Does Burros Fries set standards for real estate leases?

rest in Franchisee without first obtaining our written consent which consent shall be given or withheld within thirty (30) days of Franchisee's request.

S. Site Selection

Franchisee assumes all costs, liability, expense, and responsibility for locating, obtaining and developing a site for the Franchise Business to be established under the Franchise Agreement and for equipping the Business at such premises. A typical Burros & Fries Business has approximately 2,500- 3,000 square feet of space. The space must be enclosed and separate from other businesses with its own locking door. Franchisee may buy or lease the required real property and improvements from any source and on terms approved by us in writing. Franchisee may not sign a lease (or a contract to purchase the premises, if applicable) for the Business until Franchisee has obtained our written approval. Franchisee must not invest any monies for a site in which Franchisee wishes to open a Business until Franchisee has obtained our written approval for the site which will be made by email or any other form of written communication. On the execution of any lease for the Franchise Business, Franchisee will deliver to us a copy of the executed lease and an option to assume the lease executed by the lessor in favor of us in a form acceptable to us. All improvements to the Business must be approved by us.

FRANCHISEE ACKNOWLEDGES THAT OUR ACCEPTANCE OF A PROSPECTIVE SITE AND THE RENDERING OF ASSISTANCE IN THE SELECTION OF A SITE DOES NOT CONSTITUTE A REPRESENTATION, PROMISE, WARRANTY, OR GUARANTEE BY US THAT A BURROS & FRIES FRANCHISE OPERATED AT THAT SITE WILL BE PROFITABLE OR OTHERWISE SUCCESSFUL.

Franchisee acknowledges that we have spent considerable amount of time choosing and creating the décor and outfitting Burros & Fries Businesses. It is part of our trade dress. Franchisee acknowledges and agrees that the design, layout and other characteristics of the Business constitute and/or contain

Confidential Information and/or trade secrets of ours. Franchisee agrees that the Business shall be maintained and operated as follows:

• 1. Franchisee will maintain the Business and every component of the kitchen equipment furnishings, fixtures and technology items in good order and repair at all times as specified in the Operations Manual;
• 1. Franchisee will keep the Business fully insured as specified in this Agreement and in the Operations Manual;
• 1. Franchisee will keep the Business at all times in a clean and tidy condition and free of any advertising and promotional material other than that required by law or the Operations Manual, and will exhibit such signage, colors and logos in the Business and upgrade or review the same as specified in the Operations Manual;
• 1. Franchisee will not alter or in any way amend the appearance of the Business, or any kitchen equipment, furnishings, fixtures, technology items and signage contained within the Business as specified in the Operations Manual;
• 1. Franchisee will maintain all kitchen equipment, furnishings, fixtures, technology items and signage as specified from time-to-time in the Operations Manual and may be required to upgrade such items as technology advances or in our sole discretion because of new functionality so as to always use our then-current specifications;
• 1. Franchisee shall meet and maintain the highest level of health standards and ratings applicable to the operation of the Business. Franchisee shall furnish to us, immediatelyor within three (3) days after receipt thereof, a copy of all inspection reports, warnings, citations, certificates and/or ratings resulting from inspections conducted by any federal, state or local governmental authority with jurisdiction over the Business; and
• 1. Franchisee may be required to use only approved service centers for repairs and maintenance of all kitchen equipment.

Franchisee shall not execute a lease or sublease for the Business, or make any modifications or amendments to the lease or sublease, without our prior written consent, which we may grant, condition or withhold in our Business Judgment. Franchisee will deliver to us a copy of any lease or sublease for our review at least ten (10) days before execution. Franchisee must deliver a copy of the signed lease or sublease to us within five (5) business days after it is signed. We do not offer legal services to Franchisee and Franchisee is encouraged to consult with independent legal counsel for a legal review of the lease. Franchisee shall ensure that the lease or sublease for the Business contains, in an addendum or otherwise, the following provisions which:

• 1. Permit Franchisee to operate a Burros & Fries Business in accordance with this Agreement and the Manuals;
• 1. Provide that the site will be used only for the operation of a Burros & Fries Business, and prohibit Franchisee from assigning or modifying any of Franchisee's lease rights, or extending the term without our prior written consent;
• 1. Require the lessor to concurrently provide us with a copy of any written notices of default to Franchisee under the lease and give us the right to cure any default if weso choose; within fifteen (15) days following the expiration of the Franchisee's cure period under the lease;
• 1. Provide us with a right to take assignment and possession of the Business, without the lessor's consent or any additional consideration. If we exercise this right and

Franchisee is in good standing, we'll sign a sublease with Franchisee for the same rent Franchisee is paying.

Source: Item 22 — CONTRACTS (FDD page 53)