What is the basis for the Deck Medic brand development (advertising) fee that franchisees must pay?

blic brand recognition and awareness of the Licensed Marks. The National Advertising Fund will not be utilized to directly or indirectly market or promote the Franchised Business or, unless otherwise directed by Franchisor, in Franchisor's Reasonable Business Judgment, pay for media placements that may benefit or include any media market that includes Franchisee's Administrative Office or Operating Territory;

• (5) Franchisee agrees that the National Advertising Fund may be used to pay various costs and expenses of Franchisor for such reasonable salaries, wages, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration, activities and/or the brand awareness goals of the National Advertising Fund including expenses incurred by Franchisor for advertising, marketing, product and service testing, product and service development, maintenance, evaluation and monitoring of the Business Management Systems, upgrades to the System Website, development of Digital Media and creative development that is internally administered or prepared by Franchisor and other marketing activities made by Franchisor, provided, however, that salary expenses for Franchisor's personnel paid by the National Advertising Fund shall be commensurate with the amount of that time spent by such personnel on National Advertising Fund matters. Franchisor shall not use contributions to the National Advertising Fund to defray any of Franchisor's general operating expenses, except for such reasonable salaries, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration and activities of the National Advertising Fund and creation or conduct of its marketing programs including, without limitation, conducting market research, preparing advertising and marketing materials and collecting and accounting for contributions to the National Advertising Fund. Franchisor may spend in a fiscal year an amount greater or less than the aggregate contributions of all Deck Medic Businesses to the National Advertising Fund in that year;
• (6) Franchisee agrees to participate in all advertising, marketing, promotions, research and public relations programs instituted by the National Advertising Fund;
• (7) Deck Medic Businesses owned by Franchisor or Franchisor's affiliates are not required to pay any National Advertising Fund Fee or contribute to or make any contribution to the National Advertising Fund;
• (8) Franchisee and Franchisor acknowledge and agree that (a) the National Advertising Fund is not a trust, (b) Franchisor is not a trustee or fiduciary of the National Advertising Fund, and (c) Franchisor may deposit and maintain any and all funds of the National Advertising Fund Fee in Franchisor's general accounts. National Advertising Fund Fees are not required to be segregated from other assets or accounts of Franchisor. The National Advertising Fund is not required to expend National Advertising Fund Fees in the year that they are collected and the National Advertising Fund may borrow from Franchisor or other lenders at standard commercial interest rates to cover deficits of the National Advertising Fund, and Franchisor may cause the National Advertising Fund to invest any surplus for future use by the National Advertising Fund. All interest earned on monies contributed to the National Advertising Fund will be used to pay costs of the

National Advertising Fund before other assets of the National Advertising Fund are expended. A summary statement of monies collected and costs incurred by the National Advertising Fund for Franchisor's immediately preceding fiscal year shall be made available to Franchisee upon Franchisee's written request. Franchisor will have the right to cause the National Advertising Fund to be incorporated or operated through an entity separate from Franchisor at such time as Franchisor deems appropriate, and such successor entity shall have all rights and duties of Franchisor pursuant to this Article 9.A.;

• (9) Although Franchisor will endeavor to utilize the National Advertising Fund to develop advertising and marketing materials and programs, Franchisor undertakes no obligation to ensure that expenditures by the National Advertising Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the National Advertising Fund by Deck Medic Businesses operating in that geographic area or that any Deck Medic Businesses will benefit directly or in proportion to its contribution to the National Advertising Fund from the development of advertising and marketing materials. Franchisor may use the National Advertising Fund to promote or benefit any type of Deck Medic Businesses in the System. Franchisor may use the National Advertising Fund to promote or benefit Deck Medic Businesses located within a particular region of the United States.

Source: Item 23 — RECEIPTS (FDD pages 43–228)