What elements are included in the 'Business System' as it relates to a Circle K franchise?

ch is a full service convenience store with sufficient floor space, vehicle parking, and inventory levels to offer all of the merchandise and services of a traditional convenience store and that complies with the specifications of a Circle K Store as more fully described in the Business Systems Manuals.

• 1. "Confidential Information" means all information and knowledge about the Business System and the services, standards, specifications, programs, procedures, and techniques prescribed by Franchisor which are not in the public domain or generally known in the convenience store industry including, but not limited to, the Business Systems Manuals, any other manuals methods, policies, procedures, programs and standards created for or approved for use in the operation of the Store, and the information contained therein, trade secrets, information, data, Customer Information, software, technology, materials, know-how, ideas, techniques, procedures, marketing plans, strategic plans, research methods, methods of operation, improvements, and copyrighted materials (whether published, confidential, or suitable for registration or copyright), and the goodwill associated with them, information concerning the pricing structure, advertising, and promotional discounts relating to items offered at the Circle K Store, and any other information and material concerning the Business System or that Franchisor may designate as confidential or that a reasonable person would consider confidential (due to nature of the information and/or circumstances of disclosure).
• 1. "Conversion Store" means an operating convenience store not currently operated under the Marks as of the Effective Date that is being converted to a Circle K Store pursuant to the terms and conditions contained herein.
• 1. "Effective Date" means the date that this Agreement is executed by Franchisor, unless otherwise specified on the signature page hereto.

DMS_US.371161686.7

• 1. "Electronic Point of Sale and Software Agreement" means the agreement set forth in Exhibit 2 attached hereto.
• 1. "Existing Store" means an existing convenience store currently controlled, owned, or operated by Franchisor or its Affiliate, and operating under the Marks as of the Effective Date.
• 1. "Franchised Business" means the operation of the Store at the Franchised Location subject to the terms of this Agreement.
• 1. "Good Standing" means that all amounts of money due and owing to Franchisor or its Affiliates by Franchisee have been paid and that Franchisee is not otherwise in default hereunder or in violation of any of the material provisions set forth herein or in the Business Systems Manuals.
• 1. "Gross Sales" means the total dollar revenue from the sale of all goods, wares, merchandise, and services sold (including car wash services, provided the car wash is using the Marks), whether sold for cash, for payment by check, on credit, on barter or otherwise, without reserve or deduction for the inability or failure to collect from customers, and all other items of value received by Franchisee as payment in the course of such operations (including, without limitation, handling and placement fees and fees for the operation of coin-operated and other machines), excluding the following: (i) revenue from sales of motor fuel, car wash services that do not use the Marks, money orders, lottery, pay phones, ATMs, postage stamps, pre-paid phone cards, gift cards, and gaming machines; (ii) revenue from sales from other approved royalty-based franchises that require separate point-of-sale equipment as part of their business system (excluding any approved Additional Business that is subject to the separate Co-Branded Fee as set forth in Section 5.3); (iii) the amount of any authorized cash or credit refunds made upon transactions that were previously included in Gross Sales, not exceeding the selling price of merchandise returned by the customer and accepted, which refunds may be deducted from Gross Sales in the month made; and (iv) the amount of any separated, collected, and stated city, county, state, or federal sales, luxury, or excise tax on such sales, which Franchisee pays directly to the governmental taxing authorities rather than to its suppliers; provided, however, that no franchise or capital-stock tax or any other similar tax based upon income, profits, or gross sales shall be deducted from Gross Sales. Notwithstanding the foregoing, Franchisor may, in its sole discretion, from time to time approve in writing that with respect to certain products or services, Gross Sales shall be calculated on the basis of earnings as opposed to sales proceeds. If applicable law prohibits collection of royalty fees on sale of alcoholic beverages from the Store, the definition of Gross Sales will not include any income from the sale of alcoholic beverages.
• 1. "Guarantor" or "Guarantors" means all persons or entities that execute a Personal Guaranty attached as Exhibit 5.

Source: Item 22 — CONTRACTS (FDD page 100)