Is Goldfish Swim School obligated to create a cooperative advertising program?

At this time, there are no Advertising Cooperatives. Although we are not obligated to do so, we may create a cooperative advertising program for the benefit of all Goldfish Swim School franchises located in a particular region so long as at least 50% of the franchisees in the region agree to create the advertising cooperative. Your contributions to the advertising cooperative will satisfy your local advertising obligations, provided that your contributions to the advertising cooperative meet or exceed the local advertising requirements. The level of your cooperative advertising contribution will be determined by the cooperative, of which you will be a voting member, but that amount may exceed your minimum local advertising obligation under the Franchise Agreement, but in no event will it exceed 5% of gross sales. We will determine the geographic territory and market areas for each cooperative advertising program. If formed, you must participate in any cooperative advertising program established in your region. If cooperative advertising is implemented in a particular region, an

advertising council of franchisees in that region will be appointed to self-administer the program. We reserve the right to dissolve or merge these program(s) and/or council(s) at any time. Goldfish Swim Schools operated by us or our affiliates in an area covered by an Advertising Cooperative will contribute to the Advertising Cooperative on the same basis as comparable franchisees and have the same voting rights as any comparable franchisee. (Section 11.4; See also ITEM 9.o.)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 32–42)