Does Beem Light Sauna provide an exclusive territory to franchisees?

nager, agent, independent contractor, or other third party. We will, however, remain responsible for ensuring that those obligations are performed in compliance with the terms of the Franchise Agreement.

ITEM 12 TERRITORY

Franchise Agreement

Site. Your franchise is for the specific Site that we approve. You must select a site that we have accepted within the non-exclusive Site Selection Area that we specify. Your Site Selection Area is not exclusive and is only intended to give you a general indication of the area within which you may locate the Site for the Studio. The site will be added to the Franchise Agreement once we accept it and you secure it.

Limited Territorial Protection. Once you have selected, and we have accepted, a Site in the Site Selection Area, and you have secured the Site, we will provide you an area in which you will have protected rights (the "Territory"). The size of your Territory may vary from the territory granted to other franchisees based on the location and demographics surrounding your Studio. Typically, the territory will be a geographic area encompassing (i) a population of approximately 50,000 people surrounding the applicable Studio or (ii) a two-mile radius from the front door of the Studio, whichever includes fewer people. However, in very high-density urban markets having a population above one million people, we might not provide any territory at all or might reduce the territory to no more than a city block. The sources we use to determine the population within your Territory will be publicly available population information (such as data published by the U.S. Census Bureau or other governmental agencies and commercial sources).

You will not receive an exclusive territory. You may face competition from other franchisees, outlets that we own, or other channels of distribution or competitive brands that we control.

Except as described below and for Non-Traditional Locations (defined below), we and our affiliates will not open, or license a third party to open, a Studio within your Territory. Except as stated in the preceding sentence, we and our affiliates have the right to conduct any business activities, under any name, in any geographic area, at any location, regardless of the proximity to or effect on your Studio. For example, we and our affiliates have the right to:

• (1) establish, or license others to operate, Studios or Sessions operating under the Marks and System at Non-Traditional Locations anywhere, including inside and outside the Territory. A "Non-Traditional Location" is a site that is located within a larger venue or facility that is likely to draw at least 75% of its customers from people who use such larger facility, including big box gyms and fitness facilities, cruise ships, military bases, college campuses, airports, sports or entertainment venues, hotels or resorts, theme parks, industrial or office complexes, train stations and other transportation facilities, travel plazas, casinos, hospitals, multi-unit residential properties, and other similar captive market locations;
• (2) establish, or license others to establish, studios or businesses offering similar or identical products, services, classes, and programs and using the System or elements of the System (i) under the Marks anywhere outside of the Territory, or (ii) under names, symbols, or marks other than the Marks anywhere, including inside and outside of the Territory;
• (3) sell or offer, or license others to sell or offer, any products, services, or Sessions using the Marks or other marks through any alternative distribution channels, including through e-commerce, in retail stores, via recorded media, via online videos, or via broadcast media, anywhere, including inside and outside of the Territory;
• (4) advertise, or authorize others to advertise, using the Marks anywhere, including inside and outside of the Territory; and
• (5) acquire, be acquired by, or merge with other companies with existing studios or businesses anywhere (including inside or outside of the Territory) and, even if such businesses are located in the Territory, (i) convert the other businesses to the Brand, (ii) permit the other businesses to continue to operate under another name, and/or (iii) permit the businesses to operate under another name and convert existing Studios to such other name.

Currently, we anticipate offering on-demand subscriptions, retail products, and teacher training programs under the Marks or other marks, but we and our affiliates reserve the right to conduct any of the aforementioned activities.

As long as you are in compliance with the Franchise Agreement, your exclusive rights in the Territory will not be modified for any reason, except by mutual written agreement signed by both parties.

We will not compensate you for any of our activities in your Territory, even if they have an impact on your Studio.

Minimum Sales Levels. During the Term, you must achieve the following minimum sales levels (the "Minimum Sales Levels"): (A) average monthly Gross Sales of at least $30,000 in

the first full calendar year after the Opening Date; and (B) average monthly Gross Sales of at least $40,000 in the second and each subsequent full calendar year after the Opening Date. If you fail to meet the Minimum Sales Levels in any calendar year, you must create a business plan that we must approve in writing and you must diligently implement the business plan during the next calendar year. If you fail to meet the Minimum Sales Levels for two consecutive years, such failure shall be an Event of Default, in which case, we may reduce the size of your Territory, terminate the Franchise Agreement, or exercise other remedies outlined in the Franchise Agreement.

Relocation of the Studio. If you would like to relocate your Studio, you must receive our written consent. Our approval will not be unreasonably withheld, provided (a) the new location for the Studio is satisfactory to us and complies with our then-current requirements, (b) your lease, if any, for the new location complies with our then-current requirements, and you and your landlord execute the Lease Rider, (c) you comply with our then-current requirements for constructing and furnishing the new location, (d) the new location will not, as determined in our sole discretion, materially and adversely affect the Gross Sales of any other Studio, (e) you have fully performed and complied with each provision of the Franchise Agreement within the last three years prior to, and as of, the date we consent to such relocation (the "Relocation Request Date"), (f) you are not in default, and no event exists, which, with the giving of notice and/or passage of time, would constitute a default, as of the Relocation Request Date, and (g) you have met all of our thencurrent training requirements. If you lose your lease, you must secure our approval of another site and enter into a lease for the new approved site within 90 days after you lose your site lease. You must pay us a relocation fee as specified in Item 6, whether or not your new proposed site is approved.

Restriction on Rights. Unless you sign a Development Agreement (described below), you do not have the right to open additional Studios, nor do you have any rights of first refusal on any other location. You do not have the right to use the Marks or the System at any location other than the Site or in any wholesale, e-commerce, or other channel of distribution besides the retail operation of the Studio at the Site. Any media advertising or direct mail marketing that you conduct must be predominantly focused within your Territory, unless we agree otherwise. There are no territorial restrictions from accepting business from customers that reside or work or are otherwise based outside of your Territory if these customers contact you, but we reserve the right to implement additional rules and restrictions regarding soliciting such customers in the future in our Manuals.

Development Agreement

Development Area. You may (if you qualify) develop and operate a number of Studios within a specific territory (the "Development Area"). We and you will identify the Development Area in the Development Agreement before signing it. The Development Area typically is a city, cities, counties, or specific zip codes and will be narratively described in, and pictorially identified on a map attached to, the Development Agreement.

Source: Item 12 — TERRITORY (FDD pages 47–51)