Does Casa De Corazon maintain and administer a Brand Fund?

tising Programs**

We have no obligation to conduct advertising or marketing on your behalf.

System Brand Fund

Under the Franchise Agreement, you must contribute 2% of your monthly Gross Revenue to the Casa de Corazon System Brand Fund. (Franchise Agreement – Section 8(a)). Your contributions to this Fund are due at the same time you pay your Royalty Fee, based on the amount of Gross Revenue your Center generated in the previous month. All our franchisees must contribute to this Fund. Centers operated by us or our affiliates will contribute to this Fund.

We account for the contributions to this Fund separately from our other revenues, and we do not use them to pay any of our general operating expenses other than our costs of administering the Fund and the costs, including salaries and overhead, of personnel engaged in administration or operation of the System Brand Fund, including those performing services that benefit, or are on behalf of, the System Brand Fund, including creative services. The purpose of the Fund is to develop programs that benefit the Casa de Corazon brand and promote the Marks. This means we may use monies in the Fund for any purpose that promotes the Casa de Corazon name, including the creation, production and placement of commercial advertising; to pay for agency costs and commissions; to pay the costs to create and produce video, audio and written advertisements; to pay for direct mail and other media advertising, including internet advertising, internet search engine campaigns and the cost to maintain and update our or our affiliate's websites, web pages, social media and social networking sites, profiles and accounts and for the costs of search engine optimization; to pay for salaries, administrative costs, direct expenses, and overhead we incur in activities related to the operation and administration of the Fund; local and regional promotions; public relations campaigns including the cost of retaining public relations firms; market research; and other advertising and marketing activities.

We may create advertising materials in-house or use international, national, regional and local agencies. Advertising may be placed in local, regional or national media of our choice, including print, direct mail, electronic and online advertising, video, radio or television. We do not guarantee that advertising expenditures from the Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. It is our responsibility to determine how these monies are spent. We are not required to use monies in this Fund to benefit any individual market. However, we will not spend any portion of these monies for advertising principally designed to solicit the sale of franchises, but we may use monies in the Fund to update and administer our or our affiliate's website, which may contain information on franchise opportunities. In our fiscal year ended December 31, 2024, 5% of expenditures from the Brand Fund were

used for media placement, 2% were used for production of advertising, 62% were used for social media and internet marketing, and 31% for administrative expenses.

Any unused amounts in the Fund in any calendar year will be carried over to the following year. Any interest the Fund earns will be used for advertising before we use any principal. At your request, we will make available to you an annual accounting for the Fund that shows how the Fund proceeds were spent for the previous year, but these statements will not be audited. We may, but have no obligation to, loan amounts to the Fund and can determine the repayment obligation of the Fund, including interest rate of the loan and repayment terms, as we see fit. Currently, we would intend any loan to be due on demand, and until paid in full would accrue compound interest at the prime rate of interest as determined annually.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–31)