What is the definition of 'Approved Suppliers List' for a Bhc franchise?

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Approved Suppliers and Approval of Alternative Suppliers

We provide you with a list of approved manufacturers, suppliers, and distributors ("Approved Suppliers List") and approved inventory products, fixtures, furniture, equipment, signs, stationery, supplies and other items or services necessary to operate the Master Franchised BHC Restaurant ("Approved Supplies List"). The Approved Supplies List may specify a required manufacturer or supplier of a specific product or piece of equipment. We reserve the right to designate a required source of supply for certain products and supplies, and we or an affiliate may be a required source. The lists also may include other specific products without reference to a particular manufacturer or supplier, or they may set forth the specifications and/or standards for other approved products. A copy of the current list of Approved Supplies List is attached as Exhibit H. The Approved Suppliers and Approved Supplies List are not specific to the operation of a Subfranchise. We may revise the Approved Suppliers List and Approved Supplies List. We and the Approved Suppliers may make changes to the prices, delivery terms, and other terms relating to their respective sale of Approved Supplies to you, your Affiliate Franchisee and/or your Subfranchisees on 30 days' notice to you. We and the Approved Suppliers reserve the right to discontinue the sale of any Approved Supplies (or any part thereof) at any time we or the Approved Suppliers determine, in our or their sole judgment, that the continued sale of such item has become unfeasible, unprofitable, or otherwise undesirable. We give you the approved lists as we deem advisable. We generally do not give these lists to approved suppliers. We will provide contact information for your distributors and/or manufacturers of all products offered at the Master Franchised BHC Restaurant. Except where we identify a sole single source, if you, your Affiliate Franchisee and/or your Subfranchisees propose to use in the operation of your Affiliate Franchisee and/or your Subfranchisee's BHC Restaurant any product, supply, material, furnishing or equipment which has not yet been approved by us as conforming to our specifications and quality and system standards ("Alternative Supplies") and/or from a supplier not yet approved in writing by us ("Alternative Supplier"), you must first notify us in writing and must submit to us, upon request, sufficient information, specifications, and samples so that we can determine whether the item or service complies with System standards or the supplier meets our supplier criteria. We will provide you with written approval or disapproval within a reasonable time period (typically 30 days).

You may not, and must ensure that your Affiliate Franchisee your Subfranchisees not, use any product, supply, material, furnishing or equipment that we have not approved. Supplier approval will depend on product quality, delivery frequency and reliability, service standards, financial capability, customer

relations, concentration of purchases with limited suppliers to obtain better prices and service, and/or a supplier's willingness to pay us or our affiliates for the right to do business with our System. We may inspect or re-inspect the facilities and products of any approved supplier and revoke our approval if the supplier fails to continue to meet our criteria and specifications.

As a condition of approval, you, your Affiliate Franchisee and your Subfranchisees, and/or any supplier must reimburse us for all costs and expenses incurred by us associated with any testing, including travel and lodging expenses together with daily allowance incurred where we deem it necessary to visit a supplier's facilities.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 25–28)