Total Initial Franchise Investment

The following is our best estimate of your initial investment to open one PRO MARTIAL ARTS Franchise. The estimate presented covers the period before the opening of your PRO MARTIAL ARTS Franchise and for the initial phase of your PRO MARTIAL ARTS Franchise estimated to be 3 months. Our estimates do not provide for your cash requirements to cover operating losses after the initial phase or personal living expenses. You must have additional sums available, whether in cash or through unsecured credit lines, or have other assets that you can liquidate, or that you can borrow against, to cover your personal living expenses and any operating losses after the initial phase of your PRO MARTIAL ARTS Franchise. We urge you to retain the services of an experienced accountant or financial advisor in order to develop a business plan and financial projections for your PRO MARTIAL ARTS Franchise. Your actual investment will vary depending upon local conditions peculiar to your geographic area or market, for example, real estate demand, availability and occupancy rates. Additional variables that will impact your initial investment are: size of your facility; age of the structure; length of your lease or other instrument granting you the right of occupancy to the Premises; if your space is to be built out by the developer with no initial out-of-pocket cost to you; lease arrangements; location in the market; costs of demolishing existing leasehold improvements; construction costs; other variable expenses and whether you currently hold a lease of an acceptable location. We do not expect you to purchase real estate or construct the building containing your PRO MARTIAL ARTS Franchise. Franchise fee Single unit - $40,000 Multi-unit - $60,000 Total Estimated Single Unit Investment $99,835 - $114,875. (includes $15,000 working capital.) Royalty fee 6% of gross revenue per month. Advertising Budget i. 2% of gross revenue for national advertising campaigns. (Currently 2% national advertising not being collected.) ii. $1,000 local advertising per month. Basis For Estimate We relied on our management staff's 18 years of experience as owners and operators of six karate schools in the Philadelphia metropolitan area, utilizing the Grandmaster Samane and PRO MARTIAL ARTS names and trademarks, to compile these estimates. You must review these figures carefully with a business advisor before making any decisions to purchase an PRO MARTIAL ARTS Franchise.

NO PREVIOUS KARATE TRAINING IS NECESSARY TO QUALIFY FOR A PRO MARTIAL ARTS FRANCHISE