NO LONGER FRANCHISINGFor franchisees that enter into a Development Agreement for the establishment of multiple SALONS, the initial franchise fee is as follows: * First SALON $25,000 * Second to Fifth SALON $20,000 * Sixth or more SALONS $15,000 The fee for the first SALON is paid to us when you sign the Development Agreement. The fees for the additional SALONS are paid when you sign the Franchise Agreement for each SALON. In addition to the initial franchise fee for each SALON, you must also pay us, when you sign the Development Agreement, a multiple unit development fee of $5,000 multiplied by the number of SALONS to be developed under the Development Schedule. For illustrative purposes only, if you enter into a Development Agreement for ten SALONS, the initial ''franchise fee and development fee payable to us at the time you enter into the agreements will be as follows: Initial Franchise Fee $25,000 Units Two through Ten $45.000 (9 x $5,000) Total Fees Due $70.000 Multiple unit franchisees can expect to have additional capital and operating expenses which single unit franchisees may or may not incur. For example, we may provide our multi-SALON franchisees a continuing royalty credit of V2 of one percent. To qualify for this credit you will likely require an office, training capabilities, multi-unit management and other support personnel. We have not included these additional costs in the above projections as they will likely not occur with the opening of your first SALON, nor are they reasonably estimated due to the uniqueness of each multi-SALON franchisee''s independent business determinations. Unless otherwise noted above, all of the above fees are uniform and none of the above fees are refundable to you.