Does Baya Bar administer a marketing fund?

Marketing Fund: You are required to contribute 1% of your Gross Sales weekly to our System, Baya Bar Shops and the products and services offered by Baya Bar Shops. (Franchise Agreement, Section 8.3.) Each Baya Bar outlet operated by our affiliates or us may, but is not obligated to, contribute to the Marketing Fund on the same basis as System franchisees. All franchisees will contribute the same percentage to the Fund.

The Marketing Fund is administered by our owner William Loesch. We may use Marketing Fund contributions to pay any and all costs for developing, producing and disseminating advertising, marketing, promotional and public relations materials, programs, campaigns, sales and marketing seminars and training programs of every kind and nature, through any media we determine; conducting marketing research and employing advertising agencies; developing, enhancing and maintaining our website, social media platforms, apps, and other technology for the benefit of the Marketing Fund image and/or Systemwide

improvements; and staff salaries and other personnel and departmental costs for advertising that we internally administer or prepare.

The Marketing Fund will not be used to defray any of our other general operating expenses. Marketing Fund contributions will not be used to solicit new franchise sales; provided however, we have the right to use the Marketing Fund for public relations, to explain the franchise system, and/or include "Franchises Available" or similar language and contact information in advertising produced with Marketing Fund contributions.

The Marketing Fund collects and expends contributions for the benefit of the System as a whole. We have the right to use the Marketing Fund contributions to place advertising in national, regional or local media (including broadcast, print, or other media) and to conduct marketing campaigns through any channel, in our discretion, including but not limited to, internet and direct-mail campaigns. We have no obligation, however, to use the Brand Fund to place advertising or conduct marketing campaigns in any particular area, including the geographical area where your Franchised Business is located. No amount of the Fund will be spent for advertising that is principally a solicitation for the sale of franchises.

We have no obligation to make expenditures that are equivalent or proportionate to your Marketing Fund contribution or to ensure that you benefit directly or pro rata from the production or placement of advertising from the Brand Fund.

We have the right to reimburse ourselves out of the Fund for the total costs (including indirect costs such as salaries for our employees who devote time and effort to Fund related activities and overhead expenses) of developing, producing and distributing any advertising materials and collecting the marketing fund fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any marketing fund fee). We also have the right to use a portion of the Fund to subsidize the cost of presenting refresher training and/or a franchisee meeting. The Marketing Fund and its earnings shall not otherwise inure to our benefit except that any resulting technology and intellectual property shall be deemed our property."

Shops owned by us or our affiliates are not obligated to contribute to the Fund. Funds from the marketing fund fees paid will be kept in a non-interest-bearing account separate from our other funds. These funds will not be used to defray any of our general operating expenses, except as described in the paragraph above. Any sums paid to the Fund that are not spent in the year they are collected will carry over to the following year. We will prepare, and furnish to you upon written request, an annual statement of funds collected, and costs incurred. We are not required to have any Fund statement audited, but if we choose to have the Fund audited it will be at the Fund's expense.

In our most recently concluded fiscal year ending December 31, 2023, Marketing Fund contributions, including contributions that were carried over from the previous year, were used as follows: 17% for production, 76% for media placement, and 7% for administrative expenses.

Although the Fund is intended to be perpetual, we may terminate the Fund at any time. The Fund will not be terminated until all monies in the Fund have been spent for advertising or promotional purposes or returned to contributors on a pro rata basis. If we terminate the Fund, we have the right to reinstate it at any time and you must again contribute to the Fund. Any reinstated Fund will be maintained as described above.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)