Overview If you have dreamed of owning a Christian bookstore...we can help that dream become reality. For over 25 years, we have been helping people realize their dreams. We hope we can help you better evaluate our franchise and affiliate opportunities and your potential for success as a Christian bookstore owner. At Insight Retail Group we offer three development and support programs designed to help you own and operate a successful Christian bookstore. Products & Services By way of an introduction to Insight Retail Group, LLC a good starting point is to get a brief perspective on the development of the Christian retail industry and our unique niche in the industry. In 1950 the Christian Booksellers Association (CBA) was formed as a trade association of mostly small, independent Christian bookstores and publishers. At that time the product lines offered by Christian bookstores were very limited and consisted mainly of theological books which provided about 90 percent of a store's total revenue and church supplies which represented the other 10 percent of revenue. The targeted retail consumer was the institutional church market and the professional Christian worker. The targeted consumer was a "destination oriented" consumer so good retail merchandising and first rate store positioning were not major retail considerations. Most stores were located in downtown and secondary locations. In the 1960's Christian publishers started to expand their offerings. Whole new product lines also developed especially in the area of gift merchandise for the family. With the growth of the suburbs, Christian retail stores started to appear outside of traditional downtown locations and were established in stand-alone locations or in small neighborhood strip centers. The 1970's brought explosive growth to the CBA industry. While in the past most books were written for the professional clergy, new products were developed for the much larger "lay" consumer audience. Along with this change in consumer focus, the development of secondary product lines, to enhance the old mix of books and supplies, began in earnest. Hundreds of new stores opened to meet the growing consumer demand for evangelical Christian products. Contemporary Christian music began in the late 70's. Stores serving the suburbs and universities developed quickly. Zondervan, a leading publisher, began development of some 100 corporate stores. By the end of the decade there were over 5,000 Christian bookstores in the United States. The decade saw the development of the first computer applications for the management of bookstore inventory. In the 1980's the Christian retail industry grew at a rate of 12-15% annually. Overall industry growth helped fuel further product line growth by providing a market large enough to support authors, music artists and the publishers who produced books and music for this growing market. In 1981, Lemstone, Inc, predecessor of Lemstone, LLC, franchisor of Lemstone Books, was founded. We were the first and only Christian bookstore franchise and focused on meeting the needs of the growing evangelical market by placing well designed and merchandised bookstores in major retail focal points - regional enclosed malls and major strip center shopping centers. Our first store opened in early 1982. The 1990's brought even more growth especially in the areas of music and gifts. Authors and music artists in the CBA arena reached out to more than just the traditional Christian bookstore customer. Major names such as author Max Lucado, musical artists like Amy Grant and Bob Carlisle, and groups like Jars of Clay and DC Talk sold millions of books and CDs to not only Christians but to "seekers", and non-Christian shoppers. In 2002 Lemstone began franchising stores under the trade name Lemstone Christian Stores to better meet the needs of our power strip and strip center locations. In June 2003 Lemstone, LLC, a new corporation headed by a Lemstone, Inc. shareholder and former director, David Sveen, along with Scott Macdonald, co-owner and president of Lemstone, LLC, acquired the assets of Lemstone, Inc. with the intent to expand the services and support of the Lemstone Christian Stores franchise. In 2005 Lemstone launched the Church Bookstore Solutions division to assist churches in the development and operation of church based bookstores in a non- franchised non-branded format. This allowed the individual church to control the trade name of the store and the product and service offering of the church bookstore to fit the unique needs of the individual church. Also, in 2005, the Lemstone of Cedar Rapids, Iowa was honored by the industry and selected as the CBA Store of the Year in its size category. In 2006 Lemstone launched the Lemstone Retail Group Affiliate division to assist new independant Christian bookstore owners with development and ongoing operational support. This division focuses on helping prospective new Christian bookstore owners in smaller markets and in markets where Lemstone is not franchise active. Our first affiliate store opened in Virginia Beach, Virginia in June followed by two more affiliates opening by year end. Also in 2006, the Lemstone of Rockford, Illinois was honored at the CBA Store of the Year in its size category. In June 2007 we changed our corporate name from Lemstone, LLC to Insight Retail Group, LLC in order to better differentiate, under one distinct corporate name, our three store development and support programs: Lemstone Christian Stores - our franchise division, Insight Retail Associates - our affiliate division, and Church BookstoreSolutions our church store division. Training & Support All new store owners attend our multi-day new store training seminar conducted at our corporate headquarters office in Wheaton, IL. Our staff will also work with you in the field before and during store setup and opening for additional training.

• Approximately 2 months prior to store opening, franchise and affiliate store owners participate in a multi-day training seminar at our Wheaton IL headquarters. Classroom learning with our expert staff combines with valuable hands-on exercises and simulations that create a comprehensive learning experience. The key objectives include:
• To develop a solid base of retail business knowledge.
• To develop an understanding of retail best practices in various areas (marketing, product mix, staff development, and more).
• To develop a base of systems knowledge.
• To develop a strong desire for superior customer service.
• To provide operational procedure familiarization.
• To provide an overview of first-year organizational structure.

After store opening, we maintain close contact and support through everyday contact by phone and email. Operations support is available 24/7. We also provide support through regularly scheduled contacts and meetings. The first support vehicle involves corporate communications. Once a month stores receive eMOP (our digital Monthly Operational Plan also delivered via our Intranet), a hands-on tool to assist store owners in the daily operations of the store in the various areas of product mix, promotions, merchandising, information systems, training, and more. Online forums, via our Intranet, help you keep in touch with your fellow store owners, exchange information, and pickup on the latest operational tips and product trends. Another support system is our Touchpoints program for new stores. This system involves weekly phone calls, regular check-up visits, and evaluation of store systems to ensure that best practices are in place and that a new store is off to a good start. The third method of ongoing support includes our two annual events, Insight Annual Convention and Insight Spring Seminar. The Insight Annual Convention is held in conjuction with our industry's annual trade show (The ICRS - International Christian Retail Show, sponsored by CBA) in July. In April the Insight Spring Seminar is a time of training on various operational issues. Why Lemstone Christian Stores? Our store owners make their own buying decisions with the assistance of our experienced Insight buyers at our headquarters office. Much training and guidance is given in this area since good buying is necessary for strong product sales, good margins, lower cost of goods sold, and cash flow. Small business is a risk for the newcomer in today's competitive business climate. The Small Business Administration reports that the main cause for small business failure is lack of business know-how in basic areas of operations such as site selection, product mix, financial management, market penetration, and long-range planning. The new independent small business owner suffers from a lack of support and knowledge in business basics as well as from increasingly heavy competition from more sophisticated franchises and chains. These competitors are larger in scale, operate with higher margins, and can maximize profits offering more services and better pricing. Today, the independent small business in most retail specialties, including the Christian retail industry, is disappearing. National chains and franchise organizations now dominate in almost every retail specialty niche. The risks of going it alone in small business are greater today than ever. As a Lemstone franchise or Insight Retail Associate affiliate store owner you benefit from our extensive experience and expertise in the Christian retail industry. You join an extended family of like-minded Christians serving their communities for the cause of Christ. We like to say - you own your own business - but you're not on your own. We are here to help every step of the way. Are You a Good Fit for Lemstone Christian Stores? The initial investment for developing a typical new franchise store is approximately $225,000. Additionally, reserve capital of approximately $40,000 is recommended, usually in the form of a bank line of credit, to help support the business during the launch phase - normally the first two years of operation. Owning a Christian bookstore is exciting, challenging, rewarding, and...lots of hard work! It represents much more than simply another business opportunity or career challenge. Store ownership has to do with stepping out in faith, relating to people, serving them, and helping them grow in their Christian walk as God works in their life through products that honor him. If that is the experience that you are looking for, then store ownership could be the right step for you.