VAULT — INTERNATIONAL MASTER FRANCHISE STRATEGY

Version: 1.0 Date: 2026-07-28 Owner: Tajanay Hines, CEO / Emmett Walker, CSO Target First International Launch: Y5 (2030-2031)

OVERVIEW

The international master franchise model is the vehicle for VAULT’s global expansion. Rather than operating international locations directly (which requires local legal entities, local management, local real estate relationships, and local regulatory navigation in every country), VAULT licenses the right to develop, sub-franchise, and operate the VAULT system within a defined country or region to a single qualified partner: the master franchisee.

The master franchisee pays a substantial upfront fee for the exclusive rights to their territory, signs a development schedule committing to open a minimum number of units over a defined period, and in return receives a percentage of the royalties collected from any sub-franchisees they develop within their market.

VAULT retains the master brand, the IP, the standards, and the ongoing royalty stream. The master franchisee owns the country.

THE MASTER FRANCHISE STRUCTURE

What VAULT Sells to the Master Franchisee

• Exclusive rights to operate and sub-franchise the VAULT concept in a defined country or region
• The VAULT brand license, trademark rights (for that territory), and systems access
• Initial training at VAULT Charlotte for the master franchisee and their key leadership team
• Ongoing brand standards, training materials, and system updates
• Annual international franchise summit access
• Priority consideration for new program development and innovation sharing

What the Master Franchisee Pays VAULT

• Upfront master franchise fee: $1,000,000 to $3,000,000 depending on market GDP, population, luxury market depth, and exclusivity scope (country vs. region)
• Ongoing royalty share: 3% to 4% of gross revenues collected from all locations in the territory (whether company-owned by the master or sub-franchised). This is separate from and in addition to whatever royalty rate the master charges their sub-franchisees.
• Development schedule: Minimum unit commitments (typically 5 to 10 units over 5 to 7 years). Failure to meet milestones gives VAULT rights to reduce exclusivity or reclaim the territory.

What the Master Franchisee Keeps

• The right to charge their own franchise fees and royalties to sub-franchisees in their market, above the pass-through to VAULT
• Local brand marketing authority (within VAULT brand standards)
• Local real estate development and site selection authority
• Local hiring and staffing authority
• The equity value of the sub-franchise agreements they sign in their territory

VAULT’s Role in International

• Set and enforce brand standards globally
• Provide the system, training, and technology platform
• Receive and audit royalty payments
• Approve new locations (Taj reviews and approves each site)
• Conduct annual brand audits (in-person or virtual)
• Control the global trademark

PRIORITY INTERNATIONAL MARKETS

Market 1: London (Mayfair, Chelsea, Knightsbridge)

Why first: English-speaking market. Largest luxury wellness spend per capita in Europe. Mayfair and Chelsea neighborhoods have the spending profile that mirrors VAULT’s target member: high-net-worth individual, global traveler, status-conscious wellness consumer. London has a deep market for premium fitness and wellness (Third Space, Equinox, KX, Bamford). VAULT enters as a distinctly American luxury vertical concept that those brands have not owned.

Regulatory framework: - The United Kingdom does not have a federal franchise disclosure law equivalent to the FTC Rule. There is no mandatory FDD filing. Franchise relationships are governed by general contract law. - The British Franchise Association (BFA) publishes voluntary ethical codes but does not regulate franchisors. - The master franchisee will need to negotiate their own agreements with sub-franchisees under UK contract law. - VAULT must register the VAULT trademark with the UK Intellectual Property Office (UKIPO). Post-Brexit, EU trademark registration (EUTM) no longer covers the UK. Register separately with UKIPO and EUIPO. - VAT implications: the master franchise fee and royalties paid by a UK master franchisee to a US entity may be subject to UK withholding tax under the US-UK tax treaty. Engage international tax counsel before finalizing the agreement. - Currency: GBP. Structure royalty payments in USD or include a currency hedging clause. GBP/USD volatility is manageable but must be addressed in the agreement.

Master franchise fee target: $2,000,000 to $3,000,000 (London is the highest-value single market outside of the US)

Royalty share to VAULT: 3.5% of gross revenues from all UK locations

Minimum development commitment: 4 units in Greater London in 5 years. Optional expansion to Manchester, Edinburgh in Year 6+.

Ideal master franchisee profile: An established luxury hospitality or wellness operator in the UK. Could be an individual with deep Mayfair market knowledge, a luxury hotel group with interest in standalone wellness, or a private equity-backed hospitality platform. Not a startup. Not a first-time operator.

Market 2: Dubai (DIFC, Downtown Dubai, Dubai Marina)

Why second: Dubai is the gateway city for the entire MENA (Middle East and North Africa) region. High-net-worth population with strong appetite for luxury American brands. The Dubai International Financial Centre (DIFC) and Downtown Dubai/Burj Khalifa area have the density and spending power. Tourism volume (40M+ annual visitors) creates both member base and brand visibility beyond the resident population.

Regulatory framework: - The UAE does not have a federal franchise law. Franchise relationships are governed by general commercial law under the Commercial Transactions Law (Federal Law No. 18 of 1993) and the Civil Transactions Law. - Dubai has a specific commercial register requirement: the master franchisee must register the franchise relationship with the Dubai Department of Economic Development (DED) or the relevant free zone authority (DIFC has its own legal framework and courts under English common law). - Trademark registration: the UAE Intellectual Property Department (part of the Ministry of Economy) governs trademark registration. VAULT must file separately in the UAE. This is a GCC (Gulf Cooperation Council) member state, but there is no unified GCC trademark; registration must be done country by country or via the Gulf Cooperation Council Trademark Office for regional coverage. - Business ownership: historically, UAE law required a local Emirati partner holding 51% of any non-free-zone business. This has been substantially liberalized since 2021 for most business activities. However, the structure of the master franchisee entity (mainland vs. free zone) will affect ownership and operating rights. DIFC-based entities operate under English common law and have their own courts. Strongly recommended for financial services and premium commercial operations. - Currency: AED (UAE Dirham) is pegged to USD at 3.6725. Currency risk is minimal for royalty repatriation. - Withholding tax: UAE has no personal income tax and, as of 2023, a 9% corporate tax applies to profits above AED 375,000. Consult international tax counsel on treaty implications.

Master franchise fee target: $1,500,000 to $2,500,000 (UAE country rights, with option for broader GCC expansion in Y6+)

Royalty share to VAULT: 3% to 4% of gross revenues from all UAE locations

Minimum development commitment: 2 units in Dubai in 4 years. Optional expansion to Abu Dhabi in Year 5, GCC (Saudi Arabia, Qatar) in Year 6+.

Ideal master franchisee profile: A UAE-based luxury hospitality or wellness group with existing real estate relationships in DIFC and Downtown Dubai. A sovereign wealth-backed investment vehicle with leisure/lifestyle exposure (Meraas, ICD, or family-office groups active in wellness). Not a solo entrepreneur. The UAE master franchise requires operating infrastructure that is already in place.

Market 3: Toronto (Yorkville, Forest Hill, Rosedale)

Why third: Canada is the natural geographic and cultural adjacency to the US. Toronto is Canada’s financial capital and has a concentrated luxury consumer base in Yorkville, Forest Hill, and Rosedale. Canadian regulatory framework is manageable. The VAULT concept translates directly with minimal cultural adaptation. This market functions as a low-risk proof-of-concept for North American cross-border expansion.

Regulatory framework: - Canada does not have federal franchise legislation. Six provinces have franchise-specific disclosure laws: Alberta, British Columbia, Manitoba, New Brunswick, Ontario, and Prince Edward Island. - Ontario (Toronto) is governed by the Arthur Wishart Act (Franchise Disclosure), 2000. It requires disclosure at least 14 days before signing any franchise agreement or accepting any funds. The disclosure requirements are similar in philosophy to the FTC Rule but the specific format differs. VAULT will need a Canada-specific FDD or a disclosed amendment to the US FDD for Ontario compliance. - Trademark registration: the Canadian Intellectual Property Office (CIPO) governs trademark registration. A US registered trademark does not automatically protect the mark in Canada. File separately with CIPO. - Currency: CAD. Exchange rate risk applies. Structure agreements to specify whether royalties are calculated and paid in USD or CAD. - Withholding tax: the US-Canada tax treaty generally provides a reduced withholding rate (typically 5% to 15% depending on the type of payment) on royalties paid by a Canadian entity to a US entity. Confirm with international tax counsel. - No foreign ownership restrictions on franchise operations. A US-based franchisor can operate in Canada without a Canadian partner requirement.

Master franchise fee target: $1,000,000 to $1,500,000 (Ontario/Toronto rights; separate pricing if pan-Canada rights are sought)

Royalty share to VAULT: 3% to 3.5% of gross revenues

Minimum development commitment: 2 to 3 units in Toronto metro in 4 years.

Ideal master franchisee profile: A Toronto-based luxury fitness or wellness operator, a real estate developer with premium retail/commercial holdings in Yorkville or Rosedale, or a Canadian hospitality group with existing operational infrastructure. Must have existing connections to the Yorkville luxury consumer market.

Market 4: Mexico City (Polanco, Lomas de Chapultepec, Santa Fe)

Why fourth: Mexico City’s Polanco neighborhood is Latin America’s most concentrated luxury consumer district: international brands, high-net-worth residents, and a growing wellness culture that is moving upmarket rapidly. Mexico is geographically close, VAULT can provide on-ground support efficiently, and the Mexican luxury market is underserved by premium US wellness brands.

Regulatory framework: - Mexico has no federal franchise disclosure law equivalent to the FTC Rule. Franchise relationships are governed by the Ley de la Propiedad Industrial (Industrial Property Law) and the Código de Comercio (Commercial Code). Article 142 Bis of the Ley de la Propiedad Industrial requires the franchisor to provide the franchisee with sufficient technical and commercial information (in effect, a disclosure document) at least 30 days before signing. - Trademark registration: the Instituto Mexicano de la Propiedad Industrial (IMPI) governs trademark registration in Mexico. Registration is required separately from the US. Mexico is a member of the Madrid System, so an international trademark application through WIPO with Mexico designated is an option. - Royalty payments: classified as “royalties” under Mexican law and subject to Mexican income tax withholding at the source (currently 25%, reduced to 10% for royalties for the use of patents and technology under the US-Mexico tax treaty as defined by Article 12 of the treaty). Confirm the applicable rate with international tax counsel, as the characterization of master franchise fees and royalties can vary. - Currency: Mexican Peso (MXN). Significant exchange rate volatility. Structure agreements with a USD calculation base for royalties, with MXN payment converted at the date of each payment. - Foreign ownership: Mexico permits 100% foreign ownership in most commercial sectors as of the 1993 liberalization under NAFTA (now USMCA). However, real estate ownership in restricted zones (within 100km of borders and 50km of coastlines) is restricted. Polanco and Santa Fe do not fall in restricted zones.

Master franchise fee target: $1,000,000 to $1,500,000 (Mexico City metro rights, with option for national expansion)

Royalty share to VAULT: 3% of gross revenues (adjusted for MXN tax implications)

Minimum development commitment: 2 units in Polanco or Lomas area in 5 years.

Ideal master franchisee profile: A Mexican entrepreneur or investment group with existing luxury hospitality or retail real estate in Polanco. Ideally someone with existing relationships with the target consumer demographic. An established Mexican lifestyle brand operator (gym, spa, hotel) looking to expand into the premium wellness category.

Market 5: Sao Paulo (Jardins, Itaim Bibi, Vila Nova Conceicao)

Why fifth: Brazil has Latin America’s largest luxury consumer market by total spend, and Sao Paulo is its center of gravity. The Jardins neighborhood (particularly Rua Oscar Freire and adjacent streets) is Latin America’s most prestigious retail address. The Brazilian wellness market is enormous and moving aggressively upmarket post-pandemic. VAULT’s vertical integration model differentiates from existing Brazilian wellness brands.

Regulatory framework: - Brazil has federal franchise legislation: Lei n. 13.966/2019 (the Franchise Law), which requires a Circular de Oferta de Franquia (COF) equivalent to a disclosure document. The COF must be delivered at least 10 days before signing any agreement or accepting any payment. The COF requirements differ from the FTC Rule in format; a Brazil-specific disclosure document is required. - Trademark registration: the Instituto Nacional da Propriedade Industrial (INPI) governs trademark registration. Registration is required separately. Brazil is NOT a member of the Madrid System as a receiving office (as of 2024; confirm current status), which means direct national filing is required. The INPI review process is notoriously slow (2 to 5 years for registration). File early. - Currency: Brazilian Real (BRL). Historically volatile against USD. Include a USD calculation base and specific currency conversion language in the master franchise agreement. - Withholding tax: royalty remittances from Brazil to the US are subject to CIDE (Contribution on Economic Intervention) and Brazilian income tax withholding. Rates on royalties and technical service fees can reach 15% to 25% before treaty relief. The US-Brazil tax treaty is NOT in force (the US and Brazil do not have a bilateral income tax treaty as of 2026). This means no treaty-reduced rate applies. Structure the commercial arrangement carefully to minimize withholding burden. Consult international tax counsel before executing any Brazil master franchise agreement. - Foreign investment: Brazil generally permits 100% foreign ownership in service businesses. The Receita Federal (Brazil’s IRS equivalent) has strict transfer pricing and thin-capitalization rules that apply to related-party transactions. - Operational complexity: Brazil’s tax system (Simples Nacional, Lucro Presumido, Lucro Real) is among the most complex in the world. The master franchisee must have sophisticated local finance and legal teams. VAULT should not attempt to operate here directly.

Master franchise fee target: $1,000,000 to $2,000,000 (Sao Paulo metro rights, with option for Rio de Janeiro and national expansion)

Royalty share to VAULT: 3% of gross revenues (structured to minimize Brazilian withholding burden per counsel’s advice)

Minimum development commitment: 2 units in Sao Paulo metro in 5 years.

Ideal master franchisee profile: A major Brazilian lifestyle or hospitality group with existing operations in Jardins. Must have a sophisticated Brazilian legal and tax team. A private equity-backed operator or a family office with luxury retail or wellness holdings in Sao Paulo. This is the highest-complexity market on the list. Do not rush it.

MASTER FRANCHISE FEE SUMMARY

EXPANSION TIMELINE

Y5 (2030-2031): First International Master Franchise Signed and Opened

Target market: London. Rationale: English-speaking, strongest legal and commercial infrastructure, highest per-unit revenue potential, and the VAULT brand story travels best in a market where the luxury wellness category is already educated.

Activities: - Identify and qualify 3 to 5 candidate master franchisees in London starting Y4. - Engage UK franchise counsel (recommend Bristows LLP or Bird and Bird LLP for UK franchise matters) to prepare UK-compliant franchise documentation. - File VAULT trademark with UKIPO no later than Y3 (this takes 4+ months for examination and 3 months opposition period minimum). - Execute master franchise agreement. First London unit opens in Y5 or early Y6.

Y6 (2031-2032): Second International Master Franchise Signed

Target market: Dubai or Toronto depending on pipeline maturity. - Dubai first if a qualified UAE hospitality operator has been in conversation since Y4. - Toronto first if a Canadian operator commits before Dubai pipeline closes. - These two markets can be pursued simultaneously. They do not conflict.

Y7 (2032-2033): Third International Master Franchise Signed

Target market: Mexico City or Sao Paulo (whichever not already in contract). - Mexico City is the lower-complexity entry point of the two. - Sao Paulo requires more preparation time and should be last on the list unless a qualified group approaches VAULT proactively.

MASTER FRANCHISEE QUALIFICATION CRITERIA

Every international master franchisee candidate must meet all of the following criteria before VAULT engages in substantive negotiation:

1. Minimum net worth of $10,000,000 (USD equivalent). They must be able to fund both the upfront fee and the first unit development cost without strain.

2. Existing operational infrastructure in luxury hospitality, fitness, wellness, or premium retail in the target market.

3. A management team capable of running franchise operations without relying on VAULT for day-to-day support.

4. No prior franchise violations, regulatory sanctions, or material litigation in the hospitality or franchise space.

5. Demonstrated knowledge of the luxury consumer in their market.

6. Willingness to develop a minimum of 2 units per the development schedule, with financial capacity to do so.

7. Alignment with VAULT’s aesthetic and brand standards. Taj personally reviews and approves every master franchisee candidate. This is not a delegatable decision.

CROSS-CUTTING LEGAL AND OPERATIONAL REQUIREMENTS

Trademark: File in each target country before signing the master franchise agreement for that market. Do not execute an international master franchise without registered (or at minimum applied-for) trademark protection in that jurisdiction. A master franchisee cannot defend your brand if you have not filed it.

International Counsel: Engage a US law firm with an active international franchise practice for the master agreement (Cheng Cohen, Faegre Drinker, or Pillsbury all have international capacity) PLUS local counsel in each market for local law compliance.

Currency and Repatriation: Structure all master franchise agreements to require royalty payments in USD (or converted at the payment date rate) and remitted to a VAULT US bank account. Do not accept royalties in local currency unless absolutely required by local law (Brazil may have restrictions on USD-denominated domestic contracts). Work with international banking counsel to set up compliant repatriation structures.

Data and Technology: VAULT’s technology platform must be GDPR-compliant for EU markets (London post-Brexit has UK GDPR under the UK Data Protection Act 2018, which mirrors EU GDPR). Dubai DIFC has its own data protection law (DIFC Law No. 5 of 2020). Build compliance into the technology stack before the first international unit opens, not after.

Training Program Delivery: International master franchisees and their key team members train at VAULT Charlotte. This is non-negotiable. Remote-only training does not produce brand consistency. Budget for travel and hosting costs in the international launch plan.

WHAT TAJ WATCHES ON INTERNATIONAL

• Master franchise agreement milestones vs. timeline (signed, first unit open, development schedule compliance)
• Royalty payment timeliness (30 days late from an international master is an early warning sign)
• Brand audit results from each international market (annual minimum)
• Sub-franchisee performance in each master’s territory (VAULT has the right to audit)
• Trademark registration status in each market
• Pipeline for subsequent international markets

Last updated: 2026-07-28 Owner: Tajanay Hines / Emmett Walker (CSO) This document is internal planning only. International franchise offerings require country-specific legal and regulatory review before any offer or sale is made.