What do the standards and specifications for Big O Tires include?

[Item 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES]

You must establish and operate your Big O Store in compliance with your Franchise Agreement and the standards and specifications contained in our confidential operating manual ("Manual"). Our Manual consists of various written, electronic, audio, video, and Internet instructions, including our Franchise Policies & Standards Manual, consisting of our policies and standards on various matters. The Manual also includes any training materials, including the online Learning Management System, or any other proprietary information and other materials stating Big O's standards, policies, procedures, technical bulletins or other information, including any information posted on the Big O Tires Website Business Center. The Manual is designed to protect our reputation and the goodwill of the Licensed Marks, it is not designed to control the day-to-day operations of your Big O Store. Our Manual may be modified by us periodically to reflect changes in authorized products and services, standards or service quality, and the operations of Big O Stores. It is your responsibility to maintain an updated Manual, or if provided electronically, to regularly check for updates to the Manual and maintain compliance with the current Manual. In the event of a dispute as to the contents of the Manual, the most recent revision made and issued by us shall control.

We have standards and specifications for your Store, the premises where your Store is located, equipment, signage, furniture, fixtures, wearables, supplies, forms, inventory, advertising materials, computer software and hardware, and most products and other items used in or sold through your Big O Store. Standards and specifications include standards for delivery, performance, warranties, signage, fixtures, design, appearance, quality and other matters. You must purchase or lease all products,

equipment, supplies, and services used in or sold through your Big O Store in accordance with our standards and specifications only from us or other sources approved by us. When you sign the Franchise Agreement, we will grant you online access to the Manual. Included in the Manual is a list of our approved suppliers. We have the right to change the standards and specifications included in the Manual, including the list of approved suppliers. You must comply with all standards and changes which are deemed, by their terms, to be mandatory; provided that the changes are applied in a reasonable and nondiscriminatory manner among comparable Big O franchisees. The Franchise Agreement also provides that you must comply with Big O's national fleet account policies and must participate in Big O's national fleet account programs, which are described in Item 11 (see paragraph 7 under "Continuing Obligations"). Also, periodically, we may institute pricing or discount programs in which the availability of lower prices or of discounts may depend, in whole or in part, on your meeting certain requirements established by us.

Unapproved Suppliers. If you want to purchase or lease any products, equipment, supplies, or services, or use a supplier not listed in the Manual as previously approved by us, you must first obtain our written approval. We will determine whether to approve a supplier selected by you using the following procedures:

• (1) You must submit a written request to us for approval of the supplier and provide us evidence of the need for the products or services and that the products do not conflict with existing marketing program products;
• (2) The supplier must demonstrate to our reasonable satisfaction that it is able to supply the product or service to you which meets our standards and specifications, and that it is able to do so on a timely basis;
• (3) The supplier must demonstrate to our reasonable satisfaction that it is financially sound and in good standing in the business community with respect to the reliability of its products and services;
• (4) The supplier must indemnify and hold you and us harmless from and against any claim or liability based on the supplier's products or services, including claims of defects in materials and workmanship, and the supplier must provide to us certificates or other evidence of insurance coverage with limits sufficient to cover the risks associated with its products and services, and with an endorsement naming you and us as additional insureds; and
• (5) Any supplier of tire products must meet the then current requirements under the TREAD Act.

We will notify you of our approval or disapproval in writing as soon as practicable, but no later than 90 days after we have received all of the information requested by us. If we do not provide this notice within 90 days, the supplier is deemed disapproved. We may withhold our approval of any product, service equipment or supplier as we determine in our sole discretion. For instance, we would withhold our approval if in our opinion the product conflicts with existing marketing program products or the product cannot be adequately warranted and serviced by other Big O franchisees. We may also withhold our approval of any services as we determine in our discretion.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)