Can Annex Brands spend more or less than the aggregate contributions of Centers to the Fund in any fiscal year?

According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands has the discretion to spend more or less than the total contributions from franchised Centers to the marketing fund in any given fiscal year. This means that the amount Annex Brands spends on marketing in a year does not necessarily have to match the exact amount collected from franchisees.

This flexibility allows Annex Brands to adjust its marketing expenditures based on various factors, such as market conditions, strategic priorities, or the availability of marketing opportunities. If Annex Brands spends less than the total contributions in one year, the remaining funds will be carried over to the next year, ensuring that the money is eventually used for marketing purposes.

For a prospective Annex Brands franchisee, this policy has both potential benefits and risks. On one hand, it allows Annex Brands to build up a reserve of marketing funds to use for larger or longer-term campaigns. On the other hand, it means that franchisees may not see an immediate return on their marketing contributions if Annex Brands chooses to save the money for future use. It is important to note that Annex Brands is not allowed to profit from the marketing fund, and must provide an annual report on the fund's operation to franchisees upon written request.