Who administers the System Marketing Fund for Face Foundrie?

ffiliate or an advertising agency or consulting firm) will maintain and administer the Fund, as follows:

(a) We (or our designee) will direct all advertising programs, with the sole right to decide the concepts, materials, and media used in these programs and the placement and allocation of the programs, and retain sole discretion over the operation and advertising decisions of the Fund. The Fund is for brand development initiatives and programs intended to maximize

general public recognition, acceptance, and use of the System. Neither we nor our designee will be obligated to make expenditures for you that are equivalent or proportionate to your Marketing Contributions, or to make sure that you or any particular franchisee benefits directly or pro rata from expenditures by the Fund, or to spend any amounts in any particular geographic area. Any Facial Bar owned or operated by us or our affiliates will contribute to the Fund in the same manner as similarly situated franchisees. We may use outside advisors and agencies for advertising, marketing, public relations, Website and social media programs (and other successor technology platforms), and Marketing Contributions may be used to pay all advisor and agency fees and/or offset administrative costs of managing the Fund.

• (b) The Fund, and all contributions to and earnings from the Fund, will be used exclusively to meet the costs of marketing and any other activities that we believe will enhance the System's image and, in our sole discretion, promote general public awareness of and favorable support for the System. This includes the costs (including, without limitation, reasonable salaries and overhead incurred by us) of creating, preparing, administering, directing, and conducting media marketing campaigns and System advertising, marketing and sales programs and campaigns; consumer research and marketing surveys designed to assist in maintaining high quality standards; public relations activities; trade show participation (including travel and expenses for our staff); the development and operation of a national and regional accounts program; online directory listings; developing, enhancing, and maintaining our Website and other Internet marketing, as well as social media and other digital applications (and other successor technology platforms); sponsorship of organizations and events; purchasing promotional items and advertising materials; out-of-pocket expenses (including printing, postage, shipping, telephone and photocopying); our allocable overhead and administrative costs (including compensation and expenses of employees relating to the Fund); and providing promotional and other marketing materials and services to the Facial Bars operating under the System. We do not expect to spend any money from the Fund for advertising that is primarily a solicitation of franchise sales except for the portion, if any, of our website specifically relating to soliciting franchisees.

• (c) All sums paid to the Fund will be maintained in an account separate from our general funds. The Fund is not and will not be our asset, and we or our designee will maintain separate bookkeeping accounts for the Fund. We will have the right to charge the Fund for the reasonable administrative costs and overhead that we incur in activities reasonably related to the direction and implementation of the Fund and advertising programs for you and the System (for example, accounting costs, salaries, costs of our personnel for creating and implementing, advertising, merchandising, promotional and marketing programs and associated overhead). The Fund and its earnings will not otherwise inure to our benefit. We have no fiduciary obligation to you for administering the Fund. We may incorporate the Fund or operate it through a separate entity when we think best. The successor entity will have all of the rights and duties described in this paragraph. We may use collection agents and institute legal proceedings to collect the Marketing Contributions at the Fund's expense. We also may forgive, waive, settle and compromise all claims by or against the Fund. We assume no other direct or indirect liability or obligation to you for collecting amounts due to, maintaining, directing, or administering the Fund.

• (d) We may occasionally make available to franchisees marketing plans and promotional materials produced from contributions to the Fund. Additionally, we may sell these items to franchisees in the System at a reasonable price, and any proceeds from any of those sales will be contributed to the Fund.

• (e) The Fund may spend in any calendar year more or less than the total Marketing Contributions in that year, borrow from us or others to cover deficits (which borrowing will include the payment of interest) or invest any surplus for future use. We will use interest earned on Marketing Contributions to pay costs before spending the Fund's other assets. We anticipate all of our franchisees will contribute to the Fund, although there is no prohibition against us charging higher or lower rates for future franchisees. We may, at any time, defer or reduce a franchise owner's Marketing Contributions and, upon written notice to you, reduce or suspend Marketing Contributions and operations for one or more periods of any length and terminate (and, if terminated, reinstate) the Fund.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 33–43)