TRUEPRESENCE COSMETICS - FDD UFOC ITEM 7 Detail

ITEM 7

ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT

Explanatory Notes

Note 1: Initial Franchise Fee. The initial franchise fee includes the designation of your Primary Marketing Area and ongoing support. The minimum initial franchise fee is $45,000 for a Primary Marketing Area with 10,000 prospective Clients, but certain discounts may apply as described in Item 5. The initial franchise fee increases by $4,500 for every additional 1000 prospective Clients. The initial franchise fee for a second and subsequent Business is less than the then current minimum initial franchise fee for the same size Primary Marketing Area under our then current formula for the initial fee. See Item 5.

Note 2: Office Lease Costs. You may maintain an office in your home, but if you elect to lease office space from which to conduct your Business, we require only a 100 square foot office in an executive suite with a shared receptionist and the office need not be located in a central business district. Your office should be located in your Primary Marketing Area. The estimate set forth in the table includes three months of lease payments and a one-month security deposit. However, the lease rate and required deposit for leased office space will vary considerably throughout the United States.

Note 3: Office Equipment and Furnishings. Your office must be equipped with one dedicated telephone line. This item estimates the cost of a facsimile machine and a printer with minimum requirements that we specify.

Note 4: Computer Equipment and Licenses. To operate your Business, we require that you have a portable computer that is loaded with both commercially available software for you to market the Internet marketing services to prospective Clients as well as to operate your Business by having access via the Internet to our TruePresence Services Our current hardware and operating system specifications for the computer you will use are described in Item 11. You will access our TruePresence Services software over the Internet. In addition, even if you already own all required hardware, peripherals and generic business software (Microsoft Windows XP, Office and Adobe Reader or Acrobat), we require you to use an approved customer relationship management (CRM) program and thus the minimum cost listed above for the first year''s subscription for that application.

Note 5: Insurance. As a franchisee, you will be required to obtain, maintain and provide evidence of liability and other insurance policies described in the Franchise Agreement. See Item 8. Insurance payments estimated above represent the first three months'' insurance payments.

Note 6: Marketing. This estimates costs you may incur for marketing programs such as telemarketing campaigns, participation in trade shows and seminars, online advertising, membership dues in chambers of commerce and networking groups, print advertisements or other marketing services as you start your business. This estimate does not include the initial supply of marketing materials which are included as part of the initial franchise fee as detailed in Exhibit IV to the Franchise Agreement.

Note 7: Additional Funds. This estimates additional funds necessary for the first three months of your Business operations. These figures are estimates and we cannot guarantee that you will not have additional expenses starting the Business. Your costs depend on factors such as: how much you follow our methods and procedures; your sales skill, experience and business acumen; local economic conditions; the local market for our products and services; competition; and the sales level reached during this initial period. This item includes a variety of expenses and working capital items during your start-up phase such as legal and accounting fees, office supplies and other miscellaneous costs. This item excludes your salary.

Note 8: Basis for Estimates, Financing. We relied on our management team''s eleven years of experience providing Internet marketing services to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment. See Item 10.