Under what circumstances might failure to adhere to criminal background checks for prospective employees be considered a breach of the Burros Fries franchise agreement?

Franchisee must not use unethical or illegal tactics to recruit employees. Franchisee shall properly hire Employees per our guidelines and standards (subject to applicable employee protection laws) which include carefully screening Employees by the use of background checks before employing them, to ascertain fitness for employment. Specifically, Franchisee must use its best efforts, including taking every action required by applicable laws related to criminal background checks of persons working in the Business, to ensure that no person is employed who has a record of theft, child molestation or abuse, immoral conduct, drug, alcohol orsubstance abuse; criminal behavior or any other pattern of conduct which might jeopardize the welfare of guests or reflect adversely on our reputation or the System. Franchisee will indemnify us (as described in Section 18) for all claims arising out of or relating to Franchisee's Employees and Franchisee's hiring, firing and discipline decisions regarding Employees including payment of wages, overtime and any applicable benefits, as well as failure of Franchisee to utilize background checks on any potential Employee.

Franchisee will require its Employees to wear uniform dress bearing one or more of the Marks while working at the Business, and shall be of such design and color as we may prescribe from time to time, as set forth in the Operations Manual.

Franchisee will keep us advised, in writing, of all management and non-management personnel involved in the operation of the Business.

G. Open Business within Time Limit

Time is of the essence. Franchisee must secure a lease within eighteen (18) months of the execution of this Franchise Agreement and open the Businessfor operation within twenty-four (24) months of the date of execution of this Franchise Agreement which includes having obtained our approval prior to opening, subject to Section 9.B of this Agreement. Prior to opening, Franchisee shall complete, to our satisfaction, all the build-out and preparations of the Business, in accordance with specifications set forth in the Operations Manual, and as required by local governmental agencies, including installation of all kitchen equipment, furnishings, fixtures and signage; acquire all technology items (such as a POS system, computers, sound system, etc.) and an inventory of products and supplies; complete our initial training program, and provision to us of all required local information, artwork and photos for the completion of the Franchisee's web page.

Source: Item 22 — CONTRACTS (FDD page 53)