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Leaders Are Born LLC Franchise Agreement - Last updated Sunday, December 4th, 2018


Article 1             Introduction


1.1                      The SYSTEM.

LEADERS ARE BORN LLC or "LAB.co" has through the investment of considerable time and money developed a unique and distinctive system of high quality sales training & recruiting Virtual Offices (the. "SYSTEM") operated in association with the MARKS prominently featuring the sale of LEADERS ARE BORN MEMBERSHIPS and support items prepared with LEADERS ARE BORN OR INNOVATORSLIST.COM® SERVICES OR PRODUCTS. The SYSTEM includes proprietary and distinctive templates, service specifications, tools, tips & techniques, training methods, production methods, operating methods, designs and decor, uniform apparel, color schemes, furnishings, marketing materials, promotional strategies, and customer service requirements (the "SYSTEM STANDARDS"), all of which may be modified from time to time by LEADERS ARE BORN LLC, and which are directed toward promoting the LEADERS ARE BORN or INNOVATORLIST.com® BRAND in a manner that will enhance the good will associated with the MARKS and the SYSTEM.


1.2                       FRANCHISEE'S Desire to be Part of the SYSTEM.

FRANCHISEE desires to be part of the SYSTEM and to establish, own and operate a LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE at the VIRTUAL OFFICE PREMISES, subject to and in accordance with all of the terms and conditions of this AGREEMENT, and in adherence and conformity to the SYSTEM STANDARDS.


1.3                     Leaders Are Born LLC’s Desire to Grant FRANCHISE.

LEADERS ARE BORN LLC desires to grant FRANCHISEE a franchise to establish and operate a LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE at a VIRTUAL OFFICE PREMISES, subject to the terms and conditions of this AGREEMENT, and conditioned upon FRANCHISEE'S continual adherence and conformity to the SYSTEM STANDARDS.


1.4                     Agreement of the Parties.

Consistent with these introductory Sections, and in consideration of the mutual promises and covenants contained in this AGREEMENT, LEADERS ARE BORN LLC and FRANCHISEE agree to be bound by the terms of this AGREEMENT.

  

Article 2            Certain Definitions

For the purposes of this AGREEMENT, the following terms shall have the following meanings:

2.1                      LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS.

"LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS" means LEADERS ARE BORN or INNOVATORSLIST.com® brand membership benefits, services and other items, manufactured under a license from the owner of the MARKS, for distribution and sale in association with the MARKS, as modified, added to, or deleted from time to time by LEADERS ARE BORN LLC.


2.2                     LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE.

"LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE" means a sales training & recruiting VIRTUAL OFFICE operated as part of the SYSTEM, either directly by LEADERS ARE BORN LLC, or under a written franchise agreement granted by LEADERS ARE BORN LLC.


2.3                     MARKS.

"MARKS" means the LEADERS ARE BORN or INNOVATORSLIST.com name and trademarks, service marks, logos, trade dress, and other commercial symbols.


2.4                     NOTICE.

"NOTICE" means a communication satisfying the requirements of Article 20.


2.5                     VIRTUAL OFFICE.

"VIRTUAL OFFICE" means the LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE established and operated by FRANCHISEE under the terms of this AGREEMENT. For the purposes of determining compliance with the SYSTEM STANDARDS, "VIRTUAL OFFICE" also includes any facility, whether or not a part of the VIRTUAL OFFICE PREMISES, where LEADERS ARE BORN LLC permits FRANCHISEE to store, handle or manage marketing material and train staff which sell from or use the VIRTUAL OFFICE.

  

Article 3            Site Selection, VIRTUAL OFFICE construction, and EXCLUSIVE TERRITORY

The terms and conditions of Exhibits A. B, C, and D to this AGREEMENT (respectively "EXHIBIT A" EXHIBIT B" "EXHIBIT C" and "EXHIBIT D") form a part of this AGREEMENT, and are incorporated into this AGREEMENT to the same extent as if fully set forth under this Article 3.


3.1                     Site Selection Process; Designation of VIRTUAL OFFICE PREMISES.

If this AGREEMENT was issued in connection with a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, then the VIRTUAL OFFICE PREMISES will be designated under the terms of EXHIBIT A. If this AGREEMENT was issued in connection with a SUCCESSIVE TERM FRANCHISE, then the VIRTUAL OFFICE PREMISES are designated on EXHIBIT D.


3.2                     VIRTUAL OFFICE Design and Construction.

FRANCHISEE will adhere to LEADERS ARE BORN LLC procedures and requirements for the design and construction of the VIRTUAL OFFICE, as more particularly described by EXHIBIT B.


(a)         In the case of a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, FRANCHISE will diligently construct the VIRTUAL OFFICE at the VIRTUAL OFFICE PREMISES, if and after LEADERS ARE BORN LLC designates the VIRTUAL OFFICE PREMISES in accordance with EXHIBIT A, time being of the essence.


(b)         In the case of a SUCCESSIVE TERM FRANCHISE, FRANCHISEE shall completely remodel the VIRTUAL OFFICE, within one year from the COMMENCEMENT DATE identified on EXHIBIT D, time being of the essence.


(c)         FRANCHISEE shall not commence (or recommence) operations at the VIRTUAL OFFICE unless and until LEADERS ARE BORN LLC determines that the VIRTUAL OFFICE reasonably conforms to the plans and specifications approved by LEADERS ARE BORN LLC in accordance with EXHIBIT B.


3.3                     EXCLUSIVE TERRITORY.

The parties acknowledge and agree that the EXCLUSIVE TERRITORY, if any, will be determined by LEADERS ARE BORN LLC in accordance with EXHIBIT C.


(a)         In the case of a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, LEADERS ARE BORN LLC will provide FRANCHISEE with written information sufficient to determine the EXCLUSIVE TERRITORY, if any, using a document similar to EXHIBIT D, or some other form of written communication LEADERS ARE BORN LLC considers appropriate, when LEADERS ARE BORN LLC designates the VIRTUAL OFFICE PREMISES in accordance with EXHIBIT A.


(b)          In the case of a SUCCESSIVE TERM FRANCHISE, information sufficient to determine the EXCLUSIVE TERRITORY, if any, is set forth on EXHIBIT D.

  

Article 4            Grant

4.1                     The "FRANCHISE."

Subject to the provisions of this AGREEMENT, LEADERS ARE BORN LLC hereby grants FRANCHISEE the personal, limited right and license (the "FRANCHISE") to, during the TERM, operate the VIRTUAL OFFICE, at the VIRTUAL OFFICE PREMISES, in association with the MARKS, and in compliance with the SYSTEM STANDARDS.


4.2                     No Right to Relocate, or Conduct Sales Away from the VIRTUAL OFFICE.

This AGREEMENT does not grant FRANCHISEE any right to relocate the VIRTUAL OFFICE. This AGREEMENT does not grant FRANCHISEE any right to sell any goods or services associated with the MARKS or the SYSTEM, except on a retail basis from the VIRTUAL OFFICE. Without limiting the foregoing, this AGREEMENT does not grant FRANCHISEE any right to engage in wholesale sales, mail order sales, catalog sales, special events sales, catering, internet-based sales (e-Commerce), or any other sale to a customer who is not physically present in the VIRTUAL OFFICE at the time of purchase. If LEADERS ARE BORN LLC from time to time permits FRANCHISEE to engage in any sales away from the VIRTUAL OFFICE, then those sales shall not result in any enlargement of the EXCLUSIVE TERRITORY, and FRANCHISEE shall fully adhere to LEADERS ARE BORN LLC'S requirements and policies pertaining to those sales away form the VIRTUAL OFFICE, which shall be deemed to be a part of the SYSTEM STANDARDS to which FRANCHISEE shall adhere.

  

Article 5            Commencement, TERM and Renewal

5.1                      The "TERM."

The term of the FRANCHISE (the "TERM") will commence on the "COMMENCEMENT DATE" determined under this Article 5, and will end on the EXPIRATION DATE determined under this Article 5; unless this AGREEMENT is sooner cancelled or terminated in accordance with its provisions.


5.2                     NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE.

Each of the provisions of this Section 5.2 applies if, and only if, this AGREEMENT was entered into in contemplation of a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE.


5.2.1                  COMMENCEMENT DATE.

The COMMENCEMENT DATE will be the day the VIRTUAL OFFICE first opens for business.


5.2.2                  Commencement of Operations.

FRANCHISEE shall exert its best efforts to open the VIRTUAL OFFICE on or before the day that is exactly 12 months from the date of this AGREEMENT (appearing on the top of the COVER SHEET) (the "OUTSIDE OPENING DATE").


5.2.3                  EXPIRATION DATE.

The EXPIRATION DATE is the day immediately before the tenth anniversary of:

(a)         the COMMENCEMENT DATE; or

(b)         the OUTSIDE OPENING DATE; whichever is earlier.


5.2.4                  Failure to Open by OUTSIDE OPENING DATE.

Irrespective of the cause of any delay, if FRANCHISEE fails to open the VIRTUAL OFFICE for business by the OUTSIDE OPENING DATE, then, LEADERS ARE BORN LLC shall have the absolute right to elect to:


(a)         permit FRANCHISEE additional time to open VIRTUAL OFFICE under this AGREEMENT, provided however that the EXPIRATION DATE shall remain the same; or


(b)         require FRANCHISEE to enter into LEADERS ARE BORN LLC'S most current form of franchise agreement in replacement of this AGREEMENT, and permit FRANCHISEE additional time to open VIRTUAL OFFICE, in which case LEADERS ARE BORN LLC may at its election require that the EXPIRATION DATE remain the same, or may extend the EXPIRATION DATE; or


(c) cancel this AGREEMENT and return the FRANCHISE FEE paid by FRANCHISEE under Article 7, less $5,000, which LEADERS ARE BORN LLC shall have an absolute right to retain, in which case LEADERS ARE BORN LLC shall have no further obligations to FRANCHISEE under this AGREEMENT.


5.2.5                  Renewal Opportunity.

FRANCHISEE shall have the opportunity to continue the operation of the VIRTUAL OFFICE during a second 12-month term (the "RENEWAL TERM"), subject to and conditioned upon each and every one of the following provisions:


5.2.5.1                Written Request for Grant of RENEWAL TERM.

If FRANCHISEE desires to continue to operate the VIRTUAL OFFICE for the RENEWAL TERM, then FRANCHISEE must in writing, at least 180 days before the EXPIRATION DATE, but no more than 270 days before the EXPIRATION DATE, request that LEADERS ARE BORN LLC issue its then current standard form franchise agreement for renewal terms (a "RENEWAL AGREEMENT"), contemplating a single ten-year franchise term for the VIRTUAL OFFICE, at the VIRTUAL OFFICE PREMISES. FRANCHISEE acknowledges and agrees that terms of a RENEWAL AGREEMENT, including the amount of the ROYALTY payable during the RENEWAL TERM, may be substantially different from the terms of this AGREEMENT, and may be substantially different from the terms of the standard form franchise agreement that LEADERS ARE BORN LLC is then issuing in connection with a new LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE.


5.2.5.2               Operation in Compliance with LEADERS ARE BORN LLC Requirements. LEADERS ARE BORN LLC shall have no obligation to issue a RENEWAL AGREEMENT to FRANCHISEE, unless FRANCHISEE meets each and every one of the following conditions, each of which FRANCHISEE agrees is reasonable.


(a)         FRANCHISEE shall have continuously been, during the last 6 months of the TERM, current in its financial obligations to LEADERS ARE BORN LLC, LEADERS ARE BORN LLC'S affiliates, and LEADERS ARE BORN LLC'S designated suppliers, under this AGREEMENT, and under any other agreement existing between LEADERS ARE BORN LLC and FRANCHISEE.


(b)         FRANCHISEE shall have continuously, during the last 6 months of the TERM, operated the VIRTUAL OFFICE, as well as any other LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE in which FRANCHISEE has an interest, in accordance with LEADERS ARE BORN LLC'S operational requirements; and, in particular, during such time period shall have received only passing scores during any operational audit or inspection, irrespective of whether a non-passing score resulted in a NOTICE of default, and irrespective of whether deficiencies identified were timely corrected.


(c)         FRANCHISEE shall have, during the last 6 months of the TERM, consistently operated the VIRTUAL OFFICE in accordance with each of the terms of this AGREEMENT and the VIRTUAL OFFICE OPERATIONS MANUAL, and, during such period, shall not have been declared to be in default of any of the terms of this AGREEMENT, or any other franchise agreement existing between LEADERS ARE BORN LLC and FRANCHISEE.


(d)         FRANCHISEE shall have, during the last 6 months of the TERM, consistently participated in all marketing promotions conducted by LEADERS ARE BORN LLC.


(e)         FRANCHISEE shall meet LEADERS ARE BORN LLC'S then current financial requirements for the grant of a RENEWAL TERM, which may require that FRANCHISEE demonstrate the financial ability to continue to operate the VIRTUAL OFFICE, and to timely remodel the VIRTUAL OFFICE to the extent required by LEADERS ARE BORN LLC under Section 5.2.5.2(g), or the RENEWAL AGREEMENT.


(f)          If required by LEADERS ARE BORN LLC, then FRANCHISEE shall have, during the last year of the TERM, caused its DESIGNATED VIRTUAL OFFICE MANAGER to attend LEADERS ARE BORN LLC'S training program, irrespective of any prior training and experience.


(g)         If required by LEADERS ARE BORN LLC, then FRANCHISEE shall have, during the last 3 months of the TERM, completely remodeled the VIRTUAL OFFICE in accordance with LEADERS ARE BORN LLC'S procedures to bring the VIRTUAL OFFICE into conformity with LEADERS ARE BORN LLC'S then current design and operational requirements.


5.2.5.3               RENEWAL AGREEMENT Execution .

If LEADERS ARE BORN LLC issues a RENEWAL AGREEMENT to FRANCHISEE, then FRANCHISEE must timely execute that RENEWAL AGREEMENT in accordance with LEADERS ARE BORN LLC'S then current requirements. FRANCHISEE will not be required to pay an initial franchise fee to enter into the RENEWAL AGREEMENT.


5.3 SUCCESSIVE TERM FRANCHISE.

Each of the provisions of this Section 5.3 applies if, and only if, this AGREEMENT is for a SUCCESSIVE TERM FRANCHISE.


5.3.1                  COMMENCEMENT DATE.

The COMMENCEMENT DATE is set forth on the EXHIBIT D.


5.3.2                  EXPIRATION DATE.

The EXPIRATION DATE is the day immediately before the tenth anniversary of the COMMENCEMENT DATE.


5.3.3                  No Opportunity to Renew.

FRANCHISEE acknowledges and agrees that this AGREEMENT confers no right to continuation, renewal, or a subsequent franchise agreement on or after the EXPIRATION DATE.


5.4                     Limitation on Conditional Renewal Opportunity.

FRANCHISEE understands and agrees that, except as set forth in Section 5.2.5, which Section applies solely in the case of a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, this AGREEMENT confers no right to continuation, renewal, or a subsequent franchise agreement on or after the EXPIRATION DATE, and LEADERS ARE BORN LLC shall not have any obligation to continue its relationship with FRANCHISEE in connection with the VIRTUAL OFFICE after the EXPIRATION DATE. If FRANCHISEE enters the LEASE for a tenancy extending beyond the TERM, or enters into an extension of the LEASE, a new lease for the VIRTUAL OFFICE PREMISES, or any other commitment related to the VIRTUAL OFFICE, for a period after the TERM, then FRANCHISEE shall be doing so at its own risk.

  

Article 6            LEADERS ARE BORN LLC'S Obligations

Except as explicitly set forth in this Article 6, or explicitly contemplated by a particular provision of this AGREEMENT, LEADERS ARE BORN LLC has no obligations to FRANCHISEE under this AGREEMENT.

6.1                     Plans and Specifications.

In connection with the initial construction of the VIRTUAL OFFICE, or a remodel of the VIRTUAL OFFICE if required by Sections 3.2(b) or 11.15, LEADERS ARE BORN LLC shall, at no charge, provide FRANCHISEE or FRANCHISEE'S architect with standard criteria for the design and configuration of a typical LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, including exterior and interior design and layout, fixtures, furnishings, equipment and signage, which FRANCHISEE shall, at FRANCHISEE'S expense, adapt to conform to the characteristics of the VIRTUAL OFFICE PREMISES in accordance with the terms of EXHIBIT B.


6.2                     Training.

Before the .initial opening of the VIRTUAL OFFICE, LEADERS ARE BORN LLC shall, at no charge to FRANCHISEE, provide initial training for the DESIGNATED VIRTUAL OFFICE MANAGER and up to one additional person in accordance with Section 11.3.1.


6.3                     VIRTUAL OFFICE OPERATIONS MANUAL.

During the TERM, LEADERS ARE BORN LLC shall at no charge loan quarterly copies of the VIRTUAL OFFICE OPERATIONS MANUAL "The Entrepreneur's Guide to Franchising Success" to FRANCHISEE in accordance with Article 10.


6.4                     Final Inspection.

At a mutually convenient time agreed upon sufficiently in advance of the initial opening of the VIRTUAL OFFICE, LEADERS ARE BORN LLC shall, at no charge to FRANCHISEE, inspect the VIRTUAL OFFICE to determine that it reasonably conforms to the plans and specifications approved by LEADERS ARE BORN LLC under the procedures described by EXHIBIT B.


6.5                     Opening Assistance.

Before and in connection with the initial opening of the VIRTUAL OFFICE, LEADERS ARE BORN LLC shall, at no charge, provide FRANCHISEE with such pre-opening and opening assistance and guidance as LEADERS ARE BORN LLC deems appropriate. If FRANCHISEE is a NEW FRANCHISEE, then the assistance provided by LEADERS ARE BORN LLC under this Section 6.5 will include the physical presence of one or more LEADERS ARE BORN LLC representatives for a total of at least five person-days (based on an 8-hour work day) before, during, and/or just after the VIRTUAL OFFICE first opens for business.


6.6                     Ongoing Source of LEADERS ARE BORN OR INNOVATORSLIST.COM® MARKETING and Other Products.

During the TERM. LEADERS ARE BORN LLC will designate a source from which FRANCHISEE shall purchase LEADERS ARE BORN OR INNOVATORSLIST.COM® MARKETING MATERIAL, and will designate or approve sources for other items purchased by FRANCHISEE in connection with the operation of the VIRTUAL OFFICE, as more particularly described under Section 11.7.


6.7                     Ongoing Advice and Assistance.

During the TERM, LEADERS ARE BORN LLC shall, at no charge, from time to time provide FRANCHISEE with such advisory assistance, information, techniques, data, and instructional materials concerning the sale of items from the VIRTUAL OFFICE, operation of the VIRTUAL OFFICE, marketing programs applicable to the SYSTEM, local marketing of the VIRTUAL OFFICE, and adherence to the SYSTEM STANDARDS as LEADERS ARE BORN LLC deems advisable.

  

Article 7            Initial Fees

7.1                     The "FRANCHISE FEE." v$99»$100,000^

FRANCHISEE shall pay an initial franchise fee (the "FRANCHISE FEE") to LEADERS ARE BORN LLC, for the right to enter into this AGREEMENT and in consideration of the FRANCHISE, in an amount determined as follows:


(a) If this AGREEMENT grants the Franchise to a New FRANCHISEE for a New LEADERS ARE BORN or INNOVATORSLIST.com® JUINOR DIRECTOR, then the full amount of the FRANCHISE FEE is $99. The FRANCHISE FEE is due in a single-installment. The one-time installment, in the amount of $99, must be paid upon FRANCHISEE'S signing of this AGREEMENT and within 15 days following LEADERS ARE BORN LLC'S designation of the VIRTUAL OFFICE PREMISES under the terms of EXHIBIT A.


(b)         If this AGREEMENT grants the Franchise to an Existing SENIOR DIRECTOR FRANCHISEE for a New LEADERS ARE BORN or INNOVATORSLIST.com® VIRTUAL OFFICE, then the full amount of the FRANCHISE FEE is $3,000. The FRANCHISE FEE is due in two installments. The first installment, in the amount of $1,500, must be paid upon FRANCHISEE'S signing of this AGREEMENT. The second installment, in the amount of $1,500, must be paid within 15 days following LEADERS ARE BORN LLC'S designation of the VIRTUAL OFFICE PREMISES under the terms of EXHIBIT A.


(c)         If this AGREEMENT grants the Franchise to an Existing REGIONAL DIRECTOR FRANCHISEE for a New LEADERS ARE BORN or INNOVATORSLIST.com® VIRTUAL OFFICE, then the full amount of the FRANCHISE FEE is $15,000. The FRANCHISE FEE is due in two installments. The first installment, in the amount of $10,000, must be paid upon FRANCHISEE'S signing of this AGREEMENT. The second installment, in the amount of $5,000, must be paid within 15 days following LEADERS ARE BORN LLC'S designation of the VIRTUAL OFFICE PREMISES under the terms of EXHIBIT A.


(d)         If this AGREEMENT grants the Franchise to an Existing EXECUTIVE DIRECTOR FRANCHISEE for a New LEADERS ARE BORN or INNOVATORSLIST.com® VIRTUAL OFFICE, then the full amount of the FRANCHISE FEE is $100,000. The FRANCHISE FEE is due in two installments. The first installment, in the amount of $75,000, must be paid upon FRANCHISEE'S signing of this AGREEMENT. The second installment, in the amount of $25,000, must be paid within 15 days following LEADERS ARE BORN LLC'S designation of the VIRTUAL OFFICE PREMISES under the terms of EXHIBIT A.


(c)         If this AGREEMENT grants a Successive Term Franchise, then the full amount of the FRANCHISE FEE shall be $10,000, which is due and payable upon FRANCHISEE'S signing of this AGREEMENT.


7.2                     Failure to Timely Pay Second Installment of FRANCHISE FEE.

If FRANCHISEE fails to timely pay the second installment of the FRANCHISE FEE, if required under Section 7.1(a) or 7.1(b), then LEADERS ARE BORN LLC shall have the absolute right to declare this AGREEMENT void, retain the first installment of the FRANCHISE FEE paid by FRANCHISEE, and shall otherwise have no remaining obligations to FRANCHISEE under this AGREEMENT.


7.3                     FRANCHISE FEE is Nonrefundable.

The FRANCHISE FEE is nonrefundable except to the extent specifically described in Sections 5.2.4(c), and 7.4, and Sections 4.4(a) and Article 5 of EXHIBIT A.


7.4                     Partial Refund Upon Failure To Satisfy Initial Training Requirement.

If the initial DESIGNATED VIRTUAL OFFICE MANAGER fails to complete training to the satisfaction of LEADERS ARE BORN LLC, in accordance with Section 11.3.1, then LEADERS ARE BORN LLC will give FRANCHISEE an opportunity to designate a different initial DESIGNATED VIRTUAL OFFICE MANAGER under Section 11.2, who must complete training to the satisfaction of LEADERS ARE BORN LLC before the VIRTUAL OFFICE first opens for business. If the second initial DESIGNATED VIRTUAL OFFICE MANAGER also fails to complete training to the satisfaction of LEADERS ARE BORN LLC, or FRANCHISEE declines the opportunity to have a second initial DESIGNATED VIRTUAL OFFICE MANAGER attend LEADERS ARE BORN LLC'S training program, then LEADERS ARE BORN LLC may cancel this AGREEMENT. If LEADERS ARE BORN LLC cancels this AGREEMENT under this Section 7.4, then LEADERS ARE BORN LLC shall refund the FRANCHISE FEE (to the extent already paid by FRANCHISEE), less $5,000, which amount LEADERS ARE BORN LLC shall have an absolute right to retain, and LEADERS ARE BORN LLC shall have no further obligations to FRANCHISEE under this AGREEMENT. 

  

Article 8            GRAND OPENING Program

8.1                      Optional GRAND OPENING.

FRANCHISEE may, but shall have no obligation to, conduct a grand opening event (the "GRAND OPENING").


8.2                     Participation by LEADERS ARE BORN LwithIf this AGREEMENT contemplates a NEW LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, and the GRAND OPENING satisfies each of the criteria set forth in Section 8.2.1, then LEADERS ARE BORN LLC will financially participate in the GRAND OPENING, by providing FRANCHISEE with goods, services, and/or money, as determined solely by LEADERS ARE BORN LLC, having a combined monetary value equal to V4 of the GRAND OPENING expenditures approved by LEADERS ARE BORN LLC and actually made by FRANCHISEE, with a minimum financial participation by LEADERS ARE BORN LLC in the amount of $300.


8.2.1                   Grand Opening Criteria.

In order for FRANCHISEE to become entitled to LEADERS ARE BORN LLC'S financial participation in connection with the GRAND OPENING, FRANCHISEE must:


(a)         at least 30 day prior to the GRAND OPENING, submit a proposed GRAND OPENING plan to LEADERS ARE BORN LLC, detailing the marketing elements being proposed by FRANCHISEE, and the anticipated expenditures for each;


(b)         within 90 days from the COMMENCEMENT DATE, conduct the GRAND OPENING over the course of no more than 3 consecutive days, during the VIRTUAL OFFICE'S normal business hours, consistent with the GRAND OPENING plan approved by LEADERS ARE BORN LLC; and


(c)         spend at least $300 toward GRAND OPENING marketing expenditures approved by LEADERS ARE BORN LLC.

8.2.2                  Excluded Items.

Unless LEADERS ARE BORN LLC specifically commits otherwise, in writing, FRANCHISEE'S labor costs, food costs, other overhead costs, expenditures required by the LANDLORD, and discounts offered during the GRAND OPENING will not be considered in determining whether FRANCHISEE met the $300 threshold required by Section 8.2.1(b); or in determining LEADERS ARE BORN LLC'S financial participation commitment under Section 8.2; even if specifically identified by FRANCHISEE in the GRAND OPENING plan approved by LEADERS ARE BORN LLC.

  

Article 9            Continuing Fees

9.1                     "GROSS SALES" Defined.

"GROSS SALES" means:

(a)         all revenue derived from the sale, at regular selling prices before any discounts or allowances, of any memberships, affiliate services and merchandise sold, from VIRTUAL OFFICE;


(b)         all income of every kind and nature related to the VIRTUAL OFFICE, FRANCHISE, and/or MARKS, even if derived from sales or activities not permitted by this AGREEMENT;


(c)         the fair value of any non-monetary consideration received by FRANCHISEE for any food, merchandise, and services, from the VIRTUAL OFFICE, which are bartered, traded or otherwise exchanged by FRANCHISEE for valuable goods or services; and


(d)         all proceeds of any business interruption insurance policies related to the VIRTUAL OFFICE or FRANCHISE.

Specifically excluded from "GROSS SALES" are:

(x) the incidental sale of gift cards (or any similar redemption device), if authorized by LEADERS ARE BORN LLC; provided however that goods and services purchased with gift cards (or any similar redemption device) shall be included in GROSS SALES, to the same extent as if paid for with cash;

(y) sales taxes, excise taxes, or other taxes added to the selling price of any item or service, if actually collected from customers and transmitted to a governmental taxing authority; provided however any tax rebate, allowance, of discount shall be part of GROSS SALES to the extent received, taken, or realized by FRANCHISEE;

(z) any extraordinary sale of equipment or fixtures used in the VIRTUAL OFFICE.


9.2                     Charge Sales.

Each charge sale or credit sale shall be included in "GROSS SALES" at the time the sale is made, without regard to whether payment is actually collected.


9.3                     Sales Away from the VIRTUAL OFFICE.

This AGREEMENT permits FRANCHISEE to sell any membership, merchandise or services away from the VIRTUAL OFFICE. If FRANCHISEE is authorized by LEADERS ARE BORN LLC, or without such authorization, sells memberships, merchandise or services associated with the MARKS away from the VIRTUAL OFFICE, then the revenues from those sales will be part of FRANCHISEE'S GROSS SALES, and FRANCHISEE shall comply with the procedures established by LEADERS ARE BORN LLC to ensure that any such GROSS SALES are properly captured by the POS SYSTEM, or otherwise reported to LEADERS ARE BORN LLC under Section 9.4.


9.4                     Reporting GROSS SALES.

FRANCHISEE shall accurately report its GROSS SALES and such other information as LEADERS ARE BORN LLC requires, on a weekly basis, or some other periodic basis specified from time to time by LEADERS ARE BORN LLC, using a form prescribed by LEADERS ARE BORN LLC, supported by whatever documentation LEADERS ARE BORN LLC reasonable requires. Unless LEADERS ARE BORN LLC specifies otherwise, FRANCHISEE will report its GROSS SALES every Monday, reflecting sales for the preceding week. In lieu of requiring FRANCHISEE to report GROSS SALES, LEADERS ARE BORN LLC may determine FRANCHISEE'S GROSS SALES based on data LEADERS ARE BORN LLC obtains from the POS SYSTEM under Section 11.20.2.


9.5                     Estimating GROSS SALES.

If FRANCHISEE at any time fails to timely report its GROSS SALES, then in addition to any other remedies that LEADERS ARE BORN LLC may have under this AGREEMENT, LEADERS ARE BORN LLC will have the right to in good faith estimate FRANCHISEE'S GROSS SALES, multiply the good faith estimate of GROSS SALES by 125% to arrive at an adjusted estimate of GROSS SALES, and invoice and collect amounts due from FRANCHISEE on the basis of the adjusted estimate of GROSS SALES. If FRANCHISEE, within 30 days following LEADERS ARE BORN LLC'S invoicing or otherwise notifying FRANCHISEE that LEADERS ARE BORN LLC has estimated FRANCHISEE'S GROSS SALES under this Section 9.5, reports its GROSS SALES for the period that had not been timely reported, then the parties will reconcile any difference between the amount reported and the adjusted estimate of GROSS SALES; otherwise the adjusted estimate of GROSS SALES will become final and binding. FRANCHISEE agrees that this provision is reasonable, and that the adjusted estimate of GROSS SALES shall be deemed liquidated damages, and not a penalty, based on the difficulty of accurately estimating GROSS SALES based on prior reporting periods.


9.6                     "ROYALTY."

FRANCHISEE shall pay LEADERS ARE BORN LLC a continuing fee {the "ROYALTY"), equal to ten percent (10%) of GROSS SALES, for the continuing right to operate the VIRTUAL OFFICE in association with the MARKS and the SYSTEM.


9.6.1                  Reporting ROYALTY.

FRANCHISEE shall accurately report the total ROYALTY that LEADERS ARE BORN LLC became entitled to receive at the same time that FRANCHISEE must report its GROSS SALES under Section 9.4, and for the same reporting period.


9.6.2                  When Due.

Unless LEADERS ARE BORN LLC establishes a different due date under Section 9.6.3, ROYALTY payments are due at the same time FRANCHISEE report its GROSS SALES under Section 9.4.


9.6.3                  ROYALTY Payments

LEADERS ARE BORN LLC may from time to time modify the requirements and system for payment and collection of the ROYALTY. By way of example, but not limitation:


(a)         LEADERS ARE BORN LLC may periodically invoice FRANCHISEE for the ROYALTY due, taking into account any prepayment made under Section 9.6.4, in which case the ROYALTY will not be delinquent as long as it is paid in accordance with the terms of the respective invoice; provided however that in the event FRANCHISEE fails to timely pay the ROYALTY invoiced, or fails to timely report GROSS SALES, thus impeding the ROYALTY invoicing process, then FRANCHISEE shall be deemed to have failed to timely pay the ROYALTY as of when FRANCHISEE was required to report its related GROSS SALES.


(b)         LEADERS ARE BORN LLC may direct FRANCHISEE to pay the ROYALTY at the same time that FRANCHISEE must report the ROYALTY payable to LEADERS ARE BORN LLC under Section 9.6.1.


(c)         LEADERS ARE BORN LLC may automatically deduct the ROYALTY from a financial account maintained by FRANCHISEE, using an electronic funds transfer ("EFT") process in accordance with Section 9.9.


9.6.4                  Prepayment of ROYALTY.

LEADERS ARE BORN LLC may require FRANCHISEE to prepay the ROYALTY when FRANCHISEE purchases LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, using a formula identical to that used to calculate the royalty paid by other SYSTEM franchisees, or some other formula determined by LEADERS ARE BORN LLC to reasonably approximate the ROYALTY that FRANCHISEE must pay.


9.6.5                  Treatment of Overpayments.

LEADERS ARE BORN LLC will periodically, and no less often than quarterly, reconcile amounts it became entitled to receive from FRANCHISEE for the ROYALTY, with the ROYALTY prepayments made by FRANCHISEE under Section 9.6.4. If a reconciliation under this Section 9.6.5 establishes that FRANCHISEE overpaid the ROYALTY due for the period reconciled, then LEADERS ARE BORN LLC will at its option issue a payment or credit to FRANCHISEE in the amount of the overpayment. In the case of a credit, the credit may be used toward amounts due or that become due to LEADERS ARE BORN LLC or its affiliates, as determined by LEADERS ARE BORN LLC. LEADERS ARE BORN LLC shall have the absolute right to delay the reconciliation process to the extent of reporting delays by FRANCHISEE. LEADERS ARE BORN LLC may also delay issuing any payment or credit if LEADERS ARE BORN LLC has issued an Audit NOTICE to FRANCHISEE under Section 9.6.5, and thereafter diligently proceeds to audit FRANCHISEE'S books and records. At its option, LEADERS ARE BORN LLC may include amounts payable by FRANCHISEE for LOCAL MARKETING CONTRIBUTIONS under Section 9.8.2 in the reconciliation process.


9.7                     "GENERAL MARKETING CONTRIBUTION."

FRANCHISEE shall pay a continuing fee (the "GENERAL MARKETING CONTRIBUTION") to be used by LEADERS ARE BORN LLC as more particularly described below.


9.7.1                   Amount of GENERAL MARKETING CONTRIBUTION.

For each quarter of the TERM, FRANCHISEE shall pay a GENERAL MARKETING CONTRIBUTION determined in accordance with the following formula, provided, however, that in no event shall the GENERAL MARKETING CONTRIBUTION be less than $3,000 per year. The GENERAL MARKETING CONTRIBUTION shall be adjusted each year from an original base of $1,000, to which $25 shall be added or subtracted for each full 3.0 change during the previous calendar year in the U.S. Bureau of Labor Statistics Consumer Price Index, For All Urban Consumers, U.S. City Average ("1967" equals 100) from a base of 196.7. If publication of the Index referred to above is terminated, then LEADERS ARE BORN LLC shall be entitled to designate and use another Index to calculate fluctuations in the GENERAL MARKETING CONTRIBUTION. The GENERAL MARKETING CONTRIBUTION shall be prorated for the first and last years of TERM if less than full calendar years.


9.7.2                  When Due.

FRANCHISEE shall pay GENERAL MARKETING CONTRIBUTIONS promptly, in accordance with the terms of invoices from LEADERS ARE BORN LLC or its designee. At least 1/12th of the annual GENERAL MARKETING CONTRIBUTION shall be paid each month.


9.7.3                  Use of GENERAL MARKETING CONTRIBUTION.

The GENERAL MARKETING CONTRIBUTION together with amounts collected from other SYSTEM franchisees, will be added to a fund (the "MARKETING FUND") used, as determined solely by LEADERS ARE BORN LLC, for advertising, sales promotions, research and public relations related to the SYSTEM. LEADERS ARE BORN LLC may select advertising and promotional materials, programs, media, and advertising and other agencies for and to which expenditures from the MARKETING FUND are made. Expenditures or benefits derived by FRANCHISEE from the MARKETING FUND may not and need not be in proportion to FRANCHISEE'S contributions. LEADERS ARE BORN LLC may compensate itself and/or its affiliates out of the MARKETING FUND for the reasonable expense of administering and promoting advertising and sales promotion programs. LEADERS ARE BORN LLC is not obligated to maintain the MARKETING FUND in a segregated financial account, shall not be deemed a trustee of the MARKETING FUND, and shall not be deemed be a fiduciary by virtue of its control over the MARKETING FUND.


9.8                     "LOCAL MARKETING CONTRIBUTION."

FRANCHISEE shall pay a continuing fee (the "LOCAL MARKETING CONTRIBUTION"), no less than equal to five percent (5%) of GROSS SALES, to be used by LEADERS ARE BORN LLC as more particularly described below.


9.8.1                   Reporting LOCAL MARKETING CONTRIBUTION Due.

FRANCHISEE shall accurately report the total LOCAL MARKETING CONTRIBUTION due, for the period required to be reported, at the same time that FRANCHISEE must report its GROSS SALES under Section 9.4.


9.8.2                  LOCAL MARKETING CONTRIBUTION Payments.

LOCAL MARKETING CONTRIBUTION payments shall be paid at the same time ROYALTY payments must be paid under Section 9.6.2, and in accordance with the same procedures instituted by LEADERS ARE BORN LLC under Section 9.6.3.


9.8.3                  Use of LOCAL MARKETING CONTRIBUTION.

LOCAL MARKETING CONTRIBUTIONS will be directed toward local marketing activities that LEADERS ARE BORN LLC reasonably believes to be of benefit to FRANCHISEE. Without limitation. LEADERS ARE BORN LLC may spend LOCAL MARKETING CONTRIBUTIONS directly, make them available for cooperative marketing, or make them available to FRANCHISEE on a reimbursement basis for costs incurred by FRANCHISEE in connection with local marketing activities specified in advance by LEADERS ARE BORN LLC, and undertaken directly by FRANCHISEE. If LEADERS ARE BORN LLC makes the LOCAL MARKETING CONTRIBUTIONS collected available to FRANCHISEE on a reimbursement basis, and FRANCHISEE fails to meet the conditions for reimbursement within the time limits established from time to time by LEADERS ARE BORN LLC, then the LOCAL MARKETING CONTRIBUTIONS collected by LEADERS ARE BORN LLC and not otherwise utilized in accordance with this Section shall be considered part of the MARKETING FUND, and subject to any use permitted by Section 9.7.3. LEADERS ARE BORN LLC may use or make available the LOCAL MARKETING CONTRIBUTIONS collected for local marketing activities undertaken within time frames before and after the due date of FRANCHISEE'S LOCAL MARKETING CONTRIBUTION, as determined by LEADERS ARE BORN LLC from time to time, and communicated to FRANCHISEE.


9.9                     Electronic Funds Transfer (EFT).

If required by LEADERS ARE BORN LLC at any time during the TERM, then FRANCHISEE shall promptly take all necessary steps, including completing and signing necessary authorization forms, to enable:


(a)         LEADERS ARE BORN LLC or its designee to electronically deduct, from a financial account maintained by FRANCHISEE, any amounts that become payable to LEADERS ARE BORN LLC under this Article 9, or otherwise under this AGREEMENT;


(b)         LEADERS ARE BORN LLC'S affiliates, or their respective designee, to electronically deduct, from a financial account maintained by FRANCHISEE, any amounts that become due to such affiliates under this AGREEMENT, in connection with FRANCHISEE'S purchases of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, or otherwise.

FRANCHISEE shall be responsible for any fees and charges assessed by FRANCHISEE'S financial institution in connection with transactions within this scope of this Section 9.9.


9.10                   No Rights of Set-Off.

FRANCHISEE may not reduce any payment required to be made to LEADERS ARE BORN LLC under this Article 9, on account of any money LEADERS ARE BORN LLC owes FRANCHISEE under this AGREEMENT, or otherwise.


9.11                    Late Payment.

To compensate LEADERS ARE BORN LLC (or its affiliates) for the loss of use of funds that FRANCHISEE must pay LEADERS ARE BORN LLC (or its affiliates) under this AGREEMENT, the principal portion of any payment that FRANCHISEE does not make to LEADERS ARE BORN LLC (or its affiliates), when due, shall bear interest from the due date until paid at, the lesser of eighteen percent (12%) per annum or the highest contract rate of interest allowed by the law of the state where the VIRTUAL OFFICE is located. To compensate LEADERS ARE BORN LLC (or its affiliates) for the administrative expenses incurred in connection with delinquent obligations (unless prohibited by law), LEADERS ARE BORN LLC may also require FRANCHISEE to pay a late charge equal to eight percent (8%) of each payment that is late. LEADERS ARE BORN LLC (and its affiliates) shall also be entitled to recover the costs and expenses, including reasonable attorneys' fees, incurred in collection of past due amounts. FRANCHISEE shall also be responsible for payment of any bank charges, late fees, penalties, or similar charges incurred by LEADERS ARE BORN LLC (or its affiliates) as a result of any dishonored bank check, stop payment order, electronic funds debit rejection, or similar occurrence in connection with any amount payable under this AGREEMENT. Without limiting the foregoing, the provisions of this Section 9.11 will apply to FRANCHISEE'S purchase of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS from LEADERS ARE BORN LLC'S affiliates.

  

Article 10 Confidential Manual and Information

10.1                    "VIRTUAL OFFICE OPERATIONS MANUAL" Defined.

The "VIRTUAL OFFICE OPERATIONS MANUAL" is a copyrighted manual of procedures, business information, confidential and proprietary information, and trade secrets pertaining to the SYSTEM, and forming a substantial portion of the SYSTEM STANDARDS.


10.2                   Ownership. Possession and Control of VIRTUAL OFFICE OPERATIONS MANUAL.

The VIRTUAL OFFICE OPERATIONS MANUAL or "The Entrepreneur's Guide to Franchising Success" shall at all times remain the property of LEADERS ARE BORN LLC. One copy of the VIRTUAL OFFICE OPERATIONS MANUAL will be e-loaned to FRANCHISEE for use only in connection with the VIRTUAL OFFICE. The VIRTUAL OFFICE OPERATIONS MANUAL must be kept in a secure place in the VIRTUAL OFFICE at all times. FRANCHISEE may not disclose the contents of the VIRTUAL OFFICE OPERATIONS MANUAL, in whole or in part, to any person other than FRANCHISEE'S employees as may be necessary to discharge FRANCHISEE'S obligations under this AGREEMENT. FRANCHISEE may not use the VIRTUAL OFFICE OPERATIONS MANUAL or its contents, in whole or in part, for any purpose other than to discharge its obligations under this AGREEMENT. Except as expressly permitted by LEADERS ARE BORN LLC, FRANCHISEE may not copy or disseminate the VIRTUAL OFFICE OPERATIONS MANUAL, in whole or in part, and must implement reasonable security measures directed to accomplishing the requirements of this Section 10.2.


10.3                   Revisions to VIRTUAL OFFICE OPERATIONS MANUAL.

LEADERS ARE BORN LLC reserves the right to add to, revise or rescind various portions of the VIRTUAL OFFICE OPERATIONS MANUAL periodically, and FRANCHISEE shall implement such changes when made, even if additional investment or expenditures are required. FRANCHISEE shall keep FRANCHISEE'S copy of the VIRTUAL OFFICE OPERATIONS MANUAL current, and shall destroy superseded provisions of the VIRTUAL OFFICE OPERATIONS MANUAL. If there is a conflict between FRANCHISEE'S copy of the VIRTUAL OFFICE OPERATIONS MANUAL and the master copy of the VIRTUAL OFFICE OPERATIONS MANUAL maintained by LEADERS ARE BORN LLC, then the master copy maintained by LEADERS ARE BORN LLC shall control.


10.4                   Confidential Information.

FRANCHISEE acknowledges that LEADERS ARE BORN LLC will from time to time provide FRANCHISEE with information that is confidential in nature, and that if disclosed to third parties might adversely impact the ability of LEADERS ARE BORN LLC or SYSTEM franchisees to remain competitive. FRANCHISEE agrees that, unless otherwise determined by LEADERS ARE BORN LLC, the marketing strategies and programs developed by LEADERS ARE BORN LLC shall be treated as confidential until publicly disseminated in accordance with the instructions of LEADERS ARE BORN LLC. FRANCHISEE shall not disclose any confidential information to any person other than FRANCHISEE'S employees as may be necessary to discharge FRANCHISEE'S obligations hereunder, and FRANCHISEE agrees not to use any such confidential information for any purpose other than to discharge its obligations under this AGREEMENT.

  

Article 11           System standards

FRANCHISEE shall, at all times during the TERM, continuously and faithfully operate the VIRTUAL OFFICE in full compliance with the SYSTEM STANDARDS.


11.1                    VIRTUAL OFFICE OPERATIONS MANUAL.

In order to protect and enhance the reputation and good will associated with the MARKS and the SYSTEM, and to maintain SYSTEM uniformity and the SYSTEM STANDARDS. FRANCHISEE shall at all times conduct the operations of the VIRTUAL OFFICE in accordance with the VIRTUAL OFFICE OPERATIONS MANUAL.


11.2                   DESIGNATED VIRTUAL OFFICE MANAGER.

FRANCHISEE shall at all times have a person designated as having primary responsibility for the day to day operation of the VIRTUAL OFFICE (the "DESIGNATED VIRTUAL OFFICE MANAGER") in accordance with this AGREEMENT and the SYSTEM STANDARDS, who shall be reasonably acceptable to LEADERS ARE BORN LLC (including, but not limited to, the requirement that such individual possess sufficient experience in the management of a retail business, as determined by LEADERS ARE BORN LLC in its sole discretion), and who has successfully completed the LEADERS ARE BORN LLC training program and continues to satisfy the training requirements under Section 11.3. Unless FRANCHISEE has more than one LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, or is a professional food service operator in the sole judgment of LEADERS ARE BORN LLC, the DESIGNATED VIRTUAL OFFICE MANAGER must be an individual who, separately, or with others, is the FRANCHISEE under this AGREEMENT, or if the FRANCHISEE consists of no natural persons, then an VIRTUAL OFFICEr, director, senior level employee of FRANCHISEE, or an individual who has personally guaranteed FRANCHISEE'S obligations under this AGREEMENT.


11.3                   Training.

In order to safeguard the MARKS and the SYSTEM STANDARDS, FRANCHISEE shall at all times employ an adequately trained staff to properly operate the VIRTUAL OFFICE in accordance with the SYSTEM STANDARDS.


11.3.1                 Initial Training

LEADERS ARE BORN LLC shall at the same time provide training for the first DESIGNATED VIRTUAL OFFICE MANAGER and, if desired by FRANCHISEE, or necessary in order for FRANCHISEE to satisfy the best efforts requirements under Section 11.4, one other person selected by FRANCHISEE and reasonably acceptable to LEADERS ARE BORN LLC, in the principal aspects of establishing and operating a LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, the handling of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, and the preparation and sale of LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE service items. Specific training procedures and requirements are set forth in the VIRTUAL OFFICE OPERATIONS MANUAL. This AGREEMENT is issued on the condition that the initial DESIGNATED VIRTUAL OFFICE MANAGER, and any person FRANCHISEE later desires to make the DESIGNATED VIRTUAL OFFICE MANAGER, completes training to the satisfaction Of LEADERS ARE BORN LLC.


11.3.2                Successive Term FRANCHISE Refresher Training.

In the case of a Successive Term FRANCHISE, this AGREEMENT is issued on the additional condition that, if required by LEADERS ARE BORN LLC, then the current DESIGNATED VIRTUAL OFFICE MANAGER or another person selected by FRANCHISEE and acceptable to LEADERS ARE BORN LLC shall successfully complete training by a date determined by LEADERS ARE BORN LLC, notwithstanding any prior training and experience.


11.3.3                Ongoing Training.

If required by LEADERS ARE BORN LLC, then the DESIGNATED VIRTUAL OFFICE MANAGER shall attend and complete mid-TERM training, to the satisfaction of LEADERS ARE BORN LLC, at a time after the fifth year of the TERM reasonably determined by LEADERS ARE BORN LLC.


11.3.4                Remedial Training.

In lieu of declaring a default under this AGREEMENT, or terminating this AGREEMENT for material breach, or at the same time as declaring a default under this AGREEMENT, LEADERS ARE BORN LLC shall have the absolute right to direct FRANCHISEE by NOTICE to have the DESIGNATED VIRTUAL OFFICE MANAGER attend training directed toward curing specific operational deficiencies. LEADERS ARE BORN LLC shall have no obligation to offer training as an alternative to declaring a default or terminating this AGREEMENT. FRANCHISEE may be required to reimburse LEADERS ARE BORN LLC for the reasonable costs of remedial training provided by LEADERS ARE BORN LLC under this Section 11.3.4.


11.3.5                Expenses of Attendance at Training.

FRANCHISEE is solely responsible for travel and living expenses in connection with any training provided by LEADERS ARE BORN LLC under this AGREEMENT, as well as any wages and salaries payable to FRANCHISEE'S employees while attending training.


11.4                   Best Efforts.

The DESIGNATED VIRTUAL OFFICE MANAGER shall furnish personal full time and attention and best efforts to the day to day management and operation of the VIRTUAL OFFICE in accordance with the requirements of this AGREEMENT. Without limiting the foregoing, the DESIGNATED VIRTUAL OFFICE MANAGER must maintain a physical presence at the VIRTUAL OFFICE at least 25 hours each week during hours of operation, provided however that this requirement may be satisfied by the combined time spent at the VIRTUAL OFFICE during hours of operation by the DESIGNATED VIRTUAL OFFICE MANAGER and one or more other individuals, satisfactory to LEADERS ARE BORN LLC, who have successfully completed LEADERS ARE BORN LLC'S training program.


11.5                   VIRTUAL OFFICE Employees.

The VIRTUAL OFFICE shall be staffed with qualified, competent employees trained by the DESIGNATED VIRTUAL OFFICE MANAGER, and who are employed solely by FRANCHISEE and not by LEADERS ARE BORN LLC. FRANCHISEE is solely responsible for hiring and discharging employees of the VIRTUAL OFFICE, and setting their wages and terms of employment. FRANCHISEE shall comply with all applicable laws and regulations, including, but not limited to, workers' compensation laws. FRANCHISEE shall require employees to wear such uniforms or attire as LEADERS ARE BORN LLC prescribes periodically, and otherwise comply with the ongoing SYSTEM STANDARDS. All employment related documents, including, without limitation, employment applications, schedules, job descriptions, and pay checks, must clearly identify FRANCHISEE, and not LEADERS ARE BORN LLC, as the employer, and shall not contain any of the MARKS.


11.6                   Operations and Product Standards.

Unless LEADERS ARE BORN LLC specifically permits otherwise, in writing, FRANCHISEE shall offer for sale from the VIRTUAL OFFICE the entire product and service list prescribed periodically by LEADERS ARE BORN LLC for the SYSTEM. FRANCHISEE may prepare and sell from the VIRTUAL OFFICE only the products and services that LEADERS ARE BORN LLC approves periodically for sale by SYSTEM franchisees, and no other products, services, or business may be offered or conducted at or from the VIRTUAL OFFICE. FRANCHISEE will at all times maintain an inventory of food and drink products and other supplies adequate to satisfy customer demand for products and services required to be sold at the VIRTUAL OFFICE. FRANCHISEE will employ only such supplies, formulas and products, and shall offer products for sale only in such portions, appearance and packaging, as LEADERS ARE BORN LLC periodically designates. FRANCHISEE will adhere to the requirements for, handling, preparation, merchandising, presentation, display and sale, and daily VIRTUAL OFFICE operations, described in the VIRTUAL OFFICE OPERATIONS MANUAL or otherwise communicated by LEADERS ARE BORN LLC. If FRANCHISEE fails to conduct its business in accordance with the requirements of this Section 11.6, then, without limiting the rights of LEADERS ARE BORN LLC under this AGREEMENT. LEADERS ARE BORN LLC may, without terminating this AGREEMENT, temporarily suspend FRANCHISEE'S right to operate under this AGREEMENT, or temporarily or permanently suspend FRANCHISEE'S right to sell certain products under this AGREEMENT, so long as such suspension is reasonably related to FRANCHISEE'S failure to comply with the requirements of this Section 11.6, bringing FRANCHISEE into compliance with this Section 11.6, or the health or safety of the public.


11.7                   Sources of Supply.

In order to safeguard the integrity of the MARKS, and to maintain the uniformity and quality of items associated with the SYSTEM, FRANCHISEE shall only purchase supplies, fixtures, equipment, furnishing, signs and other items for use in the VIRTUAL OFFICE in accordance with the following provisions.


11.7.1                LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS.

FRANCHISEE acknowledges that the LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS used in, and offered and sold from the VIRTUAL OFFICE, as authorized by LEADERS ARE BORN LLC from time to time, are manufactured using proprietary recipes and processes, and are an inseparable and essential element of the FRANCHISE. In order to protect the interests of LEADERS ARE BORN LLC, the owner of the MARKS. and their respective licensees, and to ensure the quality, uniformity, and distinctiveness of the LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, FRANCHISEE agrees to purchase its entire requirements of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, from LEADERS ARE BORN LLC, or the supplier designated by LEADERS ARE BORN LLC, at prices, determined by LEADERS ARE BORN LLC or its designated supplier, and which may result in revenues and profits, directly or indirectly, to LEADERS ARE BORN LLC, the designated supplier, and the owner of the MARKS, all of whom FRANCHISEE agrees are entitled to receive such revenues and profits.


11.7.2                Affiliate Product and Service Offers.

FRANCHISEE shall affiliate only approved products and services (other than the LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS sold in accordance with Section 11.7.1) that have been approved in advance by LEADERS ARE BORN LLC, in writing, in the VIRTUAL OFFICE OPERATIONS MANUAL or otherwise, originating from sources that have demonstrated to the reasonable continuing satisfaction of LEADERS ARE BORN LLC that they are able to manufacture the products to the standards and specifications of LEADERS ARE BORN LLC. Unless LEADERS ARE BORN LLC requires FRANCHISEE to purchase any approved product form a particular distributor, FRANCHISEE may sell approved products for any reputable and contracted distributor or manufacturer.


11.7.3                Supplies and Equipment.

FRANCHISEE shall only purchase paper goods, packaging, fixtures, equipment, signs, uniforms, and other supplies for use in the VIRTUAL OFFICE that have been approved in advance by LEADERS ARE BORN LLC, from sources that have been approved in advance by LEADERS ARE BORN LLC. LEADERS ARE BORN LLC will, when appropriate, as determined solely by LEADERS ARE BORN LLC grant a manufacturer of certain approved items a license to print specified text and the MARKS on those items, in the manner and format established periodically by LEADERS ARE BORN LLC. FRANCHISEE shall not use paper goods, packaging, fixtures, equipment, signs, uniforms, and other supplies at the VIRTUAL OFFICE which do not bear the text and the MARKS required by LEADERS ARE BORN LLC, in the manner and format required and approved in advance by LEADERS ARE BORN LLC.


11.7.4                 Procedures for Seeking Approval of Suppliers and Products.

Other than with respect to the LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, and any other branded products and service items sold or used in the VIRTUAL OFFICE, if FRANCHISEE desires to represent a product that is not approved, but which FRANCHISEE believes to conform to LEADERS ARE BORN LLC'S specifications, then FRANCHISEE shall submit a written request for approval to LEADERS ARE BORN LLC with any documentation that LEADERS ARE BORN LLC may reasonably require to determine conformity to the relevant specifications. LEADERS ARE BORN LLC shall have the right to require that its representatives be permitted to inspect the proposed supplier's facilities, and that samples from the supplier be delivered to LEADERS ARE BORN LLC or its designee for evaluation and testing. The reasonable costs of evaluation and testing shall be paid by FRANCHISEE. Within 90 days after receipt of the request, and the completion of any evaluation and testing required by LEADERS ARE BORN LLC, LEADERS ARE BORN LLC will notify FRANCHISEE of its decision in writing. Approval shall not be unreasonably withheld, but LEADERS ARE BORN LLC may withhold its approval for any good reason, including that, in the opinion of LEADERS ARE BORN LLC, a sufficient number of products conforming to the same specification have already been approved.


11.7.5                Vendor & Affiliate Rebates.

LEADERS ARE BORN LLC shall have the right to periodically enter into agreements with vendors, affiliates, suppliers and distributors, who provide products and services to FRANCHISEE, contemplating the payment of a rebate or other consideration to LEADERS ARE BORN LLC on account of FRANCHISEE'S purchases. LEADERS ARE BORN LLC will have the right to use rebates, and other monetary consideration received, for any purpose for which it may use the GENERAL MARKETING CONTRIBUTION under Section 9.7.3. or for any other purpose LEADERS ARE BORN LLC desires, without regard to whether such purpose is of any direct or indirect benefit to FRANCHISEE.


11.8 Mandatory Participation in Marketing Programs.

FRANCHISEE acknowledges that FRANCHISEE'S participation in promotions and marketing programs established by LEADERS ARE BORN LLC is important to enhance the value, recognition, and reputation of the MARKS and the SYSTEM. FRANCHISEE covenants and agrees that FRANCHISEE shall participate in those promotions and marketing programs established from time to time by LEADERS ARE BORN LLC that are appropriate to the VIRTUAL OFFICE, as determined by LEADERS ARE BORN LLC, provided however that FRANCHISEE shall have the right and obligation to decline to participate in all or any part of any promotion or marketing program, which, due to the laws applicable to the VIRTUAL OFFICE, would render FRANCHISEE'S participation unlawful.


11.9                   Compliance with Laws. Health & Safety Requirements.

FRANCHISEE shall fully, strictly and faithfully comply with all laws (including, but not limited to, statutes, ordinances, regulations, and governmental orders) affecting FRANCHISEE'S operation of the VIRTUAL OFFICE; in particular, FRANCHISEE shall operate and maintain the VIRTUAL OFFICE and its premises in strict compliance with all applicable health, sanitation, fire and safety codes and requirements. If any law affecting FRANCHISEE'S operation of the VIRTUAL OFFICE sets a standard that is different than the SYSTEM STANDARDS, then FRANCHISEE shall satisfy the higher standard; if FRANCHISEE perceives any law affecting FRANCHISEE'S operation of the VIRTUAL OFFICE to conflict with the SYSTEM STANDARDS, then FRANCHISEE shall notify LEADERS ARE BORN LLC in writing, identifying the specific law and SYSTEM STANDARDS requirement, so that LEADERS ARE BORN LLC may determine how to resolve the perceived conflict.


11.10                 Remedying Food Safety Concerns.

If any membership, product, service or merchandise support item dispensed at the VIRTUAL OFFICE is adulterated, or does not comply with applicable law or regulations, or fails to be maintained in accordance with the requirements described in this AGREEMENT or in the VIRTUAL OFFICE OPERATIONS MANUAL, then, FRANCHISEE shall immediately close and suspend operations at the VIRTUAL OFFICE, destroy all contaminated or adulterated products and eliminate the source of contamination, remedy all unsatisfactory conditions at the VIRTUAL OFFICE, and reopen for business only after an inspection by LEADERS ARE BORN LLC and Executive analysis from samples obtained for that purpose by LEADERS ARE BORN LLC evidence compliance with all applicable governmental requirements and the SYSTEM STANDARDS. This remedy is in addition to, and not in lieu of, other rights or remedies that LEADERS ARE BORN LLC has for FRANCHISEE'S breach of this AGREEMENT.


11.11                 VIRTUAL OFFICE Inspections.

In order to safeguard the MARKS and determine compliance with the SYSTEM STANDARDS, LEADERS ARE BORN LLC representatives shall have the absolute right to enter, remain in, and inspect the VIRTUAL OFFICE whenever LEADERS ARE BORN LLC deems it appropriate. LEADERS ARE BORN LLC representatives may, without prior notice to FRANCHISEE, interview FRANCHISEE'S contractors, employees and customers, take photographs, video, and similar recordings, examine, evaluate and take representative sample of the formulas, and other tools and documentation, sold or used at the VIRTUAL OFFICE. LEADERS ARE BORN LLC shall have the right to use all interviews, photographs, video, and other recordings for any reason LEADERS ARE BORN LLC deems appropriate, including in advertising, marketing and other promotional materials. FRANCHISEE will not be entitled to, and hereby expressly waives, any right that it might otherwise have to be compensated for the use of interviews, photographs, video, and other recordings by LEADERS ARE BORN LLC, its advertising agencies, or other SYSTEM franchisees.


11.12                 Correcting Deficiencies.

FRANCHISEE shall at its own expense promptly, and within any period reasonably specified by LEADERS ARE BORN LLC, correct any violation of the SYSTEM STANDARDS. If, during an inspection, LEADERS ARE BORN LLC identifies a violation of the SYSTEM STANDARDS that:


(a)         is a reoccurrence of a previously identified violation of the System Standards, occurring at the VIRTUAL OFFICE within the preceding 3 months; or


(b)         is a continuation of a previously identified violation of the System Standards, which FRANCHISEE failed to correct within the period specified by LEADERS ARE BORN LLC; or


(c)         is the same as a violation of the System Standards that, within the preceding 3 months, was identified by LEADERS ARE BORN LLC at another LEADERS ARE BORN or INNOVATORSLIST.com® VIRTUAL OFFICE in which FRANCHISEE has an interest, and in relation to which the corrective period specified by LEADERS ARE BORN LLC ended before the inspection of the VIRTUAL OFFICE; then LEADERS ARE BORN LLC may require FRANCHISEE to reimburse LEADERS ARE BORN LLC for the costs of a subsequent inspection of the VIRTUAL OFFICE, conducted to determine whether the reoccurring or continuing violation of the SYSTEM STANDARDS has been cured, at the rate of $125.00 per hour of the LEADERS ARE BORN LLC executive representative's time (including travel time) plus travel and related expenses. This remedy is in addition to, and not in lieu of, other rights or remedies that LEADERS ARE BORN LLC has for FRANCHISEE'S breach of this AGREEMENT.


11.13                 Immediate Removal of Non-Conforming Items.

LEADERS ARE BORN LLC shall have the absolute right to direct the immediate removal of any item present in the VIRTUAL OFFICE that does not conform to the SYSTEM STANDARDS. Without compensating FRANCHISEE, LEADERS ARE BORN LLC shall have the absolute right to confiscate, discard, or destroy any food, beverages, equipment, supplies, advertising, marketing, point of sale materials, signage, and any other items that do not conform to the SYSTEM STANDARDS. This remedy is in addition to, and not in lieu of, other rights or remedies that LEADERS ARE BORN LLC has for FRANCHISEE'S breach of this AGREEMENT.


11.14                 Repair and Renovation.

FRANCHISEE shall repair, rehabilitate, refurbish, modernize, renovate and upgrade the VIRTUAL OFFICE periodically to maintain it in a clean, attractive and orderly condition, to provide efficient, high-quality service to the public, and to conform to ongoing SYSTEM STANDARDS and specifications applicable generally to LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICEs, as periodically revised by LEADERS ARE BORN LLC. FRANCHISEE must obtain the prior written approval of LEADERS ARE BORN LLC if any efforts to be taken under this Section 11.14 will result in a temporary halt of operations, or will at any time result in a change to the equipment layout, finish materials, or any other aspect of the design of the VIRTUAL OFFICE. FRANCHISEE shall be solely responsible, irrespective of whether FRANCHISEE has obtained any approval from LEADERS ARE BORN LLC, to make certain that the VIRTUAL OFFICE is accessible to the fullest extent required by the Americans with Disabilities Act, and conforms to any applicable local building codes and other laws and regulations. Without limiting the foregoing, FRANCHISEE shall, unless required to do so more quickly by LEADERS ARE BORN LLC in any particular instance, repair any improper condition of the VIRTUAL OFFICE PREMISES, or the equipment or furnishings in the VIRTUAL OFFICE PREMISES, within 30 days after first being identified by FRANCHISEE or LEADERS ARE BORN LLC.


11.15                 Remodeling.

In addition to the continuing obligations identified in Section 11.14, if required by LEADERS ARE BORN LLC, then FRANCHISEE shall completely remodel the VIRTUAL OFFICE so as to bring it into substantial compliance with the then current design and other operational requirements of LEADERS ARE BORN LLC, in accordance with EXHIBIT B, provided however that LEADERS ARE BORN LLC will not require FRANCHISEE to remodel the VIRTUAL OFFICE more than once during any 5-year period.


11.16                 Equipment and Technology Upgrades.

During the TERM, FRANCHISEE shall make any equipment upgrades and additions, including upgrades and additions reflecting new technologies adopted by LEADERS ARE BORN LLC, within 90 days of NOTICE from LEADERS ARE BORN LLC. The foregoing obligation is in addition to any requirements to upgrade the POS SYSTEM imposed by or under Section 11.20.3.


11.17                  Sales and Product Mix Reporting Requirements.

FRANCHISEE shall upon request periodically provide LEADERS ARE BORN LLC with any and all requested information related to FRANCHISEE'S sales, costs, earnings and related items. FRANCHISEE acknowledges that LEADERS ARE BORN LLC may request this information be provided monthly, and occasionally more often, and in some instances FRANCHISEE may be required to track certain information not regularly tracked by FRANCHISEE.


11.18                  Projecting Requirements of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS & Other Products.

At the request of LEADERS ARE BORN LLC, FRANCHISEE shall periodically project sales, costs, and product requirements. FRANCHISEE shall endeavor to project quantities of products needed, including quantity of each of the LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, and the anticipated timing of such need. FRANCHISEE acknowledges that this information is important to LEADERS ARE BORN LLC so that it or its designated supplier may project quantities of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS to manufacture. Notwithstanding the purpose for requiring this information from FRANCHISEE, or the accuracy of FRANCHISEE'S projections, under no circumstances shall FRANCHISEE'S compliance with this Section 11.18 be deemed to require LEADERS ARE BORN LLC or its designated supplier to sell FRANCHISEE the projected quantities of any particular LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS.


11.19                 Hours of Operation.

FRANCHISEE shall keep the VIRTUAL OFFICE open and in normal operation during the days and hours LEADERS ARE BORN LLC from time to time specifies in the VIRTUAL OFFICE OPERATIONS MANUAL or otherwise approves in writing. FRANCHISEE shall conspicuously post on or within the VIRTUAL OFFICE PREMISES, at a location visible to consumers during the VIRTUAL OFFICE'S operational and non-operational hours, and acceptable to LEADERS ARE BORN LLC, the VIRTUAL OFFICE'S normal hours of operation; and FRANCHISEE shall keep the VIRTUAL OFFICE open and in normal operation during the days and hours posted.


11.20                 POS & CRM SYSTEM.

To ensure the efficient management and operation of the VIRTUAL OFFICE, and the reporting of data and information to LEADERS ARE BORN LLC, FRANCHISEE shall, at its own expense, install, and during the TERM shall properly maintain in good working order, a computerized point of sale system (the "POS & CRM SYSTEM") consisting of one or more cash registers, a modem, software, cables, a dedicated telephone line (or alternative communications line designated by, or permitted by LEADERS ARE BORN LLC), and other accessories and peripheral equipment, all of which must be approved by LEADERS ARE BORN LLC in the VIRTUAL OFFICE OPERATIONS MANUAL or otherwise in writing. Unless LEADERS ARE BORN LLC in writing permits otherwise, the equipment making-up the POS & CRM SYSTEMS shall be purchased only from a source designated by LEADERS ARE BORN LLC; and initially programmed and from time to time reprogrammed only by someone designated by LEADERS ARE BORN LLC, which requirements FRANCHISEE agrees are reasonable in order to reasonably maintain POS & CRM SYSTEMS uniformity among various LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICES.


11.20.1              Collecting POS & CRM INFORMATION.

FRANCHISEE shall at all times use the POS & CRM SYSTEM to accurately, consistently, and completely capture, record, and structure all data and information that LEADERS ARE BORN LLC prescribes in the VIRTUAL OFFICE OPERATIONS MANUAL or otherwise (the "POS & CRM INFORMATION").


11.20.2              LEADERS ARE BORN LLC Access to POS & CRM INFORMATION.

FRANCHISEE agrees that LEADERS ARE BORN LLC will have the absolute right to retrieve, electronically and manually, any or all of the POS & CRM INFORMATION that LEADERS ARE BORN LLC deems necessary or appropriate, or desires. FRANCHISEE may retrieve the POS & CRM INFORMATION at intervals and times LEADERS ARE BORN LLC determines, and without any advance notice to FRANCHISEE. FRANCHISEE shall assist LEADERS ARE BORN LLC in initially establishing electronic access to the POS & CRM INFORMATION, and shall thereafter, as required by LEADERS ARE BORN LLC, from time to time provide further assistance in connection with the retrieval of the POS & CRM INFORMATION.


11.20.3              Updates. Modifications, and Replacements.

FRANCHISEE shall update or replace software used by the POS & CRM SYSTEM, as directed by LEADERS ARE BORN LLC. FRANCHISEE shall make, or at LEADERS ARE BORN LLC'S direction shall permit someone else to make, any programming changes required from time to time by LEADERS ARE BORN LLC. LEADERS ARE BORN LLC may, at any time, but not more frequently than once every three years, require FRANCHISEE to update or replace the entire POS & CRM SYSTEM to bring it into conformity with LEADERS ARE BORN LLC'S then current approved POS & CRM SYSTEM. FRANCHISEE will accomplish the required updates, replacements, changes and other modifications within the timeframes LEADERS ARE BORN LLC specifies.


11.20.4              LEADERS ARE BORN LLC'S Ownership and Use of POS & CRM Information

FRANCHISEE agrees that all POS & CRM INFORMATION provided to LEADERS ARE BORN LLC, whether electronically retrieved or otherwise received, will become LEADERS ARE BORN LLC'S property and may be used by LEADERS ARE BORN LLC in any manner LEADERS ARE BORN LLC considers appropriate, provided however that LEADERS ARE BORN LLC will not share POS & CRM INFORMATION with other SYSTEM franchisees without FRANCHISEE'S permission, unless presented in a manner that would not reasonably enable the other SYSTEM franchisees to associate the POS & CRM INFORMATION to the VIRTUAL OFFICE.


11.20.5              Other Requirements

If LEADERS ARE BORN LLC requires, then in connection with software for the POS & CRM SYSTEM, FRANCHISEE will enter into, and abide by, any software licensing agreements with VIRTUAL OFFICE LEADERS ARE BORN LLC or a third-party software publisher or vendor. If LEADERS ARE BORN LLC requires, then FRANCHISEE will at its own expense subscribe to a regular maintenance program for the POS & CRM SYSTEM.


11.21                  Acceptance of Credit and Debit Cards

The POS & CRM SYSTEM shall include equipment, software, and anything else necessary to make the POS & CRM SYSTEM capable of accepting, and FRANCHISEE shall accept, credit cards and debit cards specified by LEADERS ARE BORN LLC, and similar redemption devices specified by LEADERS ARE BORN LLC, that enable purchases to be made without the physical exchange of currency; and FRANCHISEE shall, it its own expense, subscribe to any related processing services designated by LEADERS ARE BORN LLC.


11.22                  Gift Card Program

FRANCHISEE shall at its own expense participate in any gift card program (or similar gift redemption device program) established by LEADERS ARE BORN LLC, which may involve the issuance and acceptance of gift cards (or other gift redemption devises) through the POS SYSTEM, and may require FRANCHISEE to obtain additional equipment as part of its POS SYSTEM.


11.23                 Coupons and Discount Offers.

FRANCHISEE will not issue coupons except those that have been approved by LEADERS ARE BORN LLC in accordance with Section 13.5. Coupons issued by FRANCHISEE will clearly identify the VIRTUAL OFFICE, and any other LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE, if any, where they are redeemable, and will state that they are not redeemable at any other LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE. If FRANCHISEE elects to accept any coupons issued by LEADERS ARE BORN LLC, which are redeemable at participating LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICEs, then FRANCHISEE will honor the redemption policies established from time to time by LEADERS ARE BORN LLC. FRANCHISEE is solely responsible for determining whether any discounts or other terms of sale offered by FRANCHISEE, coupons issued by FRANCHISEE, and coupons accepted by FRANCHISEE, including those issued by LEADERS ARE BORN LLC, comply with applicable laws, including local dairy laws.


11.24                 Promotional Materials.

FRANCHISEE acknowledges that FRANCHISEE and other SYSTEM franchisees may benefit from the promotion of LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICEs and the SYSTEM. FRANCHISEE acknowledges that certain supplies used in the VIRTUAL OFFICE (e.g. websites; media advertising; apparel; etc.) and point of sale communication materials displayed or used in the VIRTUAL OFFICE (e.g. brochures, business; etc.), in addition to displaying the MARKS, may, at the determination of LEADERS ARE BORN LLC, display information about LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICEs and the SYSTEM that may be of interest to consumers, including information relating to LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE franchise opportunities. If requested by LEADERS ARE BORN LLC, then FRANCHISEE will post, display, or make available to consumers, in a manner reasonably determined by LEADERS ARE BORN LLC information relating to LEADERS ARE BORN OR INNOVATORSLIST.COM® PRODUCTS, the SYSTEM, including if requested by LEADERS ARE BORN LLC, the addresses of other LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICEs, and LEADERS ARE BORN OR INNOVATORSLIST.COM® VIRTUAL OFFICE franchise opportunities.


11.25                 Access to Email & Internet; Consent to Communication Medium. FRANCHISEE acknowledges that the world wide web, internet, intranet, extranet, email, and similar medium are becoming an increasingly accepted and normal way of communicating. FRANCHISEE further acknowledges that LEADERS ARE BORN LLC may from time to time desire to communicate with FRANCHISEE using any of the foregoing medium. Therefore, FRANCHISEE shall at all times, before and during the TERM, have ready access to a computer (at the VIRTUAL OFFICE, FRANCHISEE'S home, or some other convenient location) with internet access and a reasonably current web browser, and:


(a)         maintain an email address to which LEADERS ARE BORN LLC may send electronic communications; keep LEADERS ARE BORN LLC apprised of FRANCHISEE'S current email address; regularly check, at a frequency specified by LEADERS ARE BORN LLC, which may be every day, for email communications from LEADERS ARE BORN LLC;


(b)         timely respond to email communications from LEADERS ARE BORN LLC, which, unless a different time-period is specified, will mean within 72 hours from receipt;


(c)         in the event LEADERS ARE BORN LLC establishes an intranet, extranet, or other means of posting information on a web site or similar on-line medium, then regularly check, at a frequency specified by LEADERS ARE BORN LLC, which may be every day, for information communicated by LEADERS ARE BORN LLC.

Except in the case of a NOTICE, FRANCHISEE hereby consents to receiving any communication or information contemplated by AGREEMENT in any manner contemplated by this Section 11.25, which communication or information shall be deemed communicated upon sending electronically to the email address designated by FRANCHISEE for such purpose, or upon posting on any web site or other on-line medium maintained by LEADERS ARE BORN LLC for such purpose.


11.26                 Prompt Payment of Obligations.

FRANCHISEE acknowledges that FRANCHISEE'S payment practices can impact the willingness of third parties to do business with, and extend credit to, other SYSTEM franchisees; the good will associated with the MARKS; and FRANCHISEE'S ability to operate the VIRTUAL OFFICE in accordance with the SYSTEM STANDARDS. Therefore FRANCHISEE shall timely pay all obligations and liabilities due and payable to vendors, affiliates, suppliers, distributors, the LANDLORD, and other parties to whom FRANCHISEE incurs obligations in connection with the FRANCHISE.


11.27                 Significant Event Notifications.

FRANCHISEE will keep LEADERS ARE BORN LLC informed of any fact, matter or circumstance that has a significant bearing on FRANCHISEE'S ability to continue to operate the VIRTUAL OFFICE in accordance with this AGREEMENT and the SYSTEM STANDARDS. Without limiting the preceding requirement, FRANCHISEE shall promptly, and in no event more than 7 days after FRANCHISEE becomes aware of any of the following situations related to the VIRTUAL OFFICE, provide NOTICE to LEADERS ARE BORN LLC of the circumstances, and provide LEADERS ARE BORN LLC with copies of pertinent documents, and any other information LEADERS ARE BORN LLC requires:


(a)         Any notice of default received with respect to the VIRTUAL OFFICE PREMISES from the LANDLORD, a rental agent, mortgagee, or lender.


(b)         Any claims, lawsuits, or other legal proceedings, asserted or brought by any consumer, employee, governmental agency, or anyone else.


(c)         Any governmental inspections, notices, claims, reports, warnings, or citations.


(d)         Any fires, robberies, injuries, or similar events occurring on or at the VIRTUAL OFFICE PREMISES.


(e)         Any other matters, including those not related to the VIRTUAL OFFICE, that could impair the good will associated with the MARKS or the SYSTEM.