What is the purpose of the Production Fund for Carls Jr. franchisees?

ly shall reimburse CJR or its designee for all costs and expenses associated with CJR obtaining such records, reports or other information. Franchisee also acknowledges that CJR has the right at any time to communicate directly with Franchisee's lenders, any other creditors, any suppliers and all regulatory authorities regarding Franchisee, Franchisee's business or any aspect of the Franchised Restaurant.

8. ADVERTISING AND PROMOTION

A. Contributions/Expenditures by Franchisee

During the term of this Agreement, Franchisee shall have a weekly advertising and promotion obligation ("APO") in the amount set forth in Section 6.C. and Appendix C. Following written notice to Franchisee, CJR may modify the amount and allocation of the APO subject to the provisions of Section 8.F. Franchisee shall pay, at the same time and in the same manner as the royalty fee, that portion of the APO as CJR may direct to the Production Fund in accordance with Section 8.B. The remainder of the APO shall be paid, at the same time and in the same manner as the royalty fee, to the Media Fund in accordance with Section 8.C.

B. Production Fund

CJR has established, and will maintain and administer a fund for the creation and development of advertising, marketing, social media and public relations, research and related programs, gift card and loyalty programs, activities and materials that CJR, in its sole discretion, deems appropriate ("Production Fund"). Franchisee shall contribute to the Production Fund the amount set forth in Appendix C, as subsequently modified pursuant to Section 8.F. Carl's Jr. Restaurants operated by CJR and its affiliates shall contribute to the Production Fund on the same basis as comparable franchisees.

CJR or its designee shall direct all advertising, marketing, social media and public relations programs and activities financed by the Production Fund, with sole discretion over the creative concepts, materials and endorsements used in those programs and activities, and the geographic, market and media placement and allocation of advertising and marketing materials. Franchisee agrees that the Production Fund may be used among other things to pay the costs of preparing and producing such associated materials and programs as CJR or its designee may determine, including but not limited to video, audio and written advertising materials; employing advertising or activation agencies; administering regional and multiregional advertising programs, including, without limitation, purchasing direct mail, in-App support for third party delivery platforms like Doordash and other media advertising and employing advertising

agencies to assist with these efforts; and supporting public relations, market research and other advertising, promotional and marketing activities. Franchisee agrees to participate in all advertising, marketing, promotions, research and public relations programs instituted by the Production Fund From time to time, CJR or its designee may furnish Franchisee with marketing, advertising and promotional materials at the cost of producing them, plus any related shipping, handling and storage charges.

**C.

Source: Item 22 — CONTRACTS (FDD pages 75–76)