WELCOME COLOR ME MINE STUDIO OWNERS ANNUAL MEETING

2013 ORLANDO, FL SEPT 8-12

TABLE OF CONTENTS

1.WELCOME 2.STUDIO DEVELOPMENT 3.STUDIO PERFORMANCE 4.WEBSITE STATISTICS 5.MARKETING MATERIAL FUND 6.SALES AWARDS 7.FRANCHISE SATISFACTION SURVEY

2012 Projected – 151

2012 Actual - 150

2014 Projected: 12 INTL: Costa Rica, Canada #10-#12, Sub-Saharan Africa, Mexico, Dubai US: Huntsville, Al, Brentwood, Ca, Shaumburg, Il, South Hills, PA

STUDIO OPEN OR UNDER DEVELOPMENT

GROWTH STRATEGY DURING RECESSION

1. BANKS NOT LENDING FOR NEW FRANCHISEES

2. RENTS ARE STILL AT HISTORICAL LOW LEVELS

3. INCREASED DEBT TO BUILD COMPANY STUDIOS

4. RESELL STUDIOS UPON PROFITABILITY

5. OXNARD, LAKEWOOD, RIVERSIDE, CAMP HILL, HILLSBORO, RIDGEWOOD ARE ALL EXAMPLES 6. CMM ACQUIRED 23 STUDIOS AND HAS RESOLD 14 OF THEM

GROWTH STRATEGY DURING RECESSION

7. ALSO REQACUIRING EXISTING STUDIOS BASED ON EARNINGS ON A NOTE WITH MONTHLY PAYMENTS AND WITH FULL PAY OFF UPON RESELL

8. EXAMPLES INCLUDE Pittsford, Webster, Oxford Valley, Montgomeryville, Peoria, Redlands, Saucon Valley, Las Vegas, Ridgewood, Lafayette

9. THIS ALLOWS COMPANY TO CONTINUE TO GROW AND

MAINTAIN BRAND PRESENCE

10. ALL OF THE STUDIOS WE HAVE RE-ACQUIRED OR BUILT NEW ARE HAVE INCREASED IN SALES AND ARE PROFITABLE

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$0.4 $1.1

$2.0

$4.2

$6.4

$9.8 $11.0

$12.2 $13.2

$14.0

$15.4

$17.3 $18.8

$19.6 $20.2 $20.9

$23.2

$25.6

$27.2

$30.9 20 YEAR SYSTEMWIDE SALES TREND (IN MILLIONS)

TUSTIN (8)

TUCSON (10)

PROVO (7)

SANTA MONICA

CRESTVIEW HILLS (6)

FRESNO (4)

BREA (5)

AVENTURA (2)

BEVERLY HILLS (1)

SUMMIT (3)

$365,348

$368,834

$369,228

$370,304

$395,851

$431,011

$437,318

$489,185

$496,156

$497,768

TOP TEN Total Sales 7/12-6/13

AVERAGE $422,100

FRISCO

TUSTIN

FAIRFAX

PROVO

CRESTVIEW HILLS

BREA

FRESNO

BEVERLY HILLS

AVENTURA

SUMMIT

$180,921

$183,007

$186,298

$189,679

$190,862

$227,240

$232,128

$233,325

$241,254

$257,861

TOP TEN Total Sales FOR 1ST 6

MONTHS 1/12-6/12

HAMILTON

WICHITA

SOUTH MIAMI

KUWAIT

ENCINO

WESTMINSTER

LAS VEGAS

VOORHEES

ROCKVILLE

SANTA MONICA

20.32%

22.63%

24.95%

27.31%

27.57%

28.53%

30.44%

31.47%

33.23%

39.37%

% INCREASE OVER LAST YEAR

2013 2012 2011 2010

$242,916

$233,532

$224,532

$215,748

Ave Sales All Studios

2013 2012 2011 2010

$280,570

$270,108

$263,796

$259,728

Ave Sales for Studios Open 1 yr +

2013 2012 2011 2010

$360,204

$367,164

$358,452

$342,876

Average Sales for Top 25

16.18%

16.63%

16.15%

17.97%

2013 2012 2011 2010

COST OF SALES ALL STUDIOS

15.77% 15.75%

16.06%

17.88%

COST OF SALES

TOP 25

2013 2012 2011 2010

2013 2012 2011 2010

19.48% 19.26%

21.06%

22.44%

Labor All Studios

2013 2012 2011 2010

18.71%

17.76% 17.84%

19.11%

Labor Top 25

(NOTE: W/O DEBT SERVICE OR OWNER’S DRAW)

$64,600

$62,100

$61,440

$60,276

Estimated Ave Profit

for All Studios

2013 2012 2011 2010 2013 2012 2011 2010

$116,412

$118,764

$112,248

$89,112

Estimated Ave Profit

for Top 25

2013 2012 2011 2010

1.95%

1.49%

1.76% 1.77%

Gift Card 1.95%

$26.00

$28.00

$30.00

$32.00

2012 2011 2010

$31.11

$30.55

$28.13

Ave Spend All Studios

$30.00

$30.10

$30.20

$30.30

2012 2011 2010

$30.15 $30.16

$30.29

Ave Spend Top 25

18.00%

20.00%

22.00%

24.00%

2012 2011 2010

19.89% 21.35%

23.35%

% Small Pieces Sold

All Studios

0.00%

10.00%

20.00%

30.00%

2012 2011 2010

16.93% 20.00% 22.45%

% Small Pieces Sold

Top 25

2013 2012 2011 2010

5.47 5.42

5.36

4.92

Mark Up All Studios

2013 2012 2011 2010

5.53

5.40 5.35

4.95

Mark Up Top 25

2013 2012 2011 2010

$6.92

$6.54 $6.59

$7.03

Paint Charge All Studios

2013 2012 2011 2010

$6.96 $6.93

$6.79

$7.56

Paint Charge Top 25

2013 2012 2011 2010

10.51% 10.78%

9.57% 9.46%

Party % - ALL

2013 2012 2011 2010

10.69%

12.00%

10.81%

11.51%

Party % TOP 25

2013 2012 2011 2010

$5,897.00

$5,691 $5,641

$5,293

Sales from 175 cust/wk

ALL STUDIOS

2013 2012 2011 2010

$6,052

$5,789 $5,727

$5,415

Sales from 175 cust/wk

TOP 25

2012 82,485,708 8,923,316 126,871,326 4,829,793

OVER 4.3 MILLION HITS/WEEK OVER 1.1 MILLION VISITORS PER MONTH

OVER 224 MILLION OVERALL HITS PER YEAR

HOME OFFICE Hits: Visits: STUDIOS Hits: Visits:

WEBSITE ACTIVITY

2013(est.) 91,451,201 8,527,438 133,183,277 5,484,361

CREATIVE/SALARIES $130,682 FEEDBACK COUPONS $ 3,145 PUBLIC RELATIONS $ 20,242 WEBSITE $ 33,909 PRESS RELEASE PROG $ 4,800 COOP AD/ROY RELIEF $ 11,614 20% OVERHEAD $ 39,918 TOTAL $244,310 VS. COLLECTED $230,368 EXCESS SPENT 13,942

MARKETING MATERIALS DEV. FUND

MARKETING MATERIALS DEVELOPMENT FUND

SALARIES,

$130,682 , 54%

FEEDBACK,

$3,145 , 1%

PUBLIC

RELATIONS,

$20,242 , 8%

WEBSITE,

$33,909 , 14%

PRESS REL,

$4,800 , 2%

COOP/RELIEF,

$11,614 , 5%

OVERHEAD,

$39,918 , 16%

AWARDS

TARA AND RAVI NAGABHYRU

SUMMIT, NJ $497,768

TOP SALES AWARD

RUNNER UP TOP SALES INCREASE

WEST ROSE MOORE

SANTA MONICA, CA 39.37% INCREASE

AWARDS

TOP SALES INCREASE WEST

EMILY OLIVERA

HANFORD, CA 48.31% INCREASE

RUNNER UP TOP SALES INCREASE

EAST ANDREA LEIGHTON

VORHEES, NJ 31.47% INCREASE

AWARDS

TOP SALES INCREASE EAST

SHAWN ZIGLARI

ROCKVILLE, MD 33.23% INCREASE

RECOGNITION

OF 10 YEAR STUDIO OWNERS FAY NAVID (TUSTIN, BREA) LINDA GIBB (SALT LAKE CITY, DRAPER) FRED ANDERSON & BOBBY ZOLEIKHAEIAN (BEVERLY HILLS) JAMI PERRY (CAPE COD) TERRI BLATT (FLOWER MOUND) BRUCE & JANIE WESTENFELDER (GLENVIEW, NAPERVILLE, BURR RIDGE) LISA HIGGINS (TUCSON) DRU ATKINS (STUDIO CITY) RONDA BAUCOM (NORFOLK, VIRGINIA BEACH) ALISA ROMANO & SHERRY STURNER (AVENTURA) MARIEVA MARTINEZ (DAVIE) ERIC CHAN (AUSTRALIA) RASHA BISHARA (KUWAIT) SANDRA DERKSON (FRESNO) PAULINE LIU (DENVILLE)

RECOGNITION 15 YEAR STUDIO OWNERSOWNERS

IRENE ROSE (TOMS RIVER) SUZANNE LITTLE (MENLO PARK) ANDREA LEIGHTON (VOORHEES) SARAH KIM, (LONG BEACH)

RECOGNITION

OF 10 & 15 YEAR TEAM MEMBERS 10 YEAR: ZHANNA OSMINA LINDSAY CRAINE SEAN GOODWIN SHANNON ADLER ALEX PINEDA TARA THOMMIN MARK HEGSTROM

15 YEAR: DRUZELLE ATKINS NED MOOSLIN FERWIN ROMERO TENNIS DEJONG

Surveys/Sectors Participants

May 2013: 62 CMM’s Responded

2013 FBR Benchmark: 26,217

GO TO SUPPORT CENTER (Reports & Analysis, Franchise Review)

HOME OFFICE BOOKKEEPING SERVICES

1.Monthly P&L 2.Side by side spreadsheet 3.Analysis of Actual to

Budget to Stat sheet 4.Balance Sheet 5.$125 per month

HAND OUT AT BOOTH

2013 WISH LIST BY DEPARTMENT