What are the obligations of a Belocal franchisee regarding site selection (Item 9) in light of the potential for competition from businesses owned by the franchisor or its affiliates (Item 12)?

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

Office

You will operate your Office out of a facility you choose, and you may use your home as your Office. We do not provide site selection assistance, negotiation assistance, or approve your Office location. We do not own or lease Offices to franchisees. Nevertheless, your Office must be within 50 miles of the perimeter of your Territory unless we grant you a variance. You are solely responsible for selecting your Office, constructing, remodeling, or decorating it, and conforming the Office to local ordinances and building codes. Many franchisees operate from Offices at their homes, meaning the additional work to construct, remodel, decorate, or conform the Office to local code is unnecessary.

Advertising

You are not required to participate in any national, regional, or local advertising programs we manage or in any local or regional advertising cooperatives. You are not required to participate in an advertising fund. We do not have an advertising council.

We are not required to spend any money to advertise your Franchised Business, the Publication, or the BELOCAL brand generally. We are not required to spend any money for advertising in your Territory. If we choose to conduct any advertising related to the Franchised Business, the Publication, or the BELOCAL brand generally, we may use any media we choose, any source we choose (an in-house team, or local, regional, or national companies) and have total discretion to select the coverage (local, regional, or national).

You must obtain our prior approval for all advertising and promotional plans and materials that you desire to use to promote your Franchised Business and that we have not prepared or previously approved. You may only use advertising materials that you create, or have created for you, if we determine that these materials and the proposed use of these materials meet our standards. We reserve the right to disapprove at

any time any plans and materials we have previously approved, and you must promptly discontinue using any promotional or advertising plans or materials upon notice from us to do so.

Online Presences

[Item 1: THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]

our sole discretion. We may require you to complete additional training and achieve certain certifications in order to qualify for the opportunity to facilitate client relationships with Hyport Digital.

We may require your current and future Principals (as defined in the Franchise Agreement), which includes the franchisee "Owners," to sign a Principals' Undertaking Agreement, binding themselves individually to certain provisions of the Franchise Agreement, including the covenants against competition (Owners only), solicitation, and disclosure of confidential information; restrictions on transfer; and dispute resolution procedures. The Principals will also guaranty any amounts owed by Franchisee to us.

From time to time, we may offer promotions and incentives, including sales incentives, to existing franchisees. Any promotions and incentives will be outlined in the Franchise Brand Standards Manual. Any such promotions and incentives will be of limited duration and subject to change in our discretion. We have no obligation to offer such promotions and incentives.

Competition

The commercial, professional, retail, and special interest publications industry is highly fragmented, ranging from small local companies to mid-size regional companies to very large national organizations. You will compete with all of these providers, as well as other types of publications seeking to attract advertisers and other types of businesses seeking to sell advertising services. You may compete with publications that we, our affiliates, or our franchisees may control. Some of these competitors will have substantial financial, marketing, and other resources and they may be well established in your market.

The ability of your Franchised Business to compete depends on your ability to identify prospective advertisers, complete the sales process, and develop relationships in your community or with industry groups. Changing local market and economic conditions and many other factors both within and outside your control or our control may also impact your Franchised Business.