rce channels, may serve multiple functions including advertising and promoting HydroDog products, programs, and services, as well as marketing HydroDog franchise opportunities. We exclusively retain all rights to electronic commerce, and you acknowledge that any such platforms may be used by us to exploit these reserved rights.

13. RECORDS, REPORTS AND FINANCIAL STATEMENTS.

13.1 Accounting System. You agree to establish and maintain at your own expense a bookkeeping, accounting and recordkeeping system conforming to the requirements and formats we prescribe from time-to-time. We may require you to use approved computer hardware and Software in order to maintain certain sales data and other information, including updating the Manuals and for communication purposes. You agree that we may have real-time, continuous, and unrestricted access to all sales data, customer information, financial records, and other business information through the Computer System at all times. You hereby grant us a perpetual, irrevocable, worldwide, royalty-free license to use, modify, analyze and share such data for any business purpose, including but not limited to system-wide analytics, optimization, and franchise sales activities, subject to applicable privacy laws and regulations.

13.2 Reports. You agree to furnish to us on such forms that we prescribe from time-to-time:

• (a) on the fifth (5th) day of each calendar month: a report on your HydroDog Business's Gross Sales during the immediately preceding calendar month with the Royalty payment;
• (b) within fifteen (15) days after the end of each calendar quarter: (i) a profit and loss statement for your HydroDog Business for the immediately preceding calendar month and year-to-date; and (ii) a balance sheet as of the end of such month;
• (c) within thirty (30) days after the end of your HydroDog Business's fiscal year: (i) annual profit and loss and source and use of funds statements; and (ii) a balance sheet for your HydroDog Business as of the end of such fiscal year; and

• (d) within ten (10) days after our request: (i) exact copies of federal and state income and other tax returns; and (ii) such other forms, records, books and other information we may periodically require.
• 13.3 Access to Information. You agree to verify and sign each report and financial statement in the manner we prescribe. We have the right to disclose data derived from such reports without identifying you or the location of your HydroDog Business. We also have the right to require you to have reviewed or audited financial statements prepared on an annual basis if we reasonably believe that the reports are incorrect. Moreover, we have the right, as often as we deem appropriate (including on a daily basis), to access all computer registers and other Computer Systems that you are required to maintain in connection with the operation of your HydroDog Business and to retrieve all information relating to your HydroDog Business's operations.
• 13.4 Copies of Reports. You agree to furnish us with a copy of all sales, income and other tax returns relating to your HydroDog Business, at our request. You will also send us copies of any sales or other reports sent to any landlord or governmental agency, at our request.

14. INSPECTIONS AND AUDITS

• 14.1 Our Right to Inspect your HydroDog Business. To determine whether you and your HydroDog Business are complying with this Agreement and all System Standards, we and our designated agents have the exclusive right at any time during your regular business hours, and with or without prior notice to you:
  • (a) enter your HydroDog Business and/or the HydroDog Vehicle and have unlimited and unrestricted access to inspect your HydroDog Business and/or HydroDog Vehicle;
  • (b) observe, photograph and videotape the operations of your HydroDog Business for such consecutive or intermittent periods as we deem necessary;
    • (c) remove samples of any products, materials or supplies for testing and analysis;
    • (d) interview personnel and customers of your HydroDog Business; and
  • (e) inspect and copy any books, records, websites (or other forms of e-commerce) and documents relating to your operation of your HydroDog Business.

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