Under the Area Development Agreement, what is the franchisee required to do within the Development Territory granted by Alloy Personal Training, LLC?

Area Development Agreement: Under the Area Development Agreement, we will grant to you rights to a Development Territory within which you will establish and operate an agreedupon number of Facilities under separate Franchise Agreements. (Area Development Agreement – Section 2.A.)

Area Development Agreement: Under the Area Development Agreement:

• 1. We will review the information regarding potential sites that you provide to us to determine whether the sites meet our standards and criteria for an Alloy Facility and, if the site meets our criteria, accept the site for a Facility. (Area Development Agreement – Section 4.B.)
• 1. We will provide you with standard specifications and layouts for building and furnishing the Facility. (Area Development Agreement – Section 4.B.)
• 1. We will review your site plan and final build-out plans and specifications for conformity to our standards and specifications. (Area Development Agreement – Section 4.B.)

The Site Selection information included in this section apply to a site for your Franchised Business under a Franchise Agreement and each of the locations that you develop under your Development Agreement (as we will approve the location for future outlets using our then-current criteria, which may change over the years (the current criteria and process are noted below). Within 180 days after you sign the Franchise Agreement, you must locate a site for your Franchised Business, obtain our acceptance of the proposed site, and enter into a lease, sublease or purchase agreement for the approved site. You may engage with our preferred real estate vendors to assist you in the search of your Alloy site. You must submit to us the information and materials we may reasonably require to allow us to review the proposed site. We generally do not own the premises and lease it to you. The factors which we consider in accepting your location include the size and location of the premises, population in the immediate area and/or median household income, the lease terms for the premises, availability of parking and ease of access, types of businesses in close proximity to the premises, competition from similar businesses and other similar factors.

We will have 30 days after receiving all information we require concerning the proposed site to notify you whether the site is accepted or not. If we do not provide our specific acceptance of a location within this 30 day period, the location is deemed not accepted. Our acceptance only indicates that the site meets our minimum criteria for a Facility. If you are unable to obtain possession of a suitable site for your Franchised Business by lease, sublease or purchase agreement within six months after you sign the Franchise Agreement, we may provide you with an extension of this timeframe or we may terminate your Franchise Agreement. We utilize this same process for each Facility you are obligated to develop under an Area Development Agreement.

Prior to opening, we reserve the right to require you to have 75 members who have joined your facility during the pre-sale marketing campaign, although we may allow you to open without 75 members. You can appoint your Director of Training or Manager to conduct this direct sales activity. You will be required to attend weekly coaching and accountability meetings during the pre-sale period. You must have Alloy HQ permission to open your facility. After opening you must attend monthly meetings with your Alloy franchise business coach. Failure to attend these required meetings will put you out of compliance with your franchise agreement.

If you are a multi-unit developer, you must sign your first Franchise Agreement at the same time you sign the Area Development Agreement. The typical length of time between the signing of the Franchise Agreement and the opening of your first Franchised Business is the same as for an individual franchisee. Each additional Franchised Business you develop must be opened according to the terms of your Minimum Performance Schedule.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–42)