Kwicksilverusa Wheel Repair and Franchise Information Kit

1. WHEEL REPAIR AND RECON PROS

2. WHEEL REPAIR AND RECON PROS OVERVIEW Love cars? Are you a People Person, looking for management and/or hands-on in a unique franchise? Owning a Kwicksilver franchise can provide: ? 90% Gross Profit ? Access National Customers ? Immediate Startup and Income ? Patented Machinery and Proprietary Methods ? Financing Assistance ? Protected Territories ? Cap on Royalties ? Special Terms for those already in Wheel Repair Kwicksilver is now offering franchises to qualified businesses and individuals interested in taking advantage of the rapidly emerging wheel repair/ recon market. No one else offers such a comprehensive package of training, equipment, tools, supplies, marketing and ongoing consultation. We are with you every step of the way to ensure your success. Co-brand with your existing shop or start an entirely new business. Kwicksilver franchises are designed to be a mobile business primarily; however, the business can also be run from a fixed-location shop. A combination of both works best. Single franchise territories, multi-unit franchises, and area development agreements are available. A select number of Eight (8) Regional Master Franchises will be awarded in the US. Master franchise opportunities are also available outside the U.S.

3. WHEEL REPAIR AND RECON PROS THE OPPORTUNITY A PROVEN SYSTEM: Buying a Kwicksilver franchise removes much of the risk of starting a business. Most businesses fail due to a lack of experience which leads to unrecoverable mistakes. We have tackled all the problems a new business owner might face and have created solutions. These solutions have evolved into a proven method of operation that maximizes efficiency and minimizes problems. and $18,500 (Please refer to the Startup Equipment Package). The higher-priced, upgraded package includes our newest wheel straightener, which is capable of straightening 8 rims in one hour. The royalty fee is 6% but includes a portion for advertising in your local market. There are no royalties for the first 4 months after opening. Moreover, Kwicksilver puts a cap on royalties once you reach $30,000 in monthly sales. All sales over this mark are royalty free. Consequently, we have some franchisees paying as little as 2% - 3% in royalties per month. We’re also your own personal consultant, providing ongoing technical and administrative support. Remember, a Kwicksilver partner is in business for himself but not by himself. Research shows that after 5 years in operation, only 8% of franchised businesses close, while over 77% of independents fail. INTENSIVE TRAINING: In a new business, during the initial learning period, the upfront capital can be exhausted because of too much trial and error. This often leads to closure of the business. Kwicksilver removes this unproductive period by providing comprehensive hands- on training and ongoing support, to ensure a fast start for the business. SMALL INITIAL INVESTMENT: The initial franchise fee is $15,000. There are two equipment/training packages from which to choose, valued at $13,000 You’ll receive two weeks of step- by-step instruction from our Kwicksilver Technical Team. The training includes, basic tire/ wheel identification and instruction, tire service training according to TIA standards, wheel straightening and repair, cosmetic damage repair, custom wheel painting and polishing. You’ll also receive our Operations Manual, which is loaded with useful information on repair techniques, vendor and supplier information, sales and marketing advice, etc. You’ll be prepared for success right from the start.

4. WHEEL REPAIR AND RECON PROS wheels. In addition, we have created a system for wheel restoration and reconditioning that is second to none. The process is effective, efficient and uncomplicated. Kwicksilver is committed to the continuing research and development of new tools, products and methods to enhance the Kwicksilver system. You’ll also be entitled to ongoing technical consultation from the Tech Team, future periodic training programs, and assistance from the corporate office. ADVERTISING AND MARKETING: Most business owners do not have the expertise or the money to advertise and market their business successfully. When they do, their efforts are often poorly conceived and inconsistent. SITE DEVELOPMENT: Kwicksilver assists in the selection of a site ideally suited for the Kwicksilver shop. We know where to locate your shop, relative to your prospective customers, to maximize its profit and efficiency. We’ll allow you the flexibility to choose the specific location, within a general area. You’ll receive an exclusive protected territory in which to run your business, without the worry of encroachment. Upon request, we’ll work to negotiate favorable lease terms for you, and help identify problematic lease issues. You’ll be presented with the general layout of the typical Kwicksilver shop as well as a list of essential tools and equipment. As a Kwicksilver partner, you benefit from our ability to provide high quality creative talent and resources necessary for local, regional and national advertising and marketing. This is especially important in large metropolitan areas where advertising costs are often prohibitive. Our cooperative advertising agreements allow each Kwicksilver partner to tap into the resources of all the other partners. You’ll receive point-of-sale marketing materials, brochures and promotional advertising leaflets. NETWORK PURCHASING POWER: A Kwicksilver partner is able to exploit the purchasing power of a network that includes Kwicksilver corporate, in addition to your fellow Kwicksilver franchise owners. While you’re permitted to purchase non-proprietary equipment, such as tire changers and balancers, from any reliable vendor, Kwicksilver has forged relationships with certain vendors and manufacturers that will be able to offer you significant discounts on paints, abrasives, tools and equipment. BRAND RECOGNITION: When you become a Kwicksilver partner, you benefit from strong brand recognition. It provides immediate credibility and identification for your shop. As we increase the number of Kwicksilver partners, the intangible value this creates will only strengthen. Our commitment to our advertising and marketing programs will ensure that the Kwicksilver brand remains strong and growing. PROPRIETARY TOOLS AND METHODS: Kwicksilver partners will have access to the latest innovations in the wheel repair and recon industry. Kwicksilver has invented and patented wheel- straightening equipment for all OEM and aftermarket

5. WHEEL REPAIR AND RECON PROS CO-BRAND WITH YOUR EXISTING BUSINESS: Kwicksilver realizes that you may have an existing business ideally suited to add wheel repair and recon services. Whether you own a tire/wheel shop, a body shop or simply provide services to existing dealers, such as detailing, PDR, bumper repair, upholstery, glass repair, etc., adding wheel repair can greatly increase your profits. ABILITY TO QUICKLY EXPAND: Kwicksilver offers both multi-unit franchises and area development rights for qualified individuals, investment groups or companies. Multi-unit franchises can be purchased at a discount to the single-unit franchise fee. Our area development agreement allows a franchisee to expand, by opening additional shops, within an exclusive area, according to a schedule. Either option allows for profit growth at a much faster pace, when compared to the single-unit franchise. BEWARE OF THE BIZ-OP: The biz-op is what’s commonly known as a business opportunity. Companies that sell these opportunities often refer to it as a license or franchise. The biz-op often appears attractive because of the low entry fee and lack of royalty payments. However, most biz-ops provide little or no training, no continuing field support, no advertising or marketing and no trademark recognition—the very things that make franchising so successful. You’re on your own to fumble through the challenges and difficulties of your new business. PROFIT POTENTIAL: A Kwicksilver franchisee will take advantage of several streams of revenue, such as wheel straightening and repair, chrome exchanges, cosmetic wheel repair, custom wheel painting, wheel location and replacement, tire/ wheel sales, resale of exclusive Kwicksilver car care products (Kwick6 & FLOW Products), mobile wheel repair, etc. A Kwicksilver franchisee will have both wholesale and retail customers. Repairs typically range from $55 to $250, depending on the severity of the damage, the type of rim, and the particular customer. One experienced technician can repair as many as 15 rims in a day. An individual franchisee’s revenue depends heavily upon the franchisee’s ability to spend a significant amount of time developing a solid customer base. This is a very local business where frequent, ongoing, in-person sales calls are necessary.

6. WHEEL REPAIR AND RECON PROS THE MARKETPLACE ALUMINUM OVER STEEL: The ratio of aluminum to steel wheels is growing at an ever-increasing rate. Today, approximately 70% of vehicles use aluminum wheels. Some high-end manufactures are using aluminum exclusively. Virtually all aftermarket wheels are cast or forged aluminum. This is a natural transition, as the aluminum wheel is lighter, providing better performance, handling, improved gas mileage and, it just plain looks better than a steel wheel with a cheap plastic cover. The drawback to the consumer is the additional cost of an aluminum wheel, as well as its propensity to bend and scuff easily. What’s bad for the consumer is good for the Kwicksilver professional. softer, aluminum wheels are also prone to curb rash, scrapes and gouges. This translates into additional business for the wheel repair technician. BIGGER IS BETTER TREND: Have you looked at the size of your typical performance wheel these days? The ability to manufacture low profile tires has radically increased the wheel size on many vehicles. At one time, 16” wheels were only available by special order. Now, 17”, 18” and larger wheels are common. Aftermarket wheels are often 20”, 22” – even 24”. As wheels increase in size, their durability is reduced. It’s not uncommon for a careless driver with low-profile tires to bend all four wheels in one REPLACE OR REPAIR: Replacing a damaged or bent aluminum wheel with a new one is becoming less of an option these days. With the escalating cost of these new wheels, the owners and their insurance carriers are looking for alternatives. The obvious answer is Kwicksilver. A bent wheel can generally be repaired for $75 - $200. A cosmetically damaged wheel can be reconditioned for $50 - $175. The work can be performed in 15 – 45 minutes. The price of performance OEM rims range from approximately $400 - $2,000 each. Aftermarket aluminum alloys can cost even more. The numbers clearly favor repair over replacement. It’s a win-win solution—both shop owner and customer benefit. incident. These larger, FRAGMENTED INDUSTRY: The wheel repair and reconditioning industry is fragmented into tiny wheel shops, sporadically located, and a few large warehouse companies. This is precisely what makes the industry ripe for the emergence of a high-quality specialty

7. WHEEL REPAIR AND RECON PROS franchise like Kwicksilver. The small wheel shops suffer from the lack of name recognition, network support/pricing and skilled wheel repair technicians. The large warehouse companies suffer from the inability to provide quick, efficient and accurate repair and reconditioning. The damaged wheel is often shipped to a distant location and painted with one basic silver, which is unlikely to match the original color. The result – the customer is forced to wait days for a wheel that doesn’t match the other 3 on his vehicle. Finally, both the small shop and large warehouse company will not have access to the equipment, tools and techniques that we have developed to be used by every Kwicksilver technician. PRIME LOCATIONS AVAILABLE: Kwicksilver is a growing franchise but many of the most profitable locations are still available. Our typical franchised territory is very generous in size, and will have a population of 800,000 - 1,200,000. Some territories are even larger, depending on various demographics. Don’t miss out on this very unique opportunity! ????????????????????????????????????????????????????

8. WHEEL REPAIR AND RECON PROS FREQUENTLY ASKED frequent, ongoing, in-person sales calls are necessary. What Does a Franchise Cost? Our business model differs from our competitors in that our franchisees derive revenues from several different sources and provide several different wheel- related services to the wholesale and retail markets. This gives Kwicksilver a huge competitive advantage. We are the one-stop-shop for everything related to wheel repair and replacement. The competition relies heavily on the wholesale market at car dealerships. The initial franchise fee is $15,000. There are two equipment/training packages to choose from, valued at $13,000 and $18,500 (Please refer to the Startup Equipment Package). The higher priced upgraded package includes our newest wheel straightener, which is capable of straightening 8 rims in one hour. The royalty fee is 6% but includes a portion for advertising in your local market, as well as national advertising. There are no royalties for the first 4 months after opening. Moreover, Kwicksilver puts a cap on royalties once you reach $30,000 in monthly revenues. Anything earned over this mark is royalty free. Consequently, we have some franchisees paying as little as 2% – 3% in royalties per month. If you choose to open a full service shop, which includes a CNC lathe, your royalties are capped at 3%, once you reach certain monthly revenue levels. Conversely, when you offer a complete package of wheel services to the wholesale and retail market, as our franchisees do, your revenues and margins increase dramatically. You’ll also avail yourself to our latest 50500 wheel straightener and Kwickspin™ cosmetic repair station – the most advanced and innovative wheel repair equipment in the industry. What Sort of Training Will I Receive? How Much Money Can I Expect to Make? You’ll receive 2 weeks of step by step instruction from our Kwicksilver Tech Team. The training includes basic tire/wheel instruction, wheel straightening and repair, cosmetic repair, paint blending techniques, and custom wheel painting. Additional training modules can be added, such as welding. The training is loaded with valuable trade secrets that we have developed over many years. You’ll also receive important administrative guidance on setting up accounts with tire/wheel suppliers, body shops, tire stores and insurance companies, etc. There is no fee for the first person. Thereafter, the training fee is $2,000 per person. In addition, you must pay travel and living expenses for yourself and/or your employees/partners during the training period. A Kwicksilver franchisee will take advantage of several streams of revenue, such as wheel straightening and repair, cosmetic wheel repair, welding, wheel machining, powder coating, custom wheel painting, wheel location and replacement, and tire/wheel sales. A Kwicksilver franchisee will also benefit as a reseller of some exclusive Kwicksilver products. These include our Kwick6 tire shine and a full line of FLOW Car Care Products. A Kwicksilver franchisee will have both wholesale and retail customers. Repairs typically range from $55 to $250, depending on the severity of the damage, the type of rim, and the particular customer. One experienced technician can repair as many as 15 rims in a day. An individual franchisee’s revenue depends heavily upon the franchisee’s ability to spend a significant amount of time developing a solid customer base. This is a very local business where Once you return home you will have unlimited access to the Kwicksilver Tech Team. The Team will be

9. WHEEL REPAIR AND RECON PROS employment or finding a suitable location for the operation of the business. available by phone or email to answer any technical questions you may have. This support is especially beneficial during your first few months of operation. Moreover, Kwicksilver has split the country into 8 regional master territories. Each master territory will have a Master Franchisee. The Master Franchisee will be your primary contact for technical questions and marketing support. After training, the Master Franchisee will come to your territory and assist in setting up your initial accounts. Consequently, we leave the timing up to you. After we have a signed agreement and down payment, you dictate when you will be available for training. It may be in 2 weeks or 4 months. This gives you more control and should increase your comfort level. Can I Add Kwicksilver to my Existing Business? Absolutely – the Kwicksilver concept is a perfect match for those already providing aftermarket repairs, mobile detailing, PDR, windshield repair, carpet and upholstery reconditioning, etc. Kwicksilver is also very well suited for an existing tire dealer, performance shop, custom wheel shop, body shop or service center. Simply designate one bay or area of your shop for wheel repair. Where Will I Obtain Financing? We have partnerships with lenders to cover your capital equipment needs, including the financing of our new fully equipped Kwickshop™ trailer. This can help limit your upfront, out of pocket expenses. We also offer some in-house financing that is considered on a case-by-case basis. You will be allowed to continue to use your existing name or trademark for your existing services. However, you are required to use Kwicksilver’s trademarks when you are offering wheel repair services. Bank loans are generally done on a local basis. Overall, franchisees have an easier time obtaining bank loans because of the established nature and experience of the franchisor. Often, there are lower default rates on loans for franchises. Lenders will expect the borrower to come up with 15% – 30% of the total capital needed. Do I Have to participate in the Operation of the Business? Home equity loans and lines of credit are also a great source of start-up capital and carry very low interest rates. The line of credit is an especially useful tool because you only pay interest on those funds that you actually use. Kwicksilver does not require that you personally supervise the franchised business. You may want to purchase a franchise solely as an investor or part-time owner. However, the business must be supervised by an on-premises manager who has successfully completed Kwicksilver’s training program. The ideal franchisee may have several technicians working in different shops, all of whom have completed the training program. How Can I Secure an Area Without Immediately Jumping In? We understand that there are many variables that make up your decision to become a franchisee. It’s not always simply a matter of seeing Kwicksilver as a great opportunity and having the money/financing ready. There are timing issues to consider, such as, creating a smooth transition from your current Will I Receive an Exclusive Territory? You will receive an exclusive territory which is dependent upon the general population, the number

10. WHEEL REPAIR AND RECON PROS The addition of a small shop can be very beneficial. This is especially true when building a retail customer base. The Kwickshop trailer is primarily designed for servicing large auto dealer accounts, on their lot. of body shops, tire dealers, and car dealers, among other factors. The typical population range is 800,000 – 1,200,000. You will operate from one location and must receive Kwicksilver’s permission before relocating. Kwicksilver will not operate other shops or grant additional franchises in your territory. There is no minimum sales quota. You maintain rights to your area even though the population increases. Any Special Programs for Existing Wheel Repair Guys? Yes, depending on your current level of work and customer base, Kwicksilver offers a reduced franchise fee and royalty program for existing wheel repair vendors. Several of our new franchisees came to us with existing wheel repair companies. You are allowed to do business outside your protected area until we sell a franchise in that area, at which time you will be required to give up those customers to the new franchisee. Sometimes, other arrangements can be agreed to between the two franchise owners. Any Special Pricing on Tools, Equipment and Supplies? How Can I Expand My Operations? As a network, we are able to leverage our size to secure special pricing on tools, equipment and supplies. This includes shop equipment, consumables (paints, abrasives) and marketing materials. We also offer special pricing on web services, such as website design and SEO (search engine optimization). Kwicksilver offers both multi-unit franchises and area development rights for qualified individuals, investment groups or companies. Multi-unit franchises can be purchased at a discount to the single-unit franchise fee. Our area development agreement allows a franchisee to expand, by opening additional territories, within an exclusive area, according to a schedule. Either option allows for profit growth at a much faster pace, when compared to the single-unit franchise. What Sort of Marketing/Advertising Materials are availablew? HOW TO CONTACT US Kwicksilver has a full assortment of brochures, flyers, mailers, signage, vehicle wraps, POP displays, banners, logo artwork, and website design materials. New franchisees receive these materials as part of the their Startup package. Kwicksilver franchisees receive help with website development and local SEO (search engine optimization). Kwicksilver Systems, LLC PO BOX 428 Washington, VA 22747 Phone: 800-201-7597 Fax: 540-675-3230 Office Hours:9 a.m.-6 p.m. Mon-Fri (EST) Do I Have To Open Up a Fixed Location Shop? partners@kwicksilverusa.com www.kwicksilverusa.com No, you can open the business from a fixed location or from a Kwickshop trailer or truck.