• 1.11 "Franchise" means the Beauty Bungalows Studio which Franchisee is granted the right to operate in conformity with the requirements of this Agreement.

2. GRANT OF FRANCHISE

• 4.01 Franchise.

Franchisee may operate the Franchise only at the mutually agreed upon Premises to be located within the Site Selection Area set forth in Appendix A to this Agreement.

Franchisee may not relocate the Premises without Franchisor's prior written approval; such consent shall not be unreasonably withheld.

• 4.02 Protected Territory.

Once you have selected and we have accepted a Premises in the Site Selectin Area, we will designate an area within the confines of your Site Selection Area as your Protected Territory.

During the term of this Agreement and any extensions, neither Franchisor nor any affiliate will operate, or grant others the right to open and operate, a Beauty Bungalows location using the Marks within your Protected Territory, but Franchisor, its affiliates, and its franchisees have the right to do so anywhere outside your Protected Territory as designated in Appendix A to this Agreement.

Once established, the boundaries of Franchisee's Protected Territory will not be adjusted during the Term without the written consent of both parties hereto.

• 4.03 Solicitation.

Franchisee will have the right to solicit potential Customers within the Protected Territory.

Franchisee may not knowingly, directly or indirectly, solicit or endeavor in any way to entice or lure customers of another Beauty Bungalows franchisee except, however, the general solicitation of potential Customers through direct mail and social media advertising, when intended as a general solicitation across large, multiple geographic areas, is not a violation of this provision.

• 4.04 Reservation of Rights.

Franchisor reserves the rights, among others:

• (a) to own, franchise, or operate Beauty Bungalows businesses anywhere outside of the Protected Territory, regardless of the proximity to the Premises;

• (b) to use the Marks and System to sell any goods or services, including any salon equipment and beauty supplies, similar to those which Franchisee will sell through alternative distribution channels within or outside of the Protected Territory, other than through the Franchise at the Premises.

• (d) to implement Multi-Area Marketing Programs which may allow Franchisor or others to solicit or sell to Customers or potential Customers anywhere, as set forth in Section 9.

In such a program, Franchisee will have the option of servicing any Customer within its Protected Territory.

Source: Item 22 — CONTRACTS (FDD pages 47–48)