Does Belocal have the right to operate a business inside a franchisee's territory?

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Additionally, we, our affiliates, and any other authorized person or entity will have the right, among others, (i) to develop and establish other business systems (including systems that distribute products or services similar to those offered by the Franchised Business) using the Marks, or other names or marks, and to grant licenses to use those systems at any location without providing any rights to you; (ii) to advertise and promote any business of The N2 Company or any N2 Franchising, Inc. franchised business anywhere; (iii) to operate, and license others to operate, any business of The N2 Company or any N2 Franchising, Inc. franchised business or any publishing business of any of our affiliates anywhere, including locations that are inside, adjacent to, or surrounded by your Territory; and (iv) to engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and sale of all forms (including electronic forms) of magazines, newsletters, advertising, marketing, graphic and web design, or other services and products, under the Marks, or under other names or marks, without compensation to you, at any location, including in the Territory, through any method of distribution, including, but not limited to, mail order catalogs and the Internet, regardless of the proximity to, or the competitive impact on, the Franchised Business. If we solicit or accept orders from within your Territory, we are under no obligation to compensate you.

Our affiliate, The N2 Company, owns and operates a digital marketing services business under the trademark "Hyport Digital." These services include search engine optimization, search engine marketing, web design, email marketing, social media advertising, mobile and display advertising, and other related digital marketing services. Currently, Hyport Digital does not sell print advertising. There are no limitations on where Hyport Digital can solicit and sell its goods and services and Hyport Digital may sell its goods and services in your Territory and to the clients who purchase print advertisements in the Publication. The N2 Company shares our principal place of business and has no plan to implement separate offices or training facilities for the Hyport Digital business. We do not operate any Hyport Digital businesses.

If you choose to, you may solicit leads for Hyport Digital as part of your Franchised Business and receive a commission on referrals. You will also have the opportunity to facilitate the client relationships between such leads and Hyport Digital and receive a commission associated with such relationship management services. There are no restrictions on where you may solicit leads for Hyport Digital or restrictions on the location of the clients for which you facilitate the relationship with Hyport Digital. Your opportunity to solicit leads for and facilitate client relationships with Hyport Digital is conditioned on the continuance of

the sales program. We may modify and discontinue this program in our sole discretion. We may require you to complete certain training and certifications in order to qualify to facilitate a client's relationship with Hyport Digital.

As discussed in detail in Item 1, we offer Neighborhood Publications franchises and RP Businesses under separate disclosure documents, and these businesses operate using substantially similar operating systems as the Franchised Business. Our affiliate, The N2 Company, operates businesses similar to its various franchises but we currently do not. These businesses, among other activities, sell print advertising for publications, organize events, and sell digital advertising services using, as applicable, the STROLL® trademark, the GREET trademark, and the REAL PRODUCERS® trademark, among others. These other publications are targeted at different audiences than a BELOCAL® publication.

Source: Item 12 — TERRITORY (FDD pages 42–44)