Is Beverly Anns Cookie required to hold the Brand Fund in a separate bank account?

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Advertising

Brand Fund

We have established a Brand Fund for Beverly Ann's Businesses. You must pay $1,000 per year to the Brand Fund for each Beverly Ann's Franchise you own and $200 per year for each piece of Additional

Equipment you operate. This amount can be raised annually by up to 10% in our sole discretion. The amount of the Brand Fund contribution may also be increased at any time upon super-majority (75%) of the Ad Council (which is defined below) and upon 30 days' notice to you of the increase. The Brand Fund may be held in a separate bank account, commercial account, or savings account, but we are not required to do so. The Brand Fund is administered by us or one of our affiliates, and we may use a professional advertising agency or media buyer to assist us with the supervision and administration of the Brand Fund. We may use national and/or regional advertising agencies as the source for our advertising materials, or we may prepare them in-house. Your contribution to the Brand Fund will be in addition to all other advertising requirements set out in this Item 11.

We may reimburse ourselves, our authorized representatives, or our affiliate from the Brand Fund for administrative costs, independent audits, reasonable accounting, bookkeeping, reporting and legal expenses, taxes, and all other reasonable direct or indirect expenses that may be incurred by us or our authorized representatives and associated with the programs funded by the Brand Fund. We assume no fiduciary duty to you or other direct or indirect liability or obligation to collect amounts due to the Brand Fund or to maintain, direct, or administer the Brand Fund. Any unused funds in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Brand Fund on any terms we deem reasonable. Because we do not have this fund audited, audited financial statements are not available to Beverly Ann's franchisees. We will provide to you each year an annual accounting for the Brand Fund that shows how the Brand Fund proceeds have been spent for the previous year upon written request (Franchise Agreement – Section 11). We do not guarantee that advertising expenditures from the Brand Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all.

We are not obligated to spend any amount on advertising in the geographical area where you are or will be located. We may use the Brand Fund for local, regional or national marketing, and any other purpose to promote the Beverly Ann's brand.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM, AND TRAINING (FDD pages 37–43)