pdates or upgrades.

ITEM 12 TERRITORY

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

Your Territory (Franchise Agreement)

Designation of Territory

We grant you the right to operate a Bigfoot Forestry Business within the territory described in Part E of ATTACHMENT "A" to the Franchise Agreement. We determine the boundaries of your territory using one of the following approaches:

• 1. We may designate a geographic area that includes a minimum of 100,000 owner-occupied households. If we use this approach, we may designate the boundaries by zip codes, municipal boundaries, or in any other manner we deem appropriate.
• 1. We may identify a central geographic point for your territory and designate your territory as the area within a 50-mile radius from the central point we designate. We intend to use this approach only in situations where there are fewer than 100,000 owner-occupied households within a 50-mile radius from the central point we designate.

We do not offer territories with more than 210,000 owner-occupied households (you must purchase an additional franchise to operate within a larger area). We use recent U.S. Census Data to determine the number of owner-occupied households. We reserve the right to use an alternative source of data in the future.

Your territory will not change during the term of the Franchise Agreement based on changes to the number of owner-occupied households. You have no right to alter or relocate your territory. If you renew your franchise rights we can (at the time of renewal) modify the boundaries of your territory in accordance with our thencurrent territory guidelines and criteria.

Extraterritorial Operations

You may not provide Bigfoot Forestry Services at job sites located outside your territory except as otherwise described below. With our prior written approval, you may provide Bigfoot Forestry Services at job sites located outside your territory but within a geographic area we approve (an "Approved Open Territory"). Under no circumstances will we approve an area that: (a) is assigned to another Bigfoot Forestry Business; or (b) is not adjacent to and contiguous with your territory. If we grant our approval, you may provide Bigfoot Forestry Services at job sites located in the Approved Open Territory subject to your compliance with: (a) our thencurrent extra-territorial operations policy, if any, described in the Manual; and (b) all other conditions and requirements that we specify. We may revoke our approval if we award the territory (or a portion of the territory) to another Bigfoot Forestry Business or if we determine you are not servicing the territory in accordance with our minimum standards (for example, if we receive a high number of customer complaints). If we revoke our approval, you must immediately discontinue all operations within the Approved Open Territory. You must also help transition to us (or any person we designate) any projects involving job sites located in the Approved Open Territory.

Location of Franchised Business

We expect franchisees will operate from a home office. You do not need our approval of your home office and you may relocate your home office at any time. You must notify us of the address of your new home office at least 30 days before you relocate. Although you may operate from a home office, you will need adequate storage space to store your equipment and tools. You may store these items at your home if you have sufficient space. Otherwise you must rent commercial storage space. We must approve the site of any commercial storage facility where you propose to store your equipment and tools. However, the storage facility is not required to be located in your territory.

Your Development Territory (ADA)

If you acquire area development rights, we will identify the boundaries of each franchised territory you will develop before signing the ADA. In other words, before you sign the ADA we will designate the boundaries of each territory that will granted to you under each Franchise Agreement you sign. The total geographic area comprised by all of the individual franchised territories constitutes your "development territory". The boundaries of your development territory will be described in Part E of ATTACHMENT "A" to your ADA.

There is no specific minimum or maximum size for a development territory. Instead, the size of your development territory is determined based on the number of Bigfoot Forestry Businesses you commit to develop under the ADA.

Source: Item 12 — TERRITORY (FDD pages 29–31)