How will the Marketing and Promotion Fees collected from Bhc franchisees be used?

Once BHC starts to require payment, Marketing and Promotion Fees collected from BHC franchisees less a 15% administration fee will be spent for national and regional advertising and promotional campaigns designed to promote and enhance the value of the BHC trademarks and their general public recognition and acceptance.

We need not ensure that any particular franchisee benefits directly or proportionately from the Marketing and Promotion Fee.

In Franchisor's sole discretion and as Franchisor deems appropriate, Franchisor will expend, for the purposes of national, regional or local marketing, advertising, market research, public relations and promotional campaigns designed to promote and enhance the value of the Marks and general public recognition and acceptance thereof, an amount equal to the aggregate Marketing and Promotion Fees stated in section 4.4 hereof and collected from all of its franchisees less a 15% administration fee. No interest on unexpended Marketing and Promotion Fees will be imputed for Franchisee's benefit or payable to Franchisee. If requested by Franchisee in writing not later than March 31 of any calendar year, Franchisor will provide Franchisee no later than May 31 of the same calendar year with a statement of receipts and expenditures of the aggregate Marketing and Promotion Fees relating to the preceding calendar year, certified to be correct by one of Franchisor's officers.

• (b) In Franchisor's sole discretion and as Franchisor deems appropriate, Franchisor is obligated to spend the Marketing and Promotion Fees collected from Franchisee and all other BHC franchisees (less Franchisor's 15% administration fee) on regional, local or national media or other marketing techniques or programs designated to promote the Marks and the retail sale of BHC Products and other aspects of the BHC brand, creative and production costs, and for other purposes deemed appropriate by Franchisor to enhance and promote the general recognition of BHC franchises. These may include branding and marketing studies, initiatives, and research; test marketing new products or concepts; franchisee compliance with System standards and practices through a "mystery shopper" program; the development of marketing strategies, tools, initiatives, and materials; public relations; market research; annual conferences (excluding the expenses of Franchisor's principals and employees to travel to such conferences); and occasional selective regional and local advertising.

Franchisor determines the cost, form of media, content, format, production, timing (including regional or local concentration and seasonal exposure), location and all other matters relating to regional or system-wide advertising (including advertising paid from Marketing and Promotion Fee contributions), public relations and promotional campaigns.

Source: Item 23 — Receipts (FDD pages 52–230)