INFORMATION GUIDE

FRANCHISEOPPORTUNITY

Dear Prospective Franchisee,

Thank you for your interest in becoming a member of the Stirling Sports team.

The Stirling Sports brand has a clearly defined space within the marketplace based around providing a great retail experience in high foot traffic locations, providing excellent service and ranging better lines. We are continually seeking the newest, hottest products and brands that make for a compelling offer that is differentiated from our competitors.

Our experienced team and brand partners are focussed on ensuring our 48 stores nationwide offer a superior retail experience and have the latest and greatest ranges. The product differentiation, backed by the exceptional enthusiasm and quality customer service of our owner operators and their teams, gives us a point of difference.

We welcome anyone who displays a genuine interest in sports goods retail, has the financial and management capabilities and the drive and enthusiasm to succeed in business, to join our team.

We look forward to having an opportunity to meet and further discuss the Stirling Sports Franchise Systems with a view to a developing a successful long term business partnership.

Yours Sincerely,

Mark Anderson Managing Director

Wayne Turner General Manager

STIRLING SPORTS A UNIQUE OPPORTUNITY

Stirling Sports opened their first

Store on Dominion Rd in Auckland

in 1964. They have always been

about stocking the best brands and

hottest product lines and delivering a

great retail experience and service.

The group grew to twelve stores

across the North Island and in 1983

the first Stirling Sports franchises

were awarded, after investing

almost 20 years in developing and

testing the business format.

The Stirling Sports group, under the direction of the group founder and Managing Director, Colin Taylor, pioneered franchising in New Zealand and

is a founding member of the Franchise Association of New Zealand. Within a few years of issuing its first franchise, Stirling Sports became, and still

remains, the largest independently owned sports retail group in New Zealand.

Today the name Stirling Sports has powerful

brand awareness and nationwide customer

loyalty with high profile stores servicing the

community in almost all major cities and towns.

Stirling Sports continues to enjoy a strong

compound retail sales growth, sound return

on investment and offers Franchisees an

opportunity for real financial independence.

The original Stirling SportsSince — 1963

The Franchisor’s Association of Australia

and New Zealand (FAANZ) define a

franchised system as “The granting of a

licence by one person (the Franchisor)

to another (the Franchisee)”.

A Franchise is fundamentally a set of

proven business practices, operated by

a group of capable and responsible

Franchisees backed up by professional

services and support from the Franchisor.

The Franchisee is granted the right to use

the trademarks and Stirling Sports’ name,

and in return, is required to conduct the

business in accordance with the Franchise

Agreement and Business Manual which

specify the marketing, business and

operational systems and standards to

be met.

The Franchise agreement is designed to

protect the “system” developed over 5

decades for the benefit of all Franchisees

participating in that system. Stirling Sports

works diligently to uphold the quality

and standards of the Franchise System

which in turn delivers not only satisfied

customers and brand partners but profitable

business for our Franchisees.

STIRLING SPORTS FRANCHISE SYSTEM

In a study that covers more than a decade of data, the

U.S. Department of Commerce reported a rate of over 95% of Franchises succeeded in any given year compared to a failure rate of between 30% and 65% for all non-franchised

businesses.

• The Franchisee owns the right to use and trade under the Stirling Sports

brand within a designated territory

• Stirling Sports assists with site selection and lease negotiations

• Stirling Sports assists with store design and layout and initial stock planning

• In-depth management systems and in-store training, covering store operations,

budgeting, buying, use of reporting systems and group data and policies,

covering all vital information and business knowledge required to successfully

operate in sporting goods retail

• Systems for Staff recruitment, induction, sales training and product

knowledge and tracking of results

• Buying groups, which provide assistance and guidance with buying across

a wide number of categories and access to the best ranges and information

on sell through performance & holding orders for at once replenishment

business through the year

• Buying power of a nationwide chain that gives you more margin and

competitive pricing

• Multi-million dollar advertising campaigns across various media channels

and in store support in terms of point of sale material, windows and instore visits

by merchandisers

• Comprehensive set of weekly and monthly benchmarking of results covering

all KPIs

• On-going in-store support from Stirling Sports Operations Managers

covering Stock / Operations / Merchandising and Marketing / Staff Training /

IT Support

• Via regular Regional Meetings, Buying Meetings and at National Conference

the Franchisee can network with a team of experienced, motivated and

successful Franchisees

Being awarded a Stirling Sports Franchise entitles the Franchisee to many tangible benefits and significant on-going support

Franchisee Benefits and Support

Upholding the Stirling Sports system, which at its core is

about marketing, presentation of the store, product availability,

product differentiation, customer service standards and

product knowledge, is very important to us.

There is no aspect of the business, which does not, or could not involve the Stirling Sports Ltd management team.

We are available at any reasonable time to discuss any matter relative to the Franchisee’s business.

Put simply, we provide opportunities and expertise to help

our Franchisees to achieve better sales and profitability than

could otherwise be attained by standalone sports stores.

We believe communication with our Franchisees

is a top priority. Our business philosophy is to

allow data, information and ideas to flow via

regular intranet site newsletters, regular meetings

and in store visits.

This means we get access to key lines and exclusive stock at great prices, and marketing support from the brands.

We are proud to associate ourselves

with the likes of ...

FAQ

Q: What is the investment required to set up a new

Stirling Sports?

A: The following is the estimated capital required to

completely establish a new Stirling Sports franchise.

These estimates are based on a site of 200m2.

Franchise Territory Fee $40,000

Joining Fee / Training / Set Up $10,000

Stock $180,000

Signage, Fixtures and Equipment $120,000

Trading Cash Requirements $10,000

Total $360,000

The $360,000 estimated cost is based on a new site fitted

out to a Mall standard. No allowance has been made for

creditor’s funding nor allowance for landlord contributions.

The above estimated capital requirements are approximate

only and will vary depending on each and every franchise’s

individual location. We recommend that you verify all

financial assumptions with your own professional advisors.

FAQQ: What is the Franchise Fee?

A: 3.275% of turnover, there are certain elements of

the turnover that are exempt from fees

Q: What is the National Advertising Contribution?

A: 2.5% of turnover, there are certain elements of the

turnover that are exempt from fees

Q: May I see actual accounts which support and help

me make my own financial projections?

A: We do not make any predictions, warranties or

projections for your particular store, but we will make

available historical data as to the performance of existing

stores and will give you general guidance as to the sorts

of factors you and your accountant or business advisor

may wish to take into account when preparing your own

business plan, cash flow forecasts and profit projections.

Q: What financing arrangements are available?

A: Stirling Sports does not provide financing or financial

assistance. However, Stirling Sports can introduce

Franchisees to bankers who are familiar with the Stirling

Sports System Franchise and who will consider applications

from Franchisees, subject to the banks’ normal lending

criteria.

Q: What services will you provide after the business

has commenced?

A: Stirling Sports will provide ongoing support and

assistance in the following areas: buying coordination

of ranges and purchasing terms; marketing, advertising,

in store pos, windows and merchandising; IT training

and support; operational field support; weekly and

monthly performance monitoring; regular meetings on

and off site designed to support and develop your

business; and general advice concerning the use of the

Stirling Sports franchise system in your business.

FAQQ: What systems do you have for keeping Franchisees

in touch with you and each other?

A: There are weekly bench marking results and weekly

emails regarding day to day operational requirements;

fortnightly there is a newsletter covering all aspects

of the business; there are regular store visits from

Stirling Sports field support staff, both merchandisers

and operational managers. Buying meetings are held

quarterly and Regional Franchisee meetings are held

at regular intervals 3 times a year. A National Conference

is also held once a year. Stirling Sports operates a

Franchise Advisory Council (FAC) made up by elected

Franchisees that represent all Franchisees interests,

this body meets at regular intervals with the Franchise

company.

Q: Do I need retail experience to be successful?

A: Relevant business experience is ideal, although not

necessary. What we are seeking are people with the

required financial capacity, drive, ambition and the

ability to be a team player and operate within a franchise

business system.

Q: Can I speak to current Stirling Sports Franchisees?

A: Yes. We actively encourage all potential franchisees

to talk to any of our franchisees. A contact list of all

Franchisees will be made available on application.

Q: Does the Franchise Agreement permit me to sell

the business?

A: Yes provided the purchaser is approved by Stirling

Sports.

Q: Can I order directly from suppliers?

A: Yes. Individual Franchisees order directly from

suppliers under advantageous terms negotiated by the

Franchisee Company. Indicative Indent orders are written

by the Franchise Company for the stores and reviewed

by the Franchise Company when placed by the Franchisee

with the Suppliers. Holding orders of key lines will also

be exclusively available to Stirling Sports Franchisees.

STEPS TO BECOMING A STIRLING SPORTS FRANCHISEE

Stirling Sports places the utmost

importance on selecting the right

person before granting a franchise.

The financial resources available to

the candidate, while important, are

only one element in the selection

process.

Everyone who decides that they

would like to have their own business

should subject themselves to an

examination of their attitudes,

capabilities and long term goals.

The provision by the Franchise of

know how, systems and business

format does not guarantee success.

The success of any operation depends

on the Franchisee’s ability and skill

in maximising the opportunity that

the Franchise represents and in

managing the Franchise business.

Stirling Sports Ltd requires that all

new Franchisees complete an

on-line Psychometric Test through

Selector NZ Ltd. This process allows

Stirling Sports Ltd to see if the

potential Franchisee is a good fit for

the business and the group.

Franchisee Selection

STEPS TO BECOMING A STIRLING SPORTS FRANCHISEE

How to Apply for a Stirling Sports Franchise

1. You will have had to have read the information kit and know something about how Stirling Sports operates and believe that you have the enthusiasm

and drive to become a successful Franchisee. You must want to buy / set up and operate a store, this decision you must make for yourself without any external

pressure. We want the Franchisees to be keen and enthusiastic buyers. It is a very important decision for you, probably a change of your lifestyle and not

without some risk therefore the decision to apply should not be taken lightly.

Some key questions to ask yourself before you proceed are:a. Do I have the drive and passion to succeed?

b. Do I like dealing with people?

c. Am I a good communicator?

d. Am I keen to work as part of a team of Franchisees, while leading my own team?

e. Am I capable of exercising a disciplined approach to managing my business?

f. Do I have the appropriate financial resources to meet the investment?

2. If you have answered yes to the questions in step one, then we invite you to fill in the attached application form, so we can understand your background

a little better. Most potential Franchisees will be familiar with our Brand and product offer, and after reading the enclosed information will have more

understanding of the Stirling Sports business and so should be in a position to disclose their own circumstances by completing and signing the enclosed

“Statement of Personal Details” and “Deed of Confidentiality”.

STEPS TO BECOMING A STIRLING SPORTS FRANCHISEE

3. After the point where you have registered your interest, and we are in receipt of your personal data, then you may feel free to call on, or talk,

to any Stirling Sports Franchisee.

4. Once we have your application we will check out the references and request a psychometric test be completed. Assuming there is a positive

outcome we will then approve your application and begin to work closely with you against our new store / new franchisee check list and planner-gram

to ensure all elements of a new store or purchase of an existing store happen within the agreed timeframe. We will issue you a copy of our franchise

agreement for you and your legal council to review.

5. We do not ask for any payment nor deposit, nor do we ask for a For Sale and Purchase contract with you until we are both well past the point

where we have approved you as a potential Franchisee and you have had a chance to talk to our existing Franchisees, view our new store / franchisee

check list, are comfortable with the franchise agreement and have finalised the sale and purchase of an existing business or secure the lease and finance

for a new Stirling Sports business.

We look forward to receiving your signed “Statement of

Personal Details” and “Deed of Confidentially” documents

should you decide to take the next step towards investigating

owning a Stirling Sports franchise.

As previously mentioned, the process through to you owning

your own Stirling Sports needs to be carefully thought through,

investigated thoroughly and independent advice sought. At every

stage we need you to question whether you are making the

right decision, for the right reasons.

“Believe you can and you're halfway there” — Theodore Roosevelt