What is the purpose of the Brand Fund for 7 Brew?

loyment contracts; and

• (4) To presume conclusively that any violation of the terms of this Section or Section 19.E was accompanied by the misappropriation and inevitable disclosure of Confidential Information and constitutes a deceptive and unfair trade practice and unfair competition.

13. Advertising and Marketing

A. Brand Fund

• (1) We have established a fund ("Brand Fund" or "Fund") for advertising, marketing, research and development, public relations, Social-Media management, lead-generation, customer-relationship-management, and technology programs, materials, and activities, the purpose of which is to enhance, promote, and protect the 7 BREW Store brand and Franchise System. You agree to contribute to the Brand Fund the amounts we periodically specify, not to exceed two percent (2.0%) of the Store's weekly Gross Sales. Your Brand Fund contribution is due and payable at the same time and in the same manner as the Royalty or in such other manner we periodically specify. 7 BREW Stores that we and our affiliates own will contribute to the Brand Fund on the same percentage basis as franchisees.
• (2) 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, 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, multi-regional, 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 lead-generation 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 Store brand; establishing on-line systems and other vehicles for centralized customer interaction; supporting public relations, market research and

development, 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. The Brand Fund periodically may give you sample advertising, marketing, promotional, and lead-generation formats and materials (collectively, "Marketing Materials") at no cost. We may sell you multiple copies of Marketing Materials at our direct cost of producing them, plus any related shipping, handling, and storage charges.

• (3) 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 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; TRE of our 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. The Brand Fund is not a trust, and we do not owe you fiduciary obligations because we maintain, direct, or administer the Brand Fund or for any other reason.
• (4) The Brand Fund may spend in any fiscal year more or less than the total Brand Fund contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, invest any surplus for future use, and roll over unspent monies to the following year. We may use new Brand Fund contributions to pay Brand Fund deficits incurred during previous years. We will use all interest earned on Brand Fund contributions to pay costs before using the Brand Fund's other assets. We will prepare an annual, unaudited statement of Brand Fund collections and expenses and share the statement electronically within sixty (60) days after our fiscal-year end or otherwise give you a copy of the statement upon reasonable request. We may (but need not) have the Brand Fund audited annually, at the Brand Fund's expense, by a certified public accountant we designate. We may incorporate the Brand Fund or operate it through a separate entity whenever we deem appropriate. The successor entity will have all of the rights and duties specified in this Section 13.A.
• (5) 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 Store brand and Franchise System.

Source: Item 22 — CONTRACTS (FDD pages 82–83)