How should a Fat Shack franchisee operate their business to protect the Fat Shack brand's reputation?

s Operations

Franchisee acknowledges that it is solely responsible for the successful operation of its FAT SHACK Restaurant and that the continued successful operation thereof is partially dependent upon Franchisee's compliance with this Agreement and the Operations Manual. In addition to all other obligations contained herein and in the Operations Manual, Franchisee agrees that:

• a. Franchisee shall maintain a clean, safe, and high quality FAT SHACK Restaurant operation and shall promote and operate the business in accordance with the Operations Manual and in such a manner as not to detract from or adversely reflect upon the name and reputation of FSI and the goodwill associated with the FAT SHACK name and Marks.
• Franchisee will conduct itself and operate its FAT SHACK Restaurant in compliance with all applicable laws, regulations and other ordinances and in such a manner so as to promote a good public image in the business community, including, if Franchisee offers alcohol beverages at its FAT SHACK Restaurant, all applicable liquor licensing laws, regulations and ordinances and dram shop laws. In connection therewith, Franchisee will be solely and fully responsible for obtaining any and all licenses to operate the FAT SHACK Restaurant. Franchisee shall keep copies of all health department, fire department, building department and other similar reports of inspections by governmental authorities on file and available for inspection by FSI. Franchisee shall immediately forward to FSI any such reports or inspections in which Franchisee has been found not in compliance with the underlying regulation. Franchisee shall also promptly notify FSI in writing of any notices of default or non-compliance under its lease or any other third-party contracts related to the operation of the FAT SHACK Restaurant, by sending copies of all such notices to FSI. FSI has no obligation to advise Franchisee of any legislative or other legal developments that may affect its FAT SHACK Restaurant. Franchisee is solely responsible for inquiring about and becoming familiar with all applicable laws, ordinances, and regulations, and determining those actions required for compliance. Any information FSI provides to Franchisee regarding applicable laws, ordinances, or regulations does not relieve Franchisee of its responsibility to consult with its own legal advisor and otherwise take appropriate action to inquire about and comply with applicable laws, ordinances, and regulations.
• c. Franchisee acknowledges that proper management of the FAT SHACK Restaurant is important and shall ensure that Franchisee (or its Managing Owner) or a General Manager who has completed the initial training program will be responsible for management of the FAT

SHACK Restaurant after commencement of operations and be present at the Restaurant Location during operation of the FAT SHACK Restaurant. Franchisee shall require each of its General Managers and other employees who have access to the Operations Manual to sign the Nondisclosure and Noncompetition Agreement in a form approved by FSI, and send a copy of such signed agreements to FSI.

• d. Franchisee acknowledges that FSI requires and authorizes Franchisee to offer only authorized products and services as are more fully described in the Operations Manual, which may include, without limitation, "Fat Sandwiches," burgers, wings, other sandwiches, and other authorized food and beverage products, FAT SHACK merchandise, and related products and services. Franchisee shall maintain at all times a sufficient supply of all menu items and related food and paper products to ensure, insofar as possible, that such items are at all times available to its customers. Franchisee acknowledges that a major component of the Licensed Methods is the delivery of its products to customer's residential and work locations, including late night delivery services. Franchisee shall offer all types of services and products as from time to time may be prescribed by FSI and shall not offer any other types of services or products, from or through the FAT SHACK Restaurant, unless FSI's written consent is first obtained.
• e. Franchisee shall not offer, sell or ship any goods or services to other franchisees without FSI's prior written consent.
• f. Franchisee shall engage in all types of advertising, marketing and promotional activities as from time to time may be prescribed by FSI and shall not engage in any advertising, marketing or promotional activities unless FSI's written consent is first obtained.
• g. Franchisee shall promptly pay when due all taxes and other obligations owed to third parties, including without limitation, all federal, state, county and local taxes, and any and all accounts payable or other indebtedness incurred by Franchisee in operating the FAT SHACK Restaurant.
• h. Franchisee shall comply with all agreements with third parties related to the FAT SHACK Restaurant including, in particular, all provisions of any lease for the Restaurant Location. If the term of the lease for the Restaurant Location ends before the term of this Agreement expires, Franchisee shall negotiate a renewal of the lease term in good faith.

Source: Item 23 — Receipts (FDD pages 53–223)