What are the obligations of a Crave Cookies franchisee regarding System Standards?

en its written approval to open, which will not be unreasonably withheld.

• 6.6 Opening Date. Franchisee shall open the Business to the public on or before the date stated on the Summary Page.

ARTICLE 7. OPERATIONS

• 7.1 Compliance with Manual and System Standards. Franchisee shall at all times and at its own expense comply with all mandatory obligations contained in the Manual and with all other System Standards. If Franchisee is found to be in non-compliance with Crave Cookies Franchising's System, Manuals, or standards, Franchisee will be charged a fine as set forth in Our Operations Manual. The fine is due upon billing.
• 7.2 Compliance with Law. Franchisee and the Business shall comply with all laws and regulations. Franchisee and the Business shall obtain and keep in force all governmental permits and licenses necessary for the Business.
• 7.3 Products, Services, and Methods of Sale. Franchisee shall offer all products and services, and only those products and services, from time to time prescribed by Crave Cookies Franchising in the Manual or otherwise in writing. Franchisee shall make sales only to retail customers, and only at the Location. Unless otherwise approved or required by Crave Cookies Franchising, Franchisee shall not make sales by any other means, including without limitation by wholesale, by delivery, by mail order or over the internet, or at temporary or satellite locations. Franchisee shall provide all products and perform all services in a high-quality manner that meets or exceeds the customer's reasonable expectations and all applicable System Standards.
• 7.4 Menu. Franchisee shall offer all menu items, beverages, and other products and services, and only those menu items, beverages, and other products and services, from time to time prescribed by Crave Cookies Franchising, LLC in the Manual or otherwise in writing.
• 7.5 Preparation. Franchisee shall follow all recipes prescribed by Crave Cookies Franchising, LLC, including, without limitation, use of all ingredients specified or authorized by Crave Cookies Franchising, LLC, and only such ingredients. Franchisee shall prepare and serve

all food products in a high-quality manner that meets or exceeds the customer's reasonable expectations and all applicable System Standards. Franchisee shall not substitute any recipe prescribed by Crave Cookies Franchising, LLC, unless Franchisee receives express written permission from Crave Cookies Franchising, LLC to make a substitution.

• 7.6 Inventory. Franchisee shall maintain sufficient levels of inventory at all times.
• 7.7 Method of Sale. Franchisee shall make sales only at the Location or by off-site catering services, or at temporary event locations (e.g. street festivals). Unless otherwise approved or required by Crave Cookies Franchising, LLC, Franchisee shall not make sales by any other means, including without limitation by delivery by Franchisee, delivery by third-party service, via a food truck, or at satellite locations. Crave Cookies Franchising, LLC retains the right to determine (and to change at any time) a territory outside of which Franchisee cannot offer catering. If Crave Cookies Franchising, LLC permits (or requires delivery), Crave Cookies Franchising, LLC retains the right to determine (and to change at any time) a territory outside of which Franchisee cannot offer delivery.
• 7.8 Royalty on Third-Party Delivery Service. If Crave Cookies Franchising, LLC requires or approves Franchisee's use of a third-party delivery service, Gross Sales on deliveries will be calculated on the amount paid by the customer to the delivery service (not counting any delivery fee, service charge, or gratuity paid by the customer), rather than the amount paid by the delivery service to Franchisee.
• 7.9 Health Inspection Scores. In addition to Franchisee's obligations to comply with all System Standards pursuant to Section 7.1 and with all applicable laws pursuant to Section 7.2, Franchisee must achieve a health code inspection score of 90, "A" or higher pursuant to the grading or rating system of the applicable governmental authority. If the applicable government authority does not score inspections on a numerical or alphabetical scale, then a rating by the governing body similar in nature to a "90" or "A" will be the governing standard. Franchisee will provide Crave Cookies Franchising, LLC a copy of any inspection report and score within two business days after receipt.
• 7.10 Prices. Franchisee acknowledges that the System Standards determined by Crave Cookies Franchising may include the minimum, maximum, and/or exact prices that franchisees may charge for products or services sold (except to the extent such authority is limited or prohibited by applicable law).

7.11 Personnel.

• (a) Management. The Business must at all times be under the supervision of the Principal Executive or a local general manager who has completed Crave Cookies Franchising's training program.

• (b) Service. Franchisee shall cause its personnel to render competent and courteous service to all customers and members of the public.

• (c) Appearance. Franchisee shall cause its personnel to comply with any dress attire, uniform, personal appearance and hygiene standards set forth in the Manual.

• (d) Qualifications. Crave Cookies Franchising may set minimum qualifications for categories of employees employed by Franchisee.

• (e) Sole Responsibility. Franchisee is solely responsible for the terms and conditions of employment of all of its personnel, including recruiting, hiring, training, scheduling, supervising, compensation, and termination. Franchisee is solely responsible for all actions of its personnel. Franchisee and Crave Cookies Franchising are not joint employers, and no employee of Franchisee will be an agent or employee of Crave Cookies Franchising. Within seven days of Crave Cookies Franchising's request, Franchisee and each of its employees will sign an acknowledgment form stating that Franchisee alone (and not Crave Cookies Franchising) is the employee's sole employer. Franchisee will use its legal name on all documents with its employees and independent contractors, including, but not limited to, employment applications, time cards, pay checks, and employment and independent contractor agreements, and Franchisee will not use the Marks on any of these documents.

• 7.12 Post-Opening Training. Crave Cookies Franchising may at any time require that the Principal Executive and/or any other employees complete training programs, in any format and in any location determined by Crave Cookies Franchising. Crave Cookies Franchising may charge a reasonable fee for any training programs. Crave Cookies Franchising may require Franchisee to provide training programs to its employees. If a training program is held at a location which requires travel by the Principal Executive or any other employee, then Franchisee shall pay all travel, living and other expenses.

• 7.13 Software. Without limiting the generality of Section 7.1 or Section 8.1, Franchisee shall acquire and use all software and related systems required by Crave Cookies Franchising. Franchisee shall enter into any subscription and support agreements that Crave Cookies Franchising may require. Franchisee shall upgrade, update, or replace any software from time to time as Crave Cookies Franchising may require. Franchisee shall protect the confidentiality and security of all software systems, and Franchisee shall abide by any System Standards related thereto. Franchisee shall give Crave Cookies Franchising unlimited access to Franchisee's point of sale system and other software systems used in the Business, by any means designated by Crave Cookies Franchising.

• 7.14 Customer Complaints. Franchisee shall use its best efforts to promptly resolve any customer complaints. Crave Cookies Franchising may take any action it deems appropriate to resolve a customer complaint regarding the Business, and Crave Cookies Franchising may require Franchisee to reimburse Crave Cookies Franchising for any expenses.

• 7.15 Evaluation and Compliance Programs. Franchisee shall participate at its own expense in programs required from time to time by Crave Cookies Franchising for obtaining customer evaluations, reviewing Franchisee's compliance with the System, and/or managing customer complaints, which may include (but are not limited to) a customer feedback system, customer survey programs, and mystery shopping. Crave Cookies Franchising shall share with Franchisee the results of these programs, as they pertain to the Business. Franchisee must meet or exceed any minimum score requirements set by Crave Cookies Franchising for such programs. Crave Cookies Franchising may set minimum scores that Franchisee must receive from the public on internet review sites (such as Yelp or Google).

• 7.16 Payment Systems. Franchisee shall accept payment from customers in any form or manner designated by Crave Cookies Franchising (which may include, for example, cash, specific credit and/or debit cards, gift cards, electronic fund transfer systems, and mobile payment systems). Franchisee shall purchase or lease all equipment and enter into all business relationships necessary to accept payments as required by Crave Cookies Franchising. Franchisee must at all times comply with payment card industry data security standards (PCI-DSS).

• 7.17 Gift Cards, Loyalty Programs, and Incentive Programs. At its own expense, Franchisee shall sell or otherwise issue gift cards, certificates, or other pre-paid systems, and participate in any customer loyalty programs, membership/subscription programs, or customer incentive programs, designated by Crave Cookies Franchising, in the manner specified by Crave Cookies Franchising in the Manual or otherwise in writing. Franchisee shall honor all valid gift cards and other pre-paid systems, regardless of whether issued by Franchisee or another Crave Cookies business. Franchisee shall comply with all procedures and specifications of Crave Cookies Franchising related to gift cards, certificates, and other pre-paid systems, or related to customer loyalty, membership/subscription, or customer incentive programs.

• 7.18 Maintenance and Repair. Franchisee shall at all times keep the Business in a neat and clean condition, perform all appropriate maintenance, and keep all physical property in good repair. In addition, Franchisee shall promptly perform all work on the physical property of the Business as Crave Cookies Franchising may prescribe from time to time, including but not limited to periodic interior and exterior painting; resurfacing of the parking lot; roof repairs; and replacement of obsolete or worn out signage, floor coverings, furnishings, equipment and décor. Franchisee acknowledges that the System Standards may include requirements for cleaning, maintenance, and repair.

• 7.19 Remodeling. In addition to Franchisee's obligations to comply with all System Standards in effect from time to time, Crave Cookies Franchising may require Franchisee to undertake and complete a Remodel of the Location to Crave Cookies Franchising's satisfaction. Franchisee must complete the Remodel in the time frame specified by Crave Cookies Franchising. Crave Cookies Franchising may require the Franchisee to submit plans for Crave Cookies Franchising's reasonable approval prior to commencing a required Remodel. Crave Cookies Franchising's right to require a Remodel is limited as follows: (i) the Remodel will not be required in the first two or last two years of the term (except that a Remodel may be required as a condition to renewal of the term or a Transfer), and (ii) a Remodel will not be required more than once every five years from the date on which Franchisee was required to complete the prior Remodel.

• 7.20 Meetings. The Principal Executive shall use reasonable efforts to attend all in-person meetings and remote meetings (such as telephone conference calls) that Crave Cookies Franchising requires, including any national or regional brand conventions. Franchisee shall not permit the Principal Executive to fail to attend more than three consecutive required meetings.

7.21 Insurance.

• (a) Franchisee shall obtain and maintain insurance policies in the types and amounts as specified by Crave Cookies Franchising in the Manual. If not specified in the Manual, Franchisee shall maintain at least the following insurance coverage:

  • (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible);
  • (ii) Business interruption insurance covering at least 12 months of income;
  • (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit;
  • (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in an amount of not less than $1,000,000; and
  • (v) Workers Compensation coverage as required by state law.

• (b) Franchisee's policies (other than Workers Compensation) must (1) list Crave Cookies Franchising and its affiliates as an additional insured, (2) include a waiver of subrogation in favor of Crave Cookies Franchising and its affiliates, (3) be primary and non-contributing with any insurance carried by Crave Cookies Franchising or its affiliates, and (4) stipulate that Crave Cookies Franchising shall receive 30 days' prior written notice of cancellation.

• (c) Franchisee shall provide Certificates of Insurance evidencing the required coverage to Crave Cookies Franchising prior to opening and upon annual renewal of the insurance coverage, as well as at any time upon request of Crave Cookies Franchising.

• 7.22 Payments to Third Parties. Franchisee shall pay all vendors and suppliers in a timely manner. Franchisee shall pay all taxes when due. If Franchisee borrows money, it shall comply with the terms of its loan and make all loan payments when due. If Franchisee leases the Location, Franchisee shall comply with its lease for the Location and make all rent payments when due.

• 7.23 Public Relations. Franchisee shall not make any public statements (including giving interviews or issuing press releases) regarding Crave Cookies, the Business, or any particular incident or occurrence related to the Business, without Crave Cookies Franchising's prior written approval, which will not be unreasonably withheld.

• 7.24 Association with Causes. Franchisee shall not in the name of the Business (i) donate money, products, or services to any charitable, political, religious, or other organization, or (ii) act in support of any such organization, without Crave Cookies Franchising's prior written approval, which will not be unreasonably withheld.

• 7.25 No Other Activity Associated with the Business. Franchisee shall not engage in any business or other activity at the Location other than operation of the Crave Cookies Business. Franchisee shall not use assets of the Business for any purpose other than the Business. If Franchisee is an entity, the entity shall not own or operate any other business except Crave Cookies businesses.

• 7.26 No Third-Party Management. Franchisee shall not engage a third-party management company to manage or operate the Business without the prior written approval of Crave Cookies Franchising, which will not be unreasonably withheld.

Source: Item 22 — CONTRACTS (FDD page 47)