What are the obligations of Annex Brands franchisees regarding purchases from approved suppliers as outlined in Item 8 and Item 9?

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You must always use signs, graphics, decals, wrapping tape, wrapping materials, marketing materials, business forms, print and digital communications, and other documents, that properly display the Marks and/or any Annex Brands, PostalAnnex, PostalAnnex+, Pak Mail, AIM Mail, Parcel Plus, Handle With Care Packaging Store, and Sunshine Pack & Ship 800 numbers, website addresses, email addresses, and domain names, in the forms and manners that we specify in our Manuals, in writing or otherwise.

Our specifications are in our Manuals. We may modify these specifications on reasonable written notice to you. We will consider your written request for a modification of a specification, if you explain the reason for the requested modification (or for the approval of any equipment or supply we have not previously approved) and provide us with sufficient technical data to enable us to evaluate your request. We will provide you with notification of approval or disapproval within 60 days after receipt of your request. We will approve a request if we determine that a modified specification is appropriate or that any equipment or supply meets our specifications then in effect. We may perform tests to determine if any equipment or supply meets our specifications.

We may offer equipment, supplies or services to you through volume contracts we negotiate with suppliers, manufacturers and others.

We maintain a list of approved suppliers in our Manuals. We may modify the list on reasonable written notice to you. We modify the list in our Manuals, in bulletins, in our newsletter (360), on our Intranet franchisee support site, by email, in writing or otherwise, or at regional and national meetings. You may request in writing our approval of additional suppliers. We will grant or withdraw approvals of suppliers based on the criteria for approving suppliers in our Manuals, and based on inspections and performance reviews. If any supplier fails to comply with our specifications, we will notify the supplier of the deficiency. The supplier will have a reasonable time, not more than 30 days, to correct the deficiency or be terminated as an approved supplier. We may grant approvals of new suppliers or withdraw past approvals of suppliers on reasonable written notice to you. We will provide you with written notification of the approval or disapproval of a supplier you propose within 60 days after receipt of your request.

We may periodically negotiate strategic alliances with dot-com, e-commerce, and other companies that may provide income opportunities to you and to us.

We may periodically choose to offer you franchisor customer referrals, which may include business accounts, national accounts, work orders for products and services, and other fulfillment business. Our current policy is to offer you the opportunity to service a franchisor customer referral for a specific fee, which is less than the price at which we sell the business to the customer, and to keep the difference. You are not required to accept the franchisor customer referral. In our fiscal year ended September 30, 2024, we received $4,476,000 in revenue from franchisor customer referrals, or 17.9% of our total revenue of $24,936,000, and the franchisor customer referrals program had expenses of $4,112,000.

We can require you to participate in sales fulfillment or other programs related to strategic marketing alliances we negotiate and/or form with other companies, which may include our affiliates. The programs can involve sales fulfillment services connected with online estimating, purchasing, shipping services systems, or printing services employed by web-based sites or other platforms. As a participant in any of these programs, you must service each order in the time and manner we specify and for the price and terms offered to consumers as part of the program. We or the applicable program supplier, which may be our affiliate, can require you to pay a reasonable fee that may be in addition to royalty fees and marketing fees for any business generated for you under any program.

We may derive income from suppliers selling products and services to our franchisees. Occasionally, some suppliers, including FedEx and UPS, have offered and paid us advertising funds based on system-wide package volume generated by franchised businesses. We may receive information about and credit for your sales volume totals from these suppliers. We use these allowances to fund marketing and promotional materials and programs for the franchise system.

In our fiscal year ended September 30, 2024, we received $661,000 in revenue from franchisees' purchases of equipment, inventory and supplies from us, or 2.7% of our total revenue of $24,936,000, with $550,000 in expenses. We received $0 from suppliers approved by us based on their sales and leases of products and services to our franchisees.