Does CNS Franchising control the Crab N Spice franchisee's business operations?

tem Standards in a manner consistent with the image then in effect for a new Crab N Spice business.

• "Required Vendor" means a supplier, vendor, or distributor of Inputs which CNS Franchising requires franchisees to use.
• "System Standards" means, as of any given time, the then-current mandatory procedures, requirements, and/or standards of the System as determined by CNS Franchising, which may include without limitation, any procedures, requirements and/or standards for appearance, business metrics, cleanliness, customer service, design (such as construction, decoration, layout, furniture, fixtures and signs), equipment, inventory, marketing and public relations, operating hours, presentation of Marks, product and service offerings, quality of products and services (including any guaranty and warranty programs), reporting, safety, technology (such as computers, computer peripheral equipment, smartphones, point-of-sale systems, back-office systems, information management systems, security systems, video monitors, other software, backup and archiving systems, communications systems (including email, audio, and video systems), payment acceptance systems, and internet access, as well as upgrades, supplements, and modifications thereto), uniforms, and vehicles.

"Territory" means the territory stated on the Summary Page. If no territory is stated on the Summary Page, then the Territory is determined in accordance with Section 6.1.

"Transfer" means for Franchisee (or any Owner) to voluntarily or involuntarily transfer, sell, or dispose of, in any single or series of transactions, (i) substantially all of the assets of the Business, (ii) this Agreement, (iii) direct or indirect ownership interest of more than 25% of the Business, or (iv) control of the Business.

ARTICLE 2. GRANT OF LICENSE

• 2.1 Grant. CNS Franchising grants to Franchisee the right to operate a Crab N Spice business solely at the Location. If no Location is stated on the Summary Page when this Agreement is signed, then the parties will determine the Location in accordance with Section 6.1. Franchisee shall develop, open and operate a Crab N Spice business at the Location for the entire term of this Agreement.
• 2.2 Protected Territory. CNS Franchising shall not establish, nor license the establishment of, another Crab N Spice business within the Territory. CNS Franchising retains the right to:
  • (i) establish and license others to establish and operate Crab N Spice businesses outside the Territory;
  • (ii) operate and license others to operate businesses anywhere that do not operate under the Crab N Spice brand name; and
  • (iii) sell and license othersto sell products and services in the Territory through channels of distribution (including the internet) other than Crab N Spice outlets.
• 2.3 Franchisee Control. Franchisee shall provide Franchisor with the following information: (i) the identity of each owner, officer and director of Franchisee, and (ii) describes the nature and extent of each owner's interest in Franchisee. If any of this information changes (which is not a Transfer), Franchisee shall notify CNS Franchising within 10 days.
• 2.4 Principal Executive. Franchisee agrees that the person designated as the "Principal Executive" on the Summary Page is the executive primarily responsible for the Business and has decision-making authority on behalf of Franchisee. The Principal Executive must have at least 10% ownership interest in Franchisee. The Principal Executive does not have to serve as a day-today general manager of the Business, but the Principal Executive must devote substantial time and attention to the Business. If the Principal Executive dies, becomes incapacitated, transfers his/her interest in Franchisee, or otherwise ceases to be the executive primarily responsible for the Business, Franchisee shall promptly designate a new Principal Executive, subject to CNS Franchising's reasonable approval.
• 2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to CNS Franchising, in the form of Attachment 2.
• 2.6 No Conflict. Franchisee represents to CNS Franchising that Franchisee and each of its Owners (i) are not violating any agreement (including any confidentiality or non-competition

covenant) by entering into or performing under this Agreement, (ii) are not a direct or indirect owner of any Competitor, and (iii) are not listed or "blocked" in connection with, and are not in violation under, any anti-terrorism law, regulation, or executive order.

ARTICLE 3. TERM

• 3.1 Term. This Agreement commences on the Effective Date and continues for 10 years.

Source: Item 22 — CONTRACTS (FDD pages 50–51)