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ADNOC DISTRIBUTION

ADNOC KSA

Franchise Opportunity

Memorandum of

Information

Ref No.: Rev:

Date: 02-Oct-2012

Copyright

This document and the related Process Maps, Procedures, Work Instructions, Forms, Checklists, guidelines are the property of Adnoc Distribution. These may not be reproduced in whole or in part or otherwise disclosed without the prior consent in writing from Adnoc Distribution.

PO Box 4188, Abu Dhabi, United Arab Emirates

Phone: +971-2-6771300; +971-2-6959639 Fax: +971-2-6776379

ADNOC Distribution

ADNOC KSA Franchise Prospectus

NON – DISCLOSURE & RELIANCE STATEMENT

Franchise Division

Riyadh

Revision No. 0

Section 0

Non - Disclosure & Reliance Statement

This document is the property of ADNOC Distribution and is intended for use by prospective Franchise investors and constitutes a confidential disclosure.

ADNOC Distribution is the owner of the copyright in all material contained in this document. Other than as permitted by the KSA Copyright Law, no part of this document can be reproduced, copied or transmitted in any form or by any means (electronic, mechanical, microfilming, photocopying, recording, storage in a retrieval system or otherwise), without the prior written permission of a director of the company.

It is made available subject to the express condition that it must remain in your personal care at all times and must not be revealed or imparted to any unauthorized person(s) or business(es).

The information contained in this document is confidential and is given to you for your use in evaluating the ADNOC KSA Franchise opportunity and must not be divulged to anyone other than your financial and legal advisors.

Prospective investors are requested to make their own enquiries to establish the accuracy of the information provided. ADNOC Distribution or any person representing it will not be held liable for any loss sustained by any prospective Franchise investor from relying upon the contents of this document. This document is for guidance only and does not in any way detract from the terms and conditions laid out in the Franchise Agreement which form the legal binding contract between the two parties.

KSA Franchise Prospectus.docx

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ADNOC Distribution

 

 

 

ADNOC KSA Franchise Prospectus

 

 

 

TABLE OF CONTENT

 

 

Franchise Division

Riyadh

Revision No. 0

Section 0

 

 

CONTENTS

 

 

1.

WHAT IS FRANCHISING?..............................................................................................

 

4

1.1

Franchising - a Strategic Partnership ...............................................................................

 

4

1.2

Definition of Franchising...................................................................................................

 

4

2.

OUR FRANCHISE OPPORTUNITY.................................................................................

 

5

2.1

The ADNOC KSA Franchise Concept ..............................................................................

 

5

2.2

The ADNOC KSA Franchise Package .............................................................................

 

6

2.3

The ‘Ideal’ ADNOC KSA Franchisee ................................................................................

 

8

3.

THE INVESTMENT & RETURN ......................................................................................

 

9

3.1

The ADNOC KSA Franchise Fees ...................................................................................

 

9

3.2

Franchisee Investment & Return....................................................................................

 

11

4.

THE FRANCHISE AGREEMENT – IN SUMMARY........................................................

 

13

5.

NEXT STEPS ................................................................................................................

 

 

17

APPENDIX A – FREQUENTLY ASKED QUESTIONS.............................................................

 

18

APPENDIX B – INTENT TO PROCEED AGREEMENT (TEMPLATE) .....................................

20

APPENDIX C – THE FRANCHISE APPLICATION FORM.......................................................

 

23

APPENDIX D – THE ADNOC KSA MANAGEMENT TEAM.....................................................

 

24

APPENDIX E – USEFUL CONTACT DETAILS FOR ADNOC DISTRIBUTION .......................

26

APPENDIX F – ADNOC KSA IN THE PRESS .........................................................................

 

27

APPENDIX G – ADNOC KSA FRANCHISE LIST ....................................................................

 

28

APPENDIX H – KSA FRANCHISE LAWYERS ........................................................................

 

29

APPENDIX I – OTHER INFORMATION ...................................................................................

 

30

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

WHAT IS FRANCHISING

Franchise Division

Riyadh

Revision No. 0

Section 1

1. WHAT IS FRANCHISING?

1.1Franchising - a Strategic Partnership

Franchising is fundamentally a business partnership between an established company (the Franchisor), wishing to expand its business, and independent third parties (the Franchisees). The partnership is governed by a legally binding contract under which the Franchisor permits Franchisees to use its trade name, trade mark and confidential business methods. In return, Franchisees accept certain restrictions on the way that business is conducted, and financially reward the Franchisor on the level of success achieved.

A Business Format Franchise gives Franchisees the advantage of setting up in business with the support and advice of an organization that has successfully carried out First Phase pilot operations that serve as a blueprint. This system eliminates many of the risks that are involved in a normal business start-up situation.

1.2Definition of Franchising

Franchising is a system of marketing goods and/or services and/or technology, which is based upon a close and on-going collaboration between legally and financially separate and independent undertakings, the Franchisor and its individual Franchisees, whereby the Franchisor grants its individual Franchisees the right, and imposes the obligation, to conduct a business in accordance with the Franchisor's concept. The right entitles and compels individual Franchisees, in exchange for a direct or indirect financial consideration, to use the Franchisor's trade name, and/or trade mark and/or service mark, know-how, business and technical methods, procedural system, and other industrial and/or intellectual property rights, supported by continuing provision of commercial and technical assistance, within the framework and for the term of a written Franchise Agreement, concluded between parties for this purpose.

The Franchisor develops the operating blueprint, has obligations to market and develop the Franchise as a whole and to help Franchisees improve their performance, at the same time maintain and improve standards of quality and service. The Franchisor provides the brand, experience, expertise and complete know-how which all help to reduce the expensive learning curve of both time and money.

The Franchisees have obligations to uphold the good name of the Franchisor, maintain and improve standards of quality and service, and to operate the business in accordance with the standard format/system. The operation will be to locally promote, sell and provide the product/service of the Franchise. The Franchisees provide the benefits of entrepreneurial drive, motivation and ambition.

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

OUR FRANCHISE OPPORTUNITY

Franchise Division

Riyadh

Revision No. 0

Section 2

2. OUR FRANCHISE OPPORTUNITY

2.1The ADNOC KSA Franchise Concept

ADNOC Distribution is one of the UAE’s best and most recognized brands having won many awards for innovation and social projects. Operating from both dedicated retail shops and from over 200 Petrol Forecourts in the UAE, ADNOC Distribution provides the highest levels of customer service to over 1 million customers per year.

It has a reputation built on quality and service. We ensure that these values are embedded in any new business ventures under the ADNOC Distribution name such as the ADNOC KSA Franchise.

ADNOC Distribution has grown its business year on year and has a strategy for growth both in the UAE and the broader GCC region. To support these growth plans, ADNOC Distribution plans to enter the Retail Fuels Sales and Allied Services (RFASS) sector in KSA with a plan to open over 35 sites in the next ten years. The RFASS market in KSA is ripe for investment and standards of operation currently fall below those enjoyed across the region and in the UAE.

Over the years ADNOC Distribution has studied the KSA and is now ready to make an entry through offering the ADNOC KSA Franchise to as series of select investors and support them through the creation of a dedicated with professionals who really understand the market and how to drive sales.

Through the ADNOC KSA Franchise we will train you, help you set up your new businesses and provide ongoing advice and guidance to help ensure success over the lifetime of the Franchise. As the national oil company for Abu Dhabi and a leading player in the UAE and region, ADNOC Distribution is here for the long term and is committed to ensuring that the ADNOC KSA Franchise is a success.

In summary the franchise opportunity consists of;

•World class standard RFASS Offer & Formats will set a new standard and offer franchisees a major competitive advantage in the KSA fuel retailing market

•ADNOC Service Station design & specifications for all RFASS offers (i.e. fuel islands, c-store etc)

•Expertise and experience in managing fuel and non-fuel retail network through established performance proved business processes & operating manuals

•ADNOC retail management systems and ongoing support from experienced IT team

•Franchisee training & support programs and staff training manuals

•Introduction of high quality brand inserts / tenants to sites providing attractive income streams

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

OUR FRANCHISE OPPORTUNITY

Franchise Division

Riyadh

Revision No. 0

Section 2

2.2The ADNOC KSA Franchise Package

 

 

Business / Operating Area

 

Franchise Offer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise License

 

ï‚·

The Franchise will grant you an exclusive territory within

 

 

 

 

 

 

which your station will operate

 

 

 

 

 

 

 

ï‚·

You will be granted the rights to use the ADNOC KSA

 

 

 

 

 

 

Franchise brands (e.g. ADNOC KSA Forecourt, OASIS C-

 

 

 

 

 

 

Store) & trademarks in line with the franchise obligations

 

 

 

 

 

ï‚·

You will be granted the rights to use the ADNOC KSA

 

 

 

 

 

 

Intellectual Property, Operating Methods and Systems

 

 

 

 

 

 

 

 

 

 

 

Business Manuals

 

ï‚·

You will be furnished with copies of the relevant operating

 

 

 

 

 

 

manuals that will help make a success of the business and

 

 

 

 

 

 

ensure the highest possible operating standard

 

 

 

 

 

 

 

ï‚·

These manuals are updated regularly and managed under

 

 

 

 

 

 

ADNOC Distributions strict QA process

 

 

 

 

 

 

 

 

 

 

 

 

 

Training & Opening

 

ï‚·

Initial training to prepare you to run the Franchise

 

 

 

Support

 

 

successfully from day one

 

 

 

 

 

 

 

ï‚· Access to training materials to train your own staff to provide

 

 

 

 

 

 

the best possible service to customers

 

 

 

 

 

 

 

ï‚· A planned opening marketing campaign to

open your

 

 

 

 

 

 

business with impact

 

 

 

 

 

 

 

 

 

 

 

 

 

IT Solution

 

 

 

 

 

 

 

 

 

 

 

ï‚·

ADNOC EPOS Hardware (x1) & Software designed

 

 

 

 

 

 

 

specifically to help you run your business as efficiently as

 

 

 

 

 

 

 

possible

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing Materials &

 

ï‚·

Posters, Display Stand and Point of Sale (PoS) materials and

 

 

 

Promotions

 

 

other related marketing materials will be provided

 

 

 

 

 

 

 

ï‚· Shop and product promotions will be run on regular basis to

 

 

 

 

 

 

attract sales and will be supported by the required marketing

 

 

 

 

 

 

materials

 

 

 

 

 

 

 

 

 

 

 

 

Shop Fitting & Signage

 

ï‚·

Exterior and Interior Signage needed to attract customers to

 

 

 

 

 

 

the site and encourage sales

 

 

 

 

 

 

 

ï‚·

C-Store Equipment, Refrigeration, Fittings and any agreed

 

 

 

 

 

 

Food Service or Bakery modules within

 

 

 

 

 

 

 

 

 

 

 

 

Business Materials

 

ï‚·

ADNOC KSA uniforms, business stationery, shop materials

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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(See Appendix for

ADNOC Distribution

ADNOC KSA Franchise Prospectus

OUR FRANCHISE OPPORTUNITY

Franchise Division

Riyadh

Revision No. 0

Section 2

(& consumables, e.g. carrier bags)

Ongoing Business Support ADNOC Distribution has created a dedicated ADNOC KSA organisation staffed by professional with experience of developing and growing RFASS businesses.

summary biographies).

An important part of their accountably is to:

ï‚·Regularly visit your site in order to provide an opportunity for review, analysis and advice and guidance on your business.

ï‚·Undertake a continual programme of research to ensure that you are kept up to date with developments in the market place and have the products and the marketing strategy to keep your business thriving.

ï‚·Commitment to maintaining and further developing the Franchise brand and image and providing regular communications on relevant and appropriate information relating to the ADNOC KSA concept.

Create the ‘Franchisee Forum’ to promote two way communications.

ï‚·Ongoing business consultancy to help keep you on track including feeding back results from Mystery Motorist and marketing campaign performance.

The above is not an extensive list of the support you will receive as an ADNOC KSA Franchisee but highlights the key elements of what we believe will be an ongoing successful partnership.

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

OUR FRANCHISE OPPORTUNITY

Franchise Division

Riyadh

Revision No. 0

Section 2

2.3The ‘Ideal’ ADNOC KSA Franchisee

It will be your role to develop your business – we will help – but ultimately it will be your efforts that will bring success.

You must be willing to operate your business using our full business format system and to adopt any new initiatives as they are introduced. Our standards are high. We will only accept the best entrepreneurs or companies/partnerships prepared to devote the time, energy and resources to succeed.

In any successful growing network, teamwork is critical. You must be a team player, be prepared to share experiences and have a genuine desire to provide the very best service to your customers. You will have the backing and strength of our head office team and your fellow franchisees. We can learn from each other and feel proud to be part of a 'larger family'.

As part of the selection process we are looking for entrepreneurs or companies/partnerships who can demonstrate what we believe are the necessary skills to create success for both parties. These include:

 

Entrepreneur

 

 

Company / Partnership

 

 

 

 

 

 

 

 

ï‚· Hard working with the drive an commitment

 

 

In addition to those expected of entrepreneurs;

 

 

to succeed

 

 

ï‚· A complimentary business culture and ethic

 

 

 

 

 

 

 

ï‚· Positive and enthusiastic outlook with

 

 

ï‚· A track record of successfully developing

 

 

excellent communication skills and real

 

 

brands and offers

 

 

passion for customer service

 

 

 

 

 

 

 

 

 

ï‚· Computer literacy and good grasp of

 

 

 

 

 

business basics and leadership skills

 

 

 

 

 

ï‚· Access to the required funding needed to

 

 

 

 

 

launch an ADNOC KSA franchise

 

 

 

 

 

 

 

 

 

 

The ADNOC KSA Franchise presents an exciting opportunity for both ADNOC Distribution and a Franchisee but success can only happen when both parties work together for mutual benefit.

The ADNOC KSA business model is designed to ensure that by taking advantage of this opportunity both you and ADNOC Distribution can secure a profitable return in this growing market.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE INVESTMENT & RETURN

Franchise Division

Riyadh

Revision No. 0

Section 3

3. THE INVESTMENT & RETURN

The ADNOC KSA Franchise offer combines all essential elements required to build a successful franchise business.

ADNOC KSA

FRANCHISE OFFER

 

Simple,

Proven business

standardised

concept

operating system

Equitable risk/ reward sharing &

aligned incentives

High quality,

Effective ongoing

committed

franchise support

franchisees

 

In the sections that follow we are providing you with an example of how the financial component of the franchise operates. Obviously, each location is different and any franchise agreement will be subject to individual negotiation. Therefore please consider what follows as illustrative only.

3.1The ADNOC KSA Franchise Fees

The franchise fee mechanisms exist to ensure that you receive all the support you need to open your ADNOC KSA Service Station as well as provide you with all the ongoing support required to make it a success. The fees are payable over the term of the Franchise.

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE INVESTMENT & RETURN

 

 

Franchise Division

 

Riyadh

 

 

Revision No. 0

 

Section 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type

 

 

Formula

 

 

Percentage / Rate

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Application Fee

 

 

Fixed fee per Site based

 

 

SR 50,000

 

Appropriate sum to encourage

 

 

 

 

 

 

upon contribution to costs of

 

 

 

 

only serious applicants and

 

 

 

 

 

 

franchisee and Site appraisal

 

 

 

 

avoid timewaster

 

 

 

 

 

 

 

Payable upon application

 

 

 

 

Retained if application is

 

 

 

 

 

 

 

 

 

 

 

 

 

successful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Refundable within 30 days if

 

 

 

 

 

 

 

 

 

 

 

 

 

application is rejected

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franchise Fee

 

 

Fixed fee for Start- up

 

 

SR 700,000

 

 

 

 

 

 

 

 

 

 

(individual Franchisee)

 

 

 

 

 

 

 

 

 

 

 

 

 

Payable post successful

 

 

 

 

 

 

 

 

 

 

 

 

 

application

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Area Exclusivity

 

 

Fixed fee structure for area

 

 

SR 2,500,000

 

Fee includes exclusivity for

 

 

 

Fee

 

 

exclusivity for a franchise

 

 

 

 

area, application fee and

 

 

 

 

 

incorporating multiple Sites

 

 

 

 

franchise fee for the first Site.

 

 

 

 

 

 

 

 

 

 

 

 

 

(for multiple-site

 

 

 

 

 

 

 

 

 

Franchise Fees applicable for

 

 

 

application)

 

 

 

 

 

 

 

 

 

each of the subsequent Sites.

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclusivity bound with agreed

 

 

 

 

 

 

 

 

 

 

 

 

 

timeline for development of all

 

 

 

 

 

 

 

 

 

 

 

 

 

Sites (e.g. 12 months)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty Fee

 

 

% of gross turnover including

 

4%

 

 

 

 

 

 

 

 

 

 

rent income from retail

 

 

 

 

 

 

 

 

 

 

 

 

 

partners and excluding fuels

 

 

 

 

 

 

 

 

 

 

 

 

 

sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payable quarterly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising &

 

 

% of gross turnover

 

1%

 

Essential to both drive

 

 

 

Marketing Fees

 

 

excluding fuels sales

 

 

 

 

performance and differentiate

 

 

 

 

 

 

 

 

 

 

 

 

the offer

 

 

 

 

 

 

 

Payable quarterly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE INVESTMENT & RETURN

Franchise Division

Riyadh

Revision No. 0

Section 3

3.2Franchisee Investment & Return

In order to develop your ADNOC KSA Franchise Service Station you will need to invest.

ADNOC Distribution will help with site selection, business plan development, fit out, pre-opening planning and site launch but as this is your business you will need to source the required investment funds and working capital.

Every ADNOC KSA Franchise will be developed upon an individual assessment so the examples we are providing here is illustrative only and is based upon an established ADNOC Distribution site operating in the UAE adjusted to account for the KSA market. It is a projection only of the potential profitability.

Site Profitability

Format

Highway Location

Location

Abu Dhabi

Plot size

25,500 sq.m

Main products

ULG 91, ULG 95, ULG 98, Diesel

Opening hours

24 hr (Fuel & C-Store), 16 hr (other services)

 

 

Offers

 

Notes

 

 

 

LPG



 

 

 

 

NGV

x

 

Lube Change



2 pits

 

 

 

Car Wash



Automatic &

 

 

Manual

 

 

Medium size with

C-Store



several fast food

 

 

inserts

Other Tenants



 

 

 

 

Tyre Repair



 

Car Repair



 

 

 

 

Vehicle



 

Inspection Centre

 

 

 

 

Mosque

x

 

 

 

 

Using the above site as a model ADNOC Distribution have then applied a series of adjustments and sensitivities in order to arrive at an indicative level of profitability for an investing franchisee.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE INVESTMENT & RETURN

Franchise Division

Riyadh

Revision No. 0

Section 3

 

Initial investment required

 

This covered the cost of acquiring the

SR 19,000,000

 

 

site and the build and fit out cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The average daily sales achieved over

 

 

Annual Sales at maturity

 

SR 36,000,000

 

 

the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The average cash generated by the

 

 

Net Annual Cash Flow

 

 

 

 

 

ADNOC KSA Franchise having

SR 4,000,000

 

(20 year average)

 

accounted for all costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The number of years it is estimated for

 

 

 

 

 

 

Payback

 

the Site to payback its initial

5

 

 

investment (based upon current

 

 

 

 

 

 

 

performance)

 

 

 

 

 

 

 

 

 

 

 

Please Note

The above example is illustrative only.

You must not take it that the results demonstrated as a guarantee to achieving similar results in your chosen site or territory. Your success will greatly depend on your own hard work and commitment, the competition, local market conditions and specific operating costs. As sales increase and if overheads are controlled, your business should make good progress as it becomes fully established.

You will need to work with an accountant to produce your own Site specific business plan, sales targets, budgets and income forecasts for your Site or territory.

The ADNOC KSA Franchise formats have the backing of ADNOC Distribution who are investing in this for the long term. With your determination, resources and the might of ADNOC Distribution behind you with have every confidence that this will be a successful venture – for both parties.

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE FRANCHISE AGREEMENT IN SUMMARY

Franchise Division

Riyadh

Revision No. 0

Section 4

4. THE FRANCHISE AGREEMENT – IN SUMMARY

This section aims to summarise the key elements of the franchise agreement and your rights and obligations under it. It is not a substitute for the full agreement and in obtaining legal advice on it.

Parties

There are two parties to the Agreement: ADNOC KSA, referred to as "the Franchisor", and the Franchisee company or individual, referred to as "the Franchisee”.

The Nature of the Rights Granted to the Franchisee

There is a definition in principle of franchising in Section 1 of this Memorandum of Information. It is fundamental to the relationship between Franchisor and Franchisee that the Franchisor grants to the Franchisee the right - and imposes the obligation - to conduct a business in accordance with the Franchisor's concept, in exchange for obligations on the part of the Franchisee, including financial obligations. The franchise agreement sets out in legal terms the precise legal rights granted by the Franchisor. They include:

ï‚·Trademarks - the right - and obligation - to use the Franchisor's trademarks. The Franchisor grants to the Franchisee the right to use its trade marks ADNOC KSA and ADNOC OASIS C- Store. The Franchisee may not itself apply to register the trade marks. The Franchisor will immediately notify the Franchisor of any infringement of the trade name or marks of which it becomes aware. The Franchisor does not give any warranty in respect of the validity of the trade name or marks. The Franchisee will if required enter into the Franchisor's trade mark license agreement.

ï‚·Confidentiality - the right to use a business system that the Franchisor, and its associated companies within the ADNOC Group, have developed over many years. The information that comprises this business system - the Franchisor's know-how - is confidential, and it will be made available under obligations of confidentiality to the Franchisee. Later in this document we will describe how this is done.

Exclusivity

When a franchise agreement is entered into, specific premises are agreed as those from which the Franchisee will carry on the franchise business. In addition, a territory will be agreed, a geographical area around the premises. So long as the franchise agreement continues and so long as the Franchisee complies with its obligations, the Franchisor will not grant any other franchise within that territory, nor will it knowingly itself sell the franchise products within the territory.

KSA Franchise Prospectus.docx

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE FRANCHISE AGREEMENT IN SUMMARY

Franchise Division

Riyadh

Revision No. 0

Section 4

The Period of the Franchise Agreement

The Agreement will last for an initial period of twenty years (with a review after 10).

If the Franchisee is not then in breach of the agreement, it may call for a new franchise agreement on the Franchisor's then standard terms, which may of course be different. The new agreement will also normally contain the right of renewal.

Either the Franchisor or the Franchisee may, however, terminate the agreement in certain circumstances before its full term is finished. These include but are not limited to:

ï‚·The Franchisor may terminate if the Franchisee fails to pay any money payable under the agreement on its due date.

ï‚·The Franchisor may terminate if the Franchisee breaches any obligations under the agreement and fails to remedy the position within a period of fourteen days.

ï‚·The agreement may be terminated, or in some circumstances will terminate automatically, if the Franchisee ceases to be able to carry on the business in a number of circumstances. The most significant of these is its financial failure.

ï‚·The agreement will be terminated if the Franchisee fails financially.

The Franchisor also has certain rights short of terminating the agreement altogether. In certain circumstances it may appoint a manager, for example to help the Franchisee through a period of crisis. In other circumstances, it may qualify the Franchisee's rights of exclusivity by allowing other Franchisees to trade within the Territory.

Financial Provisions

The Franchisee has three financial obligations.

ï‚·On entering into the agreement it will pay a one-off franchise license fee of SR 700,000

ï‚·During the course of the agreement the Franchisee will pay to the Franchisor a royalty fee equal to 4% of gross turnover excluding fuels sales

ï‚·The Franchisee pays to the Franchisor an Advertising & Marketing fee of 1% on gross turnover excluding fuels sales

Specific Benefits to the Franchisee

The Franchisor delivers its know-how by means of initial training. If required by the Franchisor the Franchisee may be required to undergo further training at its own cost. Training is to be provided at the Franchisor's standard rate and the Franchisee is liable for travelling and other expenses.

The main other means by which the Franchisor delivers its know-how is through the Manuals. This is a blueprint for successfully running a franchise business. It is updated from time to time.

The Franchisor's ongoing support is not to training. The Franchisor will if necessary consult with the Franchisee, send its people to the Franchisee's premises from time to time and co-ordinate meetings with other Franchisees.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE FRANCHISE AGREEMENT IN SUMMARY

Franchise Division

Riyadh

Revision No. 0

Section 4

An essential element of the business system is certain EPOS software. The Franchisee is required to obtain a license of this from the supplier of the software, but the Franchisor will organize all formalities in obtaining the software, obtaining the necessary licenses, obtaining the hardware on which the software runs and finally organizing maintenance arrangements for both hardware and software. At the current time, the only approved supplier of the required EPOS software and hardware for ADNOC KSA Franchise operations is ADNOC Distribution.

Supply of Products

An essential element of the business is of course the supply of products. The Franchisor will not supply these directly but will develop the price book through nominated /approved suppliers.

However, only approved products purchased through the ADNOC KSA Franchise system are allowed to be stocked, and all c-store merchandising and planograms are strictly controlled to ensure consistency, quality of service to our customers, and to optimise through scale ADNOC KSA purchasing power for you as Franchisee.

Obligations owed by the Franchisee to the Franchisor

It is in the nature of a franchise that close control is exercised over the way in which the Franchisee runs the business. The franchise outlet will be part of a network that must be run to a consistently high standard. There are therefore detailed provisions and guidelines on how the business is to be run.

There are provisions protecting the Franchisor's goodwill in the system. The Franchisee may not compete with the Franchisor in the Territory or in the territory of any other Franchisee during the period of the Agreement or for a period of one year afterwards.

Because it is essential that the Franchisee keeps the details of the system confidential, there are obligations of confidentiality, and the Franchisor is entitled to seek the same obligations directly from the Principal and the employees in the business.

The Franchisee is required to submit an annual business plan, which it must agree with the Franchisor. If the Franchisee fails to comply with the business plan the Franchisor may call a meeting to discuss this and ultimately impose a recovery plan. Failure to comply may result in the boundaries of the Territory being changed or other Franchisees being appointed within the Territory. In the last resort the franchise may be terminated.

Advertising

The 1% of turnover (excluding fuels sales) Advertising & Marketing fee funds the marketing and advertising plans & programs arranged by the Franchisor in order to increase brand awareness and generate sales.

The Franchisor will maintain a website, in which the ADNOC KSA offer and franchised operations will be profiled. In order to ensure that the use of the brand is entirely consistent, the Franchisee may not promote itself on the internet other than with prior approval of the Franchisor.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

THE FRANCHISE AGREEMENT IN SUMMARY

Franchise Division

Riyadh

Revision No. 0

Section 4

Sale of the Business

The Franchisee has rights to assign or sell its interests under the franchise agreement to another third party or purchaser. Such consent will not be unreasonably withheld but is subject to a number of important provisions:

ï‚·The purchaser must be acceptable to the Franchisor.

ï‚·The Franchisor will charge a fixed fee of SR 50,000 to cover the costs of dealing with the assignment and of training the proposed purchaser.

ï‚·The Franchisor will have first option to purchase the business for the same price as that offered by the proposed purchaser.

Rights on Termination

On termination of the franchise agreement, all the Franchisee's rights to operate the system and use the trademarks and the confidential know-how immediately cease.

The Franchisee must immediately cease operating the business and pay to the Franchisor all outstanding monies due. All promotional material is to be returned to the Franchisor or destroyed. The Manual is to be returned to the Franchisor and no copies may be kept.

The Franchisor may buy from the Franchisee certain of its assets in the business, including the premises and saleable products, but the Franchisor has no obligation to do so.

After termination the Franchisee shall not compete with a similar business to the Franchisee's business within the Territory or any other Franchisee's territory; reveal any trade secrets or confidential information to any third party; or solicit or entice away any employee or former clients of the Franchisee's business for a period of one year.

Miscellaneous

There are a number of other legal provisions, but they do not detract from those outlined above.

NB

The above is intended to be a guideline to the commercial provisions of the ADNOC KSA Franchise Agreement, and is not intended in any way to cover every legal provision of the Franchise Agreement. You are advised to take independent legal advice before you enter into the formal Franchise Agreement.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

NEXT STEPS

Franchise Division

Riyadh

Revision No. 0

Section 5

5. NEXT STEPS

There are a number of steps you will need to take before formally applying for an ADNOC KSA Franchise. Franchising is a long-term commitment and as such, we both need to feel comfortable with our decisions.

Consider all Aspects

ï‚·Review this document thoroughly and be sure to seek answers to any questions you may have

ï‚·Be totally sure it is what you want to do - it is a serious commitment

ï‚·Be sure you have the prerequisites for being a Franchisee - it is hard work, often with long hours, especially during the early stages

ï‚·Be sure your family or partner(s) are behind you.

ï‚·Seek professional advice - provisionally sound out your bank manager for an indication of financial support available, if that is required, and talk to your accountant. We suggest that you take formal legal advice

ï‚·Carry out some initial market research to identify the potential and demand

ï‚·Be sure that you fully understand your responsibilities

Initial Commitment

To proceed to the next stage, you will be asked to complete and sign the Intent to Proceed document and complete the Application Form and submit with the application fee of SR 50,000. This amount is refundable if your application is unsuccessful.

The Intent to Proceed agreement is included as an appendix to this document and should be submitted with the initial Franchise Fee of SR 700,000.

Signing this document will secure the agreed territory for 8 weeks whilst you carry out further research.

Detailed Business Plan

You and your accountant will now need to prepare a detailed business plan for the agreed territory. We will provide assistance to you in its preparation. You and your accountant will need to feel comfortable with the plan, and we will want to formally review the contents. It will then need to be presented to your bank, especially if you require additional funding.

Franchise Lawyer

If the previous steps have been satisfactorily progressed, you will now need to seek the advice of a specialist Franchise Lawyer before finally committing and signing the Franchise Agreement.

(We have provided a list of KSA Lawyers with expertise in franchises at the end of this document).

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

FAQS

Franchise Division

Riyadh

Revision No. 0

Appendix A

APPENDIX A – FREQUENTLY ASKED QUESTIONS

We have listed below various questions you may have and given short answers to each. We will be happy to answer these in greater detail if you so wish, along with any other questions you may have.

Ql. How can I finance the ADNOC Franchise?

A.Banks are the most convenient way to generate finance and are probably have a specialist franchise department. They will expect to see your business case and ADNOC KSA will help you in pulling this together. Franchising is seen as a safer way to start a new business. In this regard, local bank managers will usually provide attractive terms and a higher lending proportion of the required start-up capital than might otherwise be available.

Q2. Who will find the location?

A.The potential franchisee should find or recommend the RFASS location. ADNOC KSA have selection criteria and will want to approve the premises, likely footfall and its sales potential prior to you negotiating the lease or purchasing the freehold.

Q3. What size and type of RFSAA will we need?

A.Currently ADNOC KSA has four performance formats available within the ADNOC KSA Franchise. They can range in plot size from 3,000 sq.m to 26,000 sq.m. All sites and opportunities though are assessed on individual merit.

Q4. Do I have to pay an initial fee to secure the ADNOC Franchise?

A. All initial fees are summarised in the table below.

.

 

Type

Formula

Percentage / Rate

 

 

 

 

 

 

 

Application Fee

Fixed fee per site based upon contribution to costs of

SR 50,000

 

 

 

franchisee and site appraisal

 

 

 

 

Payable upon application – Refundable if application

 

 

 

 

unsuccessful

 

 

 

 

 

 

 

 

Franchise Fee

Fixed fee for Start- up (individual Franchisee)

SR 700,000

 

 

 

Payable post successful application

 

 

 

 

 

 

 

 

Area Exclusivity

For multiple sites application

SR 2,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

FAQS

 

Franchise Division

Riyadh

Revision No. 0

Appendix A

 

 

 

 

 

 

 

Fee

Fixed fee structure for area exclusivity for a franchise

 

 

 

 

 

incorporating multiple sites.

 

 

 

 

 

 

 

 

 

 

 

 

Q6. Will I need to prepare a business plan?

A.We will need to satisfy ourselves that what you project in your business plan is both realistic and achievable. You will also require this for your own planning and for raising any additional funding required to start your business.

Q7. Why is the ADNOC KSA Franchise more beneficial than just opening my own RFASS operation?

A.Being a Franchisee and committing 100% to the ADNOC KSA offer will give you access to better buying prices, which means a wider range of products for less money tied up in stock . You will gain from the considerable experience of our management team, reducing the usual learning curve you may otherwise have experienced. You will benefit from shared experiences and marketing with other ADNOC KSA Franchises, and you will have access to industry-leading system, processes and training and building specifications for your operation.

Q8. How will my Territory be protected?

A.Each Franchisee is awarded exclusive rights to a Territory that no other Franchisees will be allowed to market in.

Q9. Can I sell my Franchise?

A.Yes. One of the benefits of owning a business is the ability to sell on that business and receive the capital appreciation you have built up over time. Obviously, we will want to first approve the new owner prior to issuing a new Franchise Agreement, just as we will with you prior to your acceptance to the ADNOC KSA Franchise.

QI0. On what basis do you select your Franchisees?

A.We want our Franchisees to succeed and on that basis, we will be very selective. We want hard working ambitious people who are disciplined, capable, customer focused, team builders with a positive outlook, and who are happy, with a pleasant disposition.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

INTENT TO PROCEED AGREEMENT

Franchise Division

Riyadh

Revision No. 0

Appendix B

APPENDIX B – INTENT TO PROCEED AGREEMENT (TEMPLATE)

[Letterhead of proposed Franchisee]

ADNOC Distribution P.O. Box: 4188,

Abu Dhabi,

United Arab Emirates

……… 2012

Dear Sirs

This letter confirms the terms on which you and we will discuss together, and we will evaluate, the possibility that you might grant franchising rights to me or us or to a new company incorporated by me or us. This evaluation will necessitate the exchange of confidential information, and we both wish the mutual disclosure of that confidential information to be made subject to the terms set out below.

For the purposes of this letter it is convenient to have certain expressions defined. The expressions themselves are capitalized (as in "the Receiving Party" in the next paragraph) and the definition in each case appears in the schedule at the end of this letter.

Non-Disclosure

The Receiving Party (we or you as the case may be) shall keep Confidential Information received from the Disclosing Party secret and confidential and shall not disclose it to any third party other than to its Representatives as provided below. The Receiving Party shall use that Confidential Information exclusively for the purposes of the evaluation referred to above.

The Receiving Party shall not disclose any Confidential Information to any of its Representatives except those of its Representatives who need to know the Confidential Information in order properly to undertake the evaluation referred to above. The Receiving Party shall advise each of its Representatives of the confidential nature of the Confidential Information received from the Disclosing Party and of the existence and importance of the provisions of this letter agreement, and shall be responsible for ensuring that the Representatives observe the obligations in this letter agreement.

The Receiving Party acknowledges and agrees that all documents and information received by it from the Disclosing Party, and all copies, shall remain the Disclosing Party's exclusive property. The Receiving Party shall on the Disclosing Party's request either destroy or return them, without keeping any copies.

Fee

We shall on delivery and acceptance of this letter pay you the FRANCHISING FEE.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

INTENT TO PROCEED AGREEMENT

Franchise Division

Riyadh

Revision No. 0

Appendix B

Standstill

You shall not within the Standstill Period appoint any Franchisee other than us for all or any part of the Territory, unless we notify you that we do not intend to enter into a franchise agreement for the Territory.

Employees

Without the written consent of the other of us, until the elapse of two years from the date of this Agreement neither of us shall directly or indirectly solicit for employment or hire or consultancy any officer or employee of the other with whom we (or you as the case may be) had contact or who became known to us (or you as the case may be) in connection with our evaluation. This provision shall not prohibit the engagement in good faith of individuals who contact either of us on their own initiative without any direct or indirect solicitation or encouragement from us or you as the case may be; who respond to general recruitment advertisements placed in the normal course, or who have had their contracts of employment or consultancy terminated by one of you and us before discussing employment with the other.

Miscellaneous

References in this letter to "us" mean the signatory of this letter on behalf of himself or herself, my or our Representatives and any company that I or we allocate to be the proposed Franchisee, if the Evaluation is successful.

Nothing in this letter agreement shall be, or shall be construed as being, an agreement between us to enter into a franchise or any other agreement.

Whilst each of us shall endeavour to disclose such Confidential Information as is relevant for the purpose of your evaluation, we both acknowledge that the Disclosing Party makes no express or implied representation or warranty as to the accuracy or completeness of the Confidential Information it discloses, and the Disclosing Party shall have no liability to the Receiving Party if the Receiving Party uses of or relies on the Confidential Information, except as may be provided in any definitive agreement entered into between the parties.

Please confirm your agreement by signing the attached copy of this letter.

Yours faithfully

………………………………..

For ADNOC Distribution

Agreed by all Parties: ……………….

Capacity of signature: ……………….

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

INTENT TO PROCEED AGREEMENT

Franchise Division

Riyadh

Revision No. 0

Appendix B

Expressions used in this agreement:

"Confidential Information"

shall mean, with respect to the Receiving Party (as defined in the next sub-paragraph), all information:

(a)disclosed by one party or its Representatives (the "Disclosing Party") to the other party or its Representatives (the "Receiving Party") including not only written information but information transferred orally, visually, electronically, through discussion or observation or by any other means including without limitation any information about the Disclosing party's research and development, products, manufacturing, marketing or geographical organization; and

(b)by way of any analysis, compilations, data studies or other documents prepared by the Receiving Party containing, reflecting or based in whole or in part on information received from the Disclosing Party; and

(c)regarding the existence, nature, progress or termination of any discussions or negotiations between the parties or their Representatives with respect to the Evaluation including the existence and terms of this Agreement.

Confidential Information shall not include information that:

(a)was already in the Receiving Party's possession before its disclosure by the Disclosing Party to the Receiving Party;

(b)is independently developed by the Receiving Party;

(c)is or becomes publicly available through no fault of the Receiving Party; or

(d)is obtained by the Receiving Party from a third party who, so far as the Receiving Party is aware, is under no obligation not to disclose it.

"the Fee" shall mean the sum of SR 700,000;

"the Disclosing Party" shall mean as defined in the definition of "Confidential Information";

"the Receiving Party" shall mean as defined in the definition of "Confidential Information";

"Representatives" shall mean each of the parties' directors, officers, employees, bankers, agents, representatives and professional advisers.

"Standstill Period" shall mean eight weeks from the date of this Agreement;

"the Territory" shall mean [ ]

"to become public" shall mean to allow any third party other than the relevant party's Representatives to know the relevant fact or intent.

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ADNOC Distribution

ADNOC KSA Franchise Prospectus

FRANCHISE APPLICATION FORM

Franchise Division

Riyadh

Revision No. 0

Appendix C

APPENDIX C – THE FRANCHISE APPLICATION FORM

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ADNOC DISTRIBUTION

FRANCHISE APPLICATION FORM

For Company or Corporate Applicant

Date: 01-Oct-2012

PO Box 4188, Abu Dhabi, United Arab Emirates

Phone: +971-2-6771300 | +971-2-6959639 Fax: +971-2-6776379

To be fill in by ADNOC Distribution personnel only:

Franchise Application Number

Date Received

Received By

Signature

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Page 1 of 26

 

 

This application form should be completed and submitted to ADNOC Distribution in the United Arab Emirates (‘ADNOC Distribution’) by company or corporate applicants even if the applying company is yet to be formed (all referred to as the ‘Company’) who wish to apply for ADNOC Distribution Service Station Franchise (the ‘Franchise’) in the Kingdom of Saudi Arabia (‘KSA’).

This application must be filled in and signed by the individual(s) with the appropriate authority to make all commercial decisions on behalf of the applying Company, and such individual(s) must have the authority or Power of Attorney to represent the Company in all legal matters in the KSA jurisdiction. If the Company is yet to be formed, each of its proposed shareholders must sign this application.

If the Company is yet to be formed, ADNOC Distribution requires that the proposed Company to have been fully registered and set up before the signing of the Franchise Agreement.

Please provide ALL requested information where applicable. Failure to provide any information requested in the application form may result in the application being rejected by ADNOC Distribution. Additional pages should be attached if further space is required. ADNOC Distribution will initially assess suitability for becoming a potential franchisee based upon the information and supporting documents provided by the Company. Any incorrect, missing or illegible information could affect the outcome of your application.

The acceptance of this application form does not obligate ADNOC Distribution to pursue the application, or to justify the reasons as to its decision to pursue or not the application.

Should you have any questions or require any help in completing the form, please contact:

Franchise Development Committee

ADNOC Distribution

PO Box 4188, Abu Dhabi, UAE

Telephone: +971

2695 9290

Fax:

+971

2672 8742

Please ensure that you submit with this application all the required supporting documents listed in Appendix A and any other documents which you deem necessary and appropriate in supporting your application. Please provide the original documents, wherever it is mentioned specifically, otherwise a “Self Attested” photo copy (a colour photocopy required for all critical Govt. approvals/ certificates etc.) of each document. In case any original document is collected then ADNOC Distribution will return the same after the application has been processed. “Self Attested” copy means a clear legible photo copy signed by the applicant (with date) conforming that the copy is a “True Copy” and in case of any mismatch found with the original document at later date, the applicant shall be liable.

Any copy is submitted with this application must be “self attested” failing which no cognizance shall be taken and application may be rejected.

Where a yes/no answer is required, please tick () on the correct answer. If you tick ‘yes’ to any answer, you must provide further details in the space provided. In case any item of the application form is inapplicable or irrelevant or information is not available please write “NA”.

Please complete the form in BLOCK LETTERS AND IN BLACK INK. Each page of application should be signed (counter signature acceptable) at right bottom.

2

PART A: APPLICANT DETAILS

A.1. Legal entity of the applying Company (please tick box)

Limited Liability Company (minimum number of shareholders 2)

Branch of a Company (please also tick the box corresponding to the legal form of the Company)

Limited Partnership (minimum number of partners 2)

Corporation (minimum of 5 stockholders)

General Partnership (minimum number of general partner 1 and limited partners 2)

Partnership Limited by Shares (minimum number of general partner 1 and limited shareholders 4)

A.2. Name of the applying Company

A.3. Place of incorporation

Please submit with this application a self attested copy of the Company's Certificate of Incorporation or Trade Licenses and/or other constitution documents (unless the Company is not yet formed).

A.4. Date of incorporation

In case of changes in the name of the company and / or partnership in past (from original initial date of incorporation), please provide copies of the relevant documents and certificates.

3

A.5. Name of the person(s) submitting this application form and his/her position(s) (e.g. Business Owner, Company Managing Director, Commercial Director)

This application may be filled by any authorized staff, but should be submitted and signed by only authorized person of the company (example- Owner/ proprietor, Managing Director, any full time Director on the Board, partner).

A.6. The applying Company’s registered (or to be registered) business address in the Kingdom of Saudi Arabia

..................................................................................................................................................................

..................................................................................................................................................................

City...........................................................................................................................................................

Post code: ................................................................................................................................................

PO Box: ...................................................................................................................................................

Telephone: ………………....................................... Fax: .......................................................................

Email Address: …………………………………………………………………………………………

Company Website: …………………………………………………………………………………...

A.7. Is the Company listed on a stock or investment exchange?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

4

A.8. Business Activity

Please tick box to confirm that the Company will not be conducting any activities prohibited in the Kingdom of Saudi Arabia

B.1. Please describe the nature of your current business activities(please use additional pages if required)

A.9. Please provide the approximate number of employees of the Company

A.10. Please provide the geographical extent of the applying Company (please list the countries and cities in the KSA where the Company has registered offices and conducts business)

5

PART B: COMPANY OWNERSHIP

B.2. Please list the shareholders in the applying Company. Please include all legal and beneficial holders of stock (whether ordinary or preferred, voting or non-voting), or any other equity interest in the business. (there must be at least two shareholders)

Name

Number and Type of Shares

% of Issued Stock Held

 

held

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B.3. When was the Company established under the above ownership?

Please note that if a franchise is awarded, where ADNOC Distribution consider appropriate, one or more of the main shareholders above will be required to sign the Franchise Agreement in order to guarantee the Company's obligations to ADNOC Distribution.

If a holding company structure is employed, full ownership disclosure of the ultimate beneficial ownership is required.

6

B.4. Please provide details of the Company's parent company/companies (unless covered above) and subsidiaries and affiliated companies (if any) (please use additional pages if required)

Name

Location

Type of Business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B.5. Is the Company, or any of its shareholders or parent companies or subsidiaries or affiliated companies (if any), resident in or a citizen of or registered or incorporated in any part of the United Arab Emirates?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

7

PART C: ASSET DETAILS

C.1. Does the Company own any real estate(s) with a minimum plot size of 3500 sqm each which are intended for the development of Fuel Service Station and Allied Services?

Yes

 

No

 

 

 

 

 

 

If yes, for each real estate please give the following details: (please use and attach additional pages if required)

Address………………..………………..………………..………………..………………..…………

Location (District, Town/Province/City) ………………..…………..………………..……………….

Plot Size (in square meters)……………..…………..………………..………………..……………….

Permit for commercial use:

 Yes

 No

Address………………..…………..………………..………………..………………..………………..

Location (District, Town/Province/City) ………………..………………..…………………………….

Plot Size (in square meters)……………..…………………………..………………..……………….

Permit for commercial use:

 Yes

 No

Address………………..………………..………………..………………..………………..…………..

Location (District, Town/Province/City) ………………..………….………………..……………….

Plot Size (in square meters)……………..…………..………………..………………..……………….

Permit for commercial use:

 Yes

 No

Please submit with this application the Self Attested true photo copies of the real estate ownership documents and a self attested copy of Site Plans, Land Ownership Certificates and any other legal permit documents allowing unrestricted land use for service station development purpose.

8

C.2. Does the Company hold any lease on real estate(s) with a minimum plot size of 3500 sqm each which are intended for the development of Service Station and Allied Services?

Yes

 

No

 

 

 

 

 

 

If yes, for each real estate please give the following details: (please use and attach additional pages if required)

Address………………..………………..………………..………………..………………..…………..

Location (District, Town/Province/City) ………………..………………..…………..……………….

Plot Size (in square meters)……………..………………..…………..………………..……………….

Lease terms: ………………..………………..…………..………………..………………..………….

Permit for commercial use:

 Yes

 No

Address………………..………………..………………..………………..………………..…………..

Location (District, Town/Province/City) ………………..………………..…………..……………….

Plot Size (in square meters)……………..…………..………………..………………..……………….

Lease terms: ………………..……………………………..………………..………………..………….

Permit for commercial use:

 Yes

 No

Address………………..…………..………………..………………..………………..………………..

Location (District, Town/Province/City) ………………..………………..…………..……………….

Plot Size (in square meters)……………..…………………………..………………..……………….

Lease terms: ………………..……………………………..………………..………………..………….

Permit for commercial use:

 Yes

 No

Please submit with this application the self attested true photo copy documents and a self attested copy of Site Plans, Lease Contracts and any other legal permit documents allowing unrestricted land use for service station development purpose.

9

PART D: FINANCIALS

D.1. What level of capital does the applying Company have or intend to obtain to invest in the ADNOC Service Station Franchise?

D.2. How will the Franchise Fees and Service Station development costs be funded?

Please specify below the amount, sources of finance (e.g. cash in bank, borrowings), and list the proof documents to be provided with this application.

Amount

Source (e.g. cash in bank,

Proof documents

 

borrowings)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please submit with this application the following documents:

Latest five year (or all available if the Company is less than five years old) audited consolidated financial statements which must include the profit and loss statement, balance sheet, funds statement, management’s or directors’ report, accountants’ or auditors’ report, and all footnotes thereto

Details of all Company’s current borrowings showing interest and repayment terms, and collateral assets

If the franchise fees and/or capital investment is funded by cash in bank, the Company’s last one year bank statements are required

ï‚·If the franchise fees and/or capital investment is funded by borrowings, proof of loan facility or any agreements in principle with banks are required

ï‚·Details of any other available assets which may be used as collateral for bank loans

10

D.3. Please give the name of the Company's bank(s)

Name

Address

Telephone & Fax

 

 

 

 

 

 

 

 

 

 

 

 

D.4. May ADNOC Distribution contact your Bank(s) to confirm your cash or borrowing positions?

Yes

 

No

 

 

 

 

 

 

Please note that by marking tick to “yes” above and by signing this application, you have also authorized ADNOC Distribution and its authorized staff to contact your banks and verify your financial standing any time.

11

PART E: BUSINESS HISTORY

For the purposes of the following questions, the term "ownership interest" means the legal or beneficial ownership of stock (whether ordinary or preferred, voting or non-voting) or any other equity interest in the business and the term "operating rights" means the right to control or direct the business in any fashion regardless of whether such control is exercised through another corporation or partnership and regardless of whether such control is direct or indirect.

E.1. Does the Company possess, or has it at any time possessed, any direct or indirect ownership interest in or operating rights related to, any fuel related business (e.g. fuel distribution, logistics, retail)

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

Please submit with this application a copy of financial reports of all fuel related businesses listed above.

12

E.2. Does the Company possess, or has it at any time possessed, any direct or indirect ownership interest in, or operating rights related to, any franchise or dealership business?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

Please submit with this application a copy of financial reports of all franchise or dealership businesses listed above.

E.3. Does the Company possess, or has it at any time possessed, any direct or indirect ownership interest in, or operating rights related to, any retail business or any supplier/distributor of goods and services to retail business?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

Please submit with this application a copy of financial reports of all retail related businesses listed above.

13

E.4. As far as you are aware, has the Company ever provided products, goods or services to ADNOC Distribution or ADNOC group of companies in UAE ?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

E.5. Does the Company possess any ownership interest in, or operating rights related to, any supplier or distributor of products, goods or services to the ADNOC Distribution, any where in the world?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

14

E.6. As far as you are aware, does any supplier or distributor of products, goods or services to ADNOC Distribution, its service companies possess any ownership interest in, or operating rights related to, the Company?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

E.7. As far as you are aware, does any entity that either operates or is the franchisee of a Service Station and Allied Services business (or any owner or affiliate thereof) possess any direct or indirect ownership interest in, or operating right related to, the Company?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

15

E.8. Will your application to ADNOC Distribution for the Franchise breach any existing license or franchising agreement to which you are a party in any jurisdiction?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

E.9. Has an application or petition by or against the Company ever been filed seeking any type of relief under any bankruptcy or insolvency law?

Yes No

If yes, please give detailed explanation and current status: (please use a separated sheet if required)

16

E.10. Has an application or petition by or against any of the Company's officers been filed seeking any type of relief under any bankruptcy or insolvency law?

Yes No

If yes, please give detailed explanation and current status: (please use a separated sheet if required)

17

PART F: FRANCHISE BUSINESS PLAN

F.1. By what date do you wish the Franchise to commence?

F.2. How many Service Stations do you plan to invest and build over the next 3 years?

F.3. Does the Company have a proposed Project Manager(s) capable of executing the Service Station Franchise project?

Yes

 

No

 

 

 

 

 

 

If yes, please provide below a summary of relevant experience of the Project Manager(s) and submit with this application a copy of his/her CVs.

18

F.4. Does the Company have a proposed Manager(s) capable of being in charge of the daily operations of Fuel Service Station and Allied Services business?

Yes

 

No

 

 

 

 

 

 

If yes, please provide below a summary of relevant experience of the Manager(s) and submit with this application a copy of his/her CV.

Please submit with this application a copy of the Company’s organogram and five year business plan.

19

PART G: GENERAL INFORMATION

G.1. Has the Company ever been refused registration/ business license in KSA, other Free Zones of KSA, and other jurisdiction than KSA?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

G.2. Has the Company ever been de-registered in KSA, other Free Zones in KSA, and other jurisdictions than KSA?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

20

G.3. Has the Company or any of the Owners, Principals, full time Director, Directors / partner ever been convicted of a criminal offence or been a party in any other legal proceedings (other than as a plaintiff in debt recovery actions in the ordinary course of business)?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

G.4. Have any of the Company's senior executive management team members (like GM, Sr. Manager, Head of Department etc.) been convicted of a criminal offence (excluding minor motoring convictions) or been a party in any other legal proceedings?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

21

G.5. Have any warrants for the arrest of any owner, director, principal, officer or of the Company who remains in one or more of these capacities as of the date of this application been issued (and, if so, are same currently outstanding) by any government or international body?

Yes

 

No

 

 

 

 

 

 

If yes, please give details:

G.6. What would be the source of the funds which will be used to capitalize the Company to be established and/or fund its operational needs?

Yes

 

No

 

 

 

 

 

 

If yes, please give full details of source of fund:

22

PART H: REFERENCES

Please list below the name and contact details of three companies with whom the Company have recent business dealings and whom we may contact for references:

Reference 1

Contact Name

 

 

 

 

 

 

 

Company name

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

Telephone

 

Fax

 

 

 

 

 

Email

 

 

 

 

 

 

 

Relationship

 

 

 

 

 

 

 

Duration of

 

 

 

Business

 

 

 

Dealings

 

 

 

 

 

 

 

Reference 2

 

 

 

Contact Name

 

 

 

 

 

 

 

Company name

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

Telephone

 

Fax

 

 

 

 

 

Email

 

 

 

 

 

 

 

Relationship

 

 

 

 

 

 

 

Duration of

 

 

 

Business

 

 

 

Dealings

 

 

 

 

 

 

 

Reference 3

 

 

 

Contact Name

 

 

 

 

 

 

 

Company name

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

Telephone

 

Fax

 

 

 

 

 

Email

 

 

 

 

 

 

 

Relationship

 

 

 

 

 

 

 

Duration of

 

 

 

Business

 

 

 

Dealings

 

 

 

 

 

 

 

23

By signing below, I/we, hereby certify that, I am/we are an authorised party who has the capacity and authority to make this application to ADNOC Distribution, Abu Dhabi (UAE). I/we also certify that all the information provided is true and complete and to the best of my/our knowledge and belief.

I/we will advise ADNOC Distribution immediately of any changes to the legal entity or ultimate shareholders.

Name of Applicant

Position

Phone Number

Fax Number

Mobile Number

Email Address

Current Address

I confirm that if, before this application is approved, there is a material change in circumstances or new information relevant to this application becomes available, I will immediately inform ADNOC Distribution of such information. Furthermore, any change to the source of finance will be shared and approved by ADNOC Distribution before entering any Franchise Agreement or implementation.

I hereby consent for all of the data contained in this application form and submitted documents to be processed by ADNOC Distribution.

_________________________

________________________________

____________________

1st Signature

Print Name

Date

_________________________

________________________________

____________________

2nd Signature

Print Name

Date

All information is subject to verification by ADNOC Distribution. False or misleading statements will result in the refusal of the application.

ADNOC Distribution reserves the right to request further information or clarification as it considers necessary or appropriate to this application.

24

APPENDIX A: LIST OF REQUIRED DOCUMENTS

All information provided in this application will remain confidential, and will not be disclosed in any way whatsoever to any person or entity unless such disclosure is necessary within the franchise application process.

Please ensure that you submit with this application all the required supporting documents listed below and any other documents which you deem necessary and appropriate in supporting your application.

Please provide the original documents, wherever it is mentioned specifically, otherwise a “Self Attested” photo copy (a colour photocopy required for all critical Govt. approvals/ certificates etc.) of each document. In case any original document is collected then ADNOC Distribution will return the same after the application has been processed. “Self Attested” copy means a clear legible photo copy signed by the applicant (with date) conforming that the copy is a “True Copy” and in case of any mismatch found with the original document at later date, the applicant shall be liable. Any copy is submitted with this application must be “self attested” failing which no cognizance shall be taken and application may be rejected.

Please check and tick () box to confirm that the following documents have been submitted with this application:

1.

Company Registration Certificate or Trade



License………………………………………………

 

 

 

 

2.

Company articles of association and/or bylaws, and any amendments



 

 

 

3.

Site plans, Land Ownership Certificates, Commercial Use Permit for company owned



lands…...

 

 

 

 

4.

Site plans, Lease Contracts, Commercial Use Permit for company leased



lands………………….

 

 

 

 

5.

Five-year audited consolidated financial statements and



reports…………………………………

 

 

 

 

6.

One-year bank



statements………………………………………………………………………….

 

 

 

 

7.

Agreement in Principle with banks for bank loans and/or proof of other loan facilities



…………

 

 

 

 

8.

Financial reports for all franchise business(es) owned or operated by the



Company……………..

 

 

 

 

9.

CVs of proposed Operations Manager(s) for the



Franchise……………………………………….

 

 

 

 

25

10.

CVs of proposed Project Manager(s) for the execution of the Franchise



project……………….

 

 

 

 

11.

Copy of the Company’s five year business



plan……………………………...………………….

 

 

 

 

12.

Copy of the Company’s



organogram…………..……………………………...………………….

 

 

 

 

26

ADNOC Distribution

ADNOC KSA Franchise Prospectus

ADNOC KSA MANAGEMENT TEAM

Franchise Division

Riyadh

Revision No. 0

Appendix D

APPENDIX D – THE ADNOC KSA MANAGEMENT TEAM

Your initial contact should be with A.N.Other, Franchise Sales & Marketing Manager (or their delegate).

ADNOC KSA Franchise

Manager

A.N.Other

Tel : 123 456 789

E-mail: xxxx@adnoc.com

 

 

 

 

 

 

 

 

 

 

 

Franchise Sales &

 

Sales & Marketing

 

Operations

 

Franchise

 

 

 

Services & Support

Marketing Manager

 

Manager

 

Manager

 

 

 

 

Manager

 

 

 

 

 

 

 

 

 

A.N.Other

 

A.N.Other

 

A.N.Other

 

A.N.Other

 

 

 

 

 

 

 

 

 

Tel : 123 456 789

 

Tel : 123 456 789

 

Tel : 123 456 789

 

Tel : 123 456 789

E-mail: xxxx@adnoc.com

 

E-mail: xxxx@adnoc.com

 

E-mail: xxxx@adnoc.com

 

 

 

 

E-mail: xxxx@adnoc.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A.N.Other – ADNOC KSA Franchise Manager

BRIEF BIOGRAPHY DETAILING FRANCHISING CREDENTIALS

A.N.Other – Franchise Sales & Marketing Manager

BRIEF BIOGRAPHY DETAILING FRANCHISING CREDENTIALS

A.N.Other – Sales & Marketing Manager

BRIEF BIOGRAPHY DETAILING FRANCHISING CREDENTIALS

A.N.Other – Operations Manager

BRIEF BIOGRAPHY DETAILING FRANCHISING CREDENTIALS

KSA Franchise Prospectus.docx

Page 24 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

ADNOC KSA MANAGEMENT TEAM

Franchise Division

Riyadh

Revision No. 0

Appendix D

A.N.Other – Franchise Services & Support Manager

BRIEF BIOGRAPHY DETAILING FRANCHISING CREDENTIALS

KSA Franchise Prospectus.docx

Page 25 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

USEFUL CONTACT DETAILS

Franchise Division

Riyadh

Revision No. 0

Appendix E

APPENDIX E – USEFUL CONTACT DETAILS FOR ADNOC DISTRIBUTION

ADNOC KSA Head Office: xxxxxxxxxxxxxxx

Bankers: xxxxxxxxxxxxxxx

Accountants: xxxxxxxxxxxxxxx

Lawyers: xxxxxxxxxxxxxxx

KSA Franchise Prospectus.docx

Page 26 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

ADNOC KSA IN THE PRESS

Franchise Division

Riyadh

Revision No. 0

Appendix F

APPENDIX F – ADNOC KSA IN THE PRESS

News clippings

Example adverts

Marketing materials

KSA Franchise Prospectus.docx

Page 27 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

ADNOC KSA FRANCHISE LIST

Franchise Division

Riyadh

Revision No. 0

Appendix G

APPENDIX G – ADNOC KSA FRANCHISE LIST

No

Date Commenced

Address

Owner

 

 

 

 

1

11/2011

 

ADNOC Distribution

 

 

 

 

2

04/2012

 

ADNOC Distribution

 

 

 

 

3

/2012

 

ADNOC Distribution

 

 

 

 

KSA Franchise Prospectus.docx

Page 28 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

KSA FRANCHISE LAWYERS

Franchise Division

Riyadh

Revision No. 0

Appendix H

APPENDIX H – KSA FRANCHISE LAWYERS

List of Lawyers in KSA who deal with Franchise matters

KSA Franchise Prospectus.docx

Page 29 of 30

 

 

ADNOC Distribution

ADNOC KSA Franchise Prospectus

OTHER INFORMATION

Franchise Division

Riyadh

Revision No. 0

Appendix I

APPENDIX I – OTHER INFORMATION

KSA Franchise Prospectus.docx

Page 30 of 30