Service Station Franchise Association

So think about it: When will you create your blue ocean? We can build our SSFA membership into a collective voice and incorpo-rate the above mentioned six princi-ples to rebuild our brand and mar-keting strategies for a better tomor-row and sustainable growth. United anything is possible.

Communication Newsletter will cover an array of topics as:

ONLINESSFA.ORG web site Franchisee Business Tools

Class Action Updates Mass Action Updates

Industry News Industry Regulations

BP News Vendors

New Products Industry Trends

Franchisee Rights Franchisee Recognition

Legal Rights

For Years now you’ve probably engaged in head –to-head battle with your competitors in search of sustainable and profitable growth—a completely honorable strategy. You have fought over market share, wrestled for com-petitive advantage and struggled for differentiation.

Yet in today’s overcrowded indus-try, competing head-on results in nothing but a “red Ocean” of bloody rivals fighting over a dwin-dling profit pool-according to au-thors W. Chan Kim and Renee Mauborgne in their book, Blue Ocean Strategy, Challenging what you thought you knew about how to achieve strategic success, the authors contend that while most companies compete in these red oceans, their strategy doesn’t necessarily create profitable growth for them in the years ahead.

Tomorrow’s leading companies succeed not by battling their competitors, the authors argue, but by creating “blue oceans” of unchallenged market space ripe for growth. These kinds of strategic moves-called “value innovation”-create big leaps in value for the company and its customers. Rivals are soon rendered obsolete and new demand is unleashed.

Examining a range of strategic moves across a variety of in-dustries , blue ocean strategy highlights six principles that every company can use to suc-cessfully formulate and exe-cute the strategy. The six prin-ciples show how to rebuild mar-ket borders, focus on the big picture, reach beyond current demand, get the strategic se-quence right, surmount organ-izational hurdles and develop execution into strategy.

Feeling Blue

Pepsico Refocusing on Indulgence

SSFA News Letter

2012

Executive Board Members

Sam Hariz President

Ali Mazarei Vice President

James Brown Secretary

Ryan Farsai Treasurer

Joe Johal Executive Advisor

: Franchisees Working together for a better tomorrow

1-1-12

Volume 1, Issue 3

2012 Board Members

Kiran Asher

Daljit Bains

James Brown

Ryan Farsai

Sam Hariz

Joe Johal

Robert Juckniess

Ali Mazarei

Erwin Randhawa

Bill Rowley

Amin Salkhi

Mike Sater

Marc Strauch

NEW YORK – Albert Carey, CEO of PepsiCo Americas Beverages, said the company would begin refocusing on its “core” carbonated drinks and snacks portfolio, Warc reports.

"We cannot forget about what I call the indulgent core businesses," said Carey. "If you're going to do the healthy, you have to do the core, because we still have a very strong business in the core."

According to PepsiCo, only 10% of American consumers solely eat healthy snacks, 25% mix healthful options with treats, while 65% look for taste and convenience.

Carey said the company’s renewed focus will reflect those preferences.

You can't just try to promote and develop healthy brands alone. You have to also get behind the indul-gent brands," Carey said. "I don't think we should demonize these

Carey said PepsiCo’s “fun for you” line of brands has been particu-larly popular and includes Taco-flavored Doritos and Ruffles Mol-ten Hot Wings, a “bar food”-like sampling of tastes.

In an effort to leverage its range of brands, PepsiCo will revise its “Power of One” marketing model, jointly promoting snacks and drinks like Mountain Dew and Doritos in stores.

"At the retail end, we haven't done a good job. There's a lot more work to be done," Carey said. "In 2012, you'll see more."

Carey also said local marketing will play a dominant role for the company, as “the passion for local business is extraordinary.”

Town Hall Meetings: Los Angeles County Market

January 10th, 2012 Holiday Inn Burbank

11:00am - 2:30pm

Orange County Market January 12th, 2012

Caspian Restaurant Irvine 11:00am - 2:30pm

For more Information

WWW.ONLINESSFA.ORG

Page 2 Newsletter Title

When was the SSFA Created?

November 2008 by de-voted Franchisees

What experience do the Board Members bring to the associa-tion?

Board members have a combined 150+ year busi-ness experience not only in our industry but other in-dustries.

How many stations to the Board member own and operate?

The board members com-bined own and operate over 100 + service stations under multiple brands between them.

Board members also bring vast amount of knowledge and ex-perience from other brands, fields and organizations such as; Law, NACS, WPMA, AOCA, BBB, ICA, FAC, Rotary, Lions International, Computer Sci-ence, Law Enforcement , GIA, OFFA, Engineering and Cham-ber of Commerce.

To connect with the SSFA board

members you can use:

Phone — {Listed above}

Fax — 951.940.9221

Email –info@onlinessfa.org

Email – {Listed Above}

US Mail —

23261 Cajalco Expressway Perris, California 92571

www.Onlinssfa.org

Onlinssfa.org Forum

Facebook—Online SSFA

Twitter– Online SSFA

Skype –Online SSFA

Google—Talk/chat

SSFA Trivia

2012 Board Member Contact Information

425-220-7278 916-300-7792 650-245-5594 310-345-4077 818-822-6100 408-888-2250 312-208-1500 714-715-1685 951-847-4669 509-899-0455 510-331-8405 909-772-5717 916-257-6497

Kiran.Asher@onlinessfa.org Daljit.Bains@onlinessfa.org James.Brown@onlinessfa.org Ryan.Farsai@onlinessfa.org Sam.Hariz@onlinessfa.org Joe.Johal@onlinessfa.org Robert.Juckniess@onlinessfa.org Ali.Mazarei@onlinessfa.org Erwin.Randhawa@onlinessfa.org Bill.Rowley@onlinessfa.org Amin.Salkhi@onlinessfa.org Mike.Sater@onlinessfa.org Marc.Strauch@onlinessfa.org

Kiran Asher Daljit Bains James Brown Ryan Farsai Sam Hariz Joe Johal Robert Juckniess Ali Mazarei Erwin Randhawa Bill Rowley Amin Salkhi Mike Sater Marc Strauch

Volume 1, Issue 3 Page 3

Page 4 SSFA News Letter

Volume 1, Issue 3 Page 5

SERVICE STATION FRANCHISE ASSOCIATION, INC.

MEMBERSHIP FORM

( )Yes I want to add my voice and join the Service Station Franchise Association, Inc.

Section I (All franchisees complete Section I, if you are a multi unit owner, attach site numbers on a separate sheet)

Site Contract Number(s)___________________________ Number of Sites_______

Business Name on Franchise Agreement_____________________________________

Name of Franchisee on Franchise Agreement_________________________________

Address:______________________________________________________________

Telephone Number:________________ Cell :________________________

Email_________________________________________________________________

Signature:_______________________________ Date__________________________

Section II (only complete if Representative is different than franchisee of record)

Designated Representative:

By signing below, I certify that the Franchisee identified above (or in the case of multiple units, on the attached sheets) have authorized me to speak and vote for it/them with respect to the Service Station Franchise Association..

Name:________________________________________________________________ Ad-

dress:______________________________________________________________ Tele-

phone Number:________________ Cell :________________________

Email_________________________________________________________________ Signa-

ture:_______________________________ Date_________________________ Dues: Dues are $125/per store/per year, make check payable to SSFA, Inc. (Due 30 days after

signing) ___ enclosed is our check for $_________.

Mailing Address

SSFA Membership 23261 Cajalco Expressway, Perris California 92571 For more information visit or email us on the Web

www.onlinessfa.org email: info@onlinessfa.org

2 Tier Pricing, Reality Check!!! By Pilot Franchisee The roll out Piloted program to accept credit cards at ARCO stations in WA started in Early September 2011. The introductory meeting seemed to be so promising. The logic was that Franchisees would tap into a market of customers that we did not already serve. The software updates and the roll out of the program was very well done for the most part. Many thanks for the late nights and over night shifts pulled by Manish Pater, {BP Pilot Program Representative}, and the local FBC’s that worked hand in hand with fran-chisees to make the program work, and take care of the bugs quickly. Franchisees tried to convince Metro Mala-savage and his team to stick to displaying cash/debit prices for a single grade {which is acceptable in WA} but Metro’s team de-cided to go with their plans. {See example above}. NOTE: The new signs paid for by BP do not display the text “part of BP” or logo of BP. As part of the program, the franchisees are expected to absorb the DEBIT FEES, and they were verbally told that they would be “allowed” an extra one cent per gallon to pay for the debit fees. To date this has not happened. Debit transactions were about 40% of total sales and fairly quickly another 10% of sales switched to credit. So, half the total sales were by debit and credit. One of the unmentioned consequences of this was that before the 2 tier program roll-out we were getting our debit monies back from BP/PAY Point in 24 hours, now it be-came 48 hours. On a bank holiday that falls on a Monday, it will even take longer, some-times up to 4 days. This drawback led to significant cash flow problems, especially on Monday EFT(s). Mental note there are over

16 bank holidays during the year. This became and is a major problem in trying to have enough cash for the gas EFT(s), and has caused many franchisee bank accounts to be overdrawn regularly, adding addi-tional overdraft service fees to the cash strapped franchisee. So what was the impact on Sales and the bottom line? For most franchisee in the program, there did not seem to be an sig-nificant increase in sales as anticipated. The franchisees bottom line also was im-pacted because they did not anticipate and realize the increase in additional bank fees that was been taken on in regards of the debit transactions. {average additional $3,000.00+ per month or $36,000.00 annu-ally}. On the same token, some freeway sites, especially near the Canadian border saw a significant increase in sales with this pro-gram, but day to day, these sites are an exception. Another benefit to the program, is the ability to take more fleet cards brands.

While working with BP and Pay Point to expedite payment processing, many fran-chisees found themselves looking at their competition switching to tier pricing and matching the cash price of ARCO and enjoying rack + gasoline pricing {$.40cpg margins}. After a month or so most fran-chisees have decided to opt out of pro-gram when the pilot program ends. This is a classic example of someone at BP deciding that they know what was good for the franchisees and there cus-tomers. This program could have been and still could be a great program. But not in its’ current execution format. The 2 tier pricing model has had such a negative effect of franchisee stations prof-itability and the morale, that a large num-ber of dealers are considering discon-tinuation of all required AMPM promo-tions to become profitable or break even.

What about the little guys? I only have one store?

The board members are sensitive to this issue and have adopted resolutions to ensure that small and large franchi-sees have representation on the board and executive committee.

What are my voting rights as a member?

The bylaws call for one vote per store. You will have the right to vote for a seat of board member, who will in turn elect officers and committee chairs.

If you are interested in becoming a board member. What can you do?

If you are interested in becoming board member and can donate your time and expertise, please contact one of the existing board members via email. There are other opportunities to assist, by being on a committee or working on specific task or project . Please let one of the board members know.

Why join an independent Franchisee asso-ciation?

The Answer is simple.

An association provides a voice for fran-chisees

Strength in numbers

Credibility and legitimacy

What else do I get out of Membership in an association?

The ability to communicate and ex-change information privately with other franchisees

Formation and operation of buying co-operatives

Addressing concerns and getting an-swers

How much does this cost?

Currently only $125.00 per store per year.

How do I contact the Attorneys regard-ing BP law suit?

Class Action - Lee Tran & Liang, A Professional Law Corporation

601 S. Figueroa St. | Suite 4025 Los Angeles, California 90017 tel: 213-612-3737 | fax: 213- 612-3773 dir: 213-612-8910

Mass Action -

Kabateck Brown Kellner LLP Engine Company No. 28 Building 644 S. Figueroa Street Los Angeles, Ca 90017 tel: 213-217-5013 fax: 213-217-5010 Visit our Web Site for links:

www.onlinessfa.org

Frequently asked Questions

Sam Hariz James Brown President Secretary Ali Mazarei Ryan Farsai Vice President Treasurer

Joe Johal Executive Advisor

Communications Questions Please Contact Ali Mazarei 714.715.1685

Ali.mazarei@onlinessfa.org

SSFA, Inc.

www.onlinessfa.org

The mission of the Service Station Franchisee Associa-tion is to give BP ARCO AM/PM Franchisees an Inde-

pendent credible voice in the BP Global System to pro-tect and preserve franchisee rights, enhancing mem-bers investments, profitability and strengthening the

brand.