What mandatory obligations must a Desi District franchisee comply with?

[Item 22: CONTRACTS]

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.
• 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 Desi District Franchise Group 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 Desi District Franchise Group, 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 Prices. Desi District Franchise Group may require Franchisee to offer products and services at specific prices determined by Desi District Franchise Group if Desi District Franchise Group is promoting such products and services on a national, regional, or local market basis, for the duration of the promotion (but only to the extent permitted by applicable law).

7.5 Personnel.

• (a) Management. The Business must at all times be under the on-site supervision of the Principal Executive or a general manager who has completed Desi District Franchise Group'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.

Desi District Franchise Group may set minimum qualifications for categories of employees employed by Franchisee.

• (e) Sole Responsibility.

Franchisee shall upgrade, update, or replace any software from time to time as Desi District Franchise Group 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 Desi District Franchise Group unlimited access to Franchisee's point of sale system and other software systems used in the Business, by any means designated by Desi District Franchise Group.

• 7.8 Customer Complaints. Franchisee shall use its best efforts to promptly resolve any customer complaints.

Desi District Franchise Group may take any action it deems appropriate to resolve a customer complaint regarding the Business, and Desi District Franchise Group may require Franchisee to reimburse Desi District Franchise Group for any expenses.

• 7.9 Evaluation and Compliance Programs. Franchisee shall participate at its own expense in programs required from time to time by Desi District Franchise Group 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.

Desi District Franchise Group 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 Desi District Franchise Group for such programs. Desi District Franchise Group may set minimum scores that Franchisee must receive from the public on internet review sites (such as Yelp or Google).

• 7.10 Payment Systems. Franchisee shall accept payment from customers in any form or manner designated by Desi District Franchise Group (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 Desi District Franchise Group.

Franchisee must at all times comply with payment card industry data security standards (PCI-DSS).

• 7.11 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 Desi District Franchise Group, in the manner specified by Desi District Franchise Group 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 Desi District business.

Franchisee shall comply with all procedures and specifications of Desi District Franchise Group related to gift cards, certificates, and other pre-paid systems, or related to customer loyalty, membership/subscription, or customer incentive programs.

• 7.12 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 Desi District Franchise Group 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.

• 7.13 Remodeling. In addition to Franchisee's obligations to comply with all System Standards in effect from time to time, Desi District Franchise Group may require Franchisee to undertake and complete a Remodel of the Location to Desi District Franchise Group's satisfaction.

Franchisee must complete the Remodel in the time frame specified by Desi District Franchise Group.

Desi District Franchise Group may require the Franchisee to submit plans for Desi District Franchise Group's reasonable approval prior to commencing a required Remodel.

• 11.8 Delegation. Desi District Franchise Group may delegate any duty or obligation of Desi District Franchise Group under this Agreement to an affiliate or to a third party.

• 11.9 System Variations. Desi District Franchise Group may vary or waive any System Standard for any one or more Desi District franchises due to the peculiarities of the particular site or circumstances, density of population, business potential, population of trade area, existing business practices, applicable laws or regulations, or any other condition relevant to the performance of a franchise or group of franchises.

Franchisee is not entitled to the same variation or waiver.

• 11.10 Temporary Public Safety Closure. If Desi District Franchise Group discovers or becomes aware of any aspect of the Business which, in Desi District Franchise Group's opinion, constitutes an imminent danger to the health or safety of any person, then immediately upon Desi District Franchise Group's order, Franchisee must temporarily cease operations of the Business and remedy the dangerous condition.

Desi District Franchise Group shall have no liability to Franchisee or any other person for action or failure to act with respect to a dangerous condition.

ARTICLE 12. MARKS

• 12.1 Authorized Marks. Franchisee shall use no trademarks, service marks or logos in connection with the Business other than the Marks. Franchisee shall use all Marks specified by Desi District Franchise Group, and only in the manner as Desi District Franchise Group may require. Franchisee has no rights in the Marks other than the right to use them in the operation of the Business in compliance with this Agreement. All use of the Marks by Franchisee and any goodwill associated with the Marks, including any goodwill arising due to Franchisee's operation of the Business, will inure to the exclusive benefit of Desi District Franchise Group.
• 12.2 Change of Marks. Desi District Franchise Group may add, modify, or discontinue any Marks to be used under the System. Within a reasonable time after Desi District Franchise Group makes any such change, Franchisee must comply with the change, at Franchisee's expense.

12.3 Infringement.

• 7.19 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 Desi District 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 Desi District businesses.
• 7.20 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 Desi District Franchise Group, which will not be unreasonably withheld.
• 7.21 Identification. Franchisee must identify itself as the independent owner of the Business in the manner prescribed by Desi District Franchise Group. Franchisee must display at the Business signage prescribed by Desi District Franchise Group identifying the Location as an independently owned franchise.
• 7.22 Business Practices. Franchisee, in all interactions with customers, employees, vendors, governmental authorities, and other third parties, shall be honest and fair. Franchisee shall comply with any code of ethics or statement of values from Desi District Franchise Group. Franchisee shall not take any action which may injure the goodwill associated with the Marks.

Source: Item 22 — CONTRACTS (FDD page 52)