You (or if you are a corporate entity, one of your principals) must attend our initial training. If we approve your Shop to operate with an Operations Manager, at least the Operations Manager plus another manager must successfully complete the training program, unless we waive this requirement with respect to him or her. Other managers may attend, but you will be required to pay us for the attendance of any employees beyond your Operations Manager and you. We plan to conduct the training program on an as-needed basis. Initial training is conducted at our Elizabethtown, North Carolina location, and it generally spans a one-week period. You or a principal, and, if applicable, your Operations Manager, must complete the training program to our satisfaction before we will authorize you to open your Shop. We may in the future designate your Shop as an approved training facility for other franchisees. If so, you will be compensated at our then current reimbursement rate for any training you provide to new franchisees at our specific request in your capacity as a training facility.

If you buy the franchise from us, your initial franchise fee includes the cost of initial training for up to 2 persons pre-opening. You bear all indirect training costs and expenses, such as salary expenses of your employees and all expenses of travel, lodging, meals, and other living expenses you and your designees incur.

The exact amount of time spent on each part of the training will depend on the time required for mastery by the students participating in the training. All training is provided by Michael or

Gina Burney, who each have more than 8 years of experience operating a BURNEY'S SWEETS & MORE Shop.

The training program covers the following information:

TRAINING PROGRAM

The Brand Standards Manual contains mandatory and suggested specifications, standards, and procedures, which are confidential and remain our property. Your employees are to see them only on a need to know basis, subject to confidentiality agreements. Anyone who attends any training session will be required to sign a confidentiality agreement in the form we designate. We may modify this material from time to time and its modified terms are binding on you. The Brand Standards Manual currently contains a total of 58 pages. (Franchise Agreement Section 11(i).)

ADVERTISING

You may develop advertising materials for your own use at your own cost. We encourage the sharing by franchisees of advertising ideas and materials. We require you to submit advertising and promotional materials to us in advance and to obtain our approval before using them. You are required to follow our instructions in connection with any advertising or promotional materials we provide for your use. (Franchise Agreement Section 8(g).) Failure to follow our instructions regarding pre-approval of advertising materials will result in fines. These fines will be as follows: 1 st infraction: $0, 2nd infraction: $100, and third or subsequent infraction: $500. Imposition of these fines will in no way waive our right to consider your use of unapproved advertising as a default-triggering event, such as that described at Franchise Agreement Section 17(c)(v).

Brand Fund. We have established the Brand Fund to support the development of new recipes and franchisee revenue sources, the evaluation and adoption of new technology, and the

creation of marketing content and public relations materials, as we, in our sole discretion, deem appropriate for the benefit of the brand. (Franchise Agreement Sections 8 (a)(ii) and 8(b))

The contribution is currently 0.5% of monthly Gross Sales. We reserve the right to raise the contribution to the Brand Fund, but not to exceed 1.5% of your Gross Sales. We may at our discretion defer Brand Fund contributions for you or another franchisee for an additional period of time we deem appropriate at the outset of your or their Shop.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–33)