What is the Brand Fund used for in the 7 Brew franchise system?

The Brand Fund's principal purposes are to maximize recognition of the Marks, increase patronage of 7 BREW Stores, and enhance, promote, and protect the 7 BREW brand and franchise system. Although we will try to use the Brand Fund in the aggregate to develop and implement Marketing Materials and programs benefiting all 7 BREW Stores, we need not ensure that Brand Fund expenditures in or affecting any geographic area are proportionate or equivalent to Brand Fund contributions by 7 BREW Stores operating in that geographic area or that any 7 BREW Store benefits directly or in proportion to its Brand Fund contribution from the development of Marketing Materials or the implementation of programs. (In other words, the Brand Fund need not spend any specific amount in your market area.) We have the right, but no obligation, to use collection agents and institute legal proceedings at the Brand Fund's expense to collect unpaid Brand Fund contributions. We also may forgive, waive, settle, and compromise all claims by or against the Brand Fund. We assume no other direct or indirect liability or obligation to you for collecting amounts due to, maintaining, directing, or administering the Brand Fund.

We have established the Brand Fund to which you and other franchisees must contribute the amounts we periodically specify, not to exceed 2% of your Store's weekly Gross Sales. We currently require you and other franchisees to contribute the full 2%. 7 BREW Stores that we and our affiliates own will contribute to the Brand Fund on the same percentage basis as franchisees.

We will direct all programs the Brand Fund finances, with sole control over all creative and business aspects of the Fund's activities. The Brand Fund may pay for, among other things, preopening support and franchisee training, preparing, producing, and placing video, audio, and written materials, Digital Marketing, and Social Media; developing, maintaining, and

administering one or more System Websites; creating and administering national, regional, multiregional, local, and multi-local marketing, advertising, and lead-generation programs (which may include spending Brand Fund contributions in specific geographic markets or directing Brand Fund contributions to individual or groups of franchisees to spend on marketing, advertising, and leadgeneration programs in their own markets); using advertising, promotion, and marketing agencies and other advisors to provide assistance; establishing regional and national promotions and partnerships and hiring spokespersons to promote the 7 BREW brand; establishing on-line systems and other vehicles for centralized customer interaction; supporting public relations, market research, and other advertising, promotion, marketing, and brand-related activities; funding visits by our executives, other personnel, and third-party service providers to 7 BREW Stores to establish, enforce, and confirm compliance with the 7 BREW Store culture; and funding technology initiatives for 7 BREW Stores, including mobile training and operational performance software, cloud-based franchise-management solutions, IT phone support and database maintenance, online ordering and loyalty subscriptions, iPad mobile device management, and elearning solutions. ("Digital Marketing" means any domain name, homepage, electronic address, metatag, or other marketing in connection with any website or other online presence. "Social Media" means blogs, common social networks like Facebook and Instagram, professional networks like LinkedIn, live-blogging tools like Twitter, file, audio, and video-sharing sites, and other similar social-networking media or tools, both existing and developed in the future.)

We will account for the Brand Fund separately from our other funds (although we need not keep Brand Fund contributions in a separate bank account) and will not use the Brand Fund for any of our general operating expenses. However, the Brand Fund may reimburse us and our affiliates for the reasonable salaries and benefits of personnel who manage and administer, or otherwise provide assistance or services to, the Brand Fund; the Brand Fund's administrative costs; travel-related expenses of personnel while they are on Brand Fund business; meeting costs; overhead relating to Brand Fund business; and other expenses we and our affiliates incur administering or directing the Brand Fund and its programs, including conducting market research, preparing Marketing Materials, collecting and accounting for Brand Fund contributions, paying taxes due on Brand Fund contributions we receive; and any other costs or expenses we incur operating or as a consequence of the Fund. We will not use the Brand Fund specifically to develop materials and programs to solicit franchisees. However, media, materials, and programs prepared using Brand Fund contributions may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. Of the Brand Fund's 2024 expenditures, approximately 35% was spent on new Store opening support and franchisee training, approximately 40% was spent on marketing-related activities (split among ad production media (8%), creative promotions (7%), and purchased media (25%), 20% was spent on salaries and benefits of personnel who manage and administer the Brand Fund, and approximately 5% was spent on technology to support marketing initiatives and analysis.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 34–45)