Does Floyds 99 require approval for all franchisee advertising?

tedness to Franchisor for Royalties, National Marketing Contributions, product purchases from the Franchisor or its affiliates, interest or any other indebtedness. The Franchisee acknowledges that the Franchisor has the right to set-off any amounts the Franchisee may owe to the Franchisor against any amounts the Franchisor might owe to the Franchisee.

13. ADVERTISING

13.1 Approval of Advertising. The Franchisee shall obtain the Franchisor's prior written approval of all written advertising or other marketing or promotional programs regarding the FLOYD'S 99 Shop, including, without limitation, "Yellow Pages" and other directory listing advertising, newspaper ads, flyers, brochures, magazines, coupons, direct mail pieces, specialty and novelty items and radio, television. See Section 13.6 below regarding electronic advertising. The Franchisee shall also obtain the Franchisor's prior written approval before using any promotional materials as may be provided by vendors. The proposed written advertising or a description of the marketing or promotional program shall be submitted to the Franchisor at least 30 days prior to publication, broadcast or use. The Franchisee acknowledges that advertising and promoting the FLOYD'S 99 Shop in accordance with the Franchisor's standards and specifications is an essential aspect of the Licensed Methods, and the Franchisee agrees to comply with all advertising standards and specifications. The Franchisee shall display all required promotional materials, signs, point of purchase displays and other marketing materials in its FLOYD'S 99 Shop and in the manner prescribed by the Franchisor. The Franchisee agrees to participate in any mandatory gift card or customer loyalty card programs implemented by the Franchisor in accordance with all of the Franchisor's standards and specifications. The Franchisee acknowledges and agrees that participation in a gift card or customer loyalty card program, whether voluntary or required, may require the Franchisee to pay fees, enter into agreements or purchase equipment or other products or services from the Franchisor or from a designated third-party supplier.

13.2 National Marketing Contribution. The Franchisee shall make contributions ("National Marketing Contributions") to a national advertising fund established by the Franchisor ("National Marketing Fund"). The amount of the National Marketing Contribution is currently 1.5% of Franchisee's Gross Sales and can be changed by Franchisor from time to time. The National Marketing Contribution

shall be paid to the Franchisor in addition to Royalties and in addition to any amounts spent on local or regional advertising, and the following terms and conditions shall apply:

• a. The National Marketing Contribution shall be payable concurrently with (or on another designated Due Date), and in the same manner as, the payment of the Royalties as described in Section 12.3.
• b. When combined with Franchisee's Local Advertising Allocation (described below in Section 13.3), Franchisee's total advertising obligation (the National Marketing Contribution plus Local Advertising Allocation) will not exceed 4% of Franchisee's Gross Sales.
• c. Franchisor may increase the amount of the National Marketing Contribution (up to a maximum of 3% of Gross Sales) by providing Franchisee with at least 90 days' prior written notice.
• d. The Franchisor shall have the right to verify National Marketing Contribution payments from time to time as it deems necessary, in any reasonable manner.
• e. The National Marketing Contributions will be subject to the same late charges and interest as the Royalties, in an amount and manner set forth in Section 12.3 above.
• f. Upon the request of the Franchisee, the Franchisor will make available to the Franchisee, no later than 120 days after the end of each fiscal year, an unaudited financial statement which indicates how the National Marketing Fund has been spent.
• g. The Franchisor shall direct all advertising and marketing programs financed by the National Marketing Fund, with sole discretion over the creative concepts, materials and endorsements used therein, geographic, market and media placement and allocation, and the administration thereof. The Franchisee agrees that the National Marketing Fund may be used to pay the costs of preparing and producing video, audio and written advertising materials, and Electronic Advertising (as defined in Section 13.6), including website design and maintenance and communication by social media and electronic mail; agency costs and commissions;

Source: Item 18 — PUBLIC FIGURES (FDD page 49)