What are the Brand Standards that I must comply with when opening my Big Blue Swim School to avoid termination?

You agree to comply with all Brand Standards, as we may periodically modify them, as if they were part of this Agreement. You may not offer, sell, or provide at or from the School any services or products not authorized in the Operations Manual. You must offer, sell, and provide all services and products we prescribe from time to time. We may change such services and products from time to time and from market to market based on numerous considerations. Brand Standards may direct any aspect of the School's operation and maintenance that impacts the goodwill associated with the Marks, the Franchise System, and BIG BLUE Swim Schools. While we maintain the right to issue and modify Brand Standards, you alone exercise day-to-day control over the School's operation and remain solely responsible for compliance with Brand Standards, which may include any one or more of the following:

• (1) Ancillary Services, required and/or authorized services and products; unauthorized and prohibited services and products; and inventory requirements so the School may operate at full capacity. We always have the right to approve or disapprove in advance all items and services to be used or sold by the School. We may withdraw our approval of previously-authorized products and services;
• (2) sales, marketing, advertising, and promotional programs and the materials and media used in those programs, including participating in and complying with the requirements of any special advertising, marketing, and promotional programs we periodically specify;
• (3) adequate staffing levels to operate the School in compliance with Brand Standards, appearance of School personnel, conducting criminal background checks and due diligence on the School's employees (although you alone will review the results and make employment decisions on the basis of those results), and courteous service to customers. However, you have sole responsibility and authority for your labor relations and employment practices, including, among other things, employee selection, promotion, termination, hours worked, rates of pay, benefits, work assigned, discipline, adjustment of grievances and complaints, and working conditions. School employees are exclusively

You may not use, or allow another to use, any part of the School for any purpose other than operating a BIG BLUE Swim School in compliance with this Agreement. You must place or display at the School (interior and exterior), according to our guidelines, only those signs, emblems, designs, artwork, lettering, logos, and display and advertising materials we periodically specify. You agree to maintain the condition and appearance of the School, the site, and the Operating Assets in accordance with Brand Standards. Without limiting that obligation, you must take the following actions during the Term at your own expense: (1) thorough cleaning, repainting, and redecorating of the School's interior and exterior at intervals we periodically specify and at our direction; (2) interior and exterior repair of the School and the site as needed; and (3) repair or replacement, at our direction, of damaged, worn-out, unsafe, non-functioning, or obsolete Operating Assets at intervals we periodically specify (or, if we do not specify an interval for replacing an Operating Asset, as that Operating Asset needs to be replaced in order to provide services required to be offered by BIG BLUE Swim Schools in compliance with Brand Standards).

We will provide guidance on the School's design, construction, and development, although the School will be developed at your expense. You are responsible for and must pay all fees due to all service providers and vendors. The School's design, construction, and development will follow our guidelines and mandatory specifications and layouts for a BIG BLUE Swim School (collectively, "Plans"), including requirements for dimensions, design, interior layout, improvements, color scheme, décor, finishes, signage, and Operating Assets. You must work with your Project/Construction Manager or thirdparty vendor to ensure that the Plans reflect the requirements of any federal, state, or local

You agree to use the Marks as the School's sole identification, subject to the notices of independent ownership we periodically designate. You may not use any Mark (1) as part of any corporate or legal business name, (2) with any prefix, suffix, or other modifying words, terms, designs, or symbols (other than logos we license to you), (3) in selling any unauthorized services or products, (4) in connection with any Digital Marketing, or in any user name, screen name, or profile in connection with any Social Media sites, without our consent or, if applicable, without complying with our Brand Standards communicated to you, or (5) in any other manner we have not expressly authorized in writing. You may not use any Mark to advertise the transfer, sale, or other disposition of the School or an ownership interest in you without our prior written consent, which we will not unreasonably withhold. You must give the notices of trademark and service mark registrations we periodically specify and obtain any fictitious or assumed name registrations that applicable Law requires. You may not pledge, hypothecate, or grant a security interest in any property that bears or displays the Marks (unless the Marks are readily removable from such property) and must advise your proposed lenders of this restriction.

If the School is damaged by fire or other casualty, you must notify us immediately. If the cost to repair the damage is less than or equal to the Damage Threshold (defined below), or if the cost to repair the damage exceeds the Damage Threshold but you notify us within a reasonable time after the casualty that you intend to repair the damage and operate the School as a BIG BLUE Swim School, then you must repair the damage promptly according to the Brand Standards and this Agreement's other terms and conditions. The "Damage Threshold" means the greater of (a) sixty percent (60%) of the School's market value immediately before the fire or other casualty, or (b) the amount of insurance proceeds made available to you in connection with the fire or casualty.

Upon termination or expiration of this Agreement, you must de-identify the School in compliance with this Section 20.B and as we reasonably require. De-identification includes, but is not limited to, taking the following actions:

• (1) beginning immediately upon the effective date of termination or expiration, you and your owners may not directly or indirectly at any time afterward or in any manner (except in connection with other BIG BLUE Swim Schools you or they own and operate): (a) identify yourself or themselves in any business as a current or former BIG BLUE Swim School or as one of our current or former franchisees; (b) use any Mark, any colorable imitation of a Mark, any trademark, service mark, or commercial symbol that is confusingly similar to any Mark, any copyrighted items, or other indicia of a BIG BLUE Swim School for any purpose; or (c) use for any purpose any trade dress, trade name, trademark, service mark, or other commercial symbol suggesting or indicating a connection or association with us.
• (2) immediately upon the effective date of termination or expiration, you must take the action required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
• (3) if we do not exercise the option under Section 20.G below, you must at your own cost, and without any payment from us for such items, destroy all signs, Marketing Materials, forms, and other materials containing any Mark within twenty (20) days after the De-identification Date (defined below). If you fail to do so voluntarily, we and our representatives may enter the School at our convenience and remove these items without liability to you, the landlord, or any other third party for trespass or any other claim. You must reimburse our costs of doing so. (Notwithstanding the above, you may after the Deidentification Date sell these branded items to another BIG BLUE Swim School franchisee.);

Source: Item 22 — CONTRACTS (FDD pages 75–76)