$77

Business Description

Circle K Stores Inc is our parent, the owner of all of our common stock, and the owner of the Kangaroo Express trademarks Circle K Stores Inc was incorporated under the laws of the State of Texas on June 8, 1951 The principal business address and telephone number of Circle K Stores Inc is also 1130 West Warner Road, Tempe, Arizona 85284, (602) 728-8000 Circle K Stores Inc has never offered franchises in any other line of business Circle K Stores Inc licenses TMC the right to use the trademarks in its franchise program Circle K Stores Inc is a wholly-owned subsidiary of Circle K Delaware Inc , which is a Delaware corporation wholly owned by The Circle K Corporation The Circle K Corporation is a wholly-owned subsidiary of Couche-Tard U S Inc, and both of these entities are Delaware corporations None of Circle K Delaware Inc , The Circle K Corporation, nor Couche-Tard U S Inc have ever offered franchises in any line of business The principal business address of Couche-Tard U S Inc is 315 Commons Mall, Columbus, Indiana 47201, 812-379-9227 The principal business address for Circle K Stores Inc, Circle K Delaware Inc, and The Circle K Corporation is 1130 West Warner Road, Tempe, Arizona 85284, (602) 728-8000 Couche-Tard U S Inc IS, through other subsidiaries, wholly-owned by the ultimate parent. Alimentation Couche-Tard Inc (ACT), a Canadian public company traded on the Toronto Stock Exchange The principal business address for ACT is 4204 Boulevard Industrial, Laval, Quebec, Canada H7L 0E3 Couche-Tard US L P, a predecessor of Couche-Tard US Inc, acquired The Circle K Corporation on December 17, 2003 from ConocoPhillips Company ConocoPhillips Company, however, is not a predecessor of TMC in as much as TMC has remained the franchisor of the Circle K franchise concept since TMC's inception m 1995 On March 16, 2015, Circle K Stores Inc acquired all equity ownership interests in The Pantry, Inc, which owned the rights to the Kangaroo Express® convenience store system, including the rights to the Kangaroo Express trademarks and the existing Kangaroo Express® convenience store assets, which included over 1,400 Kangaroo Express convenience stores The Pantry, Inc entity since dissolved and the Kangaroo Express® convenience store system and assets were transferred to Circle K Stores Inc Since early 2016, Circle K Stores Inc has been engaged in the process of converting approximately 1,200 of its Kangaroo Express convenience stores into Circle K convenience stores Over 1,000 stores have been converted into Circle K convenience stores as of April 28, 2019 with the lemming stores expected to be converted (or KE 2019 Multi-State FDD us 123569293 07 closed) m the next 24 months The remaining Kangaroo Express® stores are being offered as franchises pursuant to this Disclosure Document or are being rebranded and sold as unbranded convenience store assets As of April 28, 2019, TMC was the franchisor of 23 Kangaioo Express franchised locations in the states of Florida, Georgia, Louisiana and Tennessee In addition, as of the date of this Disclosure Document, ACT, through various subsidiaries, including TMC and Circle K Stores Inc , owns, operates or franchises in excess of 5,900 convenience stores in the United States under the trademark Circle K® The Circle K® franchise is a convenience store program operated under the Circle K® mark and m accordance with the Circle K® franchise system TMC offers and sells the Circle K® franchise opportunity under a separate franchise disclosure document ACT, through various subsidiaries, including Circle K Stores Inc , also owns, operates or franchises in excess of 4,800 Circle K® motor fuel businesses ACT IS one of the largest convenience store operators in North America, with over 1,800 stores in Canada that are company-operated under brands other than Kangaroo Express TMC has not conducted the type of business to be operated by you, but Circle K Stores Inc and its predecessors have been operating convenience stores since 1951 and motor fuel businesses since 1951 We have offered Circle K convenience store franchises for convenience store businesses since 1995 We have offered Circle K motor fuel businesses since July 2011 We have offered Circle K branded businesses since July 2012 As of April 28, 2019 (the end of our last fiscal year), there were 562 franchised Circle K Stores m the United States TMC operates the Circle K business from its current principal place of business, 1130 West Warner Road, Tempe, Arizona 85284 Circle K Stores Inc has, directly or through its affiliates, offered Circle K licenses internationally since 1979 Circle K Procurement and Brands Limited, an affiliate of Circle K Stores Inc, offers Circle K franchises in a number of countries around the world Circle K Procurement and Brands Limited's principal business address is Topaz House, Beech Hill, Clonskeagh, Dublin 4, Ireland On May 28, 2009, TMC acquired the rights to the On the Run® franchise system from ExxonMobil Oil Corporation (“ExxonMobil”), including the rights to the On the Run trademarks and the existing On the Run® Franchise Agreements TMC is the franchisor for 108 On the Run franchised locations and has the right to offer and sell franchises under the On the Run mark The On the Run franchise is a convenience store program operated under the On the Run mark and in accordance with the On the Run franchise system These locations are located in 12 states, primarily in the Eastern and Midwestern United States TMC offers and sells the On the Run franchise opportunity under a separate franchise disclosure document TMC operates the On the Run franchise business from its current principal place of business, 1130 West Warner Road, Tempe, Arizona 85284 On June 28, 2017, ACT acquired CST Brands, Inc, an operator of over 1,100 convenience stores m the United States under the following brands Comer Store (located throughout the United States), Nice N Easy Grocery Shoppes (in New York), and the Flash Foods Network (in Georgia and Florida) Although no specific plans have been made as of the issuance of this FDD, it is likely that most of the acquired convenience stores will be converted into Circle K Stores TMC offers and sells the Corner Store franchise opportunity under a separate franchise disclosure document As of April 28, 2019, there were not any Corner Store franchised locations in the United States Although TMC does not have any plans to offer or sell KE 2019 Multi-State FDD us 123369293 07 franchises under the other acquired brand names (Nice N Easy Grocery Shoppes and Flash Foods Network), it is possible that TMC will, at some point m the future, offer franchises under one or both of these other brand names pursuant to a separate franchise disclosure document On December 22, 2017, ACT acquired all the membership interests of Holiday Station stores, LLC and certain affiliated companies As a component of this transaction, TMC acquired all the membership interests of Holiday Diversified Services, LLC (“HDS”) m exchange for a capital contribution, and so TMC is the direct parent of HDS is a franchisor of Holiday Stationstores® that sell automotive fuels and convenience stores products and services and that operate under the Holiday Station stores® mark and m accordance with the Holiday Stationstores® franchise system HDS offers and sells the Holiday Station stores® franchise opportunity under a separate franchise disclosure document HDS operates the franchise business from its principal place of business, 4567 American Boulevard West, Minneapolis, Minnesota 55437 As of April 28, 2019, there were 140 Holiday Stationstores® franchises operating m the U S An affiliate of TMC, Mac's Franchise Management LLC, incorporated in Delaware on August 29, 2002 and with a principal business address of 315 Commons Mall, Columbus, Indiana 47201, has been offering franchises for convenience stores under the Dairy Mart brand since 1987 The 24 Dairy Mart franchised stores as of April 28, 2019 are in the following states Ohio - 16, Kentucky - 5, Michigan - 2, and Indiana - 1 Except as noted in this Item 1, we and our predecessors and affiliates have not offered franchises m the convenience store business or m other lines of business

Prior Experience

We were incorporated under the laws of the State of Arizona on February 7, 1995, under the name Circle K Franchise Corporation On September 27, 1997, we changed our name to TMC Franchise Corporation Our principal business address is 1130 West Warner Road, Tempe, Arizona 85284, (602) 728-8000

Business Offered

We offer to certain qualified franchisees a franchise arrangement for Kangaroo Express Stores which consists of a franchise agreement (the “Franchise Agreement”) for the right to use the “Kangaroo Express” mark and other distinctive Marks, as defined below, and the business system m connection with the operation of a single Kangaroo Express convenience store business In addition, we may, from time to time, enter into a Franchise Agreement with existing convenience store operators, existing dealers or existing marketers From time to time, we also have offered and may offer m the future, franchises to certain types of operators whose sites are acquired m transactions The terms and conditions of the Kangaroo Express convenience store franchises offered to those operators may be materially different from the terms and conditions described in this Disclosure Document The Franchise Agreement which you will be required to sign is the form of Franchise Agreement attached to this Disclosure Document as Exhibit F We also will provide you with training and continuing support as described in this Disclosure Document and will provide you access to an online copy of the Kangaroo Express Business Systems Manuals We also offer to certain qualified franchisees that already own multiple, existing convenience stores or that wish to develop and operate multiple convenience stores a multiple site operator agreement (the “Multiple Site Operator Agreement”) for the right to convert their existing convenience stores to Kangaroo Express Stores and/or develop multiple new Kangaroo Express Stores Under the Multiple Site Operator Agreement, you must commit to convert and/or develop a minimum of six Kangaroo Express Stores at Franchised Locations within a KE 2019 Multi-State FDD US 123569293 07 given period of time The Multiple Site Operator Agreement that you will be required to sign is the form of the Multiple Site Operator Agreement attached to this Disclosure Document as Exhibit G The rights granted to you under the Multiple Site Operator Agreement are limited to the right to convert existing convenience stores to Kangaroo Express Stores or develop multiple new Kangaroo Express Stores at designated Franchised Locations and do not include any sort of territorial protection The terms and conditions of each Franchise Agieement entered into with a franchisee that has executed a Multiple Site Operator Agreement (a “Multi-Site Operator”) will differ materially from TMC's standard Kangaroo Express Franchise Agreement For example, in consideration for a modified fee structure, you, rather than TMC, will be responsible for (1) providing all training as required under the Franchise Agreement, and, at our option, (2) administering and collecting marketing, promotional, or other similar allowances to which you may be entitled These and other material variations are discussed in other sections of this Disclosure Document and are incorporated into an Amendment to Kangaioo Express Franchise Agreement for MultiSite Operators (the “Multi-Site Amendment”) Unless otherwise stated, any reference to a Kangaroo Express convenience store franchisee m this Disclosure Document is intended to refer to (1) a franchisee operating one Kangaroo Express Store under a single Franchise Agreement, and (2) a franchisee operating multiple Kangaroo Express Stores under multiple Franchise Agreements whether or not pursuant to the terms of a Multiple Site Operator Agreement We also offer to qualified Kangaroo Express convenience store franchisees the right to offer and sell, from their Kangaroo Express Store, Kangaroo Express-sourced and branded motor fuel or motor fuel from a third-party source As of the date of this Disclosure Document, we only offer the Motor Fuel Business to franchisees who already operate, or agree to open and operate, a Kangaroo Express Store We reserve the right m the future to offer a Motor Fuel Business to a person or entity that does not operate a Kangaroo Express Store If you will operate a Motor Fuel Business, you will sign our form Motor Fuel Agreement attached to this Disclosure Document as Exhibit H (“Motor Fuel Agreement”) Franchisees operating a Motor Fuel Business under a Motor Fuel Agreement must purchase their motor fuel supply from us or our affiliate In addition, under the Branded Business, we offer to qualified Circle K convenience store franchisees the right to use and display the Kangaroo Express Marks (as defined below) m connection with the sale from their Kangaroo Express Store of motor fuel Franchisees operating a Branded Business may obtain their fuel from any source, provided, the motor fuel meets our standards and requirements As of the date of this Disclosure Document, we offer the Branded Business only to franchisees who already operate, or agree to operate, a Kangaroo Express Store We reserve the right m the future to offer a Branded Business to a person or entity that does not operate a Kangaroo Express Convenience Store If you operate a Branded Business, you will sign our Branding Agreement (m the form attached hereto as either Exhibit I1 or Exhibit 1-2, as applicable, collectively the “Branding Agreement”)

Initial Fees

If you are signing one Franchise Agreement for a single Kangaroo Express Store, the Initial Franchise Fee is $12,500 You will pay the entire Initial Franchise Fee of $12,500 upon execution of the Franchise Agreement Except as noted below, the Initial Franchise Fee is earned upon receipt and is non-refundable In addition, we may offer a discounted Initial Franchise Fee due to the franchisee's (or the franchisee's motor fuel supplier's) motor fuel business relationship with us or our affiliate If you agree to develop a limited number of Kangaroo Express Stores, but are not a Multi-Site Operator, the Initial Franchise Fee you will pay for your first Store will be $12,500 (payable as noted above), but TMC may reduce the Initial Franchise Fee you will pay for each additional Kangaroo Express Store you agree to develop consistent with the Multi-Site Operator Initial Franchise Fee schedule in effect at the time you sign the franchise agreement for each such additional Kangaroo Express Store For example, if you currently operate two Kangaroo Express Stores and agree to open a third Kangaroo Express Store, our current Multi-Site Operator Initial Franchise Fee schedule (as described below) provides that the Initial Franchise Fee for your second and third Kangaroo Express Stores would be $7,500 We reserve the right to change or withdraw this program at any time If you are not a Multi-Site Operator, you will be required to pay the Initial Franchise Fee for each Store at the time you sign the Franchise Agreement for that Store If you are a Multi-Site Operator, you will be required to pay the Initial KE 2019 Multi-State FDD us 123569293 07 Franchise Fee for each Store you agree to develop at the time you sign the Multiple Site Operator Agreement We reserve the right to waive the Initial Franchise Fee for any On the Run franchisees that convert their existing On the Run store to a Kangaroo Express Store

Financing

We offer an Equipment/Construction Funding program to qualified franchisees for our Convenience Store offering If you accept funding for your Store, we will use these funds to offset the cost of equipment and construction at your Store, and pay invoices on your behalf The KE 2019 Multi-State FDD 47 us 123569293 07 amount of funding offered to you will depend on whether your Kangaroo Express Store is a newly constructed store or conversion Kangaroo Express Store, however, the funding offered will not exceed the actual costs incurred We will retain a security interest in each item of equipment purchased with Equipment/Construction Funding until the Franchise Agreement expires Upon any such expiration, we will release our security interest If the Franchise Agreement is terminated, you will (a) pay us the remaining net value of the equipment, which amount will reflect the unamortized portion of the Equipment/Construction Funding you receive or, at our option, (b) grant us access to the Store so we can remove the equipment Upon receipt of such payment, we will release our security interest in the equipment For a newly constructed Kangaroo Express Store, or the raze and rebuild of a Kangaroo Express Store, two levels of funding are available, which, for purposes of the calculation of Royalty Fees, are referred to as “Level 2” funding amount and “Level 3” funding amount The Level 2 funding amount of the Equipment/Construction Funding is up to $50 for each square foot of selling space your Store contains The Level 3 funding amount of the Equipment/Construction Funding is up to $70 for each square foot of selling space your Store contains TMC has the right to determine the square footage to establish the maximum amount of the funding For bay-conversions, store re-openings, store expansion projects, or conversions where TMC cannot adequately verify existing sales levels, two levels of funding are available, which, for purposes of the calculation of Royalty Fees, are referred to as “Level 2” funding amount and “Level 3” funding amount The Level 2 funding amount of the Equipment/Construction Funding IS up to $40 for each square foot of selling space your Store contains, capped at $90,000 The Level 3 funding amount of the Equipment/Construction Funding is up to $60 for each square foot of selling space your Store contains, capped at $135,000 TMC has the right to determine the square footage to establish the maximum amount of the funding For conversion Store, the amount of the funding is based on the verified annual amount of your existing convenience store's Gross Sales for the most recently completed 12-month period as determined by you and us and specified in the Equipment/Construction Funding Agreement If your store's tobacco sales as a percentage of your total sales are substantially over the average for such percentage, your funding may be altered In addition, TMC reserves the right to modify the amount of the funding if, subsequent to the parties' execution of the Equipment/Construction Funding Agreement but before the store is deemed open as a Kangaroo Express Store, the merchandise sales levels drop below the amount used by TMC to set the original funding amount Otherwise, funding for existing convenience stores that will be converted is as follows

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document Financial performance information that differs from that included m Item 19 may be given only if (1) a franchisor provides the actual records of an existing outlet you are considering buying, or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets We also do not authorize our employees or representatives to make any such representations either orally or in writing If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet If you receive any other financial performance information or projections KE 2019 Multi-State FDD US 123569293 07 80 of your future income, you should report it to the franchisor's management by contacting Mitch Filiere at 1130 West Warner Road, Tempe, Arizona 85284, telephone number (602) 728-3958, the Federal Trade Commission, and the appropriate state regulatory agencies