What is the deadline for a Burros Fries franchisee to pay the System Advertising Fee each month?

more than 1% upon 90 days' written notice to you and shall not exceed 3% of Gross Revenue per month for the term of the Franchise Agreement.

The System Advertising Fee is to be received by us on or before the fifth (5th) day of each month for the prior month's Gross Revenue (as defined above in Section 10.A). This fee will be deposited into our System Advertising Account (the "Fund") for ongoing technology or new product development (including recipes and menu items) or kitchen equipment development, and such national advertising or public relations programs as we, in our sole discretion, may deem appropriate to promote our mark. The Fund may also be used for local franchisee group advertising or marketing and Franchisee advisory council expenses; local, regional, national or international advertising or marketing; administration of advertising and marketing (including salaries, accounting, collection, legal and other costs), related expenses and any media (including media production costs) or agency costs. We will direct all such programs, and will have sole discretion over the creative concepts, materials, endorsements and media used in such programs, and the placement or allocation of such programs. We reserve the right to determine in our sole discretionthe composition of all geographic territories and market areas for the implementation and development of such programs. The Burros & Fries Restaurants owned by our affiliates may will contribute on the same basis to the Fund but are not required.

We may disclose the identity of vendors who pay promotional allowances to us upon request and only after Franchisee's signing an appropriate non-disclosure agreement. We have the right to spend that money as we determine. We are not obliged to spend more on advertising and marketing than the amount of the Fund. Any unspent balance in the Fund at the end of the year may be carried over to later years and used for the purposes described in this Agreement. Neither we nor any of our members has any fiduciary duty to the Franchisee regarding any System Advertising Fund.

Franchisee's failure to pay required System Advertising Fees is a material breach of this Agreement, subjecting Franchisee to all remedies at law and as set forth in this Agreement. We may remove Franchisee from advertising or marketing materials without notice if Franchisee fails to timely remit its System Advertising Fee.

C. Local Advertising

Franchisee will spend a minimum of five hundred dollars ($500) per month on local advertising and promotion, in addition to payment of the System Advertising Fee required above but we recommend $1,500 per month. We shall have the right to approve or disapprove any advertising proposed for use by Franchisee. Franchisee may choose to advertise its Business any way it chooses so long as such advertisements and marketing materials are approved by us (as described in Section 12.L) and are in the format as specified in the Operations Manual.

D. Electronic Funds Transfer

We reserve the right to require Franchisee to remit fees and other amounts due to us hereunder via electronic funds transfer or other similar means utilizing our approved computer system or otherwise. If we notify Franchisee to use such payment method, Franchisee agrees to comply with procedures specified by us and/or perform such acts and deliver and execute such documents including authorization, in the form attached to this Agreement as Schedule 1 "Authorization Agreement for Prearranged Payments" for direct debits from Franchisees' business bank operating account, as may be necessary to assist in or accomplish payment by such method. Under this procedure, Franchisee shall authorize us to initiate debit entries and/or credit correction entries to a designated checking or savings account for payments of fees and other amounts payable to us and any interest and related processing fees charged due thereon. Franchisee shall make funds available to us for withdrawal by electronic transfer no later than the due date for these payments. If Franchisee has not timely reported its Gross Revenue to us (as defined in Section 10.A) for any reporting period, then we shall be authorized, at our option, to debit Franchisee's account in an amount equal to (a) the fees transferred from Franchisee's account for the last reporting period for which

a report of the Business's Gross Revenue was provided to us as required hereunder or (b) the amount due based on information retrieved from our approved POS or computer system (whichever is greater).

E. Technology Fee & POS Support.

Source: Item 22 — CONTRACTS (FDD page 53)