What is the franchisee's obligation regarding the standards and specifications of the Canine Dimensions franchised business?

• C. Franchisee desires to operate a franchise under the System and wishes to obtain a franchise from Franchisor for that purpose, as well as to receive the training and other assistance provided by Franchisor, and Franchisee understands and acknowledges the importance of operating the franchised business in conformity with Franchisor's standards and specifications.

In consideration of the undertakings and commitments of each party to the other party in this Agreement, the parties agree as follows:

1. GRANT

1.1 Franchised Business

Franchisor grants to Franchisee, upon the terms and conditions herein contained, the right, license, and privilege, and Franchisee undertakes the obligation, to operate a Canine Dimensions franchise (the "Franchise" or "Franchised Business") and to use solely in connection with it the Marks, the Authorized Products and Services, and the System, as they may be changed, improved, and further developed from time to time, only from the Approved Location.

• 4.8.1 Franchisee shall secure and maintain in force, in its name, all required licenses, permits and certificates relating to the operation of the Franchised Business. Franchisee shall operate its Franchised Business in full compliance with all applicable laws, ordinances and regulations, including, without limitation, workers' compensation insurance, unemployment insurance, and withholding and payment of income taxes, social security taxes and sales taxes. All advertising by Franchisee will be completely factual, in good taste in Franchisor's sole and absolute discretion, and will conform to high standards of ethical advertising. Franchisee will, in all dealings with customers, suppliers and the public,

adhere to high standards of honesty, integrity, fair dealing and ethical conduct. Franchisee will refrain from any business or advertising practice which may be injurious to Franchisor's business and the goodwill associated with the Marks and other Canine Dimensions Businesses. Franchisee will notify Franchisor in writing within five (5) days of the commencement of any action, suit or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency, or other governmental instrumentality, which relates to or which may affect the operation or financial condition of Franchisee and/or its Franchised Business. Franchisee agrees to manage the employment functions of the Franchised Business in compliance with federal, state, and local employment laws.

Upon termination or expiration of this Agreement, all rights granted under this Agreement to Franchisee shall immediately terminate. Upon such termination or expiration, Franchisee must comply with the following procedures:

15.1 De-identification

• 15.1.1 Franchisee must immediately cease to operate the Franchised Business and shall not thereafter, directly or indirectly, represent to the public that the Franchise is a Canine Dimensions Franchise or hold itself out as a present or former franchisee of Franchisor. Franchisee must comply with the covenants contained in Article 16.
• 15.1.2 Franchisee must immediately and permanently cease to use, in any manner whatsoever, any confidential methods, procedures and techniques associated with the System; the Mark "Canine Dimensions", and all other Marks and distinctive forms, slogans, signs, symbols, monograms and devices associated with the System, and shall entirely remove all Internet listings, local citations and social media associated with the System. In particular, Franchisee must cease to use, without limitation, all signs, advertising materials, displays, stationery, forms, and any other articles or clothing which display the Marks.
• 12.1 Requirement

Franchisee must procure, no later than fifteen (15) days prior to the commencement of operations of the Franchised Business, and shall maintain in full force and effect at all times during the Term, at Franchisee's expense, an insurance policy or policies protecting Franchisee and Franchisor, and their respective officers, directors, shareholders, partners, and employees, against any demand or claim with respect to personal injury, death, or property damage, or any loss, liability, or expense whatsoever arising or occurring upon or in connection with the Franchised Business. The insurance policy(ies) must contain an endorsement to Franchisee's policy naming Franchisor and its officers, directors, shareholders, partners and employees shall be named as "additional named insureds" and not "additional insureds" in the broadest form, extending to Franchisor's negligence and errors and omissions, and cannot be limited to vicarious liability. The insurance afforded to additional insureds must apply as primary insurance and not contribute to any insurance or self-insurance available to Canine Dimensions Franchising, LLC.

12.2 Minimum Coverage

Such policy or policies shall be written by an insurance company satisfactory to Franchisor in accordance with standards and specifications set forth in the Manual or otherwise in writing, and shall include, at a minimum, such coverages and policy limits as may reasonably be specified by Franchisor from time to time, which coverages may include, without limitation, the following:

• 7.2.4 During the Term and any successor agreement, Franchisee must identify itself as the owner of the Franchised Business in conjunction with any use of the Marks, including, but not limited to, on invoices, order forms, receipts, and contracts.

Franchisee must post a conspicuous notice on any documents used with Franchisee's customers and Associates that states: "EACH CANINE DIMENSIONS BUSINESS IS INDEPENDENTLY OWNED AND OPERATED" or any modification of this statement as Franchisor requires.

Franchisee must include this disclaimer on all business cards, stationery, promotional and advertising materials, website and Internet communications, real estate documents, and all other materials Franchisee uses.

Source: Item 22 — CONTRACTS (FDD page 36)