What right does Aerus grant to the Franchisee regarding the operation of the Franchised Business?

ement.

A G R E E M E N T

NOW, THEREFORE, for and in consideration of the foregoing premises and the promises set forth below and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged and confirmed, the parties agree as follows:

1. Grant of Franchise Rights.

A. Company hereby grants to Franchisee the right and license, and Franchisee hereby accepts the right and obligation, to establish and operate the Franchised Business (under the Standard Program) upon and subject to the terms, conditions and provisions of this Agreement. Franchisee agrees and acknowledges that Franchisee shall have the right to offer and sell the Products only to Approved Customers within the area identified as the Area of Responsibility in Schedule 1, attached hereto (the "Area of Responsibility"), all in accordance with the terms, conditions and provisions of this Agreement and the Manuals, including the Policies and Procedures. Except as otherwise provided herein, such offers and sales may only be made through the Approved Location or from in-home or in-person demonstrations conducted within the Area of Responsibility. Nothing herein shall be construed to grant the right to Franchisee to offer and sell the Beyond Products.

• B. Subject to Company's prior approval, the Franchised Business shall be identified and operated by Franchisee only under the assumed name (the "Approved Name") "Aerus" (including such qualifiers and descriptions as may be set or approved by Company from time to time so as to geographically or otherwise distinguish one franchise from another), including the hanging of an approved exterior sign bearing such trade name; provided, that Company shall be permitted at any time and from time to time after the date of this Agreement, upon written notice, to alter or change the assumed name under which the Franchised Business shall be identified and operated. Franchisee shall, at its expense, make all county and state assumed name filings required by law (including any filings made necessary by a change in required trade names pursuant hereto) and provide evidence of such filing to Company.
• C. The Franchised Business shall be operated from one or more Approved Locations and from no other physical location, except as may be permitted by Company in writing at its sole option. Franchisee shall cause any premises lease covering an Approved Location to include a lease rider in a form substantially similar to the form attached hereto as Exhibit I. Notwithstanding the generality of the foregoing, upon Company's prior written consent of and to any proposed Outlet Licensee which may be withheld or conditioned in Company's sole discretion, Franchisee shall be permitted to engage Outlet Licensees, on forms acceptable to Company and which grant no greater rights and retain at least the same restrictions and limitations (including without limitation adherence to the Manuals and to proper use of the Marks) as this Agreement, to establish, on a non-exclusive basis in accordance with the Manuals, additional physical locations (each a "Licensed Outlet") within those parts of the Area of Responsibility that do not include any part of another franchisee's protected area. Licensed Outlets shall be subject to all provisions of this Agreement and the Manuals concerning Approved Locations, except that repair, maintenance and warranty service may be provided by or at an affiliated approved location rather than on-site and, provided that, so long as Company receives prompt notice of the establishment and location of a Licensed Outlet, Company shall not require prior approval of the site or lease for any Licensed Outlet. Once notice is received by Company and this Agreement is amended accordingly, each Licensed Outlet shall constitute an Approved Location under this Agreement, for which Franchisee shall have all of the rights and obligations associated with any Approved Location under this Agreement and the Manuals. Outlet Licensees shall be solely and exclusively the responsibility of Franchisee for all purposes, including without limitation, all training and support. Company shall have no legal obligation whatsoever to or for the benefit of any Outlet Licensees; however, Company shall be a third-party beneficiary of any of Franchisee's rights under all agreements existing between Franchisee and any Outlet Licensees and may enforce such rights in its sole discretion. In its sole discretion at any time, Company may require a direct contractual relationship with any Outlet Licensee. Company reserves the right at any time to disallow the further establishment of Licensed Outlets or to impose any such policies, procedures and practices directed to the establishment and operation of Licensed Outlets as Company may deem appropriate in its sole discretion. Nothing herein shall be construed to grant Franchisee the right to sublicense or subfranchise all or part of the Marks or the System.
• D. In order to facilitate the growth and development of the Franchised Business, Franchisee may from time to time (with Company's prior written consent) establish satellite locations (each a "Satellite") within those parts of the Area of Responsibility that do not include any part of another franchisee's protected area. Franchisee shall promptly notify Company of the establishment of a Satellite. Satellites shall be subject to all provisions of this Agreement and the

Manuals concerning Approved Locations, except that repair, maintenance and warranty service may be provided by or at an affiliated approved location rather than on-site and, provided that Company shall not require prior approval of the site or lease for any Satellite. Once opened, each Satellite shall constitute an Approved Location for which Franchisee shall have all of the rights and obligations associated with any Approved Location under this Agreement and the Manuals. Operation and compliance of Satellites shall be solely and exclusively the responsibility of Franchisee for all purposes. Franchisee shall be permitted to employ or engage, on forms reasonably acceptable to Company and which grant no greater rights and retain at least the same restrictions and limitations as this Agreement, Satellite Managers to operate the Satellites in accordance with this Agreement and the Manuals. Company shall have no liability for or obligation concerning any Satellite;

Source: Item 23 — Receipts (FDD pages 74–305)