Within my Beauty Bungalows Development Area, will I face competition from other channels of distribution or competitive brands that Beauty Bungalows or its affiliates control?

If you execute a ADA, you will be assigned a geographic area ("Development Area") within which you will be granted the right and obligation to develop and establish the agreed-upon number of franchised locations under a prescribed Development Schedule. The size of your Development Area may range from a portion of a city or an unincorporated area to a single or multi-county or single state area, and will be determined based on the number of franchised locations we grant you the right to develop and establish under the ADA, and the demographics of the general geographic area where we mutually agree you will be opening these locations. Your Development Area will be defined, typically by zip codes, in Attachment A to the ADA. Subject to your rights regarding a Protected Territory (as described below) around a franchised unit as set forth in the franchise agreement for such franchised unit, you may face competition within the Development Area from other franchisees, from outlets that we or our affiliates own, or from other channels of distribution or competitive brands that we or our affiliates control. You must execute our then-current form of franchise agreement for each franchised unit to be developed under the ADA within the Development Area. We will review and approve the site for each franchised unit to be developed in accordance with the Franchise Agreement for such franchised unit and our then-current site selection criteria, as summarized below.

Source: Item 12 — TERRITORY (FDD pages 30–32)