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Business Description

Lil' Kickers Inc., a Washington corporation formerly known as Lil' Kickers LLC, was formed on October 29, 2007 to offer Lil' Kickers franchises. We changed our name to Lil' Kickers Inc. on December 7, 2015. The child development soccer program we are offering began in 1999 as a program of Arena Sports, Inc. (“Arena Sports”). We were a wholly-owned subsidiary of Arena Sports until January 1, 2016. Arena Sports also owns subsidiaries that operate the company-owned or -affiliated Lil' Kickers Programs described in Item 20 below.

Prior Experience

We have an affiliate named Lil' Strikers Franchising, Inc. (“Lil' Strikers”) that offers and sells Lil' Strikers franchises in Canada. Lil' Strikers franchises are essentially the same as Lil' Kickers franchises, except for the name. Lil' Strikers is our wholly-owned subsidiary. We also have an affiliate named Sports IT, Inc. that designs and sells Internet-based software solutions specifically for arena sports businesses. Sports IT, Inc. was also a wholly-owned subsidiary of Arena Sports until January 1, 2016. All Lil' Kickers Programs must use the Sports IT software to manage and administer the operations of their Lil' Kickers Program.

Business Offered

Lil' Kickers Programs operate a soccer training program for children varying in age from 1 through 12 years. The program is based on child development principles and includes soccer classes, clinics, camps, parties, and other events. Lil' Kickers Programs also participate in advertising, marketing, and information systems, and quality standards designed and implemented by us or our affiliates. We have developed all of these as part of the operating system (the “System”), which you may be granted a franchise to use. We refer to the Lil' Kickers Program that you will operate as the “Franchised Business.” You will operate the Franchised Business under a license to use our System, know-how, and trademarks. You will sign a franchise agreement with us (the “Franchise Agreement”). The Franchise Agreement is attached to this disclosure document as Exhibit C. The Franchise Agreement gives you the right to establish and operate the Franchised Business at one specific and permanent location, which is usually your indoor sports arena but may be another acceptable location. We refer to each Lil' Kickers Program as a “traditional” Lil' Kickers Program, unless it is located in a small market and operates as a Micro Lil' Kickers Program (see next paragraph). If your Franchised Business is a traditional Lil' Kickers Program, you are also granted the right to operate off-site programs within your limited territory. If your Franchised Business will be located (i) within a city or township with a population of less than 100,000, (ii) in a facility with less than 25,000 square feet of total floor space, or (iii) in a market whose other demographics or characteristics may not, as determined in our sole discretion, support a traditional Lil' Kickers Program, we may offer you a smaller-scale franchise referred to as a “Micro” Lil' Kickers Program. The decision of whether to offer you a Micro Lil' Kickers Program instead of a traditional Lil' Kickers Program is completely in our discretion. If you sign a Franchise Agreement for a Micro Lil' Kickers Program, you will sign (in addition to our standard Franchise Agreement) the Addendum for Micro Lil' Kickers Program (attached as Exhibit F). Micro Lil' Kickers Programs have no protected area (unlike “traditional” Lil' Kickers Programs), a lower initial franchise fee, and a smaller marketing requirement. If you operate a Micro Lil' Kickers Program, we may during the term of your franchise agreement, in our sole discretion, offer you the option to convert to a traditional Lil' Kickers Program. In order to convert you are required to meet several conditions stated in the Addendum for Micro Lil' Kickers Program, including signing a new, then-current franchise agreement, and paying us the difference between the new initial franchisee fee and the initial $8,000 franchise fee you already paid. If we offer you the option to convert to a traditional Lil' Kickers Program, we will provide you with our then-current franchise disclosure document and the disclosures in that disclosure document will apply to your converted Franchised Business (see Item 12 for more information on Exclusive Areas and Nonexclusive Territories). In addition to your traditional or Micro Lil' Kickers Program, we may offer you the ability to operate additional Lil' Kickers programs and events at off-site locations outside of your Exclusive Area or Nonexclusive Territory that meet our standards and specifications. If you accept the offer, you will sign an Addendum for Remote Locations in Adjacent Territory (attached as Exhibit G). These off-site locations may only be located in a geographic area that will be designated on a schedule attached to the Addendum for Remote Locations in Adjacent Territory, but in any event may not be located: (i) within the Exclusive Area of another franchisee or licensee, or (ii) in a facility whose primary function is serving as an indoor or outdoor sports facility that is capable of supporting a separate Franchised Business, as determined in our sole discretion. You will have no exclusive rights in any adjacent territory, and we may establish, own, operate, or franchise any business, including competitive businesses, and may sell or produce any products and services, using any trademarks and any channel of distribution, in these adjacent territories (see Item 12 for more information on Exclusive Areas and Non-exclusive Territories). If we sell a traditional Lil' Kickers Program with an Exclusive Area that overlaps with the Adjacent Territory, you will be required to cease operations at any off-site locations in that Exclusive Area at the end of the then-current season.

Initial Fees

Franchise Fee. You must pay us an initial franchise fee of $15,000 for a traditional Lil' Kickers Program. You must pay us an initial franchise fee of $8,000 for a Micro Lil' Kickers Program. The franchise fee must be paid to us in a lump sum when you sign the Franchise Agreement, though in limited circumstances we may allow the franchise fee to be paid in installments over a period not to exceed one year. We will not refund any portion of the franchise fee except under the following circumstances: (1) if you and we cannot agree upon a facility location within 60 days (or 120 days if we agree to a 60day extension) following the date we sign the Franchise Agreement, then either you or we can terminate the Franchise Agreement, upon which we will refund 50% of the franchise fee; or (2) if you (or your Designated Manager) fail to complete the initial training to our satisfaction, we can terminate the Franchise Agreement, upon which we will refund 50% of the franchise fee. You may be required to execute a general release of claims against us to receive the refund. We fully earn the franchise fee when you sign the franchise agreement. The franchise fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you as described in the Franchise Agreement and for costs incurred by us, including general sales and marketing expenses, legal, accounting, product development, and other professional fees. Technology Set-up Fee. You must pay us a one-time fee of $500 as a technology set-up fee. The technology set-up fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you in connection with the initial set-up of software you will use to track and manage products, seasons, leagues, classes, annual registration fees, discounts, internal calendars, email templates, and online registration associated with Lil' Kickers Programs. The technology set-up fee must be paid to us in a lump sum when you sign the Franchise Agreement, though in limited circumstances we may allow the Technology Set-up Fee to be paid in installments over a period not to exceed one year. This fee is not refundable. Marketing Campaigns. You must pay us a quarterly fee of $1,500 for traditional Lil' Kickers Programs, or $750 for Micro Lil' Kickers Programs, for marketing expenses that we conduct on behalf of you and all other franchises. This fee, called the “Marketing Fee,” may be used by us to purchase signs, on-site collateral, promotional items, direct mail campaign materials and similar marketing, advertising and promotional products and services. Your initial marketing fee will become due when you sign the Franchise Agreement, though in limited circumstances we may allow the initial marketing fee to be paid in installments over a period not to exceed one year. This fee is not refundable. You pay us or our affiliates no other fees or payments for services or goods before your business opens. Variability. Arena Sports' existing licensees that are in good standing with Arena Sports may convert to a franchise without paying the initial franchise fee or technology set-up fee. See Exhibit 6 to the Franchise Agreement.

Financing

We do not offer direct or indirect financing. We do not guarantee any obligations you make or have madeWe do not offer direct or indirect financing. We do not guarantee any obligations you make or have made

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 territory or under particular circumstances This Financial Performance Representation consists of the following information about British Swim School 1 Important Histoncaljnformation A short summary of the history of British Swim School 2 Key Financial Metrics. An overview of the franchise system performance consisting of performance by class year (i e , year that a franchise territory opened), revenue growth by class year and income statement data 3 Additional Performance Metrics A table providing key metric information in a question and answer format A Important Historical Information British Swim School began franchise operations in 2011 under our predecessor, BSCF, after operating as a non-franchise business in both the United Kingdom and the United States for almost thirty years By leveraging available commercial pools instead of constructing pools, the business model supports a lower initial investment strategy and offers agility and scalability to enable franchise business owners to rapidly meet demand and changing demographics Upon launching franchise operations m 2011, BSCF operated a number of corporate owned territories in addition to its franchised territories Over time, BSCF transitioned to a franchise-only business model As of December 31, 2018, British Swim School had 50 U S -based franchise business entities in continuous operation for more than nine months under the same ownership that owned 79 unique territories across 19 states The performance as represented in the tables below is based on data provided to us by our predecessor, BSCF We acquired the British Swim School franchise system on April 18, 2019, after the occurrence of all of the following financial performance information included below Franchisee financial performance could change under our ownership of the franchise system