Brand Fund as of the close of our previous fiscal year.

The Fund is intended to maximize public recognition and acceptance of the Beauty Bungalows brand, increase business, and enhance the collective success of all salons operating under the System. We will administer contributions to the Brand Fund in our sole determination for the creation and development of marketing, advertising, promotions, and related programs and materials, including electronic, print, and internet media, as well as the planning and purchasing of national, regional, and/or local advertising. We will direct all advertising and marketing programs funded by the Fund, including but not limited to research methods, branding, creative concepts and materials, sponsorships, and endorsements, selection of geographic and media markets, and media placement and allocation thereof. We may reimburse our self from the Fund for its expenses in administering the Fund or any MAM Program(s), including expenses related to third-party services, in-house services, contractors, employees and other costs related to the managing the Fund and the collecting Fund contributions. The Fund or any MAM Program(s) may be used to satisfy any and all costs of maintaining, administering, directing and preparing advertising or marketing, including, without limitation, (a) the costs or preparing and conducting marketing campaigns intended to enhance the brand, including marketing, advertising, or promotions that are directed at consumers, salon professionals or general business professionals such as lenders to franchisees, landlords and beauty industry participants, (b) digital marketing, (c) social media marketing, (d) in-store and point of purchase marketing, (e) public relations activities or events, intended to enhance the brand, that are directed at consumers, salon professionals or general business professionals such as lenders to franchisees, landlords and beauty industry participants, (f) employing or engaging advertising and/or marketing personnel, contractors or agencies, (g) development, enhancement and maintenance of Beauty Bungalows- sponsored or promoted websites and mobile applications, (h) costs incurred by Beauty Bungalows for personnel and other departmental costs for marketing purposes, (i) Beauty Bungalows programs and differentiators relating to education and support, (j) technologies and platforms used by Beauty Bungalowsfranchisees and Customers, and (k) other internal or administrative costs, expenses, or overhead caused by or related to the collecting, administering and managing the Fund or any MAM Program(s) or creating, preparing, distributing, monitoring and managing marketing related marketing or advertising programs or campaigns, websites and mobile applications.

Beauty Bungalows Franchising, LLC We will not use the Fund or any MAM Program(s) for advertising that is principally a solicitation for the sale of Beauty Bungalows Franchises, but we reserve the sole right to pursue any franchisee or business opportunity that results from any MAM Program or any use of the Fund, including marketing, promotional, public relations, and advertisement activities. We reserve the right to include notations in any advertisement or marketing platform, including websites or mobile applications, that Beauty Bungalows Franchises are

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available (or similar phrasing) along with contact forms or informational pages. We did not collect any contributions to the Fund in our previous fiscal year.

We may develop advertising internally, or contract with local, regional, or national agencies to develop advertising for the brand fund.

Regional Advertising Cooperative

We may establish a Marketing Cooperative in a geographic area in which two or more Beauty Bungalows are located. The Marketing Cooperative's members include all Beauty Bungalows franchises operating in the geographic area, including those operated by us and our affiliates, if applicable. We may require you to join a Marketing Cooperative existing or established in a geographic area encompassing your Beauty Bungalows franchise. We will determine how any Marketing Cooperative is organized and governed, but the Marketing Cooperative's members are responsible for its administration and determination of contribution levels, provided your required contribution to the Marketing Cooperative will not exceed 2% of your Beauty Bungalows Franchise's location's monthly Gross Revenue. Each Marketing Cooperative will operate under written governing documents prepared by us or our designee. Such documentation will be made available to members of the Marketing Cooperative upon reasonable request. Marketing Cooperatives will prepare an annual unaudited financial statement and make it available to members upon reasonable request.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 23–30)