of any court or government agency that may adversely affect the operation of the Franchised Business or your financial condition or give rise to liability or a claim against you or us. You must follow and abide by the crisis management information contained in the Manuals.

I. Management and Staffing of the Franchised Business.

• (1) You (or your Operating Principal or Multi-Unit Manager) must remain active in overseeing the operations of the Franchised Business, including, without limitation, regular, periodic visits to the Franchised Business and sufficient communications with us to ensure that the operations of the Franchised Business comply with the System Standards promulgated by us from time to time in the Manuals or otherwise in written or oral communications to you. You (or your Operating Principal or Multi-Unit Manager) will not engage in any other business or activity that conflicts with your obligations to operate the Franchised Business. You have the sole responsibility for recruiting, hiring, and training employees for the Franchised Business. Before you hire any employee for the Franchised Business, you should require that employee to sign a non-disclosure and confidentiality agreement. No employee of the Franchised Business is or shall be considered an employee of PIU.
• (2) You must conduct appropriate criminal background checks and due diligence on all employees of the Franchised Business to ensure that your employees meet the high ethical standards necessary for working with children. You must comply with all state and local laws and regulations regarding the staffing and on-premises management of personnel including, but not limited to, any required licenses and any regulations dealing with the ratio of your staff or equipment to the children on the Premises. You must employ only suitable persons of good character and reputation who will at all times conduct themselves in a competent and courteous manner in accordance with the image and reputation of Pump It Up Businesses and the System and, while on duty, comply with the dress attire, personal appearance and hygiene standards set forth in the Manuals.

J. Insurance.

(1) You will be responsible for any and all loss or damage arising from or related to your development and operation of the Franchised Business, and for all demands or claims with respect to any loss, liability, personal injury, death, property damage, or expense whatsoever occurring upon the Premises, or in connection with the development and/or operation of the Franchised Business. Throughout the term of this Agreement, you must obtain and maintain in full force and effect that insurance which you determine is necessary or appropriate for liabilities caused

by or occurring in connection with the development or operation of the Franchised Business, which shall include, at a minimum, insurance coverage in the amounts and covering the risks we periodically specify in the Manuals or otherwise in writing. Our minimum insurance requirements are not representations or warranties that such coverage is sufficient for the operation of your Franchised Business. Our requirements only represent the minimum coverage for your Franchised Business that we deem acceptable to protect our interests. Our current minimum insurance requirements are as follows:

• (a) comprehensive general liability insurance with limits of the greater of (i) $1,000,000 per occurrence and $2,000,000 aggregate; and (ii) those amounts required by the state or local government in which your Franchised Business is located;
• (b) worker's compensation and employer's liability insurance as well as such other insurance as may be required by statute or rule of the state in which the Franchised Business is located and operated;
  • (c) employment practices liability coverage;

Source: Item 23 — RECEIPTS (FDD pages 60–225)