ss. Such guidance will, at our discretion, be furnished in our Manuals, bulletins, emails, written materials, online sources, telephone conversations, virtual webinars, and consultations at our office or a Pump It Up business or any other location, including virtually.

12. SYSTEM STANDARDS

A. Compliance with System Standards.

• (1) We own and control the distinctive plan for the establishment, operation and promotion of the Pump It Up Business and all related licensed methods of doing business, previously defined as the "System Standards." System Standards may regulate and/or provide suggested specifications, best practices, standards, operating procedures, general guidance, ongoing advice, and consultation to you on any one or more of the following with respect to the Pump It Up Business: franchised site, premises, leasehold improvements, interior finish, interior décor, furnishings, equipment, products, product formulas, supplies, materials, inventory type, technical equipment standards, client relations, marketing techniques, written promotional materials, advertising, accounting systems, and service delivery methods. All information identified in the preceding sentence constitute our confidential trade secrets. You understand that our System Standards may regulate (to the extent allowed by law) maximum, minimum and other pricing requirements for the services and products your Pump It Up Business sells. You acknowledge that we have valuable rights in and to such trade secrets. You further acknowledge that you have not acquired any right, title or interest in the System Standards except for the right to use the System Standards in the operation of the Pump It Up Business as it is governed by this Agreement and that it is obligated to maintain the confidentiality of the System Standards.
• (2) You acknowledge that each and every detail of the appearance, layout, décor, cleanliness, safety standards, services and operation of the Franchised Business is essential to us and to other franchisees of Pump It Up Businesses to preserve the goodwill of the Marks and all Pump It Up Businesses. These details constitute our protected trade dress. You agree to cooperate with us by operating and maintaining the Franchised Business safely and securely and according to all of our System Standards (whether contained in the Manuals or another written communication to you), as we periodically modify and supplement them. You agree that the System Standards we prescribe in the Manuals or otherwise communicate to you in writing or another form, are part of this Agreement as if fully set forth within its text.
• (3) We may modify the System (including System Standards) from time to time and these modifications may obligate you to invest additional capital in the Franchised Business and/or incur higher operating costs. We may require you to integrate new or updated rides, inflatables, games, or concessions into your Franchised Business. You agree to accept, integrate and use or display in the Franchised Business any such changes or modifications to the System as if they were a part of the System at the time this Agreement was executed, and you agree to make such expenditures as the changes or modifications to the System may require. This includes, but is not limited to, refurbishing or remodeling the Premises or any other aspect of the Franchised Business, hiring additional personnel, buying new equipment, adding new services and products, or otherwise modifying the nature of your operations, as if those changes or modifications were part of the System as of the Effective Date.
• (4) If you or your owners, employees, designees, or independent contractors develop any new concepts, processes or improvements relating to the System, you must promptly notify us and provide us with all information regarding the new concept, process or improvement, all of

which shall become our property as a "work made for hire" and which may be incorporated into the System without any payment to you or your owners, employees, designees or independent contractors. If any designee or independent contractor working on your behalf develops any new concepts, processes or improvements relating to the System, you shall obtain covenants from that designee or contractor that you own (as a "work made for hire") such concepts, processes or improvements (and all components thereof) and have the right to freely transfer to us such concepts, processes or improvements. You, at your own expense, must promptly take all actions deemed necessary or desirable by us to vest in us ownership of such concepts, processes or improvements. To the extent that any item does not qualify as a "work made for hire" for us, you will assign ownership of that item, and all related rights to that item, to us and agree to take whatever action (including signing an assignment or other documents) we request to evidence our ownership or to help us obtain intellectual property rights in the item. We will make no payment to you, your owners, employees, designees or independent contractors for any such item, or for our subsequent use (or our franchisees' subsequent use) of such item.

B. Vendors, Products and Services.

• (1) You must purchase all products, equipment, materials, supplies and services for the operation of the Pump It Up Business from us, our affiliates, or from our Designated Vendors, Preferred National Vendors or Local Vendors of your choosing (collectively, the "PIU Vendors"). We reserve the right to require you to purchase specific products, equipment, material, supplies and/or services from specific PIU Vendors.
• (2) We may develop certain proprietary or branded products, including inflatable devices, hardware, or software programs that will be prepared by or for us according to our proprietary designs (collectively, "Proprietary Products"). We also have developed standards and specifications for other products, materials and supplies incorporated by or used in providing services or the packaging and delivery of products authorized for sale at Pump It Up Businesses.
• (3) If specified for your Franchised Business, you must purchase the Proprietary Products or any other specified fixture, equipment, inventory, marketing materials, or supplies, only from us or a third party designated and licensed by us to prepare and sell such products ("Designated Vendors"). From time to time, we may modify the list of Designated Vendors.
• (4) We may, in our sole discretion, choose to designate (or remove) any vendor as a "Preferred National Vendor". We reserve the right to require that you use a Preferred National Vendor for the purchase of specified fixtures, equipment, inventory, marketing materials, or supplies. We may work with these Preferred National Vendors to establish prices, products, shipping costs, contacts, and other agreements as at our discretion.
• (5) Dependent on restrictions we may identify for purchasing products and services from our Designated Vendors and/or Preferred National Vendors, you may also purchase products, equipment, materials, supplies and services from a vendor in the geographic area near your Premises (a "Local Vendor").

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