What quality standards must a Bambu franchisee maintain in their Bambu shoppe operations?

ject to space considerations, training staff availability and prior commitments to new Bambū franchisees.

10. FRANCHISEE'S OPERATIONAL COVENANTS

• 10.1 Business Operations. Franchisee acknowledges that it is solely responsible for the successful operation of its Bambū shoppe and that the continued successful operation thereof is, in part, dependent upon Franchisee's compliance with this Agreement and the FRC Materials. In addition to all other obligations contained in this Agreement and in the FRC Materials, Franchisee shall comply with the following operational obligations:
• a. Quality of Operations. Franchisee shall maintain clean, efficient and high-quality Bambū shoppe operations and shall operate the business in accordance with the FRC Materials and this Agreement, and in such a manner as not to detract from or adversely reflect upon the name and reputation of Bambu and the goodwill associated with the Bambu Franchising LLC name, the service mark "BAMBŪ® " and the Marks generally. The Franchised Location shall not be used for any purpose other than operating a Bambū shoppe in compliance with this Agreement, and that Franchisee shall place or display at the premises (interior and exterior) only those signs, emblems, designs, artwork, lettering, logos, display and advertising material that Bambu approves from time to time.
• b. Compliance with Laws and Good Business Practices. Franchisee shall conduct itself and operate its Bambū shoppe in compliance with all applicable laws, rules and regulations, and ordinances, including, without limitation, health department regulations and other ordinances in such a manner so as to promote a good public image in the business community. In connection therewith, Franchisee will be solely and fully responsible for obtaining any and all other licenses to carry on business at the Bambū shoppe. Franchisee shall promptly forward to Bambu copies of all health department, fire department, building department and other similar reports of inspections as and when they become available, and shall notify Bambu in writing within three business days of: (1) the commencement of any action, suit or proceeding relating to the shoppe; (2) the issuance of any order, writ, injunction, award or decree of any court, agency or other governmental instrumentality relating to the shoppe; (3) any notice or violation of any law, ordinance or regulation relating to the shoppe; (4) receipt of any notice of complaint from the Better Business Bureau, and local, state or federal consumer affairs department or division, or any other governmental or independent third party involving a complaint from a customer or potential customer relating to the shoppe, or (5) written complaints from any customer or potential customer, providing Bambu copies of any documentation along with the notice. Franchisee shall resolve or otherwise address any matter listed in (1) through (5) above in a prompt and reasonable manner in accordance with good business practices. Additionally, Franchisee shall comply with the terms and conditions of any mandatory product recall promptly upon receipt of notice from Bambu of such recall. Franchisee shall be solely responsible for any penalties or fines assessed for failure to abide by such laws and regulations. Bambu has no obligation to advise Franchisee of any legislative or other legal developments that may affect its Bambū shoppe. Franchisee is solely responsible for inquiring about and becoming familiar with all applicable laws, ordinances, and regulations, and determining those actions required for compliance. Any information

Bambu provides to Franchisee regarding applicable laws, ordinances, or regulations does not relieve Franchisee of its responsibility to consult with its own legal advisor and otherwise take appropriate action to inquire about and comply with applicable laws, ordinances, and regulations.

• c. Management. Franchisee acknowledges that proper management of the Bambū shoppe is important. Consequently, Franchisee shall employ at all times and register with Bambu in such manner as Bambu may require from time to time, at least three Bambū Certified Team Leaders who have satisfactorily completed Bambu's Training Program and who shall be responsible for the supervision and management of Franchisee's Bambū shoppe. One of the Bambū Certified Team Leaders must be available at all times to be at the Bambū shoppe upon demand by Bambu. At least one of Franchisee's Bambū Certified Team Leaders may not engage in any other business or other activity, directly or indirectly, that requires any significant management responsibility, time commitment, or otherwise may conflict with his or her obligations to operate and manage Franchisee's Bambū shoppe. The Bambū Certified Team Leaders shall assign one or more qualified employees (a "Shift Leaders") to be present at the shoppe during all operating hours when a Bambū Certified Team Leader is not present. Shift Leaders may be part-time employees.
• d. Approved Products and Programs. Franchisee shall offer through its shoppe only products, including but not limited to Chè, coffees, teas, smoothies, yogurts, other drinks, snacks, and food items, and programs, which meet or exceed the minimum standards and specifications established by Bambu and which have been approved in advance by Bambu. Franchisee shall offer all types of products and services as from time to time may be prescribed by Bambu and shall refrain from offering any other types of products or programs, or operating or engaging in any other type of business or profession, from or through the Bambū shoppe that are not authorized by Bambu,
• e. Payment of Obligations.

Source: Item 23 — Receipts (FDD pages 52–209)