What happens if a Management Recruiters franchisee fails to comply with applicable laws or regulations?

he reputation of the System or the Marks;

• cease use of any advertising programs or materials within twenty-four (24) hours of receipt of written notice from Franchisor to do so;

• offer all and only such services as may from time to time be approved and/or required by Franchisor;
• only use the Marks as they relate to the System and then only as previously approved by Franchisor; and
• Comply with the MRI Code of Conduct, as may be amended from time to time.
• 9.5. Legal Compliance. Franchisee shall comply with all federal, state, and local Laws, rules, regulations, and ordinances, and timely obtain any and all permits, certificates, or licenses necessary for the full and proper conduct of the Franchise Business. Such Laws, rules, and regulations will include, without limitation, licenses to do business, fictitious name registrations, sales and other tax permits, and any permits, certificates, or licenses required by any federal, state, or local Law, rule, or regulation, and any other requirement, rule, Law, or regulation of any federal, state, or local jurisdiction. Franchisee shall pay all taxes and other fees owed to any federal, state, or local government when due.
• 9.6. Claims. Franchisee will notify Franchisor in writing within three (3) calendar days of the commencement of any action, suit, or proceeding and of the issuance of any order, writ, injunction, award or decree of any court, agency, or other Governmental Authority, in any way relating to or affecting the operation or financial condition of the Franchisee or the Franchise Business.
• 9.7. Further Assurances. Following execution of this Agreement, Franchisee shall, and shall cause its Principals and Guarantors to, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.
• 9.8. Continuing Obligation. Franchisee and each Principal acknowledge and agree that the representations, warranties, and covenants set forth in this Section 9 are continuing obligations of Franchisee and each Principal, as applicable, and that any failure to comply with such representations, warranties, and covenants constitutes a material event of default under this Agreement. Franchisee and each Principal will cooperate with Franchisor in any efforts made by Franchisor to verify compliance with such representations, warranties, and covenants.

10. FRANCHISEE OPERATIONS

• 10.1. Operation of Franchise Business. All persons employed or retained by Franchisee to assist with the day-to-day operations of the Franchise Business (and not the temporary or contract employees) are the employees or agents of Franchisee and not Franchisor. Franchisee shall disclose this relationship all persons employed or retained by Franchisee for such purposes and will ensure that all materials provided to applicants for such positions prominently state: This business is an independently owned and operated franchise of the MRINetwork. You are not an employee or agent of our franchisor, HQ MRI Corporation.
• 10.2. Bookkeeping and Reports. Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations utilizing generally accepted accounting principles in the United States ("U.S. GAAP") consistently applied.

Source: Item 23 — RECEIPTS (FDD pages 67–327)