What obligations does a Gold Star franchisee have regarding suppliers (Item 8) and how does this relate to the supplier payment assignment fee (Item 6)?

[Item 6: OTHER FEES]

Note 5: You must assign to Gold Star or its designee all product and/or advertising rebates or allowances that are granted to you by certain suppliers, as directed by Gold Star. Currently assignments are required with respect to our soft drinks supplier, with whom Gold Star has negotiated a group purchase arrangement. Although not obligated to do so by the Franchise Agreement or any related agreement, Gold Star's current practice is to have the assigned Franchisee supplier payments made (and to have all of the rebate or allowance payments from those suppliers receivable by Gold Star for company-owned Restaurants made) to GSCAA for use in the Brand Building Fund. Gold Star reserves the right to change this practice at any time without notice to its franchisees.

Note 8: If you want to purchase Restaurant equipment, furnishings, inventory, supplies or other items (a) from a source that is not on Gold Star's then current approved supplier list or (b) that have not been approved by Gold Star, then Gold Star, in accordance with its approval procedures, has the right to inspect the supplier's facilities, test and evaluate samples of items, and require you to pay Gold Star a charge not to exceed the reasonable cost of the inspection and the actual cost of testing or other evaluation.

[Item 8: Restrictions on Sources of Products and Services]

Except for the certain branded items described above (for which Gold Star is an approved supplier), the POS System, and as described in the previous paragraph, neither Gold Star nor any affiliate of Gold Star is an approved supplier or the only approved supplier for, or will or may derive revenue or other material consideration as a result of, purchases or leases of, any items or services that are related to or used in the Franchise and that must be purchased or leased in accordance with Gold Star's standards and specifications, from suppliers approved by Gold Star or otherwise approved by Gold Star. Franchisees, however, are required to assign to Gold Star or its designee all product and/or advertising rebates or allowances received from certain suppliers related to the Franchise (currently assignments are required for our soft drink supplier only). It is Gold Star's current practice to have these assigned payments made to GSCAA for deposit to and use in the Brand Building Fund. Gold Star receives product and/or advertising rebates or allowances from the same suppliers. The terms are the same for Gold Star and the Franchisees. Although not obligated to do so by the Franchise Agreement or any related agreement, it is Gold Star's current practice to transfer the product and/or advertising rebates and allowances Gold Star itself receives from these suppliers to the Brand Building Fund. Approximately $613,262 was received by GSCAA during the year ended December 31, 2024 pursuant to these supplier rebates and advertising allowances for Gold Star and its franchisees (the above information was derived from the books and records of GSCAA). GSCAA does not sell or lease products or services to franchisees or derive revenue from operations but merely receives Brand Building Fees and supplier assignment proceeds and oversees the Brand Building Fund as Gold Star's designee.

Gold Star does not provide material benefits to Franchisees based on a Franchisee's use of designated or approved sources.

This Item describes your obligations to buy or lease from Gold Star or Gold Star's designees, from suppliers approved by Gold Star, or in accordance with Gold Star's specifications. Gold Star negotiates purchase arrangements with suppliers in order to receive quantity discounts for franchisees and its company-owned restaurants.

To ensure that the Restaurant maintains the highest degree of quality and service, you must operate your Restaurant in strict conformity with the methods, standards and specifications that we prescribe in the Manual (as defined in Item 11 hereof) or otherwise in writing:

• offer for sale only those products and services for which Gold Star has given its written approval;
• sell or offer for sale all of the products and services Gold Star requires;
• purchase equipment, fixtures, software, ingredients, paper products and other items in accordance with Gold Star's specifications;
• employ only the preparation standards and techniques that Gold Star specifies;
• not deviate from Gold Star's standards and specifications, including our requirements concerning product preparation; and
• refrain from selling and offering for sale any products and services that Gold Star has later disapproved.

Depending on the item, Gold Star's purchasing specifications may include particular brands or models, particular characteristics of the products and services to be purchased, or one or more particular sources for the product or service. Gold Star may change the specifications during the term of the Franchise Agreement in its sole discretion.

You must purchase the following goods and services from designated suppliers pursuant to our specifications: chili products in all forms, food products, branded food products, branded and non-branded paper products, cleaning supplies, soda/beverages, bakery items, uniforms, signage and logo items, credit card services, equipment, furniture, architectural services, real estate brokerage services, civil engineering services, menus, marketing services, guest feedback systems.