What is the required action regarding suppliers for a Burneys Sweets More franchisee?

Authorized Distributors. You must purchase and use only goods, services, supplies, fixtures, equipment, inventory, and computer systems that meet our standards and specifications. We have developed and may develop additional standards and specifications for these items that we make available to you through the Brand Standards Manual, pre-opening materials, and other communications. You must comply with the changes after receiving notice from us. Your supplier of all the goods, services, supplies, fixtures, equipment, inventory, and computer systems must be a supplier that we approve or designate. We or our affiliate may be an approved or designated supplier. We reserve the right to revoke approval for any item or supplier for any reason, and you must cease to use the item or supplier upon 30 days' notice from us. Even with approved suppliers,

only certain inventory items are approved. We have the right to change our business relationship with our approved suppliers as well as the right to add and/or remove approved suppliers from the approved supplier list.

You must purchase or lease the required point-of-sale system as designated by us and from an approved supplier. You will be obligated to purchase all POS equipment we may require during the term of your Franchise Agreement. The POS system you may be required to purchase must conform to our standards and specifications. You are required to use the credit card processing service we approve.

We have approved exclusive suppliers from whom you will be required to purchase certain inventory, food, and products, including, but not limited to, all baking supplies and products. We may restrict you from buying inventory we have not approved, even from suppliers we approve.

If you do not own your business premises, we must approve your lease. It is your responsibility to select your own location. We have the right to require you and your landlord to provide in the lease that we shall have the right at our option and without compensation to you to take assignment of the lease should you materially default under the lease or should your franchise agreement terminate or not be renewed for any reason. You are not allowed to relocate the business premises without our prior written approval.

Because of the volume of business franchisees may bring in the future to our suggested suppliers, you may enjoy lower prices than you could receive from other suppliers, or on the other hand, you may encounter higher prices than you would otherwise encounter if you were not required to purchase from the authorized supplier. We may, but are under no obligation to, negotiate with these suppliers to your benefit. We will have no obligation to share any revenue, rebates, commissions, discounts, or other benefits received with you.

We do not provide you with any material benefits based upon your use of approved suppliers.

Insurance. You are obligated to obtain and maintain, at your own expense, such insurance that we require from time to time from a nationally-recognized insurance company and at all times during the term of the Franchise Agreement maintain in force and pay the premiums for all types of public liability insurance with complete operations coverage, with limits of liability for bodily injury, personal injury and advertising injury of not less than $1,000,000 with limits of liability for property damage of not less than $1,000,000 in each occurrence, $1,000,000 of public and product liability coverage, and non-owned vehicle coverage of at least $500,000. You are also required to purchase business interruption insurance and must use the proceeds received from your business interruption insurance to pay Royalties during any period your business is interrupted by hurricanes, fires, or other disasters. From time to time in our sole discretion, we may increase or modify such limits of liability or require additional types of coverage, including coverage for cyber liability. The cost of this coverage will vary depending on the insurance carrier's charges, terms of payments and your history. All insurance policies must name us as an additional insured party. The Franchise Agreement also outlines the types, amounts, terms and conditions of insurance coverage required for your Shop, including, but not limited to, standards for underwriters of policies providing required insurance coverage; our protection and rights under such policies as an additional named insured; required or impermissible insurance contract provisions; assignment of

policy rights to us; periodic verification of insurance coverage that must be furnished to us; our right to obtain insurance coverage at your expense if you fail to obtain required coverage; our right to defend a claim; and similar matters relating to insured and uninsured claims.

Method of Approving Suppliers. To use a supplier, product, service, or vendor that we have not already approved, you must first submit to us certain information including product specifications, costs, product components, performance history, product samples, supplier information or photographs, and any other relevant information. We will evaluate the proposed good, service, or supplier based upon certain criteria and determine if you are approved to use the alternate good, service, or supplier. We do not make the criteria available to you.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 20–23)