What funds will Engineering For Kids administer during the operation of the Franchised Business?

During the operation of your Franchised Business.

• 1. We will administer the Brand Fund and Regional Fund (if we establish a Regional Fund), as described below in this Item. (Franchise Agreement, Sections 9.1 - 9.4)

(e) Unless we designate otherwise in writing when we establish a Regional Fund, we will administer the Regional Fund in the same manner as described above regarding the System Fund.

During any periods that the Brand Fund is in effect, you must contribute the amounts that we specify to the Brand Fund as described in the first paragraph above under "Ongoing Advertising". We may use your contributions and any earnings on the Brand Fund for any costs associated with local, regional, and/or national advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses and "Engineering For Kids" brand and the System generally, including advertising campaigns in various media; creation and maintenance of online marketing (including one or more websites or other Online Sites (as defined below), social media/networking and other digital media); direct mail advertising; market research and testing, including secret customers and customer satisfaction surveys; employing advertising and/or public relations agencies; purchasing promotional items; conducting and administering promotions, contests, giveaways, public relations events, community involvement activities, etc.; providing promotional and other marketing materials and services to our franchisees; and development of, or producing for franchisees, materials and items used in the Businesses for customer viewing and use; and on materials and/or services designed to promote the brand and employment opportunities in order to facilitate selection and hiring of qualified staff. We have the right to deduct from the Brand Fund 15% of the monies in the Brand Fund on contributions for administration and management of the Brand Fund. We have the right to direct all marketing programs, with the final decision over creative concepts, materials and media used in the programs and their placement. The Brand Fund contributions may be used for national, regional and/or local advertising activities and may take place in a variety of media (including television, radio, and print).

We will deposit all contributions to the Brand Fund in an account separate from our other funds and will not use them to defray any of our general operating expenses, except for reasonable administrative costs and overhead we incur in activities reasonably related to the administration of the Brand Fund or the management of Brand Fund-supported programs (including full or partial salaries of our personnel who devote full- or part-time to Brand Fund activities). Additionally, we may charge the Brand Fund fees at reasonable market rates for advertising, marketing, and promotional services that we ourselves actually provide in lieu of engaging third-party agencies to provide such services.

At any time, we may stop collecting and disbursing advertising contributions and terminate the Brand Fund. It will not be terminated, however, until all monies in the fund have been expended for marketing purposes.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)