What is the purpose of the Advertising and Development Fund for Focalpoint Coaching?

ay the Initial Marketing Fee.

Advertising and Development Fund

We have established a formal Advertising and Development Fund (the "Fund") for advertising, marketing, and public relations programs and materials we deem appropriate. We may designate a separate entity as we deem appropriate in our sole discretion to operate and administer the Fund. Any such entity will have all of the rights and duties described here. You must contribute to the Fund the amounts that we periodically require, not to exceed $150 per month, plus an additional $150 per month for each Associate you retain or hire (currently, $150 plus $150 per Associate per month). (See Item 6) FocalPoint Franchised Businesses operating under franchise agreements with FocalPoint International also contribute to the Fund but may contribute on a different basis than your contributions to the Fund. FocalPoint Franchised

Businesses that we or our affiliates operate are not required to contribute to the Fund. We have the right to collect for deposit into the Fund any advertising, marketing, or similar allowances paid to us by suppliers who deal with FocalPoint Franchised Businesses and with whom we have agreed that we will so deposit these allowances.

We and/or an advertising agency that we designate, and, if applicable, your Area Representative, will direct all programs that the Fund finances, with sole control over the creative concepts, materials, and endorsements used and their geographic, market, and media placement and allocation. The Fund may pay for preparing and producing video, audio, and written materials and electronic media; developing, implementing, and maintaining an electronic commerce Website and/or related strategies; administering regional and multi-regional marketing and advertising programs, including purchasing trade journal, direct mail, and other media advertising; using advertising, promotion, and marketing agencies and other advisors to provide assistance; and supporting public relations, market research, and other advertising, promotion, and marketing activities. The Fund may advertise locally, regionally, and/or nationally in printed materials, on radio or television, and/or on the Internet, whatever we think best. The Fund periodically will give you samples of advertising, marketing, and promotional formats and materials at no cost. We or the Fund will sell you multiple copies of these materials at their direct cost of producing them, plus any related shipping, handling, and storage charges.

We will account for the Fund separately from our other funds and not use the Fund for its or our general operating expenses. However, we may use the Fund to pay the reasonable salaries and benefits of personnel who manage and administer the Fund, the Fund's other administrative costs, travel expenses of personnel while they are on Fund business, meeting costs, exposition and show costs, overhead relating to Fund business, and other expenses that we incur in activities reasonably related to administering or directing the Fund and its programs, including conducting market research; public relations; preparing advertising, promotion, and marketing materials; and collecting and accounting for Fund contributions.

The Fund is not our asset. The Fund also is not a trust. We have a contractual obligation to hold all Fund contributions for the benefit of the contributors and to use contributions only for their permitted purposes (described above). We do not have a fiduciary obligation to you for administering the Fund. The Fund may spend in any fiscal year more or less than the total Fund contributions in that year, borrow from us or others (paying reasonable interest) to cover deficits, pay back outstanding principal amounts borrowed in prior years from us or third parties, or invest any surplus for future use. We do not expect to use any of the Fund contributions specifically to develop materials and programs to solicit franchisees. However, media, materials, and programs, including our Website, prepared using Fund contributions may describe our franchise program, reference the availability of franchises and related information, and process franchise leads. We will prepare an annual, unaudited statement of Fund collections and expenses and give it to you upon written request. We may have the Fund audited annually, at the Fund's expense, by an independent certified public accountant. 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 here.

During fiscal year 2024 the Fund contributions were spent as follows: 10% on media placement, 75% on production expenses, and 15% on administrative expenses.

The Fund is to maximize recognition of the Marks and patronage of FocalPoint Franchised Businesses, and currently, we believe using the Fund to grow the number of FocalPoint Franchised Businesses will accomplish these objectives. Although we and, if applicable, your Area Representative, may use the Fund to develop advertising and marketing materials and programs, and to place advertising and marketing, that will benefit all FocalPoint Franchised Businesses, we and, if applicable, your Area Representative, need not ensure that Fund expenditures in or affecting any geographic area are proportionate or equivalent to Fund contributions by FocalPoint Franchised Businesses operating in that geographic area or that any FocalPoint Franchised Business benefits directly or in proportion to its Fund contribution from the development of advertising and marketing materials or the placement of advertising. We may use collection agents and institute legal proceedings to collect Fund 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

Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–36)