Now you have a chorus: Treat the store like any other new customer. Common ownership, management, personnel and even common driveways are irrelevant if the store is a second legal entity.
However, I think I used to work with your EVP. Unless his stripes have changed, he's going to say, "Show me where it says that!"
Exemptions are a grant of authority to make an exception. The regulations and FinCEN guidance on exemptions do not say what you cannot do, they say what you can do. If they do not say you can craft the exemption a certain way then you simply cannot. FinCEN advisory number 10 in Q & A 6 creates the only exception to the requirement that a Phase II exemption customer must have had a transaction account with you for 12 consecutive months. It talks about a situation where the customer left your bank briefly and then came back. That is an exception to the fact that the 12 months had to be consecutive, not to the fact that a 12 month history is a prerequisite. There are no exceptions to a 12 month history for a Phase II exemption.
It's always been a source of fascination to me that if you tell people they can do what they want, they never ask for a citation. It's only when you tell them the rules are not what they imagined them to be without reading them that they want to know where you came up with your answer.
Calling FinCEN is always a good idea, but telephone advice is often inconsistent and never binding. If they tell you the relationship with the sister company waives 12 month requirement, then its your turn to say, "Where does it say that?"
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.