Best_In_Class_Education_Center 2025 Franchise FAQ - FDD Ninja

Question 1

As of December 31, 2024, how many company-owned Best In Class Education Centers were in operation?

Accepted Answer

For purposes of this FPR, each Center may be referred to as an "outlet." As of December 31, 2024 (the last day of the Measuring Period) there were: (a) 36 Franchised Centers in operation, 27 of which are Qualifying Centers; and (b) 1 Company-Owned Center in operation, which is a Qualifying Center.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–44)

Question 2

As of December 31, 2024, how many franchised Best In Class Education Centers were in operation?

Accepted Answer

For purposes of this FPR, each Center may be referred to as an "outlet." As of December 31, 2024 (the last day of the Measuring Period) there were: (a) 36 Franchised Centers in operation, 27 of which are Qualifying Centers; and (b) 1 Company-Owned Center in operation, which is a Qualifying Center.

"*Franchised Center*" means any Center owned by a franchisee.

"*Measuring Period*" means the period of time that begins January 1, 2024 and ends December 31, 2024.

"*Qualifying Center*" means any Company-Owned Center or Franchised Center that satisfies the following criteria: (a) the Center was open and operating throughout the entire Measuring Period; (b) the Center provided us with all data we requested in order to prepare the FPR; (c) the Center is not a Satellite Office; and (d) the Center does not operate remotely.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–44)

Question 3

How many franchised Best In Class Education Centers are considered 'Qualifying Centers' as of December 31, 2024?

Accepted Answer

, including royalties, brand fund contributions, technology fees and BCP-LMS Monthly Fees (or equivalent fees).

## **System Statistics**

For purposes of this FPR, each Center may be referred to as an "outlet." As of December 31, 2024 (the last day of the Measuring Period) there were: (a) 36 Franchised Centers in operation, 27 of which are Qualifying Centers; and (b) 1 Company-Owned Center in operation, which is a Qualifying Center. The table below summarizes the outlet statistics and the number of Qualifying Centers:

|  | PROVISION | S ECTIONS IN AGREEMEN T | SUMMARY |
|---|---|---|---|
| w. Choice of law |  | FA: 25.1 SOA: 5 ADA: 12.1 | Subject to applicable state law, Washington law governs.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–44)

Question 4

What is the total projected number of new franchised Best In Class Education Center outlets expected to open in the next fiscal year?

Accepted Answer

| TABLE 5 - PROJECTED OPENINGS AS OF DECEMBER 31, 2024 |
|---------------------------------------------------------------|---------------------------------------------------------|----------------------------------------------------------------|
| State | Franchise Agreements Signed But Outlet Not Opened | Projected New Franchised Outlets in the Next Fiscal Year |
| Texas | 1 | 1 |
| Washington | 1 | 1 |
| Total | 2 | 2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 44–47)

Question 5

According to the Best In Class Education Center Franchise Agreement, what is the purpose of defining 'Gross Sales' and 'Special Program Sales' in relation to 'Affiliate Program Sales' for a Best In Class Education Center franchise?

Accepted Answer

her described in §22.2(a).
  - "*Affiliate Program*" means any program or revenue-generating activity conducted at or in connection with your Center that is not a standard part of our System but is approved by us.
  - "*Affiliate Program Sales*" means the total gross sums you collect from all Affiliate Programs conducted in connection with your Center. Affiliate Program Sales also include amounts that third-party marketing agencies, such as Groupon, receive and retain from your customers for marketing goods or services relating to your Affiliate Programs. Affiliate Program Sales excludes: (a) sales or use taxes you pay to a Governmental Authority; (b) revenue you collect and subsequently refund to a customer in a bona fide refund transaction; (c) Gross Sales; and (d) Special Program Sales.
  - "*After-School Program*" means the optional educational program you may offer at your Center whereby students visit every day after school for at least two and one-half (2.5) hours per day and receive one (1) packet of Math and one (1) packet of English each week.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 6

According to the Best In Class Education Center Franchise Agreement, what is the relationship between retail sales at a Center and Alternative Channels of Distribution for a Best In Class Education Center franchise?

Accepted Answer

provided, however, you have five (5) business days after receipt of the Site Approval Notice to suggest changes to your Center Territory (which may, but need not, accept).
- **3.3. Territorial Protections & Limitations**. During the Term we will not develop or operate, or license a third party to develop or operate, a Center or a Satellite Office that is located in the Center Territory except as otherwise provided in this Section with respect to Acquisitions. At any time during the Term we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to BEST IN CLASS EDUCATION CENTER® outlets, even if those outlets are located in your Center Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) within the Center Territory through Alternative Channels of Distribution.

## **4. TERM AND RENEWAL**.

- **4.1. Generally.** This Agreement grants you the right to operate your Center during the Term. You may renew your franchise rights by signing a Successor Agreement for a five (5) year renewal term. You may enter into a maximum of three (3) Successor Agreement(s). The parties may agree to further renewals after expiration of the third (3rd) renewal term, but neither party is obligated to do so (unless required by applicable Law, in which case the same renewal terms and conditions set forth in this Agreement shall apply to subsequent renewals). In order to sign a Successor Agreement you must satisfy all renewal conditions specified in this Agreement or the Successor Agreement you wish to renew, as applicable.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 7

What assistance does Best In Class Education Center provide before opening the center as described in Item 11, and how does this relate to the initial training expenses listed in Item 7?

Accepted Answer

below, we are not required to provide you with any assistance.**

## Before you open your Center, we will:

- 1. Provide access to our Manual which will help you establish and operate your Center. The Manual includes 210 pages. The Table of Contents is attached as EXHIBIT "E". (§6.1 & 11.2)
- 2. Provide an initial training program, as discussed below under "Training Program". (§5.1)
- 3. Evaluate sites you propose for your Center, as discussed below under "Site Selection". (§7.1 & 7.5)
- 4. Provide our written specifications for goods and services you must purchase to develop, equip and operate your Center and a list of suppliers. We do not deliver or install any items you purchase. (§11.2)
- 5. Assist you in developing and implementing a grand opening marketing plan for your Center, as discussed below under "Advertising and Marketing". (§10.2 & 10.3(a))
- 6. Prepare and send you 2 alternative Site Drawings at no additional charge (you select the Site Drawing your prefer), as discussed below under "Site Development". (§7.3)
- 7. Review and approve or disapprove the preliminary design and final construction plans prepared by your architect, as discussed below under "Site Development". (§7.3)
- 8. Evaluate your Center's design and buildout, as discussed below under "Site Development". (§7.4 & 7.5)

## During the operation of your Center, we will:

- 1. Send a corporate trainer to your Center to provide 2 days of onsite training and operational support within 30 days after your Center opens. (§6.3)
- 2. Grant you a license to utilize BCP-LMS, as discussed below under "Computer System". (§6.2)
- 3. Provide our guidance and recommendations on ways to improve the operation of your Center. (§6.4)
- 4. Conduct periodic field visits to provide onsite consultation, assistance and guidance pertaining to the operation and management of your Center.

Question 8

How does the Best In Class Education Center's assistance provided before opening (Item 11) compare to the franchisee's obligations for site selection and acquisition/lease (Item 9)?

Accepted Answer

[Item 9: FRANCHISEE'S OBLIGATIONS]

|  | OBLIGATION | SECTIONS IN AGREEMENT | DISCLOSURE DOCUMENT ITEM |
|---|---|---|---|
| a. Site selection and acquisition/lease | FA: 7.1 & 7.2 SOA: 3 ADA: 4.3 | Item 7 & Item 11 |  |
| b. Pre-opening purchases/leases | FA: 7.3, 7.4, 11.6 & 16.1 SOA: 8 ADA: Not Applicable | Item 5, Item 7, Item 8 & Item 11 |  |
| c. Site development and other pre-opening requirements | FA: 7.3, 7.4 & 7.5 SOA: 5 ADA: 4.3 | Item 6, Item 7 & Item 11 |  |

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING]

- visibility, size, condition and characteristics of the building
- traffic counts and traffic patterns
- accessibility and availability of parking and security of the surrounding area
- general location and character of neighborhood
- existence and location of competitive businesses
- local demographic information and economic indicators

We list the address of your approved site either: (a) in Part C of ATTACHMENT "A" to the Franchise Agreement (if we approve the site before signing the Franchise Agreement); or (b) in a Site Approval Notice we send you after we approve the site (if we approve the site after signing the Franchise Agreement). If you sign an ADA, we must approve the site for each Center you develop applying our then-current site selection criteria.

We do not help you negotiate your lease. However, we will provide contact information for our recommended real estate attorney who you may choose to hire to help review and negotiate your lease.

## **Site Development** (§7.3 & 7.4)

The Manual includes our standards and specifications for the design, layout, equipping and trade dress for a Center. After we approve your site, you must send us complete and detailed dimensions and specifications of the leased space. After receiving this information, we prepare and send you 2 alternative Site Drawings for your consideration. You select the Site Drawing you prefer. You must hire a licensed and bonded architect that we designate or approve to prepare initial design plans and final construction plans for your Center. We must approve these plans. Once approved, you must construct and equip your Center according to the approved construction plans and the requirements of the Manual. We do not provide assistance with conforming the premises to local ordinances and building codes and obtaining any required permits, and/or constructing, remodeling, or decorating the premises (your architect is responsible for these obligations). You must purchase (or lease) and install the Technology Systems, equipment, fixtures, signs and other items we require.

Question 9

Besides Best In Class Education Center, what other companies has Stephanie Zhu been employed by in the last 5 years?

Accepted Answer

[Item 2: BUSINESS EXPERIENCE]

## **Stephanie Zhu – Chief Financial Officer**

Stephanie Zhu has served as our Chief Financial Officer since February 2023. During the prior 5 years, she has also held the following positions:

| Employer                            | Title                        | Location          | Period of Time       |
|-------------------------------------|------------------------------|-------------------|----------------------|
| Best In Class Education Center, LLC | Vice President of Operations | Mercer Island, WA | Aug 2019 to present  |
| Adaptively Education, Inc.          | Co-Founder & CEO             | Mercer Island, WA | Feb 2021 to present  |
| Lam's Tutoring Services, inc.       | Vice President of Operations | Seattle, WA       | Feb 2009 to Aug 2019 |

Source: Item 2 — BUSINESS EXPERIENCE (FDD page 10)

Question 10

Besides franchised centers, does the Best In Class Education Center financial performance representation include gross sales data for company-owned centers?

Accepted Answer

> This outlet was a Company-Owned Center that was sold to a franchisee in 2024. We have classified this outlet as a Franchised Center. This FPR includes data from both Franchised Centers and Company-Owned Centers. We excluded data from: (a) 4 Franchised Centers that were open during the Measuring Period because they are Satellite Offices; (b) 5 Franchised Centers that operated remotely; and (c) 2 Franchised Centers that did not operate throughout the entire operating period (one of which was also operated remotely). There are no material differences between the operations of the Qualifying Centers and the franchised business offered under this Disclosure Document that impact the realization of Gross Sales. ## **Subsets Utilized** The FPR includes 2024 Gross Sales data for the 28 Qualifying Centers described above. We have broken down the data between Franchised Centers and the Company-Owned Center. We have also separately broken out the data for 27 Franchised Centers into subsets based on the top 1/3^rd (highest Gross Sales), middle 1/3, and bottom 1/3 (lowest Gross Sales). ## **Financial Performance Representation** | TABLE 1 - 2024 GROSS SALES: FRANCHISED OUTLETS | | | | | | | | |--------------------------------------------------------------------|-----------|-----------|-----------|-----------|-----------------------------------------------------|--|--| | Subset (Number of Outlets in Subset) Highest Lowest Median Average | | | | | Number & Percent that Achieved/Surpassed Average | | | | All (27 Outlets) | \$468,728 | \$46,510 | \$219,476 | \$209,044 | 15 of 27 (56%) | | | | Subset 1 (9 Outlets) | \$468,728 | \$248,563 | \$304,918 | \$310,026 | 3 of 9 (33%) | | | | Subset 2 (9 Outlets) | \$248,171 | \$144,960 | \$219,476 | \$207,730 | 6 of 9 (67%) | | Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–44)

Question 11

Besides Hawaii, which other states does Best In Class Education Center indicate the FDD is or will shortly be on file in?

Accepted Answer

- 4. The states in which this filing is or will be shortly on file include the following: California, California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, Virginia, Washington and Wisconsin.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 12

What other companies has Hao Lam been involved with in the past 5 years besides Best In Class Education Center?

Accepted Answer

## **ITEM 2 BUSINESS EXPERIENCE**

## **Hao Lam – Chief Executive Officer and Chairman**

Hao Lam has served as our Chief Executive Officer and Chairman since February 2023. During the prior 5 years, he has also held the following positions:

| Employer                            | Title                |                   | Period of Time       |
|-------------------------------------|----------------------|-------------------|----------------------|
| LBIS, LLC                           | Manager              | Mercer Island, WA | Feb 2023 to present  |
|                                     | CEO and Chairman     | Mercer Island, WA | Jul 2012 to present  |
| Best In Class Education Center, LLC | Manager and Chairman | Mercer Island, WA | Feb 2011 to Jun 2012 |
| Adaptively Education, Inc.          | Executive Chairman   | Mercer Island, WA | Feb 2021 to Dec 2024 |
| EDYU USA Holding Ltd.               | Manager              | Mercer Island, WA | Feb 2010 to Dec 2021 |
| Lam's Tutoring Services, Inc.       | Manager              | Bellevue, WA      | Jan 1995 to present  |

Source: Item 2 — BUSINESS EXPERIENCE (FDD page 10)

Question 13

Considering the initial fees (Item 5) and other fees (Item 6) for a Best In Class Education Center franchise, what is the total potential financial obligation within the first year?

Accepted Answer

e.

## **Grand Opening Marketing Fee**

At the time you sign the Franchise Agreement, you pay us a \$10,000 grand opening marketing fee. We spend all of these funds on grand opening marketing activities to promote your Center over a 6-month period, completing no later than 2 months after your grand opening. We do not keep any portion of these funds. We reserve the right to require you to spend the grand opening marketing funds directly with suppliers in accordance with our instructions, in which case you will not pay the fee to us. For United States Veterans and "Qualified Educators," we will provide an additional \$5,000 allowance toward grand opening marketing activities to promote your Center. A "Qualified Educator" is any person who is: (a) a credentialed educator; (b) a state certified teacher

Question 14

What was the effective income tax rate for Best In Class Education Center in 2024 and 2023, considering both federal and state taxes?

Accepted Answer

The Company's 2024 and 2023 effective income tax rate is 23% federal for 2024 and 21% federal for 2023 and 0% state for both years. The statutory Federal rate for both years is 21%. Federal taxable income is increased by the effect of nondeductible meals. The Company had income tax expenses of $5,447 and income tax benefits of $8,668 for year ended December 31, 2024 and period from February 10, 2023 to December 31, 2023 respectively.

No state tax provision has been recorded for Florida, as income falls below the exemption threshold of $50,000.

[Item 23: RECEIPT]

The Company's 2023 effective income tax rate is 21% federal and 7% state. The Company had income tax benefits of $8,668 for the year ended December 31, 2023.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 15

How do the 'other fees' listed in Item 6 for Best In Class Education Center franchises compare to the initial fees listed in Item 5?

Accepted Answer

ormly imposed. |

![](_page_12_Picture_0.jpeg)

|  | TYPE OF FEE 1 | AMOUNT 2 | DUE DATE | REMARKS |
|---|---|---|---|---|
| Customer Service Fee | Up to $500 per year (not currently imposed) | 10 days after invoice | Imposed to cover our costs if we implement a customer satisfaction program, such as collecting and evaluating data and feedback from customers to determine their satisfaction with your Center and identify potential modifications to the System to improve customer satisfaction. |  |
| Conference Registration Fee | Up to $350 per person per conference | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless we designate attendance as optional or we waive your obligation to attend based on showing of good cause. |  |
| Gift Card Program Fees | Up to $50 per month per Center (not currently imposed) | 10 days after invoice or as we otherwise specify | You must participate in any gift card program we establish and pay required fees and contributions to us or a third party to administer the program. |  |
| Product Purchases | Varies depending on item purchased (not currently imposed) | 10 days after invoice | We may serve as a System supplier for goods and services you must purchase. If this occurs, we will provide you with a price list upon request. |  |
| Relocation Fee | $1,000 for each new site you propose plus Travel Expenses | At time new site proposed | You may not relocate your Center without our approval. If we allow you to relocate, you must pay us the $1,000 fee and reimburse all Travel Expenses we incur to visit new sites you propose. We refund 75% of the fee if we reject the site. |  |
| Satellite Office Fee (per office) | [If Office Located Inside Your Center Territory] $5,000 per office [If Office Located Outside Your Center Territory] $22,500 per office | At time you sign Satellite Office Addendum | See Note 4 for a description of the other fees you pay relating to a Satellite Office. |  |
| Renewal Fee | $2,500 | At time you sign renewal agreement | Imposed if you renew your franchise rights by signing a renewal Franchise Agreement. |  |
| Transfer Fee | 60% of then-current initial franchise fee (reduced to 40% if buyer is an existing franchisee) | Before Transfer | You pay the transfer fee for all Transfers other than Permitted Transfers. If our broker finds the buyer, you must also reimburse us for all commissions we pay the broker. |  |
| Audit Fee | Actual cost of audit (plus Travel Expenses for audit team) | 10 days after invoice | Imposed if audit (a) is required because you fail to submit required data or reports in a timely manner or (b) reveals you understated sales by 3% or more. |  |
| Late Fee | $100 plus default interest at lesser of (a) 15% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If our debit of your account is rejected or your check is returned for insufficient funds, we may charge (in addition to the late fee) an NSF fee of $50 per incident. Default interest is limited to 10% per annum in California. |  |
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $100 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the Brand Fund.

Question 16

How do the initial fees for a Best In Class Education Center franchise (Item 5) compare to the ongoing fees listed in Item 6, in terms of amount and due date?

Accepted Answer

[Item 5: INITIAL FEES]

## **ITEM 5 INITIAL FEES**

You must pay us and our affiliate the initial fees and payments described below.

All of these fees and payments are uniformly imposed except: (a) a franchisee who is renewing their franchise rights does not pay any of these fees or other amounts (instead they pay the renewal fee required by the expiring Franchise Agreement); (b) a franchisee who acquires their Center from another franchisee via an approved transfer does not pay an initial franchise fee (instead they or the selling franchisee may be required to pay the transfer fee required by the selling franchisee's Franchise Agreement) or the Systems Implementation Fee; and (c) for any discounts listed below.

As further discussed below, a portion of pre-paid Travel Expenses for grand opening assistance may be refundable if our actual expenses are less than the estimate. All other fees and payments are nonrefundable.

## **Initial Franchise Fee**

At the time you sign the Franchise Agreement, you pay us an initial franchise fee that varies depending on whether you are purchasing your 1st, 2nd, 3rd or subsequent Center in accordance with the table below:

---

[Item 6: OTHER FEES]

|  | TYPE OF FEE 1 | AMOUNT 2 | DUE DATE | REMARKS |
|---|---|---|---|---|
| Customer Service Fee | Up to $500 per year (not currently imposed) | 10 days after invoice | Imposed to cover our costs if we implement a customer satisfaction program, such as collecting and evaluating data and feedback from customers to determine their satisfaction with your Center and identify potential modifications to the System to improve customer satisfaction. |  |
| Conference Registration Fee | Up to $350 per person per conference | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless we designate attendance as optional or we waive your obligation to attend based on showing of good cause. |  |
| Gift Card Program Fees | Up to $50 per month per Center (not currently imposed) | 10 days after invoice or as we otherwise specify | You must participate in any gift card program we establish and pay required fees and contributions to us or a third party to administer the program. |  |
| Relocation Fee | $1,000 for each new site you propose plus Travel Expenses | At time new site proposed | You may not relocate your Center without our approval. If we allow you to relocate, you must pay us the $1,000 fee and reimburse all Travel Expenses we incur to visit new sites you propose. We refund 75% of the fee if we reject the site. |  |
| Satellite Office Fee (per office) | [If Office Located Inside Your Center Territory] $5,000 per office [If Office Located Outside Your Center Territory] $22,500 per office | At time you sign Satellite Office Addendum | See Note 4 for a description of the other fees you pay relating to a Satellite Office. |  |
| Renewal Fee | $2,500 | At time you sign renewal agreement | Imposed if you renew your franchise rights by signing a renewal Franchise Agreement. |  |
| Transfer Fee | 60% of then-current initial franchise fee (reduced to 40% if buyer is an existing franchisee) | Before Transfer | You pay the transfer fee for all Transfers other than Permitted Transfers. If our broker finds the buyer, you must also reimburse us for all commissions we pay the broker. |  |
| Audit Fee | Actual cost of audit (plus Travel Expenses for audit team) | 10 days after invoice | Imposed if audit (a) is required because you fail to submit required data or reports in a timely manner or (b) reveals you understated sales by 3% or more. |  |
| Late Fee | $100 plus default interest at lesser of (a) 15% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If our debit of your account is rejected or your check is returned for insufficient funds, we may charge (in addition to the late fee) an NSF fee of $50 per incident. Default interest is limited to 10% per annum in California. |  |
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $100 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the Brand Fund. |  |

---

[Item 5: INITIAL FEES]

At the time you sign the Franchise Agreement, you pay us an initial franchise fee that varies depending on whether you are purchasing your 1st, 2nd, 3rd or subsequent Center in accordance with the table below:

## **Systems Implementation Fee**

At the time you sign the Franchise Agreement you pay our affiliate, LBIS, a $2,000 implementation fee for the setup and configuration of BCP-LMS (the "Systems Implementation Fee"). We may require you to pay us the Systems Implementation Fee, in which case we will remit the fee to our affiliate.

---

[Chunk 3 | Item 23: Receipts] (chunk_id: ef71585e-dcf3-4e97-9e2f-1ab674e9bee6)
[Item 23: RECEIPT]

- (c) Monthly Student User Fees. "Monthly Student User Fees" are calculated by multiplying a "base fee" (as set forth in the Manual) by the total number of subjects taken by students enrolled at your Center as of the last day of the immediately preceding month.

The base fee is currently $8 per student per subject per month (Mathematics, English and STEM are each considered a separate "subject"); *provided, however*, that: (i) we may increase the base fee, not more than once per calendar year, upon at least 90 days' prior notice; (ii) the maximum annual increase to the base fee is $2 per student per subject per month; (iii) the maximum base fee that we may charge at any point during the Term is $15 per student per subject per month; and (iv) if you are a renewing franchisee who operates a Legacy Center (as defined below), your initial base fee will be $4 per student per subject per month but will increase by $1 each January 31st until it equals the standard base fee charged to new franchisees.

Question 17

How does the initial franchise fee for Best In Class Education Center (Item 5) compare to the ongoing royalty fees or other fees listed in Item 6 over a five-year period?

Accepted Answer

[Item 5: INITIAL FEES]

## **ITEM 5 INITIAL FEES**

You must pay us and our affiliate the initial fees and payments described below.

All of these fees and payments are uniformly imposed except: (a) a franchisee who is renewing their franchise rights does not pay any of these fees or other amounts (instead they pay the renewal fee required by the expiring Franchise Agreement); (b) a franchisee who acquires their Center from another franchisee via an approved transfer does not pay an initial franchise fee (instead they or the selling franchisee may be required to pay the transfer fee required by the selling franchisee's Franchise Agreement) or the Systems Implementation Fee; and (c) for any discounts listed below.

As further discussed below, a portion of pre-paid Travel Expenses for grand opening assistance may be refundable if our actual expenses are less than the estimate. All other fees and payments are nonrefundable.

## **Initial Franchise Fee**

At the time you sign the Franchise Agreement, you pay us an initial franchise fee that varies depending on whether you are purchasing your 1st, 2nd, 3rd or subsequent Center in accordance with the table below:

---

[Item 5: INITIAL FEES]

## **Systems Implementation Fee**

At the time you sign the Franchise Agreement you pay our affiliate, LBIS, a $2,000 implementation fee for the setup and configuration of BCP-LMS (the "Systems Implementation Fee"). We may require you to pay us the Systems Implementation Fee, in which case we will remit the fee to our affiliate.

## **Grand Opening Marketing Fee**

[Item 5: INITIAL FEES]

## **Grand Opening Marketing Fee**

At the time you sign the Franchise Agreement, you pay us a $10,000 grand opening marketing fee. We spend all of these funds on grand opening marketing activities to promote your Center over a 6-month period, completing no later than 2 months after your grand opening. We do not keep any portion of these funds. We reserve the right to require you to spend the grand opening marketing funds directly with suppliers in accordance with our instructions, in which case you will not pay the fee to us. For United States Veterans and "Qualified Educators," we will provide an additional $5,000 allowance toward grand opening marketing activities to promote your Center. A "Qualified Educator" is any person who is: (a) a credentialed educator; (b) a state certified teacher (active or retired); (c) a licensed childcare professional; (d) a college educator; or (e) an educator employed through an accredited Kindergarten through 12th grade institution. If you are both a United States Veteran and

[Item 23: RECEIPT]

## **14. FEES**

- **14.1. Initial Franchise Fee.** You agree to pay us the initial franchise fee set forth in Part F of ATTACHMENT "A" in one lump sum at the time you sign this Agreement. The initial franchise fee is fully earned by us and nonrefundable upon execution of this Agreement.
- **14.2. Royalty Fee.** On the seventh (7th) day of each month (the "royalty fee due date"), you agree to pay us a monthly royalty fee equal to the greater of (a) $250 or (b) the sum of 12% of Gross Sales plus 12% of Affiliate Program Sales plus 6% of Special Program Sales generated during the prior month.

## **14.3. BCP-LMS Fees.**

[Item 23: RECEIPT]

- (c) Monthly Student User Fees. "Monthly Student User Fees" are calculated by multiplying a "base fee" (as set forth in the Manual) by the total number of subjects taken by students enrolled at your Center as of the last day of the immediately preceding month.

The base fee is currently $8 per student per subject per month (Mathematics, English and STEM are each considered a separate "subject"); *provided, however*, that: (i) we may increase the base fee, not more than once per calendar year, upon at least 90 days' prior notice; (ii) the maximum annual increase to the base fee is $2 per student per subject per month; (iii) the maximum base fee that we may charge at any point during the Term is $15 per student per subject per month; and (iv) if you are a renewing franchisee who operates a Legacy Center (as defined below), your initial base fee will be $4 per student per subject per month but will increase by $1 each January 31st until it equals the standard base fee charged to new franchisees.

[Item 6: OTHER FEES]

|  | TYPE OF FEE 1 | AMOUNT 2 | DUE DATE | REMARKS |
|---|---|---|---|---|
| Customer Service Fee | Up to $500 per year (not currently imposed) | 10 days after invoice | Imposed to cover our costs if we implement a customer satisfaction program, such as collecting and evaluating data and feedback from customers to determine their satisfaction with your Center and identify potential modifications to the System to improve customer satisfaction. |  |
| Conference Registration Fee | Up to $350 per person per conference | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless we designate attendance as optional or we waive your obligation to attend based on showing of good cause. |  |
| Gift Card Program Fees | Up to $50 per month per Center (not currently imposed) | 10 days after invoice or as we otherwise specify | You must participate in any gift card program we establish and pay required fees and contributions to us or a third party to administer the program. |  |
| Product Purchases | Varies depending on item purchased (not currently imposed) | 10 days after invoice | We may serve as a System supplier for goods and services you must purchase. If this occurs, we will provide you with a price list upon request. |  |
| Relocation Fee | $1,000 for each new site you propose plus Travel Expenses | At time new site proposed | You may not relocate your Center without our approval. If we allow you to relocate, you must pay us the $1,000 fee and reimburse all Travel Expenses we incur to visit new sites you propose. We refund 75% of the fee if we reject the site. |  |
| Satellite Office Fee (per office) | [If Office Located Inside Your Center Territory] $5,000 per office [If Office Located Outside Your Center Territory] $22,500 per office | At time you sign Satellite Office Addendum | See Note 4 for a description of the other fees you pay relating to a Satellite Office. |  |
| Renewal Fee | $2,500 | At time you sign renewal agreement | Imposed if you renew your franchise rights by signing a renewal Franchise Agreement. |  |
| Transfer Fee | 60% of then-current initial franchise fee (reduced to 40% if buyer is an existing franchisee) | Before Transfer | You pay the transfer fee for all Transfers other than Permitted Transfers. If our broker finds the buyer, you must also reimburse us for all commissions we pay the broker. |  |
| Audit Fee | Actual cost of audit (plus Travel Expenses for audit team) | 10 days after invoice | Imposed if audit (a) is required because you fail to submit required data or reports in a timely manner or (b) reveals you understated sales by 3% or more. |  |
| Late Fee | $100 plus default interest at lesser of (a) 15% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If our debit of your account is rejected or your check is returned for insufficient funds, we may charge (in addition to the late fee) an NSF fee of $50 per incident. Default interest is limited to 10% per annum in California. |  |
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $100 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the Brand Fund. |

Question 18

How does the initial franchise fee for Best In Class Education Center (Item 5) compare to the potential long-term earnings, considering the minimum sales requirements in Item 13 and the ongoing fees in Item 6?

Accepted Answer

* After opening, you may, with our approval, purchase the right to operate a Satellite Office by paying us the satellite office fee listed in Item 6. The fee is $5,000 if the Satellite Office is located inside the territory assigned to your Center (your "Center Territory") or $22,500 if located outside your Center Territory. For purposes of determining the initial franchise fee applicable to the next brick-and-mortar Center you purchase, a Satellite Office located outside your Center Territory counts as the purchase of a Center but a Satellite Office located inside your Center Territory does not. For example, if you purchase your 1st Center, followed by a Satellite Office located inside your Center Territory, followed by a 2nd Center, you would pay: (a) a $45,000 initial franchise fee for your 1st Center; (b) a $5,000 satellite office fee for your Satellite Office; and (c) a $40,000 initial franchise fee for your 2nd Center. On the other hand, if the Satellite Office in the example above is located outside your Center Territory, then you would pay: (a) a $45,000 initial franchise fee for your 1st Center; (b) a $22,500 satellite office fee for your Satellite Office; and (c) a $35,000 initial franchise fee for your 2nd Center.

The initial franchise fee is inclusive of a $10,000 initial training fee for the franchise management and operations training program ("Management Training") that we conduct before you open your Center.

## **Systems Implementation Fee**

At the time you sign the Franchise Agreement you pay our affiliate, LBIS, a $2,000 implementation fee for the setup and configuration of BCP-LMS (the "Systems Implementation Fee"). We may require you to pay us the Systems Implementation Fee, in which case we will remit the fee to our affiliate.

## **Grand Opening Marketing Fee**

|  | TYPE OF FEE 1 | AMOUNT 2 | DUE DATE | REMARKS |
|---|---|---|---|---|
| Customer Service Fee | Up to $500 per year (not currently imposed) | 10 days after invoice | Imposed to cover our costs if we implement a customer satisfaction program, such as collecting and evaluating data and feedback from customers to determine their satisfaction with your Center and identify potential modifications to the System to improve customer satisfaction. |  |
| Conference Registration Fee | Up to $350 per person per conference | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless we designate attendance as optional or we waive your obligation to attend based on showing of good cause. |  |
| Gift Card Program Fees | Up to $50 per month per Center (not currently imposed) | 10 days after invoice or as we otherwise specify | You must participate in any gift card program we establish and pay required fees and contributions to us or a third party to administer the program. |  |
| Product Purchases | Varies depending on item purchased (not currently imposed) | 10 days after invoice | We may serve as a System supplier for goods and services you must purchase. If this occurs, we will provide you with a price list upon request. |  |
| Relocation Fee | $1,000 for each new site you propose plus Travel Expenses | At time new site proposed | You may not relocate your Center without our approval. If we allow you to relocate, you must pay us the $1,000 fee and reimburse all Travel Expenses we incur to visit new sites you propose. We refund 75% of the fee if we reject the site. |  |
| Satellite Office Fee (per office) | [If Office Located Inside Your Center Territory] $5,000 per office [If Office Located Outside Your Center Territory] $22,500 per office | At time you sign Satellite Office Addendum | See Note 4 for a description of the other fees you pay relating to a Satellite Office. |  |
| Renewal Fee | $2,500 | At time you sign renewal agreement | Imposed if you renew your franchise rights by signing a renewal Franchise Agreement. |  |
| Transfer Fee | 60% of then-current initial franchise fee (reduced to 40% if buyer is an existing franchisee) | Before Transfer | You pay the transfer fee for all Transfers other than Permitted Transfers. If our broker finds the buyer, you must also reimburse us for all commissions we pay the broker. |  |
| Audit Fee | Actual cost of audit (plus Travel Expenses for audit team) | 10 days after invoice | Imposed if audit (a) is required because you fail to submit required data or reports in a timely manner or (b) reveals you understated sales by 3% or more. |  |
| Late Fee | $100 plus default interest at lesser of (a) 15% per annum (prorated on daily basis) or (b) highest rate allowed by applicable law | 10 days after invoice | If our debit of your account is rejected or your check is returned for insufficient funds, we may charge (in addition to the late fee) an NSF fee of $50 per incident. Default interest is limited to 10% per annum in California. |  |
| Noncompliance fee | $500 per incident | Upon demand | Imposed if you breach a mandatory standard or operating procedure (including submission of required reports) and fail to cure within the time period we require. We may impose an additional $100 fee every 48 hours the breach remains uncured after we impose the initial fee. We will deposit these fees into the Brand Fund. |  |

We review your compliance with the monthly minimum performance requirements on a quarterly basis, meaning your failure to achieve the minimum monthly Total Sales for a given month will not be a default as long as your average monthly Total Sales over the three (3) month review period equals or exceeds the minimum required average monthly Total Sales amount. We may change our review period at any time. If you fail to achieve the minimum performance requirement and you are not dedicating full-time efforts to your Center (i.e., you are not physically present at your Center during substantially all hours of operation), then we may, but need not: (a) terminate this Agreement; or (b) modify or eliminate your territorial protections. We will not terminate this Agreement solely on the basis of your failure to achieve the minimum performance requirement if you are dedicating full-time efforts to your Center (i.e., you are physically present at your Center during substantially all hours of operation). When you renew, you will be subject to any minimum performance requirement in effect at the time of renewal.

Question 19

How does the initial franchise fee for Best In Class Education Center (Item 5) compare to the total estimated initial investment (Item 7), and what percentage does it represent?

Accepted Answer

erate.

## ITEM 7 ESTIMATED INITIAL INVESTMENT

|  | YOUR ESTIMATED INITIAL INVESTMENT |  |  |  |
|---|---|---|---|---|
| TYPE OF EXPENDITURE 1 | AMOUNT |  | WHEN DUE |  |
|  |  |  |  |  |
| Initial Franchise Fee 2 | $45,000 | Lump sum | At time you sign Franchise Agreement | Us |
| Initial Training Expenses 3 | $1,500 to $3,000 | As incurred | During training | Hotels, restaurants and airlines |
| Travel Expenses for Onsite | $1,300 to $3,800 | Lump sum | Prepaid estimate due | Us |
| Training 4 |  |  | 30 days before opening |  |
| Lease Deposit 5 | $4,000 to $6,000 | Lump sum | Before opening | Landlord |
| Build Out & Improvements 6 | $2,500 to $35,000 | As incurred | Before opening | Contractors, architects & suppliers |
| Signage 7 | $500 to $4,500 | Lump sum | Before opening | Suppliers |
| Decorating, Furniture & | $3,000 to $4,000 | As incurred | Before opening | Suppliers |
| Furnishings 8 |  |  |  |  |
| Systems Implementation Fee 9 | $2,000 | Lump sum | At time you sign Franchise Agreement | Us or affiliate |
| Technology Systems 10 | $2,000 to $3,000 | Lump sum | Before opening | Suppliers |
| Utility Deposits | $500 to $1,000 | As incurred | Before opening | Utility companies |
| Business License | $200 to $400 | Lump sum | Before opening | Government agencies |
| Professional Fees 11 | $2,500 to $5,000 | Lump sum | Before opening | Suppliers |
| Insurance Premium | $875 to $1,200 | Lump sum | Before opening | Insurance companies |
| (3 months) |  |  |  |  |
| Grand Opening Marketing | $10,000 | Lump sum | At time you sign | Us |
| Fee 12 |  |  | Franchise Agreement |  |
| Additional Funds 13 (3 months) | $8,500 to $18,600 | As incurred | As incurred | Landlord, us, business coaching organization, suppliers & employees |
| Total Estimated Initial | $84,375 to $142,500 |  |  |  |
| Investment 14 |  |  |  |  |The table below estimates the initial investment for the purchase of area development rights for 2 to 4 Centers:

| TYPE OF EXPENDITURE 1 | AMOUNT |  | METHOD OF PAYMENT | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
|---|---|---|---|---|---|
| Development Fee 15 | $85,000 to $155,000 | Lump sum |  | At time you sign ADA Us |  |
| Initial Investment to Open | $39,375 to $97,500 | This is the total estimated initial investment in Table above less |  |  |  |
| Initial Center |  | $45,000 initial franchise fee that is included in development fee. |  |  |  |
| Total Estimated Initial | $124,375 to $252,500 |  |  |  |  |
| Investment 14 |  |  |  |  |  |
![](_page_17_Picture_0.jpeg)

## Notes:

- 1.

Question 20

How does the initial franchise fee for Best In Class Education Center (Item 5) relate to the potential for creating a lasting legacy and making a difference in the lives of young people (Item 9)?

Accepted Answer

ly homework exercises and weekly tests and provide tailored help to meet each student's specific needs. Contact Info: ■ Call: (888) 683-8108 [FRANCHISEE PHONE NUMBER] ■ Message: @BestInClassEducationCenter [FRANCHISEE USERNAME] ■ E-Mail: info@bestinclasseducation.com [FRANCHISEE EMAIL] ■ Website: https://www.bestinclasseducation.com [FRANCHISEE WEBSITE] ■ More info: ■ About: Our goal is to motivate and encourage students to learn the principles of mathematics and English in a way that they will find rewarding and enjoyable. ■ Products: Tutoring Service Pre-K through 12th Grade; SAT / ACT and Gifted Test Prep |![](_page_121_Picture_0.jpeg)

![](_page_121_Picture_1.jpeg)

| ■ Category: Tutor/Teacher – Franchising Service |  |
|---|---|
| ■ Story: |  |
|  | English for both enrichment and remedial purposes. Opened in Washington in 1995, Best In |
|  | Class Education Center is committed to strengthening students' analytical and reasoning skills |
|  | through our tailor-made teaching materials and professional guidance. |
|  |  |
|  | The exercises are carefully formulated and tested so as to provide students with enough drilling |
| in different aspects. They enable students to have a complete revision of their learned topics.

Question 21

How does the Best In Class Education Center's initial training program in Item 11 relate to the initial training expenses listed in Item 7?

Accepted Answer

for any additional Centers you purchase.
- 3. Initial Training Expenses: This estimates your expense to send 1 to 2 people to Washington for Management Training. Your actual training expenses may vary depending on: (a) the number of people you send to training; (b) the distance they must travel; and (c) the level and quality of accommodations, travel and dining selected.
- 4. Travel Expenses for Onsite Training: You must reimburse our Travel Expenses to send 1 corporate trainer to your Center for 2 days of onsite training and support. We estimate these expenses will range from \$1,300 to \$3,800. You pay us a \$1,500 pre-paid estimate of these expenses 30 days prior to opening. The actual Travel Expenses incurred are reconciled with the pre-paid estimate after completion of onsite training. As discussed in Item 5, if our actual Travel Expenses are less than the \$1,500 pre-paid estimate, we will refund the overpayment to you or issue you a credit against royalty fees. This estimate assumes we send 1 corporate trainer to your Center. If you request additional trainers, you pay an additional training fee of \$350 per day for each additional trainer you request.
- 5.

Question 22

What is the relationship between the initial franchise fee for Best In Class Education Center in Item 5 and the estimated total initial investment in Item 7?

Accepted Answer

TIAL INVESTMENT |  |  |  |
|---|---|---|---|---|
| TYPE OF EXPENDITURE 1 | AMOUNT |  | WHEN DUE |  |
|  |  |  |  |  |
| Initial Franchise Fee 2 | $45,000 | Lump sum | At time you sign Franchise Agreement | Us |
| Initial Training Expenses 3 | $1,500 to $3,000 | As incurred | During training | Hotels, restaurants and airlines |
| Travel Expenses for Onsite | $1,300 to $3,800 | Lump sum | Prepaid estimate due | Us |
| Training 4 |  |  | 30 days before opening |  |
| Lease Deposit 5 | $4,000 to $6,000 | Lump sum | Before opening | Landlord |
| Build Out & Improvements 6 | $2,500 to $35,000 | As incurred | Before opening | Contractors, architects & suppliers |
| Signage 7 | $500 to $4,500 | Lump sum | Before opening | Suppliers |
| Decorating, Furniture & | $3,000 to $4,000 | As incurred | Before opening | Suppliers |
| Furnishings 8 |  |  |  |  |
| Systems Implementation Fee 9 | $2,000 | Lump sum | At time you sign Franchise Agreement | Us or affiliate |
| Technology Systems 10 | $2,000 to $3,000 | Lump sum | Before opening | Suppliers |
| Utility Deposits | $500 to $1,000 | As incurred | Before opening | Utility companies |
| Business License | $200 to $400 | Lump sum | Before opening | Government agencies |
| Professional Fees 11 | $2,500 to $5,000 | Lump sum | Before opening | Suppliers |
| Insurance Premium | $875 to $1,200 | Lump sum | Before opening | Insurance companies |
| (3 months) |  |  |  |  |
| Grand Opening Marketing | $10,000 | Lump sum | At time you sign | Us |
| Fee 12 |  |  | Franchise Agreement |  |
| Additional Funds 13 (3 months) | $8,500 to $18,600 | As incurred | As incurred | Landlord, us, business coaching organization, suppliers & employees |
| Total Estimated Initial | $84,375 to $142,500 |  |  |  |
| Investment 14 |  |  |  |  |The table below estimates the initial investment for the purchase of area development rights for 2 to 4 Centers:

| TYPE OF EXPENDITURE 1 | AMOUNT |  | METHOD OF PAYMENT | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
|---|---|---|---|---|---|
| Development Fee 15 | $85,000 to $155,000 | Lump sum |  | At time you sign ADA Us |  |
| Initial Investment to Open | $39,375 to $97,500 | This is the total estimated initial investment in Table above less |  |  |  |
| Initial Center |  | $45,000 initial franchise fee that is included in development fee. |  |  |  |
| Total Estimated Initial | $124,375 to $252,500 |  |  |  |  |
| Investment 14 |  |  |  |  |  |
![](_page_17_Picture_0.jpeg)

## Notes:

- 1.

Question 23

What is the total estimated initial investment for a Best In Class Education Center franchise (Item 7), and how much of that is the initial franchise fee (Item 5)?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT]

|  | YOUR ESTIMATED INITIAL INVESTMENT |  |  |  |
|---|---|---|---|---|
| TYPE OF EXPENDITURE 1 | AMOUNT |  | WHEN DUE |  |
|  |  |  |  |  |
| Initial Franchise Fee 2 | $45,000 | Lump sum | At time you sign Franchise Agreement | Us |
| Initial Training Expenses 3 | $1,500 to $3,000 | As incurred | During training | Hotels, restaurants and airlines |
| Travel Expenses for Onsite | $1,300 to $3,800 | Lump sum | Prepaid estimate due | Us |
| Training 4 |  |  | 30 days before opening |  |
| Lease Deposit 5 | $4,000 to $6,000 | Lump sum | Before opening | Landlord |
| Build Out & Improvements 6 | $2,500 to $35,000 | As incurred | Before opening | Contractors, architects & suppliers |
| Signage 7 | $500 to $4,500 | Lump sum | Before opening | Suppliers |
| Decorating, Furniture & | $3,000 to $4,000 | As incurred | Before opening | Suppliers |
| Furnishings 8 |  |  |  |  |
| Systems Implementation Fee 9 | $2,000 | Lump sum | At time you sign Franchise Agreement | Us or affiliate |
| Technology Systems 10 | $2,000 to $3,000 | Lump sum | Before opening | Suppliers |
| Utility Deposits | $500 to $1,000 | As incurred | Before opening | Utility companies |
| Business License | $200 to $400 | Lump sum | Before opening | Government agencies |
| Professional Fees 11 | $2,500 to $5,000 | Lump sum | Before opening | Suppliers |
| Insurance Premium | $875 to $1,200 | Lump sum | Before opening | Insurance companies |
| (3 months) |  |  |  |  |
| Grand Opening Marketing | $10,000 | Lump sum | At time you sign | Us |
| Fee 12 |  |  | Franchise Agreement |  |
| Additional Funds 13 (3 months) | $8,500 to $18,600 | As incurred | As incurred | Landlord, us, business coaching organization, suppliers & employees |
| Total Estimated Initial | $84,375 to $142,500 |  |  |  |
| Investment 14 |  |  |  |  |

Question 24

According to Best In Class Education Center, under what conditions would a franchisee be prohibited from being a member of the advisory council?

Accepted Answer

You would have the right to be a member of the council as long as you comply with your Franchise Agreement and do not act in a disruptive or abusive manner, as determined by us in our discretion. As a member, you would be entitled to all voting rights and privileges granted to other council members. Any company-owned Center would also be a member of the council. Each member would be granted 1 vote on all matters on which members are authorized to vote. We would have the power to form, change or dissolve the advisory council in our discretion.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 24–32)

Question 25

Can Best In Class Education Center change the trademarks that franchisees are allowed to use?

Accepted Answer

ion if we do not feel it is warranted. You may not control any proceeding or litigation relating to our Marks.

We may change the trademarks you may use from time to time, including by discontinuing use of the Marks listed in Item 13. If we require you to discontinue use of our primary Mark (i.e., BEST IN CLASS EDUCATION CENTER®), we will reimburse you for your tangible costs of compliance (e.g., changing brochures, business cards, etc.). We have no other liability to you for changing the Marks.

The Franchise Agreement does not require that we: (a) protect your right to use the Marks; (b) protect you against claims of infringement or unfair competition arising out of your use of the Marks; or (c) participate in your defense or indemnify you for expenses or damages you incur if you are a party to an administrative or judicial proceeding involving our Marks or if the proceeding is resolved in a manner unfavorable to you.

There are currently no: (a) effective material determinations of the Patent and Trademark Office, the Trademark Trial and Appeal Board, the trademark administrator of this state or any court; (b) pending infringements, oppositions or cancellations; (c) pending material litigation matters involving any of the Marks; or (d) infringing uses we are aware of that could materially affect your use of the Marks.

On April 11, 2025, we entered into an Intellectual Property License Agreement with HL Media (the "License Agreement"). Under the terms of the License Agreement, HL Media granted us the right to use and sublicense the Marks to our franchisees. The initial term of the License Agreement is 5 years, and then automatically renews for additional 5-year renewal terms unless terminated in accordance with its terms. HL Media may terminate the License Agreement only if we: (a) declare bankruptcy or become insolvent;

Source: Item 13 — TRADEMARKS (FDD pages 34–35)

Question 26

Under what conditions can HL Media terminate the Intellectual Property License Agreement with Best In Class Education Center?

Accepted Answer

On April 11, 2025, we entered into an Intellectual Property License Agreement with HL Media (the "License Agreement"). Under the terms of the License Agreement, HL Media granted us the right to use and sublicense the Marks to our franchisees. The initial term of the License Agreement is 5 years, and then automatically renews for additional 5-year renewal terms unless terminated in accordance with its terms. HL Media may terminate the License Agreement only if we: (a) declare bankruptcy or become insolvent; (b) breach HL Media's quality control standards and fail to cure the breach within a 60-day cure period; or (c) consent to the termination. If the License Agreement is terminated, it states all sublicenses granted by us to our franchisees will continue in full force and effect until the expiration or termination of the applicable franchise agreement. No other agreements limit our right to use or sublicense use of the Marks.

Source: Item 13 — TRADEMARKS (FDD pages 34–35)

Question 27

According to the Best In Class Education Center franchise agreement, what happens if a Washington state law regulates franchise relationships?

Accepted Answer

- **25.1. Governing Law.** Except as governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. §§ 1051, et seq.), this Agreement and the franchise relationship shall be governed by the Laws of the State of Washington (without reference to its principles of conflicts of law), but any Law of the State of Washington that regulates the offer and sale of franchises or business opportunities or governs the relationship of a franchisor and its franchisee will not apply unless its jurisdictional requirements are met independently without reference to this Section.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 28

According to the Best In Class Education Center Franchise Agreement, what is the relationship between 'Acquired Assets' and the termination or expiration of the agreement for a Best In Class Education Center franchise?

Accepted Answer

"*Acquired Assets*" means any assets associated with your Center that we elect to purchase upon termination or expiration of this Agreement, as further described in §22.2(a).

If we choose to exercise our purchase option, we will notify you of the assets we wish to purchase (the "Acquired Assets") within 20 days after the termination or expiration date.

If we exercise our purchase option we may require that: (i) you assign your lease to us at no additional charge (if you lease the premises); or (ii) you or your affiliate enter into a lease with us upon standard and commercially reasonable leasing terms, including rent at fair rental value, for a term of 10 years or such shorter term that we specify (if you or your affiliate own the real estate).

The purchase price for the Acquired Assets will be: (i) the purchase price established by the parties (if mutually agreed upon); or (ii) the Appraised Value established in accordance with §22.2(b) below.

"Appraised Value" means the fair market value of the Acquired Assets as of the date this Agreement is terminated or expires, as applicable; *provided, however*, that fair market value shall not include any value for goodwill and/or the franchise rights granted by this Agreement.

The parties shall attempt to mutually agree upon a single independent appraiser.

If they fail to do so, either party may demand the appointment of three (3) appraisers in accordance with the following: (i) no later than 15 days after the demand, each party shall appoint one (1) appraiser and notify the other party of the appointed appraiser's name and contact information; and (ii) no later than 30 days after the demand, the two (2) appraisers appointed by the parties will jointly appoint a third (3rd) appraiser.

You must promptly provide any documents or information requested by the appraisers.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 29

According to the Best In Class Education Center Franchise Agreement, what is the role of franchisor approval in conducting Affiliate Programs at a Best In Class Education Center?

Accepted Answer

"*Affiliate Program*" means any program or revenue-generating activity conducted at or in connection with your Center that is not a standard part of our System but is approved by us.

**11.3. Authorized Goods and Services.** You must offer all goods and services we require, including the specific classes, programs and curriculum we specify. Centers are currently required to offer Math and English classes, SAT and ACT preparation courses, and small group or "private" tutoring for these subjects and a variety of other high school subjects. You have the option, but not the obligation, to offer Special Programs, which must be administered in accordance with our policies, procedures and other requirements. You may only offer Affiliate Programs we approve. We may condition our approval on any requirements we deem appropriate.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 30

Can Best In Class Education Center or its affiliates potentially become approved or designated suppliers for other goods or services in the future?

Accepted Answer

We are currently an approved supplier for marketing materials and the exclusive supplier for BEST IN CLASS EDUCATION CENTER® email accounts. Our affiliate, LBIS, is currently the exclusive supplier for our proprietary BCP-LMS and the educational materials you acquire and obtain through BCP-LMS. No other person affiliated with us is currently an approved (or the only approved) supplier. We may appoint ourselves or our affiliate as an approved or designated supplier for other goods or services in the future. We and our affiliates may generate a profit from these purchases. Our officer, Hao Lam, owns an interest in LBIS. There are no other approved or designated suppliers in which any of our officers own an interest.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)

Question 31

Does Best In Class Education Center always approve the satellite office site before the addendum is signed?

Accepted Answer

If we approve the site for your Satellite Office before signing this

![](_page_184_Picture_0.jpeg)

Addendum, we will list the address of your approved site in Part A of ATTACHMENT A to this Addendum. Otherwise, we list the address of your approved site in a Site Approval Notice we send to you within 15 days after we approve your site. Within five (5) business days after we send you the Site Approval Notice, you must sign and date the franchisee acknowledgment section and send us a copy for our records. Our approval of the site and designation of your Satellite Office Territory is immediately effective and binding at the time we issue the Site Approval Notice even if you do not sign the acknowledgment; *provided, however*, you have five (5) business days after receipt of the Site Approval Notice to suggest changes to your Satellite Office Territory (which may, but need not, accept). Our approval of a site is not a representation or warranty of any kind, express or implied, of the suitability of the site for a Satellite Office. It only means we believe the site meets our minimum criteria.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 32

Does the amendment regarding the statute of limitations for claims under the Virginia Retail Franchising Act apply to all claims against Best In Class Education Center, or only those arising under that specific act?

Accepted Answer

- 4. Any provision in the Franchise Agreement or Supplemental Agreement that limits the time period in which you may assert a legal claim against us under the Virginia Retail Franchising Act is amended to provide for a four (4) year statute of limitations for purposes of bringing a claim arising under the Virginia Retail Franchising Act.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 33

Is attendance at Best In Class Education Center conferences mandatory, and if not, under what conditions?

Accepted Answer

|  | TYPE OF FEE 1 | AMOUNT 2 | DUE DATE | REMARKS |
|---|---|---|---|---|
| Conference Registration Fee | Up to $350 per person per conference | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless we designate attendance as optional or we waive your obligation to attend based on showing of good cause. |  |

Source: Item 6 — OTHER FEES (FDD pages 12–17)

Question 34

For Best In Class Education Center, is attendance at periodic conferences mandatory, and if not, under what conditions is attendance optional?

Accepted Answer

se provided in §6.3 with respect to certain pre-paid expenses; and (b) the fee for Management Training, which is due prior to training. You are responsible for all wages and Travel Expenses you and your personnel incur to attend training.

**5.5. Conferences**. We may hold periodic conferences to discuss business and operational matters relevant to Centers. Attendance is mandatory unless: (a) we designate attendance as optional; or (b) we waive your obligation to attend based on showing of good cause. We will not require attendance at more than

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 35

For each center developed under an Area Development Agreement, does a Best In Class Education Center franchisee sign the same franchise agreement as the one attached to the Disclosure Document?

Accepted Answer

You sign a separate franchise agreement for each Center you develop under the ADA. Each franchise agreement will be our then-current form of franchise agreement, which may differ from the current Franchise Agreement attached to this Disclosure Document.

Source: Item 1 — FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–10)

Question 36

Are certain liquidated damages clauses in the Best In Class Education Center Franchise Agreement or Supplemental Agreements unenforceable under California Civil Code Section 1671?

Accepted Answer

- 9.

Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.

Any such provisions contained in the Franchise Agreement or Supplemental Agreements may not be enforceable.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 37

Concerning the Best In Class Education Center franchise, did any representative make promises about training not found in the FDD?

Accepted Answer

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| Yes | No | 13. | contained in the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the costs involved in operating a Best In Class Education Center |  |
|  |  |  |  | franchise that is not contained in the FDD or that is contrary to, or different from, the information |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 38

What condition applies to further renewals of a Best In Class Education Center franchise after the third renewal term if required by applicable law?

Accepted Answer

## **4. TERM AND RENEWAL**.

- **4.1. Generally.** This Agreement grants you the right to operate your Center during the Term. You may renew your franchise rights by signing a Successor Agreement for a five (5) year renewal term. You may enter into a maximum of three (3) Successor Agreement(s). The parties may agree to further renewals after expiration of the third (3rd) renewal term, but neither party is obligated to do so (unless required by applicable Law, in which case the same renewal terms and conditions set forth in this Agreement shall apply to subsequent renewals). In order to sign a Successor Agreement you must satisfy all renewal conditions specified in this Agreement or the Successor Agreement you wish to renew, as applicable. The Successor Agreement shall be the current form of franchise agreement we use to grant franchises as of the expiration of the Term or renewal term, as applicable, the terms of which may vary materially and substantially from the terms of this Agreement. If this Agreement is a Successor Agreement, the Term of this Agreement and your remaining renewal rights, if any, shall be governed by your original franchise agreement.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 39

What conditions must a Best In Class Education Center franchisee meet to relocate their Center, assuming Best In Class Education Center approves?

Accepted Answer

ur Franchise Agreement. We must also approve the site of any Satellite Office you develop.

You may relocate your Center with our prior written approval, which we will not unreasonably withhold. If we allow you to relocate, you must: (a) obtain our approval of the site for your new Center within the Site Selection Area (but outside any territory assigned to another Center); (b) pay us the \$1,000 relocation fee for each new site you propose; (c) comply with our then-current site selection and development requirements; and (d) open your new Center and resume operations within 30 days after closing your p

Source: Item 12 — TERRITORY (FDD pages 32–34)

Question 40

What conditions must be met for a 'Transfer' to be considered a 'Permitted Transfer' under the Best In Class Education Center Area Development Agreement?

Accepted Answer

- "*Permitted Transfer*" means a Transfer: (a) between existing Owners; or (b) by the Owners to a new Developer Entity for which such Owners collectively own and control 100% of the Equity Interests; *provided, however*, that a Permitted Transfer does not include any Transfer that results in the Managing Owner owning less than 20% of the Equity Interests in the Development Business or Developer Entity.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 41

What are the conditions that must be satisfied for Best In Class Education Center to approve a proposed transfer of the Area Development Agreement?

Accepted Answer

in reliance upon the character, skill, attitude, business ability and financial resources of you and your Owners. Because this Agreement is a personal services contract, neither you nor any Owner may engage in a Transfer (other than a Permitted Transfer) without our prior approval. Any Transfer (other than a Permitted Transfer) without our approval is void and constitutes a breach of this Agreement. We will not unreasonably withhold our approval of a proposed Transfer if all of the following conditions are satisfied:
  - (a) we believe the proposed transferee has sufficient business experience, aptitude and financial resources to own and operate a Center and meets our minimum criteria for franchisees;
  - (b) you and your affiliates and Owners are in full compliance with all Definitive Agreements;
  - (c) the transferee's owners successfully complete, or make arrangements to attend, the initial training program (and the transferee pays us any applicable training fee);
  - (d) your landlord consents to the assignment of your lease to the transferee, or the transferee is diligently pursuing an approved substitute location within the Site Selection Area;
  - (e) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Center;
  - (f) the transferee (i) agrees to discharge and guarantee your obligations under this Agreement and any other Business, including contracts (including, customer contracts and supplier contracts) and (ii) signs any agreement we require to confirm the foregoing;

![](_page_79_Picture_0.jpeg)

- (g) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we specify otherwise; and (ii) the transferee need not pay a separate initial franchise fee;
- (h) the transferee agrees to remodel the Center and upgrade all furniture, fixtures and equipment to conform to our then-current standards and specifications (these changes must be completed within 12 months after the Transfer or such shorter period of time we specify);

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 42

What are the conditions that must be satisfied for Best In Class Education Center to not unreasonably withhold approval of a proposed transfer?

Accepted Answer

We will not unreasonably withhold our approval of a proposed Transfer if all of the following conditions are satisfied:
  - (a) we believe the proposed transferee has sufficient business experience, aptitude and financial resources to own and operate a Center and meets our minimum criteria for franchisees;
  - (b) you and your affiliates and Owners are in full compliance with all Definitive Agreements;
  - (c) the transferee's owners successfully complete, or make arrangements to attend, the initial training program (and the transferee pays us any applicable training fee);
  - (d) your landlord consents to the assignment of your lease to the transferee, or the transferee is diligently pursuing an approved substitute location within the Site Selection Area;
  - (e) the transferee and its owners obtain all licenses and permits required by applicable Law to own and operate the Center;
  - (f) the transferee (i) agrees to discharge and guarantee your obligations under this Agreement and any other Business, including contracts (including, customer contracts and supplier contracts) and (ii) signs any agreement we require to confirm the foregoing;
![](_page_79_Picture_0.jpeg)
- (g) the transferee and its owners sign our then-current form of franchise agreement (unless we instruct you to assign this Agreement to the transferee) except that: (i) the Term and renewal term(s) shall be the Term and renewal term(s) remaining under this Agreement unless we specify otherwise; and (ii) the transferee need not pay a separate initial franchise fee;
  - (h) the transferee agrees to remodel the Center and upgrade all furniture, fixtures and equipment to conform to our then-current standards and specifications (these changes must be completed within 12 months after the Transfer or such shorter period of time we specify);
  - (i) you or the transferee pay us a transfer fee equal to 60% (or 40% if the buyer is an existing franchisee of ours) of our then-current initial franchise, without taking into account any potential discounts on the then-current initial franchise fee, to defray expenses we incur in connection with the Transfer (in addition to the transfer fee, you must reimburse us for any commission we pay our broker if our broker finds the transferee);
  - (j) you and your Owners sign a General Release;
  - (k) you agree to subordinate the transferee's financial obligations to you to the transferee's financial obligations owed to us pursuant to the franchise agreement (we may require you to enter into a written subordination agreement);
  - (l) we choose not to exercise our right of first refusal described in §20.5; and
  - (m) you or the transferring Owner, as applicable, and the transferee satisfy any other conditions we reasonably require as a condition to approval of the Transfer.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 43

What are the conditions under which a Best In Class Education Center franchisee may form a separate entity to enter into each Franchise Agreement?

Accepted Answer

## **Background**

- A. We signed a Franchise Agreement with you, dated __________, 202____ (the "Franchise Agreement") pursuant to which we granted you the right to own and operate a Best In Class Education Center education business;
- B. You have notified us of your desire to transfer the Franchise Agreement and all rights related thereto, or an ownership interest in the franchisee entity, to a transferee, [**enter into a successor franchise agreement**] and we have consented to such transfer [**agreed to enter into a successor franchise agreement**]; and
- C. As a condition to our consent to the transfer [**your ability to enter into a successor franchise agreement**], you and Owner have agreed to execute this Agreement upon the terms and conditions stated below.
- D. In consideration of our consent to the transfer [**our entering into a successor franchise agreement**], and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, you and Owner hereby agree as set forth below.

## **Agreement**

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 44

What is the consequence if a Best In Class Education Center franchisee purchases the right to develop more than 4 Centers?

Accepted Answer

cusses how the development fee is calculated. This initial investment estimate assumes you commit to develop either 2 Centers (low estimate) or 4 Centers (high estimate). If you purchase the right to develop more than 4 Centers, your development fee will increase by \$35,000 for

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–19)

Question 45

What is the consequence if a Best In Class Education Center franchisee does not sign the acknowledgment section of the Site Approval Notice?

Accepted Answer

Our approval of the site and designation of your Satellite Office Territory is immediately effective and binding at the time we issue the Site Approval Notice even if you do not sign the acknowledgment; *provided, however*, you have five (5) business days after receipt of the Site Approval Notice to suggest changes to your Satellite Office Territory (which may, but need not, accept). Our approval of a site is not a representation or warranty of any kind, express or implied, of the suitability of the site for a Satellite Office. It only means we believe the site meets our minimum criteria.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 46

When considering a Best In Class Education Center franchise, did any representative make promises about operating costs not found in the FDD?

Accepted Answer

| Yes   | No                               | 12. | Do you understand that the Franchise Agreement, ADA (if applicable) and the attachments to those agreements contain the entire agreement between us and you concerning the franchise for the Best In Class Education Center franchise, meaning any prior oral or written statements not set out in the Franchise Agreement, ADA or the attachments will not be binding? |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|-------|----------------------------------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| Yes | No | 13. | contained in the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the costs involved in operating a Best In Class Education Center |  |
|  |  |  |  | franchise that is not contained in the FDD or that is contrary to, or different from, the information |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 47

What is the dependency for operating a Best In Class Education Center Satellite Office?

Accepted Answer

ill include between 7,500 and 9,000 students between the ages of 5 and 17 (as of the date we determine the boundaries of your Satellite Office Territory). If your Satellite Office is located inside your Center Territory, then your Satellite Office Territory will consist of the same geographic area that comprises the Center Territory. If your Satellite Office is located outside your Center Territory, then we will designate the boundaries of your Satellite Office Territory: (a) in Part B of ATTACHMENT A to this Addendum (if we designate your Satellite Office Territory prior to the Effective Date); or (b) in the Territory Approval Notice we issue to you within 15 days after approving the site for your Satellite Office (if we do not designate your Satellite Office Territory prior to the Effective Date). Your Satellite Office Territory, if different than your Center Territory, must be located adjacent to your Center Territory. During the term of this Addendum, we will not develop or operate, or license a third party to develop or operate, a Center or a Satellite Office that is located in your Satellite Office Territory except as otherwise provided in this Section. At any time during the term of this Addendum we reserve the right to engage in Acquisitions that involve, or subsequently result in, conversion of the acquired or acquiring company's outlets to BEST IN CLASS EDUCATION CENTER® outlets, even if those outlets are located in the Satellite Office Territory. We reserve the right to sell, and license third parties to sell, competitive or identical goods and services (including under the Marks) through Alternative Channels of Distribution, including within the Satellite Office Territory and you are not entitled to any compensation for these sales.
- **5. DEVELOPMENT AND OPERATION OF SATELLITE OFFICE**. The development and operation of your Satellite Office shall be subject to all of the terms of the Franchise Agreement other than the following Sections of the Franchise Agreement which shall not apply: §2 (Grant of Franchise); §3 (Territory); §4 (Term and Renewal); §5 (Training and Conferences); §6.3 (Opening Assistance); §7 (Establishing your Center); §12 (Minimum Performance Requirements); §14.1 (Initial Franchise Fee); and the provisions in §21.1 (Termination By You) requiring you to comply with various procedural requirements in order to terminate without cause, but the remaining provisions in §21.1 shall apply to the Satellite Office. You must open your Satellite Office no later than 180 days after the Effective Date.
- **6. TERM AND TERMINATION**. The term of this Addendum shall commence upon the Effective Date and expire upon the expiration, termination or transfer of the Franchise Agreement. You may terminate this Addendum upon notice to us if you close your Satellite Office. Your termination of this Addendum due to the closure of your Satellite Office shall not be deemed grounds for termination of the Franchise Agreement by either Party. We may also terminate this Addendum if you breach any of your obligations under this Addendum or the Franchise Agreement and fail to cure such breach within the applicable cure period. A breach of any term of this Addendum shall have a 30-day cure period.
- **7. SATELLITE OFFICE FEE**.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 48

In evaluating a Best In Class Education Center franchise, is it my responsibility to report any conflicting information received outside the FDD?

Accepted Answer

[Item 23: RECEIPT]

| Yes   | No                               | 12. | Do you understand that the Franchise Agreement, ADA (if applicable) and the attachments to those agreements contain the entire agreement between us and you concerning the franchise for the Best In Class Education Center franchise, meaning any prior oral or written statements not set out in the Franchise Agreement, ADA or the attachments will not be binding? |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|-------|----------------------------------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| Yes | No | 13. | contained in the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the costs involved in operating a Best In Class Education Center |  |
|  |  |  |  | franchise that is not contained in the FDD or that is contrary to, or different from, the information |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |
| Yes | No | 14. |  | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the training, assistance or support that will be provided to you that |  |
|  |  |  |  | is not contained in the FDD or that is contrary to, or different from, the information in the FDD? |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |
| Yes | No | 15. | Item 19 of the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the actual, average, projected or hypothetical profits or earnings, |  |
|  |  |  |  | the likelihood of success, the amount of money you may earn, or the total amount of revenue a |  |
|  |  |  |  | Best In Class Education Center business may generate, other than any information included in |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |
|  |  |  | CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. | YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON THEM. BY |  |
|  |  |  |  | SIGNING THIS QUESTIONNAIRE, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED EACH QUESTION |  |
|       | Signature of Franchise Applicant |     |                                                                                                                                                                                                                                                                                                                                                                                  | Signature of Franchise Applicant                                                                                                                                                                                                                                                                                                                                                                   |  |
|       | Name (please print)              |     |                                                                                                                                                                                                                                                                                                                                                                                  | Name (please print)                                                                                                                                                                                                                                                                                                                                                                                |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
| Dated |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | Dated                                                                                                                                                                                                                                                                                                                                                                                              |  |
|       | Signature of Franchise Applicant |     |                                                                                                                                                                                                                                                                                                                                                                                  | Signature of Franchise Applicant                                                                                                                                                                                                                                                                                                                                                                   |  |
|       | Name (please print)              |     |                                                                                                                                                                                                                                                                                                                                                                                  | Name (please print)                                                                                                                                                                                                                                                                                                                                                                                |  |
| Dated |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | Dated                                                                                                                                                                                                                                                                                                                                                                                              |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|       | EXPLANATION SECTION              |     |

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 49

Does the Best In Class Education Center financial performance representation reflect every cost or expense?

Accepted Answer

g                                                                           | \$4,455   |  |  |
| General & Admin                                                                     | \$18,214  |  |  |
| Royalties & Fees                                                                    | \$32,496  |  |  |
| Gross Sales Less Selected Expenses                                                  | \$15,553  |  |  |

Notes to Tables 3 and 4:

![](_page_43_Picture_0.jpeg)

- 1. Source of Data: We sent out a survey to all Qualifying Centers on January 23, 2025 via email. We received 23 total responses by the deadline given which was February 10, 2025. All of the data received was unaudited.
- 2. Historical Data: The data in this FPR is historical and represents the financial results achieved by the Qualifying Centers for the 2024 calendar year.
- 3. Selected Expenses Only: The financial performance representation in Tables 3 and 4 does not reflect every cost or expense that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your Center. Franchisees or former franchisees, listed in the Franchise Disclosure Document, may be one source of this information.

**Some Best in Class Education Centers have sold or earned this amount. Your individual results may differ. There is no assurance that you will sell or earn as much.**

Written substantiation for this financial performance representation will be made available to you upon your reasonable written request.

Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Hao Lam at 4820 NE 4th St., Suite A-107, Renton, Washington 98059 or by phone by calling (425) 880-2688, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–44)

Question 50

Does the Best In Class Education Center Franchisee Disclosure Questionnaire require franchisees to confirm they received and reviewed the Area Development Agreement (ADA), if applicable?

Accepted Answer

| Yes | No | l.  | Have you received from us and personally reviewed the Franchise Agreement and, if applicable, Area Development Agreement ("ADA"), together with all attachments to those agreements?                                                                                                                                         |
|-----|----|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  |  | [If you answer "no," please explain in Explanation Section]

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 51

Is a Best In Class Education Center franchisee obligated to renew the franchise agreement?

Accepted Answer

|  | THE FRANCHISE RELATIONSHIP |  |
|---|---|---|
|  | PROVISION S |  |
| a. Length of | FA: 1 (definition of Term) | Term is equal to 5 years. |
| franchise term | & 4.1 |  |
|  | SOA: 6 | Term is concurrent with term of Franchise Agreement. |
|  | ADA: 1(definition of | Term expires on required opening date of last Center to be developed |
|  | Term) | under development schedule. |
| b. Renewal or extension of the term | FA: 4.1 & 4.2 | If you meet our conditions for renewal, you can enter into 3 consecutive successor franchise agreements. Each renewal term is 5 years. The parties may mutually agree to further renewals but neither party is obligated to do so (subject to state law). |
|  | SOA: 6 | Term is concurrent with term of Franchise Agreement and may be renewed if you renew the Franchise Agreement. |
|  | ADA: 4.5 | No renewal rights. |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 37–41)

Question 52

What must a Best In Class Education Center franchisee do in order to develop centers beyond those listed in the Development Schedule?

Accepted Answer

You may not develop any Center other than the Centers listed in the Development Schedule unless we, in our sole discretion, permit you to enter into a new area

development agreement, which will be upon such terms that we specify, after you develop all Centers listed in the Development Schedule.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 53

Are Best In Class Education Center franchisees required to implement a gift card program?

Accepted Answer

amended agreement acknowledging your agreement to it terms).

## *Gift Card Program*

We may require that you participate in a gift card program in accordance with our policies and procedures. In order to participate, you may be required to purchase additional equipment, software and/or Apps and pay fees relating to the use of that equipment, software and/or Apps. We have the right to determine how proceeds from gift cards sales are divided or otherwise accounted for and we may retain proceeds from unredeemed gift cards. You must follow all of our policies regarding any gift card program we establish.

## *Brand and System Development Fund*

We currently administer a Brand Fund to promote public awareness of our brand and improve our System. We may use the Brand Fund to pay for any of the following:

- developing, distributing or administering advertising and marketing materials and programs
- conducting and administering promotions, contests or giveaways
- public and consumer relations and publicity
- brand development
- sponsorships and charitable and nonprofit donations and events
- research and development of technology, products and services
- website development and search engine optimization
- development, maintenance and promotion of an ecommerce platform
- development and implementation of quality control programs
- conducting market research
- reimbursing us for costs we incur to host franchisee conferences
- changes and improvements to the System
- fees and expenses charged by advertising agencies we engage to provide marketing services

![](_page_29_Picture_0.jpeg)

- collecting and accounting for brand fund fees and preparing financial accountings of the Brand Fund
- any other programs or activities we deem appropriate to promote or improve the System
- reimbursing us for administra

Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 37)

Question 54

Are Best In Class Education Center franchisees in Washington state subject to Section 3 of this agreement?

Accepted Answer

- 3. Right to Assign. At any time (including, without limitation, upon the expiration or termination of the Franchise Agreement), and without Landlord's prior consent, Tenant may assign the Lease to Franchisor. In such event, Franchisor may thereafter assign the Lease to another Best In Class Education Center franchisee or to an entity owned and/or controlled by Franchisor. If it does, Franchisor must first obtain Landlord's written approval of the assignee. Landlord, however, must neither unreasonably withhold nor delay its approval thereof. Landlord will acknowledge any such assignment in writing. No assignment permitted under this Section is subject to any assignment or similar fee or will cause any rental acceleration.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 55

For Best In Class Education Center franchises in Illinois, what happens if a provision in the Illinois State Addendum is inconsistent with a provision in the Franchise Agreement?

Accepted Answer

To the extent that any provision in the Illinois State Addendum is inconsistent with any provision in this Agreement, the provision in the Illinois State Addendum shall control.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 56

When is a 'General Release' required from Best In Class Education Center area developers and their Owners?

Accepted Answer

- (f) you and your Owners sign a General Release;

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 57

When is a 'General Release' required from a Best In Class Education Center franchisee and their Owners?

Accepted Answer

## **Agreement**

- 1. Release. Owner, you, and each of your officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and all persons or firms claiming by, through, under, or on behalf of any or all of them (the "Franchisee Parties"), hereby release, acquit and forever discharge us, any and all of our past and present affiliates, parents, subsidiaries and related companies, divisions and partnerships, consultants, advisors and franchise sellers and its and their respective past and present officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and the spouses of such individuals (collectively, the "Franchisor Parties"), from any and all claims, liabilities, damages, expenses, actions or causes of action which any of the Franchisee Parties may now have or has ever had, whether known or unknown, past or present, absolute or contingent, suspected or unsuspected, of any nature whatsoever, directly or indirectly arising out of or relating to the execution and performance (or lack thereof) of the Franchise Agreement or the offer, sale or acceptance of the franchise related thereto (including, but not limited to any disclosures and representations made in connection therewith). The foregoing release shall not be construed to apply with respect to any obligations contained within this Agreement.
- 2. California Law. You and Owner hereby express your intention to release all existing claims, whether known or unknown, against the Franchisor Parties. Accordingly, you and Owner hereby waive §1542 of the California Civil Code, which provides the following:
  - "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

## [Section 2 only applies for California franchisees; otherwise it is omitted]

3. Washington Franchise Law. The General Release does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, or the rules adopted thereunder.

## [Section 3 only applies for Washington franchisees; otherwise it is omitted]

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 58

What happens if the actual Travel Expenses exceed the $1,500 pre-paid estimate for Best In Class Education Center's grand opening assistance?

Accepted Answer

ing Assistance Expense Reimbursement**

We send a trainer to your Center to provide a minimum of 2 days of onsite training and grand opening assistance. You must reimburse us for the associated Travel Expenses (defined in Note 2 of Item 6), which we estimate will range from \$1,300 to \$3,800. You pay us \$1,500 at least 1 month prior to your grand opening date as a pre-paid estimate of the Travel Expenses for the trainer. If the actual Travel Expenses incurred are different than the \$1,500 pre-paid estimate then: (a) you pay us any Travel Expenses that exceed the \$1,500 pre-paid estimate within 10 days of invoicing; or (b) we promptly refund to you any overpayment if the Travel Expenses are less than the \$1,500 pre-paid estimate. If you request that we send more than 1 trainer, you must also pay an additional fee of \$350 per day (including each work day and travel day, for a minimum of 2 days) and reimburse us for the associated Trave

Source: Item 5 — INITIAL FEES (FDD pages 11–12)

Question 59

What happens if the actual Travel Expenses are less than the $1,500 pre-paid estimate for Best In Class Education Center's grand opening assistance?

Accepted Answer

ing Assistance Expense Reimbursement**

We send a trainer to your Center to provide a minimum of 2 days of onsite training and grand opening assistance. You must reimburse us for the associated Travel Expenses (defined in Note 2 of Item 6), which we estimate will range from \$1,300 to \$3,800. You pay us \$1,500 at least 1 month prior to your grand opening date as a pre-paid estimate of the Travel Expenses for the trainer. If the actual Travel Expenses incurred are different than the \$1,500 pre-paid estimate then: (a) you pay us any Travel Expenses that exceed the \$1,500 pre-paid estimate within 10 days of invoicing; or (b) we promptly refund to you any overpayment if the Travel Expenses are l

Source: Item 5 — INITIAL FEES (FDD pages 11–12)

Question 60

What happens if the actual travel expenses for Best In Class Education Center's onsite training are less than the pre-paid estimate?

Accepted Answer

ommodations, travel and dining selected.
- 4. Travel Expenses for Onsite Training: You must reimburse our Travel Expenses to send 1 corporate trainer to your Center for 2 days of onsite training and support. We estimate these expenses will range from \$1,300 to \$3,800. You pay us a \$1,500 pre-paid estimate of these expenses 30 days prior to opening. The actual Travel Expenses incurred are reconciled with the pre-paid estimate after completion of onsite training. As discussed in Item 5, if our actual Travel Expenses are less than the \$1,500 pre-paid estimate, we will refund the overpayment to you or issue you a credit against royalty fees. This estimate assumes we send 1 corporate trainer to your Center. If you request additional trainers, you pay an additional training fee of \$350 pe

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–19)

Question 61

What happens if Best In Class Education Center has not approved the satellite office site when the addendum is signed?

Accepted Answer

Your site is deemed disapproved if we do not issue our approval within the 15-day period.

If we approve the site for your Satellite Office before signing this

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Addendum, we will list the address of your approved site in Part A of ATTACHMENT A to this Addendum. Otherwise, we list the address of your approved site in a Site Approval Notice we send to you within 15 days after we approve your site. Within five (5) business days after we send you the Site Approval Notice, you must sign and date the franchisee acknowledgment section and send us a copy for our records. Our approval of the site and designation of your Satellite Office Territory is immediately effective and binding at the time we issue the Site Approval Notice even if you do not sign the acknowledgment; *provided, however*, you have five (5) business days after receipt of the Site Approval Notice to suggest changes to your Satellite Office Territory (which may, but need not, accept). Our approval of a site is not a representation or warranty of any kind, express or implied, of the suitability of the site for a Satellite Office. It only means we believe the site meets our minimum criteria.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 62

What happens if a franchisee answers 'no' to any question on the Best In Class Education Center Franchisee Disclosure Questionnaire?

Accepted Answer

| Yes   | No                               | 12. | Do you understand that the Franchise Agreement, ADA (if applicable) and the attachments to those agreements contain the entire agreement between us and you concerning the franchise for the Best In Class Education Center franchise, meaning any prior oral or written statements not set out in the Franchise Agreement, ADA or the attachments will not be binding? |                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|-------|----------------------------------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| Yes | No | 13. | contained in the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the costs involved in operating a Best In Class Education Center |  |
|  |  |  |  | franchise that is not contained in the FDD or that is contrary to, or different from, the information |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |
| Yes | No | 14. |  | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the training, assistance or support that will be provided to you that |  |
|  |  |  |  | is not contained in the FDD or that is contrary to, or different from, the information in the FDD? |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |
| Yes | No | 15. | Item 19 of the FDD? | Did any of our employees or representatives, or any person speaking on our behalf, make any |  |
|  |  |  |  | statement or promise regarding the actual, average, projected or hypothetical profits or earnings, |  |
|  |  |  |  | the likelihood of success, the amount of money you may earn, or the total amount of revenue a |  |
|  |  |  |  | Best In Class Education Center business may generate, other than any information included in |  |
|       |                                  |     |                                                                                                                                                                                                                                                                                                                                                                                  | [If you answer "yes," please describe the statement or promise in Explanation Section]                                                                                                                                                                                                                                                                                                             |  |

Source: Item 23 — RECEIPT (FDD pages 47–204)

Question 63

What happens if a Best In Class Education Center franchisee fails to meet the minimum performance requirement but dedicates full-time efforts to the Center?

Accepted Answer

We will not terminate your Franchise Agreement solely on the basis of your failure to achieve the minimum performance requirement if you are dedicating full-time efforts to your Center (i.e., you are physically present at your Center during all hours of operation).

Source: Item 12 — TERRITORY (FDD pages 32–34)

Question 64

What happens if the sale is not completed within 120 days after Best In Class Education Center receives the offer for a transfer?

Accepted Answer

If the sale is not completed within 120 days after we receive the offer, or there is a material change to the terms of sale, we will again have the right of first refusal specified in this Section.

Source: Item 23 — RECEIPT (FDD pages 47–204)

Best_In_Class_Education_Center 2025 FDD FAQ