Cheap Smokes is the franchise opportunity for you!

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1 Cheap Smokes is the franchise opportunity for you! Would you invest $50K cash to generate sales of $1,500,000 per year? Our opportunity is particularly suited to rural towns where there are few good franchise opportunities. Does your town really need another shoe store, clothing store or video store? What franchise can you invest in that gives you an opportunity to build sales to $140K/month or more in a small to medium sized town? What franchise can you start with a consumable product that your customer will purchase daily? It s a cash business with no receivables and you will start making money in a few short months with a product that is sold to both men and women over the age of majority. Our company has a proven concept that works, a concept that builds sales quickly to profitability with a low investment. The best part is the fact that you will love going to work! At Cheap Smokes and Tobacco we meet and talk with people from all walks of life in a great environment. We develop relationships and friendships with our clients as we see them regularly. We have created a themed store concept based on an era where icons like Marylyn Monroe, and the Rat Pack of the 60 s made smoking in vogue. Walking through our doors you will have the overwhelming feeling of being invited and welcomed! The décor is elegantly designed in rich dark walnut wood, soft lighting, extraordinary cigar cases and aesthetically designed glass display cases. We have recreated the chic age of smoking where our customers are treated as friends. We set a high standard for service and attention to detail. Our customers are so pleased with our service and selection that they serve as our best form of advertising by recommending us to their friends. Word of mouth is always the best marketing tool and it s free.

2 We offer over a 500 choices of tobacco products including cigarettes, cigarillos, pipe tobacco, chewing tobacco and of course a great range of exotic cigars for the aficionado. We support our core products with distinctive accessories such as specialty ash trays, humidors, cigar cases, cigarettes cases, cutters and lighters sourced from over 25 vendors around the world. What we offer is exclusive and exceptional. The name Cheap Smokes & Tobacco is a great marketing tool to get customers in the door, but clearly we offer so much more and with greater margins for our owners. The most important part of our store concept is our professional and friendly staff. We ensure they understand our vision and that they are trained on every product we offer. At Cheap Smokes and Tobacco our vision is to give the client the best possible shopping experience and our staff is trained to be knowledgeable of the products, service- oriented, personable and make the customer feel that we appreciate them. That kind of service sets us apart. If you are interested in this vision, desire to be your own boss, want to enjoy every day with your clients and co- workers, let Cheap Smokes and Tobacco provide you with our proven success formula to start you on the road to success!

3 What we provide our franchise owners 1. Fully developed concept store 2. Layout design, displays and build out drawings of your location 3. Ideal Location knowledge we know where the smokers are! 4. Lease negotiations if required 5. Finance assistance/expertise 6. Training on Set Up and Operation of the business 7. Employee training manuals, operating manuals 8. Point of sale software and computer systems to track inventory, ring in daily sales and do all reporting will be identical in all stores and set up by our ID company. 9. Set up of data base and training on how to set stock reorder points 10. Knowledge workshops on products 11. Marketing promotions for your store 12. Source products from around the world for your store and customers 13. Merchandising & Supplier Relationships 14. Negotiation with Suppliers for possible Preferred Pricing & Advertising Fees 15. Set up of all Supplier Accounts (20+ suppliers) so you can purchase directly 95% of your products from our approved vendors. 16. Exclusive trading area agreements 17. Lower Franchise Royalty fee s & Advertising Fund fee s then typical franchises.

4 What are the steps to open your Franchise? 1. Request a franchise brochure by completing the Interest Form 2. Discussion to determine if we right for each other. 3. Submit the Franchise Application Form 4. Talk with us about your proposed location we know the best locations 5. Review the Disclosure Documents - get legal advice 6. Sign the Franchise Agreement subject to financing if needed. 7. Secure financing, with our help if required 8. Secure location & Build your store (we can offer a turn key build out) 9. Attend Training 10. Set opening dates 11. Order inventory 12. Celebrate grand opening

5 General info you want to know 1. Location & Space Criteria a. The right size is square feet b. Towns with population of 7,500 or greater and preferably with a trading area of 20,000 or greater 2. Brand Support a. We have a one week training program which franchisees are required to attend while your store is under construction b. We also provide knowledge workshops throughout the year and product training for your staff c. Marketing is done at both the local and provincial levels. The objective is to build awareness for the brand and capitalize on local community opportunities to grow sales d. Product development is critical to increasing new sales so the corporate locations do product testing to ensure products are appropriate prior to placing them with our owners 3. Basic Business Terms a. Franchise Fee $25,000 $30,000 b. Investment (Cash) $50,000 min. (Total build out including inventory) $150,000 - $200,000 c. Royalty 1.5% d. Advertising Fund 0.5%

6 Chairman - Mr. Ed Alfke Edward G. Alfke corporate growth and franchise expert Ed Alfke is a corporate growth and franchise expert. He is passionate about building companies quickly and efficiently, with extensive experience in Canada and the USA. He is famous for the founding and expansion of Rent- a- Wreck, Canada s fastest growing company in the 80's.

7 Vice President - Ms. Lisa Mundell Lawrence Lisa Mundell relationship builder and marketing expert Lisa s first entrepreneurial adventure was building her international modeling agency. Her success there was due to training and development of the models thru the school side of the business. She learned a great deal about what it takes to train and develop young women and men. She sold the modeling agency and went into a new career The new undertaking was real- estate sales and marketing for condominium developers. She quickly became a top producer which led to opening her own sales and marketing company where she employed 25 sales staff with multiple condo developments both in Canada and Internationally. Lisa is the co- founder of Cheap Smokes & Tobacco started in 2009 and in only a few years has become an expert in the tobacco industry. Since 2009 Lisa and her husband Jeff have been refining their retail Tobacco stores to where, today, they are becoming an industry leader. They have successfully opened their 2nd store in Alberta with this refined approach. She has worked countless hours developing the systems for success in this industry and is ready to share this knowledge with her franchisees as they open more locations. Lisa has a personal dedication to achieving excellence both as an entrepreneur and as a mother of four children. She continues to live in Airdire and understands how rural clients want to be treated and has developed the business model to deliver.

8 President - Mr. Jeff Lawrence Jeff Lawrence sales management & marketing expert Jeff started his Sales & Marketing career in Calgary just after the 1988 Winter Olympics with Goulds Pumps and quickly rose through the ranks. At the age of 27, had achieved six Canadian salesmen of the year awards and moved on to become the National Sales Manager for Westinghouse Motors. At Westinghouse he really learned about managing people and businesses. He was second in command of a 50+ million dollar business with both direct sales and distribution sales. At the age of 29 he accepted the roll of Vice President of worldwide sales & marketing for Ruhrpumpen Inc. and relocated to Houston Texas to manage a 3,000- employee company with offices around the world. In 2006 Mr. Lawrence made a life changing decision to slow his global travelling and be home more with his family, so he left the corporate world and moved back to Canada to build companies for himself. Since 2006 he has built two successful companies from Start up to exit and is currently the Co- Founder and President of Cheap Smokes & Tobacco. Cheap Smokes & Tobacco was started in 2009 and has two corporate locations and is in the process of opening additional locations via the franchise model. Mr. Lawrence has built the perfect business in Cheap Smokes & Tobacco as he gets to work with his two passions in life; his wife Lisa and Cigars. As Jeff always says, If you love what you do, you never have to work another day in your life.

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