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Business Description

We are a corporation organized under the laws of the State of Delaware. Our principal business address is 150 N. Dairy Ashford, Houston, Texas 77079. We do business under our corporate name and the name “Jiffy Lube.” We do not conduct business under any other name.

Prior Experience

Since 1979, we have offered franchises for the establishment and operation of lubrication, oil change and light repair businessesfor cars and light trucks under the “Jiffy Lube®” mark. We also operated company owned Jiffy Lube service centers between 1979 and 2009. We have not engaged in any other business activities, and have never offered franchises in any other line of business.

Business Offered

Jiffy Lube service centers (referred to in this FDD as “service center(s)”) offer oil change and lubrication services for cars and light trucks, as well as light repair services and other similar or ancillary products and services, some of which we require to be offered and some of which are approved, but optional. Services that are neither required nor approved may not be offered. If you enter into a Franchise Agreement (as defined below) with us, you will be required to strictly comply with the Franchise Agreement and our Policies & Procedures Manual (“Policies & Procedures Manual”), which together will govern your relationship with us. We may periodically revise the contents of the Policies & Procedures Manual, and you must comply with each new or changed standard. Our primary Jiffy Lube Signature Service® Oil Change involves changing a vehicle’s oil with up to five quarts of quality motor oil and changing the oil filter; inspecting the vehicle’s brake fluid level in transparent reservoirs, serpentine belts, car blades, antifreeze/coolant reservoir levels, engine filtration system, exterior lights, and the chassis (lubricating it when applicable); checking and filling the vehicle’s tire pressure; checking the vehicle’s vital fluids (including the vehicle’s transmission/transaxle, differential, transfer case, power steering, windshield washer and battery water, but excluding sealed batteries); cleaning the exterior windows; and vacuuming the interior floors. Jiffy Lube service centers may also offer a second type of oil change service, the Value Oil Change Plus (“VOCP”), which is targeted at value conscious consumers. VOCP is an optional service oil change service that Jiffy Lube service centers may choose to add to their service menu. Jiffy Lube requires those franchisees opening new service centers under the BTS Program, or otherwise using our funding, to participate in the Jiffy Lube Multicare® program (“Jiffy Lube Multicare Program”). If a franchisee is opening a new service center that is converting from a different concept, and the franchisee is not using any of our funding programs or not otherwise participating in the BTS Program (described further below in this section), the new service center will not be required to participate in the Jiffy Lube Multicare Program. In addition to the services that franchisees are typically required to offer under the Franchise Agreement (as defined below) and the Policies & Procedures Manual, by executing the Jiffy Lube Multicare Franchise Agreement Addendum in the form attached as Exhibit M-3 to this FDD, franchisees also agree to use certain types of equipment and to offer the following services at their service centers: (i) battery testing; (ii) battery replacement; (iii) brake replacements; (iv) brake repairs; (v) brake fluid exchange; (vi) spark plug replacement; and (vii) CV joint and boot replacements. Service centers that participate in the Jiffy Lube Multicare Program also have the option to offer certain ancillary services, which currently include, for example: (i) engine diagnostic services; (ii) light engine repairs; (iii) suspension parts replacement; (iv) shock and strut replacement; (v) tire replacement service; (vi) tire repair service; (vii) vehicle heating ventilation and air conditioning repair; (viii) wheel alignment service; and (ix) driveline replacement and repair. Service centers that participate in the Jiffy Lube Multicare Program must employ a technician that has achieved A5 certification from the National Institute for Automotive Service Excellence (ASE). If you or entities under common control or ownership with you collectively own and operate multiple service centers that participate in the Jiffy Lube Multicare Program, you must have at least one A5 certified technician for every one to five service centers in a franchisee’s entity group, although you may retain additional certified technicians at your discretion. You will also need to invest in the appropriate equipment and tools to perform these services. We may modify, discontinue, or add to our optional and/or required services and may test additional service offerings. We offer three versions of our standard form of franchise agreement for a freestanding service center. Except as otherwise indicated in this FDD, we refer to all versions collectively as the “Franchise Agreement.” The first two versions of the Franchise Agreement described in this paragraph involve your participation in one of our products purchase programs. The first version, which is the only version of the Franchise Agreement that we offer to new franchisees (i.e., franchisees who are not a party to a currently effective franchise agreement with us or who are opening a new service center), is the SOPUS Products/Jiffy Lube Pacesetter Program Franchise Agreement (or “Pacesetter Franchise Agreement”). The Pacesetter Franchise Agreement enables the franchisee to participate in the Pacesetter Program (defined below). The second version of the Franchise Agreement is the SOPUS Products/Jiffy Lube Fast Lube Program Franchise Agreement, also known as the “New Way Forward Franchise Agreement” (“NWF Franchise Agreement”), and is only offered to franchisees that currently participate in the Fast Lube Program (defined below). These product supply franchise agreements may be referred to collectively as the “Product Supply Franchise Agreement.” The third version of our standard form of franchise agreement is referred to in this FDD as the “Non-Product Supply Franchise Agreement” and does not permit the franchisee to participate in one of our products supply purchase programs, described in the following paragraph. Under both the SOPUS Products/Jiffy Lube Pacesetter Program (“Pacesetter Program”) and the SOPUS Products/Jiffy Lube Fast Lube Program (“Fast Lube Program”), the franchisee will: (i) pay a reduced royalty fee, (ii) acquire and use in connection with its operation of its franchised Jiffy Lube service center certain products supplied by our affiliate, SOPUS Products, and (iii) contribute to the Jiffy Lube National Advertising Fund (“NAF”), as described in Items 6 and 11 below. (These product supply programs may be referred to collectively as the “Product Supply Program.”)

Initial Fees

Product Supply Franchise Agreements Under the Product Supply Franchise Agreement, the franchise fee for a new service center (that is, a service center that either has never operated before or has operated for less than a year under a trade name other than “Jiffy Lube”) is $35,000, of which $10,000 is paid when the Franchise Agreement is signed, and the balance of which is paid on the 15th day of the month after the month in which the service center opens for business. While the $10,000 is earned upon the execution of the Franchise Agreement, and the balance is earned on the 15th day of the month after the month in which the service center opens for business, neither amount is refundable. All service centers developed under the BTS Program are considered “new” service centers. The franchise fee for an operating service center that is being “converted” into a Jiffy Lube service center is $17,500, all of which is paid when the Franchise Agreement is signed. The $17,500 fee is earned upon the execution of the Franchise Agreement and is not refundable even if you decide not to proceed with the proposed conversion. Franchisees will be eligible for the “conversion” discount if they independently locate an existing quick lube service center operating under a trade name other than “Jiffy Lube” that has been in continuous operation for at least 12 months preceding the effective date of the Franchise Agreement, and seek to convert the existing business into a Jiffy Lube® service center. Under the Product Supply Franchise Agreement, you will pay an initial franchise fee of $7,500 if you are relocating your Jiffy Lube service center (a “Relocated Center”). For purposes of this paragraph, a Relocated Center will exist if (a) you are already a Jiffy Lube franchisee, (b) we agree that you may close an existing Jiffy Lube service center and terminate the Franchise Agreement for that service center more than five years before its initial term would otherwise expire (we are under no obligation to agree to this), (c) we have accepted the proposed Relocated Center as a replacement for the closed service center, (d) the proposed Relocated Center is within the same basic trade area (three mile radius) of the service center to be relocated, and (e) the proposed Relocated Center does not interfere with the three mile trade area protected for another service center not operated by you. You must sign the Product Supply Franchise Agreement for the Relocated Center and pay the relocation fee on such signing. The term of the “relocated” Franchise Agreement will be equal to the balance of years that would have been left on the terminated Franchise Agreement. Under the Product Supply Franchise Agreement, you will purchase certain products from our affiliate, SOPUS Products. We estimate that you will purchase approximately between $20,000 - $30,000 worth of these products before you open your Jiffy Lube service center. Service Centers built under the BTS Program will not qualify as “Relocated Centers.” Non-Product Supply Franchise Agreement There is no initial franchise fee under the Non-Product Supply Franchise Agreement, which is only offered (in very limited circumstances, depending on the language contained in the underlying franchise agreements) to franchisees that seek to renew an existing Non-Product Supply Franchise Agreement, or seek to purchase an existing service center operating under a Non-Product Supply Franchise Agreement. However, under the Non-Product Supply Franchise Agreement, you will pay a relocation fee of $7,500 if you are relocating your Jiffy Lube service center to a Relocated Center. The term of the “relocated” Franchise Agreement will be equal to the balance of years that would have been left on the original Franchise Agreement. For purposes of this paragraph, a Relocated Center will exist if (a) you are already a Jiffy Lube franchisee, (b) we agree that you may close an existing Jiffy Lube service center and terminate the Franchise Agreement for that service center more than five years before its initial term would otherwise expire (we are under no obligation to agree to this), (c) we have accepted the proposed Relocated Center as a replacement for the closed service center, (d) the proposed Relocated Center is within the same basic trade area (three mile radius) of the service center to be relocated, and (e) the proposed Relocated Center is not located within the protected trade area of another service center owned or operated by us, our affiliates, or another franchisee. Other Information If you are a party to an area development agreement with us, and if that area development agreement provides a different initial franchise fee for a new Jiffy Lube service center, then as long as your area development agreement is in effect, it will govern the franchise fee you must pay for each new Franchise Agreement you enter. If you are developing a new service center under the BTS Program, you will be required to pay a security deposit equal to the amount of one month’s rent as identified in your Build to Suit Sublease Agreement. We estimate that monthly rent can range from $8,000 to $20,000 per month and therefore, this would be the associated dollar range for a security deposit. The actual amount will depend on the final development cost of the new service center. The initial $10,000 of the $35,000 franchise fee for a new Jiffy Lube service center is not refundable. However, if we terminate the Franchise Agreement before the remaining $25,000 balance is due (as we may, for example, if you are unable to obtain the necessary permits and begin operating the service center within the period described in the Franchise Agreement), then you will have no obligation to pay that remaining balance. Further, we may waive the initial franchise fee for honorably discharged U.S. military veterans, at our option. We or our affiliates may, at our own discretion, from time to time, offer promotional programs in the recruitment of new franchisees that may include incentives, discounts, or reduced fee structures. In 2017, in two instances we waived the initial franchisee fee for military veterans.

Financing

SOPUS Products Financing SOPUS Products, our parent company, offers several financing programs for its customers, including our franchisees. These programs are described in the charts and notes below. These charts describe programs that are being offered as of the date of this FDD. These programs may be discontinued or modified at any time without notice to us or our franchisees, and new programs may be introduced. In unique situations, SOPUS Products or its subsidiaries may enter into unique financing arrangements with any of its customers (including our franchisees) that are different from the programs described in this chart. For franchisees signing the Non-Product Franchise Agreement, SOPUS Products may provide business development funds as described in the following chart. In connection with this chart, you should also refer to Exhibit O to this FDD (SOPUS Products Security Agreement). (a) Initial Advanced Funding If you meet the eligibility criteria as described in Exhibit M to the FDD, the amount of the initial advanced funding that may be provided to you will be determined by the following formula: previous 12 months’ car count for all of your service centers (as determined by SOPUS Products), multiplied by 1.3 gallons, multiplied by 85%, multiplied by five, multiplied by the Advanced Funding Rate, minus conversion funds provided in accordance with the Product Supply Agreement, if any. The initial advanced funds received, if any, must be repaid by purchasing from SOPUS Products certain qualifying products at prices that include a repayment surcharge, as further described below. The Advanced Funding Rate is 35¢ per gallon and may be increased or decreased by SOPUS Products on 30 days’ notice, but will not be less than 35¢ per gallon. (b) Advanced Funding Provided you meet the eligibility criteria set forth in the Product Supply Agreement, on the fifth anniversary of the effective date of the Product Supply Agreement and on every fifth anniversary thereafter (or earlier if there are no funds outstanding or if you repay any previously received funds before the fiveyear anniversary), you will be eligible to receive advanced funding in five year increments (or less if the Product Supply Agreement expires in less than five years). The amount of the advanced funds, if any, will be determined by SOPUS Products taking into consideration your credit worthiness and the previous 12 months’ car count for all your service centers multiplied by 1.3, multiplied by 85%, multiplied by the number of years (one to five or a fraction thereof rounded to the nearest month) to be funded, multiplied by the Advanced Funding Rate. The advanced funds received, if any, must be repaid by purchasing from SOPUS Products certain qualifying products at prices that include a repayment surcharge, as further described below. The Advanced Funding Rate is currently 35¢ per gallon, and may be increased or decreased by SOPUS Products on 30 days’ notice, but will not be less than 35¢ per gallon. (c) Growth Funding Provided you meet the eligibility criteria set forth in the Product Supply Agreement, you may receive funding from SOPUS Products for the building, acquisition or conversion of new-to-SOPUS Products or JLI service center(s) (the “Growth Funds”) as agreed by the parties. For any new-to-SOPUS Products or JLI service center you add to the Product Supply Agreement, you will be entitled to receive Growth Funds if and only if the service center (1) is not then a Jiffy Lube service center, or (2) after having purchased bulk products from SOPUS Products on or after February 8, 2011, the Service Center has not ceased purchasing bulk products from SOPUS on or before February 8, 2016, or (3) was not purchasing bulk products from SOPUS before February 8, 2011 and, (4) has not previously received Growth Funds for the newly built, acquired or converted service center. The amount of the Growth Funds that may be provided to you will be determined by the following formula: the Growth Funding Rate multiplied by (1) the actual car count for the service center to be added, if available, if the service center is a Jiffy Lube franchisee or if not a Jiffy Lube franchisee, by (2) the trailing 12 months’ average per store annual car count of Jiffy Lube service centers in the DMA where your service center will be located, multiplied by 1.3, multiplied by 85%, multiplied by up to five years (or a fraction thereof rounded to the nearest month), but in no event longer than the applicable term of the Franchise Agreement for the service center. A “DMA” is a geographic area in the United States in which local television viewing is measured by the Nielson Company. SOPUS Products has the right to designate an alternate third party media and marketing research firm to identify DMAs, or may choose another method of estimating average per store annual car counts for the additional service center(s) you wish to operate, at SOPUS Products’ sole discretion. The amount of the Growth Funds to be repaid by you to SOPUS Products will be determined by taking the then-current repayment rate dividing it by the growth funding rate and multiplying the result by the amount of the Growth Funds paid to you. (d) Jiffy Lube Multicare Growth Funding. If you receive Jiffy Lube Multicare Growth Funding, you will not be eligible to receive Growth Funding, and/or Advanced Funding as described above. Provided that (1) you are not in default of the Product Supply Agreement or the Franchise Agreement, (2) you are in full compliance with the Product Supply Agreement and the Franchise Agreement, (3) you are enrolled in and in full compliance with the Jiffy Lube Multicare Program, (4) SOPUS Products determines in its sole and absolute discretion, at the time of each disbursement, that your credit worthiness is acceptable, and (5) all accounts receivable and all notes or guarantees that SOPUS Products, JLI, or their affiliates enter into with or for your benefit, including but not limited to PLCAC CitiCorp notes and UNL Program loans, are current and not in default, you will be eligible to receive additional funding from SOPUS Products for the building, acquisition or conversion of new-to-SOPUS Products or new-to-JLI service center(s) (the “Jiffy Lube Multicare Growth Funds”) at the time the new Exhibit A to the Product Supply Agreement is agreed to by the parties as set forth in 1(r) of the Product Supply Agreement. For any new-to-SOPUS Products or new-to-JLI service center you add to Exhibit A to the Product Supply Agreement, you will be entitled to receive the Jiffy Lube Multicare Growth Funds if and only if such service center (1) is not then a Jiffy Lube service center, and/or (2) has not previously received Growth Funds or Jiffy Lube Multicare Growth Funds for the newly built, acquired or converted service center. For any newly built service center(s), any applicable payment must be made by SOPUS Products within 60 days of the official opening of the service center for normal business operations Based on SOPUS Products’ review of your credit worthiness at the time of payment, at SOPUS Products’ sole and absolute discretion, any Jiffy Lube Multicare Growth Funds would be paid to you either (a) within 30 days of you qualifying for such Jiffy Lube Multicare Growth Funds, or (b) via an alternate payment schedule. The amount of the Jiffy Lube Multicare Growth Funds that may be provided to you will be determined by the following formula: the Jiffy Lube Multicare Growth Funding Rate multiplied by (1) the trailing 12 months’ actual car count for the service center to be added, if available, if the service center is a JLI franchisee or, if not a JLI franchisee, by (2) the trailing 12 months’ JLI regional average per store annual car count (as determined by JLI in its sole discretion) multiplied by 1.3 multiplied by 85% multiplied by up to five years (or a fraction thereof rounded to the nearest month), but in no event longer than the applicable term of the franchise agreement for that service center. The amount of the Jiffy Multicare Growth Funds to be repaid by you to SOPUS Products in accordance with Article 4(f) of the Product Supply Agreement will be determined by taking the then current Jiffy Multicare Repayment Rate (defined below), dividing it by the Growth Funding Rate, and multiplying the result by the amount of the Jiffy Lube Multicare Growth Funds paid to you. For example, if SOPUS Products paid $1,000 in Jiffy Lube Multicare Growth Funds to you, you must repay $0.50 (the “Jiffy Lube Multicare Repayment Rate”) divided by $1.00 (the “Growth Funding Rate”) = 50% x $1,000 = $500. Note that the amounts described in the above example are those in effect as of the Effective Date and are subject to change as described in the Product Supply Agreement. (e) Jiffy Lube Multicare Advanced Funding If you receive Jiffy Lube Multicare Advanced Funding, you will not be eligible to receive Growth Funding, and/or Advanced Funding as described above. Provided that (1) you are not then in default of the Product Supply Agreement or the Franchise Agreement, (2) you have repaid the Funds received, if any, in accordance with the terms of the Product Supply Agreement, (3) you are in full compliance with the Product Supply Agreement and the Franchise Agreement, (4) you are enrolled and in full compliance with the Jiffy Lube Multicare Program, (5) SOPUS Products determines in its sole and absolute discretion, at the time of each disbursement, that your credit worthiness is acceptable, (6) all accounts receivable are current, and (7) all notes or guarantees that SOPUS Products, JLI, or their affiliates enter into with or for your benefit, including, but not limited to, PLCAC CitiCorp notes and UNL Program loans, are current and not in default, you will be eligible to receive Jiffy Lube Multicare Advanced Funding. If there are no Funds outstanding, you will be eligible to receive Jiffy Lube Multicare Advanced Funding in five year increments (or less if the Agreement expires in less than five years). The amount of such Jiffy Lube Multicare Advanced Funding, if any, will be determined by SOPUS Products taking into consideration your credit worthiness and the previous 12 months’ car count for all the service centers multiplied by 1.3 multiplied by 85% multiplied by the number of years (one to five or a fraction thereof rounded to the nearest month) to be funded, multiplied by the Jiffy Lube Multicare Advanced Funding Rate. Based on SOPUS Products review of your credit worthiness at the time of payment, at SOPUS Products sole and absolute discretion, Jiffy Lube Multicare Advanced Funding will be paid by SOPUS Products either (a) within 30 days of you qualifying for the Jiffy Lube Multicare Advanced Funding, or (b) via an alternate payment schedule. Such Jiffy Lube Multicare Advanced Funding received, if any, will be deemed Funds for purposes of the Agreement and repaid as set forth in Article 4(f) of the Product Supply Agreement. If you are eligible to receive Jiffy Lube Multicare Advanced Funding but have not repaid previous funds loaned to you by SOPUS Products, you may either: 1. repay to SOPUS Products any outstanding Funds amount via ACH (in accordance with the instructions in Article 10(f) of the Product Supply Agreement, or other payment method that may be designated by SOPUS Products, and then be eligible to either (a) receive additional Jiffy Lube Multicare Advanced Funds for another five year increment (or less if the Product Supply Agreement expires in less than five years) and the amount will be determined by SOPUS Products at its sole discretion by taking into consideration your credit worthiness and the last 12 months’ service center car count as described in Article 4(e)(ii)(I) of the Product Supply Agreement, or (b) move from funded pricing to unfunded pricing (as such terms are defined above); or 2. defer eligibility to receive any Jiffy Lube Multicare Advanced Funding until such time as you have repaid the Funds; or 3. request that SOPUS Products determine the amount of Jiffy Lube Multicare Advanced Funding you may be entitled to for the next five-year period as if you had repaid the Funds in full, as described above and have SOPUS Products deduct from the additional Jiffy Lube Multicare Advanced Funding the amount of the outstanding Funds.

Franchisee Revenue and Profit

On your reasonable request, we will make available written substantiation of the data used in preparing the following information. This Item 19 sets forth certain historical data. The following tables show sales and vehicle counts of franchised stores for each of the full 2018, 2017 and 2016 calendar years. All franchised service centers which were open for 12 full months in each respective year are included in the tables below. Certain of the franchised service centers participated in optional programs, such as the Jiffy Lube Brakes & Services program and the extended automotive repair and maintenance services program. The sales reported is Gross Sales, which means all receipts for goods and services sold in the ordinary course of business, excluding sales tax, coupons, discounts, proceeds of sales of recovered materials and amounts refunded to customers. This number is the basis for payment of royalty fees. Vehicle count reported is the total number of separate customer transactions experienced by a store. Although a store may have serviced the same vehicle on multiple occasions during the calendar year, each occasion would be reported as one vehicle. All data for all stores is reported daily through a point of sale computer system. These figures have not been audited, although we believe them to be reliable. The Sales Tables and Vehicles Count Tables are broken into four quartiles. Each quartile displays ranges of “High,” “Average,” “Low,” and “Median” annual Gross Sales vehicle counts, and the number and percentage of franchised service centers that exceeded the average in each quartile. The total system is also displayed with the ranges of High, Average, Low and Median for each and the percentage of service centers that exceeded the average. For purposes of this Item 19, “Net Adjusted Sales” are calculated as sales minus promotions, warranty, non-royalty income, and any national billed fleet discounts. Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much. If a store has been open for the full 12 months of any one-year period, the sales amount used in the calculation of the average net adjusted sales in the above chart is the store’s actual net adjusted sales for the store. If a store has been open for less than a full 12 months of any one-year period, the sales amount used in the calculation of the average net adjusted sales in the above chart is derived by subtracting sales from the first month the store was open from total sales, dividing the remaining number of full months the store was open, multiplied by twelve. Other than the preceding financial performance representation, we do not make any financial performance representations. 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 Matthew Coward, Esq., 150 N. Dairy Ashford, 6th Floor, Houston, Texas 77079, (832) 337- 1767, the Federal Trade Commission, and the appropriate state regulatory agencies.