What actions can Craters & Freighters take to determine if a franchisee is complying with the agreement?

• 6.13 Compliance with System Standards.

To protect the reputation and goodwill of Franchisor and the System, and to maintain uniform standards of operation under the Marks, Franchisee will conduct the Franchised Business in strict accordance with the specifications, standards, operating procedures, and rules set forth in this Agreement, the Operations Manuals, and otherwise established and communicated by Franchisor (collectively the "System Standards").

Franchisee acknowledges the System Standards are intended to protect Franchisor's standards, systems, names, Marks, Confidential Information, and Trade Secrets (including but not limited to the Proprietary Software) and are not intended to control the day-to-day operation of Franchisee's Franchised Business.

Franchisee further acknowledges and agrees that Franchisee's Franchised Business will be under the control of the Franchisee at all times and that Franchisee will be solely responsible for the day-to-day operation of the business.

Any failure or refusal by Franchisee to comply with the System Standards will be a material default by Franchisee under this Agreement.

• 6.14 Display of Logo.

Throughout the duration of this Agreement, Franchisee will use and display the Marks and will make the Craters & Freighters logo ("Logo") the primary focus of identification on all promotional and direct mail, such as on letterhead, envelopes, and sales material.

Any signage used on buildings, trucks, or billboards in connection with the Franchised Business will

• 1.3 Operation of Franchised Business Limited to Territory.

Franchisee agrees to devote its best efforts to identifying, attracting, and serving customers who reside or operate within the Territory.

Therefore, except as otherwise permitted herein or as approved in advance and in writing by Franchisor, Franchisee will solicit business only in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and Franchisee will not knowingly solicit business outside of the Territory.

However, Franchisee is not required to verify that customers to the Franchised Business reside or conduct business within the Territory.

Franchisee acknowledges and agrees that Franchisor, an Affiliate of Franchisor, or designee of Franchisor, as part of Franchisor's business strategy, may advertise or market on behalf of the System in the Territory.

Franchisee agrees to abide by Franchisor's then current policies on marketing outside the Territory, if any, and on cooperating with neighboring Craters & Freighters franchisees, as the same may be set forth from time to time in the Operations Manuals.

Franchisee acknowledges and agrees that customers residing or operating within the Territory are entitled the freedom to choose any Craters & Freighters outlet which they believe will best serve them and their needs, and that they may seek service of the type provided by Franchisee from others, including another Craters & Freighters outlet located outside of Franchisee's Territory.

Franchisee further acknowledges and agrees that advertising promotions conducted by third parties upon request by Franchisor may inadvertently refer customers residing or operating within the Territory to a Craters & Freighters outlet outside of the Territory.

• 5.2 Operations Manuals.

So long as Franchisor is in compliance with all terms and conditions of this Agreement, Franchisor will provide Franchisee with access to Franchisor's proprietary and confidential operations manuals ("Operations Manuals"), which will include all manuals, written materials, directives, books, pamphlets, bulletins, memoranda, order forms, packing slips, invoices, letters, e-mail, internet or intranet data, or other publications, documents, software programs, transmittances or communications, in whatever form (including electronic form) prepared by or on behalf of Franchisor for use by the System franchisees generally or for Franchisee in particular, containing information, methods, standards, operating procedures, requirements, instructions, information about (and processes involving) approved suppliers, and/or policies relating to the operation of a Craters & Freighters franchised business, as they may be added to, deleted, or otherwise amended by Franchisor from time to time.

• 5.4 Proprietary Software and Other Software.

Franchisor will develop, maintain, and grant Franchisee the right to use Franchisor's proprietary operating software ("Proprietary Software").

The Proprietary Software will be the central platform the Franchised Business uses to process customer jobs from start to finish with consistency, efficiency, and accuracy.

Additionally, all royalty reports submitted by the Franchised Business will be managed exclusively through the Proprietary Software, which is also designed to assist Franchisee in streamlining operations and complying with Franchisor's standards.

Franchisor will also require Franchisee to use select software, as solely determined by Franchisor.

Franchisee and Franchisee's owner(s) further acknowledge that these covenants and agreements relating to non-competition and non-solicitation are material inducements for Franchisor to enter into this Agreement, and that it is essential that Franchisee and Franchisee's owner(s) comply with the terms set forth herein.

• 15.2 In-Term Restrictive Covenants.

During the term of this Agreement, Franchisee and Franchisee's owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:

• 15.2.1 Perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any business that offers shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, or freight forwarding services, or products or services similar to the Franchised Business ("Competitive Business") without the prior written consent of Franchisor.

Notwithstanding the foregoing, Franchisee will not be prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent five percent (5%) or less of that class of securities.

• 15.2.2 Divert, attempt to divert, or solicit business or customers of the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business, to any Competitive Business by direct or indirect inducement or otherwise.

• 15.3 Post-Term Restrictive Covenants.

For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:

Source: Item 22 — CONTRACTS (FDD pages 49–50)