What specific performance obligations does Anago provide under its franchise agreements?

omplete the work assigned to your Unit Franchise and, while we might make suggestions or recommendations, from time to time, we do not direct or control the manner and means in which you perform the tasks necessary to complete the work or the hours you set aside to perform the work.

ARTICLE 2 - OUR DUTIES

We will provide You with the following assistance and services necessary for the operation of Your Anago Unit Franchise, if You are not in default under this Agreement:

SECTION 2.1 ASSIGNMENT OF ACCOUNTS.

At Our option, You will join in as a party to the Accounts secured by Us through a contract with a Client or those contracts will be assigned to You, in either case until the earlier of (a) the expiration or termination of this Agreement, (b) the contract with the Client is terminated, cancelled, or transferred, or (c) any situation arises whereby You errantly cease service to the Account. All Accounts will initially be between Us and the Client. All payments made by a Client under an Account will be sent directly to Us. You will receive the gross monthly revenues from the Account less the fees owed to Us as stated in Section 3.1 and any other liability You may have to Us. You are not permitted to offer, exchange or transfer Accounts that have been assigned to Your Unit Franchise or to which Your Unit Franchise has become a party by joinder except pursuant to a third-party's purchase of Your Anago business in accordance with this Agreement. You are not permitted to perform or invoice for janitorial or other services offered through Your Unit Franchise directly to those Accounts or to perform or invoice the Account for such services outside of the contract. You may however solicit and negotiate additional business with Clients assigned to You. All such additional business must be reflected on an amendment to the contract with the Account and will be subject to the provisions of the assignment of the contract, including Our appointment as Your agent for billing and collections related to the additional business. We will invoice for those services retaining Our fees earned under this Agreement. All Accounts We

assign to You or to which you become a party by joinder must be serviced in accordance with the times, frequency of service and cleaning specifications as determined by the Client.

You acknowledge and agree that we or AFI may negotiate contracts with third parties that provide that their products and services will be the only such products or services that are offered by the Anago System. If we notify you that such a contract has been executed, you agree that you will offer only that third party's products or services and will not provide any products or services to Clients that are competitive with that third party's products or services.

• (a) Offering Period of Initial Business. We will offer to You Accounts generating Gross Monthly Billing under the Program You select in Subsection 3.1(a) within the time period described, after the conditions described below have been satisfied. These Accounts will not be offered nor will the Initial Offering Period begin until You have satisfied the following conditions:
  • (i) You have successfully completed the Anago Orientation Program having obtained an 85% or better on the business operations examination.
  • (i) Our orientation officer has certified You as qualified to operate an Anago Unit Franchise.
  • (ii) You have signed an orientation acknowledgment in the form attached as Exhibit 1 to this Agreement.
  • (iiii) You have proof of all necessary business licenses, tax registrations, insurance and permits and have forwarded copies to Us.
  • (iv) You have purchased, leased or currently own the major equipment described in Exhibit 5 and have furnished proof of purchase (for example, serial numbers and sales slips) to Us.
  • (vi) You have formed your Corporation or LLC business entity. You have received registration of your fictitious name and EIN number and delivered copies to Our office.
  • (vii) You have opened a commercial business checking account in the name of your Corporation or LLC business entity with your fictitious name listed and delivered a voided check to Our office.

You are under no obligation to accept Initial Business offered. Our obligation is only to "offer" Initial Business to You within the Initial Offering Period. Should You decline an offer, You must sign a written statement stating that You have declined the offer. A refusal to sign a statement of decline is a material breach under this Agreement and We then have the option of immediately terminating this Agreement. All declined offers will satisfy Our obligation to offer those portions of Initial Business within the Initial Offering Period. Should You decline all Initial Business offered during the Initial Offering Period, then We have the right to terminate this Agreement. If We terminate this Agreement, We will keep all fees You paid to Us and, if You financed a portion of the Initial Fee, the unpaid portion will be forgiven. If We do not exercise the right to terminate this Agreement and You have financed a portion of the Initial Fee, the

unpaid balance becomes immediately payable.

If We are unable to secure and offer You the full amount of Initial Business within the time frame allocated for the Initial Offering Period in the Program You purchase, an amount equal to 3.0 times the amount of Initial Business not offered to You will be refunded. You agree and understand that You will not be entitled to any other remedies for our failure to offer the full amount of Initial Business during the Initial Offering Period and this Agreement shall remain binding and in full effect. Any refund will be first applied to any outstanding balance on Your Promissory Note You owe Us, with the remaining sum, if any, paid to You. A refund under this provision will fulfill Our obligations to offer any remaining portion of the Initial Business.

You understand that each Account offered to You as Initial Business may vary in type, size, number of cleans per week and gross amounts paid for the service.

Source: Item 23 — RECEIPTS (FDD pages 62–298)