What is the All County franchisee's obligation regarding compliance with approved supplier requirements?

tly the only approved suppliers for any products or services.

Approved Suppliers. We may require that you purchase all specified services and products from us, our affiliate, or our designated approved supplier, as we may specify periodically to you during the term of the Franchise Agreement. Approved suppliers and specifications are determined based on the current needs for operating the Franchise Business. We evaluate approved suppliers based on price, service, quality, and other commercially reasonable benchmarks. The identity of approved suppliers and these specifications are updated periodically in writing by modifying the appropriate sections of the Operations Manual. We will send you modified sections by updating our web site, through the United States mail, or by any other commercially reasonable means.

Proposed Suppliers. We have procedures in our Operations Manual for approving vendors and suppliers you propose. It takes up to 90 days to evaluate new vendors or suppliers. We may approve or disapprove any supplier, and we may approve a supplier conditionally, provided however, that approval will not be unreasonably withheld. If you propose to use any brand and/or supplier that is not then approved by us, then you must first notify us in writing. You must submit sufficient information, specifications and samples concerning the brand and/or supplier so that we can decide whether the brand complies with our specifications and standards and/or such supplier meets our approved supplier criteria. In evaluating any supplier you propose, we will, subject to reasonable restrictions and conditions to protect our trade secrets and confidential information, disclose to the proposed supplier applicable standards, specifications, processes, and procedures for the item in sufficient detail to enable the proposed supplier to demonstrate fully its capacity and capabilities to supply the items. Within 90 days after we receive all requested information, we will communicate to you in writing our decision to approve or disapprove your proposed supplier.

We may prescribe procedures for the submission of requests for approval and impose obligations on approved suppliers, which will be incorporated in a written license agreement with the supplier. We may obtain from you and/or the approved supplier's reimbursement of our reasonable costs and expenses incurred in the approval process and on-going monitoring of the supplier's compliance with our requirements. We do not act as an agent, representative or in any other intermediary or fiduciary capacity for you in our relationship with an alternative supplier you propose and we approve. We may impose limits on the number of approved suppliers. We have the right to monitor the quality of goods or services provided by approved suppliers in a manner we deem appropriate and may terminate any supplier who does not meet our quality standards and specifications, as may be periodically in effect. We may disapprove any supplier whom we previously approved, and you may not, after receipt of notice of disapproval, reorder from any supplier we have disapproved.

We or our affiliate may be approved suppliers for any items. We formulate and modify, at our sole business judgment, specifications and standards we impose on Franchisees and suppliers. Specifications and standards are issued to Franchisees through our Operations Manual and to suppliers by written agreement. Other than us, Kwikrents, Inc., and All County Property Management and Realty, Inc., there are no other suppliers to the Franchise Business in which any of our officers owns an interest.

Computer Hardware and Software. You must use specified software and hardware for the Franchise Business. You must use designated real estate management software as part of the Franchise Business. Any computer software and hardware we require you to use is not our proprietary property. We have the right to develop proprietary software.

You must use our required, customized version of Rent Manager® real estate management software as part of the Franchise Business. You will be required to sign an "Activation Agreement" with London Computer Systems, Inc. as a condition of using the Rent Manager® software. A sample copy of the Activation Agreement is included as Exhibit G to this Franchise Disclosure Document.

Insurance. You must maintain in force: (a) commercial general liability (including completed operations/product liability) insurance and blanket liability insurance; (b) All Risk property insurance, including fire and extended coverage, vandalism and malicious mischief insurance, for 100% of the replacement value of your ALL COUNTY® franchise and its contents; and (c) any other insurance policies, including without limitation errors and omissions insurance, business interruption insurance, automobile insurance, sexual harassment insurance, unemployment insurance, excess umbrella insurance and worker's compensation insurance (with a broad form all-states endorsement), as we may determine periodically and as required by law. All insurance policies must: (1) be issued by carriers approved by us; (2) contain the types and minimum amounts of coverage, exclusions and maximum deductibles as we prescribe periodically; (3) name us and our affiliates as additional insureds; (4) provide for 30 days' prior written notice to us of any material modification, cancellation or expiration of such policy; and (5) include such other provisions as we may require periodically.

Identified below is an outline of the standard types of insurance and minimum policy limit amounts that currently we require for franchised ALL COUNTY® businesses. If your state requires greater coverage amounts for the categories listed below, you must obtain and maintain coverage as required by your state. We may require you to use our designated insurer as a condition of the Franchise Agreement.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 16–19)