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Business Description

To simplify the language in this Franchise Disclosure Document, “we”, “us” or “SpiderSmart” means SpiderSmart, Inc., the Franchisor. “You” means the person or entity that buys the franchise (the “Franchisee”). If an entity is the Franchisee, “you” includes the Franchisee's owners.

Prior Experience

From 2004 until May 2014, we granted trademark and software licenses to other persons and/or entities, authorizing each to operate a learning center under the name “SpiderSmart” that provides personalized tutoring services to school-aged children, and permitting them to utilize our proprietary curriculum materials and Internet-based Reading & Writing Program software to provide such services (a “License Agreement”). Since 2004 we also have permitted consumers to license use of our based Reading & Writing Program software on an “eLearning Basis” through Internet subscription agreements, but without personalized tutoring support. We are party to eleven (11) different License Agreements with ten (10) different parties for the operation of SpiderSmart Learning Centers. In addition to the permitted use of our trademark and software, each License Agreement provides that the licensee not engage in illegal deceptive trade practices or otherwise clearly tarnish the SpiderSmart trademark. In exchange, the licensees are required to pay SpiderSmart a specific flat monthly license fee. We have not engaged in any other business activities

Business Offered

We began offering franchises on September 23, 2014. Our affiliate and its predecessors (as described above) has never offered franchises in this or any other line of business and does not do business under any other name. The offering of the Franchise is separate and apart from our prior licensing activities as described above under Prior Business Activities. We will have substantially more control over the operations of franchisees than we have had over licensees, for example by requiring pre-approval of all advertising and minimum amounts of expenditures on local advertising; having the right to require the franchisees to pay money into a regional advertising fund; having the right to mandate pricing within a metropolitan area (subject to applicable law); requiring maintenance of customer and accounting records in specific ways, and providing us continuous access to those records; and.giving us a right of first refusal over any proposed transfer of a franchised SpiderSmart Learning Centers. We offer “SpiderSmart Learning Center” franchises (hereinafter referred to as a “SpiderSmart Learning Center”, “Center” or “Franchise”), which is a brick-and-mortar learning center that will provide personalized tutoring services to school-aged children ages 5 through 18. The Centers will utilize the “SpiderSmart Educational System,” which is a unique model for providing tutoring and instruction services specializing in the areas of reading and writing, math, current events, test preparation and other subject-specific focuses. The SpiderSmart Educational System provides a vast array of original curricula, including assignments for over 3,200 books for reading and writing sessions, 400 for current event sessions and 4,500 math worksheets. Although not required, if you wish to open a Franchise in Maryland, Virginia, the District of Columbia, or eastern Texas, you may sign our Preliminary Agreement (Exhibit B to this Disclosure Document) reserve a geographically-described site selection area for 120 days and obtain our assistance with the site- selection process, in exchange for paying us a fee of $5,000. During the 120-day period, we will provide advice and feedback about selecting and analyzing a site for the Franchise (including advice regarding population density, traffic patterns, safety of location, parking accommodations and proximity of the proposed site to other SpiderSmart franchisees), but site selection and any lease negotiation is ultimately your responsibility. Additionally, during that 120-day period, we may terminate the Preliminary Agreement at any time prior to you signing a lease or purchasing property for use as a SpiderSmart Learning Center, provided that we refund the $5,000 to you. if you are unable to secure a site acceptable to you and us in the site selection area during the 120-day period, we will have no further obligation to you and you may obtain a refund of $2,500 of the $5,000 deposit and no additional fees will be owed to us by you. If you secure an acceptable site and sign the Franchise Agreement, then the $5,000 Preliminary Agreement fee is applied toward the Initial Franchise Fee.

Initial Fees

The Initial Franchise Fee is $30,000. The full amount of the Initial Franchise Fee (less any deposits made as described below) is due either when you sign a lease for the site of your franchise approved by SpiderSmart, in its sole discretion, or when you sign the Franchise Agreement, whichever occurs later. If you wish to open a Franchise in Maryland, Virginia, the District of Columbia, or eastern Texas, by signing our Preliminary Agreement (Exhibit B to this Disclosure Document) you may to reserve a geographically-described site selection area for 120 days and to obtain our assistance with the site- selection process, in exchange for paying us pay a fee $5,000. The Preliminary Agreement is not offered to prospective franchisees in California or any state other than those listed in the prior sentence. During that 120-day period, we may terminate the Preliminary Agreement at any time prior to you signing a lease or purchasing property for use as a SpiderSmart Learning Center, provided that we refund the fee to you. If you are unable to secure a site acceptable to you and us in the site selection area during the 120-day period, we will have no further obligation to you and you may obtain a refund of $2,500 of the $5,000 deposit and no additional fees will be owed to us by you. If you secure an acceptable site and sign the Franchise Agreement, then the Preliminary Agreement fee is applied toward the Initial Franchise Fee. You must pay us or our affiliates no other fees or payments for services or goods before your business opens. Except as described with regard to the site selection deposit, no portion of the Initial Franchise Fee is refundable.

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 franchisee 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: (I) 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. The following chart represents calendar years 2018, 2017, 2016, and 2015 information for the SpiderSmart Learning Center operated in Tysons Corner, Virginia by our affiliate, Reading and Writing Center, LLC, under the supervision of our founder Jeannie Jung. Kis. Jung has continually operated similar tutoring businesses in Fairfax County, Virginia, since 1989, and has operated at Tysons Corner since 2010.