Are Best Brains franchisees responsible for all costs incurred in complying with System Standards?

You shall operate the Franchised Business in accordance with the Company's Operations Manual, which may be amended from time to time. You agree to conform to such amendments, and to make all reasonable expenditures necessitated by the amendments, within the time periods reasonably established by us.

We may operate for the benefit of franchisees who are in compliance with the System Standards a system of non-compliance fees which you would pay for violations of some policies of the Operations Manual. For example, if your employees do not wear the proper attire, then you would pay a fee. The system of fees would be described and updated in the Operations Manual. We reserve the right to utilize the electronic funds transfer system to implement the non-compliance fee system.

I. Purchase and Maintain Insurance.

You shall purchase and maintain during the term of this Agreement insurance coverage as we may prescribe from time to time. This includes, but is not limited to, workers' compensation, comprehensive public liability and property damage, business interruption, and general and umbrella coverages. You shall maintain coverage under one or more insurance policies containing the terms, conditions, and minimum liability protection amount that we have specified. All insurance policies must be issued by insurance carriers approved by us.

We may from time to time increase the minimum amount of coverage required under any policy, and require different or additional kinds of insurance to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards, or other relevant changes in circumstances.

All insurance policies must name the Company (and its officers, directors, managers, shareholders, members and employees) as additional insureds, must contain a waiver by the insurance carrier of all subrogation rights against Company, and must provide that we will receive thirty (30) days advance written notice of termination, expiration, cancellation, or modification of any such policy.

Prior to opening, and annually thereafter, you shall furnish us with evidence of insurance, renewal, or extension of each such insurance policy, together with evidence of payment of premiums, evidencing the required limits.

If you do not maintain insurance as required, we may, obtain such insurance and keep the same in full force and effect on your behalf. If we do, you shall reimburse the Company for all premiums and other expenses incurred by us in connection with obtaining such insurance.

Source: Item 23 — RECEIPTS (FDD pages 42–190)