What are the Carls franchisee's obligations regarding the use of approved suppliers in Item 8, and how does this relate to the franchisor's assistance in providing a list of approved suppliers, as potentially implied in Item 11?

Approximately 90% of your purchases or leases of fixtures, furnishings, equipment, décor, signs, food items, ingredients, supplies and other products in connection with the establishment of the Franchised Restaurant must be purchased in accordance with our specifications or from approved suppliers. We estimate that these items represent approximately 65% of your controllable purchases, excluding labor and general administrative costs in connection with the ongoing operation of the Franchised Restaurant. We do not provide material benefits (e.g., renewal or additional franchises) to you based on use of designated or approved suppliers.

You must also participate in any online ordering/delivery and loyalty programs that we may establish from time to time with approved vendors and you must comply with the rules and participation criteria applicable to these programs. We have currently designated OLO as the sole software platform provider for our online ordering program, Punchh as the sole software platform for our loyalty program, and have partnered with designated service providers for our delivery program. Under our online ordering/delivery programs, we require you to accept and process specific customer delivery orders and we require you to use approved third-party delivery service providers, currently Uber Eats, Door Dash, and GrubHub. We must pre-approve all delivery service providers not already designated as approved under our delivery program. In addition, we must pre-approve all sales recording processes that originate from the delivery service providers. We have the right to modify the participation criteria or discontinue these initiates at any time upon written notice to you. See also Item 11.

We negotiate system-wide contracts with a number of suppliers under which Carl's Jr. Restaurants may purchase products at a negotiated price and terms. Franchisees are entitled to purchase products at the price and terms negotiated by us; however, we reserve the right to limit the number of suppliers who deliver the products at those prices and terms. With respect to equipment, smallwares and supplies, to obtain the negotiated price and to be eligible for certain revenue sharing incentives, you must purchase the equipment, smallwares and supplies from our third-party vendor Wasserstrom Holdings, Inc. and its subsidiaries. There currently are no purchasing or distribution cooperatives. We do not provide material benefits to a franchisee based on the franchisee's purchase of particular products or services or the use of particular suppliers.

Where we have issued standards and specifications, you must use only ingredients, food products, spices, seasonings, mixes, beverages, materials, supplies used in the preparation of food products, furniture, fixtures, equipment, smallwares, forms, paper and plastic products and packaging, cleaning supplies, and other materials that meet our standards and specifications as contained in the Operation Procedures Manual ("OPM"). A list of approved suppliers is available upon written request addressed to our Quality Assurance Department. Most food items and other goods that you are required to purchase will be purchased from a master distributor. The master distributor will carry items such as meats, cheese, grocery, bread products, paper and cleaning supplies. As of the date of this disclosure document, our master distributor is

Distribution Market Advantage ("DMA"). We reserve the right to change the master distributors. Other master distributors may be approved from time to time.

Certain of CJR's products, including our "special sauce," are confidential secret recipes and are considered trade secrets. For those CJR products, in order to control and maintain the quality and consistency of these products, you must use only our secret recipe products and purchase them from us, our affiliate or a source designated by us. For the fiscal year ended January 30, 2023, neither our affiliates nor us received any revenue from the sale of these products to our franchisees.

Franchisee agrees that the Franchised Restaurant will: (1) purchase those food products developed by CJR pursuant to a special recipe or formula only from CJR, an affiliate of CJR or a third party designated and licensed by CJR to prepare and sell such products; and (2) purchase from manufacturers, distributors, vendors and suppliers (collectively "suppliers") approved by CJR all other goods, food products, ingredients, spices, seasonings, mixes, beverages, materials, supplies and cleaning products used in the preparation of products and cleanliness of the Franchised Restaurant (collectively "goods"), as well as advertising materials, furniture, fixtures, equipment, smallwares, menus, forms, paper and plastic products, packaging or other materials (collectively "materials") that meet the standards and specifications promulgated by CJR from time to time. CJR has the right to require that Franchisee use only certain brands and to prohibit Franchisee from using other brands. CJR may from time to time modify the

We will permit you to inspect a copy of the OPM before you purchase a franchise, if you first sign a Confidentiality Agreement, which is attached as Exhibit F.