YEL, YOUTH ENRICHMENT LEAGUE AND YEL FRANCHISING

Item 7 lays out a modest entry: initial investment spans $44,800 to $71,500, covering the $22,500 franchise fee, equipment, curriculum, and initial marketing. Ongoing fees bite at 6% royalty, 1% brand fund, 1% technology fee, plus a $20 monthly file hosting charge—totaling around 8% plus fixed costs. Without Item 19 disclosure, there's no benchmark for average revenues or profits; this opacity hits harder in a low-overhead model reliant on partnerships with schools and rec centers, where margins hinge on volume from middle-to-upper-class families.

System health raises red flags in Items 20 and 21: total locations dropped from 4 in 2023 to 3 in 2024—a 25% contraction—with just 2 franchises versus 3 corporates. Franchising since 2019 shows slow ramp-up, and projected openings of 3 new units hint at optimism, but zero terminations or transfers reported offers little precedent. For investors eyeing children's ed, this micro-scale setup demands scrutiny—low capital in, but high execution risk without proven unit economics or momentum.