you with a standardized marketing plan for your Business. The marketing plan will be included in the Manual. We may create and make available to you advertising and other marketing materials at no additional charge. We may make these materials available over the Internet (in which case you must arrange for printing the materials and paying all printing costs). Alternatively, we may enter into relationships with third party suppliers who will create the advertising or marketing materials for your purchase. We will provide reasonable marketing consulting, guidance and support throughout the Term on an as needed basis.
8.3 Your Marketing Activities
(a) Generally. Although you are encouraged to engage in local advertising, you are not required to spend any minimum amount on local advertising to promote your Business. However, you must participate at your own expense in all advertising, promotional and marketing programs that we require. All advertisements and promotions that you create or use must be completely factual and conform to the highest standards of ethical advertising and comply with all federal, state and local laws. You must ensure that your advertisements and promotional materials do not infringe upon the intellectual property rights of any person.
(b) Approval of Advertising. We must approve all advertising and promotional materials that were not prepared or previously approved by us before you use them (including materials that we prepare or approve and you modify). We will be deemed to have approved the materials if we fail to issue our disapproval within five (5) business days after receipt. You may not use any advertising or promotional materials that we have disapproved (including materials that we previously approved).
(c) Online Advertising. You are not allowed to develop or maintain your own website. We will list your information on our website. You are permitted to engage in online advertising as long as we approve the content of the advertisement and means of communication in advance pursuant to Section 8.3(b). You also may advertise through approved social media sites. At all times you must comply with any social media policy that we develop.
(d) Coupon Deals and Discount Programs. You agree to participate in all coupon deals that we specify, such as Groupon. You agree that we may enter into agreements with these companies on behalf of you and other franchisees and we have the right to collect the funds generated through the program and distribute them to franchisees based on where the services are redeemed. You also agree to participate in all discount and referral programs that we specify, such as Beneplace. In these arrangements, a third party refers potential customers to franchisees and the customers receive a discounted rate. Under these programs, you may be required to pay commissions to the party referring the customers to you. All proceeds from coupon deals or discount and referral programs will be credited towards your obligation to pay royalty fees. To the extent such proceeds for a given month exceed your required royalty fee for that month, the excess amount will be carried forward and applied against your required royalty fee in the subsequent month. If this Agreement expires and, as of the expiration date, the amount of such proceeds exceeds the total credits you have received for your required royalty fees, the excess amounts will be refunded to you within 30 days after the expiration of this Agreement. We will notify you of all coupon or discount and referral transactions pertaining to your Business in a timely manner.
8.4 Advertising Cooperative. We have the right, but not the obligation, to create one or more advertising cooperatives for the purpose of creating and/or purchasing advertising programs for the benefit of all franchisees operating within a particular region. We have the right to: (i) allocate any portion of the advertising fund fee to the advertising cooperative; (ii) determine the composition of all geographic territories and market areas for each advertising cooperative; and (iii) require that you

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participate in any advertising cooperative if and when established by us. If we implement an advertising cooperative, we may establish an advertising council to self-administer the advertising cooperative. You must participate in the council according to the council’s rules and procedures and you must abide by the council’s decisions. Alternatively, we may administer the advertising cooperative ourselves. We reserve the right to form, change, merge or dissolve advertising cooperatives in our discretion. You must pay the monthly cooperative advertising fee established by us or the council, as applicable, which will be due on the fifth (5th) day of each month for the prior month’s operations. The initial cooperative advertising fee shall be equal to 0.5% of Program Sales. Upon the majority vote of all franchisees within the advertising cooperative, the amount of the cooperative advertising fee may be adjusted (or temporarily suspended) or the cooperative advertising fee may be eliminated altogether. If we or an affiliate of ours operate a majority of the Body & Brain home-based franchises within the advertising cooperative, we will increase the cooperative advertising fee only with the consent of all franchisees within the advertising cooperative. We will collect all cooperative advertising fees and pay them to the applicable advertising cooperative unless we administer the advertising cooperative ourselves.
8.5 Online Payment Program. We have implemented a program pursuant to which we will allow new potential customers to pay for Introductory Class sessions and Trial Class sessions through our website in advance of attending the class at a discounted rate (the “Online Payment Program”). You agree to participate in the Online Payment Program. By participating, you agree that: (i) we will list your Business on our website as a Body and Brain Body & Brain home-based franchise that is participating in the Online Payment Program; (ii) we will allow new potential customers of your Business to purchase an Introductory Class session (introductory one-on-one session) or Trial Class session (introductory group class) through our website by electronic payment; and (iii) we may offer a discount for online payment, provided that the minimum required payment will be equal to or exceed 50% of our then-current suggested retail pricing for Introductory Class sessions or Trial Class sessions, as applicable. You agree that we will retain 100% of the electronic payments made by customers through our Online Payment Program (referred to as “Online Payment Proceeds”). All Online Payment Proceeds will be depositing into the advertising fund and will be utilized solely for Advertising Campaigns. All Online Payment Proceeds attributable to purchases of Introductory Class sessions and Trial Class sessions relating to your Business will be included in your reporting of Program Sales. All Online Payment Proceeds will be credited towards your obligation to contribute to the advertising fund. To the extent your Online Payment Proceeds for a given month exceed your required contribution to the advertising fund for that month, the excess amount will be carried forward and applied against your required contribution to the advertising fund in the subsequent month. If this Agreement expires and, as of the expiration date, the amount of your Online Payment Proceeds exceeds the total credits you have received for your required contributions to the advertising fund, the excess amounts will be refunded to you within 30 days after the expiration of this Agreement. We will notify you of all online payment transactions pertaining to your Business in a timely manner.
9. OPERATING STANDARDS.
9.1 Generally. You agree to operate your Business: (i) in a manner that will promote the goodwill of the Marks; and (ii) in full compliance with our standards and all other terms and conditions of this Agreement and the Manual.
9.2 Operating Manual. You agree to establish and operate your Business in accordance with the Manual. The Manual may contain, among other things: (i) a description of the authorized goods and services that you may offer; (ii) mandatory and suggested specifications, operating procedures, and quality standards for products, services and procedures that we prescribe from time to time for franchisees; (iii) mandatory reporting and insurance requirements; and (iv) a written list of items (or specifications for items) you must purchase for your Business and a list of any designated or approved suppliers for these items. We can modify the Manual at any time. The modifications will become binding 30 days after we send you notice of the modification. All mandatory provisions contained in the Manual

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(whether they are included now or in the future) are binding on you.

9.3 Authorized Goods and Services. You agree to offer all services that we require from time to time in our commercially reasonable discretion. You may, but need not, offer the products that we authorize from time to time. You may not offer any other goods or services without our prior written permission. You may not use your Business for any purpose other than providing the goods and services that we authorize. We may, without obligation to do so, add or delete authorized goods and services. Our discontinuance of one or more goods or services shall not constitute a termination of the franchise or this Agreement.
9.4 Suppliers and Purchasing. You agree to purchase or lease all products, supplies, equipment and other items specified in the Manual from time to time. If required by the Manual, you agree to purchase certain goods and services only from suppliers designated or approved by us (which may include us or our affiliates). If we receive rebates or other financial consideration from these suppliers based upon franchisee purchases, we will deposit these amounts into the advertising fund. If you want us to approve a supplier that you propose, you must send us a written notice specifying the supplier’s name and qualifications and provide any additional information that we request. We will approve or reject your request within 60 days after we receive your notice and all additional information (and samples) that we require. We shall be deemed to have rejected your request if we fail to issue our approval within the 60-day period.
9.5 Software and Technology. You must utilize all software and technology that we specify. We may change the software or technology that you must use at any time. We may also develop proprietary software or technology that must be used by franchisees. If this occurs, you agree to enter into a license agreement with us (or an affiliate of ours) and pay us (or our affiliate) commercially reasonable licensing, support and maintenance fees. The terms of the license agreement will govern the terms pursuant to which you may utilize this software or technology. We also reserve the right to enter into a master software or technology license agreement with a third party licensor and then sublicense the software or technology to you, in which case we may charge you for all amounts that we must pay to the licensor based on your use of the software or technology. All fees referenced in this Section are due as invoiced. Currently, we require that you utilize the web-based point of sale system, BRMNet, provided by Body & Brain Yoga and Health Centers, Inc. (“BBYHC”). You must sign the Software Service Agreement required by BBYHC and perform all of your obligations under the Software Service Agreement, including payment of the monthly fees.
9.6 Customer Complaints. If you receive a customer complaint, you must follow the customer complaint resolution process that we specify to protect the goodwill associated with the Marks. If you fail to follow the complaint resolution process, then, in addition to any other remedies available to us under this Agreement, we reserve the right to impose a fine of up to $500 per occurrence, up to a maximum of $2,500 for the same violation.
9.7 Failure to Comply with Standards. You acknowledge the importance of every one of our standards and operating procedures to the reputation and integrity of the System and the goodwill associated with the Marks. If we notify you of a failure to comply with our standards or operating procedures and you fail to correct the non-compliance within the period of time that we require, then, in addition to any other remedies available to us under this Agreement, we may impose a fine of up to $500 per occurrence, up to a maximum of $2,500 for the same violation.
10. FRANCHISE ADVISORY COUNCIL. We may, but need not, create a franchise advisory council to provide us with suggestions to improve the System, including matters such as advertising, marketing, operations and new service suggestions. We will consider all suggestions from the advisory council in good faith, but we are not bound by any such suggestions. The advisory council will be established and operated according to rules and regulations we periodically approve, including procedures

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governing the selection of representatives of the advisory council who will communicate with us on matters raised by the advisory council. You will have the right to be a member of the advisory council as long as you are not in default under this Agreement and you do not act in a disruptive, abusive or counterproductive manner, as determined by us in our discretion. As a member, you will be entitled to all voting rights and privileges granted to other members of the council. Each member will be granted one vote on all matters on which members are authorized to vote.
11. FRANCHISEE AS ENTITY. If you are an Entity, you agree to provide us with a list of all of your Owners. All Owners of the Entity (whether direct or indirect) are jointly and severally responsible for the Entity’s performance of this Agreement and each Owner is bound by all of the terms of this Agreement. Upon our request, you must provide us with a resolution of the Entity authorizing the execution of this Agreement, a copy of the Entity’s organizational documents and a current Certificate of Good Standing (or the functional equivalent thereof). You represent that the Entity is duly formed and validly existing under the laws of the state of its formation or incorporation.
12. FEES
12.1 Royalty Fee. On the fifth (5th) day of each month, you agree to pay us a royalty fee equal
to 10% of your Program Sales generated during the preceding month.
12.2 Other Fees and Payments. You agree to pay all other fees, expense reimbursements and other amounts specified in this Agreement (such as training fees, renewal fees, transfer fees, etc.) in a timely manner.
12.3 Late Fee. If any sums due under this Agreement have not been received by us when due (or there are insufficient funds in your Account to cover any sums owed to us when due) then, in addition to those sums, you must pay us interest on the amounts past due at the rate equal to the lesser of 18% per annum (pro rated on a daily basis), or the highest rate permitted by your State’s law. If no due date has been specified by us, then interest begins to run ten (10) days after we bill you. We will not impose a late fee for any amounts paid pursuant to Section 12.4 if, but only to the extent that, sufficient funds were available in your Account to be applied towards the payments at the time the payments became due and payable. However, we may impose a late fee for any amounts that we are unable to reasonably determine due to your failure to furnish us with a report required by Section 14.3 within the required period of time or record sales in a timely manner, in which case we may assess a late fee on the entire amount that was due and payable. You acknowledge that this Section 12.3 shall not constitute our agreement to accept the late payments after same are due, or a commitment by us to extend credit to or otherwise finance the operation of your Business.
12.4 Method of Payment. You must complete and send us an ACH Authorization Form allowing us to electronically debit a banking account that you designate (your “Account”) for: (i) all fees payable to us pursuant to this Agreement; and (ii) any amounts that you owe to us or any of our affiliates for the purchase of goods or services. Our current form of ACH Authorization Form is attached to this Agreement as Attachment "B". You must sign and deliver to us any other documents that we or your bank may require to authorize us to debit your Account for these amounts. All fees and costs payable by you under this Agreement, and any other amounts owed to us or our affiliates for the purchase of goods or services, will be electronically debited from the Account. We will debit your Account for these payments on or after the due date. You must deposit into the Account all revenues that you generate from the operation of your Business. You must make the funds available for withdrawal by electronic transfer before each due date. If there are insufficient funds in your Account to cover all amounts that you owe, any excess amounts that you owe will be payable upon demand, together with any late charge imposed pursuant to Section 12.3. We reserve the right to broaden our Online Payment Program to allow your customers to pay for your products and services online. In such event, we will collect all proceeds, deduct all fees owed to us and our affiliates, and promptly remit the balance to you.

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12.5 Application of Payments. We have sole discretion to apply any payments from you to any past due indebtedness of yours or in any other manner we feel appropriate.
13. BRAND PROTECTION COVENANTS.
13.1 Reason for Covenants. You acknowledge that our Intellectual Property and the training and assistance that we provide would not be acquired except through implementation of this Agreement. You also acknowledge that competition by you, the Owners or persons associated with you or the Owners (including family members) could seriously jeopardize the entire franchise system because you and the Owners have received an advantage through knowledge of our day-to-day operations and Know-how related to the System. Accordingly, you and the Owners agree to comply with the covenants described in this Section to protect our Intellectual Property and our franchise system.
13.2 Our Know-how. You and the Owners agree: (i) neither you nor any Owner will use the Know-how in any business or capacity other than the operation of your Business pursuant to this Agreement; (ii) you and the Owners will maintain the confidentiality of the Know-how at all times; (iii) neither you nor any Owner will make unauthorized copies of documents containing any Know-how; (iv) you and the Owners will take all reasonable steps that we require from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you and the Owners will stop using the Know- how immediately upon the expiration or termination of this Agreement, and any Owner who ceases to be an Owner before the expiration or termination of the franchise will stop using the Know-how immediately at the time he or she ceases to be an Owner.
13.3 Unfair Competition During Term. You and your Owners agree not to unfairly compete with us during the Term by engaging in any of the following activities (“Prohibited Activities”): (i) owning, operating or having any other interest (as an owner, partner, director, officer, employee, manager, consultant, shareholder, creditor, representative or agent) in any Competitive Business, other than owning an interest of five percent (5%) or less in a publicly traded company that is a Competitive Business; (ii) diverting or attempting to divert any business from us (or one of our affiliates or franchisees); (iii) selling any Body & Brain products or services to any person who is a current member of another franchisee or company-owned Body & Brain outlet without the consent of the person with whom the person is a member; or (iv) inducing (a) any of our employees or managers (or those of our affiliates or franchisees) to leave their position or (b) any customer of ours (or of one of our affiliates or franchisees) to transfer their business to you or to any other person that is not then a franchisee of ours.
13.4 Unfair Competition After Term. During the Post-Term Restricted Period, you and your Owners agree not to engage in any Prohibited Activities. Notwithstanding the foregoing, you and your Owners may have an interest in a Competitive Business during the Post-Term Restricted Period as long as the Competitive Business is not located within, and does not provide competitive goods or services to customers who are located within, the Restricted Territory. If you or an Owner engages in a Prohibited Activity during the Post-Term Restricted Period (other than having an interest in a Competitive Business that is permitted under this Section), then the Post-Term Restricted Period applicable to you or the non-compliant Owner, as applicable, shall be extended by the period of time during which you or the non-compliant Owner, as applicable, engaged in the Prohibited Activity.
13.5 Immediate Family Members. The Owners acknowledge that they could circumvent the purpose of Section 13 by disclosing Know-how to an immediate family member (i.e., spouse, parent, sibling, child, or grandchild). The Owners also acknowledge that it would be difficult for us to prove whether the Owners disclosed the Know-how to family members. Therefore, each Owner agrees that he or she will be presumed to have violated the terms of Section 13 if any member of his or her immediate family engages in any Prohibited Activities or uses or discloses the Know-how. However, the Owner may rebut this presumption by furnishing evidence conclusively showing that the Owner did not disclose the Know-how to the family member.

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13.6 Managers. You must ensure that each manager you engage signs and sends us a Brand Protection Agreement before serving as a manager. You must use your best efforts to ensure that these individuals comply with the terms of the Brand Protection Agreements and you must immediately notify us of any breach that comes to your attention. You agree to reimburse us for all reasonable expenses that we incur in enforcing a Brand Protection Agreement, including reasonable attorneys’ fees and court costs.
13.7 Covenants Reasonable. You and the Owners acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; (ii) our use and enforcement of covenants similar to those described above with respect to other Body & Brain franchisees benefits you and the Owners in that it prevents others from unfairly competing with your Business; and (iii) you and the Owners have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU AND THE OWNERS HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS SECTION 13 AS BEING OVERLY BROAD, UNREASONABLE OR OTHERWISE UNENFORCEABLE.
13.8 Breach of Covenants. You and the Owners agree that failure to comply with the terms of this Section 13 will cause substantial and irreparable damage to us and/or other Body & Brain franchisees for which there is no adequate remedy at law. Therefore, you and the Owners agree that any violation of the terms of this Section 13 will entitle us to injunctive relief. We may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to us under this Agreement are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance and recovery of monetary damages. Any claim, defense or cause of action that you or an Owner may have against us, regardless of cause or origin, cannot be used as a defense against our enforcement of this Section 13.
14. YOUR OTHER RESPONSIBILITIES
14.1 Insurance. For your protection and ours, you agree to maintain the following insurance policies: (i) professional liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in conjunction with the operation of your Business, containing minimum liability protection of $1,000,000 combined single limit per occurrence, and $2,000,000 in the aggregate (with a maximum deductible of $1,000 per claim); and (ii) any other insurance that we specify in the Manual from time to time. You agree to provide us with proof of coverage on demand. You agree to obtain these insurance policies from insurance carriers that are rated A or better by Alfred M. Best & Company, Inc. and that are licensed and admitted in the state in which you operate your Business. All insurance policies must: (i) name us (and our members, officers, directors, and employees) as additional insureds; (ii) contain a waiver by the insurance carrier of all subrogation rights against us; and (iii) provide that we receive ten (10) days prior written notice of the termination, expiration, cancellation or modification of the policy. If any of your insurance companies fail to give us notice as required in this Section, then we may disapprove the policy and you must immediately find additional coverage with an alternative carrier satisfactory to us. Upon ten (10) days notice to you, we may increase the minimum protection requirement as of the renewal date of any policy, and require different or additional types of insurance at any time, including excess liability (umbrella) insurance, to reflect inflation, identification of special risks, changes in law or standards or liability, higher damage awards or other relevant changes in circumstances. If you fail to maintain any required insurance coverage, we have the right to obtain the coverage on your behalf (which right shall be at our option and in addition to our other rights and remedies in this Agreement), and you must promptly sign all applications and other forms and instruments required to obtain the insurance and pay to us, on demand, all costs and premiums that we

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incur.

14.2 Books and Records. You agree to prepare and maintain at your Business for at least five (5) years after their preparation complete and accurate books, records, accounts and tax returns pertaining to your Business. You must send us copies of your books and records within seven (7) days of our request.
14.3 Reports. As of the Effective Date, you are required to use software that automatically generates reports regarding the operation of your Business and you are not required to provide periodic reports of gross revenues, expenses or Program Sales. However, we reserve the right to impose this requirement at any time. Accordingly, upon our request, you must prepare and provide to us a monthly statement of gross revenues (with Program Sales separately identified) and expenses for your Business no later than the second (2nd) day of each month for the prior month’s operations. You must provide any other report that we require in the form and manner that we require. We have the right to electronically poll your computer and/or automated cash management system to retrieve and compile information regarding the operation of your Business.
14.4 Financial Statements. Within 90 days after the end of each fiscal year, you must prepare (and furnish to us upon request) a balance sheet as of the end of the calendar year and an annual statement of profit and loss and source and application of funds for your Business. All financial statements that we require must be: (i) verified and signed by you certifying to us that the information is true, complete, and accurate; and (ii) submitted in any format that we reasonably require. You authorize us to disclose the financial statements, reports, and operating data to prospective franchisees, regulatory agencies and others at our discretion, provided the disclosure is not prohibited by applicable law.
14.5 Legal Compliance. You must secure and maintain in force all required licenses, permits and regulatory approvals for the operation of your Business and operate and manage your Business in full compliance with all applicable laws, ordinances, rules and regulations. You must notify us in writing within two (2) business days of the beginning of any action, suit, investigation or proceeding, or of the issuance of any order, writ, injunction, disciplinary action, award or decree of any court, agency or other governmental instrumentality, which may adversely affect the operation of your Business or your financial condition. You must immediately deliver to us a copy of any inspection report, warning, certificate or rating by any governmental agency involving any health or safety law, rule or regulation that reflects your failure to fully comply with the law, rule or regulation.
15. INSPECTION AND AUDIT
15.1 Inspections. To ensure compliance with this Agreement, we or our representatives will have the right to evaluate your operations and inspect or examine your books, records, accounts and tax returns. Our evaluation may include watching or participating in your classes and contacting your students and/or employees. We may conduct our evaluation at any time and without prior notice. During the course of our inspections, we and our representatives will use reasonable efforts to minimize our interference with the operation of your Business, and you and your employees will cooperate and not interfere with our inspection. You consent to us accessing your computer system and retrieving any information that we deem appropriate in conducting the inspection.
15.2 Audit. We have the right, at any time, to have an independent audit made of your books and financial records. You agree to fully cooperate with us and any third parties that we hire to conduct the audit. If an audit reveals an understatement of your Program Sales, you agree to immediately pay to us any additional fees that you owe us together with any late fee payable pursuant to Section 12.3. Any audit will be performed at our cost and expense unless the audit: (i) is necessitated by your failure to provide the information requested or to preserve records or file reports as required by this Agreement; or (ii) reveals an understatement of any amount due to us by at least three percent (3%), in which case you agree

{WS018017v1 }10

to pay us $2,500 plus our actual cost of the audit or inspection, including without limitation, reasonable accounting and attorneys’ fees and travel and lodging expenses that we or our representatives incur. The $2,500 fee and audit cost reimbursements will be due ten (10) days after invoicing.
16. INTELLECTUAL PROPERTY
16.1 Ownership and Use of Intellectual Property. You acknowledge that: (i) we are the sole and exclusive owner of the Intellectual Property and the goodwill associated with the Marks; (ii) your right to use the Intellectual Property is derived solely from this Agreement; and (iii) your right to use the Intellectual Property is limited to a license granted by us to operate your Business during the Term pursuant to, and only in compliance with, this Agreement, the Manual, and all applicable standards, specifications and operating procedures that we prescribe from time to time. You may not use any of the Intellectual Property in connection with the sale of any unauthorized product or service or in any other manner not expressly authorized by us. Any unauthorized use of the Intellectual Property constitutes an infringement of our rights. You agree to comply with all provisions of the Manual governing your use of the Intellectual Property. This Agreement does not confer to you any goodwill, title or interest in any of the Intellectual Property.
16.2 Data and Customer Accounts. We will own all data pertaining to the services offered by you under your Business. We may utilize such data to evaluate and improve our services, protocols and processes or for any other purpose. We may provide or sell non-personally identifiable data to third parties in our discretion. We will also own all customer files, accounts and contracts, all of which shall be assigned to us (upon our request) following the expiration, termination or Transfer of this Agreement. In addition, you agree that if one of your members switches their membership to another Body & Brain franchisee or company-owned business, we may transfer the account and all data pertaining to that member to the Body & Brain franchisee or company-owned business to which the membership was transferred.
16.3 Changes to Intellectual Property. We have the right to modify the Intellectual Property at any time in our sole and absolute discretion, including by changing the Marks, the System, the Copyrights or the Know-how. If we modify or discontinue use of any of the Intellectual Property, then you must comply with any such instructions by us within 30 days at your cost. You waive all claims arising from or relating to any change, modification, substitution or discontinuation of the Intellectual Property. We will not be liable to you for any expenses, losses or damages that you incur (including the loss of any goodwill associated with a Mark) because of any addition, modification, substitution or discontinuation of the Intellectual Property.
16.4 Use of Marks. You agree to use the Marks as the sole identification of your Business; provided, however that you must identify yourself as the independent owner of your Business in the manner that we prescribe. You may not use any Marks in any modified form or as part of any corporate or trade name or with any prefix, suffix, or other modifying words, terms, designs or symbols (other than logos licensed to you by this Agreement). You agree to: (i) prominently display the Marks on or in connection with any media advertising, promotional materials, posters and displays, receipts, stationery and forms that we designate and in the manner that we prescribe to give notice of trade and service mark registrations and copyrights; and (ii) obtain any fictitious or assumed name registrations required under applicable law. You may not use the Marks in signing any contract, lease, mortgage, check, purchase agreement, negotiable instrument or other legal obligation or in any manner that is likely to confuse or result in liability to us for any indebtedness or obligation of yours.
16.5 Use of Know-how. We will disclose the Know-how to you by furnishing certain specifications and guidance with respect to your Business in the initial training program, the Manual, and in other guidance furnished to you during the Term. You agree that you will not acquire any interest in the Know-how other than the right to utilize it in strict accordance with the terms and conditions of this

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Agreement in the development and operation of your Business during the Term. You acknowledge that the Know-how is proprietary and is disclosed to you solely for use in the development and operation of your Business during the Term.
16.6 Improvements. If you conceive of or develop any improvements or additions to the services or products offered by, or the method of operation of, a Body & Brain Center or Body & Brain home-based franchise, or any advertising or promotional ideas related to such business (collectively, “Improvements”), you agree to promptly and fully disclose the Improvements to us without disclosing the Improvements to others. You must obtain our approval prior to using any such Improvements. Any such Improvement approved by us may be used by us and any third parties that we authorize to operate a Body & Brain franchise, without any obligation to you royalties or other fees. You must assign to us or our designees, without charge, all rights to any such Improvement, including the right to grant sublicenses. In return, we will authorize you to use any Improvements that we or other franchisees develop that we authorize for general use in connection with the operation of a Body & Brain business.
16.7 Notification of Infringements and Claims. You must immediately notify us of any: (i) apparent infringement of any of our Intellectual Property; (ii) challenge to your use of any of our Intellectual Property; or (iii) claim by any person of any rights in any of our Intellectual Property. You may not communicate with any person other than us and our counsel in connection with any such infringement, challenge or claim. We will have sole discretion to take such action as we deem appropriate. We have the right to exclusively control any litigation, Patent and Trademark Office proceeding, or other proceeding arising out of any such infringement, challenge or claim. You agree to execute any and all instruments and documents, render such assistance, and do such acts and things as may, in the opinion of our counsel, be necessary or advisable to protect and maintain our interest in any such litigation, Patent and Trademark Office proceeding or other proceeding, or to otherwise protect and maintain our interest in the Intellectual Property.
17. INDEMNITY. You agree to indemnify the Indemnified Parties and hold them harmless for, from and against any and all Losses and Expenses incurred by any of them as a result of or in connection with any of the following: (i) the marketing, use or operation of your Business or your performance and/or breach of any of your obligations under this Agreement; (ii) any other Claim arising from alleged violations of your relationship with and responsibility to us; or (iii) any Claim relating to taxes or penalties assessed by any governmental entity against us that are directly related to your failure to pay or perform functions required of you under this Agreement. The Indemnified Parties shall have the right, in their sole discretion to: (i) retain counsel of their own choosing to represent them with respect to any Claim; and (ii) control the response thereto and the defense thereof, including the right to enter into an agreement to settle such Claim. You may participate in such defense at your own expense. You agree to give your full cooperation to the Indemnified Parties in assisting the Indemnified Parties with the defense of any such Claim, and to reimburse the Indemnified Parties for all of their costs and expenses in defending any such Claim, including court costs and reasonable attorneys’ fees, within 10 days of the date of each invoice delivered by such Indemnified Party to you enumerating such costs, expenses and attorneys’ fees.
18. TRANSFERS
18.1 By Us. This Agreement and the franchise is fully assignable by us (without prior notice to you) and shall insure to the benefit of any assignee(s) or other legal successor(s) to our interest in this Agreement, provided that we shall, subsequent to any such assignment, remain liable for the performance of our obligations under this Agreement up to the effective date of the assignment. We may also delegate some or all of our obligations under this Agreement to one or more persons without assigning the Agreement.
18.2 By You. You understand that the rights and duties created by this Agreement are {WS018017v1 }12

personal to you and the Owners and that we have granted the franchise in reliance upon the individual or collective character, skill, aptitude, attitude, business ability and financial capacity of you and your Owners. Therefore, neither you nor any Owner may engage in any Transfer other than a Permitted Transfer without our prior written approval. Any Transfer (other than a Permitted Transfer) without our approval shall be void and constitute a breach of this Agreement. We will not unreasonably withhold our approval of any proposed Transfer, provided that the following conditions are all satisfied:
(i) the proposed transferee is, in our opinion, an individual of good moral character, who has sufficient business experience, aptitude and financial resources to own and operate a Body & Brain home-based franchise and otherwise meets all of our then applicable standards for franchisees;
(ii) you and your Owners are in full compliance with the terms of this Agreement and all other agreements with us or our affiliate;
(iii) all of the owners of the transferee have successfully completed or made arrangements to attend the initial training program (and the transferee has paid us the initial training fee for each new owner and manager who attends training);
(iv) the transferee and its owners sign our then current form of franchise agreement, except that the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement;
(v) you or the transferee pay us a transfer fee equal to the lesser of $2,500 or our actual costs incurred relating to the Transfer;
(vi) you and your Owners sign a General Release for all claims arising before or contemporaneously with the Transfer; and
(vii) you or the transferring Owner, as applicable, and the transferee have satisfied any other conditions we reasonably require as a condition to our approval of the Transfer.
Our consent to a Transfer shall not constitute a waiver of any claims we may have against the transferor, nor shall it be deemed a waiver of our right to demand exact compliance with any of the terms or conditions of the franchise by the transferee.
18.3 Permitted Transfers. You may engage in a Permitted Transfer without our prior approval, but you must give us at least ten (10) days prior written notice. You and the Owners agree to sign all documents that we reasonably request to effectuate and document the Permitted Transfer.
18.4 Death or Disability of an Owner. Upon the death or permanent disability of an Owner, the Owner’s ownership interest in you or the franchise, as applicable, must be assigned to another Owner or to a third party approved by us within 180 days. Any assignment to a third party will be subject to all of the terms and conditions of Section 18.3. For purposes of this Section, an Owner is deemed to have a “permanent disability” only if the person has a medical or mental problem that prevents the person from substantially complying with his or her obligations under this Agreement or otherwise operating the Business in the manner required by this Agreement and the Manual for a continuous period of at least three (3) months.
19. TERMINATION
19.1 By You. You may terminate this Agreement if you are in compliance with this Agreement and we materially breach this Agreement and fail to cure the breach within 90 days after you deliver to us a written notice specifying the nature of the breach. You may also terminate at any time prior to attending our initial training program by providing written notice to us. If you terminate this

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Agreement, you must still comply with your post-termination obligations described in Section 20 and all other obligations that survive the expiration or termination of this Agreement.
19.2 Termination By Us Without Cure Period. We may, in our sole discretion, terminate this Agreement upon five (5) days’ written notice, without opportunity to cure, for any of the following reasons, all of which constitute material events of default under this Agreement:

(i) if you fail to open your Business in the time and manner required by Section 6;
(ii) if a regulatory authority suspends or revokes a license or permit held by you or

an Owner that is required to operate the Business, even if you or the Owner still maintain appeal rights;
(iii) if you become insolvent by reason of your inability to pay your debts as they become due or you file a voluntary petition in bankruptcy or any pleading seeking any reorganization, liquidation, dissolution or composition or other settlement with creditors under any law, or are the subject of an involuntary bankruptcy (which may or may not be enforceable under the Bankruptcy Act of 1978);
(iv) if your Business, or a substantial portion of the assets associated with your Business, are seized, taken over or foreclosed by a government official in the exercise of his or her duties, or seized, taken over or foreclosed by a creditor, lienholder or lessor; or a final judgment against you remains unsatisfied for 30 days (unless a supersedes or other appeal bond has been filed); or a levy of execution has been made upon the license granted by this Agreement or upon any property used in your Business, and it is not discharged within five (5) days of the levy;
(v) if you abandon, surrender, transfer control of or fail to actively manage or operate your Business for three (3) consecutive business days, unless the failure is due to an event of force majeure or another reason approved by us;
(vi) if you fail or refuse to pay any amount owed to us or an affiliate of ours within five (5) days after receipt of a demand for payment;
(vii) if you underreport any amount owed to us by at least three percent (3%), after having already committed a similar breach that had been cured in accordance with Section 19.3;
(viii) if you are convicted of or plead no contest to a felony, a crime involving moral turpitude or any other crime or offense, or are subject to any administrative disciplinary action, that is in our sole discretion likely to adversely affect the reputation of the System or the goodwill associated with Body & Brain Centers, Body & Brain home-based franchises, or the Marks;
(ix) if you manage or operate your Business in a manner that presents a health or safety hazard to your customers, employees or the public;
(x) if you or an Owner make any material misrepresentation to us, whether occurring before or after being granted the franchise;

(xi) if you or an Owner makes an unauthorized Transfer;
(xii) if you or an Owner makes an unauthorized use of our Intellectual Property or

commits an act that can be reasonably expected to materially impair the goodwill associated with the Marks;

Section 13;

(xiii) if you or an Owner breaches any of the brand protection covenants described in {WS018017v1 }14

(xiv) if you fail to comply with any material federal, state or local law or regulation applicable to the operation of your Business; or
(xv) if we terminate any other agreement between you and us or if any affiliate of ours terminates any agreement between you and the affiliate because of your default.
19.3 Additional Conditions of Termination. We may, in our sole discretion, terminate this Agreement upon 30 days’ written notice if you or an Owner fail to comply with any other provision of this Agreement (other than the defaults listed in Section 19.2 above) or any other agreement with us, or any mandatory specification, standard or operating procedure prescribed by us, unless such default is cured, as determined by us in our sole discretion, within such 30-day notice period. If we deliver a notice of default to you pursuant to this Section 19.3, we may suspend performance of any of our obligations under this Agreement until such time that you have fully cured the breach.
19.4 Mutual Agreement to Terminate. If you and we mutually agree in writing to terminate this Agreement, you and we will be deemed to have waived the notice period in Section 19.2 and Section 19.3.
20. POST-TERM OBLIGATIONS.
After the termination, expiration or Transfer of this Agreement, you and the Owners agree to:

(i) immediately cease to use the Intellectual Property;
(ii) pay us all amounts that you owe us;
(iii) comply with all covenants described in Section 13 that apply after the expiration,

termination or Transfer of this Agreement or the disposal of an ownership interest by an Owner;
(iv) return all copies of the Manual, or any portions thereof, as well as all signs, sign faces, brochures, advertising and promotional materials, forms, and any other materials bearing or containing any of the Marks, Copyrights or other identification relating to a Body & Brain business, unless we allow you to transfer such items to an approved transferee;
(v) take such action as may be required to cancel all fictitious or assumed names or equivalent registrations relating to your use of any of the Marks;

(vi) provide us with a list of all of your current, former and prospective customers;
(vii) assign all customer contracts and information to us (unless we allow you to

transfer those contracts to an approved transferee);
(viii) notify all telephone companies, listing agencies and domain name registration companies (collectively, the “Agencies”) of the termination or expiration of your right to use: (a) the telephone numbers and/or domain names, if applicable, related to the operation of your Business; and (b) any regular, classified or other telephone directory listings associated with the Marks (you hereby authorize the Agencies to transfer such telephone numbers, domain names and listings to us and you authorize us, and appoint us and any officer we designate as your attorney-in-fact to direct the Agencies to transfer the telephone numbers, domain names and listings to us if you fail or refuse to do so); and
(ix) provide us with satisfactory evidence of your compliance with the above obligations within 30 days after the effective date of the termination, expiration or Transfer of this Agreement.

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21. DISPUTE RESOLUTION. The parties agree to submit any claim, dispute or disagreement, including any matter pertaining to the interpretation of this Agreement or issues relating to the offer and sale of the franchise or the relationship between you and us or between you and any Indemnified Party (a “Dispute”) to mediation before a mutually-agreeable mediator prior to arbitration. If the Dispute cannot be resolved by mediation, the parties will submit the dispute to mandatory and binding arbitration conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The party filing the arbitration must initially bear the cost of any arbitration fees or costs. The arbitrators will not have authority to award exemplary or punitive damages. Notwithstanding the foregoing, any Dispute that involves an alleged breach of Section 13 or Section 16 of this Agreement will not be subject to mediation or arbitration unless otherwise agreed to by both parties, and either party may immediately file a lawsuit in accordance with this Section with respect to any alleged breach of Section 13 or Section 16. All mediation, arbitration and litigation shall take place in the county in which we maintain our principal place of business at the time the Dispute arises (currently, Maricopa County, Arizona) and the parties irrevocably waive any objection to such venue. If we or you must enforce this Agreement in a judicial or arbitration proceeding, the substantially prevailing party will be entitled to reimbursement of its costs and expenses, including reasonable accounting and legal fees. In addition, if you breach any term of this Agreement or any other agreement with us or an affiliate of ours, you agree reimburse us for all reasonable legal fees and other expenses we incur relating to such breach, regardless of whether the breach is cured prior to the commencement of any dispute resolution proceedings. UNLESS PROHIBITED BY APPLICABLE LAW, ANY DISPUTE (OTHER THAN FOR PAYMENT OF MONIES OWED OR A VIOLATION OF SECTION 13 OR SECTION 16) MUST BE BROUGHT BY FILING A WRITTEN DEMAND FOR ARBITRATION (OR IF PERMITTED, LITIGATION) WITHIN ONE (1) YEAR FOLLOWING THE CONDUCT, ACT OR OTHER EVENT OR OCCURRENCE GIVING RISE TO THE CLAIM, OR THE RIGHT TO ANY REMEDY WILL BE DEEMED FOREVER WAIVED AND BARRED. WE AND YOU IRREVOCABLY WAIVE: (i) TRIAL BY JURY; AND (ii) THE RIGHT TO ARBITRATE OR LITIGATE ON A CLASS ACTION BASIS, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER OF THE PARTIES.
22. YOUR REPRESENTATIONS. YOU HEREBY REPRESENT THAT: (i) YOU HAVE NOT RECEIVED OR RELIED UPON ANY WARRANTY OR GUARANTEE, EXPRESS OR IMPLIED, AS TO THE POTENTIAL VOLUME, PROFITS OR SUCCESS OF THE BUSINESS CONTEMPLATED BY THIS AGREEMENT, EXCEPT FOR ANY INFORMATION DISCLOSED IN THE FRANCHISE DISCLOSURE DOCUMENT; (ii) YOU HAVE NO KNOWLEDGE OF ANY REPRESENTATIONS BY US OR ANY OF OUR OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES OR REPRESENTATIVES ABOUT THE BUSINESS CONTEMPLATED BY THIS AGREEMENT THAT ARE CONTRARY TO THE TERMS OF THIS AGREEMENT OR THE FRANCHISE DISCLOSURE DOCUMENT; (iii) YOU RECEIVED (1) AN EXACT COPY OF THIS AGREEMENT AND ITS ATTACHMENTS AT LEAST SEVEN (7) CALENDAR DAYS PRIOR TO THE DATE ON WHICH THIS AGREEMENT IS EXECUTED; AND (2) OUR FRANCHISE DISCLOSURE DOCUMENT AT THE EARLIER OF (A) FOURTEEN (14) CALENDAR DAYS BEFORE YOU SIGNED A BINDING AGREEMENT OR PAID ANY MONEY TO US OR OUR AFFILIATES OR (B) AT SUCH EARLIER TIME IN THE SALES PROCESS THAT YOU REQUESTED A COPY; (iv) YOU ARE AWARE OF THE FACT THAT OTHER PRESENT OR FUTURE FRANCHISEES OF OURS MAY OPERATE UNDER DIFFERENT FORMS OF AGREEMENT AND CONSEQUENTLY THAT OUR OBLIGATIONS AND RIGHTS WITH RESPECT TO OUR VARIOUS FRANCHISEES MAY DIFFER MATERIALLY IN CERTAIN CIRCUMSTANCES; AND (v) YOU HAVE CONDUCTED AN INDEPENDENT INVESTIGATION OF THE BUSINESS CONTEMPLATED BY THIS AGREEMENT AND RECOGNIZE THAT IT INVOLVES BUSINESS RISKS, MAKING THE SUCCESS OF THE VENTURE LARGELY DEPENDENT UPON YOUR OWN BUSINESS ABILITIES, EFFORTS AND JUDGMENTS, AND THE SERVICES OF YOU AND THOSE YOU EMPLOY.

23. GENERAL PROVISIONS

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23.1 Governing Law. Except as governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. §§ 1051, et seq.), this Agreement and the franchise relationship shall be governed by the laws of the State of Arizona (without reference to its principles of conflicts of law), but any law of the State of Arizona that regulates the offer and sale of franchises or business opportunities or governs the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section.
23.2 Relationship of the Parties. You understand and agree that nothing in this Agreement creates a fiduciary relationship between you and us or is intended to make either party a general or special agent, legal representative, subsidiary, joint venture, partner, employee or servant of the other for any purpose. During the Term, you must conspicuously identify yourself at your base of operations, and in all dealings with third parties, as a franchisee of ours and the independent owner of your Business. You agree to place such other notices of independent ownership on such forms, stationery, advertising, business cards and other materials as we may require from time to time. Neither we nor you are permitted to make any express or implied agreement, warranty or representation, or incur any debt, in the name of or on behalf of the other, or represent that our relationship is other than franchisor and franchisee. In addition, neither we nor you will be obligated by or have any liability under any agreements or representations made by the other that are not expressly authorized by this Agreement.
23.3 Severability and Substitution. Each section, subsection, term and provision of this Agreement, and any portion thereof, shall be considered severable. If any applicable and binding law imposes mandatory, non-waivable terms or conditions that conflict with a provision of this Agreement, the terms or conditions required by such law shall govern to the extent of the inconsistency and supersede the conflicting provision of this Agreement. If a court concludes that any promise or covenant in this Agreement is unreasonable and unenforceable: (i) the court may modify such promise or covenant to the minimum extent necessary to make such promise or covenant enforceable; or (ii) we may unilaterally modify such promise or covenant to the minimum extent necessary to make such promise or covenant enforceable.
23.4 Waivers. We and you may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other. Any waiver granted by us shall be without prejudice to any other rights we may have. We and you shall not be deemed to have waived or impaired any right, power or option reserved by this Agreement (including the right to demand exact compliance with every term, condition and covenant in this Agreement or to declare any breach of this Agreement to be a default and to terminate the franchise before the expiration of its term) by virtue of: (i) any custom or practice of the parties at variance with the terms of this Agreement; (ii) any failure, refusal or neglect of us or you to exercise any right under this Agreement or to insist upon exact compliance by the other with its obligations under this Agreement, including any mandatory specification, standard, or operating procedure; (iii) any waiver, forbearance, delay, failure or omission by us to exercise any right, power or option, whether of the same, similar or different nature, relating to other Body & Brain franchisees; or (iv) the acceptance by us of any payments due from you after breach of this Agreement.
23.5 Approvals. Whenever this Agreement requires our approval, you must make a timely written request for approval, and the approval must be in writing in order to bind us. Except as otherwise expressly provided in this Agreement, if we fail to approve any request for approval within the required period of time, we shall be deemed to have disapproved your request. If we deny approval and you seek legal redress for the denial, the only relief to which you may be entitled is to acquire our approval. You are not entitled to any other relief or damages for our denial of approval.
23.6 Force Majeure. Neither we nor you shall be liable for loss or damage or deemed to be in breach of this Agreement if our or your failure to perform our or your obligations results from any event of force majeure. Any delay resulting from an event of force majeure will extend performance accordingly or excuse performance, in whole or in part, as may be reasonable under the circumstances.

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23.7 Binding Effect. This Agreement is binding upon the parties to this Agreement and their respective executors, administrators, heirs, assigns and successors in interest. Nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies upon any person or legal entity not a party to this Agreement; provided, however, that the additional insureds listed in Section 14.1 and the Indemnified Parties are intended third party beneficiaries under this Agreement with respect to Section 14.1 and Section 17, respectively.
23.8 Integration. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND, EXCEPT AS PERMITTED BY SECTION 9.2 AND SECTION 23.3, MAY NOT BE CHANGED EXCEPT BY A WRITTEN DOCUMENT SIGNED BY BOTH PARTIES. The attachment(s) are part of this Agreement, which constitutes the entire understanding and agreement of the parties, and there are no other oral or written understandings or agreements between us and you about the subject matter of this Agreement. As referenced above, all mandatory provisions of the Manual are part of this Agreement. Any representations not specifically contained in this Agreement made before entering into this Agreement do not survive after the signing of this Agreement. This provision is intended to define the nature and extent of the parties’ mutual contractual intent, there being no mutual intent to enter into contract relations, whether by agreement or by implication, other than as set forth above. The parties acknowledge that these limitations are intended to achieve the highest possible degree of certainty in the definition of the contract being formed, in recognition of the fact that uncertainty creates economic risks for both parties which, if not addressed as provided in this Agreement, would affect the economic terms of this bargain. Nothing in this Agreement is intended to disclaim any of the representations we made in the Franchise Disclosure Document. To the extent that any provision in the Minnesota Addendum attached to this Agreement is inconsistent with any provision in this Agreement, the provision in the Minnesota Addendum shall control.
23.9 Covenant of Good Faith. If applicable law implies a covenant of good faith and fair dealing in this Agreement, the parties agree that the covenant shall not imply any rights or obligations that are inconsistent with a fair construction of the terms of this Agreement. Additionally, if applicable law shall imply the covenant, you agree that: (i) this Agreement (and the relationship of the parties that is inherent in this Agreement) grants us the discretion to make decisions, take actions and/or refrain from taking actions not inconsistent with our explicit rights and obligations under this Agreement that may affect favorably or adversely your interests; (ii) we will use our judgment in exercising the discretion based on our assessment of our own interests and balancing those interests against the interests of our franchisees generally (including ourselves and our affiliates if applicable), and specifically without considering your individual interests or the individual interests of any other particular franchisee; (iii) we will have no liability to you for the exercise of our discretion in this manner, so long as the discretion is not exercised in bad faith; and (iv) in the absence of bad faith, no trier of fact in any arbitration or litigation shall substitute its judgment for our judgment so exercised.
23.10 Rights of Parties are Cumulative. The rights of the parties under this Agreement are cumulative and no exercise or enforcement by either party of any right or remedy under this Agreement will preclude any other right or remedy available under this Agreement or by law.
23.11 Survival. All provisions that expressly or by their nature survive the termination, expiration or Transfer of this Agreement (or the Transfer of an ownership interest in the franchise) shall continue in full force and effect subsequent to and notwithstanding its termination, expiration or Transfer and until they are satisfied in full or by their nature expire, including, without limitations, Section 12, Section 13, Section 15, Section 17, Section 20, Section 21 and Section 23.
23.12 Construction. The headings in this Agreement are for convenience only and do not define, limit or construe the contents of the sections or subsections. All references to Sections refer to the Sections contained in this Agreement unless otherwise specified. All references to days in this Agreement refer to calendar days unless otherwise specified. The term “you” as used in this Agreement is applicable

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to one or more persons or an Entity, and the singular usage includes the plural and the masculine and neuter usages include the other and the feminine and the possessive.

23.13 Time of Essence. Time is of the essence in this Agreement and every term thereof.
23.14 Counterparts. This Agreement may be signed in multiple counterparts, each of which

shall be deemed an original and all of which together shall constitute but one and the same document.
23.15 Notice. All notices given under this Agreement must be in writing, delivered by hand, telegram or first class mail, to the following addresses (which may be changed upon 10 business days prior written notice):

YOU: US:
WITH A COPY TO:

As set forth below your signature on this Agreement
Body and Brain Center, LLC 3651 East Baseline Road, Suite 223 Gilbert, Arizona 85234
Daniel Warshawsky Warshawsky Seltzer, PLLC 9943 East Bell Road Scottsdale, AZ 85260

Notice shall be considered given at the time delivered by hand, or one (1) business day after sending by telegraph or comparable electronic or computer system, or three (3) business days after placed in the mail, postage prepaid, by certified mail with a return receipt requested.
[Signature page follows]

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The parties to this Agreement have executed this Agreement effective as of the Effective Date first above written.

FRANCHISOR:
Body and Brain Center, LLC, an Arizona limited liability company
By: Name: Its:
______________________________________, a(n)___________________________________
By:________ Name:
Its:
*By signing below, each individual owner of a direct or indirect interest in the franchisee entity agrees to be bound by all of the terms and conditions of the Franchise Agreement.
_______________________________________ Name:__________________________________
_______________________________________ Name: _________________________________
_______________________________________ Name: _________________________________
_______________________________________ Name:__________________________________
Franchisee Principal Business Address:

_______________________________________
_______________________________________
_______________________________________
_______________________________________

YOU (If you are an entity):

YOU (If you are not an entity):
_________________________________________ Name:____________________________________
_________________________________________ Name: ___________________________________
_________________________________________ Name: ___________________________________
_________________________________________ Name: ___________________________________

{WS018017v1 }20

ATTACHMENT "A"
TO BODY & BRAIN FRANCHISE AGREEMENT
DEFINITIONS
“Account” is defined in Section 12.4.
“Advertising Campaign” is defined in Section 8.1(a).
“Agencies” is defined in Section 20(viii).
“Agreement” is defined in the Introductory Paragraph.
“Brand Protection Agreement” means our form of Brand Protection Agreement, the most current form of which is attached to this Agreement as Attachment "C".
“Business” is defined in Section 2.
“Claim” or “Claims” means any and all claims, actions, demands, assessments, litigation, or other form of regulatory or adjudicatory procedures, claims, demands, assessments, investigations, or formal or informal inquiries.
“Competitive Business” means any business competitive with us (or competitive with any of our affiliates or our franchisees) that provides health coaching, brain based education, personal training, Yoga, Taichi or Qi-Gong.
“Copyrights” means all works and materials for which we or our affiliate have secured common law or registered copyright protection and that we allow Body & Brain franchisees to use, sell or display in connection with the marketing and operation of a Body & Brain business, whether now in existence or created in the future.
“Dispute” is defined in Section 21.
“Effective Date” is defined in the Introductory Paragraph.
“Entity” means a corporation, partnership, limited liability company or other form of association.
“General Release” means our current form of general release of all claims against us and our affiliates and subsidiaries, and our and their respective members, officers, directors, agents and employees.
“Improvements” is defined in Section 16.6.
“Indemnified Party” or “Indemnified Parties” means us and each of our past, present and future owners, members, officers, directors, managers, employees, consultation service providers, and agents, as well as our parent companies, subsidiaries, affiliates the owners or creators of the Intellectual Property, persons or entities allegedly controlling or acting in concert with us, persons or entities that refer customers to your Business, and persons or entities to whom your Business refers its customers, and each of their respective past, present and future owners, members, officers, directors, founders, managers, employees and agents.
“Intellectual Property” means, collectively or individually, our Marks, Copyrights, Know-how, Improvements and System.
“Know-how” means all of our and our affiliates’ trade secrets and other proprietary information relating to the development or operation of a Body & Brain home-based franchise, including, but not limited to, methods, techniques, specifications, procedures, marketing strategies and information comprising the System and the Manual.
“Losses and Expenses” means all compensatory, exemplary, and punitive damages; fines and penalties; attorneys’ fees; experts’ fees; court costs; costs associated with investigating and defending against Claims; settlement amounts; judgments; compensation for damages to our reputation and goodwill; and

{WS018017v1 }

all other costs, damages, liabilities and expenses associated with any of the foregoing losses and expenses or incurred by an Indemnified Party.
“Manual” is defined in Section 5.1.
“Marks” means the logotypes, service marks, and trademarks now or hereafter involved in the operation of a Body & Brain home-based franchise, including “Body & Brain” and any other trademarks, service marks or trade names that we designate.
“Online Payment Proceeds” is defined in Section 8.5.
“Online Payment Program” is defined in Section 8.5.
“Owner” or “Owners” means any individual who owns a direct or indirect ownership interest in the franchise or the Entity that is the franchisee under this Agreement. “Owner” includes both passive and active owners.
“Permitted Transfer” means: (i) a Transfer from one Owner to another Owner who was an approved Owner prior to such Transfer; and/or (ii) a Transfer to a newly established Entity for which the approved Owners collectively own and control 100% of the ownership interests and voting power.
“Post-Term Restricted Period” means a period of two (2) years after the termination, expiration or Transfer of this Agreement or two (2) years after the Transfer of an ownership interest by an Owner, as applicable; provided, however, that if a court of competent jurisdiction determines that the two-year Post- Term Restricted Period is too long to be enforceable, then the “Post-Term Restricted Period” means a period of one (1) year after the termination, expiration or Transfer of this Agreement or one (1) year after the Transfer of an ownership interest by an Owner, as applicable.
“Program Sales” means all gross sums collected by you or us from all services sold in connection with your Business, including private class fees, outreach class fees, worksite class fees, referral fees and the proceeds of any business interruption insurance that you receive. “Program Sales” do not include: (i) revenues from product sales; (ii) revenues that you collect from a customer and later refund to that customer; or (iii) any sales or use taxes that you pay to a government agency. If you include an amount as Program Sales for a given reporting period but that amount is subsequently refunded to the customer, the amount of the refund may be deducted from Program Sales for your next reporting period.
“Prohibited Activities” is defined in Section 13.3.
“Restricted Territory” means the geographic area within: (i) a 15 mile radius from your home office (and including your home office itself); and (ii) a 15 mile radius from all Body & Brain Centers and Dahn Yoga Centers that are operating or under construction as of the Effective Date; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the “Restricted Territory” means the geographic area within a ten (10) mile radius from your home office (and including your home office itself).
“System” means our unique system for operating a Body & Brain home-based franchise, the distinctive characteristics of which include logo, trade secrets, concept, proprietary programs and products, confidential operations manuals, marketing techniques and strategies, Solar body Method of systemized training, coaching system (including specially developed media content and merchandise) and operating system.
“Term” is defined in Section 3.1.
“Training Agreement” means our form of Training Agreement that we require prospective franchisees to
sign before they attend the initial training program.
“Transfer” means any direct or indirect, voluntary or involuntary (including by judicial award, order or decree), assignment, sale, conveyance, subdivision, sublicense or other transfer or disposition of the franchise (or any interest therein), the Business (or any portion thereof) or an ownership interest in an Entity that is the franchisee, including by merger or consolidation, by issuance of additional securities

{WS018017v1 }

representing an ownership interest in the Entity that is the franchisee, or by operation of law, will or a trust upon the death of an Owner (including the laws of intestate succession).
“We” or “us” is defined in the Introductory Paragraph. “You” is defined in the Introductory Paragraph.

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ATTACHMENT "B"
TO FRANCHISE AGREEMENT
ACH AUTHORIZATION FORM
[See Attached]

{WS018017v1 }

AUTOMATED CLEARING HOUSE PAYMENT AUTHORIZATION FORM Franchisee Information:

Franchisee Name
Franchisee Mailing Address (street)
Franchisee Mailing Address (city, state, zip)
Contact Name, Address and Phone number (if different from above) Franchisee Fax No.

Business No. Franchisee Phone No.
Franchisee E-mail Address
Bank Routing No. (9 digits) Bank Phone No.

Bank Account Information:
Bank Name
Bank Mailing Address (street, city, state, zip)
Checking Bank Account No. (check one)
Bank Mailing Address (city, state, zip)
Authorization:

Savings

Franchisee authorizes Body and Brain Center, LLC (“Franchisor”) to initiate debit entries to Franchisee’s account with the Bank listed above and Franchisee authorizes the Bank to accept and to debit the amount of the entries to Franchisee’s account. Each debit shall be made in an amount sufficient to cover any fees payable to Franchisor pursuant to any agreement between Franchisor and Franchisee as well as to cover any purchases of goods or services from Franchisor or any affiliate of Franchisor. Franchisee agrees to be bound by the National Automated Clearing House Association (NACHA) rules in the administration of these debit entries. Debit entries will be initiated only as authorized above. This authorization is to remain in full force and effect until Franchisor has received written notification from Franchisee of its termination in the time and manner necessary to afford Franchisor and the Bank a reasonable opportunity to act on it. Franchisee shall notify Franchisor of any changes to any of the information contained in this authorization form at least 30 days before the change becomes effective.
Signature: Date: Name:
Its:______________________________________________
Federal Tax ID Number:
NOTE: FRANCHISEE MUST ATTACH A VOIDED CHECK FOR THE BANK ACCOUNT.

{WS018017v1 }

ATTACHMENT "C"
TO BODY & BRAIN FRANCHISE AGREEMENT
BRAND PROTECTION AGREEMENT
[See Attached]

{WS018017v1 }

BRAND PROTECTION AGREEMENT

This Agreement (this “Agreement”) is entered into by the undersigned (“you”) in favor of Body and Brain Center, LLC, an Arizona limited liability company, and its successors and assigns (“us”), upon the terms and conditions set forth in this Agreement.
1. Definitions. For purposes of this Agreement, the following terms have the meanings given to them below:
“Competitive Business” means any business competitive with us (or competitive with any of our affiliates or our franchisees) that provides health coaching, brain based education, personal training, Yoga, Taichi or Qi-Gong.
“Copyrights” means all works and materials for which we or our affiliate have secured common law or registered copyright protection and that we allow Body & Brain franchisees to use, sell or display in connection with the marketing and operation of a Body & Brain business, whether now in existence or created in the future.
“Franchisee” means the Body & Brain franchisee for whom you are a manager.
“Improvements” means any additions, modifications or improvements to (i) the goods or services offered by a Body & Brain business; (ii) the method of operation of a Body & Brain business; or (iii) any marketing or promotional ideas relating to a Body & Brain business, whether developed by you, Franchisee or any other person.
“Intellectual Property” means, collectively or individually, our Marks, Copyrights, Know-how, Improvements and System.
“Know-how” means all of our and our affiliates’ trade secrets and other proprietary information relating to the development or operation of a Body & Brain home-based franchise, including, but not limited to, methods, techniques, specifications, procedures, marketing strategies and information comprising the System and the Manual.
“Manual” means our confidential operations manual for the operation of a Body & Brain business. “Marks” means the logotypes, service marks, and trademarks now or hereafter involved in the operation
of a Body & Brain home-based franchise, including “Body & Brain”.
“Prohibited Activities” means any or all of the following: (i) owning, operating or having any other interest (as an owner, partner, director, officer, employee, manager, consultant, shareholder, creditor, representative, agent or in any similar capacity) in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly traded company that is a Competitive Business); (ii) diverting or attempting to divert any business from us (or one of our affiliates or franchisees); (iii) selling any Body & Brain products or services to any person who is a current member of a franchisee (other than Franchisee) or company-owned Body & Brain outlet without the consent of the person with whom the person is a member; and/or (iv) inducing (a) any of our employees or managers (or those of our affiliates or franchisees) to leave their position or (b) any customer of ours (or of one of our affiliates or franchisees) to transfer their business to you or to any other person that is not then a franchisee of ours.
“Restricted Period” means the two (2) year period after you cease to be a manager of Franchisee; provided, however, that if a court of competent jurisdiction determines that this period of time is too long to be enforceable, then the “Restricted Period” means the one (1) year period after you cease to be a manager of Franchisee.
“System” means our unique system for operating a Body & Brain home-based franchise, the distinctive characteristics of which include logo, trade secrets, concept, proprietary programs and products, confidential operations manuals, marketing techniques and strategies, Solar body Method of systemized training, coaching system (including specially developed media content and merchandise) and operating 1
{WS018017v1 }

system.
2. Background. Franchisee engaged your services to serve as a manager. As a result of this position, you may gain knowledge of our System and Know-how. You understand that protecting our Intellectual Property is vital to our success and that of our franchisees and that you could seriously jeopardize our entire franchise system if you were to unfairly compete with us. In order to avoid such damage, you agree to comply with the terms of this Agreement.
3. Our Know-how and Intellectual Property. You agree: (i) you will not use the Know-how in any business or capacity other than the Body & Brain home-based franchise operated by Franchisee; (ii)you will maintain the confidentiality of the Know-how at all times; (iii)you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager of Franchisee. You further agree that you will not use our Intellectual Property for any purpose other than the performance of your duties for Franchisee within the scope of your employment or other engagement with Franchisee.
4. Unfair Competition During Relationship. You agree not to unfairly compete with us at any time while you are a manager of Franchisee by engaging in any Prohibited Activities.
5. Unfair Competition After Relationship. You agree not to unfairly compete with us during the Restricted Period by engaging in any Prohibited Activities; provided, however, that the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within a 15 mile radius from Franchisee’s home office (including the home office itself). If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the prohibited activity.
6. Immediate Family Members. You acknowledge that you could circumvent the purpose of this Agreement by disclosing Know-how to an immediate family member (i.e., spouse, parent, sibling, child, or grandchild). You also acknowledge that it would be difficult for us to prove whether you disclosed the Know-how to family members. Therefore, you agree that you will be presumed to have violated the terms of this Agreement if any member of your immediate family (i) engages in any Prohibited Activities during any period of time during which you are prohibited from engaging in the Prohibited Activities or (ii) uses or discloses the Know-how. However, you may rebut this presumption by furnishing evidence conclusively showing that you did not disclose the Know-how to the family member.
7. Covenants Reasonable. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE OR OTHERWISE UNENFORCEABLE.
8. Breach. You agree that failure to comply with the terms of this Agreement will cause substantial and irreparable damage to us and/or other Body & Brain franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of the terms of this Agreement will entitle us to injunctive relief. You agree that we may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to us under this Agreement are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance and 2
{WS018017v1 }

recovery of monetary damages. Any claim, defense or cause of action that you may have against us or against Franchisee, regardless of cause or origin, cannot be used as a defense against our enforcement of this Agreement.
9. Miscellaneous.
(a) If we hire an attorney or file suit against you because you have breached this Agreement
and prevail against you, you agree to pay our reasonable attorneys’ fees and costs in doing so.
(b) This Agreement will be governed by, construed and enforced under the laws of the state of Arizona and the courts in that state shall have jurisdiction over any legal proceedings arising out of this Agreement.
(c) Each section of this Agreement, including each subsection and portion thereof, is severable. In the event that any section, subsection or portion of this Agreement is unenforceable, it shall not affect the enforceability of any other section, subsection or portion; and each party to this Agreement agrees that the court may impose such limitations on the terms of this Agreement as it deems in its discretion necessary to make such terms reasonable in scope, duration and geographic area.
(d) You and we both believe that the covenants in this Agreement are reasonable in terms of scope, duration and geographic area. However, we may at any time unilaterally modify the terms of this Agreement upon written notice to you by limiting the scope of the Prohibited Activities, narrowing the definition of a Competitive Business, shortening the duration of the Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon you under this Agreement to ensure that the terms and covenants in this Agreement are enforceable under applicable law.
This Brand Protection Agreement is executed as of the date or dates set forth below.
RESTRICTED PARTY
By: ______________________________ Name: ____________________________ Date: _____________________________
WITNESS:
By: ______________________________ Name: ____________________________ Date: _____________________________

{WS018017v1 }

ATTACHMENT "D"
TO BODY & BRAIN FRANCHISE AGREEMENT
STATE ADDENDUM
[See Attached]

{WS018017v1 }

MINNESOTA ADDENDUM TO FRANCHISE AGREEMENT
A. Minnesota Rule 2860.4400(D) prohibits us from requiring you to assent to a general release.
B. We will comply with Minnesota Statute Section 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 franchise agreement; and that consent to the transfer of the franchise will not be unreasonably withheld.
C. Minnesota Statute Section 80C.21 and Minnesota Rule 2860.4400(J) prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce any of your rights as provided for in Minnesota Statues, chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. In addition, we will comply with the provisions of Minnesota Rule 2860.4400(J) which state that you cannot waive any rights, you cannot consent to our obtaining injunctive relief, we may seek injunctive relief, and a court will determine if a bond if required.
D. We will comply with Minnesota Statute Section 80C.12, Subd. 1(g) which requires that we protect your right to use the trademarks, service marks, trade names, logotypes or other commercial symbols or indemnify you from any loss, costs or expenses arising out of any claim, suit or demand regarding the use of the name.
E. We will comply with Minnesota Statute Section 80C.17, Subd. 5 regarding limitation of claims.

Signature of Franchisee Date:
Signature of Franchisor Date:

{WS018017v1 }

EXHIBIT "D"
TO DISCLOSURE DOCUMENT TRAINING AGREEMENT
[See Attached]

{WS018017v1 }

(FDD - 2015 Home-Based Minnesota)

BODY AND BRAIN CENTER LLC TRAINING AGREEMENT
This Training Agreement (this “Agreement”) is made and entered into as of _____________, 201__ (the “Effective Date”) by and between Body and Brain Center, LLC, an Arizona limited liability company (“we” or “us”), and __________________________ (“you”).
1 PREAMBLES.
(a) We have developed a unique system (the “System”) for the operation of a Body & Brain home-based franchise. Distinctive characteristics of the System include logo, trade secrets, concept, proprietary programs and products, confidential operations manuals, marketing techniques and strategies, Solar body Method of systemized training, coaching system (including specially developed media content and merchandise) and operating system. We also have been granted a license by BR Consulting, Inc., a New Jersey corporation, to use and sublicense the logotypes, service marks, trademarks and trade dress now or hereafter involved in the operation of a Body & Brain home-based franchise, including “Body & Brain” and any other trademarks, service marks, trade names or trade dress that we designate for use in a Body & Brain home-based franchise (collectively, the “Marks”).
(b) We grant franchises to individuals that meet our qualifications to develop and operate a Body & Brain home-based franchise using the System and the Marks. You have applied for a Body & Brain home-based franchise and received and reviewed our Franchise Disclosure Document.
(c) You have requested that we allow you to attend our franchise training program prior to signing the Franchise Agreement and we have agreed to your request, but only upon the terms and conditions specified in this Agreement.
2 CONSENT TO ATTEND TRAINING PROGRAM. If you sign this Agreement and pay us the Training Fee in Section 3, we will allow you to attend our franchise initial training program that begins on ___________________.
3 TRAINING FEE. Prior to attending training, you must pay us an initial training fee of $10,000 (the “Training Fee”), which we will credit against your initial training fee owed if you sign a Franchise Agreement before the expiration of the Franchise Evaluation Period (defined below). We will promptly refund the training fee if you notify us that you will not attend the franchise initial training program before the training program begins. The Training Fee is not refundable under any other circumstances.
4 SIGNING OF FRANCHISE AGREEMENT. If you successfully complete training, you will have a period of 180 days after completion of the training program (the “Franchise Evaluation Period”) to sign the Franchise Agreement that we previously offered to you. If either (i) you fail to sign the Franchise Agreement on or prior to the expiration of the Franchise Evaluation Period or (ii) you fail to successfully complete the training program, we shall have no obligation to offer you a franchise and we may keep the training fee in consideration of the training we provided to you. Further, if you do not sign the Franchise Agreement or you fail to successfully complete the training program, you understand that you must still comply with all of the terms of this Agreement.
5 COVENANTS TO PROTECT OUR INTELLECTUAL PROPERTY. You agree to comply with all of the provisions in this Section 5, even if you fail to sign a Franchise Agreement during the Franchise Evaluation Period. If you sign a Franchise Agreement during the Franchise Evaluation Period,

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

the provisions in this Section 5 will not apply to you after you sign the Franchise Agreement and the terms of the Franchise Agreement will supersede the terms of this Agreement.
5.1 Know-how. We possess trade secrets and other proprietary know-how, including methods, techniques, specifications, procedures, marketing strategies, information comprising the System and the operations manual, as well as information pertaining to the development and operation of a Body & Brain home-based franchise (collectively, the “Know-how”). We may disclose certain Know-how to you during the training program. You understand and acknowledge that you will not acquire any interest in the Know-how other than the right to utilize it in strict accordance with the terms and conditions of the Franchise Agreement in the development and operation of a Body & Brain home-based franchise. You acknowledge that the Know-how is proprietary and a trade secret of ours. The Know-how is disclosed to you solely on the condition that you agree, and you do agree, that you: (i) will not use the Know-how in any business or capacity other than the operation of a Body & Brain home-based franchise pursuant to the terms of a Franchise Agreement; (ii) will maintain the confidentiality of the Know-how and not disclose any of the Know-how to any person at any time; (iii) will not make unauthorized copies of any portion of the Know-how disclosed in written or electronic form; and (iv) will adopt and implement all reasonable procedures that we require to prevent unauthorized use or disclosure of any of the Know-how.
5.2 Noncompetition. For a period of two (2) years after you complete the training program, you agree that you will not compete with us or other Body & Brain franchisees, whether directly or indirectly. For purposes of the preceding sentence, you will be deemed to compete with us if you acquire, develop, own, operate, maintain or have any interest (including as an owner, partner, director, officer, employee, manager, consultant, shareholder, representative or agent) in any business that: (i) provides health coaching, brain based education, personal training, Yoga, Taichi or Qi-Gong; and (ii) is located within a 15 mile radius from any Body & Brain Center or Dahn Yoga center that is operating or under construction as of the date you sign this Agreement. This restrictive covenant does not preclude you from owning an interest of five percent (5%) or less in a competitive business that is a publicly traded company.
5.3 Nonsolicitation. For a period of two (2) years after you complete the training program, you may not, directly or indirectly, induce or attempt to induce: (i) any employee of ours, any affiliate of ours or of any other Body & Brain franchisee to leave the employ of said party; (ii) any franchisee of ours to leave the Body & Brain system; or (iii) any customer of ours, any affiliate of ours or any other Body & Brain franchisee to transfer their business away from us, our affiliate or any other Body & Brain franchisee to you or any other person that is not then a Body & Brain franchisee.
5.4 Immediate Family Members. You acknowledge that you could circumvent the purpose of this Agreement by disclosing Know-how to an immediate family member (i.e., spouse, parents, siblings, children or grandchildren). You also acknowledge that it would be difficult for us to prove whether you disclosed the Know-how to the family member. Therefore, you acknowledge and agree that you will be presumed to have violated the terms of this Agreement if an immediate family member uses or discloses the Know-how or violates the noncompetition and/or nonsolicitation covenants above during any period of time during which you are subject to such noncompetition and/or nonsolicitation covenants. You will have the burden to furnish evidence that conclusively rebuts the presumption in the preceding sentence to avoid being in violation of this Agreement.
5.5 Reasonableness of Covenants & Enforcement. You acknowledge and agree that: (i) the covenants described in Section 5 are reasonable both in time and in scope of geographic area; and (ii) your failure to adhere strictly to the restrictions of this Section will cause substantial and irreparable damage to us for which there is no adequate remedy at law. Therefore, you acknowledge that any violation of the terms and conditions of Section 5 will give rise to an entitlement to injunctive relief. You
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agree that we may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. The parties agree that each section of this Agreement, including each subsection, is severable. In the event that any section or subsection of this Agreement is unenforceable, it will not affect the enforceability of any other section or subsection and each party to this Agreement stipulates and agrees that either (i) the court may impose terms that it deems in its discretion will make the covenants reasonable in terms of their scope, duration and geographical restraint or (ii) we may unilaterally reduce the scope of the covenants to the minimum extent necessary to make them reasonable and enforceable in terms of scope, duration and geographic restraint. You acknowledge and agree that you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of these covenants. You waive any right to challenge these covenants as being overly broad, unreasonable or otherwise unenforceable.
6 REPRESENTATION. You hereby represent that you received (i) an exact copy of this Agreement at least five (5) business days before the date on which this Agreement is signed; and (ii) our Franchise Disclosure Document at the earlier of (a) ten (10) business days before you signed a binding agreement or paid any money to us or our affiliates or (b) at an earlier time in the sales process that you requested a copy.
7 MISCELLANEOUS.
7.1 Binding Agreement. This Agreement shall be binding upon you and your heirs, personal representatives, successors and assigns, and shall be for the benefit of us and our respective heirs, personal representatives, successors and assigns. All provisions of this Agreement which by their nature survive termination or expiration of this Agreement shall so survive.
7.2 Governing Law. This Agreement shall be governed by, construed and enforced under the laws of the State of Arizona, whose courts shall have jurisdiction over any legal proceedings arising out of this Agreement.
7.3 Attorneys’ Fees. If we retain an attorney or institute a suit against you in any way connected with this Agreement or its enforcement, we (if prevailing) shall be entitled to recover from you reasonable attorneys’ fees (not to exceed actual attorneys’ fees incurred) and all costs in connection with said enforcement or suit, whether or not suit is filed.
7.4 Entire Agreement. This Agreement constitutes the entire agreement and understanding between you and us and supersedes any prior or contemporaneous agreements or understandings, whether written or oral, relating to the matters contained herein, and such agreement and understanding may be altered or amended only by a writing signed by both parties hereto. Nothing in this Agreement is intended to disclaim any of the representations we made in the Franchise Disclosure Document.
7.5 Assignment. You may not assign this Agreement or any of your rights or responsibilities. This Agreement may be assigned by us.
7.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same document.
{WS018017v1 } (FDD - 2015 Home-Based Minnesota) Page 3

IN WITNESS WHEREOF the parties to this Agreement have signed this Agreement effective as of the Effective Date first above written.

Body and Brain Center, LLC, an Arizona limited liability company
By: Name: Its:
Y ou:
____________________________________ Name:______________________________

{WS018017v1 } Page 4

(FDD - 2015 Home-Based Minnesota)

EXHIBIT "E"
TO DISCLOSURE DOCUMENT GENERAL RELEASE
[See Attached]

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

WAIVER AND RELEASE OF CLAIMS
This Waiver and Release of Claims (the “Release”) is made as of __________ ___, 20___ by _________________________, a(n) ___________________ (“Franchisee”), and each individual holding an ownership interest in Franchisee (collectively with Franchisee, “Releasor”) in favor of Body and Brain Center, LLC, an Arizona limited liability company (“Franchisor,” and together with Releasor, the “Parties”).
WHEREAS, Franchisor and Franchisee have entered into a Franchise Agreement (the “Agreement”) pursuant to which Franchisee was granted the right to own and operate a Body & Brain Center;
WHEREAS, Franchisee has notified Franchisor of its desire to transfer the Agreement and all rights related thereto, or an ownership interest in Franchisee, to a transferee, [enter into a successor franchise agreement] and Franchisor has consented to the transfer [agreed to enter into a successor franchise agreement]; and
WHEREAS, as a condition to Franchisor’s consent to the transfer [Franchisee’s ability to enter into a successor franchise agreement], Releasor has agreed to sign this Release upon the terms and conditions stated below.
NOW, THEREFORE, in consideration of Franchisor’s consent to the transfer [Franchisor entering into a successor franchise agreement], and for other good and valuable consideration, the sufficiency and receipt of which are acknowledged, and intending to be legally bound, Releasor agrees as follows:
1. Representations and Warranties. Releasor represents and warrants that it is duly authorized to enter into this Release and to perform the terms and obligations contained in this Release, and has not assigned, transferred or conveyed, either voluntarily or by operation of law, any of its rights or claims against Franchisor or any of the rights, claims or obligations being terminated and released hereunder. [_________________________] represents and warrants that he/she is duly authorized to enter into and sign this Release for Franchisee. Releasor represents and warrants that all individuals that currently hold a direct or indirect ownership interest in Franchisee are signatories to this Release.
2. Release. Releasor and its subsidiaries, affiliates, parents, divisions, successors and assigns and all persons or firms claiming by, through, under, or for any or all of them, release, acquit and forever discharge Franchisor, all of its affiliates, parents, subsidiaries or related companies, divisions and partnerships, the owners or creators of the intellectual property licensed under the Agreement, persons or entities allegedly controlling or acting in concert with Franchisor, persons or entities that referred customers to Releasor, and persons or entities to whom Releasor referred customers, and its and their past and present officers, directors, agents, partners, shareholders, members, founders, managers, employees, representatives, successors and assigns, and attorneys, and the spouses of those individuals (collectively, the “Released Parties”), from all claims, liabilities, damages, expenses, actions or causes of action which Releasor may now have or has ever had, whether known or unknown, past or present, absolute or contingent, suspected or unsuspected, of any nature no matter what, including all claims, liabilities, damages, expenses, actions or causes of action directly or indirectly arising out of or involving the signing and performance of the Agreement and the offer and sale of the franchise related thereto.
3. Nondisparagement. Releasor expressly covenants and agrees not to make any false representation of facts, or to defame, disparage, discredit or deprecate any of the Released Parties or otherwise communicate with any person or entity in a manner intending to damage any of the Released

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Parties, their business or their reputation. 4. Miscellaneous.
a. Releasor agrees that it has read and fully understands this Release and that the opportunity has been afforded to Releasor to discuss the terms and contents of said Release with legal counsel and/or that a discussion with legal counsel has occurred.

This Release shall be construed and governed by the laws of the State of Arizona.
Each individual and entity that comprises Releasor shall be jointly and severally

liable for the obligations of Releasor.
d. If it shall be necessary for any Party to institute legal action to enforce or for the breach of any of the terms and conditions or provisions of this Release, the prevailing Party in the action shall be entitled to recover all of its reasonable costs and attorneys’ fees.
e. All of the provisions of this Release shall be binding upon and for the benefit of the Parties and their current and future respective directors, officers, partners, attorneys, agents, employees, shareholders, founders, managers and the spouses of those individuals, successors, affiliates, and assigns. No other party shall be a third-party beneficiary to this Release.
f. This Release constitutes the entire agreement and supersedes all prior oral and written agreements or understandings between and among the Parties regarding the subject matter hereof. This Release may not be modified except in a writing signed by all of the Parties. This Release may be signed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same document.
g. If one or more of the provisions of this Release shall for any reason be held invalid, illegal or unenforceable in any respect, that invalidity, illegality or unenforceability shall not affect or impair any other provision of this Release, but this Release shall be construed as if the invalid, illegal or unenforceable provision had not been contained in this Release.
h. The Parties agree to do all other acts and things and to sign and deliver all additional agreements and instruments that any Party may reasonably require to consummate, evidence, or confirm the Release in the matter contemplated.
[Signature Page Follows]

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IN WITNESS WHEREOF Releasor has executed this Release as of the date first written above. FRANCHISEE
______________________________________, a ______________________________________
By:____________________________________ Name: _________________________________ Its: ____________________________________ Date: __________________________________
STATE OF_______________________)
) ss.
County of________________________)
The foregoing instrument was acknowledged before me this ____ day of ____________, by _____________________________________.
Notary Public
My commission expires: ____________________________
FRANCHISEE’S OWNERS
By:________________________________ Name: _____________________________ Date: ______________________________
STATE OF_______________________)
) ss.
County of________________________)
The foregoing instrument was acknowledged before me this ____ day of ____________, by _____________________________________.
Notary Public
My commission expires: ____________________________

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FRANCHISEE’S OWNERS
By:________________________________ Name: _____________________________ Date: ______________________________
STATE OF_______________________)
) ss.
County of________________________)
The foregoing instrument was acknowledged before me this ____ day of ____________, by _____________________________________.
Notary Public
My commission expires: ____________________________
By:________________________________ Name: _____________________________ Date: ______________________________
STATE OF_______________________)
) ss.
County of________________________)
The foregoing instrument was acknowledged before me this ____ day of ____________, by _____________________________________.
Notary Public
My commission expires: ____________________________

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EXHIBIT "F"
TO DISCLOSURE DOCUMENT REFERRAL AGREEMENT
[See Attached]

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REFERRAL COMMISSION AGREEMENT
This Referral Commission Agreement (“Agreement”) is made this _____ day of ___________, 20____ (“Effective Date”), between Body & Brain Yoga and Health Centers, Inc. (“we,” “our,” “ours” or “us”) and the undersigned entity or individual (“you”, “your” or “yours”). You and we are each referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, we are experienced in providing programs related to yoga, Tai-Chi, and other mind-body practices;
WHEREAS, you operate a business that has customers who may be interested in our programs; and
WHEREAS, you wish to introduce us to your customers in exchange of referral commissions, and we wish to enter into an arrangement to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the adequacy and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
1. Definitions
(1) “Program” means our programs listed in Schedule A or developed after the Effective Date for which we will have determined to pay a referral commission.
(2) “Net-of-tax Payment” means a payment actually received by us for a Program excluding all state, local, or county sales taxes.
2. Program Referral and Commission
(1) You will promote us in your recruitment efforts with your active customers and from time to time introduce the Programs to your customers.
(2) If you refer a person to a Program, for each payment actually made for the Program, you will be entitled to a commission equal to the Net-of-tax Payment times the commission rate specified in Schedule A (“Commission”). To be eligible for a Commission, the person referred must have a valid membership with you and/or an agreement for a Program bearing your signature or stamp. The commission rate for a Program developed after the Effective Date will be determined by us. All Programs and commission rates thereof are subject to changes by us. You will be given 2 weeks’ written notice of any modifications or changes to the Programs and/or the commission rates.
(3) The Commission for a payment made for a Program in connection with a referral shall be paid as follows:
(a) COMMISSION AND PROCEDURES FOR PAYMENT BY CASH: If the payment is made in cash, you will deposit the entire amount of the payment into an account designated by us (“Designated Account”) within 3 business days after the receipt of the payment, and we will pay you the Commission for the payment within 3 weeks after the deposit.
(b) COMMISSION AND PROCEDURES FOR PAYMENT BY CHECK: If the payment is made by check, you must instruct the payer to make the check payable to us and deposit the check into the Designated Account within 3 business days after the receipt of the check, and we will pay you the Commission for the payment within 3 weeks after the deposit.
(c) COMMISSION AND PROCEDURES FOR PAYMENT BY CREDIT OR DEBIT CARD: If the payment is made by credit or debit card, you must instruct the payer to provide the credit or debit card

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number and other card information as designated by us (“Card Information”), and submit the Card Information to us within 3 business days after the receipt of the Card Information, and we will pay you the Commission for the payment within 3 weeks after you submit the Card Information to us.
(4) In order to address possible constant changes in the sales strategies for the Programs and occasional additions, deletions and modifications in the contents of the Programs, you will cause your salespersons to attend, and we will provide such salespersons with, reasonable continuing education and training.
3. Refund
If there is a request for a refund attributable to a payment for which you have been paid a commission, we, but not you, will determine whether to accept the refund request and the percentage of the payment to be refunded (“Refund Percentage”). If we decide to accept the refund request, you will reimburse us the Refund Percentage of the Commission within 3 weeks after you are given notice that the refund has been paid.
4. Indemnification
You agree to indemnify and hold harmless us, our affiliates, subsidiaries, business licensors, referring persons or entities, persons or entities allegedly controlling or acting in concert with us, persons or entities participating in the delivery of the Programs, owners or creators of any training methods or intellectual property used for the Programs or by us and owners or lessors of the premises used for the Programs and all their respective employees, agents, principals, contractors, managers, officers, directors, founders, shareholders, successors and assigns, including, but not limited to, Body and Brain Center, LLC (“Indemnified Parties”) from and against any and all losses and expenses as a result of or in connection with any claim asserted against you and/or any of the Indemnified Parties arising from the marketing, use or operation of your business and/or breach of obligations that you owe any of the Indemnified Parties.
5. Dispute Resolution
The Parties agree to submit any claim, dispute or disagreement of any type whatsoever that arises out of, or relates in any way to, this Agreement or the relationship between you and any of the Indemnified Parties (“Dispute”) to mediation before a mediator that the Parties will have selected jointly prior to arbitration. If the Dispute cannot be resolved by mediation, the dispute will be submitted to mandatory and binding arbitration conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The arbitrators will not have authority to award exemplary or punitive damages. The arbitrators shall adhere to the terms of this Agreement and shall have no power to add to or modify said terms. All mediation, arbitration and litigation shall take place in the County of Maricopa, the State of Arizona. If this Agreement must be enforced in a judicial or arbitration proceeding, the substantially prevailing Party will be entitled to reimbursement of its costs and expenses, including reasonable accounting and legal fees. UNLESS PROHIBITED BY APPLICABLE LAW, ANY DISPUTE MUST BE BROUGHT BY FILING A WRITTEN DEMAND FOR ARBITRATION (OR IF PERMITTED, LITIGATION) WITHIN ONE (1) YEAR FOLLOWING THE CONDUCT, ACT OR OTHER EVENT OR OCCURRENCE GIVING RISE TO THE CLAIM, OR THE RIGHT TO ANY REMEDY WILL BE DEEMED FOREVER WAIVED AND BARRED. THE PARTIES IRREVOCABLY WAIVE: (i) TRIAL BY JURY; AND (ii) THE RIGHT TO ARBITRATE OR LITIGATE ON A CLASS ACTION BASIS, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY.
6. Termination
(1) Either Party can terminate this Agreement by providing 30 days written notice. However, the Parties will still be entitled to receive any payment due at the time of the termination pursuant to the arrangement as set forth above.

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(2) All provisions that expressly or by their nature survive the termination, expiration or transfer of this Agreement shall continue in full force and effect subsequent to and notwithstanding its termination, expiration or transfer and until they are satisfied in full or by their nature expire, including, without limitations, paragraphs 3 through 8.
7. Entire Agreement and Enforcement
This Agreement supersedes and integrates any previous oral or written agreements relating to the subject matter and may not be changed, modified, or discharged except by written instrument duly executed by the Parties. If we do not enforce any right in this Agreement for any reason, it does not waive its right to enforce it later.
8. Severability
If any provision, subsection, phrase or sentence of this Agreement, including any subparts, is found to be void, invalid, or unenforceable by a court of competent jurisdiction, that provision shall be severed but the remaining portions of this Agreement, including all subparts, shall remain in full force and effect.
[Signature Page to Follow]

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IN WITNESS WHEREOF, the Parties have hereto executed this Agreement effective as of the Effective Date.

WE:
Entity Name: Body & Brain Yoga and Health Centers, Inc.,
an Arizona corporation
Address: 3651 East Baseline Road, Suite 228 Gilbert, Arizona 85234
By: _____________________________ Name: Hee Nam Kim
Its: Secretary
YOU (If you are an entity):
Entity Name: _________________________, a(n)______________________
Address: _____________________________ _____________________________ By: _____________________________ Name: _____________________________ Its: _____________________________
*By signing below, each individual owner of the above entity agrees to be bound by all of the terms and conditions of this Agreement.
Owner 1
Sign: _____________________________ Name: _____________________________
Owner 2
Sign: _____________________________ Name: _____________________________

YOU (If you are not an entity):
Name: _______________________________ Address: _______________________________ Sign: _______________________________
Name: _______________________________ Address: _______________________________ Sign: _______________________________
Name: ______________________________ Address: _______________________________ Sign: _______________________________

Owner 3 Sign: Name:

_____________________________
_____________________________

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Schedule A

No.	Program Name	Commission Rate
1	Shim Sung	40%
2	Initial Awakening	40%
3	EPW	40%
4	Dahn Yoga Instructor	30%
5	BMT	30%
6	Dahn Master	30%
7	LP Ambassador	30%
8	MIT	30%
9	Solar Body Natural Healing course	20%
10	Dahn Mu Do	20%
11	BOS(Bird of Soul) Training	20%
12	Gateway to HSP	30%
13	Healing Chakra	30%
14	PBM	30%
15	Healing Course	30%
16	Life Particle Holistic Program	30%
17	Private Class	30%
18	Regional Workshop	30%
19	Regular Membership	30%
20	Chun Hwa Meditation (Canada)	10%
21	Chun Hwa Meditation (Lake Powell)	10%
22	Chun Hwa Meditation (Korea)	10%
23	Chun Hwa Meditation (New Zealand)	10%
24	Sedona Retreat for Change	10%
25	Internship	0%
26	Supporter's Night	0%
27	YGMD	0%

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EXHIBIT "G"
TO DISCLOSURE DOCUMENT SOFTWARE SERVICE AGREEMENT
[See Attached]

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SOFTWARE SERVICE AGREEMENT
This Software Service Agreement (“Agreement”) is dated _____________, 20___ (“Effective Date”), and is between Body & Brain Yoga and Health Centers, Inc. (“Provider”) and the undersigned client (“Client”) and. Provider and Client are each referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, Provider is engaged in the business of providing yoga and wellness classes and programs, and is experienced in developing and maintaining online software specifically designed for the yoga and wellness industry;
WHEREAS, Client is in need of software for accounting and customer management; and
WHEREAS, Client wishes to receive from Provider, and Provider wishes to provide to Client, certain software service subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the adequacy and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
Article 1. TERM AND TERMINATION
Section 1.1. Term. The term of this Agreement shall commence as of the Effective Date and shall continue for a period of 1 month unless sooner terminated pursuant to the terms of this Agreement (“Term”). The Term shall be extended for additional, consecutive 1 month periods, unless either Party gives the other Party written notice of termination at least 30 days prior to the expiration of the then current Term.
Section 1.2. Termination. This Agreement may be terminated by the mutual consent of the Parties. Either Party may terminate this Agreement for violation by the other Party of any material terms or conditions of this Agreement, provided that written notice has been given to such other Party of the circumstances of such default and, where the default is capable of remedy, such other Party does not remedy the default within 10 days after receipt of the written notice.
Article 2. PROVIDER OBLIGATIONS
Section 2.1. Software Service. During the Term, Provider will provide or cause to be provided software service with regard to the following as may be amended in writing by the Parties from time to time (“Software Service”): Providing and maintaining online accounting and consumer management software called BRMNet for the operation of one wellness business without a physical location.
Section 2.2. Restoration of Data. If Client’s machine-readable files are lost, destroyed or impaired, Provider will attempt to recover a prior version of the files from back-up media maintained by Provider. If Provider is unable to restore Client’s files from back-up media, Provider will use commercially reasonable efforts to perform such restoration as can reasonably be performed using machine-readable source data furnished by Client. Any recovery or restoral efforts in addition to the foregoing or with respect to Client’s files that are lost, destroyed, or impaired by the acts or omissions of Client or its personnel or third party contractors will be performed under mutually agreed-upon terms and conditions.
Article 3. CLIENT OBLIGATIONS
Section 3.1. Fees for Software Service. During the Term, Client shall pay to Provider for the Software Service as follows: The monthly fee for the Software Service is $50.

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Section3.2. Provider Policies. Client will comply with Provider’s reasonable policies, procedures, requirements, and restrictions with respect to Client’s use of the Software Service.
Section 3.3. Cooperation. In order to enable Provider to perform the Software Service, Client and Provider will provide such mutual cooperation and assistance as reasonably requested by the other Party. Such cooperation and assistance shall include providing to Provider in a timely manner answers to questions, information, technical consultation, and, where applicable, acceptances. Provider shall be excused from performing its obligations to the extent Provider’s performance is actually prevented or hindered by:

(a) Client’s nonperformance;
(b) the failure by Client personnel or any Client third-party contractor to adequately perform its tasks related to the Software Service;
(c) unreasonable, untimely, inaccurate, or incomplete information from Client;
(d) the failure of any hardware or software that is not the fault of Provider; or
(e) the occurrence of an event described in Section 10.1 below;

Client agrees that, in connection with the foregoing, Provider shall be entitled to an extension of time to complete the affected Software Service and, if applicable, an adjustment of the applicable fees.
Article 4. INTELLECTUAL PROPERTY RIGHTS
Section 4.1. Provider Intellectual Property. Provider shall have sole and exclusive ownership of all right, title, and interest in and to:

(a) The Software Service (including any images, photographs, animations, video, audio, music, text, and applets provided by Provider);
(b) All derivatives, modifications and enhancements thereof (including ownership of all trade secrets and copyrights pertaining thereto), subject only to the rights and privileges expressly granted to Client herein by Provider; and
(c) The portion of Client Data (as defined in Section 4.5 below) aggregated with data obtained from other persons for the purposes of, among other things, producing indices, statistics, summaries, and industry reports for use by Provider or its other clients.

Section 4.2. Rights Granted. Provider grants Client a non-exclusive, non-transferable right to access, use, display, run, or otherwise interact with the Software Service subject to the terms and conditions set forth in this Agreement.
Section 4.3. Limitation on Rights Granted. Provider reserves all rights not expressly granted herein.
Section 4.4. Restrictions. Client shall not, in whole or in part, directly or indirectly:
(a) reverse engineer, disassemble, decompile, translate, reproduce, modify, alter or otherwise attempt to access or derive the source code or the underlying ideas, algorithms, structure or organization of the Software Service or reduce the Software Service to a human-perceivable form;

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(b) remove any copyright notices, logos, identification or any other proprietary notices from the Software Service;
(c) make any change to the Software Service or create any derivative works thereof;
(d) publish, sell, rent, lease, sublicense, transfer, transmit, resell, or distribute the Software Service or any part thereof; and
(e) share the rights to access and/or utilize the Software Service with any third party without prior written approval of Provider.

Section 4.5. Ownership of Client Data. Data stored by Client on Provider’s host computer system using the Software Service (“Client Data”) is owned by Body and Brain Center, LLC but may be used by Client during the term of its Body & Brain Franchise Agreement unless a member transfers its membership to another location or franchisee, in which case Provider may transfer such Client Data pertaining to the member to such other location or franchisee and Client will have no further rights or access to such transferred Client Data.
Article 5. CONFIDENTIALITY
Section 5.1. Non-Disclosure of Confidential Information. By virtue of this Agreement, a Party may have access to information that is confidential to the other Party (“Confidential Information”). Confidential Information includes, but is not be limited to:

(a) Confidential and proprietary information supplied with the legend “Confidential” or equivalent;
(b) Marketing and customer support strategies, financial information (including revenue, costs, profits and pricing methods), internal organization, employee information, and customer lists;
(c) Technology, including inventions, development efforts, data, software, trade secrets, processes, methods, product and know-how and show-how;
(d) Information of third parties as to which the non-disclosing Party has an obligation of confidentiality; and
(e) All derivatives, improvements, additions, modifications, and enhancements to any of the above, including any such information or material created or developed under this Agreement.

The Confidential Information shall not include information that: (a) is or becomes a part of the public domain through no act or omission of the disclosing Party; (b) was in the disclosing Party’s lawful possession prior to the disclosure and had not been obtained by the disclosing Party either directly or indirectly from the non-disclosing Party; (c) is lawfully disclosed to the disclosing Party by a third party without restriction on disclosure; or (d) is independently developed by the disclosing Party. Each Party agrees to hold the other Party’s Confidential Information in confidence during the Term and for a period of two years after expiration or sooner termination of this Agreement. Each Party agrees, unless required by law, not to make the other Party’s Confidential Information available in any form to any third party (except to the disclosing Party’s agents or independent contractors) for any purpose other than the implementation of this Agreement. Each Party agrees to take all reasonable steps to ensure that its employees, agents or independent contractors do not disclose or distribute the other Party’s Confidential Information in violation of the terms of this Agreement.

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Article 6. WARRANTIES AND DISCLAIMER
Section 6.1. Due Authorization. Each Party represents and warrants that such Party is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder.
Section 6.2. Binding Agreement. Each Party represents and warrants that this Agreement is a legal and valid obligation binding upon it and enforceable with its terms.
Section 6.3. Other Representation, Warranties and Covenants. Provider covenants, represents and warrants that it will render the Software Service in compliance with all applicable laws and regulations and the Software Service and the provision thereof will not violate any rights of any third parties. Client covenants, represents and warrants that the rendition of the Software Service will not require Provider to violate the laws or rights of any third parties.
Section 6.4. Disclaimer. Except as specifically provided in this Agreement, neither Party makes, and each Party expressly disclaims, any representations or warranties in connection with this Agreement, whether express, implied, statutory or otherwise, including, without limitation, warranties of merchantability, fitness for a particular purpose, non-infringement of third party rights, title, any warranties arising out of a course of performance, dealing or trade usage, and their equivalents under the laws of any jurisdiction.
Article 7. INDEMNIFICATION
Section 7.1. Indemnification. Each Party (“Indemnifying Party”) agrees to indemnify and hold harmless the other Party (“Indemnified Party”) from and against any and all claims, damages, liabilities, losses, judgments, costs, and attorneys’ fees arising directly out of, or relating to:
(a) the Indemnifying Party’s gross negligence or willful misconduct in engaging in the activities under this Agreement, or
(b) any allegation that a material furnished by the Indemnifying Party and used by Indemnified Party under this Agreement infringes copyrights, trademarks or other legal rights.
Notwithstanding the foregoing, the Indemnified Party shall have the right, in its absolute discretion and at its sole cost, to employ attorneys of its own choice and to institute or defend any claim for which the Indemnified Party has a right to be indemnified.
Section 7.2. Exclusion. Except as expressly set forth in Section 7.1 above, neither Party shall have any obligations to indemnify the other Party.
Article 8. LIMITATION OF LIABILITY
Section8.1. Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL THE PARTIES BE LIABLE, WHETHER IN CONTRACT, IN TORT, OR UNDER ANY OTHER LEGAL THEORY (INCLUDING, BUT NOT LIMITED TO STRICT LIABILITY AND NEGLIGENCE) FOR LOST PROFITS OR REVENUES, LOSS OR INTERRUPTION OF USE, LOST OR DAMAGED DATA, REPORTS, DOCUMENTATION, OR SECURITY, OR SIMILAR ECONOMIC LOSS, LOSS OF PRIVACY, OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL PROVIDER BE LIABLE FOR ANY CLAIM MADE AGAINST CLIENT BY ANY OTHER PARTY, EVEN IF PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH CLAIM. IN NO

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EVENT SHALL PROVIDER’S LIABILITY UNDER ANY CLAIM MADE BY CLIENT EXCEED THE TOTAL AMOUNT OF FEES THERETOFORE PAID BY CLIENT IN THE CURRENT CONTRACT YEAR.
Article 9. DISPUTE RESOLUTION
Section 9.1. Dispute Resolution. The Parties agree to submit any claim, dispute or disagreement of any type whatsoever that arises out of, or relates in any way to, this Agreement or the relationship between the Parties (“Dispute”) to mediation before a mediator that the Parties will have selected jointly prior to arbitration. If the Dispute cannot be resolved by mediation, the Dispute will be submitted to mandatory and binding arbitration conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The arbitrators will not have authority to award exemplary or punitive damages. The arbitrators shall adhere to the terms of this Agreement and shall have no power to add to or modify said terms. All mediation, arbitration and litigation shall take place in the State of Arizona. If this Agreement must be enforced in a judicial or arbitration proceeding, the substantially prevailing Party will be entitled to reimbursement of its costs and expenses, including reasonable accounting and legal fees. Unless Prohibited by applicable law, any Dispute must be brought by fining a written demand for arbitration (or if permitted, litigation) within one (1) year following the conduct, act or other event or occurrence giving rise to the claim or the right to any remedy will be deemed forever waived and barred. The Parties irrevocably waive: (i) trial by jury; and (ii) the right to arbitrate or ligate on a class action or any other representative basis, in any action, proceeding or counterclaim, whether at law or in equity.
Article 10. GENERAL PROVISIONS
Section 10.1. Force Majeure. Neither Party shall be liable for damages for any delay or default in performing hereunder if such delay or default is caused by conditions beyond its control and without its fault or negligence, including, but not limited to, act of God or of the public enemy, acts of the government, fires, floods, epidemics, strikes, labor disturbances or freight embargoes (but not including delays caused by subcontractors or suppliers).
Section 10.2. Relationship of Parties. The relationship between the Parties will be that of independent contractors. Nothing herein contained shall be deemed or construed by the Parties as creating the relationship of principal and agent or of partnership, joint employers or joint venture by the Parties, and neither Party will have the right, power or authority to make any claims, representations or warranties, or create any obligation, express or implied, on behalf of the other Party, or otherwise bind the other Party.
Section 10.3. Assignment and Delegation. Client shall not voluntarily, by operation of law, or otherwise assign any of its rights or delegate any of its duties, hypothecate, give, transfer, mortgage, sublet, license, or otherwise transfer or encumber all or part of its rights, duties, or other interests in this Agreement or the proceeds thereof without the written consent of Provider. Any attempt to make an assignment or delegation in violation of this provision shall be a material default under this Agreement and any assignment or delegation in violation of this provision shall be null and void.
Section 10.4. Parties Bound. This Agreement inures to the benefit of and is binding upon the Parties, their respective heirs, executors, administrators, legal representatives, successors and assigns. This Section 10.4 does not address, directly or indirectly, whether a Party may assign its rights or delegate its performance under this Agreement. Section 10.3 above addresses these matters.
Section 10.5. Governing law. This Agreement shall be subject to and governed by the laws of the State of Arizona, without giving effect to its conflicts of law principles.
Section 10.6. Titles and Captions. All article, section, or paragraph titles or captions contained in
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this Agreement are for convenience only and are not deemed part of the context thereof.
Section 10.7. Entire Agreement; Amendments. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes and integrates all prior agreements, representations and understandings of the Parties, written or oral. This Agreement may not be changed, modified or discharged except by written instrument duly executed by the Parties. Nothing in this Agreement is intended to disclaim any of the representations we made in the Franchise Disclosure Document.
Section 10.8. Waiver. Unless otherwise specified herein, the failure by a Party to require performance of any provision shall not affect that Party’s right to require performance at any time thereafter, nor shall a waiver of any breach or default of this Agreement constitute a waiver of any subsequent breach or default or a waiver of the provision itself.
Section 10.9. Notices. All notices under this Agreement shall be in writing.
Section 10.10. Severability. If any provision of this Agreement is held to be unenforceable, then this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the rest of the Agreement, valid and enforceable. If a court of competent jurisdiction declines to amend this Agreement as provided herein, the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the remaining provisions, which shall be enforced as if the offending provision had not been included in this Agreement.
Section 10.11. Counterparts. This Agreement may be executed in one or more counterparts and such counterparts taken together shall constitute a single instrument. Delivery of an executed counterpart of this Agreement by electronic means, including, but not limited to, by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing original initials or signatures.
Section 10.12. Survival of Termination. Termination or expiration of this Agreement for any reason shall not release either Party from any liability which at the time of such termination or expiration has already accrued to the other Party. Without limiting the foregoing, payments that became payable prior to termination or expiration of this Agreement shall remain payable after termination or expiration in accordance with the terms and conditions of this Agreement that were in effect immediately prior to the date of termination or expiration. In addition, Article 4 through Article 10 of this Agreement shall survive any termination or expiration of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.

PROVIDER:
Entity Name: Body & Brain Yoga and Health Centers, Inc.,
an Arizona corporation
Address: 3651 East Baseline Road, Suite 228 Gilbert, Arizona 85234
By: _____________________________ Name: Hee Nam Kim
Its: Secretary
CLIENT (If you are an entity):
Entity Name: _________________________, a(n)______________________

CLIENT (If you are not an entity):
Name: _______________________________ Address: _______________________________ _______________________________ Sign: _______________________________

Address:
By: Name: Its:

_____________________________
_____________________________
_____________________________
_____________________________
_____________________________

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(FDD - 2015 Home-Based Minnesota)

EXHIBIT "H"
TO DISCLOSURE DOCUMENT TABLE OF CONTENTS OF OPERATING MANUALS

Part 1: Introduction

Body & Brain Franchise system .................................................................... 2
Unique distinctions of Body & Brain programs .............................................. 4
Business ethics and operational standards ........................................................ 6

.......................................................................................... 37 43

Part 1:
Part 2:
Part 3:
Part 4:
Part 5:
Part 6:

Opening your center

Body & Brain Center Opening Checklist ......................................................... 9
Body & Brain Center Start-up checklist by month .......................................... 12
Guidelines of Exterior and Interior Design ....................................................... 14
Flooring Installation Instructions ...................................................................... 21
....................................................................................... 37 43

Marketing

Defining your customers ................................................................................... 27
Networking and community engagement ......................................................... 29
Online marketing ............................................................................................. 33
Open workshops ............................................................................................... 40
Monthly seminars ............................................................................................ 51
Referral system ............................................................................................... 55

................................
Intro Session

Answering the Phone ........................................................................................ 59
New member consultation ............................................................................... 65
Visitor Information .......................................................................................... 81
Energy Check-up ............................................................................................. 82

Regular class Teaching Guide

Class setting ..................................................................................................... 83
Flows, formats and components of class ........................................................ 85
Personal care during the class ........................................................................ 115

Private Session

Types of private session ............................................................................... 117
Private class outline ....................................................................................... 119
Private Coaching session outline ................................................................... 121
Members' Progress Check-up ....................................................................... 133
Member appointment/check-up list .............................................................. 135

08.
Business Support System

Using the web-based business administration system .................................. 138
Payment Processing ...................................................................................... 148
Commissions for affiliated programs .......................................................... 154

Part 7: Miscellanies and Updates

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EXHIBIT "I" STATE ADDENDUM
A. Minnesota Rule 2860.4400(D) prohibits us from requiring you to assent to a general release.
B. We will comply with Minnesota Statute Section 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 franchise agreement; and that consent to the transfer of the franchise will not be unreasonably withheld.
C. Minnesota Statute Section 80C.21 and Minnesota Rule 2860.4400(J) prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring you to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Franchise Disclosure Document or agreement(s) can abrogate or reduce any of your rights as provided for in Minnesota Statues, chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. In addition, we will comply with the provisions of Minnesota Rule 2860.4400(J) which state that you cannot waive any rights, you cannot consent to our obtaining injunctive relief, we may seek injunctive relief, and a court will determine if a bond if required.
D. We will comply with Minnesota Statute Section 80C.12, Subd. 1(g) which requires that we protect your right to use the trademarks, service marks, trade names, logotypes or other commercial symbols or indemnify you from any loss, costs or expenses arising out of any claim, suit or demand regarding the use of the name.
E. We will comply with Minnesota Statute Section 80C.17, Subd. 5 regarding limitation of claims.

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EXHIBIT "J"
TO DISCLOSURE DOCUMENT LIST OF FRANCHISEES
Part A (Current Body & Brain Home-Based Franchisees) - None
Part B (Former Body & Brain Home-Based Franchisees Who Left System During Prior Fiscal Year) – None
If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.

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EXHIBIT "K"
TO DISCLOSURE DOCUMENT FINANCIAL STATEMENTS
[See Attached]

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(FDD - 2015 Home-Based Minnesota)

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EXHIBIT "L"
TO DISCLOSURE DOCUMENT FRANCHISEE DISCLOSURE QUESTIONNAIRE
[See Attached]

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(FDD - 2015 Home-Based Minnesota)

FRANCHISEE DISCLOSURE QUESTIONNAIRE
As you know Body and Brain Center, LLC (“we” or “us), and you are preparing to enter into a Franchise Agreement for the operation of a Body & Brain franchise. The purpose of this Questionnaire is to determine whether any statements or promises were made to you that we have not authorized or that may be untrue, inaccurate or misleading, to be certain that you have been properly represented in this transaction, and to be certain that you understand the limitations on claims you may make by reason of the purchase and operation of your franchise. You cannot sign or date this Questionnaire the same day as the Receipt for the Franchise Disclosure Document but you must sign and date it the same day you sign the Franchise Agreement and pay your franchise fee. Please review each of the following questions carefully and provide honest responses to each question. If you answer “No” to any of the questions below, please explain your answer on the back of this sheet.

Yes__ No__ l.
Y es__ No__ 2. Y es__ No__ 3. Y es__ No__ 4.
Yes__ No__ 5.
Y es__ No__ 6.
Yes__ No__ 7.
Yes__ No__ 8.
Yes__ No__ 9. Y es__ No__ 10.
Yes__ No__ 11. Y es__ No__ 12. Y es__ No__ 13.
Y es__ No__ 14.

Have you received and personally reviewed the Franchise Agreement and each attachment or schedule attached to it?
Have you received and personally reviewed the Franchise Disclosure Document we provided? Did you sign a receipt for the Franchise Disclosure Document indicating the date you received it?
Do you understand all the information contained in the Franchise Disclosure Document and Franchise Agreement?
Did you receive the FDD at least fourteen (14) days before you signed any agreement or paid any fee to us or any affiliate of ours?
Did you receive a complete execution copy of the Franchise Agreement, with all material terms filled in, at least seven (7) days before you signed it?
Have you reviewed the Franchise Disclosure Document and Franchise Agreement with a lawyer, accountant or other professional advisor?
Have you discussed the benefits and risks of developing and operating a Body & Brain franchise with an existing Body & Brain franchisee?
Do you understand the risks of developing and operating a Body & Brain franchise?
Do you understand the success or failure of your franchise will depend in large part upon your skills, abilities and efforts and those of the persons you employ as well as many factors beyond your control including competition, interest rates, the economy, inflation, labor and supply costs and other relevant factors?
Do you understand all disputes or claims you may have arising out of or involving the Franchise Agreement must be arbitrated in Arizona, if not resolved informally or by mediation?
Do you understand that you must satisfactorily complete the initial training course before we will allow your franchised business to open or consent to a transfer?
Do you agree that no employee or other person speaking on our behalf made any statement or promise regarding the costs involved in operating a Body & Brain franchise that is not contained in the Franchise Disclosure Document or that is contrary to, or different from, the information contained in the Franchise Disclosure Document?
Do you agree that no employee or other person speaking on our behalf made any statement or promise or agreement, other than those matters addressed in your Franchise Agreement, concerning advertising, marketing, media support, marketing penetration, training, support service or assistance that is contrary to, or different from, the information contained in the Franchise Disclosure Document?

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(FDD - 2015 Home-Based Minnesota)

Y es__
Y es__

No__ 15.
No__ 16.

Do you agree that no employee or other person speaking on our behalf made any statement or promise regarding the actual, average or projected profits or earnings, the likelihood of success, the amount of money you may earn, or the total amount of revenue a Body & Brain franchise will generate, that is not contained in the Franchise Disclosure Document or that is contrary to, or different from, the information contained in the Franchise Disclosure Document?
Do you understand that the Franchise Agreement and attachments to the Franchise Agreement contain the entire agreement between us and you concerning the franchise for the Body & Brain business, meaning any prior oral or written statements not set out in the Franchise Agreement or the attachments to the Franchise Agreement will not be binding?

YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON THEM. BY SIGNING THIS QUESTIONNAIRE, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS.

Signature of Franchise Applicant
Name (please print) Dated
Signature of Franchise Applicant
Name (please print) Dated

EXPLANATION OF ANY NEGATIVE RESPONSES [REFER TO QUESTION NUMBER]:

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

EXHIBIT "M"
TO DISCLOSURE DOCUMENT RECEIPTS
[See Attached]

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

RECEIPT
This Disclosure Document summarizes certain provisions of the franchise agreement and other information in plain language. Read this Disclosure Document and all agreements carefully. If Body and Brain Center, LLC offers you a franchise, it must provide this Disclosure Document to you 14 days before you sign a binding agreement with or make a payment to the franchisor or an affiliate for the proposed franchise sale.
If Body and Brain Center, 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, DC 20580, and the appropriate state agency listed in EXHIBIT "A" to this Disclosure Document.
The franchise seller(s) involved with the sale of this franchise is/are:
Ann Mooney, 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234, (702) 810-3593
Jung Ae Kim, 3651 East Baseline Road, Suite 223, Gilbert, Arizona 85234, (925) 989-8319 [name]______________; [address]_____________________________; [phone]______________ [name]______________; [address]_____________________________; [phone]______________
Body and Brain Center, LLC’s agent to receive service of process is listed in EXHIBIT "B" to this Disclosure Document.
Issuance date: February 11, 2015 (amended March 10, 2015)
I have received the Body & Brain Franchise Disclosure Document for the State of Minnesota that included the following Exhibits:

EXHIBIT "A" EXHIBIT "B" EXHIBIT "C" EXHIBIT "D" EXHIBIT "E" EXHIBIT "F" EXHIBIT "G" EXHIBIT "H" EXHIBIT "I" EXHIBIT "J" EXHIBIT "K" EXHIBIT "L" EXHIBIT"M"

State Agencies and Administrators Agent for Service of Process Franchise Agreement
Training Agreement
General Release
Referral Agreement
Software Service Agreement
Table of Contents of the confidential Operating Manuals State Addendum
List of Franchisees
Financial Statements of Body and Brain Center, LLC Franchisee Disclosure Questionnaire
Receipts
Print Name
(Signature) Prospective Franchise Owner

Date

(This receipt should be signed in duplicate. One Receipt must be signed and remains in the Franchise Disclosure Document as the prospective franchise owner’s copy. The other Receipt must be signed and returned to Body and Brain Center, LLC.)

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

EXHIBIT "A" EXHIBIT "B" EXHIBIT "C" EXHIBIT "D" EXHIBIT "E" EXHIBIT "F" EXHIBIT "G" EXHIBIT "H" EXHIBIT "I" EXHIBIT "J" EXHIBIT "K" EXHIBIT "L" EXHIBIT"M"

Date

{WS018017v1 } (FDD - 2015 Home-Based Minnesota)

Franchise Disclosure Documents

Body and Brain Center

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