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Business Description

Scout Guide, LLC is a Virginia limited liability company. Our principal business address is 3465 Ivy Road, Charlottesville, Virginia 22903. We conduct business under our corporate name and under the names “The SCOUT Guide” and “TSG.” Our agents for service of process are listed in Exhibit B to this Disclosure Document. We have no predecessors. OUR PARENTS AND AFFILIATES we are owned 100% by TSG Holding Company LLC, a Virginia limited liability company, the principal business address of which is 3465 Ivy Road, Charlottesville, Virginia 22903. TSG Holding Company LLC is the sole manager of Scout Guide, LLC. We obtain and pay for editorial and management services from our affiliate TSG Media LLC, the principal business address of which is 3465 Ivy Road, Charlottesville, Virginia 22903, and TSG Media LLC directly provides stationery and other products to franchisees.

Prior Experience

We are owned 100% by TSG Holding Company LLC, a Virginia limited liability company, the principal business address of which is 3465 Ivy Road, Charlottesville, Virginia 22903. TSG Holding Company LLC is the sole manager of Scout Guide, LLC. We obtain and pay for editorial and management services from our affiliate TSG Media LLC, the principal business address of which is 3465 Ivy Road, Charlottesville, Virginia 22903, and TSG Media LLC directly provides stationery and other products to franchisees. OUR OTHER BUSINESS ACTIVITIES we operate the Internet site thescoutguide.com, which promotes the Guides via the Internet and includes the SCOUT Guide blog. We may operate an online version of the franchised business, and we may produce and distribute advertising publications that are comprised of advertising spreads purchased by clients who are not all located within one territory, such as publications that are comprised of advertisers of goods and services in the same business category but are located in a number of different markets (e.g., “Category Guides”). In the past, we have also entered into license agreements with third parties with respect to certain of the Proprietary Marks; license agreements are no longer offered. Our affiliate, TSG Media LLC, and its subsidiaries own and operate all of the company-owned Scout Guide businesses. The company-owned Scout Guide businesses are of the type being franchised in this Disclosure Document. TSG Media LLC provides necessary overhead for the company-owned Scout Guide businesses and production and printing services for company-owned Scout Guide businesses and for Scout Guide, LLC for franchised Scout Guide businesses.

Business Offered

The franchise that we offer in this Disclosure Document is the license to operate a single SCOUT Guide advertising publication business (the “SCOUT Guide Business” or “Business”) in a fixed territory as a franchisee under the form of Franchise Agreement attached as Exhibit E to this Disclosure Document (the “Franchise Agreement”). SCOUT Guide Businesses are businesses that market and sell advertising spreads to local shops and businesses and produce high quality SCOUT Guide advertising publications for distribution locally. The franchise will be operated under certain trademarks, trade names, service marks, logos, emblems, insignia and other commercial symbols (including without limitation “The SCOUT Guide” and “TSG”) developed and approved for use by us from time to time (the “Proprietary Marks”), and under a comprehensive system (the “System”) which we may modify from time to time. Our System features the promotion and sale of advertising in high quality advertising publications produced and distributed under the Proprietary Marks; standards and specifications for production and publication, assistance, and training; sales and management assistance and training; operating procedures for the production and promotion of Guides; and specialized methods and techniques for publication, distribution, customer service, sales promotion and advertising (which may include promotional events); all of which may be changed, improved and further developed by us from time to time. We currently offer to qualified persons the opportunity to operate a SCOUT Guide Business within a territory approved by us. You will operate your SCOUT Guide Business as an independent business using the Proprietary Marks, System, support, guidance, and materials developed by us. You will offer Guides for distribution and sell advertisements to businesses wishing to advertise within your territory under the terms and conditions contained within the Franchise Agreement and our confidential operating manuals, including the Franchise Operations Manual and any other manuals that we may develop or prescribe from time to time (the “Manuals”), that will be loaned to you at the time of training. You may not offer other products or services without our prior written approval. We may offer special incentive programs at any time which may decrease any of the fees listed in Items 5, 6 and 7 of this Disclosure Document, or any financing amounts and/or terms listed in Item 10. Some of these incentive programs will be conditioned upon you executing a Franchise Agreement or opening your Business by a specified date and may only be available for specific SCOUT Guide Businesses or in specified markets which we determine in our sole discretion. We may alter or discontinue these programs at any time in our sole discretion without notice to you. These incentive programs may not be combined with any other offer or program unless indicated by us in writing. Furthermore, if you have executed a Franchise Agreement before the dates specified for the incentive programs, acquired a SCOUT Guide Business from an existing franchisee via a transfer, or are renewing an existing Franchise Agreement, you may not be eligible to receive the incentive program.

Initial Fees

Before you are awarded a SCOUT Guide franchise, you must sign a Franchise Agreement with us and pay us an initial franchise fee in the amount of$50,000. The initial franchisee fee is fully earned when the Franchise Agreement is signed and we do not refund it under any circumstances. You are required to pay us the initial franchise fee for the right to operate your franchised Business in the territory we grant to you, as further described in Item 11 below. The initial franchise fee is due and payable upon Franchisee's execution of the Franchise Agreement. We reserve the right to waive initial franchise fees for existing licensees of the Proprietary Marks converting to a Franchised Business. Except as noted below, all of the costs, expenses and fees described in this Item are nonrefundable. Except for the initial franchise fee described above (which you must pay at the time you sign the Franchise Agreement), costs, expenses and fees are not billed to you until after you have signed the Franchise Agreement REFUNDS OF THE INITIAL FRANCHISE FEE The initial franchise fees are deemed fully earned upon execution of the Franchise Agreement in consideration of the granting of the franchise, and are not refundable. You must pay the initial franchise fee as provided above, and we will not refund that fee. We reserve the right to offer special incentive programs at any time which may decrease any of the fees listed in this Item. Generally, these incentive programs will be conditioned upon you executing a Franchise Agreement and may only be available for specific locations or markets which we determine at our sole discretion. We may alter or discontinue these programs at any time at our sole discretion without notice to you. If you have executed a Franchise Agreement before the dates specified for the incentive programs, acquired a SCOUT Guide Business from an existing franchisee via a transfer, or are renewing an existing Franchise Agreement, you are not eligible to receive the incentive program unless otherwise indicated by us in writing.

Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation. GUARANTEES We require all of our franchisees to personally guarantee that any and all amounts due and owing to us or our affiliates will be paid in accordance with the terms disclosed in our Franchise Agreement and, if applicable, other agreements between the franchisee and us or our affiliates, as we deem necessary for adequate security. If you are not an individual, all principals of your organization (i.e. persons or partners who sign the Franchise Agreement and in the case of a corporation, partnership or limited liability company, the shareholders, partners, managers or members of that organization) must sign the Guarantee presented at the end of the Franchise Agreement as Attachment H, as we deem necessary for adequate security. This is a personal guarantee of the obligations under the Franchise Agreement and, if applicable, all other agreements between you and us or our affiliates. This Guarantee gives us the right to collect any amounts due us or our affiliates from you personally. Neither we, nor our affiliates guarantee any notes, leases or other obligations you may have with a third party. WAIVER OF DEFENSES The Franchise Agreement contains a provision in which you waive the defense of forum non convenient, that is, the claim that the court in which the action is brought is inconvenient or inappropriate, and your right to a jury trial (Franchise Agreement, Sections 26.D and 26.E). Generally, you have the right to a jury trial in civil litigation. The laws of certain states do not permit you to waive your right to a jury trial.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to disclose Information about the actual or potential financial performance of its franchised and/or company operated outlets, if there is a reasonable basis for the information, and the information is included in the disclosure document. Financial performance information that differs from the information included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about performance at a particular location or under particular circumstances. 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 SCOUT Guide Business, however, we may provide you with the actual records of that SCOUT Guide Business. 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 Christy Ford, SCOUT Guide, LLC, 3465 Ivy Road, Charlottesville, Virginia 22903, (434)244-2817, the Federal Trade Commission, and the appropriate state regulatory agencies.