$58

Business Description

To simplify the language used in this disclosure document, “LOA,” “We,” “we,” “Us,” “us,” and “our” all mean Luxottica of America Inc., an Ohio corporation. The Pearle Vision opportunity discussed in this document is, by definition, a franchise, and we are the franchisor; however, we will refer to the franchise throughout our documentation as a “License,” and LOA as the “Licensor,” in keeping with our mission and values. The terms “You,” “you,” “Your,” “your,” and “Licensed Owner” all mean the purchaser of the License (whether one or more individuals or a legal entity). “Owner” means each individual having a direct or indirect ownership interest in the Licensed Owner. “Pearle Vision Licensed Owners” mean all Licensed Owners who license a Pearle Vision EyeCare Center from us. We are an Ohio corporation doing business under the name Luxottica of America Inc., f/k/a Luxottica Retail North America Inc. (“LRNA”), and “Pearle Vision” or “Pearle.” The name change from LRNA to LOA was effective as of December 31, 2018. Our principal business address is 4000 Luxottica Place, Mason, Ohio 45040. Our agents for service of process in states whose franchise laws require us to name a state agency as agent for service of process are disclosed in Exhibit J to this disclosure document; otherwise, our agent for service of process is National Registered Agents, Inc., 1300 East Ninth Street, Cleveland, Ohio 44114.

Prior Experience

We are a successor in interest to the merger of Pearle Vision, Inc. into Lux MASALA LLC, a wholly owned subsidiary of Luxottica U.S. Holdings Corp. (“Lux US Holdings”), which immediately merged into LensCrafters, Inc., and immediately changed its name to LRNA, n/k/a LOA, all of which occurred on August 2, 2009. We are also a wholly owned subsidiary of Oakley, Inc. (“Oakley”), a Washington corporation with a principal business address of One Icon, Foothill Ranch, California 92610. Oakley operates primarily as a manufacturer of eyewear under the Oakley® brand, and is wholly owned by Lux US Holdings, a Delaware corporation, with a principal business address of 12 Harbor Park Drive, Port Washington, New York 11050. Lux US Holdings is a direct subsidiary of Luxottica Group S.p.A. (“Luxottica”), an Italian company, with its principal business address at Piazzale Cadorna 3, 20123, Milan. We are also a successor in interest to the merger of Lenscrafters International, Inc. (“LCII”) into LRNA, n/k/a LOA, on December 31, 2016. LCII was the franchisor for the Pearle Vision brand in Puerto Rico and offered franchises for Pearle Vision locations from December 2011 to December 2016. (LCII’s predecessors began offering franchises in Puerto Rico prior to that date.) LCII did not offer any other franchises, operate any Pearle Vision location or conduct any other business. Effective October 1, 2018, Essilor International S.A. (“Essilor”), a major ophthalmic lens company and Luxottica, a global player in the design, manufacture and distribution of eyewear, merged to create an integrated company dedicated to visual health and delivering a superior consumer experience. Essilor is a holding company with the new name “EssilorLuxottica S.A.” and its wholly-owned subsidiary, Essilor International SAS, will be principally responsible for its operating activities. EssilorLuxottica S.A., through its wholly owned subsidiary EOA Holding Co., Inc. is the owner of VSH Corporation, a Delaware corporation which, in turn, is the owner of Vision Source Management L.L.C. (“Vision Source Management”). Vision Source Management is the General Partner of Vision Source L.P. (“Vision Source”), the franchisor of the nationwide network of eye care centers operating under the name and mark VISION SOURCE®. Vision Source, therefore, will be our affiliate. Vision Source’s principal business address is 23824 Highway 59 North, Kingwood, TX 77339. The first Pearle Vision EyeCare Center opened in 1961 by Stanley Pearle, O.D., and we have offered licenses for Pearle Vision EyeCare Centers since December 1980. For over 50 years, Pearle Vision has offered a complete optical experience for families throughout the United States and continues that tradition today as a leader in prescription eyewear, sunwear, contact lenses, and patient services. Through quality products, a commitment to technology, and experienced professionals, Pearle Vision remains committed to providing genuine eye care for patients and retail customers. Being a leader in the optical marketplace means constantly evolving the way we embody eye care within a brick and mortar environment. Thus, our retail footprint, which we call “EyeCare Centers,” brings care forward and celebrates our Independent Doctors of Optometry with an environment that creates energy from the exam room to the retail floor. We seek doctors, opticians, and investors who share our vision and are committed to continue this legacy that started with Dr. Pearle over 55 years ago.

Business Offered

We operate Pearle Vision EyeCare Centers in the United States (each a “Company EyeCare Center”). We license the right to operate retail optical EyeCare Centers (each a “Licensed EyeCare Center”), under the service mark PEARLE VISION® . We do not offer licenses in any other line of business. Our Company EyeCare Centers and Licensed EyeCare Centers are collectively referred to in this disclosure document as the “Pearle Vision EyeCare Centers.” Pearle Vision EyeCare Centers currently operate under the service marks PEARLE®, PEARLE VISION®, PEARLE VISION CENTER®, PEARLE VISION EXPRESS®, and PEARLE EXPRESS®. These service marks, along with the marks listed in this disclosure document and the other trademarks and service marks we may require or authorize you to use from time to time, are collectively referred to in this disclosure document as the “Pearle Vision Marks.” We are a successor in interest to LensCrafters, Inc., which has operated retail optical stores since 1983, throughout the United States, Canada, and Puerto Rico. We also operate retail optical outlets through leasing and licensing arrangements with host stores including Sears and Target. We do not own the trademarks SEARS®, SEARS OPTICALSM, TARGET OPTICAL®, or TARGET®, as the same are owned by the relevant host entities. However, under separate licensing agreements with such host entities, LOA is authorized to use these trademarks in the operation of retail optical stores at the host store sites. In some locations, these stores may be located in close proximity to Pearle Vision EyeCare Centers and offer goods and services that are similar or identical to those offered at Pearle Vision EyeCare Centers.

Initial Fees

DEVELOPMENT FEE If you enter into a Limited Exclusive Development Agreement, simultaneously with signing that Agreement, you must pay a Development Fee of $10,000 for each Licensed EyeCare Center you intend to develop under the Limited Exclusive Development Agreement; provided that, depending on the market that you will develop, we reserve the right to charge up to the entire amount of the Initial Franchise Fees for all of the Licensed EyeCare Centers you intend to develop under the Limited Exclusive Development Agreement. The Development Fee is uniform for all developers who execute the Limited Exclusive Development Agreement, is fully earned when paid and is nonrefundable. If you enter into a Non-Exclusive Development Agreement, you will not pay a Development Fee. RPORATE CONVERSION EYECARE CENTER In addition to the Initial License Fee, if you purchase a Corporate Conversion EyeCare Center, at closing you must pay us the “Purchase Price” of the assets in a non-refundable, lump sum. Prior to closing, you must pay us a “Downpayment,” which is up to 20% of the sale price of the assets you purchase in a non-refundable, lump sum. We do not finance or escrow the Downpayment, but as an incentive to license certain Corporate Conversion EyeCare Centers, we may finance the remaining balance of the Purchase Price in the form of a “Promissory Note” presented in Exhibit G-1 and secured by the assets of the Licensed EyeCare Center in the form of a “Security Agreement” presented in Exhibit G-2. OTHER MISCELLANEOUS AMOUNTS You must also purchase or install the following items from us or our Service Affiliate when you obtain a license for a New Full Service EyeCare Center (Chart A in Item 7): (1) Inventory, which will cost $40,000 to $88,000; and (2) Grand Opening Advertising, which will cost at least $15,000; and (3) A&E Fees, which will cost $16,300. INCENTIVE PROGRAMS We have offered certain special “Incentive Programs” in the past and reserve the right to offer these programs and similar programs at any time in the future. Among other things, Incentive Programs may decrease the following: (a) the Initial License Fee or amounts payable to us before you open your Licensed EyeCare Center; (b) costs incurred to open your Licensed EyeCare Center, such as local marketing; or (c) royalties. The current Incentive Programs are summarized in Exhibit N to this disclosure document, and we may add, change or discontinue Incentive Programs at any time. The opportunity to participate in an Incentive Program may be made to Licensed Owners individually or as part of a special group.

Financing

This item discusses financing arrangements that we may offer you in certain circumstances, although we anticipate that you will obtain your primary financing, or substantially all of your financing, through your banking institution or other third parties. We cannot predict whether you will be able to obtain financing for all or any part of your investment, either through us or a third party. If you obtain financing from sources other than us, we cannot predict the terms of those financing arrangements. The following financing terms and loan documents are subject to change, if necessary, to comply with the laws of the state in which your Licensed EyeCare Center is located. PROMISSORY NOTE AND SECURITY AGREEMENT FOR CORPORATE CONVERSION EYECARE CENTERS For specific Corporate Conversion EyeCare Centers, we may offer the opportunity to finance your purchase of a Corporate Conversion EyeCare Center by executing a promissory note and a security agreement, each in the form attached as Exhibit G-1 and G-2 respectively (granting to us a security interest in the fixtures, furniture, equipment, inventory, leasehold improvements, accounts, and proceeds of your Licensed EyeCare Center). The standard term of the note will be twelve (12) to thirty-six (36) months, but cannot extend past the term of either your License Agreement or Lease. The interest rate we charge you will range from 0% to 15% based upon our risk assessment and the value of the collateral securitizing the promissory note. The stated annual rate may not exceed the maximum legal rate under federal and state law. We will notify you of any changes in the stated annual rate and the amount of the monthly payment before the affected payments become due. You may pre-pay the loan at any time without penalty. We may require additional material financing terms, such as: (1) a down payment; (2) additional security, which may include personal or real property you, or any Owner of the License, own; (3) a personal guaranty and assumption of obligations from your owners, in the form of Exhibit D-1 to this disclosure document if you are a business entity; (4) lease estoppel and subordination agreements in a form acceptable to us (as set forth in Section 2.01A of the security agreement; (5) our written consent (as set forth in Section 3.02 of the security agreement if you borrow additional funds in excess of an aggregate amount of $10,000 from a third party; (6) maintenance of a minimum inventory level at the location until all your indebtedness is paid in full as set forth in Section 3.03 of the security agreement; and (7) additional documentation necessary to carry out and effectuate the purpose of the loan as set forth in Section 5.12 of the security agreement. In addition to other remedies we have at law, the promissory note and security agreement provide that upon the occurrence of various events of default by you (including default of the License Agreement, the lease or sublease or any other agreement with us or our affiliates) we may: (1) collect from you all payments of principal and interest in arrears at the time of the default, (2) accelerate payment of the outstanding principal (See Section 6.02 of the security agreement), (3) terminate the License Agreement and related lease or sublease, (4) foreclose our security interest in the collateral, and (5) have a court declare that you must immediately pay the entire amount of the outstanding balance. You may also be held liable for costs and reasonable attorneys’ fees incurred for us to collect the amount due and owing if you sign a License Agreement for an additional Licensed EyeCare Center at the time you are already a Licensed Owner; we will waive the cross default provision in the License Agreement for the new EyeCare Center during the first twenty-four (24) full calendar months of operation of the new EyeCare Center. Therefore, a default under that License Agreement for the new EyeCare Center will not in and of itself constitute a default of any other License Agreement; nonetheless, a default under the License Agreement for the new EyeCare Center may still be a default under a sublease, security agreement, or other type of agreement you may have with our affiliates or us. Under the terms of the promissory note and security agreement, you (and each Owner) must waive all notices, demands for payment, presentations for payment, notices of intention to accelerate the maturity, notices of acceleration of the maturity, protest and notice of protest, forum non conveniens (that the court in which the action is brought is inconvenient or inappropriate (see waiver sections of promissory note and security agreement), and the right to a jury trial. Further, you also agree that all suits regarding the promissory note or security agreement will be brought in a court of competent jurisdiction in Ohio and resolved according to the laws of Ohio. As part of the collection process, you will grant us the right to: (i) open your mail and collect amounts due to you from any person who is obligated to you under an account; (ii) direct you to notify, or we may directly notify, your account debtors that their accounts have been assigned to us; and (iii) cause you to direct, or we may personally direct, your account debtors to make their payments to us. SECURITY AGREEMENT AND GENERAL FINANCING TERMS AND CONDITIONS The security agreement will remain in full force and effect until your License Agreement terminates or expires. You may not remove any of the collateral for the security agreement from your Licensed EyeCare Center without our prior written consent, unless sold in the ordinary course of business (as set forth in Section 5.11 of the security agreement). We may record UCC financing statements in the state where the Licensed EyeCare Center is located as evidence of our security interest. SUBORDINATION If you request us to subordinate our security interest in the collateral described previously, we will require you to agree that we have the right (but not the obligation) to cure the default and/or purchase the loan from the lender. In the event we deliver to you a notice of default under the License Agreement, we will also give written notice of the default to your lender. At such time, your lender may (but is not obligated to) cure the default on your behalf or assist and encourage you to cure the default. We reserve the right to refuse to subordinate our security interest in the collateral in our sole discretion based upon many factors including but not limited to your payment history, current accounts receivable owed to us, whether you are receiving consigned inventory, and whether you sublease your location from us. CREDIT POLICY Before you open, we establish a “Credit Limit” for each store that is based on the amount of Frames, Lenses and Lab Services we estimate your Licensed EyeCare Center will purchase in a 5-month period. If you exceed the Credit Limit we will evaluate whether it should be increased provided that you are current on your Pearle Vision accounts receivable, which include all invoices for Frames, Lenses, Lab Services, royalties, advertising fees, rent and any other amounts payable to us. If you exceed your Credit Limit and are not current on your Pearle Vision accounts receivable, you may not purchase Frames, Lenses or Lab Services from us, and your License Agreement and related agreements may be placed in default on their terms. Credit Limits are not based on credit score or any credit reporting agency. We reserve the right to require you to execute a revolving credit or product purchase agreement, and a security agreement granting to us a security interest in the fixtures, furniture, equipment, inventory, leasehold improvements, accounts, and proceeds of your EyeCare Center based on our determination of your creditworthiness, in our sole discretion, when you license your EyeCare Center. FRAMES AND LENSES PURCHASE You must purchase Frames and Lenses from us and Additional Inventory from an Approved Supplier. If you purchase your Initial Frame Assortment or other inventory from us and you meet our credit qualifications, we may permit you to pay for your purchase in monthly installments without interest or service charge. The monthly installments generally range from one (1) to six (6) months unless otherwise negotiated, depending on factors, which include but are not limited to whether you sign a Development Agreement, current Incentive Programs, the amount of inventory purchased and your credit qualifications. PREFERRED LENDING PROGRAM We do not currently offer a preferred lending program, nor do we receive payment from any bank or any person or persons for placing financing; however, we reserve the right to do so in the future and have those payments offset our expenses incurred in obtaining the financing. We do not advise you as to which financing program you should choose, or whether financing is the best option for your Licensed EyeCare Center. We strongly advise you to investigate all available options and seek the advice of your attorney or business advisor to determine what program best suits you and your needs. OTHER FINANCING INFORMATION We may also, from time to time in our sole discretion, offer financing terms for significant purchases from us. We do not intend to transfer, assign, discount, or sell to a third party any promissory note, any portion of a promissory note, or any other payment or obligation executed by any Licensed Owner. However, we reserve the right to do so in the future under terms that we have not yet determined. Except as described above, we do not finance (or assist you to finance) any other categories of expenses (such as Initial License Fees, site acquisition/development costs, construction or refreshing costs, or fixtures).

Franchisee Revenue and Profit

Tables 1-3 below are based on unaudited balance sheets and statements of operations/income statements and monthly reports (“MFRs”) submitted to us by current licensed owners using our Eyecon™ operating model. That is the same type of franchise as is being offered to you. We are not offering any other type of franchise. The Eyecon™ operating model includes an integrated supply chain and point-ofsale system that includes Frame Board Management, Lab Service Management, Lens Management and financial reporting. It allows licensed owners to simplify the retail side of their business, leverage centralized purchasing power and focus on caring for patients. The aforementioned unaudited balance sheets and statements of operations/income statements are referred to in this Item 19 as the “Eyecon L.O. Unaudited Financial Statements.” We have included information for 181 Licensed EyeCare Centers using our Eyecon operating platform. These Licensed EyeCare Centers have at least three years of operating results and have submitted Eyecon L.O. Unaudited Financial Statements and MFRs for the last fiscal year. Other Licensed EyeCare Centers were not included in this information because they: (a) are not using the Eyecon operating platform (106), (b) have less than 3 years of operating results (116), (c) did not submit their fourth quarter operating results in a timely manner (3), or (d) are located in Canada (12). We may review the Eyecon L.O. Unaudited Financial Statements and MFRs periodically and we believe the Eyecon L.O. Unaudited Financial Statements accurately reflect the operations at such Licensed EyeCare Centers. We do not know if the Eyecon L.O. Unaudited Financial Statements and MFRs were prepared in accordance with generally accepted accounting practices; however, we believe the information is reliable. The footnotes after the Tables describe the types of items that we ask franchisees to include in each category, but we cannot guarantee that all franchisees used these categories in the manner we have requested. All monetary amounts are in thousands (000s). The information for each quartile represents the average for each category. The 68 Licensed EyeCare Centers reported in Tables 1A and 1B are owned by an optometrist or ophthalmologist. The high and low sales amounts for these Licensed EyeCare Centers were $4,003,019 and $359,176. We provided the same products, services, training, and support to all of the Licensed EyeCare Centers included in Tables 1 – 3 above that we will provide to you. The Licensed EyeCare Centers included offered substantially the same products and services to the public, except that some EyeCare Centers contained a surfacing lab, which enables a Licensed Operator to produce most eyewear in approximately one hour. We do not require you to be an optometrist in order to obtain a license. However, if you are an optometrist or operate in a state that allows a layperson to employ an optometrist, you will earn professional fee revenues in addition to Net Retail Sales, which may affect your Owner Income. Some Licensed EyeCare Centers have earned these amounts. Your individual results may differ. There is no assurance you will earn as much. We encourage you to review this material with your attorney or accountant. Written substantiation for the financial performance representation will be made available to you upon reasonable request. We do not provide any historical operating data for our company-operated EyeCare Centers. Except for the information in this Item 19, we do not make any representations about a Licensed Operator’s future financial performance or the past financial performance of Pearle Vision EyeCare Centers. We also do not authorize our employees or representatives to make any representations either orally or in writing, except as contained in this Item 19. If you are purchasing a Corporate Conversion Store, however, we may provide you with the actual records of that store. If you receive any other financial performance information or projections of your future income, you should report it to our management by contacting Cara Londin, General Counsel, Luxottica Group, 12 Harbor Park Drive, Port Washington, New York 11050, telephone number (516) 918-3188, Email [email protected]; the Federal Trade Commission, and the appropriate state regulatory agencies.