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Business Description

Lil' Angels is a Tennessee limited liability company that was formed in May 1996 Lil' Angels does business as Lil' Angels Photography Our principal business address is 550 Industrial Dnve SW, Cleveland, Tennessee 37311-8262 Our Mailing Address is P O Box 2426, Cleveland, Tennessee 37320-242

Prior Experience

we operate one Lil' Angels business in Cleveland, TN Other than the one business location in Cleveland, TN, we do not operate a business of the type to be operated by the Franchise Owner One of our members operated a business of the type to be operated by the Franchise Owner in Tupelo, Mississippi from January 1993 to June 2014 We have offered Lil' Angels franchises smce January 1, 1998 We have not offered franchises for the same type of business as that offered m this Disclosure Document Further, we have not offered franchises in any other Imes of busmess, do not offer franchises in any other lines of busmess, and do not offer franchises under names other than Lil' Angels

Business Offered

You will advertise and contact families, childcare centers, athletic teams and organizations, schools, clubs, and other youth-related organizations to take pictures of children, youth, and families There is an expanding market for pictures of children, families, and youth in childcare centers and other child organizations Although you can normally schedule the date and time for you to take pictures, some childcare centers and other organizations set the times throughout the year for taking pictures Once you have taken the pictures, you will have the unages processed and/or printed developed by a photo processing lab approved by Lil' Angels After you have received the processed images and/or pictures from the approved photo lab, you will sell the pictures to the families In addition to the charge by the photo lab for processmg each picture unit, you will pay a System Fee of $ 55 for each equivalent unit An “equivalent unit” is a unit of value we have assigned for each processed picture item This System Fee IS subject to an annual modification that is disclosed m more detail in Item 11 When other Lil' Angels Franchise Owners pay the System Fee, you may have the opportunity to receive a portion of the System Fees paid by these other Owners That is, when a new Lil' Angels Franchise Owner that you introduce to the franchise system pays the $ 55 System Fee, you will receive $ 15 from his or her System Fee payment You have the nght to receive this payment for so long as you are a Lil' Angels Franchise Owner However, you must qualify to receive this payment by meeting your minimum production requirement and being in compliance with the terms and conditions of the Franchise Agreement

Initial Fees

The initial fees of $39,500 consist of the following All Franchise Owners will pay to us a nonrefundable Initial Franchise Fee of $28,500 This fee is paid through a $29,500 Cashier's Check upon execution of the Franchise Agreement or through a debit or credit card together with a 3% service fee for the use of the card, and. All Franchise Owners will purchase $10,000 of photography equipment and supplies plus applicable taxes and any shipping expense, at least 30 days before they commence training This nonrefundable amount is paid in a lump sum to us or other vendors

Financing

We do not offer direct or indirect financing We do not guarantee your note, lease or obligation

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document Financial performance information that differs from that 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 possible performance at a particular location or under particular circumstances We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets We also do not authorie our employees or representatives to make any such representations either orally or in wnting 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 Paul Kimball, Chief Manager, 550 Industrial Dnve SW, Cleveland, Tennessee 37311-8262 (423) 432-5957, the Federal Trade Commission, and the appropriate state regulatory agencies