What mandatory specifications, standards, and operating procedures must a Management Recruiters franchisee comply with?

s a franchisee of Franchisor, or (iv) not share with any "competing business" as that term is defined in Section 15.1, any confidential information or Trade Secrets of Franchisor, the Franchise Business, or Franchisee.

17.5. Exceptions; Publicly-Traded Stock. The restrictions in this Section 17.4 shall not apply to ownership of securities traded on a nationally recognized stock exchange that constitute less than three percent (3%) of the shares of the class of securities issued and outstanding, or to the conduct of other Franchise Businesses pursuant to franchise agreements with Franchisor.

18. IMAGE AND OPERATING STANDARDS

• 18.1. Services. Franchisee shall offer all services designated by Franchisor. Franchisee shall not, without Franchisor's written approval, offer any services or products in connection with the Franchise Business that are not authorized by Franchisor.
• 18.2. Brand Standards Materials. Franchisee acknowledges that every detail of the Franchise Business's operation as it relates to the MRI brand, the appearance of the business, the quality of the supplies used, and range of services offered is critically important to Franchisor, other MRI franchisees, and to Franchisee's clients and customers. Absent written consent, Franchisee shall devote full time to development of the Franchise Businessin accordance with Franchisor's brand standards. Franchisee shall comply with all mandatory specifications, standards, and operating procedures, regardless of whether these appear in the Brand Standards Materials, or are communicated to Franchisee in writing or by other means, relating, without limitation, to:
  • appearance and decor and standards of services and conduct of the Franchise Business;
  • supplies and suppliers;
  • recommended weekly and daily schedules for providing services to clients;

• image, appearance, and decor of office;
• notices, signs, marketing, and advertising materials;
• type, brand, appearance, cleanliness, 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. Risk Management Reports. In order to enable Franchisor to assist Franchisee with the administration of risk management of workers' compensation and unemployment compensation matters, Franchisee must report to Franchiser all Contract Staffing accidents and employment terminations immediately upon their occurrence. Franchisee must provide to Franchisor all information regarding workers' compensation losses and status reports from the insurance carrier regarding the progress of the workers' compensation claims and cases. The risk management reports must be on forms that Franchisor prescribes from time-to-time and contain all of the information required.

20. TERMINATION

• 20.1. Termination with Opportunity to Cure. Except as provided in Section 20.2, when Franchisee receives written notice from Franchisor that Franchisee has failed to comply with the terms of this Agreement, Franchisee shall have thirty (30) days to cure the breach and to prove such cure to Franchisor. If any breach is not cured within thirty (30) days of Franchisee's receipt of notice of such breach, Franchisor may terminate this Agreement upon written notice to Franchisee of such termination, effective on the expiration of the cure period.
• 20.2. Termination with No Opportunity to Cure. If any of the following events of default occur, Franchisor may terminate this Agreement immediately upon delivery to Franchisee of notice of termination. Franchisor shall have no obligation to allow Franchisee any opportunity to cure any such event of default:

• Franchisee has not generated sufficient Gross Funds to pay a Gross Continuing Fee of at least three thousand dollars ($3,000.00) within six (6) months following the Effective Date;
• Franchisee is declared bankrupt or judicially determined to be insolvent, or all or a substantial part of the assets of Franchisee or the Franchise Business are assigned to or for the benefit of any creditor, or Franchisee admits his inability to pay Franchisee's debts as they come due;
• Franchisee abandons the Franchise Business by failing to operate for five (5) consecutive days during which Franchisee is required to operate the Franchise Business under this Agreement's terms, or any shorter period after which it is not unreasonable under the facts and circumstances for Franchisor to conclude that Franchisee does not intend to continue to operate the Franchise Business;
• Franchisee has made any material misrepresentation relating to acquisition of the Franchise Business or to induce Franchisor to enter into this Agreement;
• Franchisee engages in conduct that, in Franchisor's sole determination, materially and unfavorably reflects upon the operation and reputation of the Franchise Business or the System;
• Franchisee fails for a period of ten (10) days or such longer period as applicable Law may require, after notification of noncompliance, to comply with any federal, state, or local Law or regulation applicable to operation of the Franchise Business;
• after curing any failure described in Section 20.1 Franchisee engages in the same noncompliance, regardless of whether such noncompliance is corrected after notice;
• Franchisee repeatedly fails to comply with one or more requirements of this Agreement regardless of whether corrected after notice;

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