FDD Talk: Our Latest Views on the Possible Results of ACFN Franchisees Operating 5 ATMs (2014 FDD)

Highlights of ACFN’s Item 19 Financial Performance Representations (2014 FDD) – Part 2 of 4

Specific Notes Relating to Each Item on 3 Tables

• # ATMs:  The total number of ACFN ATMs a franchisee owns and has placed in operation.

• Transactions Per Day (Surcharge Transactions Per Day):  The average number of surcharge transactions performed at each of a franchisee’s ACFN ATMs each day. While the tables include information for average daily surcharge transactions ranging from 1 to 12 surcharge transactions, ACFN would generally recommend that an ACFN ATM producing less than 4 surcharge transactions per day be moved to a new location for better results, unless the ACFN ATM is part of an MLA (Multiple Location Accounts) Program the franchisor establishes.

• Total Per Day (Total Surcharge Transactions Per Day):  The average number of surcharge transactions performed at each of a franchisee’s ACFN ATMs each day multiplied by the number of ACFN ATMs in a franchisee’s network. The result represents an estimate of the total number of surcharge transactions for a franchisee’s ACFN ATM network that day.

• Transactions Per Month (Surcharge Transactions Per Month):  The estimated number of surcharge transactions performed each month by a franchisee’s ACFN ATM network based on a 30-day month.

• Fees Collected (Per Month):  Fees collected each month by a franchisee as owner of the ATM based on the Average Surcharge Collected for ACFN’s 2013 fiscal year (as described in Part 3) of $2.91 per surcharge transaction.

• Transaction Fees (Transaction Fees Per Month):  $0.08 per surcharge transaction for communications and other transaction-related costs. This is the amount currently set in the Franchise Agreement, although ACFN may periodically increase it.

• Profit Share (Per Month):  Paid to the ACFN ATM location owner for participating in ACFN’s “On Site ATM” program and based on the Average Profit Share for ACFN’s 2013 fiscal year (as described in Part 3) of $0.96 per surcharge transaction.

• Admin Fee (Administration Fee Per Month):  $12 per ACFN ATM per month for processing, reporting, and accounting. This is the amount currently set in the Franchise Agreement, although ACFN may increase it by up to 10% every 12 months.

• Paid to Franchisee (Amount Paid to Franchisee Per Month):  The Fees Collected, less the Transaction Fees, Profit Share, and Administration Fee, each month.

• Annual Total (Annual Amount Paid to Franchisee):  The amount paid to a franchisee annually for an ACFN ATM performing at this level based on the averages described above.

• Estimated Funds:  This represents the estimated amount of money needed by a franchisee to operate (that is, provide adequate cash to) the franchisee’s ACFN ATM(s) with service calls performed once each week, and is calculated by multiplying the number of surcharge transactions per month times the Average Dispense of $94.68 divided by 30 to calculate the daily average then multiplied by 9 so the ATM will have extra cash to prevent it from running out of cash before the next service call.

• 10 Year Total:  10 times the Annual Total, plus the Estimated Funds (as these terms are described above). If a franchisee ceases operating the ACFN ATM business at the end of 10 years, a franchisee will have received 10 times the Annual Total. In addition, the franchisee will be able to retrieve the Estimated Funds used to operate the franchisee’s ACFN ATM(s) since the funds are no longer needed.

5 ATMs

Transactions Per Day:  1