e. You agree to refrain from any business or advertising practice which may be injurious to our business and the goodwill associated with the HydroDog System, the Marks and other HydroDog Businesses.

• 5.7 Business Management System. You are required to use and adhere to all of the rules and regulations, specifications and System Standards for the Computer System, mapping, business management, Purchase Order System, scheduling, cost control, and accounting system we designate from time-to-time (collectively, the "Business Management System"). You must utilize the Computer System, if any, which we may designate or approve, in the manner we approve in your utilization of the Business Management System. You must use our standard supplier or vendor agreements and other agreements related to the Business Management System that we designate from time-to-time. The Business Management System may or will incorporate and consist of such functions as we designate from time-totime, which may include a mandatory Purchase Order System and rules for participation and use of such Purchase Order System, if any, which we may designate (the "Purchase Order System"). Through, and as part of, the Business Management System we may require that you establish an operating account with a bank or other financial institution that we designate or approve (the "Operating Account"). The Operating Account shall be the primary bank account utilized by your HydroDog Business. We shall have the right to make automated withdrawals from the Operating Account for agreed-upon fees and payments due to us. We, in our sole judgment, shall have the right to designate one of our officers or authorized representatives to have signature rights to the Operating Account, solely for the purpose of conducting transactions related to the franchise agreement. You must utilize the Operating Account in accordance with the System Standards as we designate (e.g. Business Management System rules). We may change, alter or amend the functions, components, System Standards, Computer System, Purchase Order System, Technology Fund and any other aspect of the Business Management System from time-to-time.
  • 5.8 Business Opening. You agree not to open your HydroDog Business until:

• (a) we have approved your HydroDog Business as developed in accordance with our specifications and standards;
  • (b) training has been completed to our satisfaction;
• (c) the Franchise Fee has been paid (subject to state law or state imposed financial assurance requirements);
  • (d) the Initial Tool Package has been purchased;
• (e) we have approved the Managers of your HydroDog Business, if any, and you have demonstrated to us that the pre-opening conditions of this Agreement have been fulfilled.
• (f) you have furnished us with copies of all insurance policies required by this Agreement, or such other evidence of insurance coverage and payment of premiums as we request or accept; and
• (g) you have provided us with copies of all required documents pertaining to your acquisition and delivery of the HydroDog Vehicle.

6. FEES.

• 6.1 Initial Franchise Fee. In consideration of the Franchise rights granted in this Agreement, you must pay us a non-refundable initial franchise fee of Forty Thousand Dollars ($40,000) for a Territory with a population of up to one hundred fifty thousand (150,000) people (the "Initial Franchise Fee"). The Initial Franchise Fee is fully earned upon receipt. The Franchise Fee is due in a lump sum payment on the Agreement Date.
• 6.2 Additional Territory Fee. You may purchase additional territory rights for areas with populations of up to 50,000 each for an additional fee of ten thousand dollars ($10,000) per additional territory (the "Additional Territory Fee"). The Additional Territory Fee shall not be prorated if the population of the additional territory is less than 50,000. The Additional Territory Fee is uniform, due in a lump sum, and fully earned and non-refundable upon payment.
• 6.3 Royalty. Beginning the first week following the week you open your HydroDog Business, and continuing throughout the remainder of the Term, you shall pay us a continuing nonrefundable weekly royalty fee ("Royalty(ies)") equal to the greater of (a) seven percent (7%) of Gross Sales or (b) two hundred fifty dollars ($250.00) per Territory. Royalties are payable to us every Monday for the previous calendar week (the "Payment Day"). If the Payment Day falls on a national holiday, the payment is due on the first weekday following the national holiday.
• 6.4 Technology Fee. You must pay to us or our designee a fee in the amount we designate from time to time for our proprietary software and technology services (the "Technology Fee"), which includes but is not limited to website listing, data hosting, scheduling system, customer relationship management (CRM), workflows, virtual assistant technology, and learning and development resources. The Technology Fee is currently $150 per month plus $99 per month for each HydroDog Vehicle. The Technology Fee is due on or before the first Payment Day in each month. We may increase this fee upon ninety (90) days written notice to you.

• 6.5 Initial Tools Package.

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