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2. enjoyable active rewarding A brief history of Little Steps gym Little Steps Gym was started in 1993 by Tracey Griggs. At the time Tracey had a three year old son attending the local playgroup. Tracey needed to work but also wanted to spend time with her son. The ideal solution appeared to be working for herself but within a child based company. Tracey started with one site and then opened a second site after which she decided to franchise the business. In June 2007 the business changed hands to Karen Hoare and Tracey Stephens. My name is Karen Hoare and I bought my franchise in the summer of 2000. I have two grown up daughters, two grandchildren and another grandchild on the way! Before buying my franchise I ran a pre-school on the NATO base in Portugal for three years where my husband was serving at the time in the Royal Navy. Having run my franchise for seven years I was extremely excited about being given the opportunity to become the franchisor with all the new challenges this will bring. My name is Tracey Stephens. I am married with two grown up children and two younger children. I have worked within the child sector for many years in various settings and ran a successful toddler group for two and a half years. I met Karen in September 2002 when I joined her gym classes with my two youngest children. I am very much looking forward to the new challenges at Little Steps Gym Ltd. 1

3. enjoyable active rewarding What is Franchising? • Franchising offers an excellent opportunity for you to be in business for yourself. When you hear the word ‘Franchising’ you probably think of fast food restaurants such as Burger King, McDonalds's or Wimpy. The truth is franchising is so much wider than that.There are franchises available in almost every business area that you could think of, in all price ranges, from one man/woman operations to large multi-national enterprises employing thousands of people. • Compared with starting your own business from scratch franchising can provide a relatively safer route into self employment. The franchisor has done it all many times before and can, therefore, help you eliminate all the mistakes you almost probably would make if you tried to do it all yourself. • A franchise can offer a successful business concept, proven market and operation methods, ongoing support and an established identity A successful franchise relationship is like a partnership. It combines your talent with the experience and knowledge of the franchisor. With franchising you are in business for yourself not by yourself Franchisors not only have sound training programs but also knowledge of financial requirements and marketing - knowledge that might take you years to acquire on your own. 2

4. enjoyable active rewarding Why Franchise? • Why do Companies Franchise?For a company with a successful service or product to offer, franchising is the ideal way of expanding and creating a corporate image nationwide. • Why should I consider franchising?There are many individuals who, like yourself want to be their own boss. They see no long term security in working for someone else, and feel that their potential income will always be limited as an employee. • Franchisingoffers these individuals an opportunity to break free and own their own business whilst minimizing the risk that is inherent in opening an entirely new business from scratch. • Franchising allowsyou to follow a tried and tested business system which greatly improves your chance of success, as the statistics prove. Remember Little Steps gym has been in operation successfully for 14 years. 3

5. enjoyable active rewarding What are the Benefits? • Franchising first became a recognized force in the UK during the 1970sAccording to a survey carried out in 1995 by the National Westminster Bank and the British Franchise Association, the overall turnover of the franchise industry in 1995 was estimated at 5.9 billion, a 7 per cent increase on 1994, with the number of business format franchising systems growing to 474, up by 14 per cent since 1994.The 25,700 individual franchised units in the UK are growing to give a total employment in the sector of more than 220,000 of which 24 per cent are women. This makes franchising larger than the energy sector and almost as big as the whole of the armed forces. • It is a sad but true fact that only one in five of all new businesses started in the UK completely from scratch, will be trading in five years time. • Compare this with franchising which has a success rate of 90%. This means there are obvious advantages to buying a franchise over starting up on your own. Not only are you more likely to succeed, but also you have the freedom of self employment. When you need help, guidance and advice is always available from the franchisor. 4

6. enjoyable active rewarding The Little Steps Franchise Concept • To provide fitness classes for children from six months to 7 years old, running termly in conjunction with school terms, including half term breaks. Classes take on a different theme each week and are broken into 3 or 4 age groups, as follows:- • Steps babiesclasses are for the 6 to 15 months age group and aim to encourage early movement and co-ordination using nursery rhymes, simple songs, hand held equipment such as balls and quoits. Classes are 45 minutes long and are attended with an adult. • Steps Toddlersclasses are for the 15 month to 3 years age group. They have more structure and help to build the child's concentration. The base is the same as above but with more difficult elements, including the use of climbing equipment. Certificates and badges are awarded in this age group as an incentive. Classes are 45 minutes long and are attended with an adult. • Steps Kidsclasses are for the 3 to 5 year age group. In this group the B.A.G.A scheme is the base for the classes, building on skills already learnt. At this age the aim is to make exercise fun with a simple gymnastic base. Certificates are gained in these classes and are from a recognized scheme run by many schools and play groups. Classes are 45 minutes long and are attended without an adult. • Steps Clubclasses are for the 5 to 7 yearage group. Optional addition. • .Children's Parties.Hire of the equipment for children's parties, with or without a coach to entertain. • Special Holiday Events.Classes or fun sessions held out of the normal term times. 5

7. enjoyable active rewarding Low Start up Costs £9,500 “The business has a highly formed concept and a sound business base. The franchise package includes everything required to open and run a Little Steps Gym®” “there are no hidden extras.” • Comprehensive Training Programme • Tried and tested methods • Business signage • Personal web page • Business stationery • The gym equipment • Business insurance • Business Database • Franchise licence • Local publicity campaign • On going guidance inthe years to come 6

8. enjoyable active rewarding What you get for your money • The business has a highly formed concept and a sound business base. The franchise package includes everything required to open and run the business, there are no hidden extras. • Trainingis tailored to individual needs, if you need more help on the database then that’s what you’ll get. Training takes place primarily at Portsmouth with additional training at your base. • The gym equipmentis very versatile and we will advise you as to the best equipment to suit your venue. • Businessstationeryis personalized to your franchise and includes day to day paperwork and marketing formats. • Business Databasethis software runs the administration of the business and will assist you with marketing and costing. (You will need your own computer to operate the data management system). • Tried and tested methods.The Little Steps gym franchise is tried and tested, we have been through all the pit falls so we're on hand to give you advise and guidance when you need it most. • On goingguidance in the years to come. As your business grows your needs change and we will be on hand to give advise as you build your own Little Steps gym. • Also included are the following: • Business signage - Outside your venue • Personal web page - Updated as required • Business insurance - First full year • Franchise licence – Five year agreement • Local publicity campaign - Tailored to your area 7

9. enjoyable active rewarding What’s the Next Step? If you are serious about working for yourself and applying for a Little Steps Franchise there are a number of steps we suggest you take. • Talk to your bank:they offer free advice so take advantage of it. All the major high street banks hold details about Little Steps, tell your bank manager to contact their franchise department. Alternatively our bank would be happy to assist you. If you would like to speak to them we will supply their details. • or DTI-Small business advisor • Premises:Look into the availability of halls in your area. There are an abundance of Scout halls, Church halls and Community centres which are unused during the day.We can help and advise about venues, and will be happy to view them with you. • British Franchise Association :Contact the BFA who publish an information pack about Franchising • Full application : fill in a full application and sign a Declaration of Secrecy document. Contact Little Steps on 023 9234 0707 or franchising@stepsgym.com 8

10. enjoyable active rewarding Useful contact details Franchisees names and contact numbers Karen Hoare Portsmouth, 023 9242 2393 Farlington & Waterlooville Sue Ali Enfield 020 8481 1485 Karen Dyos Leigh-on-sea 01702 716733 Thao Lam Lichfield & Pelsall 01922 448133 Sam Briggs Harlow & 01279 629630 Bishop’s Stortford Tracey Griggs Chalfont St Giles 01753 674150 Lorna SmithFranchise ManagerHSBC Bank plcLevel 218 Canada SquareLondonE14 5HQTel: 020 7991 0159E:Mail lornasmith@hsbc.com 9