Fill and Sign the Franchise Agreementsoffering Circular Form

FF 2/98© STP 2011-1 § 2. Franchise Agreements/Offering Circular Form 2.01 Franchise Agreement—Single Location, with Form of Personal Guaranty and Form of Collateral Assignment of Lease [1]—The Franchise Agreement and Exhibits ABC UNIT FRANCHISE AGREEMENT UNIT FRANCHISE AGREEMENT  The sample ABC Unit Franchise Agreement is written from the perspective of the Franchisor, based on the assumption that the Franchisor will normally have prepared the initial draft of the franchise agreement which is included in the Offering Circular. The agreement may or may not be subject to negotiation, depending on state law and the current business practices of the Franchisor. For a comprehensive discussion about negotiating franchise agreements, see Franchisee Chapter 2. Annotations are numbered to coincide with the paragraph numbers of the agreement and appear immediately following the Unit Franchise Agreement. Note: No standard form of agreement exists. This form is intended to be a sample only. TABLE OF CONTENTS 1. PARTIES AND RECITALS 2011-3 2. GRANT OF FRANCHISE 2011-3 3. TERM AND RENEWAL 2011-4 4. OPERATING ASSISTANCE 2011-4 5. FEES 2011-6 6. LICENSED MARKS 2011-7 7. STANDARDS OF OPERATION 2011-8 8. CONFIDENTIAL OPERATING MANUAL 2011-14 9. ADVERTISING AND MARKETING 2011-15 10. STATEMENTS, RECORDS AND FEE PAYMENTS 2011-17 11. COVENANTS 2011-18 12. TRANSFER AND ASSIGNMENT 2011-19  The International Franchise Association (IFA), a trade association of franchisors and franchisees headquartered in Washington, D.C., adopted a Code of Principles and Standards of Conduct for its members in February, 1994. Counsel should consider the impact, if any, which such Code may have on its Franchise Agreement. For further discussion of the IFA Code, see Franchisor Chapter 19, § 19.2 [1] . Form 2.01[1] 2011-2© STP FF 2/98 13. DEFAULT AND TERMINATION 2011-23 14. POST TERM OBLIGATIONS 2011-25 15. INSURANCE 2011-25 16. TAXES, PERMITS AND INDEBTEDNESS 2011-26 17. INDEMNIFICATION AND INDEPENDENT CONTRACTOR 2011-26 18. WRITTEN APPROVALS, WAIVERS, FORMS OF AGREEMENT AND AMENDMENT 2011-27 19. ENFORCEMENT 2011-27 20. NOTICES 2011-28 21. GOVERNING LAW AND DISPUTE RESOLUTION 2011-28 22. SEVERABILITY AND CONSTRUCTION 2011-29 23. ACKNOWLEDGMENTS 2011-30 GUARANTY OF FRANCHISE OWNER'S UNDERTAKINGS 2011-33 EXHIBIT 1—LICENSED MARKS AND ACKNOWLEDGMENT REGARDING OWNERSHIP AND OTHER INTERESTS 2011-35 EXHIBIT 2—COLLATERAL ASSIGNMENT OF LEASE 2011-37 EXHIBIT 3—SPECIAL STIPULATIONS 2011-40 Form 2.01[1] FF 2/98© STP 2011-3 1. PARTIES AND RECITALS (a) This Franchise Agreement (“Agreement”) is entered into as of , 19 (the “Effective Date”) by and between , a corporation, with its principal place of business at (“Franchisor”), and (“Franchise Owner”) with its principal place of business at . (b) Franchisor owns or has the right to license certain trade names, trademarks, service marks and/or indicia of origin (the “Licensed Marks”) identified on Exhibit “1” hereto, the distinctiveness and value of which are acknowledged by Franchise Owner. In connection therewith, Franchisor has developed or has the right to license a plan for the organization and operation of a system [define the type of business and describe the system—e.g., relating to the franchising of restaurants specializing in the delivery of chicken dinners, which system includes assistance in site evaluation, equipment selection and layouts, accounting methods, merchandising, advertising, sales and promotional techniques, personnel training, trade secret recipes and other matters relating to the operation and promotion of such restaurants] (the “ABC System”), all of which are designed to enhance the reputation and goodwill with the public of establishments operated pursuant to the ABC System. Franchisor may from time to time, add to, amend, modify, delete or enhance any portion of the ABC System (including any of the Licensed Marks) as may be necessary in Franchisor's Reasonable Business Judgment (as defined below) to change, maintain or enhance the ABC System trade names or the reputation, efficiency, competitiveness and/or quality of the ABC System, or to adapt it to new conditions, materials or technology, or to better serve the public. Franchise Owner, at its expense, will fully comply with all such additions or modifications reasonably designated as applicable to then existing franchise owners similarly situated. (c) Franchisor agrees to use “Reasonable Business Judgment” in the exercise of its rights, obligations and discretion under this Agreement except where otherwise indicated in this Agreement. “Reasonable Business Judgment” means that Franchisor's determination shall preva il even in cases where other alternatives are also reasonable so long as Franchisor is intending to benefit or is acting in a way that could benefit the ABC System by enhancing the value of the Licensed Marks, increasing customer satisfaction, or minimizing possible customer brand or location confusion. Franchisor shall not be required to consider Franchise Owner's particular economic or other circumstances when exercising its Reasonable Business Judgment. At no time is Franchise Owner or any third party (including, but not limited to any third party acting as a trier of fact) entitled to substitute Franchise Owner's or its judgment for a judgment which has been made by or on behalf of Franchisor and that meets the definition of Reasonable Business Judgme nt in recognition of the fact that the long-term goals of a franchised system, and the long-term interests of both Franchisor and all franchise owners, taken together, require that Franchisor have the latitude to exercise Reasonable Business Judgment. (d) Franchise Owner has investigated and become familiar with the ABC System, and desi res, upon the terms and conditions set forth herein, to obtain a license to develop and opera te a business which will utilize the Licensed Marks and the ABC System (the “Franchised Business”). Franchisor is willing, upon the terms and conditions set forth herein, to license Franchise Owner to operate the Franchised Business. 2. GRANT OF FRANCHISE (a) Subject to all of the terms and conditions herein, Franchisor grants to Franchise Owner the non-exclusive right to operate an ABC System facility (a “Unit”) solely at the following address: Form 2.01[1] 2011-4© STP FF 2/98 (the “Premises”). The rights herein granted are sometimes referred to in this Agreement as the “Franchise.” (b) Franchise Owner acknowledges and agrees that the Franchise relates solely to the Pre mises and the Unit thereon, and affords Franchise Owner no right to construct or operate any additional, expanded or modified facilities on the Premises, nor any right to construct or operate the Franchised Business at any location other than the Premises. (c) Franchise Owner expressly acknowledges and agrees that Franchisor may itself construct and/or operate, and grant to others the right to construct and/or operate any business not utilizing the Licensed Marks, as well as ABC System units, at any location other than the Premises; provided that hereafter Franchisor shall not construct or operate or authorize any other person to construct or operate any new unit under the ABC System unless the Franchisor in good faith believes that the market in which the unit is located can reasonably be expec ted to sustain both the Unit and such new unit. Practice Note Several recent cases, including Scheck v. Burger King, 756 F.Supp. 743 (S.D. Fla. 1991), on motion for reconsideration, 798 F. Supp. 692 (S.D. Fla. 1992), Bus. Franchise Guide (CCH) ¶ 10,049; Vylene v. Naugles , 90 F.3d 1472 (9th cir. 1996), Bus. Franchise Guide (CCH) ¶ 10,981; and Camp Creek Hospitality Inns v. Sheraton Franchise Corp. , ___ F.3d ___, 1997 WL 76/207 (11th Cir. 1997) make it prudent to consider not only providing that the Agreement grants the right to the Franchise Owner for a Unit at the Premises only, but that the Franchisor specifically reserves the right to establish other Units anywhere else and/or to develop other ways to sell similar or identical products or services in different types of outlets. But even then, counsel should be aware of the recent case of Carvel v. Baker, Civil No. 3:94CV 1882 (AVC), Bus. Franchise Guide (CCH) ¶ 11,208 (D.Conn. July 22, 1997), which provided that the exercise of specific rights granted and reserved to the Franchisor in the agreement may nevertheless be subject to challenge for failure of the Franchisor to exercise such rights in a reasonable manner. 3. TERM AND RENEWAL (a) This Agreement, unless previously terminated pursuant to Paragraph 13 hereof, shall extend for ( ) years from the Effective Date (the “Initial Term”). (b) If Franchise Owner is not in default under this Agreement, and if Franchise Owner has the right to continue to occupy the Premises, Franchise Owner may renew this Franchise for one additional term of ( ) years (the “Renewal Term”). At least 30 days prior to the Renewal Term, Franchise Owner shall pay to Franchisor a renewal fee in an amount equal to percent ( %) of the then-current initial franchise fee charged by Franchisor to similarly situated franchise owners executing new franchise agreements, and in accordance with Franchisor's then-current terms and conditions for granting renewal franchises, which may include: (i) execution of a new and modified agreement with different performance standards, fee structures and/or increased fees; (ii) execution of a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor, its parent, subsidiaries or affiliates (if applicable) and their officers, directors, attorneys, shareholders and employees; and (iii) a requirement that Franchise Owner refurbish the Unit to conform to Franchisor's then-current standards. (c) Franchise Owner shall exercise its option to seek renewal by giving Franchisor written notice of Franchise Owner's election to renew not less than six nor more than 12 months prior to the expiration of the Initial Term; otherwise, such renewal right shall expire automatically. Form 2.01[1] FF 2/98© STP 2011-5 4. OPERATING ASSISTANCE (a) Prior to Franchise Owner's commencement of business, Franchisor shall provide Franchise Owner with the following assistance, on the same basis as it from time to time makes available to other similarly situated franchise owners of Franchisor: (i) Information with respect to site evaluation, preliminary plans and layouts for the Unit, and standards and specifications for fixtures, signs, improvements, equipment and other related facilities required for use in typical or similar units; (ii) Information concerning possible sources of signs, equipment, fixtures, furnishings, improvements and other products and services available in connection with the operation of ABC System units; (iii) A minimum of ( ) days of training (and such additional time as Franchisor may deem necessary, up to ( ) days) in the operation of the Franchised Business prior to its opening for either Franchise Owner or its designated manager selected by Franchise Owner and approved by Franchisor. [If this is Franchise Owner's first ABC System Unit, at least one week of such training shall take place at the Unit, prior to, during and/or subsequent to its opening.] Such training shall be conducted exclusively by Franchisor or its designee at a sit e to be designated by Franchisor; provided, however, Franchise Owner shall pay all its and its employees' costs incurred in such training, such as travel, room, board, wages and living expenses. (iv) Such on-Premises pre-opening or opening assistance by Franchisor or its representative(s) in the initial operation of the Franchised Business as Franchisor may, in its discretion, deem appropriate; (v) One (1) set of any written materials which Franchisor may make available (known as the Confidential Operating Manual(s), as defined in Paragraph 8 hereof; (vi) An initial supply of accounting forms for reporting transactions to Franchisor in accordance with Paragraphs 5 and 10 hereof. [Subsequent supplies will be available at Franchisor's cost plus handling charges; and] (vii) All proprietary computer software programs which may be required by Franchisor to be utilized by Franchise Owner in the operation of the Franchised Business and which may be updated or modified by Franchisor from time to time during the term of this Agreement. Any such proprietary programs shall remain the property of Franchisor and shall be on loan to Franchise Owner only during the term of this Agreement. (b) Franchisor reserves the right to establish, and to require Franchise Owner to maintain, standards of quality, appearance and service at all similarly situated ABC System units, thereby maintaining the public image and reputation of the ABC System and the demand for the products and services provided thereunder, and to that end Franchisor may in its Reasonable Business Judgement, provide Franchise Owner with such of the following ongoing assistance as it shall deem appropriate: (i) Periodic assistance in local advertising and marketing; (ii) Periodic individual or group counseling in the operation of the Franchised Business rendered in person, by seminar, or by newsletters, bulletins, electronic or other means made available from time to time to all ABC System franchise owners; (iii) Advice concerning operating problems, new techniques or operating methods disclosed by reports submitted to or inspections made by Franchisor; (iv) Advice and guidance with respect to new and improved methods of operation or business procedures developed by Franchisor, use of the Confidential Operating Manual, management materials, promotional materials, advertising formats and the Licensed Marks; Form 2.01[1] 2011-6© STP FF 2/98 (v) The opportunity to participate in group purchasing programs for inventory, supplies, insurance and equipment which Franchisor may, from time to time, use, develop, sponsor or provide and upon such terms and conditions as may be determined solely by Franchisor; and (vi) Periodic inspections of the Premises and other ABC System units and of the products and services they offer. 5. FEES (a) In consideration of the execution of this Agreement, Franchise Owner agrees to pay Franchisor an initial franchise fee in the amount of Dollars ($ ) which shall be paid in full by the Effective Date. Upon execution of this Agreement by all parties, the initial franchise fee is non-refundable[; provided, however, that Franchise Owner may receive a partial refund of the initial franchise fee pursuant to Paragraph 7(g) of this Agreement in the event Franchise Owner or, if applicable, its designated managerial personnel, shall fail to complete initial training to the reasonable satisfaction of Franchisor, resulting in the termination of this Agreement]. (b) At all times after the commencement of operation by Franchise Owner, Franchise Owner shall pay to Franchisor the following recurring fees: (i) A continuing fee equal to percent ( %) of the Gross Volume of Business (as hereinafter defined) [or, if greater, the sum of Dollars ($ ) per [month]]; (ii) An advertising and marketing fee to support national, regional and/or local advertising equal to percent ( %) of the Gross Volume of Business. The advertising and marketing fee shall be expended in accordance with the terms of Paragraph 9. [The leve l of any or all fees under this subparagraph and Paragraph 9(c) hereof or the method of determining such fees or both may be revised from time to time by Franchisor for all unit franchise agreements in the ABC System (subject to a comparable clause) at the sole option of Franchisor upon 60 days wri tten notice to Franchise Owner; provided, however, that in no event shall the aggregate of the advertising and marketing fee percentage hereunder and the local advertising and marketing expenditure percentage required of Franchise Owner by Paragraph 9(c) hereof exceed percent ( %) of the Gross Volume of Business at any given time during the term of this Agreement][, and further provided that Franchisor may not increase the advertising and marketi ng fee provided in this Paragraph 5(b)(ii) during the first twelve months following the Effective Date of this Agreement]. Franchisor shall contribute to the ABC System Advertising Fund as defined i n Paragraph 9(a) hereof on the same basis for all retail businesses owned or operated by Franchisor or its affiliates which are a part of the ABC System. It is the intention of the parties that the cost of such programs shall be shared on a reasonably nondiscriminatory basis by all ABC System units, rather than for Franchisor to make a profit from such fees. (iii) An amount equal to any sales, gross receipts or similar tax assessed against or payable by Franchisor and calculated on continuing payments required to be paid hereunder, unless t he tax is an income tax or an optional alternative to an income tax otherwise payabl e by Franchisor. Such amount is due and payable within ten days after receipt of Franchisor's invoice therefore. (c) Unless otherwise provided, all fees and other amounts due to Franchisor hereunder shall be paid in the manner, and at the times set forth in Paragraph 10 of this Agreement. All such payments shall be also accompanied by the statement required under Paragraph 10 hereof. (d) If any fee or any other amount due under this Agreement is not paid within five days after such payment is due, Franchise Owner shall pay a service charge equal to the lesser of the daily rate of Form 2.01[1] FF 2/98© STP 2011-7 percent ( %), which is an annual rate of percent ( %), of such overdue amount or, if less, the highest rate then permitted by applicable law for each day such amount is past due. This charge shall accrue whether or not Franchisor exercises its right to terminate this Agreement pursuant to Paragraph 13 hereof. (e) The term “Gross Volume of Business,” as used in this Agreement, shall mean the aggrega te gross amount of all revenues from whatever source derived (whether in the form of cash, credit, agreements to pay or other consideration, and whether or not payment is received at the time of sale or any such amounts prove uncollectible) which arise from or are derived by Franchise Owner or by any other person from business conducted or which originated in, on, from, or through the Premises, or from the sale of any products associated with the use of the Licensed Marks, whet her such business is conducted in compliance with or in violation of the terms of this Agreement, excluding only sales or other tax receipts (the collection of which is required by law)[, and promotions, deductions (e.g., coupons, buy-one, get-one-free) and allowances]. (f) All payments by Franchise Owner pursuant to this Paragraph 5 shall be applied in such order as Franchisor may designate from time to time. Franchise Owner agrees that it may not designate an order for application of any fees different from that designated by Franchisor and expressly acknowledges and agrees that Franchisor may accept fees paid pursuant to different instructions without any obligation to follow such instructions, even if such payment is made by its terms conditional on such instructions being followed. This provision may be waived only by written agreement signed by Franchisor, which written agreement must be separate from t he check or other document constituting payment. 6. LICENSED MARKS (a) Franchise Owner expressly acknowledges Franchisor's rights in and to the Licensed Marks and agrees not to represent in any manner that Franchise Owner has acquired any ownership rights in the Licensed Marks. Franchise Owner agrees not to use any of the Licensed Marks or any marks, names or indicia which are or may be confusingly similar in its own corporate or business name except as authorized in this Agreement. Franchise Owner further acknowledges and agrees that any and all goodwill associated with the ABC System and identified by the Licensed Marks (including all future distinguising characteristics, improvements and additions to or associated with the ABC System) is Franchisor’s property and shall inure directly and exclusively to the benefit of Franchisor and that, upon the expiration or termination of this Agreement for any reason, no monetary amount shall be assigned as attributable to any goodwill associated with Franchise Owner's use of the Licensed Marks. (b) Franchise Owner understands and agrees that any use of the Licensed Marks other than as expressly authorized by this Agreement, without Franchisor's prior written consent, may constitute an infringement of Franchisor's rights therein and that the right to use the Licensed Marks granted herein does not extend beyond the termination or expiration of this Agreement. Franchise Owner expressly covenants that, during the term of this Agreement and thereafter, Franchise Owner shall not, directly or indirectly, commit any act of infringement or contest or aid others in contesting the validity of Franchisor's right to use the Licensed Marks or take any other action in derogation thereof. (c) Franchise Owner shall promptly notify Franchisor of any claim, demand or cause of action that Franchisor may have based upon or arising from any unauthorized attempt by any person or legal entity to use the Licensed Marks, any colorable variation thereof, or any other mark, name or indicia in which Franchisor has or claims a proprietary interest. Franchise Owner shall assist Franchisor, upon request and at Franchisor's expense, in taking such action, if any, as Franchisor Form 2.01[1] 2011-8© STP FF 2/98 may deem appropriate to halt such activities, but shall take no action nor incur any expenses on Franchisor's behalf without Franchisor's prior written approval. If Franchisor undertakes the defense or prosecution of any litigation relating to the Licensed Marks, Franchise Owner agre es to execute any and all documents and to do such acts and things as may, in the opinion of Franchisor's legal counsel, be reasonably necessary to carry out such defense or prosecution. (d) Franchise Owner further agrees and covenants to operate and advertise only under the names or marks from time to time designated by Franchisor for use by similar ABC System franchise owners; to adopt and use the Licensed Marks solely in the manner prescribed by Franchisor; to refrain from using the Licensed Marks to perform any activity or to incur any obligation or indebtedness in such a manner as may, in any way, subject Franchisor to liability therefore; to observe all laws with respect to the registration of trade names and assumed or fictitious names, to include in any application therefore a statement that Franchise Owner's use of the Licensed Marks is limited by the terms of this Agreement, and to provide Franchisor with a copy of any such application and other registration document(s); to observe such requirements with respect to trademark and service mark registrations and copyright notices as Franchisor m ay, from time to time, require, including, without limitation, affixing “SM”, “TM”, or ®, adjacent to all such Licensed Marks in any and all uses thereof; and, to utilize such other appropria te notice of ownership, registration and copyright as Franchisor may require. (e) Franchisor reserves the right, in its sole discretion, to designate one or more new, modi fied or replacement Licensed Marks for use by franchise owners and to require the use by Franchise Owner of any such new, modified or replacement Licensed Marks in addition to or in lieu of any previously designated Licensed Marks. Any expenses or costs associated with the use by Franchise Owner of any such new, modified or replacement Licensed Marks shall be the sole responsibility of Franchise Owner. 7. STANDARDS OF OPERATION Franchisor shall establish and Franchise Owner shall maintain standards of quality, appearanc e and operation for the Franchised Business. For the purpose of giving distinctiveness to the Licensed Marks, enhancing the public image and reputation of businesses operating under the ABC System and for the purpose of increasing the demand for services and products provided by franchise owners and Franchisor, the Franchise Owner agrees to operate the Unit in strict conformity with Franchisor’s standards and all rules, regulations and policies which are by their terms mandatory, including, without limitation, those contained in the Confidential Operating Manual. Franchise Owner also agrees as follows: (a) Before commencing any construction of the Unit at which the Franchised Business is to operate, Franchise Owner shall, at its expense, furnish to Franchisor, for its approval, the following: (i) A proposed site for the operation of the Unit which shall comply with such site criteria as Franchisor may prescribe from time to time. (ii) All preliminary plans and final plans and specifications (including all changes and modifications), which must be submitted to and approved in writing by Franchisor, but shall be prepared at Franchise Owner's sole cost. Two sets of final plans with respect to the proposed Unit must be sent to Franchisor, one of which will be returned to Franchise Owner stamped “APPROVED FOR COMPLIANCE WITH ABC SYSTEM STANDARDS.” An identical set must be retained at the job site. Material modifications may be made to such plans without Franchisor’s prior written consent. Form 2.01[1] FF 2/98© STP 2011-9 (iii) All permits and certifications as may be required for the lawful operation of the Franchised Business, together with copies of any building inspection reports and certifications from all governmental authorities having jurisdiction over the Premises and the Franchised Business that all necessary permits have been obtained and that all requirements for construction and operation have been met. (iv) A copy of any proposed lease agreement, [which must be approved by Franchisor and] which shall provide Franchisor: a. The right to enter the Premises to make any modification necessary to protect the Licensed Marks and a “Collateral Assignment of Lease” in the form substantially the same as that attached hereto as Exhibit 2, executed by Franchise Owner and the lessor of the Premises, providing Franchisor notice of Franchise Owner's default of the lease, a right to cure such default and the right to assume the lease, as well as the further right to sublease or assign to an ABC System unit franchise owner (and if Franchisor exercises its rights under the Collateral Assignment of Lease, Franchisor shall have the option to acquire all fixtures, equipment and other leasehold improvements on the Premises at fair market value), or b. The right to act as prime lessee under the lease and to sub-lease such site to Franchise Owner. Any lease of the Premises shall be for a term which, with renewal options exercisable by Franchise Owner, is not less than the Initial Term of this Agreement. (b) Franchise Owner shall complete or arrange for the completion of the construction of the Unit at the Premises in accordance with the approved site and building plans and, subject to subparagraph (c) hereof, open the Franchised Business to the public not later than the earlier to occur of the following events: (i) the date on which Franchise Owner's lease of the Premises requires Franchise Owner to commence its business; or (ii) ( ) days after the Effective Date hereof. Franchise Owner shall secure to Franchisor and its agents the right to inspect the construction at any reasonable time. Franchise Owner shall correct, upon reque st and at Franchise Owner's expense, any deviation from the approved site layout and plan, and shall furnish to Franchisor a copy of the certificate of completion from Franchise Owner’s architect that the Unit was built in accordance with the approved final plans and specifications, and in compliance with the Americans With Disabilities Act, and obtain Franchisor's approval of the completed construction prior to opening all or any part of the Franchised Business for operation. In the event Franchise Owner desires to obtain a 90-day extension of the time set forth in this Paragraph 7(b), Franchise Owner must make such a request, in writing, to Franchisor—not later than 30 days pri or to such time or times therein provided—setting forth the reason for such request and the status of the construction of the ABC Restaurant and such other information as Franchisor shall require to consider Franchise Owner's request. It is understood and agreed that Franchisor shall be free to grant or deny any such requests for extension in its sole discretion. If any such extension of time is granted, Franchise Owner shall pay to Franchisor a fee of Dollars ($_______) for the first 90-day extension. If Franchise Owner requests and is granted any subsequent 90-day extensions, the fee payable to Franchisor shall be Dollars ($_______) for each subsequent extension. (c) The Franchised Business shall be opened to the public after receipt of authorization to do so by Franchisor acting in good faith, which authorization must be requested by Franchise Owner, in writing, at least 15 days in advance of Franchise Owner’s desire to open the Unit for business. (d) All fixtures, equipment and supplies for the Franchised Business selected by Franchise Owner must meet the then current quality standards set forth in Franchisor's Confidential Form 2.01[1] 2011-10© STP FF 2/98 Operating Manual or otherwise in writing, subject to compliance with applicable laws and regulations. (e) Subject to compliance with applicable laws and regulations, Franchise Owner shall acquire all signs as required by Franchisor for use at or in connection with the Franchised Business. All signage must conform to the ABC System exterior signage specifications and must be submit ted to Franchisor for approval prior to purchase and installation. (f) Franchise Owner shall make such repairs and replacements to the Premises and the Unit as Franchisor may require in order to maintain ABC System standards. (g) Prior to opening the Franchised Business to the public, Franchise Owner or, if applicable, its designated manager, shall have been certified by Franchisor as meeting Franchisor's qualifications for management at similar ABC System units. Franchise Owner agrees that the Franchised Business shall only be operated directly by Franchise Owner or by a trained manager employed by Franchise Owner who has previously been approved by Franchisor and not thereafter disapproved. Franchise Owner shall notify Franchisor in writing at least 30 days prior to employing any such manager, setting forth in reasonable detail all pertinent informat ion relative to the individual's character and business background and experience. No such trained manager shall be employed to operate the Franchised Business (or any part thereof) without Franchisor's prior consent, based upon such standards and requirements as Franchisor may from time to time speci fy, in writing or otherwise. If Franchisor rejects or later disapproves such trained manager, it shall notify Franchise Owner of the pertinent reasons therefor. Notwithstanding the right of Franchisor to protect the goodwill of the ABC System by disapproving any manager employed by Franchise Owner, such manager shall not be deemed an employee of Franchisor for any purpose whatsoever. No part of the Premises shall be leased to or managed (either directly or indirectly) by any party other than Franchise Owner without Franchisor's prior consent. In connection therewith, Franchise Owner and/or such of its designated managerial personnel as approved by Franchisor shall complete, to Franchisor's reasonable satisfaction, any and all training programs as Franchisor may reasonably require. If any trainee fails to complete the required initial training program satisfactorily, Franchisor shall notify Franchise Owner of such failure and require Franchise Owner to designate a substitute trainee. If Franchise Owner fails to designate a substitute trainee, or if the substitute trainee fails to complete such initial training to Franchisor's satisfaction, with the result being that neither Franchise Owner, nor, if applicable, a manager selected by Franchise Owner, completes initial training to the satisfaction of Franchisor prior to the time by which the Unit is required to be open for business in accordance with this Agreement, Franchisor may, in its sole discretion, elect to terminate this Agreement, in which event Franchise Owner shall be entitled to receive a refund of the initial franchise fee less any costs and expenses incurred by Franchisor in training Franchise Owner and its managerial personnel or any expenses incurred by Franchisor in connection with its review, approval and supervision of the development of such Unit, which in no event shall be less than Dollars ($ ). Any such refund shall be in full and complete satisfaction of Franchisor's obligations to Franchise Owner. Fra nchise Owner's Unit shall at all times continue to be managed by personnel who have met Franchisor's training requirements. Franchisor may, at its option, require others of Franchise Owner's initial and subsequent management employees to attend and satisfactorily complete all or any part of such training programs. All expenses incurred in training, including, without limitation, cost of travel, room, board and wages of the person(s) receiving such training shall be borne by Franchise Owner. Franchise Owner shall also bear the cost of any additional training which may be re quired Form 2.01[1] FF 2/98© STP 2011-11 by Franchisor. Franchise Owner agrees that at all times during the term of this Agreeme nt there is to be at least one employee of Franchise Owner (the “designated manager”) who: (i) Is principally responsible for the operation of the Franchised Business on a full-time, i n- person basis at the Unit, and (ii) Has attended and satisfactorily completed such training, retraining or refresher training program as Franchisor may require, at such times and places prior to the expiration of this Agreement as Franchisor may reasonably designate. (h) Franchise Owner agrees to use the Premises solely for the operation of the Franchised Business in the manner and pursuant to the standards prescribed herein, in the Confidential Operating Manual or otherwise in writing, and to refrain from using or permitting the use of the Premises for any other purpose or activity at any time. (i) Franchise Owner agrees that this Agreement shall constitute a lien upon all exterior sign facia bearing any Licensed Marks which are to be displayed on the exterior of the Premise s and in the event of any termination or expiration of this Agreement, Franchise Owner agrees to remove immediately such facia bearing any of the Licensed Marks from the Premises. If Franchise Owner fails to make such alterations within 15 days after termination or expiration of this Agreement, Franchise Owner agrees that Franchisor or its designated agents may enter upon the Premises at any time to make such alterations, at Franchise Owner's sole risk and expense, without liability for trespass. Franchisor shall be entitled to acquire all such sign facia not removed by Franchise Owner in a timely manner pursuant to this Paragraph for the sum of Ten Dollars ($10). (j) Franchise Owner agrees to maintain the Premises, and all fixtures, furnishings, signs and equipment thereon, in conformity with Franchisor's then-current standards at all times during the term of this Agreement, and to make such repairs and replacements thereto as Franchisor may require. Without limiting the generality of the foregoing, Franchise Owner specifically agrees: (i) To keep the Franchised Business at all times in a high degree of sanitat ion, repair, order and condition, including, without limitation, such periodic repainting of the exterior and i nterior of the Unit, such maintenance and repairs to all fixtures, furnishings, uniforms, signs and equipment as Franchisor may from time to time reasonably direct; (ii) To meet and maintain at all times all governmental standards and ratings applicable t o the operation of the Franchised Business or such higher minimum standards and ratings as set fort h by Franchisor from time to time in its Confidential Operating Manual or otherwise in writing; [and] (iii) To make no structural improvements to the Franchised Business or the Premises without Franchisor’s prior approval; [and] (iv) To cause its employees to wear apparel which conforms strictly to the specifications, design, color and style approved by Franchisor from time to time. (k) Franchise Owner agrees that, in order to maintain a modern, progressive, sanitary and uniform image, Franchisor shall have the right, at any time and from time to time after the expiration of ( ) years [(or sooner with respect to delivery vehicles, at least one of which Franchise Owner shall make available in connection with the operation of the Unit, in the reasonable discretion of Franchisor)] from the Effective Date, to require Franchise Owner to perform such remodeling, repairs, replacements and redecoration in and upon the Premises, equipment [(including delivery vehicles)] and furnishings used by Franchise Owner as Franchisor shall deem necessary and practical to bring the Premises, including equipment and fixtures, up to the then-current standards of newly developed ABC System units which are comparable to the Unit. Form 2.01[1] 2011-12© STP FF 2/98 (l) Franchise Owner agrees to operate the Franchised Business in conformity with such methods, standards and specifications as Franchisor may from time to time prescribe in its Confidential Operating Manual to insure that Franchisor's required degree of quality, service and image is maintained; and to refrain from deviating therefrom and from otherwise ope rating in any manner which adversely reflects on Franchisor's name and goodwill, or on the Licensed Marks. Without limiting the generality of the foregoing, Franchise Owner specifically agrees: (i) To purchase and install, at Franchise Owner's expense, all such fixtures, furnishings, signs and equipment, [and to maintain such vehicles,] all as may be required by Franchisor, and meet the specifications of the approved site layout and plan, and all other such it ems as Franchisor may prescribe from time to time; and to refrain from installing, or permitting to be installed, on or about or in connection with the Premises or the Franchised Business, any such item not meeting Franchisor's standards and specifications. (ii) To maintain in sufficient supply, and use at all times, only operating products, m aterials, supplies and expendables, including paper goods, as conform with Franchisor's then-current standards and specifications, and to refrain from using non-conforming items without Franchisor's prior consent. (iii) To sell and to offer for sale all such products, goods and services as Franchisor may, from time to time require, and only those which Franchisor may, from time to time approve, in writing, which are not subsequently disapproved, as meeting its quality standards and specifications. In addition to any remodeling, repairs, replacement and redecoration required by Paragraph 7(k) hereof, in order to introduce new products or services through all ABC System units, Franchise Owner may be required to expend additional amounts on new, different or modified equipment or fixtures necessary to offer such new services or products. [In such event, Franchise Owner shall have up to ( ) months to complete any modifications necessitated by the introduction of such new products and/or services.] (m) To permit Franchisor or its agents, at any reasonable time, to remove from the Premises, at Franchisor's option, certain samples of any products, materials, supplies and expendables without payment therefor, in amounts reasonably necessary for testing by Franchisor or any independent laboratory, to determine whether such samples meet Franchisor's then-current standards and specifications, with no liability to Franchise Owner for any damage to such samples as a result of such testing. (n) Franchise Owner shall purchase all fixtures, furnishings, signs, equipment [including delivery vehicles], inventory, uniforms, advertising materials, services, and other supplies, products and materials required for the operation of the Franchised Business solely from suppliers who demonstrate, to the continuing reasonable satisfaction of Franchisor, the ability to meet Franchisor's reasonable standards, specifications and requirements for such items regarding quality, variety, service, safety and health; who possess adequate quality controls and capacity to supply Franchise Owner's needs promptly and reliably; who have a sound financial condition and business reputation; who will supply such items to a sufficient number of franchise owners to enable Franchisor to economically monitor compliance by the supplier with the Franchisor's standards, specifications, and requirements; and who have been approved for such items in writing by Franchisor and not thereafter disapproved. If Franchise Owner desires to purchase any items from an unapproved supplier, Franchise Owner shall submit to Franchisor a written request for such approval in accordance with procedures prescribed from time to time by Franchisor. Franchisor reserves the right to increase or decrease the number of approved suppliers and to designate itself an approved supplier and to make a profit or otherwise receive value in kind or Form 2.01[1] FF 2/98© STP 2011-13 rebates from the designation of approved suppliers and/or from the sale of supplies to Franchise Owner. Practice Note Recent cases have dealt with the issue of supplying products to a franchise system. Essentially, they involved antitrust tying claims with the argument it was improper for a Franchisor to require that the Franchise Owner purchase certain nonproprietary products from the Franchisor ( see, for example, Queen City Pizza, Inc. v. Domino's Pizza, Inc. , 124 F.3d 430, Bus. Franchise Guide (CCH) ¶ 11,224, reh'g denied, 129 F.3d 724, Bus. Franchise Guide (CCH) ¶ 11,275 (3rd Cir. 1997), and Wilson v. Mobil Oil Corp., 940 F.Supp. 944, Bus. Franchise Guide (CCH) ¶ 11,048 (where the franchisor was not prohibited from requiring such purchases); and Collins v. International Dairy Queen, Inc. , Bus. Franchise Guide (CCH) ¶ 11,256 (M.D. Ga. Oct. 7, 1997) where the court denied a summary judgment motion and allowed a class action to continue with the claim that such purchase requirements were illegal. See also, Franchisor Chapter 13). (o) Unless otherwise specifically approved by Franchisor, Franchise Owner's Unit shall be open for the conduct of business at such times and for the minimum number of hours specified by Franchisor in the Confidential Operating Manual, as may be amended from time to time or, if different, for such hours as may be required by the terms of any lease of the Premises; and Franchise Owner shall at all times staff the Franchised Business with such number of employees and operate the Franchised Business diligently so as to maximize the revenues and profits therefrom. (p) Franchise Owner shall use only business stationery, business cards, marketing materials, advertising materials, printed materials or forms which have been approved in advance by Franchisor. Franchise Owner shall not employ any person to act as a representative of Franchise Owner in connection with local promotion of the Franchised Business in any public media without the prior written approval of Franchisor. Any and all supplies or materials purchased, leased or licensed by Franchise Owner shall always meet those standards specified by Franchisor in the Confidential Operating Manual or otherwise in writing. (q) In all advertising displays and materials and at the Premises, Franchise Owner shal l, in such form and manner as may be specified by Franchisor in the Confidential Operating Manual, notify the public that Franchise Owner is operating the business licensed hereunder as a franchise owner of Franchisor and shall identify its business location in the manner specified by Franchisor in the Confidential Operating Manual. [Further, at the request of Franchisor, the Franchise Owner shall display, or otherwise make available through flyers in conjunction with delivery of goods or services, literature provided by Franchisor relating to the availability of ABC Syste m franchises as supplied by the Franchisor and at such location(s), as directed by the Franchisor from time to time.] (r) Franchise Owner shall respond promptly to customer complaints and shall take such other steps as may be required to insure positive customer relations. (s) Franchise Owner hereby grants to Franchisor and its agents the right to enter upon the Premises, without notice, at any reasonable time for the purpose of conducting inspections of the Premises, Franchise Owner's books, records and register tapes, and Franchise Owner agrees to render such assistance as may reasonably be requested and to take such steps as may be necessary immediately to correct any deficiencies detected during such an inspection upon the request of Franchisor or its agents. (t) Because complete and detailed uniformity under many varying conditions may not be possible or practical, and in order to remain competitive and respond to new technology, c ustomer needs and market conditions, Franchisor specifically reserves the right and privilege, in its sole discretion and as it may deem in the best interests of all concerned in any specific instance, to vary Form 2.01[1] 2011-14© STP FF 2/98 standards for any franchise owner based upon the peculiarities of a particular site or circ umstance, density of population, business potential, population of trade area, existing business practices or any other conditions which Franchisor deems to be of importance to the successful operation of such Franchise Owner's business. Franchise Owner shall have no recourse against Franchisor on account of any variation from standard specifications and practices granted to any franc hise owner and shall not be entitled to require Franchisor to grant Franchise Owner a like or similar variation hereunder. (u) Upon Franchisor's request, Franchise Owner agrees to install, update or replace any equipment [including cash registers, and/or computers], or software designated by Franchise Owner for use pursuant to the ABC System, including, without limitation, software designed to facilitate or enhance communications (such as e-mail), software designed for the purpose of recording receipts at point of sale, and to utilize equipment including locked totaling devices and software of such kind and in such manner as is specified by Franchisor in the Confidential Operating Manual or otherwise in writing. (v) Franchise Owner hereby grants to Franchisor the right to take such steps as are necessary t o manage the Franchised Business for the account of Franchise Owner in the event of Franchise Owner's death or in the event that an independent third party (such as a medical doctor) reasonably determines that Franchise Owner is incapacitated or incapable of running the Franchised Business, and to receive a reasonable fee for such services. 8. CONFIDENTIAL OPERATING MANUAL (a) In order to protect the reputation and goodwill of the businesses operating under the ABC System and to maintain standards of operation under the Licensed Marks, Franchise Owner shall conduct the Franchised Business operated under the ABC System in accordance with various written instructions and confidential manuals (hereinafter and previously referred to as the “Confidential Operating Manual”), including such amendments thereto, as Franchisor may publish from time to time, all of which Franchise Owner acknowledges belong solely to Franchisor and shall be on loan from Franchisor during the term of this Agreement. When any provision in this Agreement requires that Franchise Owner comply with any standard, specification or requirement of Franchisor, unless otherwise indicated, such standard, specification or requirement shall be such as is set forth in this Agreement or as m ay, from time to time, be set forth by Franchisor in the Confidential Operating Manual. (b) Franchise Owner shall at all times use its best efforts to keep the Confidential Operating Manual and any other manuals, materials, goods and information created or used by Franchisor and designated for confidential use, within the ABC System and the information contained therein as confidential and shall limit access to employees of Franchise Owner on a need-to-know basis. Franchise Owner acknowledges that the unauthorized use or disclosure of Franchisor's confidential information or trade secrets will cause irreparable injury to Franchisor and that damages are not an adequate remedy. Franchise Owner accordingly covenants that it shall not at any time, without Franchisor's prior written consent, disclose, use, permit the use thereof (except as may be required by applicable law or authorized by this Agreement), copy, duplicate, record, transfer, transmit or otherwise reproduce such information, in any form or by any means, in whole or in part, or otherwise make the same available to any unauthorized person or source. Any and all information, knowledge and know-how not known about the ABC System and Franchisor's products, services, standards, procedures, techniques and such other information or material as Franchisor may designate as confidential shall be deemed confidential for purposes of this Agreement. Form 2.01[1] FF 2/98© STP 2011-15 (c) Franchise Owner understands and acknowledges that Franchisor may, from time to time, revise the contents of the Confidential Operating Manual to implement new or different requirements for the operation of the Franchised Business, and Franchise Owner expressly agrees to comply with all such changed requirements which are by their terms mandatory; provided that such requirements shall also be applied in a reasonably nondiscriminatory manner to comparable businesses operated under the ABC System by other franchise owners. The implementation of such requirements may require the expenditure of reasonable sums of money by Franchise Owner. (d) Franchise Owner shall at all times insure that its copy of the Confidential Operating Manual is kept current and up to date. In the event of any dispute as to the contents thereof, the terms and dates of the master copy thereof maintained by Franchisor at its principal place of business shall be controlling. Form 2.01[1] 2011-16© STP FF 2/98 9. ADVERTISING AND MARKETING Recognizing the value of standardized advertising and marketing programs to the furtherance of the goodwill and public image of the ABC System, and in order to enable such programs in an effective and consistent manner, the parties agree as follows: (a) Franchisor or its designee shall exclusively maintain and administer any ABC Advertising Program (“Program”) for national and/or regional advertising, public relations and marketing programs and market research (“Advertising”) and shall direct all such Advertising with sole discretion over the concepts, materials and media used therein. All advertising a nd marketing fees paid by Franchise Owner pursuant to Paragraph 5(b)(ii) hereof shall be part of such Program. Franchisor shall have the sole right to enforce the obligations of Franchise Owner, and all other franchise owners of the ABC System who are obligated to contribute to the Program, and neither Franchise Owner nor any other franchise owners of Franchisor who shall be obligated to contribute to the Program shall be deemed a third party beneficiary with respect to said Program or have any right to enforce any obligation to contribute thereto. Franchise Owner understands and acknowledges that the Program is intended to maximize general public recognition and a cceptance of the Licensed Marks for the benefit of the ABC System as a whole and that Franchisor and its designee undertake no obligation in administering the Program to insure that any particular franchise owner benefits directly or pro rata from the Advertising. No part of the Program shall be used by Franchisor to defray any of its general operating expenses other than those reasonably allocable to such Advertising, or other activities reasonably related to the administration or direction of the Program. [Franchisor may, in its sole discretion from time to time, adva nce monies to the Program and charge the Program interest on such advances at an annual rate of one percent above the prime rate then designated by Bank (or if no such rate is then so being designated, at such annual rate as reasonably determined by Franchisor as an equivalent rate) and may authorize repayment of such advances from the Program, all in accordance with suc h terms as Franchisor deems necessary or appropriate.] Franchise Owner agrees that the Program may otherwise be used to meet any and all costs incident to such Advertising, including joint or collective advertising campaigns of Franchisor's direct or indirect parent corporations or subsidiaries thereof or affiliated companies using the ABC System. In addition, Franchisor shall have the right to expend all, or any portion of, the monies in the Program for cooperative advertising or promotional programs on a regional or local basis; provided, however, that such programs shall be available to all similarly situated franchise owners as determi ned by Franchisor in its Reasonable Business Judgment. Furthermore, Franchisor reserves the right to terminate the Program, but in such event will spend or use all remaining Program assets for Advertising. (b) Franchisor shall administratively segregate all contributions to the Program on its books and records. All such payments to the Program may be deposited in Franchisor's general operating account; may be commingled with Franchisor's general operating funds; and may be deemed an asset of Franchisor, subject however to Franchisor's obligation to expend the monies in the Program in accordance with the terms hereof. Franchisor shall furnish Franchise Owner with annual financial statements of the Program, certified to be correct by an officer of Franchisor. Franchisor may, in its sole discretion, elect to accumulate monies in the Progra m for such periods of time as it deems necessary or appropriate, with no obligation to expend all monies received in any fiscal year during such fiscal year. In the event Franchisor's expenditures for Advertising in any one fiscal year shall exceed the total amount contributed to the Program during such fiscal year, Franchisor shall have the right to be reimbursed to the extent of such excess contributions from any amounts subsequently contributed to the Program or to use such excess as a credit agai nst its future contributions. The parties do not intend that the Program be deemed a trust. Form 2.01[1] FF 2/98© STP 2011-17 (c) At its expense and exclusive of any sums paid to the Program, Franchise Owner agrees to conduct on an annual basis continuing local advertising in form, content and media approved by Franchisor, in an amount equal to not less than ( %) of Franchise Owner's prior calendar year's Gross Volume of Business. [During the first 12 months following commencement of business at the Unit, Franchise Owner agrees to expend on continuing local advertising, an amount equal to not less than percent ( %) of Franchise Owner's prior month's Gross Volume of Business, and to submit evidence of such expenditures to Franchisor no later than the tenth day of the fourth, seventh, tenth and thirteenth months following commencement of operations at the Unit.] [The value of any promotions and deductions (e.g., coupons, buy one—get one free) or other promotional allowances which are excluded from the definition of the Gross Volume of Business in Paragraph 5(f) hereof shall not be entitled to be included in any amounts which Franchise Owner is required to expend under this Paragraph 9(c) on local advertising.] Franchise Owner shall submit evidence of any such expenditures to Franchisor on an annual basis not later than January 31st of each year for the preceding calendar year. In the event that Franchise Owne r shall fail to expend such sums on local advertising during any calendar year, Franchisor may, immediately upon notice provided to Franchise Owner, assess Franchise Owner for any such deficiency, which shall be deposited to and become part of the Program. (d) In addition to the local advertising requirements under Paragraph 9(c) above, Franchise Owner agrees to expend an additional amount of at least Dollars ($ ) on promotion and advertising of the Franchised Business during the period ending ( ) days following the opening of the Franchised Business (“Grand Opening Advertising”). Franchise Owner shall pay the sum of Dollars ($ ) to Franchisor prior to and as a precondition of opening the Unit. Franchise Owner shall notify Franchisor of all Grand Opening Advertising expenses it desires to incur and, if such expenses otherwise comply with this Agreement, Franchisor shall promptly return such amounts (up to the aggregate of Dollars ($ ) to Franchise Owner for such purposes. Any Grand Opening Advertising money not so expended by Franchise Owner shall be turned over to the Program as described in Paragraph 9(a) hereof to be used for Program purposes without any allocation or credit for such amounts being given to Franchise Owner. (e) Franchisor may provide Franchise Owner, from time to time, with local advertising and marketing materials, including without limitation newspaper mats, radio commercial tapes, merchandising materials, sales aids, special promotions and similar advertising at a reasonable price, plus handling. (f) Franchise Owner, at its expense and exclusive of any fees paid to the Program, and exclusive of any local advertising under Paragraph 9(c) above, shall: (i) Obtain listings of the Franchised Business in the white and yellow pages of all local telephone directories of the kind and size specified from time to time by Franchisor for all comparable ABC System units; and (ii) Obtain and maintain any special promotional materials of the kind and size as Franchisor may from time to time require for comparable ABC System units. (g) Franchise Owner shall submit (through the mail, return receipt requested) to Franchisor for its prior approval (except with respect to prices to be charged), samples of all Advertising to be used by Franchise Owner that have not been prepared or previously approved by Franchisor or its designated agents. Form 2.01[1] 2011-18© STP FF 2/98 (h) Franchise Owner shall participate in all cooperative advertising and/or marketing programs as are from time to time prescribed by Franchisor. The terms and conditions required for participation in any such co-op advertising program or programs shall be as specified in the Confidential Operations Manual. (i) Franchisee agrees to participate in all advertising and marketing programs desginated by Franchisor as mandatory. 10. STATEMENTS, RECORDS AND FEE PAYMENTS (a) Franchise Owner shall, in a manner satisfactory to Franchisor, and in accordance with generally accepted accounting principles, maintain original, full and complete regi ster tapes, other records, accounts, books, data, licenses, contracts and product supplier invoices which shall accurately reflect all particulars relating to Franchise Owner's business and such statistical and other information or records as Franchisor may require and shall keep all such information for not less than 3 years, even if this Agreement is no longer in effect. Upon Franchisor's request, Franchise Owner shall furnish Franchisor with copies of any or all product supply invoices reflecting purchases by or on behalf of the Franchised Business. In addition, Franchise Owner shall compile and provide to Franchisor any statistical or financial information regarding the operation of the Franchised Business, the products and services sold by it, or data of a similar nature including, without limitation, any financial data that Franchisor believes that it needs to compile or disclose in connection with the sale of franchises or that Franchisor may elect to disclose in connection with the sale of franchises. All data provided to Franchisor under this Paragraph 10 shall belong to Franchisor and may be used and published by Franchisor in connection with the ABC System. Franchisor and its designated agents shall have the right to examine and audit such records, accounts, books and data at all reasonable times to insure that Franchise Owner is complying with the terms of this Agreement. If such inspection discloses that the Gross Volume of Business during any scheduled reporting period actually exceeded the amount reported by Franchise Owner as its Gross Volume of Business, Franchise Owner shall bear the cost of such inspection and audit and shall pay any such deficiency with interest from the date due at the lesser of [18%] percent per year of such overdue amount or the highest rate permitt ed by applicable law, immediately upon the request of Franchisor. (b) No later than the ( th) day of each [month] Franchisor shall have received from Franchise Owner, on forms prescribed by Franchisor, statements stating the fees due to Franchisor during the preceding [month] itemized by revenue producing activity as specified from time to time by Franchisor, the Gross Volume of Business at the Premises for the prior [month] and such other information as Franchisor may require, all signed and certified as true and correct by an authorized agent of Franchise Owner. Together with such statements, Franchise Owner shall pay Franchisor all amounts due hereunder with respect to the period of time covered by each such statement. (c) Upon Franchisor's request, Franchise Owner shall furnish Franchisor with a copy of each of its reports and returns of sales, use and gross receipt taxes and complete copies of any state or federal income tax returns covering the operation of the Franchised Business, all of which Franchise Owner shall certify as true and correct. (d) Franchise Owner shall prepare and deliver to Franchisor on a monthly basis, no later than the 15th day of each month, an unaudited profit and loss statement in a form satisfactory to Franchisor acting in its sole and subjective discretion covering Franchise Owner's business for t he prior month and such additional reports as Franchisor may require, all of which shall be certified by Franchise Owner as true and correct. Franchise Owner shall also submit to Franchisor by Form 2.01[1] FF 2/98© STP 2011-19 [March 1] and [September 1] of each year during the term of this Agreement, an unaudited balanc e sheet reflecting the financial position of the Franchised Business as of the preceding [December 31] and [June 30]. In addition, Franchise Owner, as well as any guarantor(s) of this Agreement, shall, within 60 days after request from Franchisor, deliver to Franchisor a financial statement, certified as correct and current, in a form which is satisfactory to Franchisor and which fairly represents the total assets and liabilities of Franchise Owner and any such guarantor(s). Form 2.01[1] 2011-20© STP FF 2/98 (e) Within 90 days after the close of each fiscal year of Franchise Owner, Franchise Owner shall furnish to Franchisor financial statements which shall include a statement of income and retained earnings, a statement of changes in financial position, and a balance sheet of Franchise Owner, all as of the end of such fiscal year, which shall be certified to by Franchise Owner as being true and correct. (f) Upon the request of Franchisor, in addition to the foregoing unaudited statements, within 90 days after the close of each fiscal year of Franchise Owner, Franchise Owner shall furnish to Franchisor, at Franchise Owner's expense, an audited statement of income and retained e arnings of Franchise Owner for such fiscal year and an audited balance sheet of Franchise Owner as of the end of such fiscal year,