* Except where otherwise
specified, we impose all the fees in this table, you pay them to us, and we do
not refund them.
NOTES
[1] The estimate is for the first month''s rent. Rent will
vary according to location and whether the landlord requires a security
deposit. You may not use your home or other residential property as your
Center. We may require you and your landlord to sign an acceptable form of
agreement requiring the landlord to give Mathnasium written notice if you are
in default of your lease for the Center and allowing us the right to assume the
lease if you are in default. We must review and consent to the layout of each
Center. If you don''t complete the build out of the Center in a reasonable time,
Mathnas urn may (but is not obligated to) complete the build
out, all expenses of which will be paid or reimbursed by you.
[2] The estimate includes initial lease payments for
computers, peripherals and other office equipment of $500 to $1,000, for which
financing is generally available. The total purchase price of computers is estimateci at under $2,500.
[3] The figure given is the current annual rate if you obtain
liability insurance based on an assumed Center enrollment of 100 students. See
Items 6 and 8 for more information. We recommend, but do not require, that you
also obtain other types of insurance coverage for your 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. You may also have an obligation under state
law to obtain workers compensation or other forms of insurance.
[4] You must have a separate business phone line and
answering machine used exclusively for your Mathnas|um Center, and a broadband
Internet connection.
[5] This is an estimate of the additional funds you will need
during the initial period of operation, which we define as 4 months from the
opening of the Center. The estimate does not include payroll costs for any
employees (most of our franchisees do not hire assistants during the first
three months). It also does not include any compensation that you elect to pay
to yourself, nor any royalties that you would pay us. These estimates have been
made based on the business and operations experience of the officers of
Mathnasium described in Item 2, but we cannot guarantee that you will not have
additional expenses starting the business. Your costs will depend on many
factors, such as: how closely you follow our methods and procedures; your
management skill, experience and business acumen; local economic and
environmental conditions; the local market for our services; the prevailing
wage rate; competit on; and, the enrollment level reached during the initial 4
month period.
[5] These are estimates only. The chart provides an estimate
of the initial investment to open one new Mathnasium Center. None of the
expenditures described in the chart is fully refundable, except the Initial
Franchise Fee (less related costs incurred by us), which Mathnasium will refund
if during, or within 5 days after the completion of training, Mathnasium elects
to cancel the Franchise Agreement because it believes that it is in your best
interest, or our best interest, to do so. It is extremely difficult to predict
future changes in these costs because they are under the control of third
parties. We do not expect these costs to rise faster than general inflation,
but we cannot guarantee this. You should review
these figures carefully with a business advisor before making any decision to
purchase the franchise.
[7] We do not finance any part of your initial
investment.
