DRAFT

Sporting almost thirty years of franchise experience and more than 1,100 centers located throughout North America, Sylvan Learning Centers provides franchisees with an opportunity to truly make a difference. As public school enrollment rises and budgets dwindle, it has become clear that many students must look elsewhere for extra educational guidance. That’s where Sylvan comes in. Providing students with individualized diagnostic and prescriptive education services, Sylvan franchisees not only generate satisfaction for their clients, but also for themselves. Sylvan serves students of all ages, including remedial students and students looking to keep up their proficiency in particular skills.

Operating Units	12/31/2005	12/31/2006	12/31/2007
Franchised	786	794	832
% Change	--	1.0%	4.8%
Company-Owned	237	241	198
% Change	--	1.7%	-17.8%
Total	1,023	1,035	1,030
% Change	--	1.2%	-0.5%
Franchised as % of Total	76.83%	76.71%	80.78%

Investment Required

The fee for a Sylvan Learning Center franchise is $48,000 for a Type A territory (containing approximately 18,000 to 30,000 school-age children ages 5 to 19) and $42,000 for a Type B territory containing approximately 8,000 to 18,000 school-age children. The fees include educational materials and equipment.

Sylvan Learning Centers provides the following range of investments required to open your initial franchise. The range assumes that all items are paid for in cash. To the extent that you choose to finance any of these expense items, your front-end investment could be substantially reduced.

Item	Established Low Range	Established High Range
Franchise Fee	$48,000	$48,000
Training Expenses	$2,815	$4,100
Security Deposit, Rent (6 months)	$14,583	$43,750
Real Estate Improvements and Site Preparation	$10,000	$55,000
Initial Inventory of SYLVAN Learning Materials	$36,800	$36,800
Specialized Furnishings	$12,000	$14,000
Furniture and Miscellaneous Supplies	$10,000	$12,000
Signage	$4,000	$8,000
Computers, Copier, Printers, Facsimile, Telephone, Internet Access and Software	$25,000	$35,000
Additional Funds (6 months)	$48,000	$48,000
Total Investment (does not include rent)	$211,198	$304,650

On-going Expenses

New franchisees with a Type A territory pay a royalty fee equal to 8% of monthly gross revenue. Those with a Type B territory pay a royalty fee equal to 9% of monthly gross revenue. Other fees include a national advertising fee equal to 4.5% to 6.5% of monthly gross revenue, varying local advertising and co-op costs and various online and software maintenance and support fees.

What You Get—Training and Support

Sylvan franchisees receive site-selection assistance as well as training in administering educational programs and managing and growing their business operations. As a center grows, a group of regional business and education consultants are also available for additional guidance.

Sylvan also maintains strategic partnerships to encourage synergistic opportunities and acquire national advertising supplies including ad slicks, brochures, television and radio commercials and direct mailings.

Territory

Sylvan grants exclusive territories.



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