$327

Business Description

We are a Delaware corporation, formed on June 24, 1985. We do business only under our corporate name, including “AmerisourceBergen Drug Corporation”, “AmerisourceBergen”, and the names “Good Neighbor Pharmacy” and “Elevate Provider Network.” Our principal business address is 227 Washington Street, Conshohocken, PA 19428. Our agents for service of process are listed in Exhibit A.

Prior Experience

Our parent company is AmerisourceBergen Corporation (“ABC”), a Delaware corporation, formed on March 16, 2001 in contemplation of the August 2001 merger of AmeriSource Health Corporation (“AHC”) and Bergen Brunswig Corporation (“BBC”). In August 2001, AHC and BBC became subsidiaries of ABC. AHC and BBC continued as subsidiaries of ABC until October 2002, at which time BBC was merged with and into AHC. AHC was the survivor and was renamed AmerisourceBergen Services Corporation (“ABSC”). ABSC survives today as a subsidiary of ABC. AmerisourceBergen Corporation is one of the largest global pharmaceutical sourcing and distribution services companies, helping healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. We deliver innovative programs and services designed to increase the effectiveness and efficiency of the pharmaceutical supply chain. More specifically, we distribute a comprehensive offering of brand-name and generic pharmaceuticals (including specialty pharmaceutical products), over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers located in the United States and select global markets, including retail chain and independent pharmacies, mail order pharmacies, acute care hospitals and health systems, physician practices, medical and dialysis clinics, long-term care and other alternate site pharmacies, and other customers. We also provide pharmacy services to certain specialty drug patients. Additionally, we furnish healthcare providers and pharmaceutical manufacturers with an assortment of related services, including reimbursement and pharmaceutical consulting services, niche premium logistics services, claim management services, and pharmacy management, along with retail strategies and front-end management, marketing and advertising services, digital media tools, and educational opportunities.

Business Offered

We grant franchises for GNP Premier Pharmacies that operate under the “Marks,” which include (i) the “Good Neighbor Pharmacy” and related service marks, (ii) the “Elevate Provider Network” service marks, (iii) the elements and components of a GNP Premier Pharmacy's trade dress, and (iv) any and all additional, different or replacement trade names, trademarks, service marks, logos and slogans that we adopt from time to time to identify the GNP Premier Program and products and services that can be offered by a GNP Premier Pharmacy or the GNP Premier Program, including Available Programs. Though there are currently none operational, we reserve the right to own and/or operate GNP Premier Pharmacies. ABDC, as a pharmaceutical distribution services company, delivers medicines and other products to thousands of retail customers on a just-in-time basis, which are then dispensed or sold to patients and consumers. We also provide business coaching services to help those customers who are GNP Premier Pharmacies improve their businesses and focus on their strengths. GNP Premier Pharmacies offer other retail products and services, including traditional drug store categories such as vitamins, cough and cold, first aid, and analgesics. Some GNP Premier Pharmacies carry home healthcare products, such as canes, walkers and other durable medical equipment. We offer GNP Premier Agreements that grant to eligible Customers the right to convert one or more existing or start-up pharmacies to each become a GNP Premier Pharmacy at a designated site (“Pharmacy Location”). The GNP Premier Agreement is attached to this Disclosure Document as Exhibit B. If you currently operate a pharmacy, we assume that you have an existing location, inventory, equipment and other items necessary to operate a pharmacy at the time you sign the GNP Premier Agreement. You have the right to terminate the GNP Premier Agreement at any time on 60 days' notice without cause. To be eligible to participate in the GNP Premier Program, you must meet our minimum requirements (“Premier Minimum Requirements”), including having a computer system for pharmacy management that allows participation in our InSite program from ABDC. For stores whose existing pharmacy management system does not enable participation in our program, we estimate it would take two to four months for a store to plan, evaluate, purchase and install the required system. See Items 8 and 11. You must operate your GNP Premier Pharmacy and utilize Available Programs in accordance with the GNP Premier Agreement and the standards we establish (“Standards”). The Standards are described in our manuals and other directives to you, whether on paper or electronic form (“GNP Manual”), which we revise and supplement from time to time. The Standards pertain to, among other things, purchases of prescription pharmaceuticals, over-the-counter products, including our GNP private label products (“GNP Private Label Products”), health and beauty care products, signage and layouts, equipment, specifications for products and services, training, methods of inventory control, advertising and marketing programs and information technology, all of which we may improve, further develop or otherwise modify from time to time.

Initial Fees

Premier Agreement Although we do not charge you an initial franchise fee, you may have to pay us or our affiliates for certain goods or services upon signing the Premier Agreement as described in the “Start of GNP Premier Program Billing” subsection below (existing store) or prior to your store’s opening date (startup store). Initial Inventory of Pharmaceutical and Front-End Products For an existing pharmacy, no incremental inventory may be required other than the requirements for GNP Private Label Products described below. Accordingly, the low-end estimate for this cost for an existing pharmacy is $0. Depending on your existing inventory of pharmaceutical and front-end products, we estimate in certain cases an existing pharmacy may be required to expend up to $25,000 for an initial inventory of these products. For a start-up pharmacy, we estimate that before your opening date you will pay us $75,000 to $125,000 for an initial inventory of pharmaceutical and front-end products. GNP Private Label Products For an existing pharmacy that is already stocked with a broad selection of GNP Private Label Products, we anticipate little or no additional expenditure for GNP Private Label Products will be required. However, if you are a start-up franchisee or your existing pharmacy does not currently stock a broad selection, you must place an order for GNP Private Label Products with us in quantities you determine are reasonable to meet anticipated consumer demand. We estimate this amount may be $0 to $1,200 for existing stores that have regularly stocked GNP Private Label Products. We estimate that a store with no or minimal existing inventory of GNP Private Label Products may place an order ranging from $5,000 to $12,000 (see Item 7 and Item 8), depending on the size of the store, front-end categories carried, the number of facings, and the market where it is located. Interior and Exterior Signage We provide complimentary signage packages to all new franchisees that, when applied according to our standards, meet our minimum requirements (for an existing Voluntary Pharmacy converting to a GNP Premier Pharmacy we may provide only a partial package as compliant signage may already be installed). To encourage you to enhance the appearance of your GNP Premier Pharmacy and further apply the Good Neighbor Pharmacy trade dress at your location, we offer new franchisees a one-time purchase match of up to $2,500 per location to order additional or enhanced signage and other trade dress that meets our specifications within 90 days of signing the Premier Agreement (the “Purchase Match Amount”). We will match your initial purchase, dollar for dollar, up to $2,500 for qualified expenses which meet our specifications. For example: ? If you spend $1,000, you will get a $1,000 match ? If you spend $2,500, you will get a $2,500 match ? If you spend $3,000, you will get a $2,500 match To obtain the Purchase Match Amount, you must place your signage order within 90 days of signing the Premier Agreement and order through our approved vendor (currently GoodNeighborPharmacySigns.com) or submit approved estimates and copies of paid invoices, along with photos of the installed trade dress to the Good Neighbor Pharmacy department in our Conshohocken office via email to [email protected]. If you terminate the Premier Agreement for any reason other than an uncured default by ABDC prior to the end of the first full twelve (12) month period that the Premier Agreement is in effect, you will pay ABDC, in addition to any other amounts or damages that may be owed to ABDC under any other agreement and not as liquidated damages, an amount equal to the Purchase Match Amount. Typically, all signage must be purchased from an approved vendor. From time to time, ABDC will prepurchase signage from the approved vendor to facilitate delivery of signage, in which case you may be billed for signage originally purchased by ABDC from this outside vendor. The cost of the various signage and trade dress available for purchase from our approved vendors and according to our specifications will range between $0 and $25,000 depending on your choices. Since our complimentary signage package meets our minimum requirements the low estimate on expenses is $0. Leasehold Improvements If you have an existing pharmacy, depending on the design and layout of your pharmacy, you may not need to incur any additional leasehold costs. If you do need to incur leasehold costs, these improvements vary substantially based on the location and condition of your existing pharmacy. If you are opening a start-up pharmacy, the cost of leasehold improvements will vary based on the size and existing configuration of the premises as well as local factors such as wage rates and availability and price of materials. These costs may also vary if the landlord agrees to incur the costs and allocate them over the term of the lease. Our pharmacy transformation services group can, at your option, evaluate your existing pharmacy, recommend improvements and manage the project for you for a flat fee of $1,500. Optional Available Programs At this time, there are no initial fees for Available Programs in which you elect to participate, as described in Term Sheets 1-10 of the GNP Premier Agreement (Exhibit B to this Disclosure Document). Start of GNP Premier Program Billing ABDC invoices any monthly fees such as the Premier program fee, and initial fees (applicable to optional programs and promotional material) in arrears (typically on the 25th of the month). Typically you will pay on the same terms on which you pay for other goods and services purchased from us or as we mutually agree (such as by the 10th of the following month). Release from Claims As part of your consideration for entering into the GNP Premier Agreement with us, you, your owners and affiliates agree to release us from any and all claims in connection with offering ABDC's Voluntary Pharmacy program. This release does not apply to any claim related to this offer of the GNP Premier Agreement. The fees described above are uniform as to all customers who sign the GNP Premier Agreement and such fees are fully earned when paid and not refundable.

Financing

We do not currently offer you any direct or indirect financing other than the payment terms included in your PVA, nor do we receive any payments from any person offering financing to or arranging financing for a prospective GNP Premier Pharmacy as part of the franchise relationship. We do not guarantee your note, lease or any other financial obligation.

Franchisee Revenue and Profit

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 of your future income, you should report it to the franchisor’s management by contacting Michael Nachman at (610) 727-7000, AmerisourceBergen Corporation, 227 Washington Street, Conshohocken, PA 19428, Attn: Michael Nachman, Esq. (Legal Department), the Federal Trade Commission, and the appropriate state regulatory agencies.