How does Chicken Guy collect and spend monies for advertising purposes?

e Agreement, § 14.D.)

Advertising

Weekly Marketing Obligation

During the term of the Franchise Agreement, your Weekly Marketing Obligation will not exceed 5% of the Gross Sales of the Franchised Restaurant. We may allocate the Weekly Marketing Obligation at our discretion between the Brand Fund (when established), a Regional Advertising Fund (or Regional Coop) (if established), and/or your Local Store Marketing. Currently, your Weekly Marketing Obligation is 4% of Gross Sales of the Franchised Restaurant, all of which is allocated to your Local Store Marketing. When the Brand Fund is established, the Weekly Marketing Obligation shall consist of 2% of Gross Sales to the Brand Fund (subject to a maximum annual contribution of $30,000) and 2% of Gross Sales to your Local Store Marketing. We have the right, following written notice to you, to increase and reallocate the Weekly Marketing Obligation among the Brand Fund, a Regional Advertising Fund (or Regional Co-Op) and/or Local Store Marketing.

Brand Fund

We plan to establish the Chicken Guy! Brand Fund ("Brand Fund"). When established, you must contribute 2% of weekly Gross Sales of the Franchised Restaurant to the Brand Fund up to a maximum annual contribution of $30,000. We will have sole discretion to use the Brand Fund, and the monies in the Brand Fund, for any purpose that we believe will enhance, protect, and increase public recognition and perception of the System and Proprietary Marks. We will direct all programs that the Brand Fund finances, with sole control over the creative concepts, materials, and endorsements used and their geographic, market, and media placement and allocation. You must participate in all advertising, marketing, promotions, research and public relations programs instituted by the Brand Fund.

Among the programs, concepts, and expenditures for which we may utilize the Brand Fund monies are: (1) creative development and production of print ads, commercials, radio spots, point of purchase materials, direct mail pieces, door hangers, and other advertising and marketing materials; (2) creative development, preparation, production and placement of video, audio, and written materials and electronic media; (3) media placement and buying, including all associated expenses and fees; (4) administering regional and multi-regional marketing and advertising programs; (5) market research and customer satisfaction surveys, including the use of secret shoppers; (6) the creative development of, and actual production associated with, premium items, giveaways, promotions, contests, public relation events, and charitable or nonprofit events; (7) creative development of signage, posters, and individual restaurant décor items including wall graphics and signage; (8) development and management of a kiosk or truck program; (9) website, extranet and/or intranet development and maintenance; (10) development, implementation, and maintenance of an electronic commerce website and/or related strategies; (11) development and implementation of search engine optimization strategies; (12) development and administration of consumer surveys, interviews and other customer satisfaction and retention policies; (13) retention and payment of advertising and marketing agencies and other outside advisors including retainer and management fees; and (14) public relations and community involvement activities and programs; and (15) real estate analytics and marketing.

Vendors and suppliers also may contribute to the Brand Fund. We may produce materials in house or work with an advertising agency in developing advertising for print, Internet, and other related advertising media. We did not collect or spend any Brand Fund contributions in our last fiscal year ending December 29, 2024.

Regional Advertising

In addition to the Brand Fund (when established), you will pay that portion of the Weekly Marketing Obligation as we direct to any Regional Advertising Fund or, in lieu of a Regional Advertising Fund, a Regional Co-op that we may establish in the geographic area that covers your Franchised Location. We will determine the geographic area covered by a Regional Advertising Fund or a Regional Co-op based on the location of the Chicken Guy! Restaurants in the area and the reach of print, radio and television media in the area. Company-operated and franchised Chicken Guy! Restaurants in the geographic area covered by a Regional Advertising Fund or a Regional Co-op will be obligated to contribute to that Fund or Co-op. As of the date of this disclosure document, we have not yet established any Regional Advertising Fund or Co-op.

As noted above, in lieu of a Regional Advertising Fund for the area that includes your Franchised Location, we may establish a Regional Co-op. Monies in the Regional Co-op may be spent for the purposes determined by majority vote of the Regional Co-op on the basis of one vote for each Chicken Guy! Restaurant in the Regional Co-op. If the members of a Regional Co-op are unable or fail to determine how to spend Regional Co-op monies, we may assume this decision-making authority following ten days' advance written notice to the Regional Co-op members.

Administration of the Funds

We, or our designee, shall direct all advertising, marketing, and public relations programs and activities financed by the Brand Fund (when established) and any Regional Advertising 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.

Unless we otherwise agree in writing, advertising that is funded by the Brand Fund or any Regional Advertising Funds or Regional Co-ops must conform to those advertising and sales promotions that we

specify from time to time. We, or our designee, have the right to terminate (and subsequently restart) any of the advertising and cooperative funds and establish different advertising and/or cooperative funds. We may incorporate any advertising fund and may have a separate entity manage any advertising fund.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 25–34)