Does a 7 Brew franchisee receive an exclusive territory?

During the franchise term, we and our affiliates will not own or operate, or allow another franchisee or licensee to own or operate, another Traditional 7 BREW Store that has its physical location within an "Area of Protection" described in an exhibit to the Franchise Agreement. Your Area of Protection will be a radius from the walls of the Store's building equal to either 1.5 or 2 miles depending on the size of the Metropolitan Statistical Area in which your Store is located. However, there are no restrictions whatsoever on our and our affiliates' activities with respect to Non-Traditional 7 BREW Stores physically located within the Area of Protection, including our and our affiliates' right to own and operate and to grant others the right to own and operate such Non-Traditional 7 BREW Stores within the Area of Protection. Because of our and our affiliates' rights with respect to Non-Traditional 7 BREW Stores physically located within the Area of Protection, you will not receive an exclusive territory. You may face competition from other

franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

Except for your rights with respect to Traditional 7 BREW Stores physically located within the Area of Protection, we and our affiliates retain all rights with respect to all 7 BREW Stores, the Marks, the offer and sale of products and services that are similar to, competitive with, or dissimilar from the products and services your Store offers and sells, and any other activities we and they deem appropriate, whenever and wherever we and they desire. Those rights include the following:

• (1) to own and operate, and to allow other franchisees and licensees to own and operate, Traditional 7 BREW Stores at any physical locations outside the Area of Protection (including at the boundary of the Area of Protection) and on any terms and conditions we and they deem appropriate;
• (2) to own and operate, and to allow other franchisees and licensees to own and operate, Non-Traditional 7 BREW Stores at any physical locations inside and outside the Area of Protection and on any terms and conditions we and they deem appropriate;
• (3) to offer and sell and to allow others (including franchisees, licensees, and other distributors) to offer and sell, inside and outside the Area of Protection and on any terms and conditions we and they deem appropriate, products and services that are identical or similar to and/or competitive with those offered and sold by 7 BREW Stores, whether such products and services are identified by the Marks or other trademarks or service marks, through any advertising media, distribution channels (including the Internet and retailers), and shipping and delivery methods and to any customer, no matter where located (provided that, subject to clauses (4) and (5) below, we and our affiliates will not operate or allow others to operate food trucks within the Area of Protection offering and selling products that are identical or similar to and/or competitive with those offered and sold by 7 BREW Stores);
• (4) to acquire the assets or ownership interests of one or more businesses offering and selling products and services similar to those offered and sold at 7 BREW Stores (even if such a business operates, franchises, or licenses "Competitive Businesses," including food trucks), and operate, franchise, license, or create similar arrangements for those businesses once acquired, wherever those businesses (or the franchisees or licensees of those businesses) are located or operating, including within the Area of Protection;
• (5) to be acquired (whether through acquisition of assets, ownership interests, or otherwise, regardless of the transaction form) by a business offering and selling products and services similar to those offered and sold at 7 BREW Stores, or by another business, even if any such business operates, franchises, or licenses Competitive Businesses (including food trucks) inside or outside the Area of Protection; and
• (6) to engage in all other activities the Franchise Agreement does not expressly prohibit.

We and our affiliates need not compensate you if we engage in these activities.

Source: Item 12 — TERRITORY (FDD pages 45–49)