What standards, specifications, and operating procedures and methods does Potbelly Sandwich Works use?

(1) We and our affiliates have developed (and continue to develop and modify) a system for constructing, operating, identifying, and promoting Shops under the POTBELLY SANDWICH SHOP® trademark and related commercial symbols (collectively, the "Marks") that prepare and sell sandwiches, soups, salads, shakes, desserts, and other food and beverage products (collectively, the "Products"). We have developed a franchise opportunity for Shops that sell the Products, use the Marks, and use our and our affiliates' distinctive business formats, methods, procedures, signs, designs, layouts, standards, and specifications (collectively, the "Branded System"), all of which we and our affiliates may improve, further develop, and otherwise periodically modify. Shops preparing and selling the Products, operating under the Branded System, and using the POTBELLY SANDWICH SHOP® Mark as their primary trade identity are referred to collectively in this Agreement as "Potbelly Shops."

A Potbelly Shop's Products are prepared according to specific recipes, standards, and procedures and use high quality ingredients, including certain proprietary items (collectively, "Potbelly Trade Secret Products") and other ingredients (not constituting Potbelly Trade Secret Products) that are branded and/or packaged exclusively for Potbelly Shops (collectively, "Potbelly Branded Products"). (Potbelly Branded Products also are defined to include non-food products that are branded and/or packaged exclusively for Potbelly Shops.)

(1) the Shop's design, layout, decor, appearance, and lighting; periodic maintenance, cleaning, and sanitation; periodic remodeling, painting, and decorating; replacing obsolete or worn-out improvements and Operating Assets; and using interior and exterior signs, emblems, lettering, and logos. (If the appearance or condition of the Shop or Operating Assets does not at any time meet our standards, we will notify you and identify the action you must take to correct the deficiency. If you fail to correct the deficiency within thirty (30) days after we deliver notice, we may enter the Shop and take the required action for you, in which case you must immediately reimburse all of our costs and pay us our then-current per-day fee.);

• (2) types, models, and brands of required Operating Assets, Potbelly Trade Secret Products, Potbelly Branded Products, other food and beverage products, and supplies and minimum standards and specifications you must satisfy;
• (3) required and/or authorized Products, Potbelly Trade Secret Products, Potbelly Branded Products, and services; unauthorized and prohibited food and beverage products and services; and purchase, storage, preparation, handling, and packaging procedures and techniques, and inventory requirements, for Products, Potbelly Trade Secret Products, and Potbelly Branded Products. We always have the right to approve or disapprove in advance all items and services to be used or sold by the Shop. We may withdraw our approval of previously authorized Products and services;
• (4) designated and approved suppliers of Operating Assets, Potbelly Trade Secret Products, Potbelly Branded Products, and other items and services. In the case of Potbelly Trade Secret Products and Potbelly Branded Products, suppliers will be limited to us, our affiliates and/or other specified exclusive sources, and you must acquire Potbelly Trade Secret Products and Potbelly Branded Products during the Term only from us, our affiliates and/or the other specified exclusive sources at the prices we or they decide to charge. We and our affiliates may mark up and profit on the sale of such goods and services.

You acknowledge and agree that operating and maintaining the Shop in compliance with System Standards are essential to preserve the goodwill of the Marks and all Potbelly Shops. Therefore, you agree to operate and maintain the Shop at all times in compliance with all System Standards, as we periodically issue, modify, and supplement them, even if you believe that a System Standard, as originally issued or subsequently modified, is not in the Franchise System's or the Shop's best interests. Although we retain the right to establish and periodically modify System Standards, you retain the right to control, and responsibility for, the Shop's management and operation and implementing and maintaining System Standards at the Shop.

You must use in operating the Shop only those Operating Assets that we designate or approve for Potbelly Shops as meeting our standards and specifications for quality, design, appearance, function, and performance. You may not install or use any unauthorized Operating Assets at the Shop. You agree to place or display at the Shop (interior and exterior) and on delivery/catering vehicles (if applicable) only the signs, emblems, lettering, logos, and display materials we periodically approve. You must purchase or lease approved brands, types, and models of Operating Assets only from suppliers we designate or approve (which may include and/or be limited to us and/or our affiliates).

Source: Item 22 — CONTRACTS (FDD page 79)