Is a Checkersrallys franchisee required to contribute to the advertising cooperative?

combination. We have the right in our sole discretion to form, change, dissolve or merge advertising cooperatives.

You must participate in such advertising cooperatives and its programs (other than price advertising, as to which you may choose not to participate) and abide by its by-laws. You must contribute such amounts to the advertising cooperative(s) as they determine from time to time in accordance with their by-laws. In circumstances that reasonably may warrant varied participation or contribution levels among certain members (for example, restaurants at Non-Traditional Sites that generally receive less benefit from a cooperative's local advertising), we may attempt to work with the cooperative's membership to revise its by-laws or other policies, as we deem appropriate. Any Restaurants owned by us or any of our affiliates located in such designated local or regional area(s) will contribute to the cooperative(s) on the same basis. Contributions to local and regional advertising cooperatives

are credited toward the 4.5% advertising expenditures required by the Franchise Agreement; however, if we provide you and your local and/or regional advertising cooperative 90 days' notice of a special promotion, you must participate in such promotion and pay to us any advertising fees assessed in connection with the promotion, beginning on the effective date of such notice and continuing until such promotion is concluded. Any such regional advertising fees shall be in addition to, and not credited towards, the 4.5% advertising expenditure required by the Franchise Agreement.

The by-laws of your co-op are made available for you to review. The advertising cooperatives are independently administered with our assistance and assistance from an outside independent accounting firm. The financial statements of the advertising cooperatives and reports are available to you. Decisions of advertising cooperatives generally are made by majority vote based on one vote per restaurant. Accordingly, we may control the cooperative in certain areas where company-owned Restaurants constitute the majority. The cooperative contribution rates generally range from 0.5% to 1.85% of Net Sales and they are subject to change at any time pursuant to the by-laws and/or vote of the cooperative or its governing members or executives. Some franchisees in a cooperative may contribute at a rate that varies from the standard contribution rate for the other franchisees in that cooperative if permitted or authorized by the cooperative, pursuant to the by-laws and/or rules of the particular cooperative, and/or by vote of the cooperative or its governing members or executives. By way of example, franchisees of Restaurants operating, or that will operate, within or at Walmart stores or other Non-Traditional Sites (as we may determine, in our sole discretion) may pay a lower contribution level to their local cooperatives than the general membership because, among other reasons, such restaurants often cater to separate customer flow not driven primarily by the promotions and campaigns executed by those franchisees' local cooperatives.

The chart below summarizes the 2025 cooperative contribution rates by area, which are subject to change:

| Market | 2025 Cooperative Contribution Rate | |---|---| | Atlanta | 1.85% | | Augusta | 1.85% | | Baltimore | 1.85% | | Bowling Green | 1.85% | | California | 0.50% | | Chicago | 0.00% | | Cincinnati | 1.85% | | Detroit | 1.85% | | Evansville | 1.85% | | Flint | 1.85% | | Grand Rapids | 1.85% | | Houston | 1.85% | | Indianapolis | 1.85% | | Jacksonville | 1.85% | | Lexington | 1.85% | Advertising conducted by the cooperatives may be in various media, including home, linear TV, terrestrial/streaming radio, connected TV, online video, digital display, paid search, programmatic digital, and social media. The advertising is developed by independent advertising firms, with the assistance of our in-house advertising department.

We will not require you to spend more than 4.5% of Net Sales during each of your fiscal quarters on advertising and promoting the Franchised Restaurant, however, your advertising spending could exceed this amount if you are a member of a local or regional advertising cooperative whose required contribution rate, when added to your required advertising spending obligations (including contributions to the NPF), exceeds four and onehalf percent (4.5%

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 46–57)