Are Big Apple Bagels franchisees required to contribute to the Marketing Fund?

d in order to enable Franchisor to verify Franchisee's Gross Revenues from all sources. This obligation shall apply to each Third Party Delivery Service company that submits an order to Franchisee's Store for the first time.

10. MARKETING AND PROMOTION.

a. By Franchisor.

i. Recognizing the value of advertising to the goodwill and public image of BAGELS Stores, Franchisor shall establish, maintain and administer a BAGELS marketing fund (the "Marketing Fund") for such marketing and related programs as Franchisor may deem necessary or appropriate, in its sole discretion. Franchisee shall contribute to the Marketing Fund an amount equal to three percent (3%) of the Gross Revenues of the BAGELS Store [except that receipts from wholesale accounts are excluded from Gross Revenues for purposes of calculating Marketing Fund contributions only]. Such Marketing Fund contributions shall be payable weekly together with the royalty fees due hereunder. Franchisor shall have the right from time to time to increase Franchisee's Marketing Fund contributions hereunder to an amount not to exceed the Marketing Fund contribution charged under Franchisor's then-current form of Franchise Agreement, but never to exceed five percent (5%) of Gross Revenues. Franchisor may from time to time, but is not required to, institute a policy to reduce, rebate, or modify Franchisee's contribution to the Marketing Fund, which policy is subject to rescission at any time during the term of this Franchise Agreement. However, no such policy shall increase the amount of Franchisee's contribution to the Marketing Fund greater than five percent (5%) of the Gross Revenues of the BAGELS Store.

• ii. Franchisee acknowledges that the advertising of the Marketing Fund may promote the products of the My Favorite Muffin stores as well as their own products. Despite the "spill-over" benefit of such promotions, Franchisee acknowledges that none of the Marketing Funds will pay or contribute to the other for such benefit.
• iii. Franchisor shall direct all marketing programs financed by the Marketing Fund, with sole discretion over the creative concepts, materials and endorsements used therein, and the geographic, market, and media placement and allocation thereof. Franchisee agrees that the Marketing Fund may be used to pay the costs of preparing and producing video, audio and written advertising materials and electronic media, developing, implementing, and maintaining an electronic commerce website and/or related strategies; administering multi-regional, regional, and local advertising programs, including without limitation, purchasing direct mail and other media advertising and employing advertising agencies to assist therewith; and supporting public relations, market research and other advertising and marketing activities.

Source: Item 22 — CONTRACTS (FDD pages 86–87)