Does Bonchon require franchisees to spend money on television advertising?

After your obligations under the New Restaurant Marketing Plan have been fully satisfied and continuing through the end of your Bonchon Business' first full calendar year of operations, you agree to expend on average the greater of: $1,166 per month or 1% of the preceding month's Gross Revenues on Local advertising and promotion. Following your Bonchon Business' first full calendar year and continuing for the remainder of the Initial Term, you agree to expend annually at least 2% of the previous year's Gross Revenues on Local advertising and promotion. "Local advertising and promotion" means the local or regional Advertising and promotional activities that we specify in our Manuals or otherwise, or approve in advance as provided in Section 10.02, including expenditures on television, radio, newspaper, magazines, out of home, posters, banners, brochure, direct mail, social media platforms such as Facebook, Instagram, yelp, and other digital platforms. For the avoidance of doubt, any expenditures you make on the following items shall not be applied towards and/or used to satisfy your New Restaurant Marketing Plan nor your minimum local advertising and promotional expenditure requirement: (1) an incentive program for your employees or agents; (2) charitable, political or other contributions or donations; (3) store fixtures or equipment; and/or (4) online business listings.

You will be entitled to a credit against your minimum local advertising and promotion requirement for contributions made to an advertising cooperative (as provided for in Section 10.04).

We may, from time to time, establish, change, merge or dissolve regional advertising cooperatives for a geographic area which encompasses three or more Bonchon Businesses (each a "Regional Advertising Cooperative"). We will furnish to you written notice of the establishment of any Regional Advertising Cooperative for your geographic area. The notice will specify the date you are to begin contributions and the amount of the contributions. Contributions will be calculated as a percentage of Gross Revenues as defined in Section 5.05 above. Your contributions to a Regional Advertising Cooperative will not be less than 1% nor more than 4% of your Gross Revenues, unless the maximum contribution is changed by franchisee Cooperative members in accordance with the terms of the Bylaws of the Cooperative. You will be entitled to a credit against your minimum local

We or our designee will administer the Bonchon System Brand Fund as follows:

• A. As provided in Section 5.03, you agree to pay us a Bonchon System Brand Fund Contribution which, combined with the contributions made by all other Bonchon franchisees, will constitute the Bonchon System Brand Fund (or the "Fund").
• B. We will direct all advertising programs, with sole control over the creative concepts, materials and media used in such programs, and the placement and allocation of Fund advertising. You acknowledge that the Fund is intended to further general public recognition and acceptance of the Proprietary Marks for the benefit of the Bonchon System. You further acknowledge that we and our designees undertake no obligation in administering the Fund to make expenditures for you which are equivalent or proportionate to your contributions, to ensure that any particular franchisee benefits directly or pro rata from the placement of advertising or to ensure that any advertising impacts or penetrates your Restaurant Location. The Fund is not a trust and we are not a fiduciary with respect to the Fund.
• C. The Fund may be used to meet any and all costs of administering, directing, preparing, placing and paying for national, regional or local advertising, including (without limitation): production and media; television, radio, cable, video, audio, magazine, newspaper, written materials, graphics, electronic media, and worldwide web/internet advertising campaigns; other advertising, marketing and public relations and promotional materials; point-of-purchase materials; consumer research, menu and promotion analytics tracking, interviews and related activities; the creation, maintenance and periodic modification of the Bonchon website; advertising at sports events; sports team sponsorships; mailers, door hangers, freestanding inserts/coupons, brochures and sponsorships; mystery shoppers (both for the Bonchon System and for competitive networks or units); celebrity endorsements; influencer marketing; reviewing any advertising material you propose to use (as provided below); search engine optimization; establishing a third party facility for customizing local advertising materials; accounting for Bonchon System Brand Fund receipts and expenditures; attendance at industry related conventions, shows or seminars; related retainers; association dues (including the International Franchise Association); social media programs on the

Source: Item 23 — RECEIPTS (FDD pages 92–536)