What are 'Required Items' for a Canopy Lawn Care business?

days prior written notice to you.

We have standards and specifications for your Products, Services, storage facility, equipment, tools, vehicle, uniforms, inventory, supplies, forms, advertising materials, computer hardware and software, accounting systems, bookkeeping service, and/or other services and products used in, sold or provided through your Lawn Care Business ("Required Items"). We will notify you of our specifications and standards. To maintain our standards of consistent, high-quality products, customer recognition, advertising support, value and uniformity in Lawn Care Business, we may require you to purchase or lease some or all Required Items per our specifications and standards. We also reserve the right to require you to purchase

any Required Items only from our designated or approved suppliers. The term "suppliers," also includes vendors, manufacturers and distributors. We have identified a number of preferred, but not required, suppliers for other Required Items. Except as disclosed in this Item 8, neither we nor an affiliate is currently the only designated or approved supplier of any Required Items. We reserve the right, however, at any time and at our discretion, to designate ourselves or one of our affiliates as the only designated or approved supplier, or one of several designated or approved suppliers, of any additional Required Items.

Except for certain Required Items, we do not require that you purchase any equipment, tools, goods or services from us, our affiliates or any other source we designate. You may purchase these from any supplier, but we reserve the right to designate other required suppliers in the future. Except for your purchase of a GPS tracker for the Vehicle, you are not allowed to purchase or subscribe to any required software independently. The software that you will use through the accounts we provide will provide features such as booking services, scheduling, payment processing, and invoicing.

You must purchase or lease a vehicle that is large and durable enough to accommodate our standard complement of equipment, tools and accessories, and meets out then-current standards and specifications. We currently specify the options of make(s) and model(s) of Vehicle you must purchase or lease. Our recommended supplier for the Vehicle is currently Enterprise Fleet Management. You may currently purchase the Vehicle from any supplier as long as the Vehicle meets our then-current standards and specifications, but we reserve the right to require you in the future to purchase or lease Vehicles from a designated supplier. Your Vehicle must be in good working condition and be outfitted with our trade dress so that they will look the same as other franchisees' Vehicles when emblazoned with the CANOPY® name, logo and decorations. As your Lawn Care Business grows, you will be required to obtain additional Vehicles. You must keep your Vehicles and equipment in good working order and make the necessary repairs. There is not a cap on the amount that you may be required to spend to refurbish your business and Vehicles.

As described in more detail in Item 10, we have made arrangements with Enterprise FM Trust ("Lessor") whereby Lessor will lease Vehicles, which have been equipped and outfitted in accordance with our specifications. There is no assurance or guarantee that Lessor will agree to lease any Vehicle(s) to you or any other franchisee. The decision whether or not to lease to you will be in Lessor's sole discretion, and may include you meeting credit worthiness and other conditions for qualifications.

You must purchase and use computer hardware that meets our specifications. We may require that you upgrade or change your computer equipment and software periodically. Additionally, you must pay a monthly Technology Fee for ongoing access to, and the use of, automated lawn measurements, sales and marketing automation, scheduling and routing, billing, and CRM software.

You are required to use the bookkeeping service as provided by us or our affiliate for a fee. You are also required to purchase QuickBooks Online from us or our affiliate. QuickBooks Payroll is also an optional service that may be purchased from us or our affiliate.

We may establish approved suppliers and specifications and standards that you must follow. Any required or preferred suppliers are set forth in our Operations Manual.

Approved suppliers and specifications and standards are determined based on the current needs for operating Lawn Care Businesses. If we have a designated supplier for any product and you want to purchase a product from a supplier that does not appear on our designated supplier list or use a product that is not on our approved-product list, you must first furnish us samples of the product from the supplier, together with as much information as you can gather about the product's composition, properties and intended uses; the results of lab and field tests on its use; the manufacturer's location, years in business, quality control standards and warranty policies; and such other information as we request. We may evaluate designated

suppliers based on price, service, quality, warranty, delivery terms, and other commercially reasonable benchmarks. Any preferred or required suppliers will be specified in the Operations Manual. We may establish procedures for approving alternative required suppliers you recommend (including alternative suppliers for Required Items) based on the criteria described above. We will notify you within 90 days of your request to evaluate an alternative supplier of our approval or disapproval of that supplier. We do not charge a fee to evaluate an alternative supplier. We may revoke our approval of any supplier with 30 days' prior written notice to you.

You are required to use the credit card processing service we approve. Since you accept credit cards as a method of payment, you must comply with payment card infrastructure ("PCI") industry and government requirements. PCI security standards are technical and operational requirements designed to protect cardholder data. The standards apply to all organizations that store, process, or transmit cardholder data and cover technical and operational payment system components involving cardholder data.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)