What is the franchisee's obligation regarding the development and operation of Basecamp Fitness studios?

ble and is payable in full when you sign this Agreement and is fully earned by us at that time. However, you will not be required to pay an Initial Franchise Fee for any of the Basecamp Studios you develop under this Agreement.

• A. You will sign the Franchise Agreement for your first Basecamp Studio concurrently with this Agreement. A separate Franchise Agreement must be signed, on our then-current form, for each such Basecamp Studio. Upon the execution of each Franchise Agreement, the terms and conditions of that Franchise Agreement control the establishment and operation of such Basecamp Studio.
• B. The Development Fee is consideration for this Agreement and not consideration for any Franchise Agreement.
• 1. Development Schedule. The following provisions control with respect to your development rights and obligations:
• A. You must comply with the Development Schedule requirements regarding: (i) the date of execution of the Franchise Agreements and site approval requests; (ii) the opening date for each Basecamp Studio; and (iii) the cumulative number of Basecamp Studios to be open and continuously operating for business in the Development Territory. You represent that you have conducted your own independent

investigation and analysis of the prospects for the establishment of Basecamp Fitness studios within the Development Territory, approve of the Development Schedule as being reasonable, viable, and essential to the potential success of your business and recognize that failure to sign a Franchise Agreement, obtain a site approval, open a Basecamp Studio or have a cumulative number of Basecamp Fitness Studios open and operating, according to the applicable dates set forth in the Development Schedule, gives us the right, in our sole discretion, to immediately terminate this Agreement pursuant to Section 5.

• B. You may not open a Basecamp Studio under this Agreement unless you have notified us of your intention to develop the Basecamp Studio at least thirty (30) days prior to the date set forth in the Development Schedule and meet each of the following conditions (these conditions apply to each Basecamp Studio to be developed in the Development Territory):
  • 1. Good Standing. You must not be in default of this Agreement, any Franchise Agreement entered into pursuant to this Agreement or any other agreement between you or any of your affiliates and us or any of our affiliates. You also must have satisfied on a timely basis all monetary and material obligations under the Franchise Agreements for all existing Basecamp Fitness studios.
  • 1. Execution of Franchise Agreement. You and we have entered into our then-current form of Franchise Agreement and such other agreements that we require for the grant of Basecamp Fitness studio franchises for the proposed Basecamp Studio. You understand that we may modify the then-current form of Franchise Agreement from time to time and that it may be different than the current form of Franchise Agreement, including different fees and obligations; provided, however, that you will not be required to pay any initial franchise fee under any of those Franchise Agreements. You understand and agree that any and all Franchise Agreements will be construed and exist independently of this Agreement. The continued existence of each Franchise Agreement will be determined by the terms and conditions of such Franchise Agreement. Except as specifically set forth in this Agreement, the establishment and operation of each Basecamp Fitness studio must be in accordance with the terms of the applicable Franchise Agreement.
• 1. Term. Unless sooner terminated in accordance with Section 5 of this Agreement, the term of this Agreement and all rights granted to you will expire on the date that you sign the Franchise Agreement for the last Basecamp Studio that is scheduled to be opened under the Development Schedule.
• 1. Default and Termination.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–55)