What criteria may Browns Chicken use to evaluate a distributor or supplier?

ood And Beverage Products, Supplies and Materials.**

All food and beverage products, cooking materials, containers, packaging materials, other paper and plastic products, glassware, utensils, uniforms, menus, forms, cleaning and sanitation materials, and other materials and supplies used in the operation of the Store must conform to the standards and requirements Brown establishes from time to time. Brown has approved and will periodically approve types and/or brands of such products that meet its specifications, and suppliers and distributors of the foregoing products that meet its standards and requirements for suppliers, including standards and requirements relating to quality, prices, consistency, reliability, financial capability, labor relations and customer relations. Brown may from time to time modify its list of approved types and/or brands of products and of approved suppliers, and you must not (after receipt in writing of such modification) reorder any type or brand from any supplier which is no longer approved by Brown.

In order to obtain reduced margins, Brown has approved Wilkens Foodservice as the single distributor for all food, beverage, and dry goods products, other than bakery items. You must purchase all those items from Wilkens Foodservice. Wilkens Foodservice does not pay Brown

any rebates or other payments based on franchisee purchases. The contract with Wilkens Foodservice does not have a term. Upon termination of the contract with Wilkens Foodservice, Brown may approve one or more other distributors. Brown's approval may be conditioned on requirements relating to the frequency of delivery, standards of service, including prompt attention to complaints, or other criteria, and concentration of purchases, as set forth above, and may be temporary, pending a further evaluation of such distributor or other supplier by Brown.

Other than under our arrangement with Pepsi and Dr. Pepper/Seven Up, Inc. we do not currently derive any revenue or other material consideration from your purchases or leases from designated or approved suppliers, although we reserve the right to do so in the future.

There are currently 2 purchasing arrangements for franchisees. One is with Pepsi, which is an approved fountain beverage product supplier. Under the Pepsi agreement, you will have the right to purchase Pepsi fountain syrups from Wilkens at then-current published chain account prices, which prices are subject to change from time to time. The Pepsi agreement provides that Pepsi will pay a rebate into the Brown Advertising Fund based on Franchisees' purchases of Pepsi products. During the fiscal year 2024, Pepsi paid Brown rebates totaling $1,637 which was retained by Brown in its general operating budget.

A second purchasing arrangement is with Dr. Pepper/Seven Up, Inc., which is an approved fountain beverage product supplier. During the fiscal year 2024, Dr. Pepper/Snapple paid Brown rebates totaling $308.25, which was deposited into the Brown Advertising Fund.

If you propose to purchase and use in the operation of the Store, or to offer for sale at or from the Store any type or brand of product which is not then approved by Brown as meeting its specifications and standards, or to purchase any product from a supplier that is not then an approved supplier, you must first notify Brown. If any product is offered by Wilkens, then during the 3 year contract term described above, we will not consider any other suppliers. As for products not offered by Wilkens, we may consider your request to purchase them from other suppliers. Upon request by Brown, you must submit the information, specifications, and samples as Brown requests for examination and/or testing or to otherwise determine whether such type or brand of product or such proposed supplier meets its specifications and standards. Brown will notify you, within a reasonable time, whether it approves such proposed type or brand of product or such proposed supplier.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)