What does 1 800 Packouts specify for the Franchised Business?

ide you with any assistance.**

Our Pre-Opening Obligations

Before you open the Franchised Business, we or our designee will:

• (1) Review and approve or disapprove the terms of the lease or purchase contract for the premises of the Franchised Business. Your proposed location will be approved based upon factors including adequate parking for your vehicle, including any truck or trailer you use and adequate space for the storage of contents which your operations require you to store for customers. It must also be of adequate size to support your operations and must have high-speed internet access for you and any staff member(s) you retain. Outside of these factors, and the location within your Franchise Territory, we do not consider other factors in approving or disapproving your site. We generally do not own the premises or lease the premises to you. The lease for the Facility must allow for the installation of all equipment and other items necessary to operate the Franchised Business. In addition, the lease shall provide, if required by us, that it be assignable to us or our designee at our option, upon termination or expiration of this Agreement, and shall also contain such terms and provisions as are reasonably approved by us. Currently, we do not specify other required lease terms. There is no time limit for the completion of our review of your lease or purchase contract, but we anticipate completing our review within 10 days of your submission. If we do not approve the terms of the lease or purchase contract and you are unable to locate another site with satisfactory lease or purchase terms in enough time to open the Franchised Business within 180 days after the effective date of the Franchise Agreement, we may terminate the Franchise Agreement, in which case you will forfeit your Initial Franchise Fee. (Franchise Agreement – Section 3.A)
• (2) Review and approve or disapprove plans and specifications and final construction plans complying with our requirements for design, decoration, furnishings, furniture, layout, equipment, fixtures and signs for a Facility. We do not provide assistance in providing, delivery, or installation of equipment, signs, fixtures, opening inventory, or supplies, but we do provide written specifications for such items. (Franchise Agreement – Section 3.B)
• (3) Specify the Management Systems for the Franchised Business. (Franchise Agreement Section 3.D)
• (4) Provide System/Procedure Training, including instruction about how you will make your decisions for employees or contractors (although we will not assist you in the hiring or training of your employees). (Franchise Agreement – Section 4.A)
• (5) Provide you with advice, guidance and support in connection with the opening and initial operation of the Franchised Business. If you request on-site assistance and we are able to schedule such assistance at a mutually agreeable time, you will be required to pay our reasonable fees for such on-site assistance and will be responsible for the reasonable travel, lodging and per diem expenses incurred by our personnel in providing such on-site assistance. (Franchise Agreement – Section 4.C)
• (6) Provide you with access to our Manuals. The table of contents of our Manuals is attached to this disclosure document as Exhibit D. The Manuals currently contain approximately 197 pages. The

Manuals may be modified to reflect changes in the specifications, standards, operating procedures and other obligations in operating Franchised Businesses in our sole discretion. You will be required to adopt any modifications into your Franchised Business, including any adjustments to the minimum and/or maximum prices at which you will sell products or services. (Franchise Agreement – Section 4.G)

(7) Approve the opening of your Franchised Business, provided that you have met all of our requirements for opening. We estimate that the typical length of time between signing a Franchise Agreement and opening your Franchised Business is approximately 120 days. Factors affecting this length of time include, among others: ability to select a site and negotiate a satisfactory lease; hiring of the requisite employees; successful completion of System/Procedure Training; local ordinances or community requirements; delivery of Operating Assets; issuance of all necessary licenses, permits and approvals; and procuring required insurance. (Franchise Agreement – Section 3.F)

Ongoing Assistance

During the operation of the Franchised Business, we or our designee will:

• (1) Give you guidance and assistance in the following areas: (1) methods and techniques for operation of a Franchised Business; (2) national advertising and promotion; (3) the establishment of administrative, bookkeeping, accounting and general operating procedures for the proper operation of the Franchised Business; and (4) any changes in the Franchised Business, authorized services, standards or operating procedures we prescribe for Franchised Businesses. (Franchise Agreement – Section 4.F)
• (2) At your request and expense, provide additional guidance and assistance to you for an hourly charge. (Franchise Agreement – Section 4.F)
• (3) Provide additional training programs, seminars and/or conferences. (Franchise Agreement Section 4.D)
• (4) Revise the Manuals as we deem necessary to reflect changes in the specifications, standards, operating procedures and other obligations in operating Franchised Businesses. (Franchise Agreement – Section 4.G)
• (5) Review and approve suppliers and distributors you would like to use. We have the right to charge a fee to make this evaluation. (Franchise Agreement – Section 10.B.)
• (6) Administer the Brand Fund. (Franchise Agreement − Section 11.E.)

Advertising

Our Marketing. We are not contractually obligated to conduct or develop any advertising or marketing programs for the System. We may, but are not obligated to, periodically formulate, develop, produce, and conduct advertising or promotional programs in such form and media as we determine to be most effective. We may, at our option, make available to you for you to purchase approved advertising and promotional materials, including signs, posters, collaterals, etc. that we have prepared. We currently produce marketing materials which you may purchase from us or through an approved vendor.

We have not conducted media advertising for 1-800-PACKOUTS. If we conduct media advertising, we are not required to spend any amount on advertising in the market in which your Franchised Business is located.

Brand Fund. You must contribute the Marketing Fee an amount designated by us up to 3% of your Gross Sales to the Brand Fund. We will administer the Brand Fund. The Franchised Business owned by us or our affiliates will contribute to the Brand Fund but does not have a set amount it contributes.

We will determine, in our sole discretion, when, how and where the payments deposited into the Brand Fund will be spent. We select the types of media used and the location of the advertising campaigns administered through the Brand Fund. We use or may use the following media: print, radio, television, telephone, smart phone, social media and Internet. We may also use the funds for general public relations, for business development, and to otherwise obtain and build brand awareness. All advertising and marketing materials will be prepared by us or by outside advertising/public relations/promotional agencies. We will not use the advertising fund for soliciting new franchise sales.

The Brand Fund will be held in an account separate from our other funds. We may spend in any fiscal year an amount greater or less than the total contribution of Franchised Businesses to the Brand Fund in that year. If we do not use all the funds in the Brand Fund in the year in which they accrue, we may use these amounts in the next fiscal year. We may cause the Brand Fund to borrow from us or other lenders to cover deficits of the Brand Fund or cause the Brand Fund to invest any surplus for future use by the Brand Fund. We may collect for remission to the Brand Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. All interest earned on monies contributed to the Brand Fund will be used to pay advertising costs of the Brand Fund before other assets of the Brand Fund are expended. Sums paid by you to the advertising fund may be used by us to defray any of our operating expenses and overhead reasonably related to the administration, direction or operation of the advertising fund, programs, and activities. We will prepare an annual, unaudited statement of monies collected and costs incurred by the Brand Fund and will make it available to you on written request.

The Brand Fund is intended to enhance recognition of the Marks and patronage of Franchised Businesses. We are a nationwide brand and intend to use the fund to help promote the image and good will of the entire brand through local, regional and national marketing campaigns. Although we will endeavor to use the Brand Fund to develop advertising and marketing materials, we are not obligated to ensure that expenditures by the Brand Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Brand Fund by Franchised Businesses operating in that geographic area or that any Franchised Business will benefit directly or in proportion to its contribution to the Brand Fund from the development of advertising and marketing materials. We assume no direct or indirect liability or obligation to you or any other Franchised Business in connection with the maintenance, direction, or administration of the Brand Fund.

We have the right, in our sole discretion, to terminate the Brand Fund upon 30 days' written notice to you. All unspent monies on the date of termination will be distributed to us and our franchisees in proportion to the respective contributions to the Brand Fund during the preceding 12-month period. We will have the right to reinstate the Brand Fund upon the same terms and conditions set forth in the Franchise Agreement.

During our last fiscal year, we collected monies for the Brand Fund. All of the monies collected were spent from the Brand Fund to build the nation brand for 1-800-Packouts, with the excess retained for use in the future for Brand Fund purposes.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 32–39)