Does Beggars Pizza administer an advertising and brand promotion fund?

During the term of the Agreement, Franchisee must pay to the System's advertising and brand promotion fund (the "Brand Fund") a fee in an amount equal to one percent (1%) of Franchisee's Gross Sales from the preceding Accounting Period.

Such contributions to the Brand Fund will be in addition to any expenditures made pursuant to Sections 12.1 and 12.2 hereof and must be made in accordance with Sections 4.5 and 4.6 hereof.

• 12.5 Brand Fund.

The Brand Fund will be maintained and administered by Franchisor or its affiliate as follows:

• 12.5.1 Franchisor or its affiliate will direct all advertising programs, with sole discretion over the concepts, materials, and media used in such programs and the placement and allocation thereof.

Franchisee agrees and acknowledges that the Brand Fund is intended to maximize general public recognition, acceptance, and use of the System and that Franchisor or its

affiliate is not obligated while administering the Brand Fund to make expenditures for Franchisee that are equivalent or proportionate to Franchisee's contributions or to ensure that any particular franchisee benefits directly or indirectly from expenditures by the Brand Fund.

12.5.2 The Brand Fund, all contributions thereto, and any earnings thereon, will be used exclusively to meet any costs of maintaining, administering, directing, conducting and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which Franchisor or its affiliate believes will enhance the image of the System including, without limitation, the costs of preparing and conducting radio, cable television, print, and Internet-based advertising campaigns; utilizing Networking Media Sites and other emerging media or promotional tactics; developing, maintaining, and updating a Website on the Internet; review of locally produced advertisements; door hangers, mailers, inserts and coupons; brochures and promotional materials; market research, market surveys, and sponsorships; web site design and maintenance; public relations and related retainers; mystery shoppers for the System and competitors; celebrity endorsements; trade shows including, without limitation, costs of travel and personnel expenses, trade booths, and specialty entertainment; association dues; search engine optimization; employing advertising and/or public relations agencies; purchasing promotional items; menu development and developing menu items; providing promotional and other marketing materials and services to the businesses operating under the System; developing poster, banners, and signs; and advertising for the sale of franchises.

12.5.3 All sums paid by Franchisee to the Brand Fund will be maintained in an account separate from the other monies of Franchisor and will not be used to defray any of Franchisor's or its affiliate's expenses, except for such reasonable costs and overhead, if any, as Franchisor or its affiliate may incur in activities reasonably related to the direction and implementation of the Brand Fund and advertising programs for franchisees and the System including, without limitation, costs of personnel for creating and implementing advertising, promotional and marketing programs, accounting expenses, and other out of pocket expenses to third parties incurred by the Brand Fund. The Brand Fund and any earnings thereon will not otherwise inure to the benefit of Franchisor or its affiliate. Franchisor will maintain separate bookkeeping accounts for the Brand Fund. Franchisor has formed an affiliated entity to control and administer the Brand Fund. Franchisee acknowledges that neither Franchisor nor its affiliate is a fiduciary to Franchisee of the monies in the Brand Fund.

Source: Item 22 — CONTRACTS (FDD page 39)