diff --git a/arch/config_generator.py b/arch/config_generator.py
index 2fb0ded7..fe2b0666 100644
--- a/arch/config_generator.py
+++ b/arch/config_generator.py
@@ -4,7 +4,7 @@ import yaml
 from jsonschema import validate
 
 ENVOY_CONFIG_TEMPLATE_FILE = os.getenv('ENVOY_CONFIG_TEMPLATE_FILE', 'envoy.template.yaml')
-ARCH_CONFIG_FILE = os.getenv('ARCH_CONFIG_FILE', '/config/arch_config.yaml')
+ARCH_CONFIG_FILE = os.getenv('ARCH_CONFIG_FILE', '/root/arch_config.yaml')
 ENVOY_CONFIG_FILE_RENDERED = os.getenv('ENVOY_CONFIG_FILE_RENDERED', '/etc/envoy/envoy.yaml')
 ARCH_CONFIG_SCHEMA_FILE = os.getenv('ARCH_CONFIG_SCHEMA_FILE', 'arch_config_schema.yaml')
 
diff --git a/arch/src/stream_context.rs b/arch/src/stream_context.rs
index bd6527e2..c5f2d959 100644
--- a/arch/src/stream_context.rs
+++ b/arch/src/stream_context.rs
@@ -473,7 +473,9 @@ impl StreamContext {
 
         let model_resp = &arch_fc_response.choices[0];
 
-        if model_resp.message.tool_calls.is_none() {
+        if model_resp.message.tool_calls.is_none()
+            || model_resp.message.tool_calls.as_ref().unwrap().is_empty()
+        {
             // This means that Arch FC did not have enough information to resolve the function call
             // Arch FC probably responded with a message asking for more information.
             // Let's send the response back to the user to initalize lightweight dialog for parameter collection
@@ -488,12 +490,6 @@ impl StreamContext {
         }
 
         let tool_calls = model_resp.message.tool_calls.as_ref().unwrap();
-        if tool_calls.is_empty() {
-            return self.send_server_error(
-                "No tool calls found in function resolver response".to_string(),
-                Some(StatusCode::BAD_REQUEST),
-            );
-        }
 
         debug!("tool_call_details: {:?}", tool_calls);
         // extract all tool names
diff --git a/demos/function_calling/docker-compose.yaml b/demos/function_calling/docker-compose.yaml
index 39ca3bc7..d8993669 100644
--- a/demos/function_calling/docker-compose.yaml
+++ b/demos/function_calling/docker-compose.yaml
@@ -1,3 +1,9 @@
+
+x-variables: &common-vars
+  environment:
+    - MODE=${MODE:-cloud}  # Set the default mode to 'cloud', others values are local-gpu, local-cpu
+
+
 services:
 
   arch:
@@ -11,7 +17,10 @@ services:
       - ./generated/envoy.yaml:/etc/envoy/envoy.yaml
       - /etc/ssl/cert.pem:/etc/ssl/cert.pem
       - ./arch_log:/var/log/
+      - ./arch_config.yaml:/root/arch_config.yaml
     depends_on:
+      # config_generator:
+      #   condition: service_completed_successfully
       model_server:
         condition: service_healthy
     environment:
@@ -30,14 +39,15 @@ services:
     volumes:
       - ~/.cache/huggingface:/root/.cache/huggingface
       - ./arch_config.yaml:/root/arch_config.yaml
+    << : *common-vars
     environment:
       - OLLAMA_ENDPOINT=${OLLAMA_ENDPOINT:-host.docker.internal}
+      - FC_URL=${FC_URL:-empty}
       - OLLAMA_MODEL=Arch-Function-Calling-3B-Q4_K_M
-      # use ollama endpoint that is hosted by host machine (no virtualization)
+      - MODE=${MODE:-cloud}
       # uncomment following line to use ollama endpoint that is hosted by docker
       # - OLLAMA_ENDPOINT=ollama
       # - OLLAMA_MODEL=Arch-Function-Calling-1.5B:Q4_K_M
-
   api_server:
     build:
       context: api_server
diff --git a/model_server/app/arch_fc/arch_fc.py b/model_server/app/arch_fc/arch_fc.py
index 2cc70851..2039ba8a 100644
--- a/model_server/app/arch_fc/arch_fc.py
+++ b/model_server/app/arch_fc/arch_fc.py
@@ -5,30 +5,52 @@ from app.arch_fc.arch_handler import ArchHandler
 from app.arch_fc.bolt_handler import BoltHandler
 from app.arch_fc.common import ChatMessage
 import logging
+import yaml
 from openai import OpenAI
 import os
 
+
+with open("openai_params.yaml") as f:
+    params = yaml.safe_load(f)
+
 ollama_endpoint = os.getenv("OLLAMA_ENDPOINT", "localhost")
 ollama_model = os.getenv("OLLAMA_MODEL", "Arch-Function-Calling-1.5B-Q4_K_M")
-logger = logging.getLogger('uvicorn.error')
+fc_url = os.getenv("FC_URL", ollama_endpoint)
+mode = os.getenv("MODE", "cloud")
+if mode not in ["cloud", "local-gpu", "local-cpu"]:
+    raise ValueError(f"Invalid mode: {mode}")
+arch_api_key = os.getenv("ARCH_API_KEY", "")
+logger = logging.getLogger("uvicorn.error")
 
 handler = None
 if ollama_model.startswith("Arch"):
-   handler = ArchHandler()
+    handler = ArchHandler()
 else:
     handler = BoltHandler()
 
-logger.info(f"using model: {ollama_model}")
-logger.info(f"using ollama endpoint: {ollama_endpoint}")
 
 # app = FastAPI()
 
-client = OpenAI(
-    base_url='http://{}:11434/v1/'.format(ollama_endpoint),
+if mode == "cloud":
+    client = OpenAI(
+        base_url=fc_url,
+        api_key="EMPTY",
+    )
+    models = client.models.list()
+    model = models.data[0].id
+    chosen_model = model
+    endpoint = fc_url
+else:
+    client = OpenAI(
+        base_url="http://{}:11434/v1/".format(ollama_endpoint),
+        api_key="ollama",
+    )
+    chosen_model = ollama_model
+    endpoint = ollama_endpoint
+logger.info(f"serving mode: {mode}")
+logger.info(f"using model: {chosen_model}")
+logger.info(f"using endpoint: {endpoint}")
 
-    # required but ignored
-    api_key='ollama',
-)
 
 
 async def chat_completion(req: ChatMessage, res: Response):
@@ -38,23 +60,28 @@ async def chat_completion(req: ChatMessage, res: Response):
     messages = [{"role": "system", "content": tools_encoded}]
     for message in req.messages:
         messages.append({"role": message.role, "content": message.content})
-    logger.info(f"request model: {ollama_model}, messages: {json.dumps(messages)}")
-    resp = client.chat.completions.create(messages=messages, model=ollama_model, stream=False)
+    logger.info(f"request model: {chosen_model}, messages: {json.dumps(messages)}")
+    completions_params = params["params"]
+    resp = client.chat.completions.create(
+        messages=messages,
+        model=chosen_model,
+        stream=False,
+        extra_body=completions_params,
+    )
     tools = handler.extract_tools(resp.choices[0].message.content)
     tool_calls = []
     for tool in tools:
-       for tool_name, tool_args in tool.items():
-          tool_calls.append({
-              "id": f"call_{random.randint(1000, 10000)}",
-              "type": "function",
-              "function": {
-                "name": tool_name,
-                "arguments": tool_args
-              }
-          })
+        for tool_name, tool_args in tool.items():
+            tool_calls.append(
+                {
+                    "id": f"call_{random.randint(1000, 10000)}",
+                    "type": "function",
+                    "function": {"name": tool_name, "arguments": tool_args},
+                }
+            )
     if tools:
-      resp.choices[0].message.tool_calls = tool_calls
-      resp.choices[0].message.content = None
+        resp.choices[0].message.tool_calls = tool_calls
+        resp.choices[0].message.content = None
     logger.info(f"response (tools): {json.dumps(tools)}")
     logger.info(f"response: {json.dumps(resp.to_dict())}")
     return resp
diff --git a/model_server/app/arch_fc/bolt_handler.py b/model_server/app/arch_fc/bolt_handler.py
index 7331764e..081c6091 100644
--- a/model_server/app/arch_fc/bolt_handler.py
+++ b/model_server/app/arch_fc/bolt_handler.py
@@ -89,7 +89,9 @@ class BoltHandler:
             if isinstance(tool_call, dict):
                 try:
                     if not executable:
-                        extracted_tools.append({tool_call["name"]: tool_call["arguments"]})
+                        extracted_tools.append(
+                            {tool_call["name"]: tool_call["arguments"]}
+                        )
                     else:
                         name, arguments = (
                             tool_call.get("name", ""),
diff --git a/model_server/app/arch_fc/common.py b/model_server/app/arch_fc/common.py
index 10fdde51..c26e8422 100644
--- a/model_server/app/arch_fc/common.py
+++ b/model_server/app/arch_fc/common.py
@@ -1,10 +1,12 @@
 from typing import Any, Dict, List
 from pydantic import BaseModel
 
+
 class Message(BaseModel):
     role: str
     content: str
 
+
 class ChatMessage(BaseModel):
     messages: list[Message]
     tools: List[Dict[str, Any]]
diff --git a/model_server/app/install.py b/model_server/app/install.py
index bc7e1cda..e50e1d35 100644
--- a/model_server/app/install.py
+++ b/model_server/app/install.py
@@ -9,7 +9,5 @@ print("installing transformers")
 load_transformers()
 print("installing ner models")
 load_ner_models()
-print("installing toxic models")
-load_toxic_model()
 print("installing jailbreak models")
 load_jailbreak_model()
diff --git a/model_server/app/main.py b/model_server/app/main.py
index e073b66d..b9dda9d8 100644
--- a/model_server/app/main.py
+++ b/model_server/app/main.py
@@ -6,6 +6,7 @@ from app.load_models import (
     load_guard_model,
     load_zero_shot_models,
 )
+import os
 from app.utils import GuardHandler, split_text_into_chunks
 import torch
 import yaml
@@ -25,14 +26,27 @@ zero_shot_models = load_zero_shot_models()
 
 with open("guard_model_config.yaml") as f:
     guard_model_config = yaml.safe_load(f)
+with open('/root/arch_config.yaml') as f:
+    config = yaml.safe_load(f)
+mode = os.getenv("MODE", "cloud")
+logger.info(f"Serving model mode: {mode}")
+if mode not in ['cloud', 'local-gpu', 'local-cpu']:
+    raise ValueError(f"Invalid mode: {mode}")
+if mode == 'local-cpu':
+    hardware = 'cpu'
+else:
+    hardware = "gpu" if torch.cuda.is_available() else "cpu"
 
-task = "both"
-hardware = "gpu" if torch.cuda.is_available() else "cpu"
-jailbreak_model = load_guard_model(
-    guard_model_config["jailbreak"][hardware], hardware
-)
+if "prompt_guards" in config.keys():
+    task = list(config["prompt_guards"]["input_guards"].keys())[0]
 
-guard_handler = GuardHandler(toxic_model=None, jailbreak_model=jailbreak_model)
+    hardware = "gpu" if torch.cuda.is_available() else "cpu"
+    jailbreak_model = load_guard_model(
+        guard_model_config["jailbreak"][hardware], hardware
+    )
+    toxic_model = None
+
+    guard_handler = GuardHandler(toxic_model=toxic_model, jailbreak_model=jailbreak_model)
 
 app = FastAPI()
 
diff --git a/model_server/openai_params.yaml b/model_server/openai_params.yaml
new file mode 100644
index 00000000..0b8cccc8
--- /dev/null
+++ b/model_server/openai_params.yaml
@@ -0,0 +1,8 @@
+params:
+  temperature: 0.0001
+  top_p : 0.5
+  repetition_penalty: 1.0
+  top_k: 50
+  max_tokens: 128
+  stop: ["<|im_start|>", "<|im_end|>"]
+  stop_token_ids: [151645, 151643]