City_Publications 2025 Franchise FAQ - FDD Ninja

Question 1

What is the effect of City Publications consenting to a transfer of interest?

Accepted Answer

Whenever this Agreement requires the prior approval or consent of Franchisor, Franchisee shall make a timely written request to Franchisor therefore and, except as otherwise provided herein, any approval or consent granted shall be effective only if in writing. Franchisor makes no warranties or guarantees upon which Franchisee may rely and assumes no liability or obligation to Franchisee or any third party to which it would not otherwise be subject, by providing any waiver, approval, advice, consent or services to Franchisee in connection with this Agreement, or by reason of any neglect, delay or denial of any request therefore.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 2

What is the latest effective date listed for City Publications franchise disclosures among all states listed?

Accepted Answer

Issuance Date:April 20, 2025.

I have received a disclosure document dated April 20, 2025.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 3

How many City Publications outlets opened in total during 2023?

Accepted Answer

| Outlet Type | Year | Outlets at The Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2022 | 39 | 37 | -2 |
|  | 2023 | 37 | 36 | -1 |
|  | 2024 | 36 | 40 | +4 |
| Company Owned | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2043 | 0 | 0 | 0 |
| Total Outlets | 2022 | 39 | 37 | -2 |
|  | 2023 | 37 | 36 | -1 |
|  | 2024 | 36 | 40 | +4 |
| Table No. 2 TRANSFERS OF OUTLETS FROM FRANCHISEES TO NEW OWNERS | Table No. 2 TRANSFERS OF OUTLETS FROM FRANCHISEES TO NEW OWNERS |  |  |  |
| (Other than the franchisor) FOR YEARS 2022 to 2024 |  |  |  |  |
| STATE | YEAR | NUMBER OF TRANSFERS |  |  |
| Tennessee | 2022 2032 2024 | 0 1 0 |  |  |
| Totals | 2021 2023 2024 Table No. 3 STATUS OF FRANCHISED OUTLETS FOR YEARS 2022 to 2024 | 0 1 0 |  |  |
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations |
| Alabama | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
| Arizona | 2022 | 4 | 0 | 0 |
|  | 2021 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
| California | 2022 | 2 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Colorado | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 2 | 0 |
| Connecticut | 2022 Table No. 3 STATUS OF FRANCHISED OUTLETS FOR YEARS 2022 to 2024 | 1 | 0 | 0 |
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations |
|  | 2023 | 1 | 0 | 0 |
|  | 2043 | 1 | 0 | 0 |
| Florida | 2022 | 2 | 0 | 0 |
|  | 2023 | 2 | 0 | 0 |
|  | 2024 | 2 | 0 | 0 |
| Georgia | 2022 | 2 | 0 | 0 |
|  | 2023 | 2 | 0 | 0 |
|  | 2024 | 2 | 1 | 0 |
| Hawaii | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 |
|  | 2024 | 1 | 0 | 0 |
| Illinois | 2022 | 3 | 0 | 0 |
|  | 2023 | 3 | 0 | 0 |
|  | 2024 | 3 | 1 | 0 |
| Indiana | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Kentucky | 2022 | 1 | 0 | 0 |
|  | 2032 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
| Maryland | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
| Massachusetts | 2022 Table No. 3 STATUS OF FRANCHISED OUTLETS FOR YEARS 2022 to 2024 | 3 | 0 | 0 |
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations |
|  | 2023 | 3 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Michigan | 2022 | 2 | 0 | 0 |
|  | 2023 | 2 | 1 | 0 |
|  | 2024 | 2 | 0 | 0 |
| Minnesota | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Missouri | 2022 | 2 | 0 | 0 |
|  | 2023 | 2 | 0 | 0 |
|  | 2024 | 2 | 0 | 0 |
| Nevada | 2022 | 0 | 0 | 0 |
|  | 2032 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| New York | 2022 | 1 | 1 | 0 |
|  | 2022 | 2 | 0 | 0 |
|  | 2024 | 2 | 1 | 0 |
| North Carolina | 2022 | 4 | 0 | 0 |
|  | 2023 | 4 | 1 | 0 |
|  | 2024 | 4 | 1 | 0 |
| Ohio | 2022 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Oklahoma | 2022 Table No. 3 STATUS OF FRANCHISED OUTLETS FOR YEARS 2022 to 2024 | 2 | 0 | 0 |
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations |
|  | 2023 | 2 | 0 | 0 |
|  | 2024 | 2 | 0 | 0 |
| Oregon | 2020 | 0 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Pennsylvania | 2022 | 2 | 1 | 0 |
|  | 2023 | 3 | 0 | 0 |
|  | 2024 | 3 | 0 | 0 |
| South Carolina | 2022 | 1 | 1 | 0 |
|  | 2023 | 2 | 0 | 0 |
|  | 2024 | 2 | 0 | 0 |
| Tennessee | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
| Texas | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 2 | 0 |
|  | 2024 | 3 | 1 | 0 |
| Utah | 2021 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 1 | 1 | 0 |
| Virginia | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 1 | 0 | 0 |
|  | 2022 Table No. 3 STATUS OF FRANCHISED OUTLETS FOR YEARS 2022 to 2024 | 0 | 0 | 0 |
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations |
| Washington |  |  |  |  |
|  | 2023 | 0 | 0 | 0 |
|  | 2020 | 0 | 0 | 0 |
| Washington DC | 2022 | 1 | 0 | 0 |
|  | 2023 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| Wisconsin | 2022 | 1 | 0 | 0 |
|  | 2023 | 1 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 |
| TOTALS | 2022 | 39 | 2 | 0 |
|  | 2023 | 37 | 5 | 0 |
|  | 2024 | 36 | 8 | 0 |Exhibit F contains a list of our Franchisees.

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION Systemwide Outlet Summary For years 2022 to 2024 (FDD pages 32–38)

Question 4

What was the total amount of non-refundable franchise fees collected by City Publications for the years ending December 31, 2025, 2026, 2027, and 2028?

Accepted Answer

|--------------|
| Performance obligations satisfied at a point | \$ 1,379,018 | \$ 1,250,129 | \$ 1,124,154 |
| in time |  |  |  |
| Performance obligations satisfied by the                |              |              |              |
| passage of time                                         | 34,253       | 22,373       | 16,313       |
| Total revenues                                          |

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 5

What is the total estimated revenue from non-refundable City Publications franchise fees to be recognized in future periods as of December 31, 2024?

Accepted Answer

|--------------|
| Performance obligations satisfied at a point | \$ 1,379,018 | \$ 1,250,129 | \$ 1,124,154 |
| in time |  |  |  |
| Performance obligations satisfied by the                |              |              |              |
| passage of time                                         | 34,253       | 22,373       | 16,313       |
| Total revenues                                          |

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 6

What was the trend in total revenues for City Publications from 2022 to 2024?

Accepted Answer

|                                                        | AS OF DECEMBER 31, |              |  |
|--------------------------------------------------------|--------------------|--------------|--|
|                                                        | 2024               | 2023         |  |
| ASSETS:                                                |                    |              |  |
| CURRENT ASSETS                                         |                    |              |  |
| Cash and equivalents                                   | \$ 469,911      | \$ 34,370 |  |
| Accounts receivable                                    | 6,166              | 10,184       |  |
| TOTAL CURRENT ASSETS                                   | 476,077            | 44,554       |  |
| NON-CURRENT ASSETS                                     |                    |              |  |
| Property and equipment                                 | 2,179              | 3,000        |  |
| Other assets                                           | 8,362              | 8,362        |  |
| TOTAL ASSETS                                           | \$ 486,618      | \$ 55,916 |  |
| LIABILITIES AND SHAREHOLDERS' (DEFICIT):               |                    |              |  |
| CURRENT LIABILITIES                                    |                    |              |  |
| Accounts payable                                       | \$ 478,790      | \$ 84,847 |  |
| Non-refundable deferred franchise fees, current        | 29,393             | 22,373       |  |
| TOTAL CURRENT LIABILITIES                              | 508,183            | 107,220      |  |
| NON-CURRENT LIABILITIES                                |                    |              |  |
| Non-refundable deferred franchise fees                 | 52,433             | 34,306       |  |
| TOTAL LIABILITIES                                      | 560,616            | 141,526      |  |
| SHAREHOLDERS' (DEFICIT)                                |                    |              |  |
| Common stock, \$1 par value, 100,000 shares authorized |                    |              |  |
| 1,000 shares issued and outstanding                    | 1,000              | 1,000        |  |
| Additional paid-in capital                             | 17,000             | 17,000       |  |
| Retained earnings                                      | 1,902,107          | 1,745,483    |  |
| Due from affiliates                                    | (1,994,105)        | (1,849,093)  |  |
| TOTAL SHAREHOLDERS' (DEFICIT)                          | (73,998)           | (85,610)     |  |
| TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT)          | \$ 486,618      | \$ 55,916 |  |

The accompanying notes are an integral part of these financial statements.

### **CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATION

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 7

What is the difference in the balance of deferred non-refundable franchise fees for City Publications from the beginning of 2023 to the end of 2024?

Accepted Answer

l recently issued Accounting Standards Updates ("ASU"). The adoption of the recently issued ASUs, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

### **NOTE 2 – CONTRACTS WITH CUSTOMERS**

The Company has recorded a liability for unearned revenue associated with the performance obligation of the Company's franchise agreements. The account bala

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 8

What are all the fees that a City Publications franchisee might pay, considering both the initial fees in Item 5 and the other fees in Item 6?

Accepted Answer

.

Starting in 2025 we are also offering a print advertising franchise model in which the product is a booklet of advertisements, rather than a deck of loose individual card advertisements. We expect to offer it both to current City Publication franchisees as well as those not then a part of our franchise system. For an existing City Publications franchisee, there would not be any additional franchise fee or additional franchise agreement, and you would be able to offer the booklet product anywhere within your territory. For a new franchisee, you would pay an initial franchise fee of \$29,000 and sign a franchise agreement. We are offering this new product in part to reach smaller towns and territories. As with our traditional card deck model, we and our affiliate would do the graphic design, printing and mailing, for a fee.

### Our Predecessors and Affiliates

We have one Predecessor and no parent company. Our Predecessor, Pride of the City, Inc. operated one business in Atlanta, Georgia that was similar to the franchised businesses offered through this Disclosure Document. In addition, from March 2002 until April 2004, our Predecessor offered licenses for the establishment of businesses under the "The Pride of the City" trademark, which were similar to the franchised businesses offered through this Disclosure Document. None of those licensees are still operating.

We have one Affiliate, City Publications Service, Inc. (the "Affiliate"). Our Affiliate shares our offices at 1300 Parkwood Circle SE, Suite 100, Atlanta, Georgia 30339. Our Affiliate provides marketing, and

design services and mailing list services to our franchisees, in addition to its other marketing activities unrelated to the franchise system. No affiliate or predecessor has previously offered franchises in this or any other line of business. Our Affiliate, or another entity with similar ownership, may in the future offer a license for an advertising business that would feature coupon booklets or some other coupon format, but not the loose card decks offered through this Disclosure Document, and not using any of the proprietary marks licensed in your Franchise Agreement.

Question 9

How does the City Publications's initial franchise fee (Item 5) affect the total estimated initial investment (Item 7)?

Accepted Answer

| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Franchise Fee1 | $ 40,000 - | Cashier's Check, | When you sign your | Us |
|  | 250,000 | Electronic transfer | franchise agreement. |  |
| Real Estate/Rent2 | 0 - 500 | As Arranged | As Incurred | Third Parties |
| Utility Deposits3 | 0 - 500 | As Arranged | As Incurred | Third Parties |
|  | 0 - | As Arranged | As Incurred | Third Parties |
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Leasehold | 500 |  |  |  |
| Improvements4 |  |  |  |  |
| Required Software5 | 500 - | As Arranged | As Incurred | Third Parties |
| Initial Inventory of | 150-200 - | As Arranged | As Incurred | Us, Approved |
| Order Forms6 |  |  |  | Suppliers |
| Insurance7 | 600 - 800 | As Arranged | As Incurred | Third Parties |
| Vehicle8 | 300 - 600 | As Arranged | As Incurred | Third Parties |
| Office Equipment | 400 - | As Arranged | As Incurred | Third Parties |
| and Supplies9 | 2,500 |  |  |  |
| Training10 | 250 - 500 | As Arranged | As Incurred | Third Parties |
| Licenses & Permits11 | 0 - 250 | As Arranged | As Incurred | Third Parties |
| Legal/ | 500 - | As Arranged | As Incurred | Third Parties |
| Accounting12 | 1,000 |  |  |  |
| Website and email | 800 | Lump Sum | As incurred | Designated vendors |
| setup fees |  |  |  |  |
| Startup Marketing | $1,250 | Lump Sum | Within first month after | Us |
| materials |  |  | opening |  |
| Additional Funds13 | 1,500 to - | As Arranged | As Incurred | Third Parties |
| (3 months) | 10,000 |  |  |  |
| TOTAL14 | $46,300 to $269,900 - |  |  |  |

Question 10

How does the City Publications's initial franchise fee (Item 5) compare to the other fees a franchisee might incur (Item 6)?

Accepted Answer

.

Starting in 2025 we are also offering a print advertising franchise model in which the product is a booklet of advertisements, rather than a deck of loose individual card advertisements. We expect to offer it both to current City Publication franchisees as well as those not then a part of our franchise system. For an existing City Publications franchisee, there would not be any additional franchise fee or additional franchise agreement, and you would be able to offer the booklet product anywhere within your territory. For a new franchisee, you would pay an initial franchise fee of \$29,000 and sign a franchise agreement. We are offering this new product in part to reach smaller towns and territories. As with our traditional card deck model, we and our affiliate would do the graphic design, printing and mailing, for a fe

Question 11

How does the City Publications's initial franchise fee (Item 5) compare to the ongoing royalty fees (Item 6)?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 6% of Gross Sales for Standard card deck mailings. 3% of Gross Sales for single card mailings and digital advertising | Payable twice each calendar quarter, based on the schedule for each deck mailing | See definition of Gross Sales.2 (Section 1) In case of deck/booklet cancelation, any royalty prepaid for that deck or booklet will be applied to any mailings taking place within the next four months, up to a maximum of two mailings. After four months, the prepaid royalty is non-refundable. |
| Minimum Royalty (1) | $2,500 for each mailing that you fail to achieve each year. | Each Year | After the first calendar year of the term of your franchise, you must do a minimum of four mailings in each mailing zone granted to you, or pay us $2,500 for each zone and mailing that you fail to do. You must do the first mailing within the first nine months. |

Question 12

How does the City Publications's initial franchise fee (Item 5) compare to the ongoing royalty fees (Item 6) in terms of payment schedule?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 6% of Gross Sales for Standard card deck mailings. 3% of Gross Sales for single card mailings and digital advertising | Payable twice each calendar quarter, based on the schedule for each deck mailing | See definition of Gross Sales.2 (Section 1) In case of deck/booklet cancelation, any royalty prepaid for that deck or booklet will be applied to any mailings taking place within the next four months, up to a maximum of two mailings. After four months, the prepaid royalty is non-refundable. |
| Minimum Royalty (1) | $2,500 for each mailing that you fail to achieve each year. | Each Year | After the first calendar year of the term of your franchise, you must do a minimum of four mailings in each mailing zone granted to you, or pay us $2,500 for each zone and mailing that you fail to do. You must do the first mailing within the first nine months. |

Question 13

How does the initial City Publications franchise fee in Item 5 relate to the estimated initial investment range in Item 7?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT] ### NOTES ¹Franchise Fee. The Franchise Fee varies as described in ITEM 5 of this Disclosure Document. The Franchise Fee includes payment for: Access to proprietary materials and process to include an initial supply of sales materials; A designated website for your Franchised Business, with a link between your website and ours; Exclusive rights to distribute Card Decks and other approved products within your territory as described in Item 12. The Initial Franchise fee is not refundable. All other items listed in the chart in this Item 7 are paid to third party vendors and those vendors determine the refundability of any of those items. [Item 5: INITIAL FEES] ### **ITEM 5. INITIAL FEES** The initial Franchise Fee varies depending upon characteristics of the territory of the franchise such as the availability of mailing lists for residents within the territory, home values and demographics. The standard Franchise Fee is $89,000. The maximum Franchise Fee is $250,000. Assuming a territory consisting of approximately 100,000 homes of an appropriate market value, the Franchise Fee would approximate $40,000. A second market with 25,000- 50,000 qualified homes is $50,000. Franchise fees paid in 2024 were in a range from $60,000 to $89,000, depending on the size of the territory. You must pay us the Franchise Fee in a lump sum when you sign the Franchise Agreement. The initial Franchise Fee is non-refundable. You pay us or our affiliate no other fees or payments for services or goods before your business opens. | Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made | |---|---|---|---|---| | Franchise Fee1 | $ 40,000 - | Cashier's Check, | When you sign your | Us | | | 250,000 | Electronic transfer | franchise agreement. | | | Real Estate/Rent2 | 0 - 500 | As Arranged | As Incurred | Third Parties | | Utility Deposits3 | 0 - 500 | As Arranged | As Incurred | Third Parties | | | 0 - | As Arranged | As Incurred | Third Parties | | Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made | | Leasehold | 500 | | | | | Improvements4 | | | | | | Required Software5 | 500 - | As Arranged | As Incurred | Third Parties | | Initial Inventory of | 150-200 - | As Arranged | As Incurred | Us, Approved | | Order Forms6 | | | | Suppliers | | Insurance7 | 600 - 800 | As Arranged | As Incurred | Third Parties | | Vehicle8 | 300 - 600 | As Arranged | As Incurred | Third Parties | | Office Equipment | 400 - | As Arranged | As Incurred | Third Parties | | and Supplies9 | 2,500 | | | | | Training10 | 250 - 500 | As Arranged | As Incurred | Third Parties | | Licenses & Permits11 | 0 - 250 | As Arranged | As Incurred | Third Parties | | Legal/ | 500 - | As Arranged | As Incurred | Third Parties | | Accounting12 | 1,000 | | | | | Website and email | 800 | Lump Sum | As incurred | Designated vendors | | setup fees | | | | | | Startup Marketing | $1,250 | Lump Sum | Within first month after | Us | | materials | | | opening | | | Additional Funds13 | 1,500 to - | As Arranged | As Incurred | Third Parties | | (3 months) | 10,000 | | | | | TOTAL14 | $46,300 to $269,900 - | | | |

Question 14

What is the maximum City Publications franchise fee (Item 5) and how does it relate to the estimated initial investment (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES]

### **ITEM 5. INITIAL FEES**

The initial Franchise Fee varies depending upon characteristics of the territory of the franchise such as the availability of mailing lists for residents within the territory, home values and demographics. The standard Franchise Fee is $89,000. The maximum Franchise Fee is $250,000. Assuming a territory consisting of approximately 100,000 homes of an appropriate market value, the Franchise Fee would approximate $40,000. A second market with 25,000- 50,000 qualified homes is $50,000. Franchise fees paid in 2024 were in a range from $60,000 to $89,000, depending on the size of the territory. You must pay us the Franchise Fee in a lump sum when you sign the Franchise Agreement. The initial Franchise Fee is non-refundable. You pay us or our affiliate no other fees or payments for services or goods before your business opens.

| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Franchise Fee1 | $ 40,000 - | Cashier's Check, | When you sign your | Us |
|  | 250,000 | Electronic transfer | franchise agreement. |  |
| Real Estate/Rent2 | 0 - 500 | As Arranged | As Incurred | Third Parties |
| Utility Deposits3 | 0 - 500 | As Arranged | As Incurred | Third Parties |
|  | 0 - | As Arranged | As Incurred | Third Parties |
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be Made |
| Leasehold | 500 |  |  |  |
| Improvements4 |  |  |  |  |
| Required Software5 | 500 - | As Arranged | As Incurred | Third Parties |
| Initial Inventory of | 150-200 - | As Arranged | As Incurred | Us, Approved |
| Order Forms6 |  |  |  | Suppliers |
| Insurance7 | 600 - 800 | As Arranged | As Incurred | Third Parties |
| Vehicle8 | 300 - 600 | As Arranged | As Incurred | Third Parties |
| Office Equipment | 400 - | As Arranged | As Incurred | Third Parties |
| and Supplies9 | 2,500 |  |  |  |
| Training10 | 250 - 500 | As Arranged | As Incurred | Third Parties |
| Licenses & Permits11 | 0 - 250 | As Arranged | As Incurred | Third Parties |
| Legal/ | 500 - | As Arranged | As Incurred | Third Parties |
| Accounting12 | 1,000 |  |  |  |
| Website and email | 800 | Lump Sum | As incurred | Designated vendors |
| setup fees |  |  |  |  |
| Startup Marketing | $1,250 | Lump Sum | Within first month after | Us |
| materials |  |  | opening |  |
| Additional Funds13 | 1,500 to - | As Arranged | As Incurred | Third Parties |
| (3 months) | 10,000 |  |  |  |
| TOTAL14 | $46,300 to $269,900 - |  |  |  |

Question 15

What is the range of the City Publications franchise fee as stated in Item 5, and how does it compare to the total estimated initial investment in Item 7?

Accepted Answer

this Item.

### **ITEM 5. INITIAL FEES**

The initial Franchise Fee varies depending upon characteristics of the territory of the franchise such as the availability of mailing lists for residents within the territory, home values and demographics. The standard Franchise Fee is \$89,000. The maximum Franchise Fee is \$250,000. Assuming a territory consisting of approximately 100,000 homes of an appropriate market value, the Franchise Fee would approximate \$40,000. A second market with 25,000- 50,000 qualified homes is \$50,000. Franchise fees paid in 2024 were in a range from \$60,000 to \$89,000, depending on the size of the territory. You must pay us the Franchise Fee in a lump sum when you sign the Franchise Agreement. The initial Franchise Fee is non-refundable. You pay us or our affiliate no other fees or payments for services or goods before your b

Question 16

How does the City Publications's royalty fee structure (Item 6) differ between standard card deck mailings and single card mailings?

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 6% of Gross Sales for Standard card deck mailings. 3% of Gross Sales for single card mailings and digital advertising | Payable twice each calendar quarter, based on the schedule for each deck mailing | See definition of Gross Sales.2 (Section 1) In case of deck/booklet cancelation, any royalty prepaid for that deck or booklet will be applied to any mailings taking place within the next four months, up to a maximum of two mailings. After four months, the prepaid royalty is non-refundable. |

Question 17

Under what circumstances will City Publications charge a replacement fee, and what determines the amount of this fee?

Accepted Answer

In the event of termination for any default of Franchisee, such sums shall include, but not be limited to, all damages, costs and expenses, including reasonable attorneys' fees and other expenses incurred by Franchisor as a result of the default.

- 7.

Franchisee shall pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Section 19.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 18

According to the City Publications agreement, what happens if jurisdictional requirements of laws regulating franchises are met independently?

Accepted Answer

24B and 24G of the Franchise Agreement require litigation or arbitration to be conducted in the State of Georgia; the requirement shall not limit any rights Franchisee may have under the Maryland Franchise Registration and Disclosure Law to bring suit in the State of Maryland. ◼ Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the franchise. 2. 3. Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law applicable to the provisions are met independent of this Amendment.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 19

According to the California addendum, what conditions must be met for each provision of the addendum to be effective for City Publications franchises?

Accepted Answer

- Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the California Investment Law and/or the California Franchise Relations Act are met independent of this Amendment.

To the extent this addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this addendum shall govern.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 20

According to the City Publications FDD, what should a franchisee do if they answered 'Yes' to questions about employee statements contradicting the FDD?

Accepted Answer

| 4.  | Have you discussed the benefits and risks of operating a CITY PUBLICATIONS business with an attorney, accountant or other professional advisor and do you understand those risks? Yes No                                                                                                                                 |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 5. | Do you understand that the success or failure of your business will depend in |
|  | large part upon your skills and abilities, competition from other businesses, |
|  | interest rates, inflation, labor and supply costs, lease terms and other |
|  | economic and business factors? |
|  | Yes |
|  | No |
| 6. | Has any employee or other person speaking on our behalf made any |
|  | statement or promise concerning the revenues, profits or operating costs of a |
|  | Franchised Business that we or our franchisees operate? |
|  | Yes |
|  | No |
| 7. | Has any employee or other person speaking on our behalf made any |
|  | statement or promise concerning a Franchised Business that is contrary to, or |
|  | different from, the information contained in the Disclosure Document? |
|  | Yes |
|  | No |
| 8. | Has any employee or other person speaking on our behalf made any |
|  | statement or promise concerning the likelihood of success that you should or |
|  | might expect to achieve from operating under the CITY PUBLICATIONS |
|  | System? |
|  | Yes |
|  | No |
| 9. | Has any employee or other person speaking on our behalf made any |
|  | statement, promise or agreement concerning the advertising, marketing, |
|  | training, support service or assistance that we will furnish to you that is |
|  | contrary to, or different from, the information contained in the Disclosure |
|  | Document? |
|  | Yes |
|  | No |
| 10. | If you have answered "Yes" to any of questions seven (7) through ten (10), |
|  | please provide a full explanation of your answer in the following blank lines. |
|  | (Attach additional pages, if necessary, and refer to them below.) If you have |
|  | answered "No" to each of such questions, please leave the following lines |
|  | blank. |

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 21

According to the City Publications FDD, what happens if the franchisor prevails upon a prospective franchisee to accept less favorable terms?

Accepted Answer

THE FRANCHISOR MAY, IF IT CHOOSES, NEGOTIATE WITH YOU ABOUT ITEMS COVERED IN THE FRANCHISE DISCLOSURE DOCUMENT.

HOWEVER, THE FRANCHISOR CAN NOT USE THE NEGOTIATING PROCESS TO PREVAIL UPON A PROSPECTIVE FRANCHISEE TO ACCEPT TERMS THAT ARE LESS FAVORABLE THAN THOSE SET FORTH IN THIS FRANCHISE DISCLOSURE DOCUMENT.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 22

According to the City Publications FDD, what is the impact of Article 33 of the General Business Law on the requirements for a City Publications franchisee to renew or extend their franchise in New York?

Accepted Answer

The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for a franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer": However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; this proviso intends that the nonwaiver provisions of General Business Law Sections 687(4) and 687(5) be satisfied.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 23

According to the City Publications franchise agreement, what is the consequence of encumbering any interest in the franchise without prior written consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor. If Franchisee desires to sell or transfer any rights or assets described in the preceding sentence to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 24

According to the City Publications franchise agreement, what happens if the franchisee attempts to transfer operating control of the franchised business without prior written consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor. If Franchisee desires to sell or transfer any rights or assets described in the preceding sentence to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 25

What action should be taken if unauthorized financial performance information is received regarding a City Publications franchise?

Accepted Answer

If City Publications Franchise Group Inc. does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and the state agency listed on Exhibit A.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD page 32)

Question 26

Can the advertising business offered by the City Publications affiliate operate within the area licensed to a franchisee?

Accepted Answer

Our Affiliate, or another entity with similar ownership, may in the future offer a license for an advertising business that would feature coupon booklets or some other coupon format, but not the loose card decks offered through this Disclosure Document, and not using any of the proprietary marks licensed in your Franchise Agreement. Those businesses might operate within the area we license to you under your Franchise Agreement.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–9)

Question 27

Is the City Publications affiliate allowed to offer a license for an advertising business in the future?

Accepted Answer

We have one Affiliate, City Publications Service, Inc. (the "Affiliate"). Our Affiliate shares our offices at 1300 Parkwood Circle SE, Suite 100, Atlanta, Georgia 30339. Our Affiliate provides marketing, and
design services and mailing list services to our franchisees, in addition to its other marketing activities unrelated to the franchise system. No affiliate or predecessor has previously offered franchises in this or any other line of business. Our Affiliate, or another entity with similar ownership, may in the future offer a license for an advertising business that would feature coupon booklets or some other coupon format, but not the loose card decks offered through this Disclosure Document, and not using any of the proprietary marks licensed in your Franchise Agreement. Those businesses might operate within the area we license to you under your Franchise Agreement.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–9)

Question 28

Does the City Publications agreement exclude laws regulating the sale of franchises or governing the relationship between franchisor and franchisee?

Accepted Answer

#### **Washington Addendum to the Franchise Agreement, Franchisee Disclosure Questionnaire, and Related Documents** This Amendment to the Franchise Agreement is agreed to this ______ day of _______________, 20___, between CITY PUBLICATIONS FRANCHISE GROUP, INC. and to amend and revise said Franchise Agreement as follows: In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.

RCW 19.100.180 may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.

There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.

In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel.

Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.

---

#### **FOR THE STATE OF MARYLAND**

This Amendment to the Franchise Agreement is agreed to this day of, 20, between CITY PUBLICATIONS FRANCHISE GROUP, INC. and as follows: to amend and revise said Franchise Agreement 1. In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code be amended as follows: Ann., Bus. Reg. §§14-201-14-233, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall ◼ Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under the Maryland Franchise Registration and Disclosure Law. ◼ Section 18B1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.). ◼ Section 24A of the Franchise Agreement requires that the franchise be governed by Georgia Law; however, in the event of a conflict of lawsto the extent required by the Maryland Franchise Registration and Disclosure Law, Maryland law shall prevail. ◼ Sections 24B and 24G of the Franchise Agreement require litigation or arbitration to be conducted in the State of Georgia; the requirement shall not limit any rights Franchisee may have under the Maryland Franchise Registration and Disclosure Law to bring suit in the State of Maryland. ◼ Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the franchise. 2. 3. Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law applicable to the provisions are met independent of this Amendment. To the extent this addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this addendum shall govern. Based on our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, and understands and consents to be bound by all of its terms. CITY PUBLICATIONS FRANCHISE GROUP, INC.:
### FOR THE STATE OF MINNESOTA

---

- 1.

In recognition of the requirements of the California Franchise Investment Law, Cal.

Corp.

Code §§31000-31516 and the California Franchise Relations Act, Cal.

Bus.

And Prof.

Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:

- The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.

- Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.

- Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.

- Section 18B.1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C.

Section 101, *et seq.*).

- The Franchise Agreement requires litigation to be conducted in a court located in the State of Georgia.

This provision might not be enforceable for any cause of action arising under California law.

- The Franchise Agreement requires application of the laws of the State of Georgia.

This provision might not be enforceable under California law.

- Section 19E of the Franchise Agreement contains a liquidated damages clause.

Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.

- Section 24G of the Franchise Agreement requires binding arbitration.

The arbitration will occur at the forum indicated in Section 24B with the costs being borne by the prevailing party.

Prospective franchisees are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Franchise Agreement restricting venue to a forum in the State of Georgia.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 29

Does City Publications charge a fee for the initial training program if a franchisee names a new Designated Manager after beginning operations?

Accepted Answer

If, after beginning operations, Franchisee names a new Designated Manager, the new Designated Manager must complete the initial training program to Franchisor's satisfaction within sixty (60) days. The new Designated Manager may attend the initial training program at the then-current rates for additional training, if any, for providing the new Designated Manager an initial training program in respect of such manager. Franchisee will be responsible for all travel and living expenses.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 30

Is compliance with all provisions of the City Publications franchise agreement required for the entire term to be eligible for renewal?

Accepted Answer

THE STATE OF MARYLAND**

This Amendment to the Franchise Agreement is agreed to this day of, 20, between CITY PUBLICATIONS FRANCHISE GROUP, INC. and as follows: to amend and revise said Franchise Agreement 1. In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code be amended as follows: Ann., Bus. Reg. §§14-201-14-233, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall ◼ Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under the Maryland Franchise Registration and Disclosure Law. ◼ Section 18B1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.). ◼ Section 24A of the Franchise Agreement requires that the franchise be governed by Georgia Law;

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 31

What condition must a City Publications franchisee meet to be eligible for reimbursement of defense costs related to the use of Marks in Minnesota?

Accepted Answer

quipment, inventory, training or other items included in the franchise offering are fulfilled. At the option of the Franchisor, a surety bond may be provided in place of escrow.
- 3. THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENFORCEMENT BY THE ATTORNEY GENERAL.

Any questions regarding this notice should be directed to:
State of Michigan Consumer Protection Division Attention: Franchise Bureau 670 Law Building Lansing, MI 48913 (517) 373-3800

#### **FOR THE STATE OF MINNESOTA:**

- 1. ITEM 13 of the Disclosure Document is amended as follows:
  - ◼ As required by th

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 32

What are the conditions that a City Publications franchisee must fulfill to be eligible for a renewal term?

Accepted Answer

Franchisee shall have the right to obtain a successor franchise at the expiration of the initial term of the Franchise for four (4) additional successive terms of five (5) years each for a total of twenty-five (25) years, provided that all of the following conditions have been fulfilled and remain true as of the last day of the initial term and each renewal term of this Agreement:

- 1. Franchisee has, during the entire term of this Agreement, substantially complied with all its provisions;
- 2. Franchisee has access to and the right to remain in possession of a suitable location, which is in compliance with Franchisor's then-current specifications and standards for the duration of the renewal term;

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 33

What conditions must be met to receive the City Publications 'Quick Start Program'?

Accepted Answer

- 4. The CITY PUBLICATIONS "Quick Start Program," which program consists of information, activities and materials designed to assist Franchisee in commencing operation of the Franchised Business. The Quick Start Program is provided to Franchisee upon execution of this Agreement and Franchisee's payment of the Franchise Fee;

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 34

Where does City Publications conduct the initial training program?

Accepted Answer

6.B.1)

### F. Initial Training

We will provide an initial training program which you must attend and complete to our satisfaction. Initial Training is conducted online at this time. You must successfully complete the training program no later than three months after you sign your franchise agreement. Both in connection with the training program and in the operation of your franchised business, we require that you respond to all communications from us within 24 hours of your receipt of the communication from us. There is no additional fee for initial training, however if we go back to the in-person training, you must pay for travel expenses and lodging. The following is a general description of the initial training program:

### **TRAINING PROGRAM**

| Obligation |  | Section In Agreement | Disclosure Document Item |
|---|---|---|---|
| n. | Insurance | Section 16 | ITEMS 6, 7 and 8 |
| o. | Advertising | Section 11 | ITEMS 6 and 11 |
| p. | Indemnification | Section 22 | ITEM 6 |
| q. | Owner's participation/ management/staffing | Section 14 | ITEM 15 |
| r. | Records and reports | Section 12 | ITEM 11 |
| s. | Inspections and audits | Sections 7 and 12 | ITEMS 6, 11 and 13 |
| t. | Transfer | Section 20 | ITEM 17 |
| u. | Renewal | Sections 4 and 5.B | ITEM 17 |
| v.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–24)

Question 35

What is the consequence if a City Publications franchisee assigns any part of the operating control of the Franchised Business without prior written consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 36

What is the consequence if a City Publications franchisee conveys any interest in the franchise agreement without the franchisor's consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor. If Franchisee desires to sell or transfer any rights or assets described in the preceding sentence to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:

- 1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
- 2. Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities including, without limitation, claims arising under federal, state or local laws, rules or ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the Franchised Business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.

- 3.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 37

What is the consequence if a City Publications franchisee mortgages any part of the ownership interests in Franchisee without prior written consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 38

What is the consequence if a City Publications franchisee sells any part of the ownership interests in Franchisee without prior written consent?

Accepted Answer

The rights and duties of Franchisee as set forth in this Agreement, and the Franchise herein granted, are personal to Franchisee, and Franchisor has agreed to enter into this contract with Franchisee in reliance upon Franchisee's personal skill and financial ability. Accordingly, neither Franchisee nor any successor of Franchisee, either immediate or remote, to any part of Franchisee's interest in this Agreement may sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in the Franchise granted hereby. Any purported assignment or transfer, whether by operation of law or otherwise, or encumbrance of all or any part of Franchisee's rights under this Agreement, or of all or any part of the ownership interests in Franchisee, or of all or any part of the operating control of the Franchised Business, or of fifteen percent (15%) or more of the assets used in the operation of the Franchised Business, shall be null and void and shall constitute a material breach of this Agreement, for which breach Franchisor may then terminate this Agreement without notice or opportunity to cure, unless such assignment, transfer or encumbrance has the prior written consent of Franchisor. If Franchisee desires to sell or transfer any rights or assets described in the preceding sentence to any transferee, Franchisee shall first obtain the written consent of Franchisor to such transaction, which consent will be conditioned upon the satisfaction of the following conditions:

- 1. All obligations owed to Franchisor and all other outstanding obligations relating to the Franchised Business shall be fully paid and satisfied.
- 2. Franchisee shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders and employees, in their corporate and individual capacities including, without limitation, claims arising under federal, state or local laws, rules or ordinances, and any other matters incident to the termination of this Agreement or to the transfer of Franchisee's interest herein or to the transfer of Franchisee's ownership of all or any part of the Franchised Business which operates this Franchise. If a general release is prohibited, Franchisee shall give the maximum release allowed by law.

- 3.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 39

What are the consequences if Publications Franchise Group, Inc. fails to comply with the Minnesota Franchise Law regarding City Publications?

Accepted Answer

curities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, and understands and consents to be bound by all of its terms. CITY PUBLICATIONS FRANCHISE GROUP, INC.: ### FOR THE STATE OF MINNESOTA | PUBLICATIONS FRANCHISE GROUP, INC. and to a solution of the Minnesota Franchise Law, Minn. Stat 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Rule 2860.4400, et. seq., the parties to the attached Franchise Agreement shall be ame franchises governed by Minnesota Law, the Franchisor versual Franchise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days notice of termination (with Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not section the section of the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are section to the section three days are section to the section three days are section to the section three days are section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are se | t., Chapter 80C, Sections 80C.01 through the Minnesota Commission of Securities, ment agree as follows: ended to add that with respect to will comply with the Minnesota ses, that a Franchisee be given 90 days notice of non-renewal of the the provide for a prospective general to the Minnesota Franchise Law. | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| |

80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Rule 2860.4400, et. seq., the parties to the attached Franchise Agreement shall be amended franchises governed by Minnesota Law, the Franchise repractise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days regreement.
Sections 5B.10 and 20B.2 of the Franchise Agreement do not

| ne Minnesota Commission of Securities, ment agree as follows: ended to add that with respect to will comply with the Minnesota ses, that a Franchisee be given 90 lays notice of non-renewal of the trovide for a prospective general to the Minnesota Franchise Law. | | franchises governed by Minnesota Law, the Franchisor version of Franchise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days regreement. Sections 5B.10 and 20B.2 of the Franchise Agreement do not | will comply with the Minnesota ses, that a Franchisee be given 90 lays notice of non-renewal of the provide for a prospective general to the Minnesota Franchise Law. to the Minnesota Franchise Law. | | release of claims against Franchisor which may be subject Minn. Rule 2860.4400D prohibits a franchisor from requiring release. | , a franchisee to assent to a general | | Section 7 of the Franchise Agreement shall be amended to a Franchise Law, Franchisor will reimburse Franchisee for an the defense of Franchisee's right to use the Marks, so long as in the manner authorized by Franchisor, and so long as Franch and is given the right to manage the defense of the claim in settle or otherwise resolve the claim, and to determine wheth of the claim. | y costs incurred by Franchisee in s Franchisee was using the Marks hisor is timely notified of the claim acluding the right to compromise, | | ■ Section 19E of the Franchise Agreement shall be deleted in it | ts entirety. | | Section 24D of the Franchise Agreement shall be amended the Franchised Business or this Agreement or any related agarbitration or an action for a claim that cannot be the subject of three (3) years from the date on which Franchisee or Franchin the exercise of reasonable diligence, of the facts giving rise | greement will be barred unless an of arbitration is commenced within isor knew or should have known, | | ■ Section 24E shall be deleted in its entirety. | | | ■ Section 24F shall be deleted in its entirety. | | | Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit Fr | the Offering Circular or Franchise hts as provided for in Minnesota | | to be conducted outside Minnesota. In addition, nothing in t | | | Agreement can abrogate or reduce any of Franchisee's right | | | Statutes, Chapter 80C, or Franchisee's rights to any procedure | | | by the laws of the jurisdiction. | | | 2. Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 40

Is the covenant not to compete in the City Publications Franchise Agreement, which extends beyond the term of the agreement, always enforceable under California law?

Accepted Answer

- Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 41

What is the deadline in New York State for City Publications Franchise Group, Inc. to provide the franchise disclosure document before executing the franchise agreement?

Accepted Answer

New York state law requires a franchisor to provide the franchise disclosure document at the earlier of the first personal meeting or 10 business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 42

What is the deadline for Publications Franchise Group, Inc. to amend the City Publications franchise agreement to comply with Minnesota law?

Accepted Answer

curities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, and understands and consents to be bound by all of its terms. CITY PUBLICATIONS FRANCHISE GROUP, INC.: ### FOR THE STATE OF MINNESOTA | PUBLICATIONS FRANCHISE GROUP, INC. and to a solution of the Minnesota Franchise Law, Minn. Stat 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Rule 2860.4400, et. seq., the parties to the attached Franchise Agreement shall be ame franchises governed by Minnesota Law, the Franchisor versual Franchise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days notice of termination (with Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not section the section of the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are section to the section three days are section to the section three days are section to the section three days are section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are se | t., Chapter 80C, Sections 80C.01 through the Minnesota Commission of Securities, ment agree as follows: ended to add that with respect to will comply with the Minnesota ses, that a Franchisee be given 90 days notice of non-renewal of the the provide for a prospective general to the Minnesota Franchise Law. | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| |

80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Rule 2860.4400, et. seq., the parties to the attached Franchise Agreement shall be amended franchises governed by Minnesota Law, the Franchise repractise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days regreement.
Sections 5B.10 and 20B.2 of the Franchise Agreement do not

| ne Minnesota Commission of Securities, ment agree as follows: ended to add that with respect to will comply with the Minnesota ses, that a Franchisee be given 90 lays notice of non-renewal of the trovide for a prospective general to the Minnesota Franchise Law. | | franchises governed by Minnesota Law, the Franchisor version of Franchise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days regreement. Sections 5B.10 and 20B.2 of the Franchise Agreement do not | will comply with the Minnesota ses, that a Franchisee be given 90 lays notice of non-renewal of the provide for a prospective general to the Minnesota Franchise Law. to the Minnesota Franchise Law. | | release of claims against Franchisor which may be subject Minn. Rule 2860.4400D prohibits a franchisor from requiring release. | , a franchisee to assent to a general | | Section 7 of the Franchise Agreement shall be amended to a Franchise Law, Franchisor will reimburse Franchisee for an the defense of Franchisee's right to use the Marks, so long as in the manner authorized by Franchisor, and so long as Franch and is given the right to manage the defense of the claim in settle or otherwise resolve the claim, and to determine wheth of the claim. | y costs incurred by Franchisee in s Franchisee was using the Marks hisor is timely notified of the claim acluding the right to compromise, | | ■ Section 19E of the Franchise Agreement shall be deleted in it | ts entirety. | | Section 24D of the Franchise Agreement shall be amended the Franchised Business or this Agreement or any related agarbitration or an action for a claim that cannot be the subject of three (3) years from the date on which Franchisee or Franchin the exercise of reasonable diligence, of the facts giving rise | greement will be barred unless an of arbitration is commenced within isor knew or should have known, | | ■ Section 24E shall be deleted in its entirety. | | | ■ Section 24F shall be deleted in its entirety. | | | Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit Fr | the Offering Circular or Franchise hts as provided for in Minnesota | | to be conducted outside Minnesota. In addition, nothing in t | | | Agreement can abrogate or reduce any of Franchisee's right | | | Statutes, Chapter 80C, or Franchisee's rights to any procedure | | | by the laws of the jurisdiction. | | | 2. Each provision of this Amendment shall be effective only to the Minnesota Franchise Law applicable to the provisions are met independe addendum shall be deemed to be inconsistent with any terms or conditions of attachments thereto, the terms of this addendum shall govern. | ent of this Amendment. To the extent this | | IN WITNESS WHEREOF, each of the undersigned hereby acknowledges havi and consents to be bound by all of its terms. | ing read this Amendment and understands | | CITY PUBLICATIONS FRANCHISE GROUP, INC.: Franchisee: | | | By: By: | | | Title: Title: | | #### **FOR THE STATE OF NEW YORK** | This Amendment to the Franchise Agreement is agreed to this day of, 20, between CITY | | | |--------------------------------------------------------------------------------------|----------------------------------------------|--| | PUBLICATIONS FRANCHISE GROUP, INC. Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 43

What is the dependency for a City Publications franchisee to participate in the VeriCast Program?

Accepted Answer

- 11. We have a license with a third party for a single card mailing program, called a VeriCast Program, and if you are in good standing with us and if the Program is available in your territory, you can choose to participate. (Section 4L)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–24)

Question 44

What is the dependency for a City Publications franchisee to terminate the agreement?

Accepted Answer

[Item 23: RECEIPT]

any assumed name or equivalent registration filed with state, city or county authorities which contains the name "CITY PUBLICATIONS" or any of the Marks, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement.

- 4.

Franchisee shall relinquish or transfer to Franchisor or its designee, at Franchisor's discretion, the Franchised Business telephone number and notify the telephone service provider and all listing agencies of the termination or expiration of Franchisee's rights to use any telephone number or any telephone directory listings associated with the "CITY PUBLICATIONS" name or any of the Marks and shall authorize transfer of the same to Franchisor or at Franchisor's direction.

- 5.

Franchisor shall have the right to enter any premises leased for the Franchised Business.

Additionally, upon demand by Franchisor, Franchisee shall assign (or, if an assignment is prohibited, sublease for the full remaining term and on the same terms and conditions as Franchisee's lease) its interest in the lease then in effect for the premises of the Franchised Business to Franchisor, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement.

Franchisor shall have the right to make rental and other payments directly to the landlord or other party to whom such payment is ultimately due.

- 6.

Franchisee shall promptly pay all sums owing to Franchisor.

In the event of termination for any default of Franchisee, such sums shall include, but not be limited to, all damages, costs and expenses, including reasonable attorneys' fees and other expenses incurred by Franchisor as a result of the default.

- 7.

Franchisee shall pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination or expiration of the Franchise herein granted in obtaining injunctive or other relief for the enforcement of any provisions of this Section 19.

- 8.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 45

What is the dependency between the franchisee's use of the Marks and City Publications' obligation to reimburse defense costs?

Accepted Answer

Franchisor shall reimburse Franchisee for all expenses reasonably incurred by Franchisee in any trademark or similar proceeding disputing Franchisee's authorized use of any Mark, provided that Franchisee has timely notified Franchisor of such proceeding and has complied with this Agreement and Franchisor's directions in responding to such proceeding. At Franchisor's option, Franchisor may defend and control the defense of any proceeding arising directly from Franchisee's use of any Mark. This indemnification shall not include the expense to Franchisee of removing signage or discontinuance of the use of the Marks. This Section 7 is not applicable to litigation between Franchisor and Franchisee wherein Franchisee's use of the Marks are disputed or challenged by Franchisor. This Section 7(D) is not applicable to any separate legal fees or costs incurred by Franchisee in seeking independent counsel, separate from the counsel representing Franchisor and Franchisee in the event of litigation disputing Franchisor and Franchisee's use of the Marks. Franchisee also has no right of indemnification in the event it determines to use separate counsel from Franchisor in defense of the type of litigation described herein. The Franchisee will receive a logo and formats for use in the Franchise. All material using the logo or Exclusive marks and are used to market or promote the Franchise or its products must be produced in accordance with the operating manual.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 46

What is the dependency for City Publications to grant an exclusive territory?

Accepted Answer

So long as this Agreement is in force and effect and Franchisee is not in default under any of the terms hereof, Franchisor will neither establish, nor license another to establish or operate, a CITY PUBLICATIONS Business within the geographic area identified in Exhibit A to this Agreement (the "Exclusive Territory"). The Exclusive Territory granted to Franchisee shall consist of approximately one hundred thousand (100,000) homes of an appropriate market value and shall be defined by zip codes. Demographics will be based upon the most recent available U.S. Census data at the time the Exclusive Territory is designated. Franchisee is required to confine its distribution of Card Packs to Franchisee's Exclusive Territory.

Franchisee may solicit for Card Pack advertisements outside of the Exclusive Territory so long as such advertisements are to be directed to consumers residing or situated within the Exclusive Territory. All activity to solicit advertising from individual business owners or other business entities having operations or sites in multiple franchise territories shall be reserved for Franchisor.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 47

What is the dependency related to third-party consent for agreements when establishing a Controlled Entity for a City Publications franchise?

Accepted Answer

- 4. The Controlled Entity shall enter into a written agreement with Franchisor expressly assuming the obligations of this Agreement and all other agreements relating to the operation of the Franchised Business. If the consent of any other contracting party to any such agreement is required, Franchisee shall have obtained such written consent and provided the same to Franchisor prior to consent by Franchisor.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 48

What is the dependency between the transferee meeting the Franchisor's standards and the ability to conduct the City Publications Franchised Business?

Accepted Answer

The transferee shall have satisfied Franchisor that it meets Franchisor's management, business and financial standards and otherwise possesses the character and capabilities, including business reputation and credit rating, as Franchisor may require, demonstrating ability to conduct the Franchised Business.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 49

What is the dependency for City Publications to update the Mailing List with current data?

Accepted Answer

- 4. Continuous maintenance and updating of the data used in compiling the Mailing List. At Franchisee's option, Franchisor shall update the Mailing List with current data; provided that such data is available in an appropriate format to update such list. Franchisor does not guarantee the exact demographics of a particular Mailing List. Franchisor shall use its best efforts to ensure Franchisee's Mailing List includes the desired demographic market;

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 50

Can City Publications direct a franchisee to stop using copyrighted items?

Accepted Answer

If it becomes advisable at any time, in Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or discontinue use of any of the Marks, and/or use one (1) or more additional or substitute trade names, trademarks, service marks or other commercial symbols, Franchisee shall comply with Franchisor's directions within a reasonable time after notice to Franchisee by Franchisor. Franchisor shall not be required to reimburse Franchisee for its expenses in modifying or discontinuing the use of a Mark or any loss of goodwill associated with any modified or discontinued Mark or for any expenditures made by Franchisee to promote a modified or substitute trademark or service mark.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 25)

Question 51

What is the due date for the Franchise Fee for a City Publications franchise, considering applicable state laws?

Accepted Answer

# **SECTION 4. FEES**

Franchisee agrees to pay Franchisor the following fees and amounts at the times specified herein:

#### **A. Franchise Fee**

Franchisee shall pay a Franchise Fee to Franchisor of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Dollars (\$\_\_\_\_\_\_\_\_\_). The fee is fully due and payable when you sign this Franchise Agreement. See Exhibit C for any applicable state law affecting the due date of the Franchise Fee. The Franchise Fee shall be deemed fully earned upon payment and is nonrefundable. Said Franchise Fee includes payment for:

- 1. Access to Franchisor's proprietary materials and process including, but not limited to, an initial supply of sales material;
- 2. Use of a unique domain for design and creation of a designated website for the Franchised Business, and a link between such website and the CITY PUBLICATIONS website. This domain is also for all email communication related to the franchise;
- 3. Exclusive rights to distribute Card Packs and other approved products within the Exclusive Territory as described in Section 3.B;
- 4. The CITY PUBLICATIONS "Quick Start Program," which program consists of information, activities and materials designed to assist Franchisee in commencing operation of the Franchised Business. The Quick Start Program is provided to Franchisee upon execution of this Agreement and Franchisee's payment of the Franchise Fee;
- 5. An initial training program and training materials to be provided to Franchisee pursuant to Section 10.A;
- 6. On-site sales training and assistance as further described in Section 10.D;
- 7.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 52

What is the effect of Business and Professions Code §20010 on the requirement for a City Publications franchisee to sign a general release as a condition of transfer or renewal?

Accepted Answer

- ◼ The Franchise Agreement requires Franchisee to sign a general release as a condition of transfer or renewal of your franchise. California Corporations Code §31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516). Business and Professions Code §20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code §§20000 through 20043).

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 53

What is the effect of California Corporations Code §31512 on the requirement for a City Publications franchisee to sign a general release as a condition of transfer or renewal?

Accepted Answer

- ◼ The Franchise Agreement requires Franchisee to sign a general release as a condition of transfer or renewal of your franchise. California Corporations Code §31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516). Business and Professions Code §20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code §§20000 through 20043).

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 54

What is the effect of the California Franchise Investment Law on the City Publications franchise agreement?

Accepted Answer

disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

| FOR THE STATE OF CAL | IFORNIA |
|----------------------|---------|
|----------------------|---------|

| Year ending December 31: |  |  |
|---|---|---|
| 2025 |  | $                29,393 |
| 2026 | 22,613 |  |
- 1. In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code §§31000-31516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:
  - The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.
  - Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.
  - Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.
  - Section 18B.1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, *et seq.*).
  - The Franchise Agreement requires litigation to be conducted in a court located in the State of Georgia. This provision might not be enforceable for any cause of action arising under California law.
  - The Franchise Agreement requires application of the laws of the State of Georgia. This provision might not be enforceable under California law.
  - Section 19E of the Franchise Agreement contains a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
  - Section 24G of the Franchise Agreement requires binding arbitration. The arbitration will occur at the forum indicated in Section 24B with the costs being borne by the prevailing party. Prospective franchisees are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Franchise Agreement restricting venue to a forum in the State of Georgia.
  - The Department of Financial Protection and Innovation requires that the franchisor defer the collection of all initial fees from California franchisees until the franchisor has completed all its pre-opening obligations and franchisee is open for business.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 55

What is the effect of the California Franchise Relations Act on the City Publications franchise agreement?

Accepted Answer

disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

| FOR THE STATE OF CAL | IFORNIA |
|----------------------|---------|
|----------------------|---------|

| Year ending December 31: |  |  |
|---|---|---|
| 2025 |  | $                29,393 |
| 2026 | 22,613 |  |
- 1. In recognition of the requirements of the California Franchise Investment Law, Cal. Corp. Code §§31000-31516 and the California Franchise Relations Act, Cal. Bus. And Prof. Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:
  - The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.
  - Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.
  - Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.
  - Section 18B.1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, *et seq.*).

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 56

What is the effect of the California Investment Law and/or the California Franchise Relations Act on the effectiveness of the City Publications Franchise Agreement amendment?

Accepted Answer

- The Department of Financial Protection and Innovation requires that the franchisor defer the collection of all initial fees from California franchisees until the franchisor has completed all its pre-opening obligations and franchisee is open for business.

- Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the California Investment Law and/or the California Franchise Relations Act are met independent of this Amendment.

To the extent this addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this addendum shall govern.

3.

### Section 31512.1 Franchise Agreement Provisions Void as Contrary to Public Policy:

Any provision of a franchise agreement, franchise disclosure document, acknowledgement, questionnaire, or other writing, including any exhibit thereto, disclaiming or denying any of the following shall be deemed contrary to public policy and shall be void and unenforceable:

(a) Representations made by the franchisor or its personnel or agents to a prospective franchisee;

Franchisee's Initials:

- (b) Reliance by a franchisee on any representations made by the franchisor or its personnel or agents;
- (c) Reliance by a franchisee on the franchise disclosure document, including any exhibit thereto;
- (d) Violations of any provision of this division.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 57

What is the effect of California law on the City Publications Franchise Agreement's requirement for binding arbitration?

Accepted Answer

- Section 24G of the Franchise Agreement requires binding arbitration.

The arbitration will occur at the forum indicated in Section 24B with the costs being borne by the prevailing party.

Prospective franchisees are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Franchise Agreement restricting venue to a forum in the State of Georgia.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 58

What is the effect of the Maryland Securities Commissioner requiring a financial assurance on the payment of initial fees for City Publications?

Accepted Answer

Based on our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 59

What is the effect of sections 5B.10 and 20B.2 of the Franchise Agreement on the applicability of Minnesota Franchise Law to City Publications?

Accepted Answer

curities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, and understands and consents to be bound by all of its terms. CITY PUBLICATIONS FRANCHISE GROUP, INC.:
### FOR THE STATE OF MINNESOTA

| PUBLICATIONS FRANCHISE GROUP, INC. and  to a solution of the Minnesota Franchise Law, Minn. Stat 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Rule 2860.4400, et. seq., the parties to the attached Franchise Agreement shall be ame franchises governed by Minnesota Law, the Franchisor versual Franchise Law which requires, except in certain specified can days notice of termination (with 60 days to cure) and 180 days notice of termination (with Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not sections 5B.10 and 20B.2 of the Franchise Agreement do not section the section of the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section the first three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections 5B.10 and 20B.2 of the Franchise Agreement do not section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are sections as a section three days are section to the section three days are section to the section three days are section to the section three days are section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are section to the section three days are se | t., Chapter 80C, Sections 80C.01 through the Minnesota Commis

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 60

Is the effectiveness of the North Dakota amendment for City Publications dependent on meeting jurisdictional requirements independent of the amendment itself?

Accepted Answer

Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of North Dakota law applicable to the provisions are met independent of this Amendment.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 61

Can City Publications elect to arrange cooperative advertising in the future?

Accepted Answer

- 1. There is no advertising program for which you are required to make contributions. There is no advertising council composed of franchisees. We may elect at a future time to arrange cooperative advertising. You may elect with other franchisees to establish cooperative advertising for a select area encompassing your mutual territories. It is optional for the franchisees to participate in such a cooperative. If such a cooperative is established, we anticipate that each franchisee in the given area would automatically be a member, with one vote per franchise agreement. Any company or affiliate owned outlets would also be members and would be required to make the same contributions as the other members. Since there are no cooperatives at this point or ever in the past, we do not have a policy on an amount that franchisees would be required to contribute to the cooperative. We anticipate that the members would establish a governing board and would adopt governing documents that would be available for review by a prospective franchisee. (Section 11B)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 19–24)

Question 62

What is the exception to the rule that City Publications must give 90 days notice of termination in Minnesota?

Accepted Answer

◼ With respect to franchises governed by Minnesota law, the Franchisor will comply with Minn. Stat. Sec. 80C.14, Subds. 3, 4 and 5 which require, except in certain specified cases, that a Franchisee be given 90 days notice of termination (with 60 days to cure) and 180 days notice of non-renewal of the Franchise Agreement.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 63

To what extent is each provision of the Maryland amendment effective for City Publications franchises?

Accepted Answer

Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law applicable to the provisions are met independent of this Amendment. To the extent this addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this addendum shall govern. Based on our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement.

Source: Item 23 — RECEIPT (FDD pages 39–129)

Question 64

Does the City Publications FDD allow for supplemental financial performance information under particular circumstances?

Accepted Answer

The FTC Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting our President, Richard Houden, at 1300 Parkwood Circle SE, Suite 100, Atlanta Georgia 30339 (770) 951-0048, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD page 32)

City_Publications 2025 FDD FAQ