Frequently Asked FDD Questions - Pacific Pride Commercial ...

1 Frequently Asked FDD Questions 2014 Pacific Pride Services, LLC. All rights reserved. Rev Frequently Asked FDD Questions . FRANCHISE FEE & WHAT IS INCLUDED? $15,000 is the normal Franchise Fee - currently we are offering to all CFN participants that execute a New Franchise Agreement a 25% discount reducing the fee to $11, - Included in that fee is the Controller (dedicated desktop computer). which communicates between your site and Pacific Pride to transfer information back and forth. Also included in the fee is Pacific Pride software and a 4 x 10 Pacific Pride Sign. A $1,500 sign credit will be given to you once you provide Pacific Pride with an Invoice marked Paid from the sign installer to verify installation of the required 4 x 10 internally lit sign or approved canopy striping.

2 WHAT IS THE FRANCHISE TERM AND WHAT DETERMINES THE RENEWAL FEE? We have one of the lowest Franchise Fee's in the franchise industry and also one of the lowest renewal fee rates of any franchise. Renewal Fees are a minimum of $1,000 and a maximum of $10,000. The initial Franchise Fee of $15,000 covers 3 years. The first 3 year renewal is $1, All renewals thereafter are based on a formula of foreign purchases out in the network and foreign sales at your site, the sum equal to $.006 for each gallon of your Foreign Sales (other franchisee's cards at your sites) and $.012 for each gallon of your Foreign Purchases (your cardholder's purchases out in the Pacific Pride &. WEX network) for the highest month in the twelve (12 months) preceding the renewal.

3 Minimum of $1, and maximum of $10,000. WHAT DETERMINES THE AMOUNT OF SECURITY REQUIRED AND WHY IS IT REQUIRED? A minimum of $10,000 security is required in the form of a LOC, Bond or Cash Deposit. The credit department will determine the amount of security required at the time of review and approval of the Franchise Application & Financials. If you have a current card deck that you will be converting to Pacific Pride a larger amount is usually required to cover the purchases your converted customers will make out in the network. The security is required to ensure that when we switch monies between franchisees on the 8th and 23rd of each month that we have security in place to ensure franchisees are paid for your customers fuel purchases.

4 WHAT ARE Pacific Pride MONTHLY MINIMUM FEES AND ALL OTHER FEES? $ per month - $ Debited on the 8th and 23rd of the month during the switch for controller and software maintenance and support - All Initial fees are outlined in Item 5 of the FDD - All other fees are outlined in Item 6 of the FDD. DO YOU OFFER CONVERSION FINANCING? Pacific Pride does not offer financing however all our Equipment Vendors have relationships with Finance and Leasing Companies - The equipment vendor you chose to work with will provide you with their contacts that can help you finance all equipment & much of the soft costs involved in a conversion such as signage, billing software purchase or upgrades, canopy branding, card plastic conversion, etc.

5 EXPLAIN THE OPPORTUNITY FOR $6,000 REBATE OF INITIAL FRANCHISE FEE. The FDD explains that if we record a total of 10,000 transactions done by your customers at your sites (Local Sales) or out in the Pacific Pride Network or WEX Universal Network (Foreign Purchases) in 6 months of opening your sites we will credit your account $6,000 of the initial franchise fee. Rev 2014 Pacific Pride Services, LLC. All rights reserved. Page 1. Frequently Asked FDD Questions . WHAT EQUIPMENT IS REQUIRED AT THE Pacific Pride SITES AND WHAT IS THE COST? We currently have Two Equipment Options and a Third in Development - Fiscal Systems is currently the only certified system available for purchase today - Comdata Smart Site is in beta testing and we expect it to be certified and available for purchase soon.

6 OPW has a system in development that they say will be available for beta testing in coming months. The approximately cost of 1 system is $15,000 - $17,000. Each site requires 1 site controller and that is included in 1 full system. Additional Outdoor Payment Terminals heads can be added for approximately $ Other equipment may be required depending on the type of dispensers at your site. Maintenance and support fees will be charged by the equipment vendor monthly and varies depending on equipment provider. A price sheet will be provided for your review when you are evaluating the different equipment options. Contacts information for all equipment providers will be supplied by your sales representative so you can make contact and determine which equipment option would be best to meet yoru needs.

7 Internet Service and Cellular backup will be required for communications at the sites. ONCE I BECOME A Pacific Pride /CFN DUAL MARKETER - WILL I BE ABLE TO ISSUE BOTH Pacific Pride CARDS. AND CFN CARDS TO MY CUSTOMERS IF I FEEL THAT IS THE BEST SOLUTION FOR THE CUSTOMER. WILL I HAVE TO. ASK MY CUSTOMER IF THEY ALREADY HAVE Pacific Pride CARDS FROM ANOTHER FRANCHISEE BEFORE I ISSUE. MY CUSTOMERS Pacific Pride CARDS? You can either issue Pacific Pride cards in addition to your CFN cards to all of your existing customer base at the time of conversion/implementation of your new franchise or as you evaluate your existing carddeck you may issue Pacific Pride PrideLock cards or PrideComplete Universal cards to those customers you feel need to be able to use Pacific Pride cardlock sites or PrideComplete Universal cards for the extended WEX network.

8 At the time of conversion/implenetation you can issue cards to your customers whether they already have Pacific Pride cards from another franchisee or not you do not have to ask. You will need to ask new customer prospects going forward. WHEN I AM MARKETING TO NEW PROSPECTS AM I REQUIRED TO ASK IF THEY CURRENTLY HAVE Pacific Pride . CARDS? WHAT IF I AM APPROACHED BY A CUSTOMER THAT WANTS TO DEAL WITH MY COMPANY INSTEAD OF. THEIR CURRENT CARD ISSUER? The exclusivity around card holders has changed in the 2013 FDD however until all existing franchisee's Franchise Agreements renew for their next 3 year period through 2015 you will have to ask. If they currently have Pacific Pride cards you are not to issue cards to them.

9 The customer does have the right to go through a Formal or Informal Bid Process. In the case of the informal bid they would need to try to work it out with the franchisee that issued the cards and hopefully the franchisee would release the customer and allow them to deal with another franchise if they are unhappy for whatever reason. In the case of a formal bid the account would submit a formal bid to the franchises they are considering doing business with to give everyone franchise that receives the bid the opportunity to respond with their offer. ARE THERE ANY LIMITATIONS ON WHERE I CAN MARKET Pacific Pride ? You can market anywhere in the United States. The FDD states however that marketers that add new sites to the network including your new sites have the right to exclusively market around their sites for the first 90 days.

10 This is difficult to monitor and enforce however it is considered a violation if another franchisee markets your sites the first 90 days. Pre-marketing your sites and doing aggressive marketing campaigns as soon as your sites are up and running are strongly encouraged. The Inter Company Analysis Reports that are provided in the FDD under Item 19 gives a good representation of which franchisees are aggressively marketing and which do not. This is a good way to determine areas where there might be marketing opportunities outside of your sites. Rev 2014 Pacific Pride Services, LLC. All rights reserved. Page 2. Frequently Asked FDD Questions . WHAT DOES THE FDD MEAN WHEN IT SAYS I CAN RESPOND TO A FORMAL OR INFORMAL BID FROM A.