Detailed Information on The Little Gym’s Initial Franchise Fee, Royalty Fee + 19 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $29,750 to $59,500

2.  Start-Up Equipment and Inventory Package:  $53,000 to $65,000

• Except as described below, you pay the following initial franchise fee for each franchise in full in a lump sum payment when you sign the Franchise Agreement. The total payment to The Little Gym or its affiliates is $139,500 to $175,500.

• Territories typically contain a population of at least 10,000 children under the age of 8.

• This includes the following amounts paid to The Little Gym: an initial franchise fee of $59,500 for each Territory (unless discounted 50% to $29,750 as described below) and a Start-Up Equipment and Inventory Package costing approximately $53,000 to $65,000.

• The fees for the second and subsequent units are 50% of the then-current initial fee. This incentive cannot be combined with any other incentive or promotion discount.

• The initial franchise fees The Little Gym charges are uniform. With The Little Gym’s written consent, your territory may be subdivided. For each newly-created territory, you will pay The Little Gym $20,000 and execute its then-current form of Franchise Agreement.

• The Little Gym may periodically offer promotions on the initial franchise fee. As of the date the current Disclosure Document was issued, The Little Gym offers the following discounts on the initial franchise fee:

• Qualified long-term The Little Gym International, Inc., corporate employees: 50% discount (i.e. $29,750 for a Territory). This promotion cannot be combined with any other promotion or incentive discount.

• Qualified veterans, active-duty military, and active Reserves, National Guard, and Coast Guard members: the initial Franchise Fee will be discounted to $29,750. This promotion cannot be combined with any other promotion or incentive discount.

• The Little Gym may change or discontinue these and any other promotions and discounts at any time.

3.  Signs, Initial Sales Promotion, and Other Miscellaneous Items:  $27,000 to $51,000

• You may also pay The Little Gym, its affiliates, or third parties for signs, initial sales promotion, and other miscellaneous items described in Item 7, in the aggregate amount of up to $27,000 to $51,000.

4.  Royalty:  8% of Gross Monthly Revenue, subject to the Annual Minimum Royalty Requirement or Unopened Center Fee; the Annual Minimum Royalty Requirement is $24,000 for a Territory

• Due Date:  By the 15th day of each month.

5.  Advertising Fund:  1% of Gross Monthly Revenue

• Due Date:  By the 15th day of each month.

• The Little Gym has established a system advertising fund to which you must contribute a percentage of your gross revenues.

6.  Proprietary Software Monthly Maintenance Fee:  currently, $80 per month

• Due Date:  By the 1st day of each month, beginning 90 days after download.

• This fee is for maintenance for ongoing use of The Little Gym’s proprietary software (other than its automated e-mail marketing tool called TLG ACT System), your website, and Extranet.

• This fee may change in the future upon 90 days’ notice to you, up to $15 increase per month.

7.  TLG ACT System Fee:  currently, $39 per month

• Due Date:  By the 1st day of each month.

• This fee is for ongoing use of The Little Gym’s TLG ACT System. This fee may change in the future upon 90 days’ notice to you.

8.  Additional Training:  $350 per person per day, plus your travel, lodging, and meals

• Due Date:  Before training.

• This charge is for training that is part of the group training curriculum.

• The Little Gym may require you to attend an individual training program, or a course or conference with other franchisees. For individual training, you must pay a fee of up to $350 per person per day subject to a cost-of-living adjustment.

• The Little Gym may also require you to attend up to 15 days per year of group training courses of its choosing after the initial training and may charge up to $350 per person per day.

• You must pay your transportation, lodging, meal, and other expenses incurred during all training.

9.  Training Cancellation Fee:  $500 per person

• Due Date:  Upon billing.

• Payable if you cancel or reschedule a training course less than two weeks prior to the date of training.

10.  Conference Fee:  pro rata fee for all franchisees, not to exceed $500 per person

• Due Date:  Upon billing.

• May be required to help defray The Little Gym’s cost of sponsoring regional and national conferences.

11.  Holdover Fee:  currently, $100 per day

• Due Date:  Upon billing.

• Payable if you continue to operate after the term of the Franchise Agreement until the Franchise Agreement is renewed, extended, or terminated.

12.  Uncured Customer Review Fee:  currently, $100 per day per violation

• Due Date:  Upon billing.

• Payable if you have more than three open customer complaints or multiple negative uncured online reviews that have not been resolved to The Little Gym’s satisfaction within 10 days’ notice.

13.  Interest and Late Charges:  $250 late fee per month, plus interest of 1% for each month overdue (or maximum allowable by law)

• Due Date:  Upon due date of fees.

• The Little Gym charges 1% for each 30-day period until overdue amounts are paid. These late payment charges will not exceed the maximum amount allowed under applicable law.

14.  Audit Fees:  cost of audit

• Due Date:  Upon billing after audit.

• Payable only if audit shows an understatement of at least 5%.

• You must send some of the required financial information to The Little Gym electronically (for example, via your computer systems).

15.  Additional Assistance:  $500 to $2,500 per day; plus The Little Gym’s expenses for travel and accommodations

• Due Date:  Upon billing.

• Payable if you request for The Little Gym to send a specific representative to your site for training or other assistance.

16.  Transfer and Retraining Fees:  you must pay a transfer fee of 50% of the then-current Initial Franchise Fee to The Little Gym prior to the transfer

• Due Date:  On or before transfer.

• Payable if you sell your franchise assets and The Little Gym consents to transfer the franchise license.

17.  Fee to Divide Territory:  $20,000

• Due Date:  Upon division of territory.

• You may request that The Little Gym divide your territory. The Little Gym may give or withhold its  consent. The Little Gym may condition its approval.

18.  Fees on Default and Indemnity:  payment of The Little Gym’s losses and costs

• Due Date:  Upon demand.

• You must pay liquidated damages of $1,000 per day for misuse of The Little Gym’s marks or operations manual.

• You must hold harmless, indemnify, and defend The Little Gym and its officers, directors, shareholders, and employees and pay for any claims and losses to it resulting from your activities.

19.  Insurance Reimbursement:  The Little Gym’s cost, plus 20%

• Due Date:  Upon demand.

• If you fail to obtain insurance as required by the Franchise Agreement, The Little Gym may obtain insurance on your behalf and you must reimburse The Little Gym for the cost of obtaining such insurance, plus 20% of the cost as a service fee.

20.  Late Charge for Proprietary Software and TLG ACT System Fees:  lesser of 50% of amount due and highest amount allowed by law

• Due Date:  Upon demand.

21.  Payments for Goods or Services, Including Computer Systems Upgrades:  varies

• Due Date:  Periodic upon billing.