Oakridge Esso Business Plan

Oakfield Service Station Corp. BUSINESS PLAN ANIL MALL

Oakfield Service Station Corp. Table of Contents 1.0 Executive Summary ..................................................................................................... 2 1.1 The Services .............................................................................................................. 3 1.2 Financing .................................................................................................................. 3 1.3 Mission Statement .................................................................................................... 3 1.4 Management Team .................................................................................................. 3 1.5 Sales Forecasts ......................................................................................................... 4 1.6 Expansion Plan ......................................................................................................... 4 2.0 Company and Financing Summary ........................................................................... 4 2.1 Registered Name and Corporate Structure .......................................................... 5 2.2 Required Funds ........................................................................................................ 5 2.3 Investor Equity ......................................................................................................... 5 2.4 Management Equity ................................................................................................ 6 3.0 Products and Services .................................................................................................. 6 3.1 Gasoline Sales ........................................................................................................... 7 3.2 Food, Beverage, Merchandise Sales ....................................................................... 7 3.3 Lottery Ticket Sales ................................................................................................. 7 4.0 Strategic and Market Analysis ................................................................................... 7 4.1 Economic Outlook ................................................................................................... 8 4.2 Industry Analysis ..................................................................................................... 8 4.3 Customer Profile ...................................................................................................... 9 4.4 Competition ............................................................................................................ 10 5.0 Marketing Plan .......................................................................................................... 12 5.1 Marketing Objectives ............................................................................................ 12 5.2 Marketing Strategies ............................................................................................. 12 5.3 Pricing ..................................................................................................................... 12 6.1 Organizational Plan and Personnel Summary ........................................................ 14 6.2 Organizational Budget .......................................................................................... 14 6.3 Management Biographies ..................................................................................... 15 7.0 Financial Plan ............................................................................................................. 16 7.1 Underlying Assumptions ....................................................................................... 16 7.2 Sensitivity Analysis ................................................................................................ 16 7.3 Source of Funds ...................................................................................................... 16 7.5 Profit and Loss Statements ................................................................................... 17 7.6 Cash Flow Analysis ................................................................................................ 18 7.8 Breakeven Analysis ................................................................................................ 20 Three Year Profit and Loss Statement .......................................................................... 21 1.0 Executive Summary 1

Oakfield Service Station Corp. Through the Gas Station’s retail location (where most profits are realized), the store will provide an expansive variety of food, beverage products, packaged food goods, bottled beverages, and ancillary merchandise such as toiletries, automotive products, and other small life essentials. A vast majority of the revenues will be from the sale of gasoline products and diesel fuel. The third section of the business plan will further describe the services offered by the Gas Station. 1.2 Financing The borrower is seeking to raise $2,812,500 by way of a term loan over 25 years. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 25-year with a 9% fixed interest rate. The financing will be used for the following:  Purchase of the existing Centex gas station land and building.  Re-development of the current gas station to re-brand to Esso fuel station and On the Run convenience store. Shareholders will contribute $940,000 to the venture and will receive a $450,000 forgivable loan from Parkland Corporation. Parkland Corporation is giving the loan based on projected earnings from gasoline sales. Estimating that the OSSC location will sell at minimum 2.5million litres of Esso branded fuel in each year of its operation, the management team believes that this location can achieve a sales volume that is much higher than the minimum required due to the strategic location of this business. 1.3 Mission Statement The mission statement of the OSSC is to provide the consumer with a safe, convenient location to fuel up their vehicle with several grades of gasoline and diesel options. To provide coffee, confectionery items, snacks, and essentials to a wide spectrum of customers from all walks of life. 1.4 Management Team OSSC will be owned and operated by Anil Mall and Bakhtawar Dharani, Anil Mall and Bakhtawar will be accompanied by his Anil’s father Krishan Mall. Krishan has owned and operated various businesses throughout his lifetime from restaurants to carwashes and hotels. This wide spectrum of business knowledge has been passed down to his two sons Sunil and Anil who have operated the various businesses alongside their father. Krishan Mall will act as the chief financial officer using his business knowledge to ensure financials are up to date and all income and expenses are accounted for. Anil Mall, the 3

Oakfield Service Station Corp. proposed owner of OSSC will use his business knowledge, acumen, and business degree to own and operate the service station and convenience store. Acting as the general manager of the privately held corporation. Anil’s wide spectrum of knowledge from accounting, inventory management, marketing, and organizational skills will ensure the success of OSSC and will permit all investors to receive compensation on schedule. 1.5 Sales Forecasts Anil Mall expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years. Proforma Profit and Loss (Yearly)     Year 2024 2025 2026 Sales $6,337,500 $7,605,000 $9,886,500 Operating Costs $257,872 $298,748 $302,052 EBITDA $589,628 $718,252 $1,020,048 Taxes, Interest, and Depreciation $107,276 $115,836 $138,161 Net Profit $482,352 $602,416 $881,886 2023 2024 2025 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 Sales, Operating Costs, and Profit Forecast Sales EBITDA Net Profit Year 1.6 Expansion Plan Anil Mall expects that the business will aggressively expand during the first three years of operation. Anil Mall intends to implement marketing campaigns with support from Parkland Corporation (Esso) that will effectively target individuals within the target market. 4

Oakfield Service Station Corp. 2.3 Investor Equity The management is not seeking an investment from a third party at this time. 2.4 Management Equity The management of OSSC will contribute $825,000 net of the $450,000 forgivable loan. Pictures of the OSSC 6

Oakfield Service Station Corp. 3.0 Products and Services Below is a description of the products offered by the Gas Station. 3.1 Gasoline Sales Management expects to sell more than 2.5 million liters of gasoline to motorists in first year of operations and 3.5 million liters by 2025. This is by far the largest revenue center for the business, and profit centers for the business. OSSC will use the gas sales as a primary vehicle for bringing people into the convenience store. 3.2 Food, Beverage, Merchandise Sales The primary profit center of the Gas Station will be the retail sale of packaged food items, prepared food items, beverages (sodas, coffees, and bottled beverages), as well as other merchandise such as small toiletries, ancillary automotive merchandise (oil, fluids, ice scrapers, air fresheners, etc). OSSC will offer an expansive number of these items throughout the location. On each item sold, the business generates approximately 40% of all profits. 3.3 Lottery Ticket Sales In addition to the food, beverage, and merchandise sales, the business will also provide sales of lottery tickets. This is an important revenue center for the franchise as this provides a highly predictable stream of revenue for the business on a day-to-day basis. 3.4 Tobacco Sales In addition to Lottery ticket, Tobacco sales are a significant source of revenue. Although profits on tobacco are smaller, they can still be highly profitable products based off of volume. 7

Oakfield Service Station Corp. 4.0 Strategic and Market Analysis 4.1 Economic Outlook This section of the analysis will detail the economic climate, the gas station industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Oakfield Esso’s products and services are based on the demands of a broad demographic base. OSSC will continue to grow with the growth of the population base in the surrounding area and will enjoy steady and stable economic growth. Although the service station industry is highly competitive it enjoys exclusivity due to barriers of entry arising from the high start up capital costs. Properties that are zoned for service stations are rare and restricted due to the multitude of environment safeguards, regulations and licensing requirements. The subject site has already been approved and operating as a fuel service station under a different brand. Currently, the economic climate is uncertain. The pandemic stemming from Covid-19 has created a substantial amount of turmoil within the capital markets. It is expected that a prolonged economic recession may occur given that numerous businesses are being forced to remain closed for an indefinite period of time (while concurrently having their respective employees remain at home). However, central banks around the world have taken aggressive steps to ensure the free flow of capital into financial institutions. This is expected to greatly blunt the economic issues that will arise from this public health matter. The items sold within the Gas Station are very affordable, and during times of higher living costs, Management does not expect that slight decreases in customer’s discretionary income will have an impact on the business’s ability to generate revenue. 4.2 Industry Analysis 9

Oakfield Service Station Corp. Gas Stations/ Convenience Store The service station & convenience store industry is made up of three key industry participants. Firstly, there is the corporately owned nationals, such as, Petro Canada, Esso, Chevron, Husky, and other small players. Secondly, there are the franchise owners who operate the service station independently from the corporate locations. These franchise locations generally are highly regimented and regulated through their franchise agreement to maintain a homogenous corporate look and feel. Thirdly, there is the independent owner / operator who has the option of entering into an exclusive Fuel Supply Agreement that accommodate their needs. The OSSC will be independently owned and operated with an exclusive Fuel Supply Agreement with Petro Canada. The owner: however, intends to operate the convenience store and service station much like that of a corporate station. It is the owner’s intent to leverage off the already successful Parkland Corporation’s national branding and advertising strategies. On The Run convenience stores, Optimum points rewards program has been extremely successful in maintaining a loyal customer base. The owner will implement the latest in environmental technology for the fuel storage tanks. The double walled fibreglass tanks, that are currently installed are state of the art and will be monitored by the most sophisticated, leak proof fuel technology in the industry. The dispensing pumps that will be installed will be the latest state of the art 4+1 Gilbarco Pumps which will allow for multiple fuel choices at each pump, thus mitigating long waiting lines for a specific fuel grade. The OSSC site will also be brightly lit with LED lighting technology and equipped with the latest two-way intercom technology accompanied by a drive through style window, security cameras, and monitoring systems ensuring customer and employee security, safety, and customer satisfaction. However, there are substantial changes expected to occur within the industry over the next twenty to thirty years as alternative fuels and energy sources become prevalent within the Canadian economy. There are now several stations that beginning to offer alternative fuels such as ethanol, Biodiesel mixes, and electricity for hybrid vehicles. As these changes begin to arise OSSC will be making sure to offer these new products and services. 10

Oakfield Service Station Corp. 4.4 Competition OSSC is located in Oakridge which is a matured community in SW Calgary. In that growth other service stations have appeared to service the demand in the area. Within the 10 Km radius there are 2 service stations. Petro Canada, Shell,\. The already existing Petro Canada is located 3kms North from the site. The Shell service station is located 3kms East of the site. Although competition is prevalent OSSC will use its brand loyalty to beat out the competition and attract customers to the location as the PC Optimum rewards program offers pharmacy purchase rewards through all retail and wholesale stores owned and operated under the ownership of Loblaws Inc. 4.5 Trends in the Industry Trends in the industry are and have changed significantly over the last 15 years. The service station patrons of today demand a choice of fuels and convenient options to pay. The average consumer demands rewards for their loyalty since the switching cost is rather negligible from competitor to competitor. Consumers expect the basic comforts such as safe well-lit facilities, clean bathrooms, courteous employees; and consistency in their user experiences. In the final analysis, the consumer demands value for their dollar and above all a convenience factor considering the price differential between convenience store pricing and less expensive alternatives such as supermarkets. New technology-based phone applications are the new emerging trends and have increased demand and the consumer expects their service station of choice to be up to date. 12

Oakfield Service Station Corp. 5.0 Marketing Plan The Gas Station intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Gas Station. 5.1 Marketing Objectives  Acquire a highly visible location from which the Gas Station can conduct business operations.  Regularly offer discounts on convenience store items to further drive sales. 5.2 Marketing Strategies The marketing plan is vital to the overall success of the service station and convenience store. The implementation and development of the marketing plan is crucial to achieve the objectives of business in the initial stage. The marketing plan comprises of various strategies that will be initiated at different stages to achieve the ultimate success. In this respect, the new owner intends to make a significant investment into a marketing program in conjunction with Esso’s proven nationwide branding. The marketing plan will be rolled out over a three-year period. The marketing budget after the three-year time frame will be curtailed, due to location recognition and convenience factor. The promotional campaigns will regionally target local traffic to try out the facility for the first time. It will be through great service that the new owner will be able to a build and retain a loyal client base. The owner will enjoy the benefits of being independent while still having the support and dependability of the Esso brand. The independence will allow the new owner to concentrate and allocate their marketing focus and budget to attract the local community. This will be achieved by sponsoring local sports teams and community causes. The owner intends to help fund raising efforts by helping law enforcement, fire fighters and nearby schools fund raising initiatives. 13

Oakfield Service Station Corp. 6.0 Organizational Budget Personnel Plan - Yearly       Year 2023 2024 2025 Managers/Owner $18,000 $18,540 $19,096 Store Employees $48,000 $49,440 $50,923 Total $66,000 $67,980 $70,019 Numbers of Personnel       Year 1 2 3 Owner 1 1 1 Store Employees 2 2 2 Totals 3 3 3 6.1 Organizational Budget (Cont.) 27% 73% Personnel Expense Breakdown 6.3 Management Biographies 15

Oakfield Service Station Corp. Anil Mall:(Owner/Management) Anil Mall has worked alongside his father Krishan and brother Sunil running the previously owned businesses. He currently works in Chemical distribution but will transition into the management role in the Esso Oakridge gas station. Anil will use his extensive previous work experience in management roles and his business management degree and combine his knowledge to run the OSSC Krishan Mall: (Management) Krishan has been a commercial real estate associate and investor for Twenty (20+) years and brings to the team first-hand experience and expert knowledge on how to navigate, structure and build complex mixed-use developments. Krishan has achieved great success in Real Estate being #1 in Canada and #2 in the world for commercial real estate sales. Krishan has done projects similar in nature and, has owned various businesses from hotels to restaurants and carwashes. He will help with management and structuring of the company ensuring no leakage when it comes to costs. Bakhtawar Dharani: …… 7.0 Financial Plan 16

Oakfield Service Station Corp. 7.5 Profit and Loss Statements Proforma Profit and Loss (Yearly) Year 2024 2025 2026 Sales $6,337,500 $7,605,000 $9,886,500 Cost of Goods Sold $4,920,000 $5,904,000 $7,675,200 Gross Margin 22.37% 22.37% 22.37% Gross Profit $1,417,500 $1,701,000 $2,211,300 Expenses Payroll $48,000 $85,490 $88,055 General and Administrative $6,000 $6,000 $6,000 Marketing Expenses $3,600 $3,600 $3,600 Professional Fees and Licensure $600 $618 $637 Insurance Costs $10,000 $10,500 $11,025 Utilities $30,000 $30,000 $30,000 Miscellaneous Costs $12,000 $12,000 $12,000 Payroll Taxes $3,672 $6,540 $6,736 Total Operating Costs $113,872 $154,748 $158,053 EBITDA $1,303,628 $1,546,252 $2,053,247 Corporate Tax $84,168 $104,344 $145,741 Interest Expense $81,358 $71,785 $61,313 Depreciation Expenses $26,167 $26,167 $26,167 Net Profit $1,111,935 $1,343,956 $1,820,026 Profit Margin 17.55% 17.67% 18.41% Debt Service Coverage: Blended annual loan payments $286,330.08 Available EBITDA $1,303,628 DSC 4.55 times 7.6 Balance Sheet 18

Oakfield Service Station Corp. Opening Balance Sheet Assets Cash $50,000 Inventory $250,000 Long Term Assets Land and building $2,250,00 0 Improvements $1,500,00 0 Total Assets $4,050,00 0 Liabilities and Equity Current Portion of LTD $112,500 Long Term Liabilities $2,700,00 0 Shareholder Equity $1,237,50 0 Total Liabilities $4,050,00 0 Net Worth $1,237,50 0 Total Liabilities and Equity $2,812,50 0 Debt to Equity Total Debt $2,812,50 0 Total Equity $1,237,50 0 D/E 2.27 19