What are some examples of City Publications' Proprietary Products & Services?

UBLICATIONS Business.

We and our Affiliates have developed certain proprietary items and services, including customized direct mail Card Packs, customized Specialty Programs, SEO Programs, Graphics Services for the art design and printing of direct mail card packs, target market mailing lists, lead generation, packaging, branding materials, and other items which are integral to the operation of CITY PUBLICATIONS Businesses ("Proprietary Products & Services"). You must order and purchase all of your requirements of Proprietary Products & Services exclusively from us, our Affiliate(s) or a supplier designated by us. We do not allow you to contract with alternative suppliers for these items and therefore do not have a procedure by which you would submit to us information regarding alternative suppliers. Because we do not allow use of alternative suppliers for these services, you will never pay us for such a review, and there is no stated time frame within which we would be responding. You must also purchase sufficient Proprietary Products & Services as necessary to operate the Franchised Business at full capacity. We commit to provide the Proprietary Products & Services at competitive prices; however,

¹¹Licenses & Permits. These amounts will be incurred for costs such as operating licenses and permits. Your actual costs may vary from the estimates based on the requirements of local government authorities.

you recognize that we and our Affiliates have the right to earn a reasonable profit on the sale of our Proprietary Products & Services. We estimate that your purchase of Proprietary Products & Services will represent approximately 100% of the cost of goods sold. Cost of goods sold as a percentage of revenue varies both as the size of the Card Pack changes and as the average selling price changes.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 16–18)