SCHOOL OF ROCK

Data Based On: 243 franchised Schools open and operated at least five days per week during the full 12-month period from January 1, 2025 to December 31, 2025

* Average gross profit for franchised units was calculated by applying the Cost of Sales percentage (36.7%) from the Company-Owned Schools' financial data (Table 3) to the franchised average gross revenue ($683,344). Estimated average net profit was derived by applying the expense percentages from the Company-Owned Schools' financial data (Table 3) to the franchised average gross revenue, with an adjustment for actual royalties of 8% of gross sales for franchised units (as per Note 10). The expense percentages used were: Cost of Sales (36.7%), Management Labor (9.8%), Admin Labor (4.8%), Rent (9.8%), Marketing Expenses (3.8%), IT Fees (0.4%), Other Expenses (2.4%), and Royalties (8%). This resulted in a total expense percentage of 75.7% (36.7 + 9.8 + 4.8 + 9.8 + 3.8 + 0.4 + 2.4 + 8). Net profit percentage was 100% - 75.7% = 24.3%. The best_guess_profit_low and best_guess_profit_high were estimated by varying the sum of Management Labor, Admin Labor, Rent, Marketing Expenses, IT Fees, and Other Expenses (which sum to 31%) by +/- 2 percentage points of total revenue, while keeping COGS (36.7%) and Royalties (8%) fixed. For best_guess_profit_high, other operating expenses were assumed to be 29% (31%-2%), leading to a total expense percentage of 73.7% and a profit of 26.3% of revenue. For best_guess_profit_low, other operating expenses were assumed to be 33% (31%+2%), leading to a total expense percentage of 77.7% and a profit of 22.3% of revenue.