ee "Approval Requirement" below). You may not advertise outside of your Territory without our approval, which approval may be withheld in our sole discretion (see Item 12).

We and our affiliates may earn revenue and profits on products or services we provide and may receive rebates, administrative fees, commissions, or other payments on products and services that third party vendors provide.

Brand Fund. Franchisees must contribute to a marketing fund for the BENJAMIN FRANKLIN PLUMBING system (the "Brand Fund"). New franchisees are required to contribute to the Brand Fund an amount that we determine, not to exceed 4% of Gross Revenue. As of the date of this disclosure document, the required contribution is a declining percentage of annual Gross Revenue starting at 1.5% of the first $5,000,000 of Gross Revenue in the then-current calendar year (see Item 6). The rate reverts to 1.5% at the start of the next calendar year. Franchisees under previous forms of Franchise Agreement may contribute at other rates. Company-Owned Outlets will contribute to the Brand Fund on the same basis as new franchisees.

The purpose of the Brand Fund is to support general development and recognition of the BENJAMIN FRANKLIN PLUMBING brand. We will have the right to direct all advertising, marketing, public relations, and other activities to promote, develop and enhance the brand, with final discretion over strategic direction, creative concepts, materials, endorsements, geographic market, and media allocation. We or our affiliate administer the Brand Fund. We may use the Brand Fund to pay costs and expenses as we determine in our sole discretion, including but not limited to: production of video, audio, written, online and mobile marketing materials; purchasing promotional items; sponsorship of sporting, charitable, or similar events; design, establishment, and maintenance of websites, social media, mobile applications and other electronic marketing; implementation of advertising programs, in-store promotions, direct mail, and media advertising; marketing and sales training; employing advertising agencies; conducting public relations, consumer research, product development, product testing, and test marketing programs; developing and implementing trade dress and design prototypes; fulfillment charges; salaries and expenses of our and our affiliates' employees working for or on behalf of the Brand Fund; fees of accounting firms, design firms, public relations firms, consultants and ad agencies; legal fees for advertising pre-clearance, defense of false advertising claims, and defense of any claims made regarding our administration of the Brand Fund; other administrative costs and overhead incurred in activities related to the administration and activities of the Brand Fund; and interest on any monies borrowed by the Brand Fund.

Our marketing and advertising department will prepare advertising, marketing, and related materials and programs. We will make available to you any creative materials financed by the Brand Fund. If you request specific materials to be produced or customized for you, then once you approve the requested materials, you must pay or reimburse us for any costs to reproduce the materials and/or to customize the materials for your use.

We may develop advertising and promotional materials and displays for the solicitation of franchisees for the Brand. You must display such materials and displays as we require from time to time. Our consumer website and other online activities supported by the Brand Fund may also include information about our franchise opportunity.

We have no obligation to make expenditures for you from the Brand Fund that are equivalent or proportional to your contributions, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the Brand Fund. You have no right to reduce or withhold contributions based on any alleged lack of benefits to your Franchised Business or based on failure by any other franchisee (with or without our permission) to make its contributions to the Brand Fund.

We have no obligation to have the Brand Fund independently audited. We will, however, prepare an annual unaudited statement of contributions to and expenditures of the Brand Fund. You can obtain a copy by making a written request. Any expenditures for independent accounting services in connection with the annual statement will be charged to the Brand Fund.

For the calendar year ended December 31, 2024, 42% of Brand Fund expenditures were for National Advertising & Programs, 11% of expenditures were for Marketing Support, 4% of expenditures were for Public Relations, 24% of expenditures were for Creative Production and 19% of expenditures were for Other. None of the amounts in the Brand Fund are used for marketing that is principally a solicitation for the sale of franchises.

The Brand Fund is not a trust and does not give us a fiduciary obligation. Other than our express obligations in the Franchise Agreement, we assume no liability with respect to maintenance, direction, or administration of the Brand Fund. We have the right to incorporate, replace, change or dissolve the Brand Fund. If we decide to dissolve the Brand Fund, contributions to the Brand Fund will stop, but the Brand Fund will continue in existence until remaining funds have been spent.

Other than administering the Brand Fund as described above, we do not have an obligation to conduct advertising on your behalf.

Referral Programs. As of the date of this disclosure document, we offer two referral incentive programs:

A. Standard Referral

Our affiliate, AB Inc., is sponsoring a referral incentive program that began on February 24, 2025. The referral incentive program pays $15,000 to an existing franchisee of ours or any of our affiliated brands who first directly refers a candidate who: (a) has not previously been referred to us by another source or otherwise been in contact with and/or engaged with us, our affiliates or third party consultants or agents; (b) has not previously signed a Franchise Agreement with us or any of our affiliated brands;

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 46–57)