What are the Hydrodog franchisee's obligations regarding adherence to System Standards (Item 8) and how does this relate to the franchisor's right to enforce quality control measures (Item 8)?

To protect our reputation and goodwill and to maintain high standards of operation under the System, you must operate the HydroDog Business in strict conformance with our System standards, including the methods, standards, and specifications we prescribe from time to time in the Manual or otherwise in writing. The System standards may relate to any aspect of the appearance, function, cleanliness, and operation of the HydroDog Business.

You are obligated to comply with all modifications to System Standards, other than capital modifications, within the time period we specify. There is no limit on this obligation.

• 1. As may be permitted by law, inspect and observe, photograph and videotape the operations of HydroDog Businesses, remove samples of any products, materials or supplies for testing and analysis, interview HydroDog Businesses' customers and personnel, and inspect and copy any books, records and documents relating to the operation of your HydroDog Business from time to time to assist you in complying with the Franchise Agreement and all System Standards. (Franchise Agreement, Section 14.1).

You must offer for sale all products, and perform all services, that we require from time to time for HydroDog Businesses. We reserve the sole right to decide if any supplier, vendor or item is authorized and reserve the right to disapprove or refuse to approve any supplier, vendor or item. You are not permitted, without our prior written approval, to use any inventory or order from any suppliers or vendors that have not been authorized by us.

• 1. Loan you one copy of the Operations Manuals (or make the Manuals available on-line or via other electronic format), consisting of such materials (which may include audiotapes, videotapes, magnetic media, computer software and written materials) that we generally furnish to franchisees for use in operating HydroDog Businesses. The Manuals contain mandatory and suggested specifications, standards, operating procedures and rules ("System Standards") that we prescribe from time to time for operation of HydroDog Businesses and information relating to your other obligations under the Franchise Agreement and related agreements. (Franchise Agreement, Section 11.1).
• 1. Issue, modify and supplement System Standards for your HydroDog Business. These may establish minimum or maximum prices to the extent permitted by law. We may periodically modify System Standards, which may accommodate regional or local variations as we determine or to comply with applicable laws, rules and regulations, and these modifications may obligate you to invest additional capital in the HydroDog Business and/or incur higher operating costs. However, these modifications will not alter your fundamental status and rights under the Agreement. (Franchise Agreement, Section 11.3).

You agree to follow the standards, specifications and operating procedures we establish periodically for the HydroDog System that are described in the Manuals.

You also must comply with all updates and amendments to the HydroDog System as described in newsletters or notices we distribute, including via Computer System or other media we select).

The Manuals may be modified or updated and revised periodically to reflect changes in System Standards.

You are responsible for routinely monitoring any on-line version (or electronic format) of the Manuals for changes to them.

If we make the Manuals accessible to you in read-only format and/or on-line (or electronic format), we will not send to you printed copies of any changes to them.