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					   Confidential
Franchise Overview




                     April 2003
Liquorland                                                                                                              Franchise Overview



Contents

INTRODUCTION ............................................................................................................................ 3

HISTORY........................................................................................................................................ 4

THE MARKET ................................................................................................................................ 5

         STATEMENT OF INTENT .................................................................................................... 5

YOUR BUSINESS .......................................................................................................................... 6

THE LIQUORLAND BUSINESS AND SUPPORT.......................................................................... 7

FRANCHISING - A MODEL FOR SUCCESS................................................................................. 8

CLEARLY DEFINED ROLES AND OBLIGATIONS ...................................................................... 9

AN INVESTMENT IN YOUR FUTURE ......................................................................................... 11

   THE REWARDS ....................................................................................................................... 12

THE BENEFITS ............................................................................................................................ 13

THE NEXT STEP ......................................................................................................................... 15




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Liquorland                                                      Franchise Overview



Introduction
Imagine being part of one of New Zealand's largest retail liquor chains, but
still owning your very own store. You could be part of this dynamic and
exciting group, which is fast becoming one of New Zealand's top retailers.

Over Liquorland's 20 year plus history, it has established enviable principles
which have kept it at the forefront of its industry and expanding to become a
network of 75 retail outlets.

Liquorland has developed a highly recognised brand, and has consolidated its
importance within DB Breweries, forming outstanding strategic alliances and
established marketing and financial management systems that work.

You too could become part of the Liquorland success story……….




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Liquorland                                                    Franchise Overview



History
In 1976 a joint venture company was formed between Ballins Industries of
Christchurch and L D Nathan & Co Ltd of Auckland with the idea of
expanding Ballins Industries liquor distribution to the North Island, but
particularly centred around Auckland.

Liquorland was formed in 1981 to establish a wholesale liquor chain to be
marketed and promoted under one umbrella with the objective of becoming
New Zealand’s No 1 Liquor group.

Throughout 1981 other traditional outlets progressively changed to
Liquorland. By December of that year 18 stores were under the umbrella.

In 1982 Ballins bought Dalgety NZ Ltd's liquor interests which were based in
Wellington and, therefore, strengthened distribution in the lower North
Island, truly gaining national distribution.

This saw a National chain expanding to 29 outlets.

During the late 1980’s Liquorland expanded to a chain in excess of sixty
stores with the addition of the Wilson Neil chain.

In September 1996, Liquorland joined as one of the founders in the inaugural
launch of Fly Buys.

In April 2001, Liquorland Limited was formed as a total Franchise chain.
Previously Liquorland incorporated a significant number of managed stores.

Today, through the sale and merger of major liquor brands throughout the
world, DB Breweries has made a commitment to long term strategic growth
in brewing and liquor retail. This allows for future concentration and
development of both the brewing business and its strategic alliance with
Liquorland Limited.




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Liquorland                                                        Franchise Overview



The Market
The Liquorland retail chain has outlets strategically located throughout the
nation. In this time it has grown to be a household name and is the
undisputed market leader.

The name Liquorland attracts over 85,000 customers every week and has
sales in excess of $135 million per year. Being part of DB Breweries,
Liquorland enjoys strong corporate and supplier support and is at the leading
edge of market developments. With such powerful backing and alliances,
Liquorland's market intelligence is second to none - both in the New Zealand
market and relating to overseas trends and innovations.


STATEMENT OF INTENT

Liquorland is committed to reinforcing its position as New Zealand's best
liquor retailer.

Here's how:
     Continuing to develop and enhance strong mutually beneficial
      relationships with all franchise partners.
     Being a top quality professional retailer.
     Continually looking for opportunities to grow the chain and brand by
      strategically locating franchised outlets throughout New Zealand.
     Utilising the collective bulk purchasing power of the group to secure the
      most favourable trading terms from all suppliers.
     Providing a simple, modern and distinctive look and feel in our stores.
     Continually ensuring we create an environment that is more male/female
      friendly.
     Rewarding our customers for our on-going relationship through Fly
      Buys and other loyalty programmes.




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Liquorland                                                        Franchise Overview



Your Business

Liquorland is committed to helping franchisees succeed. In order to capture
the most potential customers, Liquorland is continuing to pursue attractive
sites around the country.

Liquorland specialists will assist you in fitting out your retail outlet to make
the best use of modern marketing techniques - turning foot traffic into sales.
You will also be trained in staff recruitment and how to select and train top
people.

To help you manage your business you will have the opportunity to use
Liquorland's researched, tried, and proven point of sale and back office
software system. This user-friendly point of sale, financial and stock
management software system will automatically update you with key
business information. Regular performance benchmarks will help you to
identify sales opportunities and implement strategies to capture your full
market potential……………..




                                                                                  6
Liquorland                                                      Franchise Overview



The Liquorland Business and Support
The Liquorland brand has been present in the New Zealand market for 20
years and carries a very high level of recognition.

The initial training package including dedicated business development,
marketing and operating manuals provides Franchise Owners with a proven
set of tools and procedures, helping to get you off to a great start. On-going
training modules and materials are provided to ensure a Franchise Owner's
further growth and development.




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Liquorland                                                      Franchise Overview



Franchising - A Model for Success
The reason Liquorland keeps on growing is that the model has been
consistently proved to meet market conditions and to remain firmly the
strongest, most professional liquor retailer in the land. It is a model for
success that is only available to our franchisees.

The franchisor has a dedicated franchise support team - focused on assisting
franchise owners to succeed in all areas of their business. The franchise
support team is there for the management and operation of the network,
ensuring efficient, effective guidance and advice is available.

Recognising the importance of both on-going constructive feedback and the
necessity for continued development of the network, specific communication
forums involving franchise owners are considered a very important function
in the total operation of our retail chain.

The Franchise Advisory Committee is an essential part of the communication
mechanism available to the Liquorland Franchise team.

In comparison to starting a business from scratch, purchasing a franchise
gives you a head start - you hit the ground running. As a franchise owner
you are neither a partner nor involved in a joint venture with the franchisor.
You are an entirely independently owned and operated business. It is truly
your business, but you use an already developed and proven system that the
franchisor has developed to gain the benefits of the best recognised brand in
the industry, coordinated marketing initiatives, and combined marketing
spend and power, as well as receiving on-going support services.

The franchisor benefits when you are successful, so it is entirely in their
interests to help you to establish, operate and expand your business
profitably.




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Liquorland                                                        Franchise Overview



Clearly Defined Roles and Obligations
The core of a good franchise system are the franchise manuals which clearly
define the roles and obligations of both the franchisee and franchisor.

As part of the Liquorland chain, you as the franchisee are responsible for:

     Organising and managing your retail outlet.
     Providing the appropriate level of service and making sales to your
      customers
     Recruiting and managing retail staff to an acceptable standard
     Budgeting and managing finances for the profitable operation of your
      business
     Paying a monthly Royalty fee of 1.5% of Gross Receipts plus GST,
      based on a minimum charge of $850 plus GST per month
     Paying a Software Services Fee of $350 plus GST per month for up to
      two POS lanes with an additional $50 plus GST for each additional
      checkout lane using Liquorland's POS system
     Complying with all other legal requirements of operating a business of
      this type
     Monitoring and maintaining the appropriate and agreed operating
      standards and adhering to Liquorland guiding principals.
     Ensuring all premises and displays are presented to the highest standard
      at all times.
     Ensuring approved Liquorland uniforms are worn at all times.
     Liasing with the franchisor and providing regular and consistent
      feedback as required - working as part of the Team.
     Participating in all regional and national promotions, activities,
      advertising campaigns and marketing strategies of Liquorland.
     Participating in all loyalty programs (such as Fly Buys).
     Participating in the regional meetings of the Liquorland franchise (bi-
      monthly).



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Liquorland                                                         Franchise Overview




Liquorland as franchisor is responsible for:

     Providing franchisee training and advice in such areas as business
      development, services and products, retailing practices, in-store
      merchandising, customer and staff relations, administration and
      computer systems, staff recruitment and management.
     Providing franchisees with marketing and promotional support and
      advice to maximise the efficiency of the franchisee's business.
     Monitoring financial indicators and providing performance feedback to
      direct the franchisee in how to take full advantage of their business
      opportunity.
     Maintaining clear lines of communication with franchisees.
     Promoting the Liquorland brand and co-ordinating all promotions on
      behalf of the Liquorland network.
     Offering assistance to franchisees in the preparation of their business
      plans and offering on-going constructive advice relating to these plans.
     To gather market intelligence and keep abreast of market developments
      and as a result regularly update and refine the operating systems defined
      in the Liquorland manuals.
     Investigate the business opportunities associated with the introduction of
      new technology.
     Protection of the brand name logo and marks and allow the franchisees
      to use these devices in the approved manner.




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Liquorland                                                       Franchise Overview



An investment in Your Future
Starting a Liquorland franchise is a considerable investment in time, energy
and capital.

Franchisees have to invest in:

     Their retail outlet - premises, fittings and stock.
     The initial Franchise Fee which covers manual set development, training
      costs, system management and use of the Liquorland branding and
      intellectual property.
     Working capital to cover expenses until beyond break-even revenues are
      generated from trading.


On an on-going basis franchisees contribute the following:


     A Royalty which provides for on-going rights to the trade marks and
      operating systems, access to the considerable purchasing privileges and
      supply arrangements, and the support services provided by Liquorland
      which includes considerable resources for marketing and promotion of
      the network.


     A Software Services Fee to cover the costs of the license to the software
      and the maintenance of the Liquorland POS system.




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Liquorland                                                       Franchise Overview



The Rewards
Liquorland has an enviable track record in sales and customer satisfaction
from its existing operations.

Franchise owners achieving similar levels of performance will realise both an
attractive income, and a solid return on their investment.

Naturally each franchisee's results will be largely determined by their efforts
and ability, with the value of Liquorland's brand, buying privileges and
support services providing an advantage that is up to you to capitalise on.




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Liquorland                                                        Franchise Overview



The Benefits
Becoming a member of the Liquorland chain automatically entitles franchise
owners to the branding, operational and on-going field support systems and
procedures, that have made Liquorland the strongest and most recognised
liquor retailer in New Zealand.

Naturally Liquorland is developing a web site and this will continue to
expand over time.

It will be devoted to our franchise owners and retail chain. Initially, it will
provide information to prospective Franchisee’s with the objective of
Franchisee access at a later date to sales and market information.

Liquorland offers to its franchisees:

     The strongest, most recognised Liquor brand in the country.
     Access to capital through relationship with Westpac bank.
     Fly Buys – continuing to drive greater sales.
     Knowledgeable and professional Franchise representation focussed on
      wealth creation, risk management and compliance.
     Member and associate support
     Quality branding and promotional programmes.
     Strategic and Marketing development
     Retail trend monitors
     The massive purchasing power of being part of DB Breweries.
     Franchise Advisory Committee.
     Results-driven Training programmes and comprehensive Operations
      Manuals
     Strong corporate support through the Franchise Support Office (FSO)
     Supplier support through Preferred Supplier relationships
     Supplier funded offers of goods and services
     Potential to participate in Buying Committees

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Liquorland                                                        Franchise Overview


     Regular communication and updates from the Franchise Support Office
     Research, industry trends, and category performance/data sharing.
     Special event national promotions.
     Ability to provide tactical response where required
     Gift Voucher availability – profitable and well respected
     Strong Brand value growth for Liquorland
     Sales and financial benchmarking – store vs region vs national.
     Individual business analysis.
     Financial Advice
     P.O.S. and inventory systems.
     Sale and purchase of business through the group.
     Regular “sell in” road shows
     Regular communication programmes.
     Annual conferences - partly subsidised.
     Executives in regular and professional contact with government and
      industry groups, including the Franchise Association.
     Highly ethical company to be in partnership with. PR standing with all
      stakeholders at a high level
     Brand protection through management by Patent Attorneys
     Developmental assistance with new store projects
     Continued New Concept development
     Assistance for members with physical store fit out
     Constantly working to reduce costs for members e.g.: fit out costs at
      realistic levels




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Liquorland                                                             Franchise Overview




The Next Step
Liquorland is looking for quality people willing to invest time, energy and
financial resources required to make their new business venture succeed.

It is envisaged that successful applicants will need to invest $190,000 or
more to establish a successful operation. While banks look favourably on
financing franchisees, they generally require that the franchisee make a
significant contribution to the overall establishment costs.


If you are interested in becoming a Liquorland franchisee, ask yourself these
questions:

      Do I have the drive and passion to succeed?
      Do I like dealing with people?
      Am I a good communicator?
      Am I keen to work as part of a team - while leading my own team?
      Am I capable of exercising a disciplined approach to managing my business?
      Do I have the appropriate financial resources to meet the entry costs?

If the answers are yes, then register your interest in becoming a Liquorland
franchisee today.


Contact:      John Cleghorn
Address:      PO Box 22 010, Otahuhu, Auckland
Phone:        (09) 259 3179
Fax:          (09) 259 3012
Email:        john.cleghorn@liquorlandnz.com




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