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If you are applying for your first Kumon Center franchise, the Deposit Fee is $500 for an Instructor Development Program Kit. We will apply the Deposit Fee towards your Initial Franchise Fee if you successfully complete the Instructor Development Program and sign a Franchise Agreement.

Our Instructor Development Program consists of preliminary homework assignments, training in a Kumon Center that we have designated, training in a Kumon Regional Office, on-line training, study of our Worksheets and curriculum and two semesters of classroom training at Kumon University in Teaneck, New Jersey.

If you successfully complete the Instructor Development Program and are awarded a franchise, you will be required to attend two additional classroom training courses at Kumon University, Teaneck, New Jersey. For the Instructor Development Training, you will be required to travel to Kumon University and to a Kumon Center that we have designated at your own expense.

Expenses you will be required to pay may include transportation, lodging, meals and other expenses. The amount of these expenses will depend on your proximity to the Kumon Regional Office, Kumon University and to the Kumon Center that we have designated for your training. In the rare case that there is not a Center available in your area, you will incur additional travel cost for In-Center training.

Our Training Agreement governs the first semester of the Instructor Development Program, and our Operations Manual contains the requirements for training that occurs after the award of a franchise (See the Franchise Disclosure Document, Item 11, Training).

The estimate includes the first month’s rent. You must operate your Center in retail facilities such as a storefront, shopping center or mall. We will not accept a location where the lease term is less than five years, the space is less than 1,000 square feet, or you are unable to affix one of our exterior signs.

We will not permit any activity other than the operation of a Kumon Math and Reading Center for any site we approve. You may not use or permit the use of the site we approve for any other purpose or activity at any time without first obtaining our written consent.

Rent will vary according to the center's location and whether your landlord shall require a security deposit. Kumon does not under any circumstances act as a guarantor of the lease. The amount of the build-out for a new Kumon Center depends on many factors such as: the age of the building, a landlords willingness to make a contribution (which may take the form of a tenant improvement allowance or free rent for some specified time) and real estate market conditions.

You also have the responsibility to ensure that the premises and signage, which must be approved by us, are zoned appropriately for the operation of a Kumon Center.

At no cost to you, prior to the opening of your Center, Kumon will select and have delivered to your Center the furniture and fixtures needed to open and initially operate your Center. If paid by you, the cost of these items would be $8,900.

The items that Kumon will provide will include what we deem to be a sufficient number of tables, stools, cabinets, shelves and chairs. We have the right to change the amount and type of furniture we deliver at our discretion.

You may wish to purchase additional items of furniture and fixtures for your Center, the cost of which we estimate to be between $0 and $5,500. These items will be at your expense.

After your Center has commenced operation, we will not be responsible to replace any broken or obsolete item of furniture or fixture at your Center or to provide you with any additional furniture or fixtures you may need.

Kumon will approve in advance, and you will purchase, the carpet and paint to be used at your Center meeting the specifications contained in the Operations Manual. We will reimburse you for the cost of initial carpet, window blinds and shades and paint for your Center in an amount we determine, currently up to $5,500. We can modify or eliminate this subsidy.

Pursuant to Kumon's sign policy contained in our Operations Manual, you must pay for one exterior sign for the facade of your commercial space. We must approve the content and location of the sign prior to installation. Upon installation, we shall reimburse you for the cost of fabrication and installation of the sign. The cost of sign fabrication is currently estimated by us to be between $3,000 and $7,000. We will own the sign. At the end of our franchise relationship, we will remove the primary exterior sign; however, you must reimburse us for any and all expenses that we incur for removal of the sign. When affixing signage, the Kumon Logo (KUMON and the thinking face design) must be separated from all local Center information (i.e., Center name, phone number, hours of operation, and website address). You are free to use any vendor you select for exterior sign fabrication and installation (See the Franchise Disclosure Document for further information regarding our sign program.). Please note this subsidy applies to NEW Centers only. This is not available to Transfer or Takeover centers.

You must obtain a notebook computer for use at your Kumon Center. Your computer must be at your Center at all times when your Center is open. Your notebook computer must have the minimum specifications set forth in our Operations Manual. You must use our proprietary software, applicable to your Center, which will assist in various aspects of operating your Kumon Center. (See the Franchise Disclosure Document for more information regarding computers.)

This figure is the current annual rate if you purchase the package policy liability insurance, inclusive of sexual misconduct liability insurance, that Kumon makes available through its insurance carrier, based on an assumed Center enrollment of 100 math students. (See the Franchise Disclosure Document for more information.)

Many of our franchisees also obtain other types of insurance coverage for their Centers, such as property and casualty coverage, although we currently require only liability coverage. We estimate that the annual cost of property and casualty coverage would range from $1,000 to $2,500.

Should you elect not to participate in the insurance package offered by us, you must also purchase sexual misconduct liability insurance for yourself and your employees.

Almost every state requires you to purchase workers compensation insurance for the employees of your Center. Whether or not your state requires you to obtain workers compensation insurance, Kumon will require you to obtain and have proof that you have this type of insurance.

You may have an obligation under state law to obtain other forms of insurance.

Your Kumon Center must utilize the Kumon Lead Management Telephone System. This system utilizes Voice-Over Internet telephone technology. To utilize this System, your Center must have its own telephone number and dedicated Voice-Over Internet Protocol telephone line used exclusively for Center business.

You must purchase this System from our designated vendor. The cost for the purchase and installation of the System currently is between $480 - $600. After installation, monthly expenses for use of the System are estimated by our vendor to be approximately $40 per month. The Voice-Over Internet telephone will include the software for the System.

The System will automatically route parent telephone inquiries to our call center and provide us with access to your scheduling calendar. In your absence, our call center will schedule appointments for new parent orientations for you. Kumon earns no commission or any revenue from your purchase or use of the System. Upon expiration or termination of our relationship, you must cease using the System and the telephone number for your dedicated telephone and assign the number to Kumon.

You must purchase the books included on the Kumon Recommended Reading List. The cost of these books will vary depending on the vendor you select.

The Kumon Recommended Reading List consists of approximately 378 books in Levels 7A-L, chosen with the purpose of enhancing the student's joy of reading, to be assigned by the Instructor for use at home as needed on an individual basis.

We may add or delete books from the List at any time. If we add books to the List, you will be required to purchase them.

You must have your fingerprints taken on Form FD-258, the fingerprinting card used by the FBI, to conduct a criminal background check.

If you are invited to our Instructor Development Program, Kumon will provide this form to you along with detailed procedures to properly fill the card out, take it to a local governmental agency to obtain your full set of fingerprints, and mail to the FBI to conduct the criminal background check. You must authorize the results of the background check to be mailed directly to Kumon.

The fee to process the fingerprinting card is $18. Additional fees may apply at the local level to have your fingerprints taken. If we have not received the FBI background check prior to your scheduled attendance at our Instructor Development Program, we may reschedule your attendance until after we have received the background check.

The estimate includes the first month’s rent. You must operate your Center in retail facilities such as a storefront, shopping center or mall. We will not accept a location where the lease term is less than five years, the space is less than 1,000 square feet, or you are unable to affix one of our exterior signs.

We will not permit any activity other than the operation of a Kumon Math and Reading Center for any site we approve. You may not use or permit the use of the site we approve for any other purpose or activity at any time without first obtaining our written consent.

Rent will vary according to the center’s location and whether your landlord shall require a security deposit. Kumon does not under any circumstances act as a guarantor of the lease. The amount of the build-out for a new Kumon Center depends on many factors such as the age of the building, a landlord’s willingness to make a contribution (which may take the form of a tenant improvement allowance or free rent for some specified time) and real estate market conditions. You also have the responsibility to ensure that the premises and signage, which must be approved by us, are zoned appropriately for the operation of a Kumon Center.

Within the first three months your Center is open (6 months if you take over operation of an existing Kumon Center), you must spend a minimum of $4,000 to promote, market and advertise your Center. Provided you spend at least the required minimum ($4,000), we will reimburse you 50% of the amount that you spend on pre-approved Center promotion, advertising and marketing during the first three months of the operation of your Center (6 months if you take over the operation of an existing Kumon Center) up to the maximum amount set forth in our Operations Manual. Currently, provided you spend at least the required minimum ($4,000), we will reimburse you for $2,000 of such costs. The amount provided in the chart item for this note accounts for this reimbursement of $2,000 to you. Without this reimbursement, your costs would be a minimum of $4,000.

After the New Center Marketing period, you must continue to actively market and promote your Center. To accomplish this, you are recommended to spend a minimum of $2,400 per year in marketing and retention activities for your Center.

You may need to hire assistants as the number of students enrolled at your Center increases. You will determine when to hire assistants and the salary to pay them. Your payroll costs will depend on many factors such as the number of assistants you hire and the prevailing wage rate. This figure is an estimate, and we cannot guarantee that you will not incur greater payroll expenses.

This is an estimate of the additional funds you will need during the initial period of operation, which we define as three months from the opening of the Center. These figures are estimates, and we cannot guarantee that you will not have additional expenses in starting the business. Your costs will depend on many factors, such as: how closely you follow our methods and procedures; your management skills, experience and business acumen; local economic conditions; the local market for our services; competition; and the enrollment level reached during the initial three-month period of Center operations.

In compiling these estimates we relied on our predecessors’ more than 34 years of experience in operating and franchising Kumon Centers in the U.S.

You should review these figures carefully with a business advisor before making any decision to purchase the franchise.

We do not finance any part of your initial investment.

If your Center will be in Pennsylvania, see Exhibit G of the Finance Disclosure Document for the costs associated with that state’s accreditation requirements.

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