Does the Aw Franchise Agreement explicitly state who determines the location of the Papa Ray's Pizza Restaurant?

. This Franchise Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own and be franchised to operate a Papa Ray's Pizza Restaurant.

2. GRANT OF FRANCHISE

2.1 Term. You have applied for a franchise to own and operate a Papa Ray's Pizza Restaurant at one site approved by us in the following general area (when the exact location is determined, the parties will complete Exhibit 1 attached hereto):

_________________________________. We have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you a franchise (the "Franchise") to operate a restaurant using the Marks ("Papa Ray's Pizza Restaurant") and to use the System in the operation of that Papa Ray's Pizza Restaurant, for a term of ten (10) years commencing on the Agreement Date, unless this Agreement terminates before the end of such term as provided in Section 16 of this Agreement. Termination or expiration of this Agreement will constitute a termination or expiration of your Franchise. (All references to the "term" of this Agreement refer to the period from the Agreement Date, to the date on which this Agreement actually terminates or expires.)

• 2.2 Full Term Performance. You specifically agree to be obligated to operate the Papa Ray's Pizza Restaurant, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the Papa Ray's Pizza Restaurant and to affect the widest and best possible distribution of products and services from your Papa Ray's Pizza Restaurant within the Protected Territory, for the full term of this Agreement.
• 2.3 Protected Area. As long as this Agreement is in force and effect and you are not in default under any of the terms of this Agreement, we will not establish another Papa Ray's Pizza Restaurant franchise or operate itself or through an affiliate any other Papa Ray's Pizza Restaurant within the protected area described in Exhibit 1 ("Protected Area"). The Protected Area granted to you will be a certain mile radius from the Premises identified in Exhibit 1. The minimum radius that you will be granted is three (3) miles from the Premises. The criteria for determining the boundaries of the Protected Area include the population density, demographics, the amount of existing competition in the market, major and/or restricting topographical features which clearly define contiguous areas, and/or other factors we deem relevant to the operation of a Papa Ray's Pizza Restaurant. As a result of these considerations, the size of Protected Areas granted to franchisees may vary. Notwithstanding the foregoing, in the event the location of the Premises is within a limited use facility, your Protected Area shall be limited to the limited use facility (as defined below) in which your Papa Ray's Pizza Restaurant is located.
• 2.4 Our Reservation of Rights. We have the right to grant outside of the Protected Area such other Papa Ray's Pizza Restaurant businesses and franchises as we, in our sole and exclusive discretion, deem appropriate. We and any affiliates reserve the right, both within and outside of the Protected Area to:
• (a) grant a Papa Ray's Pizza Restaurant franchise or operate ourselves or through an affiliate a Papa Ray's Pizza Restaurant located within a limited use facility. A limited use facility includes those located within airports, railroad stations or other transportation facilities; stadiums, racetracks or other sport facilities; enclosed shopping centers; casinos; theaters, auditoriums, amusement parks or other entertainment facilities; military bases; and college campuses; and similar types of captive locations;
• (b) distribute products and services which comprise, may in the future comprise or which do not comprise, a part of the System through any alternative distribution channels including,

but not limited to, supermarkets and other retail facilities, mail order systems, the Internet or similar electronic media, using the Marks ("Alternate Distribution Channels");

• (c) establish businesses which are franchised, licensed or owned by us or any affiliate at any locations we deem appropriate or distribute products or services which are similar to the products and services offered under the System under trade names, trademarks, service marks, trade dress or other commercial symbols other than the Marks.
• (d) to acquire or be acquired by a company establishing businesses identical or similar to the Papa Ray's Pizza Restaurants, even if the other business operates, franchises, and/or licenses competitive businesses anywhere, including your Protected Area; and
• (e) to engage in any other business activities not expressly prohibited by this Agreement.
• 2.5 Delivery, Catering and Marketing Restrictions. You are prohibited from providing delivery service to or catering services at any location outside your Protected Area unless you obtain our prior written consent to do so. If you obtain our consent to deliver or provide catering services outside of the Protected Area, and subject to standards, specifications and procedures for delivery and catering as set forth in the Operations Manual, you may deliver and provide catering services outside of the Protected Area only as long as the area does not fall within the Protected Area assigned to another Papa Ray's Pizza franchisee or affiliate-owned Papa Ray's Pizza Restaurant. If the area is later assigned to a Papa Ray's Pizza franchisee, you must immediately cease all deliveries and catering services to customers located in the other franchisee's Protected Area.

Throughout the term of the franchise, you are strictly prohibited from conducting targeted marketing to promote your Papa Ray's Pizza Restaurant within the Protected Area of another Papa Ray's Pizza franchisee. "Targeted Marketing" shall include all forms of advertising and promotion for customers which can reasonably be restricted to an address, including, but not limited to, direct mailings, door leaflets, telephone solicitation, and localized signs. The purpose of this restriction includes, but is not limited to, preventing confusion in the market place among Papa Ray's Pizza franchisees soliciting the same customers.

• 2.6 Wholesale Activities Prohibited. You agree to engage only in the retail sale of the products and services which comprise the System, and you agree not to engage in the wholesale sale and/or distribution of any product offered for sale through the Papa Ray's Pizza Restaurant. "Wholesale sale and/or distribution" shall mean any sale and/or distribution of product by you to a third party for resale, retail sale or further distribution by such third party. You shall not sell any products offered for sale through the Papa Ray's Pizza Restaurant through any Alternative Distribution Channels.
• 2.7 Minimum Annual Gross Revenue. Beginning with the second year of operation of the Papa Ray's Pizza Restaurant, you must have annual Gross Revenue for each year of operation of a minimum of Three Hundred Thousand Dollars ($300,000.00) ("Minimum Annual Gross Revenue"). If you do not achieve the Minimum Annual Gross Revenue for any year of operation,

you will be given the next twelve (12) months to increase revenues so that you meet the Minimum Annual Gross Revenue. If you do not meet the Minimum Annual Gross Revenue after having been given a twelve (12) month period to increase sales and achieve the Minimum Annual Gross Revenue, we may either (i) increase the amount that you must expend on local advertising pursuant to Paragraph 12.2 herein to an amount we in our discretion deem necessary in order to increase revenues, (ii) reduce or eliminate your Protected Area upon delivery of written notice to you, and thereafter, we may establish another Papa Ray's Pizza Restaurant in the former Protected Area or (iii) terminate this Agreement upon delivery of written notice to you.

3. RENEWAL OF FRANCHISE

• 3.1 Franchisee's Right to Renew. Subject to the provisions of Paragraph 3.2 below, and if you have substantially complied with all provisions of this Agreement and any other agreement between us, then on expiration of the initial term of the Franchise, you will have the right to renew the Franchise for one (1) additional successive term of ten (10) years if: (1) you maintain possession of the Premises, or (2) you are unable to maintain possession of the Premises or in our judgment the Papa Ray's Pizza Restaurant should be relocated, and you secure an approved substitute premises and agree to expeditiously develop the substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for Papa Ray's Pizza Restaurants. You and your Owners must also comply with our then-current training requirements and attend such training classes as we deem necessary. We will charge you a renewal fee of Two Thousand Five Hundred Dollars ($2,500.00) for services we render to you and expenses we incur in conjunction with the renewal.
• 3.2 Notice of Renewal and Nonrenewal. You must give us written notice of your election to exercise your option to renew at least nine (9) months before the end of the term of this Agreement. Within sixty (60) days of our receipt of your notice, we agree to give you written notice of any deficiencies in your operation or historical performance of the Papa Ray's Pizza Restaurant which could cause us not to renew the Franchise.

Source: Item 22 — CONTRACTS (FDD pages 39–40)