Key Items to Watch out for in the SUNOCO RETAIL LLC 2020 FDD

Certain states require that the following risk(s) be highlighted: 1. Out-of-State Dispute Resolution. The franchise agreement and development agreement require you to resolve disputes with the franchisor by mediation, arbitration and/or litigation only in Texas. Out-of-state mediation, arbitration, or litigation may force you to accept a less favorable settlement for disputes. It may also cost more to mediate, arbitrate, or litigate with the franchisor in Texas than in your own state. 2. The franchise agreement and development agreement state that Texas law governs the agreement, and this law may not provide the same protections and benefits as local law. You may want to compare these laws.

Item 5: Initial Fees

Initial Franchise Fee You will pay us an initial franchise fee of $15,000. The franchise fee is payable in full when you sign the franchise agreement. The initial franchise fee is refundable if we do not execute the franchise agreement for any reason, or if we are unable to timely fulfill certain obligations during construction of a CODO franchise. The initial franchise fee is otherwise fully earned upon receipt and is non-refundable.The initial franchise fee is generally calculated uniformly forall franchisees, however we reserve the right to waive or modify the initial franchise fee in circumstances where the location proposed to be franchised has been operating as a convenience store under a different trade name/trademark for a continuous period of not less than 18 months immediately preceding the date of the initial APLUS franchise offering, or where the APLUS franchise operation is located on a toll road. In addition, we reserve the right to modify or reduce the franchise fee for multi-site franchisees. If you choose to operate your franchise in a Captive Market, wemay charge a supplemental franchise fee (“Supplemental Franchise Fee”) ranging from $15,000 to $300,000. You may pay additional fees to state, county, or other government agency for your right to operate in a Captive Market. The amount and applicability of such a fee is determined solely by us based ona number of factors, including, but not limited to, historical store performance, sales volume, the amount paid by us or an affiliate to purchase the APLUS Store and the value of the goodwill of the APLUS Store.

Development Agreement If we grant you multi-unit development rights to operate APLUS with or without a fueling station, you will sign our Development Agreement and pay us a non-refundable development fee (“Development Fee”) equal to 100% of the initial franchise fee payable under the franchise agreement for the first Store (i.e., $15,000), plus 50% percent of the discounted initial franchise fee for each additional Store to be developed. For example, if you sign a development agreement for four Stores, you will pay a development fee of $37,500 [$15,000 + ($7,500 x 3) = $37,500]. When you sign the Development Agreement, you also will sign a franchise agreement for the first APLUS Store and/or SUNOCO fueling station, and we will credit part of your development fee payment to fully satisfy the initial franchise fee due under that agreement. As you get ready to develop additional APLUS Stores and/or SUNOCO fueling stations, you will sign our then-current form of franchise agreement. The terms of our then-current form of franchise agreement may be materially different than the terms of our current franchise agreement, but the initial franchise fee willbe locked in at the discounted rate described above. When you sign the second or subsequent franchise agreements, we will credit $7,500 of your development fee payment toward payment of the initial franchisefee due under the franchise agreement, and you will pay us the $7,500 balance.

Item 8: Restrictions on Sources of Products and Services

In order to assure uniformity and consistency in all APLUS Stores, we require you to sell specific brands of merchandise at your APLUS Store. The Manual sets forth minimum standards of quality and variety of merchandise offered for sale by you, specifications for equipment, uniforms and certain products. We will provide you with store-specific schematics (layouts), merchandise planograms and vendor-approved racks to which you must conform. We specify planograms by storedesign and provide such planograms for local merchandise options subject to our prior approval. We will approve suppliers, including manufacturers, distributors, and other sources who demonstrate to our continuing, reasonable satisfaction the ability to meet our uniform standards and specifications and who possess adequate quality controls and capacity to supply your needs promptly and reliably (“Approved Suppliers”).

We will provide you a list of Approved Suppliers that will be incorporated in the Systems Manual. We will remove the status of a previously Approved Supplier by notifying you in writing of the revocation and the reasons for the revocation. We reserve the right to designate specific suppliers for specific merchandise and programs, including but not limited to, promotional programs (“Designated Specific Suppliers”). For goods and services that you are not required to purchase from an Approved Supplier, you may select any supplier at your discretion. However, we determine that a particular supplier does not meet our quality standards, including the favorable public image of the APLUS Program, we will notify you in writing and you must promptly discontinue purchasing from that supplier. At our discretion, Approved Suppliers may also make their products and services available to SUNOCO franchisees.

If you desire to purchase any of the items specified in this Item 8 from a supplier that is not an Approved Supplier, you or the supplier must submit to us a written request for approval. We have sole discretion over the approval of such suppliers. At a minimum they must demonstrate the ability to meet our standards and specifications and possess adequate quality controls and capacity to supply your needs promptly and reliably. We may inspect the proposed supplier’s facilities, and require that we receive samples from the proposed supplier for testing prior to granting or denying approval. We may impose a charge that does not exceed the reasonable costs of our inspection and testing. This charge may be paid by you or the proposed supplier. We may re-inspect the facilities and products of any supplier at any time, and may revoke the prior approval if we determine that the supplier does not meet the quality standard that is consistent with the favorable public image of the APLUS Program. The APLUS Agreement imposes no time period in which we are required to exercise our right of approval or disapproval. All suppliers approved by us are required to sign an agreement indemnifying us for the supplier’s products, actions and services. We reserve the right to establish maximum retail prices, subject to law, for certain convenience store products, specified by us, and for participation in certain APLUS promotions prices must be consistent with the advertised price. If you operate a Captive Market Franchised Business, you may be subject to any pricing constraints applicable to the concession and/or lease agreement.

You are required to purchase the following items from our Approved Suppliers or Designated Specific Suppliers: ? Food service products and supplies including all APLUS proprietary breakfast and grab & go sandwiches, cups, wrappings, containers and napkins; ? Store equipment, signs, interior/exterior graphics, promotionalmaterials; ? Fixtures, furnishings, ? Our designated proprietary, trademark, trade dress, service mark, logo, and insignia items, including retail merchandise, ? D?cor, supplies, and other items that bear the APLUS trademarks, ? Uniforms, ? Back office software and hardware, and ? Electronic Point-of-Sale (EPOS) and Data Transmission and Telecommunications Equipment. We or our affiliates are the only Approved Supplier for the following categories of goods and services: ? Store equipment, ? Signs, promotional materials, ? Interior/exterior d?cor items, ? Fixtures, furnishings and other materials required for the operation of the APLUS Store, and ? Motor fuel if operating a SUNOCO fueling station. In the event of an APLUS Store conversion, the existing equipment will be reviewed by us for conformance to our specifications. Before commencing operations, the approval for the continued use of existing equipment must be obtained by us. The purchase of the items described in this Item 8 from Approved Suppliers can reasonably represent up to 40% – 55% of your initial investment in your APLUS Store.Sunoco may derive revenue from the lease or sale of products and services to you. In the year ending December 31, 2019, Sunoco’s revenues from the sale of these products and services were a de minimus percentage of Sunoco’s total revenues.

Recommended Wholesale Providers Sunoco has currently designated McLane Company, Inc. as the recommended wholesale supplier of candy, tobacco and snack products and other general merchandise and goods for our APLUS franchisees. We refer to such a supplier as a “Recommended Wholesale Provider”. We may designate other Recommended Wholesale Providers during the term of the franchise.

Money Order Program We recommend a money order program for sale to the public through Sunoco-approved money order supplier(s) as specified in the Systems Manual. Money order fees are determined by you, but should be competitive with those in your community. You are required to comply with all local, state and federal laws regarding the sale of money orders.

Required APLUS Programs We require you to participate in the following APLUS Programs and provide such products or services accordingly and in accordance with our Systems Manual. ? Hot Dispensed Beverages Program, ? Cold Dispensed Beverages Program, ? Food and Food Service Program ? Prepaid Program (i.e. prepaid phone cards and similar products), ? ATM Program (unless otherwise restricted), ? Air and Vacuum Program, and ? All other promotional programs we may designate.

Required APLUS Programs Requiring State Agency Licenses We also require you to participate in the following state agency licensed programs (unless prohibited by regulation or statute) and provide such products or services accordingly and in accordance with our Systems Manual. ? Beer and Wine Program, ? Tobacco Products and Tobacco Compliance Program, and ? Lottery/Lotto/Multi-State Program

Other APLUS Programs The Customer Best Program has been developed to ensure a consistently positive customer buying experience among all APLUS retailers. This will be executed via scheduled mystery shops and/or customer surveys, which will be used as a tool to help improve the APLUS brand image, ensure a consistently positive customer buying experience among all APLUS retailers and provide improved communications between APLUS and franchisees. We reserve the right to charge a fee for this service. We have developed certain other proprietary programs to provideofferings to APLUS consumers. You are required to fully participate in any program, or other specific merchandise programs, designated by us from time to time as described in the Manual, which may include, but is not limited to, proprietary programs, specific product offerings and/or promotions (such asfoods and beverages identified by us), approved prepaid programs such as gift cards, phone cards, and other related telecommunications products, ATM program, and APLUS rewards and/or loyalty program, which may change periodically (collectively, “Proprietary Programs”). We will work with you in determining whether any such APLUS Proprietary Programs are appropriate for your store. If so, you agree to purchase all ingredients, materials and items required for each APLUS Proprietary Programfrom Sunoco’s Designated Specific Suppliers. We reserve the right to amend, supplement or discontinue any program described in this Item 8 in whole or in part at any time during the term of the franchise upon written notice to you.

APLUS Rebates, Allowances and/or Purchase Agreements McLane Company, Inc. has entered into arrangements with certainsuppliers that provide discounts or rebates to Sunoco/APLUS franchisees. The amounts of such rebates or discounts may vary based on the volume of purchases made by the APLUS Stores and are paid either: (i) by the supplier directly to the franchisees; or (ii) by the supplier to us and distributed to our franchisees on an equitable basis; or (iii) placed in the APLUS Store advertising account for the benefit of all APLUS Stores. Suppliers’ allowances may be paid directly to us or to a distributing wholesaler to fund off-invoice allowances provided to your store by the wholesaler. There are no purchasing or distribution cooperatives currently established.

Insurance Coverage Prior to the commencement of and during the term of your franchise, you are required to obtain and maintain in full force and effect, for the mutual benefit of you and us, insurance through a financially responsible carrier (with a rating of “A-” or better by A.M. Best) acceptable to us which is primary as to any other valid collectible insurance. Sunoco Retail LLC Its Subsidiaries & Affiliates must be included as an “Additional Insured” on all policies. . ** Excess Liability coverage may be waived if you carry $1,500,000 General Liability coverage. Prior to commencement of your APLUS Agreement, you shall provide to Sunoco a certificate of insurance coverage as required above, satisfactory to us. A renewal certificate of such policy shall be furnished to us prior to and no later than seven days before each policy renewal date. Each certificate shall include a provision that such policies may not be canceled or materially changed withoutprior written notice to us. You must keep the required insurance coverage in full force and effect during the term of the franchise. Failure to do so is a material breach of the APLUS Franchise Agreement and, if applicable, we may immediately suspend motor fuel delivers to your APLUS Store. If you operate a Captive Market Franchised Business, you may berequired to maintain additional insurance separate, and over and above that set forth in this Item 8.

Item 10: Financing

We do not offer direct or indirect financing. We do not guarantee your note, lease, or other obligations.

Item 12: Territory

Your APLUS franchise is for a specific location approved by us and you may not relocate it or establish additional APLUS stores without our written approval. You may not relocate the APLUS Store without our prior written consent. Unless we grant you development rights under a Development Agreement, we do not grant you any options or rights of first refusal to acquireadditional franchises. The APLUS franchise is non-exclusive. You will not receive an exclusive territory or any type of protected territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands that we control. You must comply with our system standards regarding soliciting consumers to choose to patronize your APLUS Store. We are not restricted from soliciting consumers and we are not required to pay you compensation for any related sales. We operate 18 company-owned APLUS Stores in the State of New Jersey. We are not restricted from operating company-owned APLUS Stores in close proximity to yourAPLUS Store, either under the APLUS trademark or other marks. Our training programs are available at our designated training facility for your staff and for our staff. In addition, with respect to motor fuel sales, our affiliate, Sunoco, operates or supplies retail outlets throughout its marketing area with Sunoco or various branded motor fuel which may or may not compete with you for motor fuel sales.

Development Agreement Under the development agreement, we grant you the right to develop and operate a specified number of Stores at sites in a specified development area. The development area will be identified on Attachment B to the development agreement and may be described in terms of cities, counties, states, or some other designation. We reserve to ourselves all other rights, including the right to own and operate and to grant others the right to own and operate APLUS Stores outside the development area, regardless of their proximity to the development area, and in “Captive Markets” located within and outside the development area. We also have the right to distribute products and services identified by the Marks, such as pre-packaged products, through alternative channels of distribution including the Internet. We are not required to compensate you if we exercise any of the rights specified above inside your development area. If you fail to meet any of your obligations under the development agreement, including the development schedule obligations, we may (i) terminate or modify any territorial protections granted to you, (ii) reduce the size of the development area, or (iii) reduce the number ofStores which you may establish under the development schedule. There are no other circumstances that permit us to modify your territorial rights under the development agreement. After the expiration of the term of your development agreement, we may own, operate, franchise, or license others to operate additional APLUS Stores anywhere, without restriction, including in your development area.

Item 15: Obligation to Participate in the Actual Operation of the Franchise Business

You must either operate the APLUS Store as a sole proprietor orin a form of business organization approved by us. In addition, prior to entering into the Franchise Agreement, you are required to show proof satisfactory to us of your United States citizenship or permanent residency status. We require that you be directly involved in the operation of your APLUS Store, devoting good faith and best efforts to the daily operation the APLUS Store. If you operate the APLUS Store as a sole proprietor, then you shall also be the Designated Manager. If you operate the APLUS Store as an approved form of business organization, then you are required to designate a Designated Manager who must devote his/her good faith and best efforts to the daily operation of the APLUS Store. If you operate under any approved form of business entity, u n l ess we agree otherwise, the Designated Manager must be the 51% owner of the voting stock or other ownership interest in the entity. You, or your Designated Manager, must attend and successfully complete to our satisfaction all required training programs and provide ongoing training, guidance and supervision to all of your employees. Before you commence operations, you must successfully complete our initial training program (see Item 11). You are responsible for insuring that those managing or employed at the APLUS Store know how to operate the store in a safe and proper manner, which includes, but is not limited to, having an employee present at your APLUS Store during all operating hours who has the ability to communicate with the public in the English language. If the franchisee is a business entity, each owner must sign anUnlimited Guaranty and Assumption of Obligations substantially in the form attached as Attachment 3 to the franchise agreement. Any individual who attends our initial training program and your Designated Manager must sign a non-disclosure and noncompetition agreement substantially in the form attached as Attachment 2 to the franchise agreement.

CODO and DODO APLUS franchises: If you operate a single APLUS Store, you are obligated to be present at the location no less than 40 hours per week, including 8:30 a.m. to 4:30 p.m. on at least three weekdays (Monday through Friday). If you operate two APLUS Stores, you are obligated to be present at the locations for no less than 40 hours per week combined, including 8:30 a.m. to 4:30 p.m. on atleast two weekdays at each location. You must also have at least one employee employed full time at each location who has completed successfully, to our satisfaction, the APLUS initial training program. If you operate more than two APLUS Stores, you are obligated tobe present at the locations for no less than 40 hours per week combined, at such times we may designate, and you must have at least one employee employed full time at each location who has completed successfully, to our satisfaction, the APLUS initial training program.

Captive Market APLUS franchises: In addition to the obligations stated above, you are obligated to comply with any additional operational requirements of the applicable Concessionaire and/or Turnpike, Thruway or Toll Road Authority.

Item 16: RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You may not use the APLUS Store or premises for any other purpose other than as an APLUS Store or Concurrent Operation. Minimum standards of quality and the variety of merchandise offered for sale by you and specifications for equipment, uniforms and some products are set forth in the Franchise Agreement and the Systems Manual. You are required to maintain a minimum merchandise inventory ofa type, quality, quantity and variety as provided in the Systems Manual (“Minimum Inventory Requirements”). We will provide to you a list of such “Minimum Inventory Requirements” that we may amend and/or supplement during the term of the franchise.

Subject to the restrictions described below, you may offer for sale other items of merchandise or services selected at your discretion. All inventory (or services) offered for sale shall be of a quality that is consistent with the favorable public image of the APLUS Program. Upon written notification from us, you must promptly discontinue offering for sale any item of merchandise (or services) that we have determined is not of this quality. You must adhere to our APLUS planogram designed for your APLUS Store, including floor and shelf plan specification by category. You may offer for sale other items of your choosing as long as they are approved by us. All self-serve paper goods provided to customers at the APLUS Store and all fast food products sold for immediate consumption are to be sold in standardized wrappings, cups and containers bearing the APLUS mark or as otherwise approved by us, and must be purchased from our approved suppliers. You are not limited as to the customers to whom you may offer goods and services.

Prohibited Sales You are prohibited from displaying or selling any adult/sophisticate magazines and/or any other materials that we determine are offensive to the general public or which may be prohibited from sale or display by applicable federal, state, or local laws or regulations. You are prohibited from selling marijuana of any kind (synthetic or otherwise), unauthorized drugs, drug paraphernalia of any type or nature, and “bath salts” in any form or known by any name, as further described in the Manual. Bath salts may be known as Bliss Blue Light, Blue Silk, Charge, Cosmic Blast, Disco Concentrate Bath Salts, Ivory Snow, Ocean Burst, Pure Ivory, Purple Wave, Snow Leopard, Stardust, Tranquility Bath Salts, White Dove, White Knight, White Rush, Zeus 2, Ivory Wave, White Lightening or other names. Further, the sale of drug paraphernalia, such as glass smoking pipes are also prohibited. Sales of these products can lead to criminal and civil charges as well as termination of your Franchise Agreement.

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