NEW HORIZONS COMPUTER LEARNING CENTERS - FDD UFOC ITEM 7 Detail

ITEM 7: ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT

Item 7 explains the estimated initial investment to open and begin operating a Center as of the issuance date of this Franchise Disclosure Document. The estimated initial investment covers the initial period of operations, beginning when you sign the Franchise Agreement and continuing through the end of the first 4 to 6 months after your Center opens for business to the public. The initial period is not our estimate of the time that we believe it should take your business to "break�even." The Item 7 charts are accompanied by the following detailed notes that explain each expense category and the variables that influence the low and high initial investment estimates. These notes are an intregal part of Item 7.

* Your actual rent will depend on the size of your Center and the location of your market and may include the amortized cost of additional leasehold improvements.

** For example: Fees payable to Microsoft and Novell for CPLS and NAEC fees respectively and license fees for participation in other vendor programs

(1)      Under limited circumstances and at our sole discretion, we may offer financing of up to 100% of the initial franchise fee. We may also suggest third party sources for financing of equipment and computer hardware. Any interest or other fees received by us from financing or otherwise under the Franchise Agreement are not refundable. See Item 10 for the terms of our financing program. As we disclose in Item 5, we participate in the International Franchise Association''s VetFran program and discount the Initial Franchise Fee by 20% for honorably-discharged U.S. military veterans. Therefore, if you qualify for this discount, your Initial Franchise Fee will be 20% lower than the amounts that we show in the charts, which will also reduce the initial investment ranges by a like amount.

(2)      You pay no additional fee for EFT but are responsible for the travel and living expenses for your trainees.

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(3)      If you are converting your business to New Horizons, you will need additional funds beyond cash flow from operations for various start-up expenses that will enable you to identify and operate your business in accordance with System requirements. Start-Up franchises will need additional funds to pay start up and operating expenses and to cover potential operating deficits as needed during the initial period. As we note above, we consider the initial phase to be the first 4 to 6 months of operations after your Center opens. The initial period is not our estimate of the time that we believe it should take your business to "break-even." You should review these figures carefully with a business advisor before making any decision to purchase a franchise. We cannot guarantee that you will not have additional expenses, or other categories of expenses, during the initial period. This estimate of additional funds is based on the experiences of our franchisees and our Affiliate-Owned Centers.

(4)      All Item 7 figures are estimates only. Your costs will depend on many factors including your management skill, experience and business acumen; local economic conditions; the local market for our services; prevailing wage rates; competition; your actual sales levels; and similar considerations.

The totals do not include any of the CMS fees that we describe in Item 6 since CMS is an optional program. The totals also do not include any allowance for payments made to a bank or financing company on loans that you may obtain to finance the cost of purchasing the franchise, equipment, or other financing costs, or fees payable to us other than those fees specifically identified in Item 7.

You should review the Item 7 figures and notes carefully with a business advisor before making any decision to purchase the franchise. We cannot guarantee that you will not have additional expenses, or other categories of expenses, to start the Franchised Business. You should not plan to draw income from operations during the start-up and development stage of your franchise, which may be a period exceeding the three month "initial phase" responsive to the franchise disclosure laws. You should have additional funds available in reserve, either in cash or through a bank line of credit, or have other assets which you may liquidate or against which you may borrow, to cover other expenses, losses or unanticipated events during the start-up and development stage or beyond.