What is the purpose of the Brand Fund for Pump It Up franchises?

eting (and the Regional Co-op Fund, if applicable), however, we will not increase your total marketing contributions, inclusive of expected local store marketing expenditures, above 6% of Gross Revenues. These marketing contributions are in addition to the Royalties due under this Agreement.

B. Brand Fund.

• (1) We have established an advertising and marketing fund ("Brand Fund") for the enhancement and protection of the System and the Marks, and for the development of advertising, marketing, and public relations programs and materials as we deem appropriate. As of the Effective Date, you must contribute 2% of the Gross Revenues of the Franchised Business per month to the Brand Fund. We may increase your monthly contribution to the Brand Fund to an amount not to exceed 3% of the Gross Revenues of the Franchised Business, and you must pay the Brand Fund contribution in the same manner as the Royalty. Pump It Up Businesses operated by us and our affiliates also will contribute to the Brand Fund on the same basis as comparable franchisees. From time to time, we or our vendors may deposit into the Brand Fund any rebates or similar allowances paid to us by our vendors although we have no obligation to do so.

• (2) We have sole discretion to use the Brand Fund, and the monies in the Brand Fund, for any purpose that we believe will enhance and protect the System and Marks and/or that we believe will improve and increase public recognition and perception of the System and Marks. We will direct (or hire a third party to direct) all programs that the Brand Fund finances, and we will have sole control over the creative concepts, materials, and endorsements used and their geographic, market, and media placement, allocation and coverage (which may be national, regional or local). You may be required to participate in advertising, marketing, social media, promotions, research and public relations programs and national cause marketing partner program events instituted by us or the Brand Fund. Among the programs, concepts, and expenditures for which we may utilize the Brand Fund monies are: (a) creative development and production of print ads, electronic media, commercials, radio spots, point of purchase materials, direct mail pieces, door hangers, and other advertising and promotional materials; (b) creative development, preparation, production and placement of video, audio, and written materials and electronic media; (c) media placement and buying, including all associated expenses and fees; (d) administering regional and multi-regional marketing and advertising programs; (e) market research and customer satisfaction surveys, including the use of secret shoppers; (f) the creative development of, and actual production associated with, premium items, giveaways, promotions, contests, public relation events, and charitable or nonprofit events; (g) creative development of new program offerings for Pump It Up Businesses; (h) creative development of signage, posters, and individual Pump It Up Business décor items including wall graphics; (i) recognition and awards events and programs; (j) system recognition events, including periodic national and regional conventions and meetings; (k) website, extranet and/or intranet development and maintenance; (l) development, implementation, and maintenance of an electronic commerce Website and reservation system and/or related strategies; (m) retention and payment of advertising and promotional agencies and other outside advisors including retainer and management fees; (n) social media platform development and management; (o) public relations and community involvement activities and programs; (p) expenses of the Franchise Advisory Council; (q) search engine optimization and other similar online and/or social media engagement tools; and (r) any other purposes deemed beneficial to the Pump It Up System by us.

• (3) We will account for the Brand Fund separately from our other funds. We are not required to segregate any Brand Fund monies from our other monies. We will not use the Brand Fund for any of our general operating expenses. We and our affiliates may be reimbursed by the Brand Fund for administrative expenses directly related to the Brand Fund's marketing programs, including without limitation, conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Brand Fund. We may use the Brand Fund to pay the administrative costs of the Brand Fund including managing the advertising, marketing, and promotional programs and payment of outside vendors utilized by the Brand Fund. We may use the Brand Fund to pay the reasonable salaries and benefits of personnel (including our personnel and our affiliates' personnel) who manage and administer the Brand Fund. We may use the Brand Fund to pay for other administrative costs, travel expenses of personnel while they are on Brand Fund business, meeting costs, overhead relating to Brand Fund business, and other expenses that we incur in activities reasonably related to administering or directing the Brand Fund and its programs.

• (4) The Brand Fund is not our asset. Although the Brand Fund is not a trust, we will hold all Brand Fund contributions for the benefit of the System and use contributions only for the purposes described in this Section 9.B. We do not owe any fiduciary obligation to you for administering the Brand Fund or for any other reason.

Source: Item 23 — RECEIPTS (FDD pages 60–225)