From obscurity to 21st century model, this franchise was transformed by our team at Allied Carpets and uses contemporary features to gain franchise interest and improve viability

1. The Allied Opportunity
1
“To re-launch Britain’s best known
flooring retail brand and revolutionise
the customer experience”.

2. Agenda 2
 Introductions
 Background and History
 The UK Flooring Market
 Allied market positioning
 The Franchise model
 Our proposition
 Headline Financials
 Summary

3. Introductions
3

4. Introductions 4
Clive Hutchings (Pending)
Over 35 years retail experience from the sales floor to the Boardroom. Clive was CEO of
Allied Carpets Group plc from January 2002 to 2009 (reporting directly to the French
owners) and after taking Allied to its first operating profit in 7 years, he oversaw the
management of the business through its sale to Hilco and administration.
Paul Davies (In-situ)
With nearly 30 years Franchise experience with major brands such as Perfect Pizza, KFC, &
Haagen Dazs, Paul spent the last 6 years developing the franchise model at United Carpets
before joining the Allied team. He is a regular speaker at franchise events and is well know
and respected amongst the franchise community.
Moony Victoire-Nijjar (Pending)
Moony previously worked with Clive and graduated at Allied. He has considerable
experience as a commercial finance director and change manager with particular expertise
in the retail and distribution sectors. He has managed M&A projects including acquisitions,
private equity fund raising and main market IPO.

5. Background & History
5

6. History
Over 60 Years Flooring Heritage
6
1953
 Creation of the
company by Harold
Plotnek in
Birmingham
1978
 Acquisition of
Allied by the
ASDA Group
1993
 Acquisition by Carpetland
of Allied (excluding the
Maples Furniture). The
combined group was
renamed Allied Carpets
Group
1996
 Floatation of
Allied Carpets on
LSE on 23 July
1996 with Mkt
Cap of £350m
1999
 Launch of Allied
at Home
 Acquisition of
Allied Carpets by
Saint-Maclou for
£83m
2009 - 2012
 Administration
followed by Hilco re-
structuring with the
objective to downsize
the business to a
profitable going
concern
2004/05
 Allied Carpets
first Profit for
seven years.
 New Chairman
appointed.
2002
 Appointment
of Clive
Hutchings to
CEO of Allied
Carpets Group
plc.
2012 - Present
 Hodges family
acquire Allied
Brand
 Franchise concept
tested
 Clive Hutchings
joins team
 Investment
partner sought

7. The UK Flooring market
7

8. Flooring Market Overview 8

9. 9
Carpet
57%
Wood & Laminate
16%
Vinyl
15%
Other
12%
Sales by product category
Flooring Market Overview

10. Competitor Review 10

11. Existing Store Proposition 11

12. Allied market positioning
12

13. Original Allied Brand
 No.1 Carpet retail brand
 Still receiving over 3000 hits
to the web address
 Customer profile ABC1- Middle
England
 Brand perceptions:
 Reliable
 Trustworthy
 Great Service
 Carpet specialists
 Always in SALE
 A little dated
13

14. New Allied Brand
Values:
 On Trend & Innovative
 Simple, Clear & Transparent
 Trustworthy, Credible & Professional
14
Target Customers:
 ABC1 (Traditional Allied)
 Professional Women
 Younger couples/families

15. 15New Allied Brand

16. 16New Allied Brand

17. 17New Allied Brand

18. Customer Journey
Selection
• Room
• Carpet type – twist etc.
• Price per sq mtr
Estimate
• Measure & plan
• Add Fitting, Underlay etc.
Install
• Delivered to store
• Fitted by sub-contractors
18
Selection
• Colour
• Texture – suitability
• Project Budget
Estimate
• Measure & plan
• Upgrade underlay,
confirm
Install
• Delivered to Fit Centre
• Fitted to SLA standards
• Follow up “Happy Call”
OLD WAY NEW WAY

19. The Franchise Model
19

20. UK Franchising Overview 20
 930 franchises in UK contributing £13.7b to economy
 39,000 outlets employing 560k people
 92% of franchisee businesses in profit
 Only 2.3% of all closures due to commercial failure
 Average age of new franchisee is 41yrs
 50% increase in female franchisees 2005 to 2013
 22,500 franchisees in UK (25% operate multiple units)
 1 in 4 UK franchises export their model overseas
 Biggest issue is recruitment

21. Allied Benefits to the Franchisee 21
 Re-launch of a recognised and respected brand
 Low entry price of £65k, up to 70% funding available
 Use of 21st century technology & cutting edge design
 Full support by team with proven achievement
 Impressive ROI with committed franchisee
 Competitive commission structure
 Female friendly
 BFA membership
 Multi-site opportunity for suitable candidates

22. 22Allied Franchise Territories
Sum Avg. Min. Max.
Population 240,337 9,950 3749 14,420
Households 109,244 4306 1,672 6,555
Target HH’s 10,704 640 0 5191
A21 HH’s 567 22 0 262
A24 HH’s 503 22 0 264

23. Franchisee Economics 23
 Max. cash requirement = £65k
(Discounted Franchise Fee )
 Strong working capital model
 <2 years cash payback of Fee
 11% - 13% EBITDA
 Average 51% ROI per annum
 -10% sales = 26% ROI per annum
Year 1 Year 2 Year 3
Cashflow £ £ £
Income 489,492 650,053 732,173
Payments (448,537) (591,567) (656,762)
Cashflow 40,955 58,485 75,411
Fee (65,000)
Cash balance c/f (24,045) 34,441 109,851
P&L
Sales 386,660 539,015 607,375
EBITDA 611 59,336 79,080
EBITDA % 0.2% 11.0% 13.0%
Balance sheet
Shareholders funds (53,556) 5,780 84,860

24. Our Proposition
24

25. Our proposition
 Locations
 1000 – 1500 sq ft Showrooms
 Main Rd/High St with good visibility and passing trade
 Franchisee holds lease
 No need for warehouse space
25
 Operations
 Owner/Managers supported by experienced Retail teams
 Outsource service options until skills acquired
 SAP system with data analysis and KPI reporting

26. Our proposition
 Supply Chain
 Multiple suppliers
 No Stock
 Individual Franchisee credit terms
26
 Key milestones (Delayed)
 Aug/Sept – Re-launch Yeovil Store & open 2 Franchises
 Dec 2014 - 2 more stores opened to support “POC”
 Feb 2015 – Launch at National Franchise Exhibition (NEC)
 Dec 2015 – 28 stores opened with a further 20 territory
commitments

27. Marketing Platform
 Website:
 Simple, clear, inspirational & informative
 View in a Room and Samples delivered within 48 hours
 Full SEO and PPC strategy
 Lead generator - Transactional for non-franchise territories
 Micro site for franchisees
27
 Store support
 Initial launch using local radio, newspapers and Leaflets
 Ongoing local magazines & radio
 Potential Regional TV & Radio (when territories allow)
 Social Media campaigns – Facebook, Twitter, Pinterest
 Home Interest Magazine editorial – Allied Ambassadors

28. Growth Strategies 28
POC – 100
Franchisees
100 – 400
Franchisees
European
Franchise
 Proof Of Concept.
 Feb 2015 Launch.
 Year 1
 30 Franchisees
 6 Corporate
 Local & Social media
 Recruitment Drive
 Call Centre Support
 Website Leads
 Opening Teams
 TV, Radio, Magazines
 Supplier Rebates
 Re-sales
 Cutting Warehouse
 Affinity schemes
 Kiosks
 Europe
Short -Term Medium -Term Longer -Term

29. Headline Financials
29

30. Trading Summary 30
 Max. cash requirement £529k
 includes £254k of set-up
 2 years cash payback
 20 Self funded owned Franchises
 83 Total stores trading
 Online Transactions & Leads
 Combined EBITDA £3M+
 Safety margin v “What-if’s”
Year 1 Year 2 Year 3
Cashflow £ £ £
Income 3,817,403 11,530,001 20,485,973
Payments (3,940,566) (10,043,576) (17,152,364)
Net Cash (123,164) 1,486,424 3,333,609
Set-up (253,800) 0 0
Cash c/f (376,964) 1,109,461 4,443,070
Max. Cash need (529,006)
P&L
Sales
Franchisor 371,164 1,912,473 4,339,631
Owned Stores 952,077 3,770,595 8,321,894
Online 1,728,938 3,921,465 4,464,780
Total Sales 3,052,179 9,604,534 17,126,306
EBITDA
Franchisor (330,993) 556,211 1,921,664
Owned Stores (32,304) 136,496 589,317
Online 94,003 554,313 664,727
Total EBITDA (269,295) 1,247,020 3,175,708
EBITDA % -8.8% 13.0% 18.5%
No' of Owned Stores 5 13 20
Total no' of Stores 20 50 83

31. Franchisor Summary 31
 Max. cash requirement £534k
 includes £140k of set-up
 2 years cash payback
 EBITDA = £1.9m Year 3
 Trading breakeven at 17 stores
Year 1 Year 2 Year 3
Cashflow £ £ £
Income 330,174 2,064,577 4,892,024
Payments (712,643) (1,533,345) (2,989,950)
Cashflow (382,468) 531,232 1,902,074
Set-up (140,400)
Cash c/f (522,868) 8,364 1,910,438
Max. Cash need (534,690)
P&L
Sales 371,164 1,912,473 4,339,631
EBITDA (330,993) 556,211 1,921,664
EBITDA % 29.1% 44.3%
Total no' of Stores 20 50 83
Balance sheet
Shareholders funds (447,993) 108,218 1,605,286
**Excludes Website & Owned stores [total 83 stores/50 trading full year]

32. Online Summary 32
 Max. cash requirement £121k.
 Includes £68k development /
launch costs.
 Pay back within 1 year.
 Good w/c trading model.
 15%+ EBITDA.
Year 1 Year 2 Year 3
Cashflow £ £ £
Income 2,239,238 4,740,189 5,384,242
Payments (2,075,179) (4,175,202) (4,838,676)
Net Cashflow 164,058 564,987 545,566
Set-up (68,400)
Cash c/f 95,658 660,645 1,206,211
Max. Cash need (120,782)
P&L
Sales 1,728,938 3,921,465 4,464,780
EBITDA 94,003 554,313 664,727
EBITDA % 5% 14% 15%
Balance sheet
Shareholders funds (210,013) 186,033 696,384

33. Owned Stores Summary 33
 Max. cash requirement £45k.
 Pay back by Q1
 Good working cap. trading model
 £1.4m value (£85k each)
 Full year EBITDA = £1.5m
Year 1 Year 2 Year 3
Cashflow £ £ £
Income 1,247,990 4,725,235 10,209,707
Payments (1,152,744) (4,335,030) (9,323,738)
Cashflow 95,246 390,205 885,969
Set-up (45,000) 0 0
Cash c/f 50,246 440,451 1,326,420
Max. Cash need (45,000)
P&L
Sales 952,077 3,770,595 8,321,894
EBITDA (32,304) 136,496 589,317
EBITDA % -3.4% 3.6% 7.1%
Total no' of Stores 5 13 20

34. Investment Opportunity 34
 Maximum cash flow need = £700k
 Pay back within 2 years
 £1.4m value of 20 owned Franchises
 EBITDA Year 3 potential exit value
 Future £17k per Franchise fee profit
Market Sales £65.2 m £121.5 m £242.9 m
No of Stores 100 200 400
Owned Stores 20 15 15
Turnover £ £ £
Franchise Fee Income 6,073,748 12,147,496 24,294,991
50% of Supplier rebate 321,909 643,817 1,287,635
Website Revenue 4,464,780
Owned Stores Revenue 12,147,496 9,110,622 9,110,622
Total Revenue 23,007,933 21,901,935 34,693,248
EBITDA
Franchise model 2,546,678 6,869,808 16,700,369
Website 664,727 -260,410 -286,451
Owned Stores 1,581,603 1,186,202 1,186,202
Total EBITDA 4,793,009 7,795,601 17,600,120
EBITDA % 21% 36% 51%

35. Summary
35

36. Summary 36
 RIGHT PROPOSITION:
 That reflects Todays Customer needs
 Simple, Clear & Female friendly
 Franchise for rapid expansion and Owner/Manager motivation
 “light” with no huge establishment cost or stock
 Outsource supply chain to avoid handling and warehouse costs
 Qualified Team to support
 RIGHT TIMING
 Housing market set to improve - Flooring market will follow
 Pensions and “Buy to Let” exhausted
 Franchise market looking for new Brand opportunities
 Women in business on the rise