31B(i) and (iii)**).

You are strictly prohibited from using the Marks to promote your Center in any manner on any social and/or networking websites, such as Facebook, LinkedIn, Instagram and Twitter (or their successor website), without our prior written consent. (Franchise Agreement – Section 31B(ii)).

Advertising

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).

If we choose to establish a Flowerama Marketing Fund, it will be administered by us as follows:

The Flowerama Marketing Fund will be used for regional or national advertising, publicity and promotion relating to our business. We will determine, in our fully unrestricted discretion, the manner in which the Flowerama Marketing Fund will be spent. Some portion of the Flowerama Marketing Fund may be used for creative concept production, marketing surveys, test marketing and related purposes. We have the right to direct all advertising activities with sole discretion over creative concepts, materials and media used, as well as their placement and allocation. We also have the right to determine, in our sole discretion, the composition of all geographic and market areas for the implementation of these advertising and promotional activities. We are not required to place any advertising for your Standard Flowerama Center or in your area. We do not have to make sure that any Standard Flowerama Center benefits from the placement of advertising in proportion to their contributions to the Flowerama Marketing Fund. (Franchise Agreement - Section 22 D).

The Flowerama Marketing Fund is intended to maximize general public recognition in all media, of the Flowerama Marks, patronage of Standard Flowerama Centers, and the availability of the products and services offered at Standard Flowerama Centers. No amount of the Flowerama Marketing Fund will be spent

for advertising that is principally a solicitation for the sale of franchises. (Franchise Agreement – Section 22 D).

If established, e have the right to reimburse ourselves out of the Flowerama Marketing Fund for the total costs (including indirect costs) of developing, producing and distributing any advertising materials and collecting the Advertising Fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any Advertising Fee). (Franchise Agreement - Section 22 D).

If established, Centers owned by us or our affiliates will contribute to the Flowerama Marketing Fund on the same basis as you. The Flowerama Marketing Fund Fees paid will be kept separate and distinct and will be accounted for separately from our other funds. These funds will not be used to defray any of our general operating expenses, except as described above. (Franchise Agreement - Section 22 D).

Any sums paid to the Flowerama Marketing Fund that are not spent in the year they are collected will be carried over to the following year. If established, we will prepare an annual accounting of the Flowerama Marketing Fund within 120 days after the end of our fiscal year and will distribute it to our franchisees, upon written request, once a year that will state the total amount of money collected and spent by the Flowerama Marketing Fund during the previous year and list, by general category, the manner in which we spent the money. The report will not be separately audited. We are not required to have the Flowerama Marketing Fund statements audited.

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