During each calendar year, you must spend a minimum of 1% of gross sales for local advertising and promotion of your Flowerama Center. You may use your own advertising material, but the media and content of your advertising is subject to our approval. (Franchise Agreement - Section 22 A). In lieu of the above advertising requirement, we, at our sole option, may establish a "Marketing Fund" for Flowerama Centers. (Franchise Agreement - Section 22 B).

Flowerama Marketing Fund – Standard Flowerama Centers

As of the date of this Disclosure Document, we have not established a separate Flowerama Marketing Fund (the "Flowerama Marketing Fund"), but we reserve the right to do so at any time in the future upon 90 days' written notice to you. When the Flowerama Marketing Fund is implemented, company-owned and affiliate-owned Standard Flowerama Centers will make contributions to the Flowerama Marketing Fund equal to the amounts required of comparable Centers for each of our or our subsidiaries' or affiliates' companyowned units operating in any market or region in which there are 5 or more Standard Flowerama Centers in operation. If a Flowerama Marketing Fund is established, all franchisees will be uniformly required to pay to us on or before the 10th day of each calendar month an amount equal to 2% of their Gross Sales for the preceding calendar month. (Franchise Agreement - Section 22 B).

The Flowerama Marketing Fund monies will be used by us for the purpose of advertising, promoting and enhancing the total Flowerama image. (Franchise Agreement - Section 22 B).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 38–52)