What are the franchisee's obligations regarding advertising the opening, transfer, or conversion of an Annex Brands center, as described in the New Center/New Owner Marketing Program?

achment 8).

• C. NEW CENTER/NEW OWNER MARKETING PROGRAM. In addition to the marketing fee contributions as specified in Subsection 8.C of this Agreement the Association fees and/or assessments required by Subsection 10.D of this Agreement and the in-Center TV marketing program of Subsection 10.E of this Agreement, Franchisee will cooperate and participate in Franchisor's efforts to advertise the Franchisee's (i) opening of the Center, (ii) assumption of the operation of an existing Center by transfer, or (iii) conversion of an existing business to a Center, as follows:
  • 1. Franchisee will deposit at least $5,500 with Franchisor: before or at initial training, for a new Center or for a conversion of an existing business to a Center; or on or before the closing date of a transfer, if Franchisee is assuming of the operation of an existing Center by transfer;
  • Franchisor will collect and hold the deposit for Franchisee, and will use it to purchase promotional items and advertising to promote the Center before, and for about 90 days, after Franchisee (i) opens the Center, (ii) assumes the operation of an existing Center by transfer, or (iii) converts an existing business to a Center. Franchisor may purchase promotional items and place advertising in 1 or more types of media, including Internet, print and/or digital, direct mail and/or any other media, in its sole discretion. The deposit will not be used for signage, including electronic signs, window graphics or banners, logo floor mats, etc. Franchisor may allocate a portion of the deposit to purchase required initial logo attire, and to cover the cost of the in-Center TV marketing program device and initial set up, in its sole discretion. Franchisor may, in its sole discretion and with 30 days' advance notice to Franchisee in its Manuals, in writing or otherwise, after the deposit is exhausted, automatically enroll Franchisee in advertising in the mediums noted above; however, Franchisee may opt out with 30 days' advance notice by following instructions provided in the Retail Marketing Manual for Standard, Flex and Express Retail Centers, in new Center/new owner marketing Program documents, in Manuals, or otherwise in writing. Franchisor will not charge a fee for this service. Franchisor will not

place any advertising outside Franchisee's Area of Dominant Influence ("ADI"), or use the deposit for any other purpose, without Franchisee's consent. An ADI is defined as the area covered by a particular advertising medium as recognized in the advertising industry. Franchisor generally will use all of the deposit, and will provide Franchisee with a written accounting of how the deposit was used. Franchisor will provide the accounting to Franchisee a reasonable time after the deposit is exhausted, or within about 150 days after Franchisee (i) opens the Center, (ii) assumes the operation of an existing Center by transfer, or (iii) converts an existing business to a Center. Notwithstanding anything in this Agreement to the contrary, Franchisor will not refund any portion of the deposit if Franchisee (i) attends initial training, even if Franchisee does not open or convert the Center, (ii) opens the Center, (iii) assumes the operation of the Center by transfer, or (iv) converts an existing business

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