What is the consequence if an Ella Cafe franchisee purchases from an unapproved source items for which the franchisee has identified Designated Supplier(s)?

s own education concerning these regulations and standards and for achieving and maintaining applicable compliance certifications. Franchisee shall defend, indemnify, and hold Franchisor harmless from and against all claims arising out of or related to Franchisee's violation of the provisions of this Section 6.15.

ARTICLE 8. SUPPLIERS AND VENDORS

8.1 Generally.

Franchisee will purchase only from Franchisor, suppliers, or distributors designated by Franchisor ("Designated Suppliers"): (a) fixtures, furniture, equipment, interior and exterior signage, decor, trade dress (as Franchisor defines trade dress), and Coffee House design consulting services; (b) food products and ingredients, whether or not they are developed by or for Franchisor pursuant to a special recipe, formula, or specifications; (c) all fountain and bottled beverages; (d) uniforms, shirts, memorabilia, and all merchandise and items intended for retail sale (whether or

not bearing our Marks); (e) advertising, point-of-purchase materials, and other printed promotional materials; (f) gift certificates, stored value cards, and other non-cash payment systems; (g) stationery, business cards, contracts, and forms; (h) bags, packaging, and supplies bearing Franchisor's Marks; and (i) all other goods and/or services as Franchisor requires. Franchisor may receive money or other benefits from Designated Suppliers based on Franchisee's purchases. Franchisee agrees that Franchisor has the right to retain and use all such benefits as it deems appropriate, in its sole discretion. Franchisor herby retains the right to add, delete, or modify any items which must be purchased from the Designated Supplier by updating the operations manual. Furthermore, franchisor retains the right to be the Designated Supplier for certain initial inventories including but not limited to coffee beans and ground coffee, supplies, branded paper products, and similar merchandises. Franchisor retains the right to be the sole supplier for any branded products used in operation of your Franchised Business.

Franchisee may purchase from any supplier items and services for which Franchisor has not identified Designated Suppliers, as long as the items and services meet Franchisor's specifications. These specifications may include brand requirements ("Approved Brands"), and to the extent that Approved Brands have been identified, Franchisee must purchase and use only the Approved Brands.

• 8.2 Alternate Vendor Approval. If Franchisor requires Franchisee to purchase a particular Input only from an Approved Vendor or Required Vendor, and Franchisee desires to purchase the Input from another vendor, then Franchisee must submit a written request for approval and any information, specifications and/or samples requested by Franchisor. Franchisor may condition its approval on such criteria as Franchisor deems appropriate, which may include evaluations of the vendor's capacity, quality, financial stability, reputation, and reliability; inspections; product testing, and performance reviews. Franchisor will provide Franchisee with written notification of the approval or disapproval of any proposed new vendor within 30 days after receipt of Franchisee's request.
• 8.3 Alternate Input Approval. Franchisor will provide Franchisee a list of Designated Suppliers and Approved Brands and may, from time to time, modify the list of Designated Suppliers and/or Approved Brands. Franchisee must promptly comply with all such modifications. Franchisor is not responsible for any delays, damages, events of Force Majeure, or defects relating to Franchisee's purchases of Approved Brands or of goods or services from Designated Suppliers. Franchisor is not responsible for any cost increases related to increases in material costs, commodity prices, shipping and transportation costs, or other costs.

Source: Item 22 — CONTRACTS (FDD page 50)