Is an Annex Brands franchisee required to be a member of the Advertising Association?

o a Center.

• ADVERTISING ASSOCIATION. Franchisor will create or assign an Advertising Association ("Association") for the Center and designate the Association's geographic coverage, which may be a portion of an ADI or an entire ADI (see definition of ADI above). Franchisee must be a member of the Association even if Franchisee is the only member. Any other businesses operating under the same type and/or brand within the Association's geographic coverage, including franchised businesses and any businesses Franchisor or any Affiliates own, also will be members of the Association, as Franchisor determines. If Franchisee is the only member of the Association, Franchisee must reserve the greater of $150 or 1% of Gross Receipts per month for local and regional advertising and promotional programs, in order to qualify to participate in any Matching Funds Advertising Program that Franchisor is administering. If the Association has 2 or more members, Franchisee is required to comply with its written bylaws, which will be available for Franchisee's review on request to the Association, and which may be adopted or changed only with Franchisor's approval. The purpose of the Association, if it has multiple members, is to develop cooperative local or regional advertising or promotional programs. A multi-member Association will be administered by a board of directors selected in accordance with its bylaws, or may be administered by a regional licensee if there is one for Franchisee's geographic area. The fees and additional assessments of the Association will be allocated equitably among members of the Association. The Association fees and assessments will be the greater of $150 or 1% of Gross Receipts per month.

Source: Item 22 — Contracts (FDD pages 109–110)