If an Anago advertising fund is established, what are the permissible uses of franchisee contributions?

We have the right to establish national and/or regional advertising funds and/or regional advertising cooperatives (hereinafter collectively referred to as the "Fund") for the common benefit of the Anago franchise System. If a Fund is established, we may require you to contribute a monthly amount not to exceed 2.2% of your Gross Revenues during the preceding month to the Fund. If established, your payments to the Fund shall be used for advertising, marketing, promotion, production and development of advertising, marketing, promotional and other programs, product development, merchandising, public relations, administrative expenses, programs designed to increase business and enhance and further the public reputation of the Anago franchise System, and activities related to any or all of the foregoing. The content of all activities of the Fund, including, without limitation, the media selected and employed, as well as the area and units to be targeted for such activities shall be at our sole discretion. We undertake no obligation to make expenditures for you or any individual Unit Franchisee which are equivalent or proportionate to contributions paid to the Fund, or to insure that you or any Unit Franchisee benefits directly or on a pro-rata basis from activities of the Fund, if any. We have the right to include a notation on all advertisements stating the availability of franchise and/or career opportunities. The Fund is not an asset of AFI. AFI does not owe any fiduciary obligation to Subfranchisors or Unit Franchisees for administering the Fund or any other reason. The Fund is not required to be audited. However, a statement of operations of the Fund, if developed, will be prepared annually by an independent public accountant selected by us. Upon reasonable request, we will provide you a copy of the annual statement of operations. Payments to the Fund may be utilized to provide for the administrative expenses of the Fund, including, without limitation, salaries, travel, rent and other expenses of administering the Fund, and for programs designed to increase sales and enhance and further develop the public reputation and image of Anago and the Anago franchise System. The balance, including any interest earned by the Fund, will be used for advertising and related expenses. Fund contributions not spent in the fiscal year in which they accrue will typically be carried forward to the next year and spent on advertising

and related expenses. We shall have the right to terminate the Fund at any time, however, the Fund will not be terminated until all contributions have been expended.

As of the issuance date of this Disclosure Document, there is no Fund in effect. We are not required to spend any amount on advertising in your Area or territory. If a Fund is developed, businesses owned by us and/or our affiliates will be required to contribute.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)