What is the Cinnaholic franchisee's obligation if the Franchisor changes its image or standards of operation?

Franchisee recognizes and agrees that from time to time hereafter, Franchisor may change, modify or improve the CINNAHOLIC® System, including, without limitation, modifications to the Operations Manual, the menu and format, the processes and systems to support the business, the menu items and other product ingredients, the products offered for sale, the required equipment, the signage, the presentation and usage of the Marks, and the adoption and use of new, modified or substituted Marks or other proprietary materials. Franchisee agrees to accept, use and/or display for the purposes of this Agreement any such changes, modifications or improvements to the CINNAHOLIC® System, including, without limitation the adoption of new, modified or substituted Marks, as if they were part of the CINNAHOLIC® System as of the Effective Date, and Franchisee agrees to make such expenditures as such changes, modifications or improvements to the CINNAHOLIC® System may require. For purposes of this Agreement, all references to the CINNAHOLIC® System shall include such future changes, modifications and improvements.

• (xiv) Make no physical changes from blueprint specifications or approved remodeling plans in connection with the premises constituting the Bakery on the Franchised Site, or the design thereof, or any of the materials used therein, or their colors, without the express written approval of Franchisor, except that Franchisee will, upon request of the Franchisor, make such reasonable alterations to the Bakery or premises as may be necessary to conform to the then-current marketing and operating standards and specifications of CINNAHOLIC®.

Franchisee will paint the Bakery (interior or exterior) at such intervals

as Franchisor may reasonably determine to be advisable, which determination shall in no event be more than once in any calendar year, using paints which will be in accordance with specifications given by Franchisor.

• (ix) Prominently display at the Bakery and the Franchised Site signs using the name "CINNAHOLIC®," and/or other signs, of such nature, form, color, number, location and size, and containing such material as Franchisor may from time to time reasonably direct or approve in writing; and not display in the Bakery or on the Franchised Site or elsewhere any sign or advertising media of any kind to which Franchisor reasonably objects.

Franchisor or its authorized representatives may at any time during normal business hours enter the Bakery or the Franchised Site and remove any objectionable signs or advertising media.

• (xvi) Participate in all national, regional or local advertising and promotional activities Franchisor requires.

Franchisee understands that Franchisor implements promotions such as discount coupons, certificates, frequent customer cards, special menu promotions, gift cards and other activities intended to enhance customer awareness and build traffic at CINNAHOLIC® Bakeries on a national, regional or local level.

Franchisor may establish procedures and regulations related to these promotions in the Operations Manual and Franchisee agrees to honor and participate in these programs in accordance with such procedures and regulations specified by Franchisor in the Operations Manual or otherwise in writing.

Franchisee understands that its participation in these programs is essential to its success and that its participation may entail some cost to Franchisee.

Franchisee agrees that Franchisor has no obligation to reimburse Franchisee for any costs it incurs due to its mandatory participation in these special promotional programs.

Franchisor may impose fines for Franchisee's failure to comply with the Operations Manual. Before any fine may be imposed, Franchisor must first have given Franchisee one written notice of the non-compliance with the Operations Manual; thereafter, any further non-compliance with that specific provision of the Operations Manual shall allow the imposition of a fine. Fines shall be in the amount of $100 to $1000, per violation, per day, as determined in Franchisor's sole discretion. However, Franchisor may elect to provide guidance in the Operations Manual regarding the amount of fines it may levy for given acts of noncompliance. Franchisee must pay any fines levied within ten days of written notice of the fine from Franchisor. If the fine is not paid within that time, Franchisor may cause an electronic funds transfer from Franchisee's bank account for the amount of any fine. Failure to pay any fine within ten days shall be a material default under this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 61–62)