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FRANCHISE OFFERING CIRCULAR

Parable Franchising, LLC

A California Limited Liability Company

3563 Empleo Street

San Luis Obispo, California 93401

(805) 543-2644

Parable franchisees operate Christian retail stores featuring Christ-based books, Bibles, music, gifts, and other merchandise.

The initial franchise fee for a Parable franchise is $15,000.00 for the first Parable store, and $10,000.00 for each additional Parable store covered by the same Franchise Agreement. The franchise fee is payable at the time you sign the Franchise Agreement. The estimated initial investment required for a new Parable store is from $321,000.00 to $770,000.00.

Risk Factors:

i. THE FRANCHISE AGREEMENT REQUIRES YOU TO ARBITRATE AND/OR LITIGATE WITH US ONLY IN SAN LUIS OBISPO, CALIFORNIA. REQUIRING YOU TO ARBITRATE OR LITIGATE IN SAN LUIS OBISPO MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE OR LITIGATE IN CALIFORNIA THAN IN YOUR HOME STATE.

2. THE FRANCHISE AGREEMENT STATES THAT, WITH CERTAIN EXCEPTIONS, CALIFORNIA LAW GOVERNS THE AGREEMENT. CALIFORNIA LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS.

3. THE FRANCHISOR HAS BEEN IN BUSINESS FOR A SHORT PERIOD OF TIME, SrNCE JULY 13, 2004. THEREFORE, THERE IS ONLY A BRIEF OPERATING HISTORY TO ASSIST YOU IN JUDGING WHETHER OR NOT TO MAKE THIS INVESTMENT.

4. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.

Information comparing franchisors is available. Call the state administrators listed on Exhibit 1 or your public library for sources of information.

Registration of this franchise with a state does not mean that the state recommends it or has verified the information in this offering circular. If you learn that anything in this offering circular is untrue, contact the Federal Trade Commission and your state agencies.

Date of Issuance: September 27, 2005. The effective date of this circular may be different in different states as noted on the State-Specific Addendum to this circular.

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NOTICE APPLICABLE TO FRANCHISES IN MICHIGAN

The state of Michigan prohibits certain unfair provisions that are sometimes in franchise documents. If any of the following provisions are in these franchise documents, the provisions are void and cannot be enforced against you.

(a) A prohibition on the right of a franchisee to join an association of franchisees.

(b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims.

(c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.

(d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee's inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor's intent not to renew the franchise.

(e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision.

(f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.

(g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to:

(i) reasonable qualifications or standards.

(ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.

(iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations.

(iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer.

(h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants

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to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c).

(i) A provision which permits the franchisor to directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services.

The fact that there is a notice of this offering on file with the attorney general does not constitute approval, recommendation, or endorsement by the attorney general.

Any questions regarding this notice should be directed to: State of Michigan, Department of Attorney General, Consumer Protection Division, 670 Law Building, Lansing, Michigan 48913, telephone number (517) 373-7117.

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Parable®

NEW STORE FRANCHISE OFFERING CIRCULAR

TABLE OF CONTENTS

ITEM PAGE

1. THE FRANCHISOR, ITS PREDECESSORS, AND AFFILIATES...................................................1

2. BUSINESS EXPERIENCE..........,........................................................................................................2

3. LITIGATION.........................................................................................................................................3

4. BANKRUPTCY......................................................................................................................................3

5. INITIAL FRANCHISE FEE.................................................................................................................3

6. OTHER FEES........................................................................................................................................3

7. INITIAL INVESTMENT......................................................................................................................7

8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES...........................................10

9. FRANCHISEE'S OBLIGATIONS.....................................................................................................12

10. FINANCING.......................................................................................................................................13

11. FRANCHISOR'S OBLIGATIONS...................................................................................................13

12. TERRITORY......................................................................................................................................21

13. TRADEMARKS.................................................................................................................................22

14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION..........................................24

15. OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF................................24

THE FRANCHISED BUSINESS.............................................................................................................24

16. RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL.................................................24

17. RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION............................25

18. PUBLIC FIGURES............................................................................................................................28

19. EARNINGS CLAIMS........................................................................................................................28

20. LIST OF FRANCHISE OUTLETS..................................................................................................29

21. FINANCIAL STATEMENTS............................................................................................................32

22. CONTRACTS.....................................................................................................................................32

23. RECED?T............................................................................................................................................32

EXHIBITS

1. State Franchise Law Administrators

2. Deposit Agreement

A. Financial Statements

B. Franchise Agreement

C. Disclosure and Confidentiality Agreement

D. Database Agreement

E. General Release

F. Acknowledgement at Closing

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1. THE FRANCHISOR, ITS PREDECESSORS, AND AFFILIATES

In this Franchise Offering Circular the words "we", "us", "our", and similar terms, refer to Parable Franchising, LLC, the franchisor of Parable stores. The words "you" and "your" refer to the purchaser of the Parable franchise.

Our principal business address is 3563 Empleo Street, San Luis Obispo, California 93401. We do not do business under any other names. The names and addresses of our agents for service of process are listed in the state-specific addendum to this offering circular.

We were formed in California as a limited liability company on July 13, 2004.

The service mark we license to you under the Franchise Agreement is licensed to us by our affiliate The Parable Group, Inc., a California corporation, referred to in this Franchise Offering Circular as "our licensor".

Other than for our licensor, we have no predecessors. We have several affiliates: We are owned by Parable Holdings, a California corporation, which also owns The Parable Group, Inc. and The Parable Advertising Agency, Inc., both California corporations. We and our affiliates share the same office address. Parable Holdings, The Parable Group, Inc., and The Parable Advertising . Agency, Inc., as well as any entities by which we may be owned, those that we may own, and those with which we have common ownership, are referred to in this Franchise Offering Circular as "our affiliates".

The Parable Group, Inc., which was formed in July, 1991, develops and supplies promotional and marketing materials, such as catalogs and flyers, and coordinates the execution of promotional and marketing programs used by Parable stores and also by independent Christian retailers who are members of its marketing association. It also provides data processing services, such as the development and maintenance of mailing lists, for retailers who are members of its marketing association. Members of The Parable Group, Inc.'s marketing association are allowed to identify themselves as members that association and to use the Parable name on their marketing and promotional materials and in conjunction with their store name. However, The Parable Group, Inc. has indicated its intention that by July 1, 2006, members of that association will no longer be allowed to use the Parable name on their advertising and promotional material or in connection with their store name. There are currently 180 members of The Parable Group, Inc.'s marketing association who, between them, own 221 stores.

The Parable Advertising Agency, Inc., which was formed in June, 1997, engaged in a business similar to that of The Parable Group, Inc., but is now inactive.

Parable Interactive, LLC, a Delaware limited liability company formed on February 14, 2000, that is partially owned by our Chief Executive Officer, develops and hosts Internet sites on the World Wide Web for Christian retailers and nonprofit Christian ministries as well as maintaining parable.com. the Internet site used by Parable stores.

We grant franchises for new Parable stores and, under a separate franchising program, franchises under which existing Christian retailers can convert their stores to Parable stores. We currently do not operate any Parable stores but our Chief Executive Officer owns and operates 2

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Parable stores of the type being franchised by this circular, the first of which opened for business in 1981. In addition to granting Parable franchises and overseeing franchised Parable stores, we coordinate the development and execution of promotional and marketing programs used by franchised Parable stores.

Parable stores are distinctively designed retail stores featuring Christ-based books, Bibles, music, gifts, and other merchandise. Parable stores are normally located in shopping centers, street storefronts, or in other shopping areas. Parable stores are designed to appeal to customers who desire Christian books, Bibles, music, and gifts. The market for this merchandise is developed and is growing.

Parable stores compete with chain and independent bookstores, local and national general retailers, Internet retailers, and specialty Christian retailers.

We have not offered franchises in any other lines of business. None of our affiliates has offered franchises in any lines of business.

2. BUSINESS EXPERIENCE

The principal officers, directors, and executives who have responsibility concerning our franchises are:

Chief Executive Officer - Steven 0. Potratz

Mr. Potratz is the founder of Parable stores and our affiliates. He assumed his present position with us upon our formation. He is also the Chief Executive Officer of The Parable Group, Inc., our licensor, and has been since its formation. He has also been the Chief Executive Officer of The Parable Advertising Agency, Inc., since its formation. Mr. Potratz is also the Chief Executive Officer of Parable Interactive LLC, described above. He is a trustee of The Potratz Family Trust, the owner of Parable Holdings, Inc., which is described in Item 1 above. Mr. Potratz and his wife, Laurie, are the owners of the 2 Parable stores described in Item 1 above.

Executive Vice President and Chief Financial Officer- Tim Blair

Mr. Blair became our Executive Vice President upon our formation. Since 1996 he has also been Vice President of our licensor. In addition, he has been the President of Parable Interactive since August, 2003. He became our Chief Financial Officer in May, 2005.

Vice President-Franchise Development - Kay Cementina

Ms. Cementina assumed her position upon our formation. She has also been employed by our licensor since 1997 in various marketing positions, including Merchandising Manager, Manager of Retail Marketing, and, currently, as Vice President-Retail Sales and Marketing. Prior to joining The Parable Group, Inc., Ms. Cementina had over 13 years of specialty and department store retailing experience.

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Vice President-Sales and Marketing - Marilyn Largent

Ms. Largent assumed her position upon our formation. She is also employed by our licensor and has been since 1997 where she served as Children's Product Specialist, Exclusive Products and Events Coordinator, Merchandising Manager, and, currently, as Vice President-Wholesale Sales and Marketing. Prior to joining The Parable Group, Ms. Largent had over 11 years of media sales and purchasing experience.

Scott Morrell - Manager of Franchise Sales

Mr. Morrell assumed his position upon our formation. Since February, 2003, he also has been Customer Service Manager of our licensor. From February, 2002, until he became Customer Service Manager, Mr. Morrell was a customer service representative with our licensor. From February, 2000, until he became a customer service representative with The Parable Group, Inc., Mr. Morrell was a customer service representative with Parable Interactive, LLC, our affiliated web site company. Prior to joining Parable Interactive, LLC he was warehouse manager for Horizon Hobby Distributors in Paso Robles, California, which he joined in October, 1992.

3. LITIGATION

Neither we, our licensor, our affiliates, nor any of the people identified in Item 2 of this circular, are or have been engaged in any litigation that is required to be discussed in this offering circular.

4. BANKRUPTCY

Neither we, our licensor, our affiliates, nor any of the people identified in Item 2 of this offering circular, have been involved as a debtor in proceedings under the U. S. Bankruptcy Code which is required to be discussed in this offering circular.

5. INITIAL FRANCHISE FEE

The initial franchise fee for your first Parable store is $15,000.00. If the Franchise Agreement you sign authorizes you to open more than one store, the franchise fee for the second and subsequent stores opened under that Franchise Agreement is $10,000.00 for each store. If the Franchise Agreement is terminated for any reason prior to you signing a lease for your first store location, we will refund the franchise fee to you less $2,500.00, which amount we can retain as consideration for reviewing your franchise application, approving you as a prospective franchisee, and for the other efforts we have made in connection with your application and this Agreement. If the Franchise Agreement is terminated after you sign your initial store lease, we will not be obligated to refund any of the franchise fee to you since we will have earned the entire amount by reviewing and approving your initial store location and granting you any additional rights contained in the Agreement.

6. OTHER FEES

The following chart lists the other fees you must pay us in connection with your franchise.

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Name of Fee	Amount	Due Date	Remarks
Royalty	2% of Gross Sales	Monthly by the 15th	"Gross Sales" is defined in
(See Note 1)		day of the month	Section 9.04 of the
		based on the sales of	Franchise Agreement
		the prior month
Cost of Required	Currently a minimum	As promotions are	You are required to
Promotions	of $3,300 per year	ordered	participate in at least 5
(See Note 1)	plus postage. The		catalog promotions during
	actual amount will		each 12 month period, one
	depend on the number		during each of our
	of pieces ordered and		seasonal campaigns that
	cost per piece at the		occur in February, April,
	time.		June, October, and November. In addition, you must participate in at least 3 flyer promotions during each calendar year. The minimum purchase of each catalog and flyer is currently 2,500 pieces. The price per piece is currently approximately $. 10 each for catalog and $.04 each for flyers. Additional print pieces are available from $.04 to $.37 each. In addition, you must purchase a promotional kit for use in connection with each promotion for which we currently charge between $100 and $250 each. You must pay us data processing fees of $160 per promotion and handling fees of $75 per 1,000 pieces mailed. In addition, you must pay the actual postage costs of your mailing. The foregoing requirements will be prorated for the first and last year of the Franchise Agreement term,

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Name of Fee	Amount	Due Date	Remarks
Brand Marketing Fund (See Notes 1 & 3)	1% of gross sales	Bythel5^,hdayof each month.	Can be used only for advertising, promotion, and public relations.
Web Site Maintenance Fee (See Note 1)	Currently $299.00 per quarter	Quarterly	For use of the parable.com Internet site on the World Wide Web.
Late Charge (See Note 1)	]'/₂%ofpastdue balance per month	Monthly	If applicable law limits the amount of late charges, the late charge will equal the maximum interest rate allowed on loans between businesses.
Audit Fees (See Note 1)	Cost of audit plus late charge on past due balances	As incurred	We can elect to charge this fee if a reviewor audit of your books shows an understatement of gross sales of 5% or more for any reporting period or if the review or audit is needed because you did not follow our reporting requirements.
Meeting Fee (See Note 1)	Amount determined prior to applicable meetings, conventions, seminars, etc.	As required by notice of meeting	Payable only if fees are required for attending our meetings.
Internet Training Fee (See Note 1)	$50.00 per month for up to 10 employees and $2.00 per month for each additional employee.	Quarterly	We can adjust this amount periodically as long as we do so for the entire Parable system. The fee is based on the total number of persons in your employ, not the number of Parable stores that you own.

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Name of Fee	Amount	Due Date	Remarks
Transfer Fee (See Note 1)	Reimbursement of our costs, including the time of our employees, incurred in connection with the transfer plus 15% for our administration and overhead costs.	Upon approval of transfer	Payable, with certain exceptions, when there is a transfer of over 50% of the ownership of the franchise on a cumulative basis. Our costs are for such things as reviewing the application of, and interviewing, your transferee, making credit checks, assisting with inventory and store appearance reviews, and so forth. If we are required to train your transferee we can also charge our additional training fee.
Additional Training Fee (See Notes 1 & 4)	$1,000.00 per day plus any travel costs we incur.	In advance of the service or as we otherwise direct	This fee is only for training over and above that which we provide as part of your initial training, or if required because you or your staff are not performing in accordance with the requirements of the Franchise Agreement. This fee is also payable in connection with a transfer if training of your transferee or his or her employees is required.
Special Visit Fee (See Note 1)	Reimbursement for the travel and other expenses of our representative, and/or a set payment for each day our representative is at your store	In advance of the service or as we otherwise direct	This fee is for special visits to your store that you request us to make over and above those we routinely provide to you at no extra charge.

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Name of Fee	Amount	Due Date	Remarks
Relocation Fee (See Note 1)	Reimbursement of our costs, including the time of our employees, incurred in connection with the relocation of your store, plus 15% for our administration and overhead costs.	At the time your new location is approved	This fee is to compensate us for our efforts in connection with the relocation of your store. The costs we may incur include reviewing your proposed new location and lease, reviewing and approving your-building plans, assisting with your decoration, flxturing, and inventory requirements, and so forth.
Renewal Fee (See Note 1)	Reimbursement of our costs, including the time of our employees, incurred in connection with the renewal of your franchise, plus 15% for our administration and overhead costs.	As billed	This fee is to compensate us for our efforts in connection with the renewal of your franchise. Our costs may include negotiating a new Franchise Agreement with you, reviewing any remodeling you may do, and costs involved if you relocate your store at the time of renewal.

NOTES: 1. These fees are not refundable and are payable to us.

2. The Brand Marketing Fund is further discussed in Item 11 below.

3. This fee is adjustable by any increase in the Consumer Price Index between the date of your Franchise Agreement and the event that gives rise to the fee.

7. INITIAL INVESTMENT

The following chart shows your estimated initial investment to open a Parable store.

Item	Amount	Method of Payment	When Due	To Whom Payment is to be Made
Initial franchise	$15,000 for	Lump sum	Upon signing the	Us
fee	your initial store and $10,000 for each store thereafter (See Note 1)		Franchise Agreement

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Item	Amount	Method of Payment	When Due	To Whom Payment is to be Made
Architect, engineer, and/or designer (See Note 2)	$3,000 to $7,000	As arranged with Renaissance Design Group	As arranged with Renaissance Design Group	Renaissance Design Group
Leasehold improvements (See Note 3)	$0 to $90,000	As arranged with contractor	As arranged with contractor	General contractor
Equipment, decor, furniture, fixtures, etc.	$60,000 to $150,000 (See Note 4)	As arranged with suppliers and contractors	As arranged with suppliers and contractors	Suppliers of furniture, store fixtures, etc. and Renaissance Design Group
Point of sale recordation system, computer system, and software	$15,000 to $40,000 (See Note 5)	As arranged with suppliers	As arranged with suppliers	Suppliers and us
Signs	$4,000 to $10,000 (See Note 6)	As arranged with suppliers	As arranged with suppliers	Sign companies
Initial inventory	$120,000 to $350,000 (See Note 7)	As arranged with suppliers	As arranged with suppliers	Suppliers
Grand opening promotion	$3,000 to $5,000	As arranged with suppliers	As arranged with suppliers	Newspapers, radio stations, printers, other suppliers, and us for in store promotion kits
Premises Lease	$1.50 to $5.50 per square foot per month (See Note 8)	As arranged with landlord	Monthly	Landlord
Security deposits, utility deposits, business licenses, and other prepaid expenses	$5,000 to $15,000 (See Note 9)	As arranged with provider	As needed	Landlord, utility companies, government agencies, etc.

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Item	Amount	Method of Payment	When Due	To Whom Payment is to be Made
Travel and living expenses while attending our training course	$1,000 to $3,000	Lump sum	As needed	Airline, hotel, rental car, restaurants, etc.
Other preopening expenses	$5,000 to $10,000	As needed	As needed	Attorney, accountant, employee salaries, and other providers
Additional Funds for the first 3 months of operation (See Note 10)	$0 to $75,000	As needed	As needed	Rent, utilities, salaries, working capital, etc.
Total Investment:	$231,000 to $770,000 (See Note 11)

NOTES: 1. If the Franchise Agreement is terminated before you sign a lease for your first store, we will refund all but $2,500.00 of the franchise fee to you. The fee is nonrefundable after you sign a lease.

2. Your store must be designed by Renaissance Design Group since they understand our store design requirements. Their charge is based on the size of your store location and is currently $.75 per square foot. If a free standing building is involved, the costs may be more and will have to be negotiated between you and Renaissance Design Group and are not included in the above estimate.

3. These improvements include changes to the store space that are not readily removable, such as walls, lighting, bathrooms, painting, floor coverings, ceiling treatment, permanent store fixtures, and so forth. The costs will depend on the condition of the space when you take it over. Sometimes a landlord will pay or finance some or all of these costs, usually depending on the demand for store space in your area.

4. These items may include sales fixtures, counters, display cases, back room furnishings, and so forth. In order for all Parable stores to obtain the best pricing, these items must be ordered through Renaissance Design Group which adds an override to the cost of the order for its efforts. That charge is based on the size of your store and currently is approximately $13.25 per square foot of store space.

5. The cost for your computer and sales recordation system will vary with the size of your store and the number of cash counters and workstations you require. See Item 11 for more information on your computer system and the software we require you to use.

6. Your store must display all of the Parable signs that we specify both outside and inside your store.

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7. The amount of your initial and ongoing inventory will depend, to a great extent, on the size of your store and the volume of business anticipated. Many vendors allow the return of products for credit under certain circumstances.

8. Parable stores usually occupy from 3,000 to 10,000 square feet of space, in addition to base rent, you may also have to pay additional charges to your landlord, such as shopping center insurance, taxes, assessments, common area maintenance, heating, ventilating and air conditioning, and other charges. We have made no allowance on this chart for rent that you may have to pay before your store is open for business. The need for rent payments before opening will depend on the terms of your lease and how fast your store is ready for opening.

9. Lease security deposits normally equal 1 to 2 months rent. Unless you have a prior history with your local utility companies, they usually will require a security deposit equal to your estimated average monthly use

10. This allowance is for additional funds that may be needed during the beginning phase of your store operations. It is based on the experience of our Chief Executive Officer in opening his own 2 Parable stores. It is an estimate of the additional cash you may need over and above the net income of your Parable store for your initial 3 months of operation. While these figures are based on our best estimates, we cannot guarantee that you will not have additional cash needs during this period and beyond. Your need for additional funds will depend on factors such as: your management skill, experience, and business ability, local economic conditions, the local market for the products provided by your store, the prevailing wage rate, competition, the sales level you reach during the initial period of your operation, and other such factors.

11. No allowance has been made in this chart for any principal or interest expenses required before the opening of your store. The need for this type of expense will vary with the terms of any financing you get in connection with your store. The refundability of payments is up to the individual vendors with whom you contract.

8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

Because we want to enhance the public image and increase consumer acceptance of Parable stores, and to protect our proprietary names and marks, we have to control the appearance of your store and the goods and services you provide under the Parable name. For this reason, we require you to purchase all of the equipment, decor, furniture, fixtures, and signs we specify for your store. Parable stores will not necessarily be uniform in appearance. We must also approve all of the bags, gift wrap, and similar material that you use in your store, as well as various other aspects of the operation of your store. Your merchandise must meet the requirements of our manuals and other directives. You cannot carry items that do not meet the doctrinal criteria set forth in our manuals. We can require you to carry specific items, such as those featured in the periodic catalogs, flyers, promotions, and marketing events in which you participate. If we determine at any time that any items you carry are not in keeping with the requirements of our manuals and other directives, you must discontinue carrying those items upon receipt of notice from us to remove the items from your Parable store.

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In order to achieve some degree of consistency in the appearance of new Parable stores, you are required to use the design services of Renaissance Design Group to design you store and to acquire your store fixtures for you. We hope that by purchasing all of our store fixtures through a designated supplier we can obtain the best price for such items for Parable stores. We derive no revenues as a result of your contracting with Renaissance Design Group for design services or fixture purchases.

You can only use marketing and promotional materials that you purchase from us, or, at our direction, from our affiliates, unless we approve in advance your use of other items. These items include catalogs, flyers, mailers, newspaper inserts, gift cards, and the like. We or our affiliates will charge you for these materials and services at rates determined at the time. We and our affiliates will derive revenue from your purchases. We estimate that your purchases from us and our affiliates will be approximately 3% of your total purchases of goods and services during the year, including your cost for resale merchandise. Where we contract with our affiliates to provide materials and services to you on our behalf, we normally will obtain the purchase price from you and will then pay our affiliates for their materials and services. If we direct that you purchase materials or services directly from our affiliates, we normally will receive revenues from our affiliates as a result of your purchases. There is no set amount or percentage of revenue that we will receive as a result of your direct or indirect purchases from our affiliates. We will negotiate with our affiliates in each instance to determine the revenues we will receive. To date, we have made no such sales nor negotiated any arrangements with our affiliates. Since this is our initial franchise offering, we cannot estimate the amount of any revenue we, or our affiliates, will receive from the goods and services we require that you purchase from us or our affiliates.

Where we, or our affiliates, feature merchandise in any of the catalogs and flyers, or other advertising, marketing, or promotional materials that are developed for use in connection with the programs we, or our affiliates, conduct, the vendors of that merchandise often pay us, or our affiliates, a promotional allowance. That is a principal source of revenue for us, and for our affiliates. These payments are normally based on the number of stores featuring the concerned merchandise or the volume of sales of the merchandise by Parable stores.

We do not have a purchasing cooperative for our stores. While we have no formal program for doing so, we intend to attempt to negotiate beneficial terms for Parable stores with our principal suppliers, such as quantity discounts based on the purchases of all Parable stores. In that regard, we may require you to participate in certain marketing and merchandise display programs and group product purchasing programs where doing so will result in reduced prices to Parable stores for the items featured in those programs.

We evaluate new suppliers and merchandise based on the experience of our executives and staff. We have no written supplier criteria. If a supplier requests that we review any merchandise for use in our stores, we normally can complete our product review and approval process within 30 days after we receive all required information about the product or supplier being considered, including, if we so require, samples of the items for which approval is being sought. If we incur expenses in connection with evaluating suppliers or merchandise, we can charge the concerned supplier for those costs as a condition of approving the supplier or merchandise.

You are required to use a computer system and point of sale software, that is compatible with our system and software. We can change our requirements for these items periodically,

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including requiring you to purchase and use specific hardware and software. While we currently are not the suppliers of any of these items, we, or our affiliates, may be such suppliers in the future.

We grant no special benefits to franchisees that purchase merchandise or other items from any special source, other than the quantity discounts available to all Parable stores that result from such purchases.

We maintain the Internet site parable.com. You will be provided with a presence on that site to feature your store and advise customers of its location. Your only presence on the World Wide Web, or any similar Internet or alternative communications medium, must be on the parable.com web site. There is currently a web site maintenance fee of $299.00 per quarter for this service.

9. FRANCHISEE'S OBLIGATIONS

THE FOLLOWING TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AGREEMENT. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR OBLIGATIONS IN THAT AGREEMENT AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

Obligation	Section in Franchise Agreement	Item in Offering Circular
a. Site selection and acquisition/lease	Sections 3 & 5	Items 11 & 12
b. Pre-Opening purchases/leases	Sections6&8	Items 7 & 8
c. Site development and other pre.-opening requirements	Sections 6, 7, & 8	Items 7, & 11
d, Initial and ongoing training	Sections 7 & 8	Items 7 & 11
e. Opening	Sections 7, 8, & 10	Items 8 & 11
f. Fees	Sections 3-5, 7-9, 11, 15, 16 & 32	Items 5 & 6
g. Compliance with standards and policies/ Operating Manual	Sections 6, & 8-14	Items 8 & 11
h. Trademarks and proprietary information	Sections 2, 8, & 14	Items 13 & 14
i. Restrictions on products/services offered	Sections 5 & 8	Items 8 & 16
j. Warranty and customer service requirements	Section 8	Item 8
k. Territorial development and sales quotas	Section 5	Item 12
1. Ongoing product/service purchases	Sections 6, &.8-10	Items 6, 8 & 16

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m. Maintenance, appearance and remodeling requirements	Sections 4, 6, & 8	Item 8
n. Insurance	Section 12	Items 7 & 9
o. Advertising	Sections 9 & 10	Items 6 & 11
p. Indemnification	Section 13	None
q. Owner's participation/ management/staffing	Sections 7 & 8	Items 11 & 15
r. Records/reports	Sections 8, 9, & 11	Items 6 & 17
s. Inspections/audits	Sections 8 & 11	Items 6, 8, & 11
t. Transfer	Section 15	Item 17
u. Renewal	Section 4	Item 17
v. Post-termination obligations	Sections 8, 16, & 17	Item 17
w. Non-competition covenants	Section 17	Item 17
x. Dispute resolution	Section 18	Item 17
y. Relocation	Section 5	Items 6, 12, & 17

10. FINANCING

We do not offer or provide any type of direct or indirect financing for our franchisees. We do not guaranty your notes, leases, or other obligations. We anticipate providing short-term financing for orders of promotional material and services that you order through us, such as payment due 30 days after billing.

11. FRANCHISOR'S OBLIGATIONS

Except as listed below, we need not provide any assistance to you.

Pre-Qpeninz Assistance

Before you open your store as a Parable store, we will:

1. Provide you with a set of typical plans and specifications for a Parable store. (Franchise Agreement Section 6)

2. We will review and approve your final store plans and specifications. (Franchise Agreement Section 6)

3. We will consult with you on the telephone regarding the design and construction of your store. (Franchise Agreement Section 6)

4. We will train you and your staff in the operation of a Parable store. (Franchise Agreement Section 7)

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5. We will specify or approve your opening inventory. (Franchise Agreement Section 8)

6. We will have a representative visit your location approximately one week before your opening to train your staff and assist you with your opening. (Franchise Agreement Section 7)

7. We will consult with you on your grand opening promotion and assist you in developing the promotion. (Franchise Agreement Section 10)

Continuing Assistance

During the operation of your Parable store we provide the following services:

1. You are allowed the continuing use of the service marks, trademarks, commercial symbols, and other proprietary property we license to you in connection with the operation of your Parable store. (Franchise Agreement Section 2)

2. Ongoing training programs on our Internet-based training site. (Franchise Agreement Section 7)

3. You have the use of our operations and other manuals and other materials. These manuals and materials are confidential and remain our property. We can change the policies, practices, procedures, and other directives in our manuals when we determine that such changes are advisable in our reasonable business judgment. You must return our manuals and material when we ask for them. (Franchise Agreement Section 8)

4. We will provide assistance and advice to you from our home office concerning the operation of your Parable store. (Franchise Agreement Section 8)

5. We will send a representative to visit your store periodically to inspect your store and to assist you in the operation of your Parable store. (Franchise Agreement Section 8)

6. We, or our affiliates, will develop and provide to you information on the various seasonal and flyer promotions in which you are required to participate. (Franchise Agreement Section 9)

7. We will perform the services described in our Database Agreement in connection with developing and using various store, inventory, and customer data. (Database Agreement)

Advertising

You must forward to us monthly an amount equal to 1% of the gross sales of your Parable store for the Brand Marketing Fund, our cooperative advertising program. We administer this fund to develop advertising, promotional, merchandising, display, and public relations materials and programs for Parable stores on a local, regional, or national basis. (Franchise Agreement Section 9) Since owners of existing Christian retail stores have established clientele, they are required to contribute to the Brand Marketing Fund at a lower rate than new Parable franchisees. Any Parable stores that we own will contribute at least 1/2% of our gross sales to the Brand Marketing Fund, the same rate as our conversion franchisees. (Franchise Agreement Section 9).

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The term "gross sales", as used in the Franchise Agreement, means proceeds generated from all sales and services from whatever source received, whether in cash or on credit, as well as the value of any barter transactions, including the gross amount you receive from all orders taken at your store but filled elsewhere and orders taken elsewhere but filled at your store. Credit transactions are considered made when the transaction giving rise to the extension of credit occurs and not when, or if, payment is made or when title passes to the goods sold. Credit card and other credit transactions result in "gross sales" in the full amount of customers' purchases without any allowance for bad debts, uncollectable accounts, or credit card fees and charges. If you record your sales using the suggested retail price of the items sold less actual discounts, you may report the net amount as the amount of your gross sales. "Gross sales" does not include any of the following:

(a) The selling price of any merchandise returned to you by, or services performed for, customers to the extent you grant a credit, discount, refund, or similar allowance. An exchange of merchandise or services shall not be deducted from "gross sales" except to the extent of any accompanying credit, discount, refund, or other allowance;

(b) Merchandise returned to its source for credit or other allowance;

(d) Amounts or credits received on claims for loss or damage to merchandise or other store assets;

(e) Sales and/or use taxes, value added tax, or other similar taxes, determined and/or imposed on the sale of merchandise or services by a governmental entity, but only to the extent that such taxes are added to the selling price of the merchandise or services and are separately stated to and collected from customers;

(f) Sales of trade fixtures or similar property not constituting merchandise of the store.

We are not obligated to spend the Brand Marketing Fund in any particular region even if the money comes from that area nor within any particular time period. Funds not spent in the year received are carried over from year to year until they are used. We do not use any of the money from the Brand Marketing Fund to solicit the sale of franchises. (Franchise Agreement Section 9)

As described in Item 8 above, you can only use marketing and promotional materials that you purchase from us and, at our direction, from our affiliates unless we approve otherwise. We, or our affiliates, will receive revenues as a result of such purchases. It is likely that we will purchase advertising and promotion services and material from our affiliates and they will receive revenues as a result.

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We may form one or more advertising councils in which our franchised stores will be required to participate. These councils will advise us on our advertising, promotion, and public relations programs. We have the right to prescribe the rules for these councils. You are required to follow these rules and, to the extent we require, participate in the activities of these councils. The Brand Marketing Fund will pay the expenses of any advertising councils we form. (Franchise Agreement Section 9)

We anticipate that all of our advertising will be developed by our employees, by those of our affiliates, and by outside advertising agencies and consultants. We will charge the Brand Marketing Fund for the time, overhead, and expenses of our employees for the work they do related to the fund's activities in an amount equal to 10% of the money collected by the fund. (Franchise Agreement Section 9)

We can publish or broadcast the advertising developed by the Brand Marketing Fund in such media as we select including newspapers, magazines, radio, television, direct mail, the Internet, by participating in special events, such as conventions, concerts, and so forth. The coverage of the concerned media can be local, regional, or national in scope. (Franchise Agreement Section 9)

All of your local advertising and promotional activities must meet the requirements and guidelines set forth in our manuals and other directives. You must submit all of your advertising, promotion, and public relations material to us within 10 days of when they are published or otherwise used. If we object to any such item or its manner of distribution, you must promptly comply with our directives in that regard. (Franchise Agreement Section 10)

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