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Description of the FranchiseWe offer franchises for the operation of a business (“Business”) providing learningenhancement, cognitive training (also referred to as brain training) and reading training to avariety of people under the LearningRx trademarks, trade names, service marks, and logos(“Marks”). The franchise is operated under a business format in accordance with a uniquesystem, including our valuable know how, information, trade secrets, methods, OperationsManual, standards, designs, methods of trademark usage, copyrightable works, Products andservice sources and specifications, proprietary software, confidential electronic and othercommunications, methods of Internet usage, marketing programs, and research and developmentconnected with the operation and promotion of the Business (collectively, the “System”) ownedand developed by us and known as a LEARNINGRX TRAINING CENTER (“Center”). Inaddition, our proprietary learning and development products, including “ThinkRx,” “ReadRx,”“ComprehendRx,” “MathRx,” “LiftOff,” and any other LearningRx products developed in thefuture (collectively, the “Products”), are designed to support customers in their ongoingtraining efforts. We reserve the right to change or otherwise modify the System and add,modify, or delete any of our Products at any time at our sole discretion.You must operate your Center in accordance with our standard business operatingpractices and sign our standard franchise agreement (“Franchise Agreement”) which is attachedto this Disclosure Document as Exhibit B. We also offer franchises to existing Franchisees whowish to open additional Centers. Existing franchisees must sign the then-current form ofFranchise Agreement and are subject to certain terms which are different from Franchiseesopening their first Center as noted in various ITEMS of this Disclosure Document.We offer one type of franchise, which is available to those persons whom we deemqualified, in our sole discretion, to operate a Business. You may operate one Business for eachFranchise Agreement you sign with us. We also offer to select qualified persons the opportunityto acquire the right to develop Businesses in multiple Territories. We retain the right, in our solediscretion, to choose to award or not to award a LearningRx Franchise to any prospectivefranchisee, for any reason, and to cease discussions regarding the awarding of a franchise at anytime, regardless of the stage of the franchise award process or the time and money spent by youor any other prospective franchisee.After you have opened your first Center, or if you possess the necessary businessoperational skills and financial resources, you may request one or more additional territories(“Development Territory”) in which to have the rights to develop additional Centers (“AreaDevelopment Rights”) within a prescribed schedule (“Development Schedule”). If you sign anarea development agreement (“Area Development Agreement”), the Initial Franchise Fee youwill pay for each Center you commit to open will be reduced (“Development Franchise Fee”).At the time you sign the Area Development Agreement, you will pay us an area development fee(“Area Development Fee”) equal to 50% of the Development Franchisee Fee multiplied by thenumber Centers you are authorized to open under your Development Schedule.8US.103554105.03

The Market and CompetitionThe Center targets its services to the general public. You may have to compete withother businesses including franchised operations, national chains, and independently ownedcompanies offering similar services to customers. The market for reading and learning servicesis developed and highly competitive. You will also face other normal business risks that couldhave an adverse effect on your Center. These include industry developments, such as pricingpolicies of competitors, and supply and demand. Another risk factor is our dependence on keypersonnel, the loss of whom could have an adverse effect on us. Our ability to fulfill ourobligations under our Franchise Agreement depends in part on our present and future financialcondition. Litigation risks also exist, including future litigation that may not be foreseeable.RegulationsThere may be specific laws or regulations in your state or municipality regarding theoperation of this Center. You should also familiarize yourself with federal, state, and local lawsof a more general nature which may affect the operation of your Center. You must comply withemployment, health and safety, workers’ compensation, insurance, licensing, and similar lawsand regulations. The laws in your state or municipality may be more or less stringent. Youshould examine these laws before purchasing a Center from us.In certain states, you must have a licensed medical professional, psychologist,neuropsychologist, or other licensed psychological examiner to administer or interpret certaintests used in the LearningRx program, including the Woodcock Johnson test. It is yourresponsibility to ensure that only properly credentialed and licensed professionals areadministering such tests in compliance with state law. These laws and requirements changeperiodically and it is your job to remain in compliance with these changes. The business ofoperating a LearningRx Training Center franchise is subject to all of the laws, codes andregulations (referred to below generally as "laws") normally applicable to educationalbusinesses. These include: (1) federal, (2) state, and (3) in most instances, city, county, parish,borough, municipality or other local laws.General Laws Regulating the Education Industry.Many jurisdictions have daycare or childcare laws which require licensing, bonding,insurance, building code, safety, teacher-to-student ratios, hours, health (eg. immunizations),instructor licensing, fingerprinting, criminal background checks and other similar requirements.In some jurisdictions the franchisee may be subject to regulation as if it were a school. Inaddition to the potential regulations listed above, these could include regulations requiringteacher and curricula accreditation.Federal. Examples of other federal laws affecting many small businesses are wage andhour, occupational health and safety, equal employment opportunity, taxes, hazardous materialscommunication to employees, hazardous waste and environmental, and the Americans WithDisabilities Act.9US.103554105.03

State. State laws may cover the same topics as federal laws. Examples of other statelaws affecting many small businesses include environmental, occupational health and safety, fire,taxes, health, and building and construction laws.Local. Local laws may cover the same topics as federal and state laws. Examples ofother local laws affecting many small businesses include health and sanitation, building codes,fire codes, permits, and waste disposal.The above are examples of some, but not all of the laws that may be applicable to thefranchised business described in the Disclosure Document. The Franchise Agreement places theresponsibility for complying with all applicable laws and regulations upon you, the franchisee.You should research these requirements before you invest.ITEM 2BUSINESS EXPERIENCECEO: Dr. Ken GibsonFrom January 2003 to the present, Dr. Ken Gibson has served as our CEO. In addition,since January 2002 to the present, he also serves as the President and Chief Executive Officer ofLearningRx, Inc., our Parent company. Both companies are based at our primary businessheadquarters, at 5085 List Drive, Suite 200, Colorado Springs, Colorado 80919.President: Dean TenpasFrom October 2004 to the present Mr. Tenpas has served as our President based at ourprimary business headquarters, at 5085 List Drive, Suite 200, Colorado Springs, Colorado80919. Before that he served as our Executive Vice President since our founding inJanuary 2003.Vice President of Franchise Development: Tanya MitchellMs. Mitchell has served as Vice President of Franchise Development since October 2004and as head trainer and consultant for LearningRx Franchise Corporation since January2003based at our primary business headquarters, at 5085 List Drive, Suite 200, Colorado Springs,Colorado 80919.Franchise Development Consultant: Katie KempMs. Kemp served as the Director of First Impressions for the LearningRx Home Officefrom April 2011 to July 2011 and then joined the franchise development team in July 2011 basedat our primary business headquarters, at 5085 List Drive, Suite 200, Colorado Springs, Colorado80919. Previously, she served as Treatment Coordinator and Office Manager for an orthodonticpractice in Castle Rock, Colorado from June 2008 to April 2011.10US.103554105.03

Vice President of Franchise Support: Kim HansonMs. Hanson has served as Vice President of Franchisee Support since October 2004and Director of Product Development since our formation in January 2003. She is based at ourprimary business headquarters, at 5085 List Drive, Suite 200, Colorado Springs, Colorado80919. Ms. Hanson has also served as the Director of Product Development for LearningRx,Inc. since May 2002.Vice President of Marketing: Mark FinzelFrom June 2009 to the present, Mr. Finzel has served as Vice President of Marketing atLearningRx based at our primary business headquarters, at 5085 List Drive, Suite 200, ColoradoSprings, Colorado 80919.ITEM 3LITIGATIONPrior Actions:Javier Arguello v. LearningRx Franchise Corporation, case no.77 114 00608 13. On December12, 2013, Mr. Arguello served us with a Demand for Arbitration, alleging wrongful terminationof his Franchise Agreement under Colorado and Maryland law, and demanding damages in theamount of 300,000, plus attorney fees and arbitration costs. We filed an Answering Statementand Counterclaim Request on December 20, 2013, denying his allegations and asserting thefollowing six counterclaims: (1) breach of the franchise agreement, (2) breach of thenondisclosure agreement, (3) breach of the covenant not to compete, (4) breach of license, (5)improper accounting, and (6) willful infringement of copyright. On August 21, 2014, anarbitrator ruled that Mr. Arguello’s Franchise Agreement was terminated without sufficientopportunity to cure the franchisee’s various defaults of the Franchise Agreement and awardedMr. Arguello 223,292 in damages. All of Mr. Arguello’s other claims were expressly denied bythe arbitrator. The arbitrator ordered Mr. Arguello to comply with the Nondisclosure andNoncompetition Agreement he signed contemporaneously with his Franchise Agreement, whichincludes a two-year post-termination covenant not to compete with the System. The arbitratoralso ordered Mr. Arguello to return to us the Operations Manual and all other proprietary andconfidential information we provided him in connection with his franchise.Governmental Actions:In the Matter of the Commonwealth of Virginia vs. LearningRx Franchise Corporation, ConsentOrder SEC-2009-00071. On or about October 15, 2009, LearningRx Franchise Corporationentered into a consent order with the state of Virginia in full settlement of a claim thatLearningRx had offered one franchise in the state of Virginia prior to the completion of theregistration process allowing it to do so. Pursuant to the consent order agreed to by LearningRx,and without admitting nor denying the claim, a rescission was offered to the Virginia consumerwho had entered into a franchise agreement with LearningRx and LearningRx agreed toreimburse administrative costs of 1,800 in settlement of all such claims.11US.103554105.03

In a meeting held with officials from the Federal Trade Commission on June 30,2015, we wereinformed that FTC staff has decided to seek authority to file a Complaint and attempt tonegotiate resolution of claims against us through a Consent Decree between the FTC and us andother related parties concerning our advertising practices. This decision is based on the FTC’sdetermination that our consumer advertising promoting the perceived cognitive benefits derivedfrom participation in the LearningRx System violates Section 5 of the FTC Act becauseLearningRx’s support for its claims does not meet the FTC’s interpretation of what constitutesreliable and competent scientific evidence. We disagree with the FTC’s interpretation of (a) thelaw and (b) the research we have offered to support our advertising, but we have made thedetermination that attempting to negotiate settlement is in the best interest of the LearningRxSystem. To date no Complaint has been filed by the FTC, so no case number, citation or filingdate is available, nor can we identify the defendants or the forum of the anticipated action. Wealso do not yet know the specific allegations the FTC intends to make or the amount of anymonetary sanctions it will seek to impose. The outcome of the dispute with the FTC cannot beanticipated. We anticipate that we will be engaged in negotiations with the FTC over the nextseveral months and the FTC will file its Complaint, along with any resulting Consent Decree,assuming settlement can be negotiated on acceptable terms, sometime before the end of 2015.Other than these actions, no litigation is required to be disclosed in this Item.ITEM 4BANKRUPTCYNo Bankruptcy is required to be disclosed in this Item.ITEM 5INITIAL FEESThe initial franchise fee (“Initial Franchise Fee”) varies depending upon the size of theTerritory. You pay an Initial Franchise Fee based on the number of people residing inFranchisee’s Territory. Franchisee must pay an Initial Franchise Fee of 15,000 for a microfranchise (“Micro Franchise”) (up to 50,000 people), 25,000 for a rural franchise (“RuralFranchise”) (50,000 to 100,000 people) and 35,000 for a standard franchise (“StandardFranchise”) (over 100,000 people). The Initial Franchise Fee is due when you sign theFranchise Agreement. The Initial Franchise Fee is fully earned upon signing of the FranchiseAgreement, and there are no refunds under any circumstances.You must also pay an Initial Training and Material Fee at the time you sign the FranchiseAgreement. The Initial Training and Material Fee is 10,000 and is fully earned upon payment.There are no refunds of the Initial Training and Material Fee under any circumstances.Depending upon the territory size of your LearningRx Center, you must pay us between 3,000 and 5,000 for opening inventory of the student kits and/or workbooks (“Products”12US.103554105.03

currently offered). Each student will need one or more kits and/or workbooks depending on theprogram. You must also purchase a trainer kit for each trainer in your Center.After you have opened your first Center, or if you possess the necessary businessoperational skills and financial resources, you may request one or more additional territories(“Development Territory”) in which to have the rights to develop additional Centers (“AreaDevelopment Rights”) within a prescribed schedule (“Development Schedule”). If you signan area development agreement (“Area Development Agreement”), the Initial Franchise Feeyou will pay for each Center you commit to open will be reduced (“Development FranchiseFee”). At the time you sign the Area Development Agreement, you will pay us an areadevelopment fee (“Area Development Fee”) equal to 50% of the Development Franchisee Feemultiplied by the number Centers you are authorized to open under your DevelopmentSchedule. Below is an example, please note the amount of the franchise fee reduced is anexample only.Example for an Additional Territory over 100,000 people:Development Franchise Fee: 35,000 .20 7,000 35,000 - 7,000 28,000Initial Training and Material Fee: 10,000 x .20 2,000 10,000 - 2,000 8,000 28,000 8,000 36,000 Area Development FeeArea Development Fee Deposit: 50% down.50 36,000 18,000 depositThe Area Development Fee is not refundable to you under any circumstances once paid.You will pay the balance of each Development Franchise Fee at the time you sign each FranchiseAgreement for each Center you actually open in your Development Territory. If you enter intoan Area Development Agreement for one or more Development Territories, you must open atleast one new Center in each Development Territory every twelve months.You must also pay us, at the same time and in the same manner as you pay your InitialFranchise Fee, depending upon the territory size of your LearningRx Center a fee of between 12,000 and 33,000 for an initial sales and marketing campaign (“Initial Marketing Fee”).The Initial Marketing Fee is fully earned by us at the time you sign the Franchise Agreement andis non-refundable for any reason.During our fiscal year ended Sept

discuss the availability of disclosures in different formats, contact LearningRx Franchise Corporation at 5085 List Drive, Suite 200, Colorado Springs, Colorado 80919 and 719-264-8808. Buying a franchise is a complex investment. The information in this disclosure document can help you make up your mind. Information comparing franchisors is .