From whom can a Caring Transitions franchisee purchase certain marketing and promotional materials?

You may purchase certain marketing and promotional materials from the Caring Transitions national branding fund. See Item 8 for a more detailed explanation of the requirements for purchasing equipment and supplies.

National Branding Fund. We, in our discretion, make certain marketing materials and promotional services available to you through a national branding fund (the "National Branding Fund"). (Franchise Agreement § 11.3). Some of the services may include a periodic publication for your customers, the development of new marketing programs, and contests for services or promotional items. The marketing materials available for purchase from the National Branding Fund include all brochures and mailers used in our marketing program and promotional items bearing our logos and service marks.

Each franchisee is required to pay a National Branding Fee of 2% of monthly Gross Receipts or $350.00 per month, whichever is greater, to the National Branding Fund. (Franchise Agreement § 5.2). We may increase the amount of the National Branding Fee, but not by more than 10% per each year in which the franchise agreement has been in effect. Any increase in the National Branding Fee will be effective at least 30 days after you receive notice of the increase. All National Branding Fees

are maintained in a separate bank account and may only be spent on advertising, promotion, and marketing of the services provided by Caring Transitions franchises, the development of new public relations campaigns and new advertising, promotional and marketing materials for the Caring Transitions system, the solicitation of National Accounts, employment of marketing personnel, and administrative costs associated with the maintenance of the National Branding Fund. Our current policy is to use the National Branding Fund for the development of new advertising, promotional and marketing materials and to advertise the services provided by franchisees in certain print media. However, we have the right to change this policy at any time and use the National Branding Fund to place advertising in national, regional or local media (including broadcast, print, or other media). We are reimbursed for any overhead, postage or labor provided to the National Branding Fund. Each franchisor-owned location, if any, will contribute to the National Branding Fund on the same basis as you.

The National Branding Fund is administered by our accounting personnel. An unaudited annual financial statement of the National Branding Fund is available to you after April 1 of each year. We do not presently have the National Branding Fund audited by an independent certified public accountant, but we reserve the right to do so at the National Branding Fund's expense.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–29)