FRANCHISE INFO | FINANCIAL INFO | FAQS

The financial investment required to purchase an Active Green + Ross franchise will vary, depending on the size and location of the franchise. Investors can expect to invest up to $200,000.00 for an average franchise.

All franchisees operate as independent businesses and the nature of each operation will vary significantly. Accordingly, we have no standard operating or financial ratios. The undernoted financial information is for illustrative purposes only, actual results will vary significantly by franchisee and location.

SALES

(Notes 1 and 2)

COST OF SALES

(note 3)

GROSS PROFIT

EXPENSES

(Note5)

SUMMARY

The above is for information purposes only. Active Tire & Auto Centre Inc. does not provide any assurance whatsoever that the above results will be achieved. See attached notes for further information and explanations.

NOTES

All franchises operate as independent businesses and the nature of each operation will vary significantly.  The included financial information is for illustrative purposes only, actual results will vary significantly by franchisee and location.  Active Tire & Auto Centre Inc. does not provide any assurance whatsoever that the included results will be achieved.

See attached notes for further information and explanations.

1) Sales mixes for all locations in 2011 was: Tires (38%), Labour (30%) and Parts (32%)( Calendar year end 2011, excludes Wholesale location)

Proforma examples are shown with sales mix of Tires (36%) Labour (33%) and Parts (31%) which are representative of an average store. Change of sales mix will affect gross profit calculations. Larger volume stores tend to have a larger % of tires in the sales mix.

2) Total annual sales were estimated at $750,000, $1,000,000 and $1,500,000 for illustrative purposes only. Actual annual sales for all locations for calendar Year End 2011 are averaged as follows:
(Wholesale locations excluded; average store sales based on store open at least 1 year)

2011 Sales Averaged as Follows:

• Top 10 locations $ 2,597,546
• Top 15 locations $ 2,312,236
• Top 20 locations $ 2,136,827

All locations:

Calendar Year End 2011 sales are averaged as follows, based on store open at least 1 year.

• Average 2011 $ All locations - 1,300,000

3) Cost of sales were determined using the following estimated gross profits:

• Tires 20%
• Labour 55%
• Parts 40%
• Overall Gross Profit 38%

4) Technicians are paid using the flat rate system. Usually anywhere from 30% to 43% is paid out for wages. We have calculated using a cost of labour at 45% and a gross profit from labour of 55%. Employee benefits is shown separately.

5) Expenses shown on the financial information are estimated as follows:

1. Employee benefits are estimated at 15% of total labour costs.
2. Equipment rent and leases are estimated based on total equipment of $125,000 leased over 5 years with interest at 10% and a 10% buyout at the end of the lease term.
3. Royalties are calculated based on 5% of total sales.
4. Advertising is calculated based on 2.5% of total sales.
5. All other expenses are estimated based on average expenditures incurred on an annual basis.

6) Other income is estimated on the average purchase rebates given from the authorized auto parts suppliers and the Active Green + Ross rebate program.

7) EBITDA - This represents the earnings before taxes, interest, depreciation and amortization.