What are some of the conditions Lees Famous Recipe may impose on a franchisee to approve delivery operations?

y those hours of operation without our prior written consent.

• I. Standards of Service. You must at all times give prompt, courteous and efficient service to your customers. You must, in all dealings with your customers and suppliers and the public, adhere to the highest standards of honesty, integrity and fair dealing.
• J. Specifications, Standards and Procedures. You acknowledge that each detail of the appearance and operation of the Restaurant is important to us and other Lee's Famous Recipe Restaurants. You agree to maintain the highest standards of quality and service in the Restaurant and agree to comply with all specifications, standards and operating procedures (whether contained in the Operations Manual or any other written or oral communication to you) relating to the appearance or operation of a Lee's Famous Recipe Restaurant, including:
  • 1. type and quality of Products and Product procurement;
  • 1. methods and procedures relating to marketing and customer service;
  • 1. the safety, maintenance, cleanliness, function and appearance of the Restaurant premises and its fixtures, equipment, furniture, décor and signs;
  • 1. qualifications, dress, general appearance and demeanor of Restaurant employees. Each of your employees will wear only those uniforms which we have approved in writing;
  • 1. the style, make and/or type of equipment (including computer equipment) used in operating the Restaurant;
  • 1. use and illumination of exterior and interior signs, posters, displays, standard formats and similar items;
  • 1. quality of and customer satisfaction respecting catering and delivery services performed; and
    • 1. Restaurant advertising and promotion.
• K. Compliance with Laws and Good Business Practices. You must secure and maintain in force all required licenses, permits and certificates relating to the operation of the Restaurant, and must operate the Restaurant in full compliance with all applicable laws, ordinances and regulations, including all labor and employment laws. You will comply with all tax laws (including those relating to individual and corporate income taxes, sales and use taxes, franchise taxes, gross receipts taxes, employee withholding taxes, F.I.C.A. taxes, inventory taxes, personal property taxes and real estate taxes, and federal, state and local income tax laws). You must comply with all laws and regulations relating to privacy and data

protection and must comply with any privacy policies or data protection and breach response policies we periodically may establish. You must notify us in writing immediately of the commencement of any action, suit, proceeding or investigation, and of the issuance of any order, injunction, award of decree, by any court, agency, or other governmental instrumentality that may adversely affect the operation or financial condition of you or the Restaurant. You must notify us immediately of any suspected data breach at or in connection with the Restaurant. You will not conduct any business or advertising practice which may or does injure us, our business, the System, the Marks, or the goodwill associated with the Marks and other Lee's Famous Recipe Restaurants.

• L. Data. You agree that Customer Data is deemed to be owned exclusively by us, and you also agree to provide the Customer Data to us at any time that we request. You have the right to use Customer Data while this Agreement or a successor or renewal Franchise Agreement is in effect, but only in connection with operating the Restaurant and only in accordance with the policies that we establish from time to time. You may not sell, transfer, or use Customer Data for any purpose other than operating the Restaurant and marketing Lee's Famous Recipe Products and services. However, if you transfer the Restaurant (as provided in Section 14 below), as part of the transfer, you must also transfer use of the Customer Data to the buyer as part of the total purchase price paid for the Restaurant.
• M. Privacy Laws. You agree to abide by all applicable laws pertaining to the privacy of consumer, employee, and transactional information ("Privacy Laws"). You agree to comply with our standards and policies pertaining to Privacy Laws. If there is a conflict between our standards and policies pertaining to Privacy Laws and actual applicable law, you must: (i) comply with the requirements of applicable law; (ii) immediately give us written notice of said conflict; and (iii) promptly and fully cooperate with us and our counsel in determining the most effective way, if possible, to meet its standards and policies pertaining to Privacy Laws within the bounds of applicable law. You agree not to publish, disseminate, implement, revise, or rescind a data privacy policy without our prior written consent as to said policy.
• N. Artificial Intelligence. You will not, without our prior written consent, utilize any Generative AI directly or indirectly in the operation of the Restaurant, including without limitation, in advertising, promotion, or marketing of the Restaurant or the Franchised Business, communications with customers, business planning, analysis or optimization, or in any social media.

Source: Item 22 — CONTRACTS (FDD pages 69–70)