Your Franchise Agreement gives you the non-exclusive right to operate your Chatime Store under the Trademarks. You may also be authorized to use other current or future trademarks to operate your Chatime Store.

We have a license from La Kaffa to use and to sublicense the use of the Trademarks in the

continental United States, Hawaii and Guam. This license is set forth in a certain Trademark License Agreement dated September 23, 2022, between La Kaffa and our parent company Chatime Global (including its subsidiaries). It has a term of thirty years and a renewal term of an additional ten years unless terminated earlier by us upon 90 days' notice to La Kaffa. It grants us the right to freely use and display the Trademarks in connection with the operation of our business in the continental United States, Hawaii and Guam. The license may not be assigned by us. All rights in and goodwill from the use of the Trademarks accrue to us and our affiliates. There are no other agreements that significantly limit our right to use or license the use of the Trademarks.

Except as otherwise noted, the Trademarks and service marks listed below are filed or registered on the Principal Register of the United States Patent and Trademark Office (the "USPTO") on the date shown and all affidavits required to preserve and renew these Trademarks have been timely filed.

Advertising Expenditures

We require you to spend at least 2.0% of Gross Sales on local marketing ("Local Marketing Expenditure"). You will spend the Local Marketing Expenditure on advertising for your Chatime Store in your local defined territory. The Local Marketing Expenditure is paid to third parties. You may use your own local advertising materials including, without limitation, directory advertising, newspaper ads, digital including social channels, flyers, brochures, coupons, direct mail pieces, specialty and novelty items, and radio and television advertising; provided, however, that you follow our brand guidelines and obtain our prior written approval of all proposed advertising materials at your expense. We will endeavour to approve or disapprove the advertising materials within 10 days after we receive it from you. You are not required to participate in a local or regional advertising cooperative. (Clause 7.1 of the Franchise Agreement).

You must contribute to our system-wide advertising and promotional fund called the Brand Marketing Fund by paying a fee of Two Percent (2 %) of your gross sales. You will pay the Brand Marketing Fund Fee to us on the tenth day of each month based on your Gross Sales for the previous month. (Clause 7.2 of the Franchise Agreement).

The fund will be used to support and pay for advertising, marketing and promotion efforts we designate, and associated administrative expenses with the management of the fund. All marketing materials will be prepared by us or our advertising/public relations/promotional agencies. The fund may be used to pay for the costs of researching, preparing, maintaining, administering and directing advertising and promotional materials and programs in the manner that we decide. We will not use the fund for the costs of soliciting prospective franchisees. In addition, the fund may be used to pay for the costs of the personnel who manage the advertising and promotional programs for the fund and for reasonable administrative costs and overhead incurred in the activities related to the fund. Company-owned and affiliate-owned locations, if any, will contribute to this fund, at the same rate as that required of franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. (Clause 7.3 of the Franchise Agreement).

Franchisee must pay the Brand Marketing Fee to Franchisor on the tenth day of each Month. The Brand Marketing Fee will be determined based on the Gross Sales of the Outlet for the previous Month.

7.3 Use of the Brand Marketing Fee

• (1) Franchisor may, in its sole discretion, use the Brand Marketing Fee to pay the Costs of:
  • (a) Developing and conducting local, regional or national advertising and promotional campaigns, including advertising in international or regional publications;
  • (b) Engaging advertising agencies and marketing and research consultants;
  • (c) Providing Franchisee with samples of brochures and marketing materials used by Franchisor or its Affiliates, for amendment and use, subject to clause 7.3(4), by Franchisee in the Territory;
  • (d) Coordinating and administering the activities set out in clauses 7.3(1)(a) to 7.3(1)(c), including reasonable overhead and administrative Costs (including employee costs), the Cost of materials and printing Costs; and
  • (e) Any other marketing activity for the purpose of developing the Chatime brand internationally, regionally, or in the Territory.
• (2) In applying the Brand Marketing Fee for the purposes set out above, Franchisor may combine the Brand Marketing Fee with other brand marketing fees provided by other franchisees. There is no assurance that any portion of your Brand Marketing Fee or the Brand Marketing Fund will be allocated or spent for advertising in your Territory or region of the country. The monies paid to the Brand Marketing Fund do not constitute a trust fund.
• (3) If Franchisee requests any additional marketing assistance from Franchisor that, in the opinion of Franchisor, is not within the scope of assistance provided for by the Brand Marketing Fee, then Franchisee must pay to Franchisor upon invoice by Franchisor any additional fees and charges levied by Franchisor for such additional marketing assistance.
• (4) Franchisee must not use any marketing or promotional materials unless that marketing or promotional material has been first approved in writing by Franchisor.

Business Name means Chatime any other name or logo associated with operation of the Chatime Store Business as the Franchisor shall notify the Franchisee of in accordance with the terms of the Franchise Documents from time to time.

Business System means the: (a) distinctive image (including characteristics, features presentation and image of a member of the network as portrayed in advertising, marketing and promotions), visual appearance, reputation and presentation of the Franchisor and franchisees in the market; (b) Franchisor name, the Intellectual Property, and the brand names, logos and slogans associated with the Franchisor; (c) goodwill and the business reputation established in the Intellectual Property; (d) business procedures and systems developed by the Franchisor for the operation of the Franchised Business and concerning a consistent high quality approach to customer service, uniform operating techniques and business management generally, including the methods and quality systems included in the Manual; and (e) any other innovations, products or services that the Franchisor may introduce to the Franchisor's franchisees from time to time.

Chatime Store Business means a business operated, including by a franchisee of the Franchisor, using the Business System, Corporate Image, Marks and other Intellectual Property (or any of them).

Corporate Image includes: (a) the Names, the Marks, all characters, mascots, logos, product and service ranges, trade dress, signs, advertising and other promotional material; (b) any common uniform to be used by the franchisees from time to time; (c) the type, quality, dimension, design, layout, placement and colours of and all materials, signs, equipment, and build-out, used for decorating or identifying the Premises or marketing the Franchised Business, including without limitation the corporate colours and décor; and (d) the manner of conducting dealings with customers and other members of the public including the manner, method and techniques used when the Franchisor or the Franchisee conduct the Services in the operation of the Business System and the Franchised Business and specified by the Franchisor from time to time.