Is a Bft franchisee responsible for paying for ongoing marketing materials?

• B.

The Fund is administered by Franchisor (or its affiliates) with the assistance and advice provided by a Fund advisory committee (the "FAC") pursuant to a charter agreement among Franchisor and the members of the FAC, which serves in an advisory capacity only.

The FAC represents BFT Studio franchisees and advises Franchisor with regard to all advertising, marketing and public relations programs and activities financed by the Fund, including the creative concepts, materials and endorsements used and the geographic market, media placement and allocation.

The FAC is purely advisory in nature and has no operational or ultimate decision-making authority.

• C.

Franchisee agrees that the Fund may be used to pay the costs of preparing and producing associated materials and programs as Franchisor may determine, including, without limitation, the use of Social Media (as defined in Section 9.3 below); formulating, developing and implementing advertising and promotional campaigns; video, audio and written advertising materials employing advertising agencies; sponsorship of sporting, charitable or similar events; administering regional, national and multi-regional advertising programs including purchasing direct mail and other media advertising, website development/operation and to pay Internet, Intranet, URL, 800 or similar number, and other charges, fees and/or expenses, including employing advertising agencies to assist with marketing efforts; supporting public relations, market research and other advertising, promotional and marketing activities; the reasonable costs of administering the Fund, including accounting expenses and the actual costs of salaries and fringe benefits paid to Franchisor's employees engaged in administration of the Fund and/or creation, development and/or placement of any creative and/or implementation of any campaigns associated with the same.

A brief statement regarding the availability of BFT franchises may be included in advertising and other items produced using the Fund.

• D.

Franchisor may spend in any calendar year more or less than the total contributions to the Fund in that year.

Franchisor may cause the Fund to invest any surplus for future use by the Fund.

Franchisor (or its affiliates) may borrow from its affiliates (or Franchisor) or other lenders on behalf of the Fund to cover deficits of the Fund.

• E.

Franchisor, its affiliates, and/or their respective employees, agents, contractors, and designated vendors can provide goods, services, materials, etc. (including administrative services and/or in-house advertising agency services) and be compensated and/or reimbursed for the same by the Fund, provided that any such compensation must be reasonable in amount.

Franchisor can arrange for goods,

services, materials, etc. (including administrative services) to be provided by independent persons/companies and all related costs, fees, etc. will be paid by the Fund.

• F. The Fund need not be segregated from but will be accounted for separately from Franchisor's other funds and Franchisor will not use the Fund for its general operating expenses. All taxes of any kind incurred in connection with or related to the Fund, its activities, contributions to the Fund and/or any other Fund aspect, whether imposed on Franchisor, the Fund or any other related party, will be the sole responsibility of the Fund. Franchisor will not be required to audit the Fund, but will provide an annual accounting of the Fund at the written request of Franchisee that is made 120 days after the fiscal year at issue. All interest earned on monies contributed to, or held in, the Fund will be remitted to the Fund and will be subject to the restrictions of the relevant franchise agreements.
• G. Franchisee acknowledges that the Fund Contributions are intended to maximize general public recognition of and the acceptance of the System and Marks generally, for the benefit of the System as a whole. Notwithstanding the foregoing, Franchisor undertakes no obligation, in administering the Fund Contributions to make expenditures that are equivalent or proportionate to Franchisee's contribution, or to ensure that any particular BFT Studio benefits directly or pro rata from advertising or promotion conducted with the Fund Contributions.

Source: Item 23 — RECEIPTS (FDD pages 79–265)