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Business Description

Kuk Sool Won™ is the famous and well known Korean National Martial Arts Association Kuk Sool Won is a worldwide orgamzation with member schools teaching and employing martial arts theory based on ancient Korean martial arts The techniques employed by the Association's members were systematically developed by our Grandmaster In Hyuk Suh m 1958 m South Korea

Prior Experience

We trace our roots back to 1958 when our Grandmaster Suh established Kuk Sool Won™ as descnbed above In 1974, Grandmaster Suh founded the World Kuk Sool Association as a sole proprietorship In 1983, the World Kuk Sool Association, Inc began offermg licenses for Schools, which operate under terms which differ substantially fi"om the Franchise Agreement (defined below) It has not offered any other licenses or franchises m any Ime of business World Kuk Sool Association, Inc is our affiliate and our parent Its pnncipal business address is the same as ours World Kuk Sool Association, Inc is the owner of our Trademarks (defined below) We acquired the license to use and sub-license the Trademarks (defined below) fi-om World Kuk Sool Association, Inc m February 2008 World Kuk Sool Association, Inc does not sell goods or services to you However, as descnbed m Item 8, all of your students must be members of World Kuk Sool Association, Inc by paying us membership fees We do not have any other parents or predecessors Gaya Won, LLC, our affiliate, is a supplier of uniforms, weapons, belts and patches, textbooks and handbooks to us and our fi-anchisees Gaya Won, LLC is a Texas limited liability company and Its pnncipal business address is 37937 FM 1774 Road, Magnolia, Texas 77355 It has never offered franchises m any line of business

Business Offered

We offer fi-anchise agreements (“Franchise Agreements”) which grant franchises for the establishment and operation of Schools Schools operate under our trademarks, which include (i) our logo, (ii) “Kuk Sool Won™”, (in) the elements and components of a School's trade dress, and (iv) any and all additional or different trade names, trademarks, service marks, logos and slogans that we adopt occasionally to identify the System (defined below) and the products and services offered by the Schools (the “Trademarks”) and the System (defined below) Schools offer the general public high quality martial arts traimng m Kuk Sool Won™, a comprehensive, traditional Korean martial arts system The Franchise Agreement grants the right to own and operate one School at a designated site (the “Site”) for an initial terai of 3 years The School which you will establish under the Francluse Agreement is referred to m this Disclosure Document as the “Franchised School ” We offer Francluse Agreements for the operation of part-time Franchised Schools (each a “PT Franchised School”), full-time Franchised Schools (each a “FT Franchised School”) and transient schools (each a “Transient School”) A FT Franchised School is a martial arts school that is located at a Site that IS dedicated exclusively to the operation of a School A PT Franchised School is a martial arts school that holds its teachmg sessions at a Site that is rented or loaned on an hourly or part-time basis, such as at a church A PT Franchised School may be further designated a Club Franchised School, which means a School located m a facility which only members of the facility may participate, such as at a health club or YMCA A Transient School is a School located at a site that is transitory in nature due to the fact that the Franchisee or Designated Instructor is located in the area on a non-permanent basis such as at a college or military base Unless otherwise designated in your Franchise Agreement your Franchised School will be a PT Franchised School Our form of Franchise Agreement is attached to this Disclosure Document as Exhibit B If you will operate a Club School, you must also sign our Club Franchised School Addendum, attached to this Disclosure Document as Exhibit C If you will operate a Transient School, you must sign our Transient School Addendum, attached to this Disclosure Document as Exhibit D You must operate the Franchised School according to our busmess methods, designs, arrangements and standards for developing and operating Schools, which are identified by the Trademarks, including those pertaining to site selection, construction, building design, signage and layouts, equipment, specifications for products and services, traimng, requirements and policies regarding personnel, accounting and financial performance, advertising and marketing programs and information technology, all of which we may improve, further develop or otherwise modify fi-om time to time (the “System”) You must be at least a candidate for a Second Degree Black Belt (as certified by us or our affiliates) in order to operate a Franchised School If you, the franchisee, are not an individual, you must designate one instructor who is at least a candidate for a Second Degree Black Belt (as certified by us or our affiliates) who will be responsible for general oversight and management of the operations of the School on behalf of Franchisee (the “Designated Instructor”) The market for a School is any child or adult that has an interest m martial arts Demand for the services provided by the School will come from consumer rather than commercial markets Your competitors include any business offenng martial arts instruction including, but not limited to, other martial arts schools and health clubs that offer martial arts instruction You may also compete with the Schools operated by us and with other of our fi'anchisees

Initial Fees

Freinchise Fee The franchise fee for each PT Franchised School is $1,000 The franchise fee for each FT Franchised School is $2,000 The franchise fee for each PT Franchised School that is further designated as Transient School is $300 00 The franchise fee is payable m a lump sum when you sign the Franchise Agreement The franchise fee is uniformly imposed and is not refundable Initial Annual Fee The first Annual Fee for a PT Franchised School is $100 The first Annual Fee for a FT Franchised School is $150 The first Annual Fee for a Transient School is $150 The first Annual Fee shall be payable when you sign the Franchise Agreement Application Fee The application fee for each potential franchisee is $45 to $100 before you sign the Franchise Agreement It is not refundable The application fee is due

Financing

We do not offer you any direct or indirect financing We do not guarantee your note, lease or any other financial obligation We do not receive any payments from any person offering financing to or arranging financing for a prospective WKSA fi-anchisee

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.