As a Bonchon franchise owner, what must I comply with to maintain quality and attract customers?

You agree to staff your franchised Business in accordance with the specifications and criteria we set forth in our Manuals concerning the selection, qualifications, hiring, training, pre-training and posttraining of your personnel. You agree to maintain a competent, conscientious, trained staff in sufficient numbers as necessary to promptly, efficiently and effectively service customers. You understand, agree, and will never contend otherwise, that the minimum staffing levels we prescribe in our Manuals do not reflect our ability to in any fashion control the day-to-day operation of your franchised Business and its Restaurant but, to the contrary, merely reflect those staffing levels necessary to achieve and maintain those standards of quality, uniformity and service which the consuming public has come to associate with the Proprietary Marks and Bonchon Restaurants.

You shall take such steps as are necessary to ensure that your employees preserve good customer relations and comply with the standards of appearance, dress code, manner and demeanor we establish in our Manuals or otherwise.

To impart to your management and employees the latest procedures, techniques, policies and

standards of the Bonchon System, you agree to conduct the in-house meetings, training sessions, electronic training programs or other programs that we specify in our Manuals or otherwise or as you – using your reasonable business judgment – determine are necessary, appropriate or desirable, using any material and programs we may provide for this purpose.

You shall permit us or our agents, at any reasonable time and with or without notice, to remove samples of items from your franchised Business' inventory, or from your franchised Restaurant, without payment therefor, in amounts reasonably necessary for testing either by us or an independent laboratory to determine whether said samples meet our then-current standards and specifications. We may require you to bear the costs of such testing if the supplier of the item has not previously been approved by us or if the sample fails to conform with our specifications.

You shall at all times maintain your franchised Restaurant in the highest degree of sanitation, repair and condition.

You agree to continuously operate the franchised Bonchon Restaurant on the days and during the minimum hours that we may from time to time specify in our Manuals, Supplements to the Manuals or otherwise. You may establish hours of operation in addition to the required minimum hours, subject to applicable laws, rules or regulations.

You must at all times undertake all reasonable measures to anticipate, detect and prevent fraudulent credit or debit transactions.

You agree to assure all communication connections (of whatever form, wireless, cable, internet, broadband or other) and access to financial information, especially credit card information, is at all times kept secure in a manner which is in compliance with all legal requirements and, particularly, with all security requirements of the issuing credit card companies. You further agree to hold us and the other Indemnitees (as defined in Section 8.11) harmless from any and all claims and liabilities related to your failure to do so. In addition, at your cost, you agree to provide us with a written report of verification from a specialist approved by us confirming compliance with the obligations imposed by this Section 8.16 and any other proof of such compliance that we may reasonably require.

Your franchised Business and the Bonchon Restaurant it operates must comply at all times with every provision of this Agreement, the Bonchon System, the Manuals and any Supplements to the Manuals. You may not use the Bonchon System or the Proprietary Marks for the benefit of any business other than the franchised Business. You may not conduct (or permit anyone else to conduct) any business at your Bonchon Restaurant other than the franchised Business embraced by this Agreement without first obtaining our written consent, which we may withhold for any reason or no reason. You acknowledge, understand and agree that your strict compliance with the System, this Agreement and the Manuals are of the essence to this Agreement and are critically important to you, us and all other franchisees, since your failure to adhere to the System, this Agreement, the Manuals and any Supplements to the Manuals may damage the reputation and goodwill enjoyed by

the Bonchon network and the Proprietary Marks.

• A. You agree to record all Gross Revenues received by and all expenditures made by you or your franchised Business. You further agree to keep and maintain adequate records of all such Gross Revenues and expenditures and to maintain accurate books, records and tax returns, including related supporting material (such as cash receipts, and credit and charge records) for your franchised Business. We may specify, in our Manuals or otherwise, the forms and media that you will be required to use in recording your franchised Business' Gross Revenues and expenditures. You agree to keep and preserve for seven years (or such longer period as may be required by any law, rule or regulation) the types and classes of electronic and/or other books, records and tax returns that we specify in our Manuals or otherwise, along with all business, personnel, financial and operating records, in any media, relating to your franchised Bonchon Business. If you do not maintain the required records, this will be a material and incurable breach of this Agreement which, unless we waive the breach, will entitle us to terminate this Agreement immediately upon notice to you, with no opportunity to cure.

You must submit to us a request to open your Restaurant. Once we receive your request, we will notify you in writing whether or not the Restaurant meets our standards and specifications. If we approve your request to open your Restaurant, our acceptance is not a representation or warranty, express or implied, that the Restaurant/ complies with any engineering, licensing, environmental, labor, health, building, fire, sanitation, occupational, landlord's, insurance, safety, tax, governmental, or other statutes, rules, regulations, requirements, or recommendations nor a waiver of our right to require continuing compliance with our requirements, standards, or policies.

Source: Item 23 — RECEIPTS (FDD pages 92–536)