What changed in this filing

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Item 1A. Risk Factors

2026-08-14 compared with 2026-05-15 · 235 added, 229 removed, 385 unchanged (55% of the section changed)

The SEC requires the company to identify risks that

are specific to its business and its financial condition.

The company is still subject to all the same risks that all companies in its

business, and all companies in the economy, are exposed to.

The SEC requires the company to identify risks

that are specific to its business and its financial condition.

The company is still subject to all the same risks that all companies in

its business, and all companies in the economy, are exposed to.

These include risks relating to economic downturns, political and economic

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Our success depends substantially on the value of our brand.

Our success is dependent in large part upon our ability

to maintain and enhance the value of our brand, our store clients’ connection to our brand and a positive relationship with our

Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity

or result in litigation.

Our success is dependent in large part upon our

ability to maintain and enhance the value of our brand, our store clients’ connection to our brand and a positive relationship with

Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative

publicity or result in litigation.

Some of these incidents may relate to our policies, the way we manage our relationships with our franchisees,

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could materially and adversely affect our results of operations and financial condition.

The high level of competition in the franchising industry could materially

and adversely affect our business.

The high level of competition in the franchising industry could

materially and adversely affect our business.

We compete with the following industry participants:

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which in each case could materially and adversely affect our results of operations and financial condition.

If we are unable to anticipate and satisfy consumer preferences and

shifting views of franchising, our business may be adversely affected.

Our success depends on our ability to anticipate and

satisfy consumer preferences relating to franchising.

If we are unable to anticipate and satisfy consumer preferences

and shifting views of franchising, our business may be adversely affected.

Our success depends on our ability to anticipate

and satisfy consumer preferences relating to franchising.

Our business is and all of our services are subject to changing consumer preferences

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strategic partnership arrangements, or if the reputation of any of our partners is impaired, our business may suffer.

A principal component of our marketing program is

to partner with high-profile marketing partners to help us extend the reach of our brand.

We may not be able to attract and partner with

new marketing partners in the future.

In addition, if the actions of our partners were to damage their reputation, our partnerships may

be less attractive to our current or prospective clients.

A principal component of our marketing program

is to partner with high-profile marketing partners to help us extend the reach of our brand.

We may not be able to attract and partner

with new marketing partners in the future.

In addition, if the actions of our partners were to damage their reputation, our partnerships

may be less attractive to our current or prospective clients.

Any of these failures by us or our partners could adversely affect our business

and revenues.

Our and our franchisees’ stores may be

unable to attract and retain clients, which would materially and adversely affect our business, results of operations and financial condition.

Our target market is business educated people seeking

to expand and help clients with finding the right franchise opportunity for their situation.

The success of our business depends on our

and our franchisees’ ability to attract and retain clients.

Our and our franchisees’ stores may

be unable to attract and retain clients, which would materially and adversely affect our business, results of operations and financial

Our target market is business educated people

seeking to expand and help clients with finding the right franchise opportunity for their situation.

The success of our business depends

on our and our franchisees’ ability to attract and retain clients.

Our and our franchisees’ marketing efforts may not be successful

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trademarks, trade names, copyrights and trade dress, may be infringed, misappropriated or challenged by others.

Our intellectual property (including our brand) is

important to our continued success.

We seek to protect our trademarks, trade names, copyrights, trade dress and other intellectual property

by exercising our rights under applicable state, provincial, federal and international laws.

Policing unauthorized use and other violations

of our intellectual property rights is difficult, and the steps we take may not prevent misappropriation, infringement, dilution or other

violations of our intellectual property, especially internationally where foreign nations may not have laws to protect against “squatting,”

or in “first-to-file” nations where trademark rights can be obtained despite a third party’s prior use of our intellectual

If we were to fail to successfully protect our intellectual property rights for any reason, or if any third party misappropriates,

dilutes, infringes or violates our intellectual property, the value of our brand may be harmed, which could have an adverse effect on

our business, results of operations and financial condition.

Any damage to our reputation could cause clientship levels to decline or

make it more difficult to attract new clients.

Our intellectual property (including our brand)

is important to our continued success.

We seek to protect our trademarks, trade names, copyrights, trade dress and other intellectual

property by exercising our rights under applicable state, provincial, federal and international laws.

Policing unauthorized use and other

violations of our intellectual property rights is difficult, and the steps we take may not prevent misappropriation, infringement, dilution

or other violations of our intellectual property, especially internationally where foreign nations may not have laws to protect against

“squatting,” or in “first-to-file” nations where trademark rights can be obtained despite a third party’s

prior use of our intellectual property.

If we were to fail to successfully protect our intellectual property rights for any reason, or

if any third party misappropriates, dilutes, infringes or violates our intellectual property, the value of our brand may be harmed, which

could have an adverse effect on our business, results of operations and financial condition.

Any damage to our reputation could cause

clientship levels to decline or make it more difficult to attract new clients.

We may also from time to time be required to initiate

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systems, and any material failure, interruption or weakness may prevent us from effectively operating our business and damage our reputation.

We and our franchisees may rely on information systems

managed by third parties, to interact with our franchisees and clients and collect, maintain, store and transmit member information, billing

information and other personally identifiable information, including for the operation of stores, collection of cash, legal and regulatory

compliance, management of our supply chain, accounting, staffing, payment of obligations, ACH transactions, credit and debit card transactions

and other processes and procedures.

Our ability to efficiently and effectively manage our franchisee and corporate-owned operations depends

significantly on the reliability and capacity of these systems, and any potential failure of these third parties to provide quality uninterrupted

service is beyond our control.

Our and our franchisees’ operations depend upon

our ability, and the ability of our franchisees and third-party service providers (as well as their third-party service providers), to

protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic

events, as well as from internal and external security breaches, viruses, denial-of-service attacks and other disruptions.

of these systems to operate effectively, stemming from maintenance problems, upgrading or transitioning to new platforms, expanding our

systems as we grow, a breach in security or other unanticipated problems could result in interruptions to or delays in our business and

member services and reduce efficiency in our operations.

In addition, the implementation of technology changes and upgrades to maintain

current and integrate new systems may also cause service interruptions, operational delays due to the learning curve associated with using

a new system, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable laws.

information systems, or those of our franchisees and third-party service providers (as well as their third-party service providers), fail

and our or our partners’ third-party back-up or disaster recovery plans are not adequate to address such failures, our revenues

and profits could be reduced and the reputation of our brand and our business could be materially adversely affected, which in turn may

materially and adversely affect our results of operations and financial condition.

Use of email marketing and social media may

adversely impact our reputation or subject us to fines or other penalties.

There has been a substantial increase in the use of

email and social media platforms, including v-logs, blogs, chat platforms, social media websites and other forms of internet-based communication,

which allow access to a broad audience of consumers and other interested persons.

The rising popularity of social media and other consumer-oriented

technologies has increased the speed and accessibility of information dissemination.

Negative or false commentary about us may be posted

on social media platforms or similar platforms at any time and may harm our business, brand, reputation, marketing partners, financial

condition, and results of operations, regardless of the information’s accuracy.

We also use email and social media platforms as marketing

For example, we maintain social media accounts and may occasionally email clients to inform them of certain offers or promotions.

As laws and regulations, including Federal Trade Commission (“FTC”) enforcement, rapidly evolve to govern the use of these

platforms and devices, the failure by us, our employees, our franchisees or third parties acting at our direction to abide by applicable

laws and regulations in the use of these platforms and devices could adversely impact our and our franchisees’ business, financial

condition and results of operations or subject us to fines or other penalties.

We and our franchisees may rely on information

systems managed by third parties, to interact with our franchisees and clients and collect, maintain, store and transmit member information,

billing information and other personally identifiable information, including for the operation of stores, collection of cash, legal and

regulatory compliance, management of our supply chain, accounting, staffing, payment of obligations, ACH transactions, credit and debit

card transactions and other processes and procedures.

Our ability to efficiently and effectively manage our franchisee and corporate-owned

operations depends significantly on the reliability and capacity of these systems, and any potential failure of these third parties to

provide quality uninterrupted service is beyond our control.

Our and our franchisees’ operations depend

upon our ability, and the ability of our franchisees and third-party service providers (as well as their third-party service providers),

to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other

catastrophic events, as well as from internal and external security breaches, viruses, denial-of-service attacks and other disruptions.

The failure of these systems to operate effectively, stemming from maintenance problems, upgrading or transitioning to new platforms,

expanding our systems as we grow, a breach in security or other unanticipated problems could result in interruptions to or delays in our

business and member services and reduce efficiency in our operations.

In addition, the implementation of technology changes and upgrades

to maintain current and integrate new systems may also cause service interruptions, operational delays due to the learning curve associated

with using a new system, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable

If our information systems, or those of our franchisees and third-party service providers (as well as their third-party service

providers), fail and our or our partners’ third-party back-up or disaster recovery plans are not adequate to address such failures,

our revenues and profits could be reduced and the reputation of our brand and our business could be materially adversely affected, which

in turn may materially and adversely affect our results of operations and financial condition.

Use of email marketing and social media

may adversely impact our reputation or subject us to fines or other penalties.

There has been a substantial increase in the use

of email and social media platforms, including v-logs, blogs, chat platforms, social media websites and other forms of internet-based

communication, which allow access to a broad audience of consumers and other interested persons.

The rising popularity of social media

and other consumer-oriented technologies has increased the speed and accessibility of information dissemination.

Negative or false commentary

about us may be posted on social media platforms or similar platforms at any time and may harm our business, brand, reputation, marketing

partners, financial condition, and results of operations, regardless of the information’s accuracy.

We also use email and social media platforms as

marketing tools.

For example, we maintain social media accounts and may occasionally email clients to inform them of certain offers or

As laws and regulations, including Federal Trade Commission (“FTC”) enforcement, rapidly evolve to govern the

use of these platforms and devices, the failure by us, our employees, our franchisees or third parties acting at our direction to abide

by applicable laws and regulations in the use of these platforms and devices could adversely impact our and our franchisees’ business,

financial condition and results of operations or subject us to fines or other penalties.

If we fail to properly maintain the confidentiality

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our reputation and business could be materially and adversely affected.

In the ordinary course of business, we and our franchisees

collect, maintain, store and transmit member and employee data, including credit and debit card numbers, bank account information, driver’s

license numbers, dates of birth and other highly sensitive personally identifiable information, in information systems that we maintain

and in those maintained by franchisees and third parties with whom we contract to provide services.

In 2019, we introduced a mobile application

that tracks exercise and activity-related data, which may in the future track other personal information.

Some of this data is sensitive

and could be an attractive target of a criminal attack by malicious third parties with a wide range of motives and expertise, including

lone wolves, organized criminal groups, “hacktivists,” disgruntled current or former employees and others.

The integrity and

protection of member and employee data is critical to us.

Despite the security measures we have in place to

comply with applicable laws and rules, our facilities and systems, and those of our franchisees and third-party service providers (as

In the ordinary course of business, we and our

franchisees collect, maintain, store and transmit member and employee data, including credit and debit card numbers, bank account information,

driver’s license numbers, dates of birth and other highly sensitive personally identifiable information, in information systems

that we maintain and in those maintained by franchisees and third parties with whom we contract to provide services.

In 2019, we introduced

a mobile application that tracks exercise and activity-related data, which may in the future track other personal information.

this data is sensitive and could be an attractive target of a criminal attack by malicious third parties with a wide range of motives

and expertise, including lone wolves, organized criminal groups, “hacktivists,” disgruntled current or former employees and

The integrity and protection of member and employee data is critical to us.

Despite the security measures we have in place

to comply with applicable laws and rules, our facilities and systems, and those of our franchisees and third-party service providers (as

well as their third-party service providers), may be vulnerable to security breaches, acts of cyber terrorism or sabotage, vandalism or

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of a significant data security breach, this insurance may not cover all of the losses that we would be likely to suffer.

The occurrence of cyber incidents, or a deficiency

in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential

information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand and our business.

The occurrence of cyber incidents, or a

deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption

of confidential information, and/or damage to our employee and business relationships and reputation, all of which could harm our brand

and our business.

We could be in the future, subject to cyber incidents

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results will not be adversely affected by such an incident.

Because our franchisees accept electronic forms of

payment from their customers, our business requires the collection and retention of customer data, including credit and debit card numbers

and other personally identifiable information in various information systems that we and our franchisees maintain and in those maintained

by third parties with whom we and our franchisees contract to provide credit card processing.

We also maintain important internal company

data, such as personally identifiable information about our employees and franchisees and information relating to our operations.

use of personally identifiable information is regulated by foreign, federal and state laws, as well as by certain third-party agreements.

Because our franchisees accept electronic forms

of payment from their customers, our business requires the collection and retention of customer data, including credit and debit card

numbers and other personally identifiable information in various information systems that we and our franchisees maintain and in those

maintained by third parties with whom we and our franchisees contract to provide credit card processing.

We also maintain important internal

company data, such as personally identifiable information about our employees and franchisees and information relating to our operations.

Our use of personally identifiable information is regulated by foreign, federal and state laws, as well as by certain third-party agreements.

As privacy and information security laws and regulations and contractual obligations with third parties evolve, we may incur additional

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industry regulations.

Under certain laws, regulations and contractual obligations,

a cyber incident could also require us to notify customers, employees or other groups of the incident or could result in adverse publicity,

loss of sales and profits or an increase in fees payable to third parties.

We could also incur penalties or remediation and other costs

that could adversely affect the operation of our business, which in turn may materially and adversely affect our results of operations

and financial condition.

If we fail to successfully implement our growth

strategy, which includes new franchisees, our ability to increase our revenues and operating profits could be adversely affected.

Under certain laws, regulations and contractual

obligations, a cyber incident could also require us to notify customers, employees or other groups of the incident or could result in

adverse publicity, loss of sales and profits or an increase in fees payable to third parties.

We could also incur penalties or remediation

and other costs that could adversely affect the operation of our business, which in turn may materially and adversely affect our results

of operations and financial condition.

If we fail to successfully implement our

growth strategy, which includes new franchisees, our ability to increase our revenues and operating profits could be adversely affected.

Our growth strategy relies in large part upon new franchisees.

Our franchisees

face many challenges in opening new operation, including:

franchisees face many challenges in opening new operation, including:

availability and cost of financing;

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general economic and business conditions.

Our growth strategy also relies on our ability to

identify, recruit and enter into agreements with a sufficient number of franchisees.

In addition, our ability and the ability of our franchisees

to successfully open and operate new stores in new or existing markets may be adversely affected by a lack of awareness or acceptance

of our brand, as well as a lack of existing marketing efforts and operational execution in these new markets.

To the extent that we are

unable to implement effective marketing and promotional programs and foster recognition and affinity for our brand in new domestic and

international markets, our and our franchisees’ new stores may not perform as expected and our growth may be significantly delayed

Economic, political and other risks

associated with our international operations could adversely affect our profitability and international growth

We may have stores operating in certain other countries

around the world.

Our growth strategy also relies on our ability

to identify, recruit and enter into agreements with a sufficient number of franchisees.

In addition, our ability and the ability of our

franchisees to successfully open and operate new stores in new or existing markets may be adversely affected by a lack of awareness or

acceptance of our brand, as well as a lack of existing marketing efforts and operational execution in these new markets.

To the extent

that we are unable to implement effective marketing and promotional programs and foster recognition and affinity for our brand in new

domestic and international markets, our and our franchisees’ new stores may not perform as expected and our growth may be significantly

delayed or impaired.

Economic, political and other risks associated

with our international operations could adversely affect our profitability and international growth prospects.

We may have stores operating in certain other

countries around the world.

Our international operations would be subject to a number of risks inherent to operating in foreign countries,

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results of, and our relationships with, our franchisees.

A substantial portion of our revenues come from royalties,

which are generally based on a percentage of gross monthly clientship dues and annual fees at our franchise stores or, in certain cases,

a sliding scale based on gross monthly clientship dues, other fees and commissions generated from activities associated with our franchisees,

and equipment sales to our franchisees.

As a result, our financial results are largely dependent upon the operational and financial results

of our franchisees.

Negative economic conditions, including recession, public health emergencies, inflation, increased unemployment

levels and the effect of decreased consumer confidence or changes in consumer behavior, could materially harm our franchisees’ financial

condition, which would cause our royalty and other revenues to decline and materially and adversely affect our results of operations and

financial condition as a result.

A substantial portion of our revenues come from

royalties, which are generally based on a percentage of gross monthly clientship dues and annual fees at our franchise stores or, in certain

cases, a sliding scale based on gross monthly clientship dues, other fees and commissions generated from activities associated with our

franchisees, and equipment sales to our franchisees.

As a result, our financial results are largely dependent upon the operational and

financial results of our franchisees.

Negative economic conditions, including recession, public health emergencies, inflation, increased

unemployment levels and the effect of decreased consumer confidence or changes in consumer behavior, could materially harm our franchisees’

financial condition, which would cause our royalty and other revenues to decline and materially and adversely affect our results of operations

and financial condition as a result.

In addition, if our franchisees fail to renew their franchise agreements, these revenues may decrease,

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Our franchisees could take actions that harm our business.

Our franchisees are contractually obligated to operate

their stores in accordance with the operational, safety and health standards set forth in our agreements with them, including adherence

to applicable laws and regulations.

However, franchisees are independent third parties and their actions are outside of our control.

In addition, we cannot be certain that our franchisees will have the business acumen or financial resources necessary to operate successful

franchises in their approved locations, and certain state franchise laws limit our ability to terminate or not renew these franchise agreements.

Our franchisees are contractually obligated to

operate their stores in accordance with the operational, safety and health standards set forth in our agreements with them, including

adherence to applicable laws and regulations.

However, franchisees are independent third parties and their actions are outside of

In addition, we cannot be certain that our franchisees will have the business acumen or financial resources necessary to

operate successful franchises in their approved locations, and certain state franchise laws limit our ability to terminate or not renew

these franchise agreements.

Our franchisees own, operate and oversee the daily operations of their stores.

As a result, the ultimate success and quality of any franchise

store rests with the franchisee.

If franchisees do not successfully operate stores in a manner consistent with required standards and

comply with local laws and regulations, franchise fees and royalties paid to us may be adversely affected, and our brand image and reputation

could be harmed, which in turn could materially and adversely affect our results of operations and financial condition.

As a result, the ultimate success

and quality of any franchise store rests with the franchisee.

If franchisees do not successfully operate stores in a manner consistent

with required standards and comply with local laws and regulations, franchise fees and royalties paid to us may be adversely affected,

and our brand image and reputation could be harmed, which in turn could materially and adversely affect our results of operations and

financial condition.

Although we believe we generally maintain positive

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with our franchisees generally.

We are subject to a variety of additional risks associated with our

Our franchise business model subjects us to a number

of risks, any one of which may impact our royalty revenues collected from our franchisees, may harm the goodwill associated with our brand,

and may materially and adversely impact our business and results of operations.

We are subject to a variety of additional risks associated with

our franchisees.

Our franchise business model subjects us to a

number of risks, any one of which may impact our royalty revenues collected from our franchisees, may harm the goodwill associated with

our brand, and may materially and adversely impact our business and results of operations.

Bankruptcy of franchisees.

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Franchisee changes in control.

Our franchises

are operated by independent business owners.

Although we have the right to approve franchise owners, and any transferee owners, we cannot

predict in advance whether a particular franchise owner will be successful.

franchises are operated by independent business owners.

Although we have the right to approve franchise owners, and any transferee owners,

we cannot predict in advance whether a particular franchise owner will be successful.

If an individual franchise owner is unable to successfully

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Franchisee litigation;

effects of regulatory efforts.

and our franchisees are subject to a variety of litigation risks, including, but not limited to, member claims, personal injury claims,

vicarious liability claims, litigation with or involving our relationship with franchisees, litigation alleging that the franchisees are

our employees or that we are the co-employer of our franchisees’ employees, employee allegations against the franchisee or us of

improper termination and discrimination, landlord/tenant disputes and intellectual property claims.

Each of these claims may increase

costs, reduce the execution of new franchise agreements and affect the scope and terms of insurance or indemnifications we and our franchisees

In addition, we and our franchisees are subject to various regulatory efforts to enforce employment laws, such as efforts to

classify franchisors as the co-employers of their franchisees’ employees and legislation to categorize individual franchised businesses

as large employers for the purposes of various employment benefits.

We and our franchisees also may be subject to changes in state tax

laws or enforcement of state tax laws, whereby states subject certain franchisee payments to out of state franchisors to state sales tax

or other, similar taxes.

These and other legislation or regulations may have a disproportionate impact on franchisors and/or franchised

These changes may impose greater costs and regulatory burdens on franchising and negatively affect our ability to sell new

franchises, which in turn may materially and adversely affect our results of operations and financial condition.

effects of regulatory

We and our franchisees are subject to a variety of litigation risks, including, but not limited to, member claims, personal

injury claims, vicarious liability claims, litigation with or involving our relationship with franchisees, litigation alleging that the

franchisees are our employees or that we are the co-employer of our franchisees’ employees, employee allegations against the franchisee

or us of improper termination and discrimination, landlord/tenant disputes and intellectual property claims.

Each of these claims may

increase costs, reduce the execution of new franchise agreements and affect the scope and terms of insurance or indemnifications we and

our franchisees may have.

In addition, we and our franchisees are subject to various regulatory efforts to enforce employment laws, such

as efforts to classify franchisors as the co-employers of their franchisees’ employees and legislation to categorize individual

franchised businesses as large employers for the purposes of various employment benefits.

We and our franchisees also may be subject to

changes in state tax laws or enforcement of state tax laws, whereby states subject certain franchisee payments to out of state franchisors

to state sales tax or other, similar taxes.

These and other legislation or regulations may have a disproportionate impact on franchisors

and/or franchised businesses.

These changes may impose greater costs and regulatory burdens on franchising and negatively affect our ability

to sell new franchises, which in turn may materially and adversely affect our results of operations and financial condition.

Franchise agreements and franchisee relationships.

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Franchisee turnover.

There can be no guarantee

of the retention of any, including the top performing, franchisees in the future, or that we will maintain the ability to attract, retain,

and motivate sufficient numbers of franchisees of the same caliber.

The quality of existing franchisee operations may be diminished by

factors beyond our control, including franchisees’ failure or inability to hire or retain qualified managers and other personnel.

no guarantee of the retention of any, including the top performing, franchisees in the future, or that we will maintain the ability to

attract, retain, and motivate sufficient numbers of franchisees of the same caliber.

The quality of existing franchisee operations may

be diminished by factors beyond our control, including franchisees’ failure or inability to hire or retain qualified managers and

other personnel.

Training of managers and other personnel may be inadequate.

These and other such negative factors could reduce franchise stores’

revenues, impact payments to us from franchisees under the franchise agreements and could have a material adverse effect on our revenues,

which in turn may materially and adversely affect our business.

Our business is subject to various laws and

regulations and changes in such laws and regulations, or failure to comply with existing or future laws and regulations, could adversely

These and other such negative factors could reduce franchise

stores’ revenues, impact payments to us from franchisees under the franchise agreements and could have a material adverse effect

on our revenues, which in turn may materially and adversely affect our business.

Our business is subject to various laws

and regulations and changes in such laws and regulations, or failure to comply with existing or future laws and regulations, could adversely

affect our business.

We are subject to the FTC Franchise Rule, which is

a trade regulation imposed on franchising promulgated by the FTC that regulates the offer and sale of franchises in the United States

We are subject to the FTC Franchise Rule, which

is a trade regulation imposed on franchising promulgated by the FTC that regulates the offer and sale of franchises in the United States

and that requires us to provide to all prospective franchisees certain mandatory disclosure in a FDD.

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and results of operations.

We and our franchisees are also subject to the Fair

Labor Standards Act of 1938, as amended, and various other laws in the United States, Canada, Panama, Mexico and Australia governing such

matters as minimum-wage requirements, overtime and other working conditions.

Based upon our experience with hiring employees and operating

corporate-owned stores, we believe a significant number of our and our franchisees’ employees are paid at rates related to the U.S.

We and our franchisees are also subject to the

Fair Labor Standards Act of 1938, as amended, and various other laws in the United States, Canada, Panama, Mexico and Australia governing

such matters as minimum-wage requirements, overtime and other working conditions.

Based upon our experience with hiring employees and

operating corporate-owned stores, we believe a significant number of our and our franchisees’ employees are paid at rates related

federal or state minimum wage, and past increases in the U.S.

federal and/or state minimum wage have increased labor costs, as would future

federal and/or state minimum wage have increased labor costs,

as would future increases.

Any increases in labor costs might result in our and our franchisees inadequately staffing stores.

Such increases in labor

costs, and those that may arise due to other changes in labor laws or as a result of low unemployment rates, could affect store performance

and quality of service, decrease royalty revenues and adversely affect our brand.

Our and our franchisees’ operations and properties

are subject to extensive U.S., Canadian, Panamanian, Mexican and Australian, federal, international, state, provincial and local laws

and regulations, including those relating to environmental, building and zoning requirements.

Our and our franchisees’ development

of properties depends to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning, land use,

environmental, traffic and other regulations and requirements.

Failure to comply with these legal requirements could result in, among

other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability, which could

adversely affect our business.

We and our franchisees are responsible at stores we

each operate for compliance with state, provincial and local laws that regulate the relationship between stores and their clients.

Such increases

in labor costs, and those that may arise due to other changes in labor laws or as a result of low unemployment rates, could affect store

performance and quality of service, decrease royalty revenues and adversely affect our brand.

Our and our franchisees’ operations and

properties are subject to extensive U.S., Canadian, Panamanian, Mexican and Australian, federal, international, state, provincial and

local laws and regulations, including those relating to environmental, building and zoning requirements.

Our and our franchisees’

development of properties depends to a significant extent on the selection and acquisition of suitable sites, which are subject to zoning,

land use, environmental, traffic and other regulations and requirements.

Failure to comply with these legal requirements could result

in, among other things, revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability, which

could adversely affect our business.

We and our franchisees are responsible at stores

we each operate for compliance with state, provincial and local laws that regulate the relationship between stores and their clients.

states and provinces have consumer protection regulations that may limit the collection of clientship dues or fees prior to opening, require

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management, even if beneficial to our stockholders.

Our certificate of incorporation and bylaws and the Delaware General Corporation

Law (the “DGCL”) contain provisions that could make it more difficult for a third party to acquire us, even if doing so might

be beneficial to our stockholders.

Our certificate of incorporation and bylaws and

the Delaware General Corporation Law (the “DGCL”) contain provisions that could make it more difficult for a third party to

acquire us, even if doing so might be beneficial to our stockholders.

These provisions include:

the division of our board of directors into three classes and the election of each class for three

period terms;

the division of our board of directors into three classes and the election of each class for three period terms;

advance notice requirements for stockholder proposals and director nominations;

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the required approval of holders of at least 75% of the voting power of the outstanding shares of our capital stock to adopt, amend or repeal certain provisions of our certificate of incorporation and bylaws or remove directors for cause.

In addition, Section 203 of the DGCL may

affect the ability of an “interested stockholder” to engage in certain business combinations, for a period of three periods

following the time that the stockholder becomes an “interested stockholder.” While we have elected in our certificate of incorporation

In addition, Section 203 of the DGCL may affect

the ability of an “interested stockholder” to engage in certain business combinations, for a period of three periods following

the time that the stockholder becomes an “interested stockholder.” While we have elected in our certificate of incorporation

not to be subject to Section 203 of the DGCL, our certificate of incorporation contains provisions that have the same effect as Section 203

of the DGCL and accordingly will not be subject to such restrictions.

Because our board of directors is responsible for

appointing the clients of our management team, these provisions could in turn affect any attempt to replace current clients of our management

As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective

measures, and efforts by stockholders to change the direction or management of the Company may be unsuccessful.

Our stock price could be extremely volatile, and, as a result, stockholders

may not be able to resell shares at or above their purchase price.

Currently our common stock is listed on the Pink Sheets

or OTC Markets and it is thinly traded.

Because our board of directors is responsible

for appointing the clients of our management team, these provisions could in turn affect any attempt to replace current clients of our

management team.

As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to

these protective measures, and efforts by stockholders to change the direction or management of the Company may be unsuccessful.

Our stock price could be extremely volatile, and, as a result,

stockholders may not be able to resell shares at or above their purchase price.

Currently our common stock is listed on the Pink

Sheets or OTC Markets and it is thinly traded.

This situation means our stock price could fluctuate based on very low trading volume.

in recent periods the stock market in general has been highly volatile.

As a result, the market price and trading volume of our common stock

is likely to be similarly volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value

of their stock, including decreases unrelated to our results of operations or prospects, and could lose part or all of their investment.

The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere

in this report and others such as:

In addition, in recent periods the stock market in general has been highly volatile.

As a result, the market price and trading volume

of our common stock is likely to be similarly volatile, and investors in our common stock may experience a decrease, which could be substantial,

in the value of their stock, including decreases unrelated to our results of operations or prospects, and could lose part or all of their

The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described

elsewhere in this report and others such as:

variations in our operating performance and the performance of our competitors;

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changes in general market and economic conditions.

In the past, securities class action litigation has

often been initiated against companies following periods of volatility in their stock price.

This type of litigation could result in substantial

costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments

or to settle litigation.

Because we do not currently pay any cash dividends

on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which

you paid for it.

In the past, securities class action litigation

has often been initiated against companies following periods of volatility in their stock price.

This type of litigation could result

in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments

to satisfy judgments or to settle litigation.

Because we do not currently pay any cash

dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than

that which you paid for it.

We may retain future earnings, if any, for future

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors