How does Cool Binz account for advertising expenses?

r to be used by the COOL BINZ Business. This number will be forwarded to any device(s) that you choose.

Under the mandatory KickStart marketing program, which is included in your Initial Promotional Package, you will receive approximately $5,000 in digital marketing to promote the opening of your business.

You must also spend a minimum of 10% of Gross Sales annually on local advertising until your fleet of Portable Equipment containers are at least 80% rented and then, at that point, you are required to spend at least 5% of Gross Sales annual on local advertising. You must use our approved advertising and marketing materials, or receive our written approval of any and all other advertising and marketing materials before their first use. We reserve the right to designate one or more approved supplier(s) for all advertising and marketing materials. In order to obtain approval of advertising and marketing materials, you must submit such proposed advertising material to us for review at least ten business days before the proposed first use. If we take no action within such ten business day period, the materials shall be deemed disapproved and you may not use such materials. The approval or disapproval is in our sole discretion. We also may, in our sole discretion, require you to immediately discontinue use of any advertising or marketing materials at any time, even if previously approved or provided by us. All advertising and marketing materials must meet our then-current standards and specifications. We may, in our sole discretion, offer and sell advertising, marketing, and promotional materials at any time. Certain items, such as your truck, yard signs and furnace stickers must reference the COOL BINZ national toll free number. You may not alter or remove reference to the national toll free number. You have no obligation to purchase any of these materials or forms from us, but you may be required to purchase such materials from approved or designated suppliers, or participate in our local marketing programs, like our call center and/or direct mail solicitations at your expense. (Section 2.G of the Franchise Agreement).

Following the System, primarily through affinity marketing programs, direct mail, networking, and sales calls, you will market your COOL BINZ Business's services directly to residences, commercial entities and governments/municipalities that require leasing portable storage containers located within the Territory. Included in your Initial Promotional Package is an opening inventory of promotional materials to initiate your marketing program. The primary marketing media we have found to be effective are affinity marketing programs, direct mail and face to face meetings, networking and partner development. We may vary the source of advertising by using one or a combination of in-house, national agencies and/or regional agencies.

You are also required to be a member of at least one local or community-based business organization, such as your local Chamber of Commerce, BNI, Caerusnet, or similar organization. We reserve the right to change this requirement from time to time. (Section 2.G of the Franchise Agreement).

We have the right to formulate and design the content of the materials, and to discontinue the materials if, in our sole business judgment, we determine a more effective alternative method of advertising. Any other forms of advertising must be approved by us in writing. We may, with 30 days' notice to you, require that you use and pay for a call center that we authorize to answer incoming sales calls.

In addition, we have established a brand marketing fund (the "Brand Marketing Fund") for the common benefit of System franchisees. You must contribute two percent (2%) of your Gross Sales monthly to the Brand Marketing Fund (the "Brand Marketing Fee") in the manner we prescribe.

We will use the Brand Marketing Fund, in our sole discretion, to develop, produce and distribute national, regional and/or local advertising and to create advertising materials and public relations programs, which promote, in our sole judgment, the services offered by COOL BINZ franchisees. We have the sole right to determine contributions and expenditures from the Brand Marketing Fund, or any other advertising program, and the sole authority to determine, without limitation, the selection of the advertising materials and programs; provided, however, that we will make a good faith effort to expend Brand Marketing Fund in the general best interests of the System on a national or regional basis. We may use the Brand Marketing Fund to satisfy any and all costs of maintaining, administering, directing, preparing, producing, and implementing advertising, including the cost of: (i) preparing, producing, and implementing television, radio, magazine and newspaper advertising campaigns, the cost of direct mail and outdoor billboard advertising; (ii) public relations activities and advertising agencies; (iii) developing and maintaining an Internet website; and personnel and other departmental costs for advertising that we internally administer or prepare. Nevertheless, we acknowledge that not all System franchisees will benefit directly or on a pro rata basis from such expenditures. While we do not anticipate that any part of the Brand Marketing Fund will be used for advertising which is principally a solicitation for franchisees, we reserve the right to use the Brand Marketing Fund for public relations or recognition of the "COOL BINZ" brand, for the creation and maintenance of a website, a portion of which can be used to explain the franchise offering and solicit potential franchisees, and to include a notation in any advertisement indicating "Franchises Available."

We may periodically assist COOL BINZ franchisees to maintain high quality standards through customer surveys, customer interviews, and other similar initiatives ("Surveys"). The cost of such programs will be borne by the Brand Marketing Fund. The cost of these programs may be

charged directly to you if the results from a Survey fall below System established minimum standards for such Surveys.

Source: Item 23 — RECEIPTS (FDD pages 63–238)