ArcReader cannot be opened using a custom template (.art) file after setting the shortcut to point to a specific custom template.
The default installation directory of ArcGIS is C:\Program Files\arcgis and does not allow for ArcReader to open with a specific template unless there double quotes are placed around the pathname.
"C:\Program Files\ArcGIS\Bin\ArcReader.exe" /Loadsettings <template>
Get help from ArcGIS experts
Download the Esri Support App