Under the All Dogs Unleashed franchise agreement, what is the relationship between the franchisor and franchisee?

s to operate a business | | | | | under the Marks or similar marks | | | |

ADU FRANCHISE LIMITED LIABILITY COMPANY FRANCHISE AGREEMENT

THIS FRANCHISE AGREEMENT (the "Agreement") is made and entered into as of the Effective Date reflected in the Summary Pages (the "Effective Date") by and between ADU FRANCHISE LIMITED LIABILITY COMPANY, a Texas limited liability company, ("Franchisor"), and the franchisee identified in the Summary Pages (referred to in this Agreement as "you" or "Franchisee").

• A. Franchisor has acquired the license to use and to sublicense the use of a business format and system ("System") for a business that provides dog obedience and behavioral modification training, grooming, and boarding services under the trade name and service mark "ALL DOGS UNLEASHED."
• B. The distinguishing characteristics of the System include, without limitation, proprietary training methods, advertising and marketing specifications and requirements, and other Standards designated by Franchisor for developing, operating and managing an ALL DOGS UNLEASHED Facility, all of which may be changed, improved, and further developed by Franchisor from time to time.
• C. The System is identified by means of certain trademarks, service marks, logos, slogans, trade dress, and other indicia of origin, including, without limitation, the service mark "ALL DOGS UNLEASHED," and such other trademarks, service marks, logos, slogans, and trade dress that may hereafter be designated by Franchisor in writing for use in connection with the System (the "Marks").
• D. You have applied for the right to operate a business using the System and Marks ("Franchised Business") and Franchisor desires to grant you such rights, all pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration for the mutual premises contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1 GRANT AND SERVICE AREA

1.1. Grant. Subject to the provisions of this Agreement, Franchisor hereby grants you the right ("Franchise") to establish and continuously operate a Facility at the Approved Location identified (or to be identified) in Attachment B, to provide canine training, boarding, grooming, and other authorized services at the Facility and at third-party locations within the Service Area in accordance with our standards, and to use the System and Marks in connection with the advertising, promotion, and operation of the business licensed hereunder. You may not sublicense any rights granted by this Agreement, nor delegate any obligations imposed under this Agreement.

1.2. Service Area Protection.

• 1.2.1. During the term of this Agreement, Franchisor shall neither provide nor grant anyone but you the right to provide dog training, grooming, and boarding services in your Service Area, except as provided in this Section 1.2.
• 1.2.2. Notwithstanding the foregoing, Franchisor and its Affiliates also may own, operate, and/or franchise, within and outside the Service Area, any business that provides similar or competitive services under a different trademark, whether or not the business uses any portion of the ALL DOGS UNLEASHED System.
• 1.2.3. Franchisor and its Affiliates expressly reserve for themselves all rights not granted to you under this Agreement. These include the right to manufacture, distribute, and market pet-related products throughout the world. This may include selling books, distributing or streaming videos, instructional materials, pet products, dog toys, foods and treats, leashes, collars, apparel and other retail items through alternative channels of distribution, including specialty stores and via online sales.

1.2.4.

Source: Item 23 — RECEIPTS (FDD pages 49–158)