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POLICY CIRCULAR ON FRANCHISEE CATEGORY.

DTDC Courier & Cargo Ltd, Corporate Office, ‘DTDC House’ No. 3, Victoria Road, Bangalore 560 047

Tel: +91-80-25365032 / 25365039 ~ Fax: +91-80-25514461

www.dtdc.com

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DGM/CCM/4102013. 4th Oct. 2013.

Dear Channel Partners, Even after 23 years of our DTDC, which is the only Indian multinational having largest Franchisee network in the Courier Industry and second largest coverage of pin codes after Indian Postal service, we have few variety of Franchisees in our system which is creating confusion in many a time like at the time of Franchisee appointment, creating his billing structure, fixing his Royalty, fixing his book cost, giving him OTC fare or other financial benefits etc. We have also found that different Region have created different ‘Franchisee Club’ which is not as per Corporate policy and which shows an island approach within the same organization. After getting feedback and valuable suggestions from the team DTDC and senior Franchisees, the below decisions have been taken with immediate effect –

There will be no more DGM Club / COO Club etc in DTDC at any of the Regions from now.

There will be only 7 type of Franchisee in DTDC which are 1) General City, 2) General Outstation, 3) Outstation Rural, 4) Delivery Franchisee, 5) Pickup Franchisee, 6) Super Franchisee & 7) Master Franchisee.

With effect from 1st Oct.2013 all existing Satellite Franchisee will be converted to Outstation Rural category Franchisee and there will be no more Satellite Franchisee or will not be recruited further.

GICA, Greater India Channel Partner policy will continue as it is since the GICA is not a Franchisee but an associate, working under an outstation Franchisee only.

The International Master Franchisee & SPOF concept will remain as it is without any changes.

The Regional or National Franchisee Advisory Board i. e RFAB and NFAB group will remain same till their term ended or any RFAB or NFAB is changed by the Management or resigned.

In the CTBS the category of the Franchisee will show only City, Outstation, Rural, SF, MF, IMF,

SPOF, RFAB or NFAB only. No other category or designation will reflect in the CTBS hereafter. For further and better understanding of all concern we are giving below a clear cut definition of each and every category or designated and authorized Franchisee in DTDC.

City General Franchisee. A City General Franchisee is an authorized Franchisee who has paid a fixed Security Deposit and can book, pick up and deliver consignments on behalf of DTDC in his given area and sell our all products. They are paying the monthly fixed Royalty on the basis of their monthly TS average as fixed for every 6 months period by the Management half yearly once. Branding and having a Computer is a must for all City Franchisee in DTDC. The City General Franchisees can be located at Metro, State Capital or the B category city of the concern state which may be also a major business hub for that State. There is no advance TS or book Royalty charged to the City General Franchisee except special approval from CMD in few cases. These Franchisees are reporting to the city Branch or Master Franchisee, and can do business even at the outstation location or anywhere in India.

Outstation General Franchisee. An outstation Genl. Franchisee is an authorized Franchisee who has paid a fixed Security Deposit, which is lesser than the City Franchisee and can book, pick up and deliver consignments on behalf of DTDC in his given area and sell our all products. The TS rate of an outstation Franchisee is always less than a city Franchisee since most of them are located away from city may be at district head quarter or at C grade



Tel: +91-80-25365032 / 25365039 ~ Fax: +91-80-25514461

www.dtdc.com

2

Contd – page 2. small town, which are basically having less business potentiality comparing to city. These Franchisees are not paying fixed Royalty, except in few exceptional cases, and paying the book Royalty to the company as fixed as payable per book by the Management for his location. They are reporting to the nearest city Branch / MF office (in case of city outskirt outstation Franchisee), outstation Branch office, Sorting office or SF offices and are not authorized to do business or pick up from a City location, without any written approval from the Regional head . In case of violation of this the Franchisee can be suspended or even terminated by the Management at any point of time. The outstation genl. Franchisee is paying OTC charges or some times even advance TS along with the consignment book cost other than the fixed book Royalty. Branding and computer is also compulsory for all outstation genl. Franchisee.

Outstation Rural Franchisee An outstation Rural Franchisee is an authorized Franchisee who has paid a fixed Security Deposit, which is lesser than the City or Outstation General Franchisee and can book, pick up and deliver consignments on behalf of DTDC in his given area and sell our all products. An Outstation Rural Franchisee is located in a Taluka or village or a remote location but not at the District head quarter or nearby a city area. These Franchisees TS rate are less than the city or outstation general Franchisee or in many places they enjoy a discount on the TS bill. The book Royalty fixed per book for the outstation rural Franchisee is very less since those remote locations are purely service locations and there is very less scope of business for them in return. Company pays one way OTC bus or train fare to the outstation rural Franchisees if there is no other connection facility available. The OTC Bus fare or train fare facility is given case to case basis to an outstation Rural Franchisee till he reaches a total TS and book sale of Rs.50,000/- average per month in any single quarter. For the Rural Franchisee who is consuming 5 or below 5 CN book in a month, there is no Royalty applicable for him .The outstation rural Franchisees are reporting to the nearest Branch or SF office and not authorized to do business at any outstation Franchisee location or city general Franchisee location and if found so the Franchisee can be suspended or even terminated. Branding of those Franchisees is also compulsory for at least 2-3 star rating.

Delivery Franchisee. These group of delivery Agent or Franchisees are only delivering the DTDC consignments and not authorized to have any office with DTDC Board for any booking or doing business. They are paid delivery charges on per shipment or per KG basis product wise and area wise as per agreement only, by the Branch/Regions. As a network base company we never encourage to recruit a delivery Franchisee, and this restricted appointment should be only need based and approved by the Zonal heads only. But for delivering Non Docs in city or even outstation selected location delivery Franchisee can be recruited.

Pickup Franchisee. The pickup Franchisee system also is not encouraged in our system and the pickup Franchisee can’t be recruited in normal situation since this is a punishment process for an existing Franchisee who does not deliver correctly or having huge service issues with him. These Franchisees Security Deposit will be higher than other general Franchisee as per the area and they are not given any delivery, though they are authorized to do business or bookings and sell all our products. Their book cost and TS rates are always 30% higher than all other Franchisees of that location (city or outstation) and Royalty also is very high. Contd. to page 3.



Tel: +91-80-25365032 / 25365039 ~ Fax: +91-80-25514461

www.dtdc.com

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Super Franchisee. A Super Franchisee must be senior and at least 5 years old existing Franchisee of the company who is having a leadership quality and ready to pay an additional Security Deposit as per the potentiality of the area and invest as per the requirement of the company. The SF will be running a Branch like our BM and managing the network expansion, Branding, sale of all DTDC products, dues collection, HR/administration and service of that Branch, where all the nearby Franchisees will report and will receive their deliveries or connect their loads from his office. The SF have to invest for the minimum or additional required manpower or other infrastructure and facilitate the reporting Franchisees all service requirement for their business growth and ensure 100% timely connection. Since he will be playing a role of a BM, he will own the Branch Budget and attend all review meet and produce profitability as a biz head. He will be responsible for network expansion, branding, computerization, service efficiency with 100% data capture under his Branch and biz growth of fellow Franchisees. A SF can be given an existing outstation Branch as well as it can be also opened in new area where company wants to open a Branch for the network and biz growth or to give more service support to the existing Franchisees falling under that area. The SF can be from the same area or can be from any other area but preferably from the same Region or at least should have a SF partner from the same area or the Region. Both the partners must be having DTDC Franchisee at least for since more than 5 years.

Master Franchisee. This is a similar concept like Super Franchisee, but should be in a city location only, not outstation. In other words a SF can be given at outstation only and if it is in city then he will be called a Master Franchisee only, not Super Franchisee. All other terms of a MF is similar like SF except the financials. In case of MF the Branch also can be an existing city Branch or a new proposed Branch consisting of at least 10-12 Franchisees falling under that MF who he has to lead them as a Branch head. Like a SF, the MF should be also minimum 5 years experienced Franchisee and is responsible for the biz growth, network, Branding, service, 100% data capture, collection of outstanding etc. and will be owning that Branch Budget and attend all review meetings called by Company officials.

All the Franchisees in DTDC must fill up an application form and follow the recruitment process as prescribed by the Corporate Channel. The Franchisee must have a valid Agreement which is valid only for two years and unless renewed on time the CTBS code can be blocked. In case of SF, MF or new biz management module like the IMF (International Master Franchisee), SPOF (Single Pincode one Franchisee) a valid MOU (Memorandum of Understanding) with financial agreement is a must along with the application, which also must be duly approved by CMD or any other Director. The application format is same for all Franchisee and only on the top the application the same is for what, to be mentioned. In case of a FAB (Franchisee Advisory Board) member he or she must be selected and appointed by the Management through a specific process only and he must receive an appointment letter for this prestigious and voluntary post which is again valid for a two years term only. There will be no other category or group of Franchisee in this company any more other than the above said categories, unless further notification by the management.

Uttam Chakraborty. DGM, Corporate Channel Management.