How does Degree Wellness administer the advertising fund?

times have arrangements in existence with Visa, Master Card, and any other credit and debit card issuers or sponsors, check verification services, and electronic fund transfer systems that we designate from time to time, in order that the Franchise may accept customers' credit and debit cards, checks, and other methods of payment. We may require you to obtain such services through us or our affiliates or designated third parties.

11. ADVERTISING.

11.1 By Degree Wellness. As stated in Paragraph 6.3a, due to the importance of promoting the public image of Degree Wellness Studio franchises, we will establish, maintain, and administer the Fund to support and pay for national, regional, or local marketing and promotional programs that we deem necessary, desirable, or appropriate, in our sole discretion, to promote the good will and image of all Degree Wellness Studio franchises. You will contribute to the Fund in the amount set forth in Section 6.3a. We agree that any Studios owned by us or our affiliates will be required to contribute to the Fund on at least the same basis as you do, subject only to limitation under applicable law.

Degree Wellness will be entitled to direct all advertising programs financed by the Fund, with sole discretion over (i) the creative concepts, materials, endorsements, and media used therein, and (ii) the geographic, market, and media placement and allocation of the programs. Degree Wellness shall have the right to determine, in its sole discretion, the composition of all geographic territories and market areas for the development and implementation of such programs. You agree that the Fund may be used to pay any and all costs of maintaining, administering, directing, and preparing national, regional or local advertising

materials, programs, and promotional activities, including, without limitation, (a) costs for preparing and conducting television, radio, magazine, billboard, newspaper, internet and other media programs and activities, (b) costs associated with conducting marketing research, (c) costs associated with website development and marketing, including without limitation, search engine optimization and social media, (d) administering regional and multi-regional advertising programs, including, without limitation, purchasing direct mail and other media advertising, (e) employing advertising, program and marketing agencies, and vendors providing marketing services, (f) development, implementation and maintenance of online asset management tools, (g) marketing and advertising training programs and materials, and (h) costs for providing promotional brochures and advertising templates and materials to Degree Wellness Studio franchises. As available, we will provide you with digital or hard copies of our marketing materials via our intranet. We may, at our discretion, charge you for hard or digital copies of these marketing materials. You agree that the amounts you contribute to the Fund may be used for placement of advertising in television, radio, newspaper or other media as solely determined by Degree Wellness.

The Fund will be accounted for separately from other funds of Degree Wellness, and will not be used to defray any of our general operating expenses, except for any reasonable salaries, administrative costs, and overhead we may incur in activities reasonably related to the administration of the Fund and its advertising programs (including without limitation conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Fund). We may spend in any fiscal year an amount greater or less than the total contributions to the Fund in that year. We may cause the Fund to borrow from us or other lenders to cover deficits of the Fund, or to invest any surplus for future use by the Fund. You authorize us to collect for remission to the Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. We will prepare an annual, unaudited statement of monies collected and costs incurred by the Fund and will make it available to you on written request.

You understand and acknowledge that the Fund will be intended to maximize recognition of the Marks and the goodwill and patronage of Degree Wellness Studio franchises. Although we will endeavor to use the Fund to develop advertising and marketing materials, and to place advertising in a manner that will benefit all Degree Wellness Studio franchises, we undertake no obligation in developing, implementing, or administering advertising or promotional programs to ensure that expenditures by the Fund in or affecting any geographic area are proportionate or equivalent to contributions to the Fund by Degree Wellness Studio franchises operating in that geographic area, or that any Degree Wellness Studio franchise will benefit directly or in proportion to its contribution to the Fund from the development of advertising and marketing materials or the placement of advertising. Degree Wellness shall not be a fiduciary to you with respect to the management of the Fund. Except as expressly provided in this

Paragraph, we assume no direct or indirect liability or obligation to you with respect to the maintenance, direction, or administration of the Fund.

We will have the right to terminate the Fund by giving you 30 days' advance written notice. All unspent monies on date of termination will be divided between Degree Wellness and the contributing Degree Wellness Studio franchisees in proportion to our and their respective contributions. At any time thereafter, we will have the right to reinstate the Fund under the same terms and conditions as described in this Paragraph (including the rights to terminate and reinstate the Fund) by giving you thirty (30) days' advance written notice of reinstatement.

In addition to the Fund, as stated in Paragraph 6.3b, we may establish a program in the future to provide additional marketing services to Studio franchises. This program will involve the placement of individuals on a local basis to perform marketing activities for your benefit, subject to applicable law. This program will be required for Studio franchises. You agree to pay the fee specified in Paragraph 6.3b. If we choose to establish this program in the future, you agree to comply with all specifications and requirements contained in the Operations Manual concerning this program.

11.2 By Franchise Owner

• a.

Source: Item 23 — Receipts (FDD pages 66–257)