Must a Hydrodog franchisee follow the policies for participation in Preferred Vendor Programs?

terminate certain programs and terms under which we, our affiliates or the HydroDog Businesses receive certain negotiated benefits or terms from Approved Suppliers ("Preferred Vendor Programs"). You must follow all of our policies and procedures which we designate from time-to-time for participation in or termination of Preferred Vendor Programs ("Program Rules"). We can refuse or terminate your participation in Preferred Vendor Programs without terminating this Agreement. We may designate one or more Approved Suppliers ("Preferred Vendors") as an exclusive supplier of types, models or brands of business materials, supplies, operating assets, consumer goods, fixtures or materials and business services that we approve for the HydroDog Businesses. We may receive compensation from Approved Suppliers, fees, rebates or other consideration for such purchases. Certain Preferred Vendors may require that you enter into agreements with them (subject to our approval) in connection with our designation or your use of them as a Preferred Vendor or participation in their Preferred Vendor Program ("Preferred Vendor Agreements"). You agree to do so. We may be a party to such Preferred Vendor Agreements. We may, but are not obligated to, contribute any such fees or rebates received by us from such agreements to the Marketing Fund. However, with respect to such contributions to the Marketing Fund, if any, we will not be obligated to offset or reduce your obligation to pay to us Marketing Fund Fees. If we permit you to receive any form of rebates, contributions or remunerations from Preferred Vendors, we may require that you provide to us accountings of such monies or other remuneration you receive, in the manner we designate in the Manuals. We may charge you fees in the amount we may designate from timeto-time for participating in Preferred Vendor Programs which we evaluate or for which we

provide services. If we cancel your participation in any Preferred Vendor Program, we will direct the Preferred Vendor to stop doing business with you on the same terms as it does for other franchisees.

• 5.5 Sale of the Products and Services. In the sale of the Product and Services to consumers, you are not permitted to distribute the Product or Services in any manner that we have not approved in writing or combine the Product or Services with any other product or service without our prior written approval, which we may grant, withhold, or revoke in our sole and absolute discretion.

Source: Item 23 — RECEIPTS (FDD pages 43–166)