Page 1 B A M O P E R A T I O N S M A N U A L Page 1 Franchisee Training & Operations Manual V.10.6.24 This training manual is intended for Franchise Owners ONLY and is not to be shared with employees or anyone outside of the company. Failure to do so will be considered a breach of our confidentiality contract and appropriate penalties will apply. Failure to abide by all policies and specific guidelines and directives outlined herein or incorporated by reference, shall constitute a breach of the Franchise Agreement (see your specific franchise agreement for specific sections) 1. INTRODUCTION 1.1 WHO WE ARE In the autumn of 2010, the inaugural Bricks & Minifigs brick and mortar store was established in Battle Ground, Washington spearheaded by one of the brand founders, David Ortiz. Merely a month later, the second location was opened in Canby, Oregon under the leadership of the other brand founder, John Masek. Together, John and David transformed the business from its humble origins into a flourishing multi-store franchise operation, initially headquartered in Clackamas, Oregon. They leveraged their tenacity, combined with the expertise and abilities of the Bricks & Minifigs staff, to successfully steer the business and retail service operations. In 2018, the founders of the Bricks & Minifigs brand and franchising company sold their shares, subsequently relocating its headquarters to Orem, Utah. The fundamental principle of Bricks & Minifigs' business approach is to introduce a well- structured operation that delivers excellent service, competitive pricing, immaculate surroundings, and a family-friendly environment for individuals of all different walks of life. Our management and personnel are comprehensively trained in exhibiting courtesy and professionalism. We regard all our customers as esteemed friends who are welcome to relax and enjoy the atmosphere at their leisure. Bricks & Minifigs takes pride in offering the public an extensive array of choices. Our most significant contribution to the LEGO® ecosystem is a premier selection of pre-owned LEGO® bricks, minifigures, and sets. With equitable pricing and a friendly, professional team, our customers return repeatedly, becoming the loyal patronage that forms the foundation of successful businesses. With a strong conviction in its business strategy and philosophy, the brand was led to consider franchising as a natural progression for itself. As such, the day-to-day operations of a Bricks & Minifigs franchise location must be impeccable and consistent. The purpose of this manual is to ensure that all team members comprehend the entire framework and to synchronize the actions of each individual. Franchising is not a 'get rich quick' scheme. The extent of success is contingent upon the effort and energy dedicated to learning and implementing each aspect of the business. Through collective teamwork and diligence, Bricks & Minifigs will maintain its ongoing success, and you can share in that achievement. We extend our congratulations and a warm welcome as you join us in creating and expanding America's premier destination for all things LEGO®—encompassing the past, present, and future! 1.2 OUR HISTORY The inception of Bricks & Minifigs can be traced back to 2003 when David Ortiz, a stay-at-home father of twin boys, envisioned a more efficient method for buying, selling, and trading LEGO® items. He recognized that a secure, family- friendly environment for engaging in LEGO® transactions would inevitably lead to success. Over the subsequent six years, David diligently endeavored to establish a reputation for himself within the online marketplace. However, the optimal circumstances for launching the brick and mortar store of his dreams remained elusive. Fortunately, in 2009, David encountered John Masek, a seasoned retail professional with extensive experience working in and managing stores for some of the most prominent names in the retail industry. John had recently ventured into selling LEGO® products online as well, and as fate would have it, both men arrived at the same individual's residence one evening to purchase a sizable collection. Instead of succumbing to an awkward and challenging situation, they engaged in conversation, and within a matter of minutes, decided to collaborate and share the collection. Following this serendipitous meeting, they began devising plans for the future, merging David's profound Page 1 B A M O P E R A T I O N S M A N U A L Page 1 Page 2 B A M O P E R A T I O N S M A N U A L Page 2 knowledge and John's retail expertise to ultimately give birth to Bricks & Minifigs. By mid-2010, they successfully opened their two locations (one in Battleground WA - near Vancouver WA - and the other in Canby Oregon - a rural town outside Portland OR) and were well on their way to laying the foundation for the Bricks & Minifigs franchise. In 2011, BAM Franchising was born, and began offering Bricks & Minifigs franchises throughout the U.S. By 2012 two additional franchise units had been opened, proving that the franchise model worked. In 2015 the brand had also expanded into Canada, and by 2018 the brand had expanded to 36 locations in North America. In 2016, Reed Brimhall, a recently onboarded franchisee in Boise Idaho was invited to join the franchise executive team as its Chief Financial Officer (with Reed being a CPA with 30+ years in similar experience). Their synergistic partnership, fueled by a shared passion for LEGO® and a commitment to providing exceptional customer experiences, paved the way for the thriving enterprise that exists today. Despite its growth, the founders of the brand (John and David), found the growth more challenging to manage, as they had not initially intended to start a franchise all the way back in 2009. They had not planned for the growth they had experienced. Coupled with some health issues, John and David sought to transition themselves out of the business, and to find suitable replacements that could carry on their legacy. In 2018 they reached out to Ammon and Matthew McNeff (brothers who had recently opened their Orem, Utah franchise location). Based on their experience opening and growing several other businesses, offered them the opportunity to take over operations of the franchise - with Reed staying on (and other vital staff). The McNeff brothers decided to jump on the opportunity, bringing their own experiences to bear on developing greater growth (both individually by unit, as well as for the franchise as a whole). Within 5 years of the McNeffs turn at the helm, they had moved the franchise corporate headquarters to Orem Utah, grown individual franchise unit economics by 132%, overall brand revenue by 161%, number of stores by 167%, and the support staff by 425%. In 2019 the Bricks & Minifigs brand had negotiated with LEGO North America the ability to become an authorized LEGO retailing brand, allowing us to overcome our then current inability to acquire new in box sets upon release - direct from LEGO and its distribution network. This negotiated deal included the need for our franchise to engage in a facelift of the brand logo. As of 2020 the new (current) Bricks & Minifigs branding had been updated, and stores across the world began updating all of their indoor and outdoor signage to match the new standards. As a new member of the Bricks & Minifigs family, it is now your opportunity to uphold and further their legacy of amicability, ingenuity, and enjoyment within your own establishment. Embrace the principles and values that have propelled Bricks & Minifigs to success, as you embark on this exciting journey of nurturing a welcoming, innovative, and entertaining space for LEGO® enthusiasts of all ages. 1.3 PURPOSE LEGO as a brand has its own unique history and culture that has flourished and grown for over 90 years (since 1932). Based in Billund, Denmark The LEGO Group has found itself ranked numerous times as the number one recognized brand in the world. As a brand they have fostered a culture that captures the imagination of young children, to the elderly - and everyone in- between. There are hundreds (if not thousands) of clubs and organizations worldwide that engage and contribute to the awesome ecosystem that focuses on the LEGO brand and product. Television shows, movies, characters, songs, pop-culture... LEGO is in it all. It captures imaginations worldwide. Part of this LEGO ecosystem, is a thriving aftermarket where selling and trading result in hundreds of millions of dollars worth of transactions annually. Bricks & Minifigs is proud to be part of this wonderful ecosystem, especially as the leader and pioneer of its model. Bricks and Minifigs (BAM) is unique because it allows for a safe and convenient place for people to buy, sell, and trade LEGO® and LEGO®- related products. We offer the widest assortment of retired sets, bulk pieces and minifigures anywhere in the country, in locations that make people comfortable and happy (not scared that they might get ripped off). Bricks & Minifigs is built on the principle of the 3 R's: • REBUILD with thousands of pieces to choose from, ensuring you'll have those childhood sets rebuilt in no time. Page 2 B A M O P E R A T I O N S M A N U A L Page 2 Page 3 B A M O P E R A T I O N S M A N U A L Page 3 • REUSE is our way of saying that we buy, sell and trade anything LEGO® brand and pay top dollar for it. • REIMAGINE those sets you get from us by creating your own masterpiece straight from your imagination. We also pride ourselves on our five points of differentiation: • Individual Minifigs • Used Sets • Bulk LEGO • Retired Sets • Brick-Parties (birthdays and other events) These elements, while individually not unique to our brand, are unique in their combination under one brand. 1.4 BAM CORE PRINCIPLE Our core principle is to exceed customer expectations with every store experience they have, whether in the store, over the phone or out in the community. We accomplish this by providing exceptional products, displays and customer service. The goal is for customers to have such positive experiences that they just have to tell others! As they leave the store you want the customer thinking, "I can't wait to come back!" or "I can't believe I found this!" or "I can't wait to tell my friends about this!" If the customer says or thinks these things, we have done our work and accomplished our goal. When Bricks & Minifigs puts its name on something, it tells the customers and the employees that they are going to experience the very best the store has to offer, every time. 1.5 BAM BRAND CHARTER Figure: Full-width graphic of four LEGO-brick-shaped panels in a 2x2 grid: blue Bricks & Minifigs® logo brick (top left), yellow MISSION brick (top right), red VISION brick (bottom left), green VALUES brick (bottom right) BRICKS & MINIFIGS® MISSION Bring joy and creativity to the world through all things LEGO® past, present, and future! VISION Joy and creativity for all, through the magic of LEGO® and related products. VALUES Exciting & Engaging Experiences Family Friendly Atmosphere of Fun Quality Products, Great Service, Reasonable Prices, Inclusive, Caring, Courteousness, Clean, Organized, and Politeness for All Share the Love of LEGO® Collaborative Hard Working Team Members WHAT DOES OUR BRAND STAND FOR AT IT'S CORE? We treat all customers as friends who are welcome to enjoy and feel comfortable in our surroundings at their leisure. Our business offers the public thousands of choices. A premier selection of used LEGO® bricks, minifigs, and sets is the most important part of our service operation. With fair pricing and a pleasant, professional staff, our customers come back time and time again... becoming the type of loyal clientele that helps build great businesses. The day-to-day operations of Bricks & Minifigs must be flawless and consistent. 1.6 IMPORTANT VIEWPOINTS TO CONSIDER Always remember, retail is a game of imperfection. Having a plan is vital, but it will never work out the way you planned. You must triage your day as it happens . There will be times when staff call-in sick, a huge collection walks in the door, or alarms literally go off and need to be handled, etc., etc. If you can maintain flexibility you can succeed in retail. Flexibility Rules! The LEGO® universe is big. Think of all things LEGO® as an iceberg. Everything LEGO® currently sells as new sets is merely the proverbial "tip of the iceberg" sticking out of the water. This represents only a small piece of the long-term LEGO® market. Our stores focus on the part of the iceberg that is under the water - the used sets, minifigs and retired sets that can't be found at mass market retailers like Walmart or Target. Figure: Photo of an iceberg showing a small tip above the waterline and a much larger mass below the water, set to the right of the preceding paragraph And finally, our stores are not museums! We are here to sell and move products. This theme is prevalent throughout this training manual. 1.7 LEGAL OVERVIEW The information provided in this manual is not intended to act as legal or accounting advice. Your specific circumstances may affect the applicability of certain statements made herein. You should seek appropriate legal and Page 3 B A M O P E R A T I O N S M A N U A L Page 3 Page 4 B A M O P E R A T I O N S M A N U A L Page 4 accounting help as needed from qualified professionals. To illustrate by way of example, each state or city may have its own laws or regulations regarding various rules, permits and pawn licenses in force for buying or selling used products of any kind. You may have to check your city, state, or country laws to ensure you are in compliance. Therefore, in no event shall Bricks and Minifigs Corporate accept any liability for injury, loss, or damage incurred by use of, or reliance on, the information in this manual. Further, we do not warrant the quality, accuracy or completeness of any information herein. Such information is provided "as is" without guarantee of any kind, and it is understood that these pages may contain occasional inaccuracies. In an attempt to make this manual as perfect as possible, we reserve the right to revise its content at any time and without notice. 1.8 ADDITIONAL RESOURCES AND TRAINING BAM Franchising Inc. has also conducted, and will continue to conduct, market research initiatives - which may be referenced throughout this training manual. The most current research was conducted in 2019 by the BYU AdLab. A copy of which is contained in the shared G-Suite resource drives accessed via each individual store G-Suite account. 2. THE BAM DIFFERENCE: KEY POINTS OF FOUNDATION FOR FRANCHISE OPERATIONS Welcome to the unique world of Bricks and Minifigs. As a new franchisee, embracing the distinct facets of our brand is critical to your operational success. Here, we spotlight the conceptual pillars that set the BAM brand apart in the toy industry. The better you can provide and promote these four pillars below, the more your customers will recognize and appreciate the service you are providing them. These four pillars embody the Bricks and Minifigs difference. By focusing on our niche market expertise, implementing the buy-sell-trade model, diversifying your inventory to include retired and used sets along with customizable options, and actively engaging with your local community you can ensure your franchise aligns with our brand values. Simply put, the more you highlight these differences the more your customers will realize the value of Bricks and Minifigs, and will not only become repeat clientele, but will spread the word to others generating even more business. 2.1 SPECIALIZATION IN A NICHE MARKET: Bricks and Minifigs operates as an aftermarket franchise for Lego products. This strategic focus positions us as experts in the field of Lego and Lego-compatible toys. Our franchisees need to embrace this specialization, reinforcing it in all operational aspects, from inventory selection to customer service. You don't need to be an expert on every aspect of LEGO, but taking time to get to know the history of LEGO and the various themes that have come and gone will serve you and your customers well (do you know the difference between Gallador and Hidden Side?). Familiarize yourself with LEGO culture, nomenclature, and trends as well as with other LEGO retail hubs like LEGO.com and Bricklink.com. Youtube and Wikipedia are replete with channels and pages dedicated to all things LEGO, including history and sales trends. While hiring people that can fill in gaps in your knowledge can be advantageous (such as hiring a Star Wars or Ninjago expert), this is now YOUR business and being at least topically familiar with all the aspects of what you are selling will be necessary for you to be able to make informed decisions and provide quality customer service. 2.2 BUY-SELL-TRADE BUSINESS MODEL: Central to our brand's uniqueness is the buy-sell- trade model. Unlike traditional toy retailers, we provide customers the opportunity to trade their new and used Bulk, Lego sets and Minifigures for cash or store credit. As a franchisee, integrating this model into your operations is vital, offering your customers a cost-effective and eco-friendly way to renew and recycle their collections. Page 4 B A M O P E R A T I O N S M A N U A L Page 4 Page 5 B A M O P E R A T I O N S M A N U A L Page 5 While there will be more detail on this topic later in the manual, it is important to remember that this aspect of your business is the heart and soul of what makes Bricks & Minifigs unique and enduring. As your community begins to invest in the idea of your business being a major part of the LEGO ecosystem, the depth and breadth of your inventory should increase, as should your sales. 2.3 FIVE MAIN POINTS OF DIFFERENTIATION: Bricks & Minifigs stands out due to our exceptional inventory, boasting a diversity of merchandise (see section 2.3) that surpasses many other suppliers, including eBay, Bricklink, Wal-Mart, Target, and even the LEGO® Store. This unique selling point is a source of pride and should be well understood by you and your store employees, and promoted to your customers at every opportunity. 1. Used Sets: Our approach at Bricks and Minifigs is unique because we're happy to buy and sell used LEGO sets in any condition. We don't insist that a set is flawless or complete to buy it or take it in trade. This policy caters to everyone: budding builders, kids, and even those looking to resell sets. Our selection of used sets is an affordable way for our customers to expand their own collections or to finish off sets they already own. 2. Retired Sets: One of the main attractions of our stores is our wide range of both current and retired LEGO sets. This means you can find sets from all eras in one place, making us a treasure trove for LEGO enthusiasts. Whether you're a collector seeking a hard- to-find retired set or someone eager to grab the latest release, we've got you covered. 3. Bulk Bricks: Unlike other outlets that may have a small choice of individual bricks, we boast an enormous selection of bulk bricks. This makes it easy for our customers to find the exact pieces they need, whether to replace a lost brick, make a custom design, or simply to add to their pile of bricks. 4. Minifigs: We also stand out for our wide array of minifigs. Customers can buy single, pre-made minifigs or enjoy the fun of building their own. With a variety that suits all budgets and tastes, from movie characters to fantasy figures, we make sure there's something for every LEGO fan. 5. Brick Parties: Whether it is a birthday party or a corporate training, our party rooms are a fun-filled experience that combines creativity, social interaction, and the joy of LEGO play for guests of all ages. 2.4 COMMUNITY ENGAGEMENT Bricks and Minifigs is more than just a retail outlet; we are community hubs for LEGO enthusiasts. Hosting events and providing educational experiences are central to our brand. This kind of engagement can occur both in-store and remotely. Hosting summer LEGO Stop Motion camps, D&D nights, LEGO derby racing, master class workshops, or bricks and brews (or LEGO and lemonade) type events are all great ways to invite people in your area to come to your store and connect. Off site events are also effective. Several stores in the system have specialized in large scale corporate training, teaching the skills of teamwork and communication through the medium of LEGO. You can also have booths at local festivals and comic-cons, sponsor events at your local library or even do a fundraising competition between local schools where the winning school gets to see their principal perform the LEGO fire walk. By engaging with your local community and providing knowledgeable assistance, you can foster a loyal customer base and establish your store as a trusted resource for all things LEGO. 3. SYSTEM AND BRAND COMMUNICATIONS 3.0 COMMUNICATION POLICY Open communication between Corporate and the franchisee is not only vital, it is required! Defining how that communication is to occur is just as important. With that in mind, here are the only approved methods to communicate with Corporate: • email, • Slack, • phone • scheduled video conference From time to time official communications will be issued through the various means mentioned above. Any official memoranda or communications will be sent out amongst the stores, and any new standards or policies explained in those communications will then be Page 5 B A M O P E R A T I O N S M A N U A L Page 5 Page 6 B A M O P E R A T I O N S M A N U A L Page 6 the new standard for the brand moving forward. Those policies will override any currently existing policies in this manual, until this manual is updated and those policies are incorporated herein. Failure to communicate in an appropriate and timely manner with the BAM Franchising Inc., especially on matters relating to the performance of your store, may be considered an abandonment of franchise and may result in termination of your franchise agreement and all associated rights. Choosing to ignore communications, or failure to adhere to communicated directives may also result in termination of your franchise agreement and all associated rights. Communication between Franchisees and the Franchisor is vital to your success as a business owner in the system. Treat communications with the franchise system with the importance it deserves. 3.1 EMAIL COMMUNICATION Email is a vital communication tool to be used in conjunction with your store. 3.1.1 Store/Business Email Account Every Bricks & Minifigs franchise/unit is assigned a territory/unit email address. It is typically the city or defining region followed by a "."and the state abbreviation then @bricksandminifigs.com (i.e. [address masked] ). This email address should be the only email address used in conjunction with official communications in connection with your franchise operations (such as communicating with customers or making vendor orders). You are to use only your assigned store email address for business purposes, and not for alternative ventures or personal matters. When trying to contact Corporate for any help please allow 24 to 48 hours for a response (SLACK is the preferred communication channel when reaching out to Corporate, and usually has a faster response than email). Be mindful that you have no expectation of privacy in your (store) business email accounts. We are authorized to access and search the email accounts and their contents, although we do not anticipate doing so except possibly in extreme circumstances. BAM Franchising Inc. is under no obligation to monitor any of your email activity. If BAM does access such email accounts and their contents, it would be solely for the benefit of the franchise system. Such access may not be for the purpose of assisting you with, or supervising, your business operations or workers. You must include in your email signature in each communication the following: "[your corporate entity or individual name] independently owns and operates this Bricks & Minifigs franchise." 3.1.2 Corporate Email Addresses (quick reference) Please remember that our preferred communication tool (with the fastest response times) is SLACK, however we know that there will be times that email communication will be the best (forwarding messages, looping us in with an email thread with a vendor, etc.) - in those times, we have prepared a quick reference list of the main email addresses to contact us at Corporate: • custom@bricksandminifigs.com. Use for any questions or orders pertaining to custom printing onto Lego pieces (pricing tiles, minifigs or other items). • franchise@bricksandminifigs.com. Used for any communication between stores and corporate. • unit.support@bricksandminifigs.com. Used when seeking specific support from our unit support team. • vendor.support@bricksandminifigs.com. Used when specifically seeking help regarding vendors accounts, orders, etc. • frandev.prospect@bricksandminifigs.com. Used when passing along information regarding potentially interested franchise prospects (someone interested in becoming a franchisee). • finance.accounting@bricksandminifigs.com. Used when sending required financial reports, or when seeking support regarding bookkeeping and accounting questions. • complaints.support@bricksandminifigs.com. Used when seeking specific help regarding a customer related complaint that requires the attention of someone from Corporate. 3.2 SLACK This is a cloud-based team collaboration tool, including a mobile app allowing us to communicate with each other like text messaging but in a more efficient manner. Corporate will set up your private store channel. Slack is set up with several pre-determined user groups that you Page 6 B A M O P E R A T I O N S M A N U A L Page 6 Page 7 B A M O P E R A T I O N S M A N U A L Page 7 cannot modify, add to or change. As a forming store, you may only observe on the general channels (please don't comment or give advice unless you receive permission first) until you are actually open for business. However, prior to opening you may actively participate (comment) on the following channels: Padawans, In-Search- of, and Identify_this. All other Slack communication should be on your private store channel (identified by your store's city name). This will direct all your questions to Corporate, who will assist you. 3.2.1 Slack Communication Policies Slack is a great tool for real-time communication between stores. It is also a great place to get fast feedback from your Onboarding and Unit Support team, or even to discuss concerns or issues with the executive team in your individual private store channel. It is NOT a great tool for discussing franchise-wide policy on public channels, nor is it a social media platform. Slack can turn into the "wild west" of opinions - especially where policy is concerned. We all have opinions and a tendency to think that everyone thinks (or should) the same as we do. Too often a discussion has occurred that leaves some feeling a bit uncomfortable, even when the participants say they meant no offense. Thus we expect all franchisees to abide by the following Slack guidelines. 3.2.1.1 Slack Policy Discussions Slack shall not be used as a forum to discuss franchise wide policy. An example of franchise policy would be the POS system currently required by policy as a standard. Publicly discussing issues related to the POS is acceptable, so long as the discussion is kept away from personal rants, and not about the policy (which can be discussed with corporate via direct Slack messaging). a. Any franchise directed policy discussions will be removed from public threads. b. If you have a franchise directed policy matter to discuss, you are to use any of the appropriate communications channels (private store channels, phone, email, text, etc.) to reach out to Corporate members to open a dialogue. c. If Corporate decides to open a public discussion on policy - feel free to participate (following all other Slack communication rules). 3.2.1.2 Not a Place to Air Personal Grievances Public channels on Slack are to be used as tools that foster inter-store communications that are kept to topics that will help everyone - not as a place to air personal grievances, or sway opinions that may or may not be feasibly actionable. 3.2.1.3 Proper Use of Store Channels This does not mean we wish to hinder the flow of ideas and discussion related to policy - just direct it to flow upwards. If you have a matter of policy you would like to discuss, have a rant about something, or have a suggestion/idea for franchises - please contact us directly; in fact, if you have questions or problems, we encourage you to communicate with us. We won't be able to solve every problem, but we want to help where we can. 3.2.1.4 Treat all Slack participants with courtesy and respect. a. Any communications Corporate deems inappropriate are subject to deletion. b. Remember that text is more difficult to convey humor and sarcasm - please be careful of your writing styles. 3.2.1.5 Be helpful. Whatever your communication needs are regarding Slack, be sure to have a reason, and when adding to a discussion, make it a valuable contribution (even if just offering positive support or ). 👍 3.2.1.6 Treat all Slack participants with courtesy and respect. It bears repeating. 3.2.1.7 Tagging for response Whether it is in your personal store channel or a public channel, if you want to get a response to your posting, you need to make sure you are tagging the right people. Tagging is a term that means you use the "@" symbol and then the user name of the person or group that you want to get a response from. The people that you tag in a post will see a notification in Slack, currently that comes in the form of a red dot next to the channel they've been tagged in as well as a push notification and their name will be highlighted in the post. From there they can then appropriately respond. Page 7 B A M O P E R A T I O N S M A N U A L Page 7 Page 8 B A M O P E R A T I O N S M A N U A L Page 8 Likewise when you are tagged in a post, you will receive a notification and a timely response is appropriate. There are hundreds of messages that are posted daily on our Slack. If you post something in your personal store channel or a public channel without tagging anyone, more than likely your post will be missed and/or not be addressed in a timely manner. The following is a list of useful Slack tags you can use to make sure your post will be seen by the right people: • @_support - a group tag for the entire support team, if you aren't sure who to tag use this • @_onboarding_team - a group tag for the entire onboarding team, if you have an onboarding question and don't know who to tag use this • @_pf_team - the product and fulfillment team, if you have needs concerning a vendor or product • @_marketing - this is the marketing team, if you have questions relating to marketing • @bam_CEO_ammon - CEO • @matt_mcneff - COO • @reed_brimhall - CFO • @mike_wu - CTO • @brad_barker - Director of Product and Development • @matt_thomas_corporate - Director of Operations • @corp_marketing_director_keaton - Marketing Director • @unit_support_ki - Unit Support Team Lead • @unit_onboarding_adam - Onboarding Team Lead 3.3 PHONE If you would like to discuss something over the phone, send a request on Slack via your private store channel, but if you have an urgent matter, use the directory provided on the backend and call the appropriate party to help you resolve your issue. A directory and chart of Franchisor employees can be found [HERE] 3.4 SCHEDULED VIDEO OR CONFERENCE CALL These generally will be done to cover operational topics. The subjects can vary but may include topics like quarterly marketing reviews, or things like the upcoming time of year, such as getting ready for a season or holiday. They may also be done on a store-by-store basis for help with specific issues such as conducting an inventory count or ordering items (both of these areas are covered in greater detail in this training manual). 3.5 VENDOR COMMUNICATION DEFINITIONS, POLICY, AND PROCEDURE As we continue growing as a brand we are finding it necessary to create new policies to help keep our brand relationships as strong as possible. Communication styles can vary greatly from person to person, and unfortunately what some may consider acceptable communication, others may not (including our vendors). Because we have now received multiple complaints from several of our vendors regarding communications they have deemed inappropriate from several of our stores, we find it prudent to create the following policy to help protect our valuable and important brand relationships. Please read the policy carefully. After reading the policy you will need to verify on your Private Store Channel that you have read and understand the policies listed below within 14 days. 3.5.1 Policy Definitions: • Vendor. In the context of this policy a Vendor is defined as any vendor, supplier, or other relationship/party that deals with our brand. • Complaint. In the context of this policy a Complaint is defined as communication received by BAM Franchising from a Vendor which describes a grievance, issue, or problem with respect to correspondence with one of our franchisees, stores, or staff. • Strike. In the context of this policy a Strike is defined as a Complaint that upon examination of the circumstances, is deemed to be a valid complaint (meaning a complaint of substance and not a Non-Strike Complaint) stemming from a Vendor. If deemed a valid complaint, and to the degree that we judge it to be material in nature, we will designate the complaint as a Strike. • Non-Strike Complaint. These are Complaints that do not typically rise to the level of Strike Page 8 B A M O P E R A T I O N S M A N U A L Page 8 Page 9 B A M O P E R A T I O N S M A N U A L Page 9 (unless Non-Strike Complaints become excessive - meaning 4 in a 6 month period). A fictitious example of a Non-Strike Complaint would be a Vendor complaining about a franchisee mis-identifying product names and it somehow bothers the Vendor (i.e. calling a "Star Wars Weapons Pack" a "Star Trek Phaser Pack Thingy"). While it is valuable and important to appropriately identify the inventory lines/products a store might be attempting to order - it is not the kind of communication error that would rise to the level of a Strike (unless it becomes excessive and becomes a point of contention with the Vendor for repeatedly making the same mistake - with no apparent effort to correct the issue). • Foul. In the context of this policy a Foul is defined as a Complaint that upon examination of the circumstances, is deemed to be a valid complaint stemming from a Vendor but has been deemed not rising to the level of a Strike due to circumstances or variables considered by an investigation. Fouls will only be allowed once per particular nature, and repeated offenses of the same nature will be considered Strikes. Fouls of separate natures become excessive (4 in a 6 month period), they may accrue to the level of one or more Strikes. 3.5.2 Vendor Communications Policy: 1. If BAM Franchising receives a complaint from a Vendor (regarding communications or interactions with a franchisee), a corporate staff member will investigate and report their findings to the executive team. a. Reported findings after an investigation. i. If the complaint was deemed not to have risen to the level of a Strike, or is considered to be a Foul, it will be recorded (and the franchisee will be notified) - but BAM Franchising will work to explain the situation with the complaining party. If any corrections or explanations are needed, the store owner/franchisee may be asked to participate in a virtual discussion or training to help prevent the circumstances that may have led to the communication issue that generated the complaint. ii . If the complaint is deemed to be a Strike, BAM Franchising will notify the offending party and issue a warning about the behavior, reminding them to review this policy. b. If a second Strike occurs within a 6-month (180-day) period (from the same Vendor) i. This will result in a 90 day period wherein all communications between the franchisee and the Vendor will be restricted, with all communications going through a BAM Franchising staff member. ii. Typically the franchisee will retain the ability to order from the Vendor if the Vendor has a non-direct communication platform for processing any such orders. iii. Otherwise the franchisee will be prohibited from all other direct means of communication with the vendor with whom they have two (2) Strikes. This will be known as the "First Consequence." 2. Once the 90 day period of the First Consequence has expired, the franchisee will be placed on a 180 day "Probationary Period." a. During this Probationary Period i. Communications between the franchisee and the Vendor will be reinstated. ii. Any additional Strikes that occur during this probation will result in the "Second Consequence," a permanent communications ban from the franchisee to that particular Vendor. b. This Second Consequence may also be egregious enough to warrant a Notice of Breach of Franchise Agreement, jeopardizing your franchise agreement. c. If a franchisee becomes subject to the Second Consequence the franchisee must wait an entire year from the onset of the Second Consequence before requesting a review for potential reinstatement of specific Vendor communication privileges. 3. If a franchisee chooses not to abide by this policy, or chooses to ignore the restrictions a. They may be placed under the "Third Consequence" which is the immediate termination of their franchise agreement. 4. At all times, the Franchise Agreement is the controlling document, and regardless of the number of Complaints, Fouls, Strikes, etc., if any actions or conduct adversely affects the brand, its reputation, or the marks, your franchise agreement may be subject to the consequences outlined for such actions (see your franchise agreement). Moving forward - these policies will be in effect for the good of the brand, and all other franchisees. If you find yourself restricted by any of these policies, we ask you to reflect inwardly Page 9 B A M O P E R A T I O N S M A N U A L Page 9 Page 10 B A M O P E R A T I O N S M A N U A L Page 10 and recognize that while your intentions may have been good, or you may not think anything is wrong with your communication style - we ask that you pause to recognize that those receiving the communications may have received it differently than you may have intended. Therefore, regardless of your intentions, it may become necessary that you and/or your behavior needs to change in order to accommodate the communication style of those who feel it is inappropriate. If you cannot or will not adjust your communications after the initial steps outlined in this policy, then - for the good of the brand and the system - you will find yourself permanently restricted in one way or another. 5. If communication from a vendor to a franchisee is inappropriate we ask that you reach out to our Product and Development director (currently Brad Barker) to assist with taking any steps that are necessary to assess and address the behavior. 3.6 EMERGENCY ISSUES Emergencies can take several forms and should be dealt with as circumstances require: • Critical emergencies such as major injuries, fire, thefts, etc. should be directed to local services such as police, fire or 911. • Non-critical emergencies such as power failures, loss of internet, register issues and other problems should be directed to the appropriate supporting party, such as your internet provider, power company or poi