How are the guidance and System Standards furnished to Extreme Art Studio franchisees?

Such guidance and System Standards will be furnished in the form of our standards manual for the operation of Extreme Art Studio Businesses ("Franchise Operations Manual"), which may include access to an Internet site containing information, as well as audiotapes, videotapes, compact discs, computer software, newsletters, bulletins, and other written or electronic materials.

We may also provide guidance via telephonic conversations and/or consultation at our offices.

If you request, and we agree to provide, additional or special guidance, assistance, or training, we may charge you our then-applicable fee, including our personnel's per diem charges and travel and living expenses.

We reserve the right to periodically visit your Extreme Art Studio Business(es) and evaluate the Franchised Business.

4.3 FRANCHISE OPERATIONS MANUAL.

• 4.3.1 We will provide you with access to some or all of the Franchise Operations Manual on a restricted website or extranet to which you will have access.

We may modify the Franchise Operations Manual periodically to reflect changes in System Standards.

We will provide mandatory and suggested standards, specifications, operating procedures and rules ("System Standards") that we periodically prescribe for operating an Extreme Art Studio Business, and information on your other obligations under this Franchise Agreement, which may include, but are not limited to: (1) standards, specifications, and operating procedures and methods that Extreme Art Studio Businesses use, including, but not limited to, scheduling and managing classes; (2) customer service standards and policies; (3) qualifications for other employees, including criminal background checks (although you will have sole responsibility and authority concerning employee selection and promotion); (4) staffing levels, training, dress and appearance of your employees; (5) amounts and types of classes to be offered, including lesson class sizes; (6) days and hours of operation; (7) supplies, equipment and inventory management; (8) use and display of the Marks at the Franchised Business and on Operating Assets and other materials; (9) sales, marketing, advertising, and promotional strategies and programs, and materials/media used in these programs; (10) recommended liability waiver forms for customers; (11) use and acceptance of gift cards, loyalty programs, coupons, passes, certificates and discounts; (12) policies regarding credit and debit cards, credit card vendors (including, among other things, companies that provide services for electronic payment such as near field communication vendors like "Apple Pay" and "Google Wallet"), electronic payment, other payment systems, and check verification services, including compliance with the then-current Payment Card Industry Data Security Standards, as those standards may be revised and modified by the PCI Security Standards Council, LLC or any successor organization, or standards that we may reasonably specify; (13) required and recommended associations and memberships; (14) participation in market research and testing and product and service development programs, as well as participation in, and dues assessed for, advisory councils; and (15) administrative, accounting, reporting and record retention.

• 8.8 COMPLIANCE WITH SYSTEM STANDARDS.

• 8.8.1 You acknowledge and agree that operating and maintaining the Franchised Business according to System Standards is essential to preserve the goodwill of the Marks and all Extreme Art Studio Businesses. Therefore, you agree at all times to operate and maintain the Franchised Business according to all of our System Standards, as we periodically modify and supplement them, even if you believe that a System Standard, as originally issued or subsequently modified, is not in the System's or your best interests. Although we retain the right to establish and periodically modify System Standards that you have agreed to maintain, you (or your Operating Owner or any Designated Manager) retain the right to, and responsibility for, the day-to-day management and operation of the Franchised Business and implementing and maintaining System Standards at the Franchised Business.

• 8.9 VARIATION AND MODIFICATION OF SYSTEM STANDARDS. We may permit variations in the System Standards as we deem advisable, including, without limitation, variations to accommodate local or regional differences. We periodically may modify System Standards, and these modifications may obligate you to invest additional capital in the Franchised Business and/or incur higher operating costs. You agree to implement any changes in System Standards within the time period we request, whether they involve buying new Operating Assets, adding new products and services, updating your Computer System and adding personnel, or otherwise modifying the nature of your operations, as if they were part of this Franchise Agreement as of the Effective Date.

Source: Item 22 — CONTRACTS (FDD page 49)