quently, it is a necessary and proper subject for discussion between Gulf and its dealers.

I must strongly deny your allegation concerning pressures brought by Gulf Management upon the individual dealers to get competitive on the retail prices of gasoline. Gulf operates under the policy stated by Chairman of the Board E. D. Brockett in his letter to all Gulf dealers under date of July 25, 1966. Gulf dealers are now and always have been free to sell Gulf gasoline at any retail price they choose with complete immunity from any sanctions. We work constantly with our employees to be certain that all Gulf sales representatives and other employees who have contact with dealers thoroughly understand this policy, and I have received assurance from all our people that they have exerted no pressure on any Gulf dealer concerning his retail price postings. Certainly it is necessary and helpful to the dealer that Gulf survey competitive prices in his immediate area and suggest to him an appropriate retail posting. However, these are suggestions and nothing more. Should you have any specific information to the contrary I would appreciate your giving me the facts and an opportunity to make a complete investigation.

Thank you very much for calling this matter to our attention. We hope that you will feel free to bring to our attention any problem which may be causing concern to our dealer organization.

Yours very truly,

Your investment in this profitable business would be $23,212.00

It is always best for the dealer to have enough money to handle the total investment; however, Shell will help arrange financing for capable men who have good character and credit reputations. Shell has a variety of plans that can be tailored to fit individuals.

You will not be asked to buy anything that is not listed on an inventory. The prices you pay for merchandise will be at cost, and equipment will be sold to you at a depreciated price, if it is not new.

We cannot, of course, guarantee that you will carn $ 3072.00 per month, because only you can inaure just what your carnings will beby the way you manage your business. We will, however, at your request, go over your recordo as frequently as you wish and show you where you fell short of your goal and recommend what you could do to improve your profits.

There are two basic ways to improve profits: Either increase gross profits by balanced selling of products and services or reduce controllable expenses or a combination of both. When we say you can earn 9 2880.00 per month, we are making this projection based upon your ability to perform a balanced selling job and to control your expenses. Remember this: There are many Shell dealers who earn a great deal more money than we have estimated for this service

station.

If you require financial assistance, this is how Shell will help you go into business:

Therefore, you will need $22,175.00 to acquire this valuable frenchloc; Shell will loan you $ 15,440.00 that in to be paid back at c per gallon on all gecoline delivered to you by

the rate of

3/4

Shell, with a monthly minimum payment of $ 500_00

EXHIBIT 13-Continued

Here are number of ways that Shell cooperates with its dealers tc help them to be successful. Shell will succeed in the marketplace only if its dealers are successful.

SERVICE STATION LOCATION A decision to build a new Shell service station is serious business with Shell. Marketing executives with plenty of know-how carefully screen every prospective location before Shell decides to build. One of the most serious considerations in evaluating a site for a new Shell service station is whether the dealer can earn a satisfactory profit. Many locations have been rejected on the grounds that a dealer could not make a satisfactory profit. This careful selection procedure is one reason why Shell has so many dealers earning well over $1,000.00 per month.

DEALER TRAINING Shell offers a four week training course to everyone of its new dealers, and Shell pays ito dealers while they are learning so that their money will not be spent while they are in school.

ADVERTISING AND SALES PROMOTION The millions of dollars that Shell spends annually on advertising helps ito dealers make more money by preselling the customer on Shell products.

A new plan has been developed to get the Shell service station off to a good start. It begins with a powerful grand opening and follows through with new techniques to bring the customer back again and again.

CREDIT CARDS Shell has more credit carda in circulation than any other Oil Company. But Shell does not rest on its laurels-we are experimenting with new ways to increase our leadership in the credit card business. Credit Card customers buy more, buy better merchandioo than cash customers, meaning Core profito for Shell dealers.

ALLSTATE EMERGENCY ROAD SERVICE This is another first for Shell dealero. Thousands of Allstate Motor Club and Allstate Insurance Policy holders can call any qualified Shell Dealer for emergency road service and the dealer is paid on the spot. This has been a real profit maker for many Shell Dealers.

SHELL PRODUCTS Shell leadership in Research and development has led to many scientific breakthroughs in both motor fuels and lubricants. Shells' reputation of producing superior automotive products is recognized, and this good name can only help Shell dealers sell more of their products to their

customaro.

There are other Shell programs that will help you earn $3072,00
per month, but the real key to success is the dealer himself. Shell can only
provide the conditions in which a franchised dealer can earn profits. For
example, Shell leases the greatest portion of its service stations from
investors, to when Shell pays a rent based upon the value of the premises.
In the case of the location at Peachtree & Roxboro
Atlanta

$

18 $

Georgia

in

Shell total rent and charges are 2337.50 per month. The rent that the dealer is expected to pay 1487 50 So you can see that Shell wil actually subsidize the dealer at the rate of $850.00 per month. There are no hidden franchise fecs that are so common in other business opportunity proposals.

Senator HART. Now, I understand that a dealer from Florida, Mr. William D. Tucker, who is the executive secretary of the Florida association, wishes to make a statement.

Mr. TUCKER. Senator Hart, very briefly I will try to give you just a little bit of an idea what is in the testimony. At this time in our country we are having one of the greatest periods of prosperity we have ever had and yet I do not know of any time in history when the service station operator has been in worse financial condition.

The Bureau of Internal Revenue records show that the average service station operator makes less than $3,000 a year. This is a man who has invested a considerable amount of money and puts in long hours. I think many dealers are misled by ads such as this one: "You can make $10,000 a year or more in your own business; be a Texaco dealer."

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