What laws and regulations must a Management Recruiters franchisee comply with when conducting the Franchise Business?

s, sanitation, safety and functioning of the Franchise Business and its fixtures, furnishings, furniture, equipment, décor, and signs, including, but not limited to, computer hardware and software;

• use of standard forms and contracts;
• methods of dealing with customers and potential customers and the labor personnel;
• use of the Marks and use and protection of Trade Secrets;
• preparation and retention of records;
• risk management administration methods for dealing with workers' compensation and unemployment compensation; and
• use of exterior and interior signs, posters, displays and standard formats.

19. COMPLIANCE WITH LAWS

19.1. Compliance. Franchisee shall conduct the Franchise Business in compliance with all applicable Laws, ordinances and regulations, including, without limitation, all Laws and regulations relating to insurance, unemployment insurance, wage and hour Laws, immigration, employment discrimination and withholding and payment of federal, state and local income taxes. The specific statutes with which Franchisee must comply include, without limitation, the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), Occupational Safety and Health Act (OSHA), Employee Retirement Income Security Act (ERISA), Title VII, the Age Discrimination Employment Act, the Americans with Disabilities Act, and the Affordable Care Act. Franchisee shall obtain and maintain in Franchisee's name all required licenses, permits and certificates relating to the conduct of the Franchise Business. Upon Franchisor's request, Franchisee shall immediately transmit copies of each such license, permit and certificate to Franchisor. Franchisee shall assume all risk of any expenses, costs, fines, punishment by legal authority, and other consequences of violation of the employment Laws, national or local immigration Laws, or Laws pertaining to Homeland Security arising from the operation of Franchisee's business. Franchisee shall also be responsible for, and reimburse Franchisor for, any fines, co-payment requirements, or deductible expenses under all insurance policies, and/or all costs for events and violations not covered by our insurance policies, arising from the operation of Franchisee's business, which relate to Franchisee's

non-compliance with or violation of the employment Laws, national or local immigration Laws, national or local healthcare insurance Laws, or Laws pertaining to Homeland Security.

• 19.2. Forwarding Notice. Within five (5) days after the receipt of written notice of, or the receiving any report or notice from any government agency or department, or from any licensing organization suggesting Franchisee may not be in full compliance with any applicable Law, Franchisee shall deliver to Franchisor a complete copy of such report or notice.
• 19.3. Actions. Franchisee shall notify Franchisor in writing, as soon as possible, but not later than five (5) days after the receipt of a written threat or notice of, or the commencement of any action, suit or proceeding against the Franchisee or the Franchise Business, or after issuance of any order, writ, injunction, award or decree of any court or government agency concerning the Franchisee or the Franchise Business.
• 19.4. Business Relations Professional Conduct. In all dealings with clients and customers, suppliers, Franchisor and all others, Franchisee shall adhere to the highest standards of ethical and professional conduct, honesty, integrity, good faith and fair dealing. Franchisee shall use its best efforts to develop, maintain and promote the Franchise Business and its public image. Franchisee shall refrain from any business practice that Franchisor determines may injure Franchisor's business, other franchisees of Franchisor or the goodwill associated with the Marks.
• 19.5. Core staff employees. Franchisee shall have exclusive responsibility for all obligations that arise from employment and compensation of Franchisee's core staff employees (as distinguished from temporary staffing services provided to clients) and, except as set forth in Section 8, for the complete training of such core staff employees in the operation of the Franchise Business. Franchisee agrees to hire all core staff employees of the Franchise Business and to be exclusively responsible for the terms of their employment, their compensation, and for their complete training in the operation of the Franchise Business.
• 19.6. Reports. Franchisee shall furnish Franchisor the following items, signed and verified by Franchisee, in the form and manner that Franchisor prescribes from time to time:

• within thirty (30) days after the end of each month, a profit and loss statement for the preceding month and a year-to-date profit and loss statement for the Franchise Business utilizing Franchisor's standard chart of accounts;
• within ninety (90) days after the end of Franchisee's fiscal year, a balance sheet and an annual profit and loss statement reflecting all year-end adjustments for the Franchise Business prepared and certified by an independent certified public accountant; and
• upon request, any requested Social Security reports, Immigration and Naturalization Service reports or forms, state and federal unemployment reports, federal income tax returns, state, county or city income, franchise, or other tax returns, and other federal, state, or other governmentally mandated reports.
• **19.7.

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