What exceptions exist to Bonchon's restriction on operating or franchising similar businesses within the Development Territory?

rds imposed in connection with same. See the description of the Franchise Agreements above in this Item 12.

For so long as the Area Development Agreement is in effect, neither we nor any of our affiliates (meaning any individual or entity we control, which controls us or which is under common control with us, together our "affiliates") will, within the Development Territory, operate or grant a franchise for a restaurant business operated under the Proprietary Marks of the type franchised to you, or a similar or competitive business, except for the rights we reserve that are described below (including, without limitation, our right to operate a Bonchon Restaurant or offer and sell Bonchon products and services at a Nontraditional Location located within your Development Territory). These restrictions, which are subject to the Trade Area Satisfaction Exception (as defined below), will terminate immediately upon the expiration or termination of the Area Development Agreement for any reason. If your Development Territory is comprised of various geographic trade areas within a particular or one or more cities, states or regions and we designate a specific number of Businesses that you may develop or operate within each geographic trade area, your exclusive right to develop and operate Bonchon Businesses within a certain geographic trade area will terminate once you have developed the specified number of Bonchon Businesses in the subject geographic trade area. For the avoidance of doubt, if your Development Territory includes City A, City B and City C and we grant you the right to develop two Bonchon Businesses in each city, then your right to develop Bonchon Businesses in City A will cease once you developed and commenced operations of two Bonchon Businesses. Accordingly, we will have the right to develop and operate or grant a third party the right to develop and operate additional Bonchon Businesses in City A, even if you have not fully satisfied your development obligations under your Area Development Agreement with respect to the other geographic trade areas within the Development Territory (e.g. in City B and City C) (the "Trade Area Satisfaction Exception"); provided, however, that neither we nor any third party will have the right to develop and operate a Bonchon Business within the Protected Territory granted under the Franchise

Agreement for each of the Bonchon Restaurants that you developed in City A pursuant to the Area Development Agreement except as otherwise permitted in the Franchise Agreement.

Outside of the Development Territory, we and our affiliates reserve the right to operate any number of Bonchon Businesses, and to authorize others to operate them, at any location we choose (including one or more locations that may be proximate to, but not within, the Development Territory).

We and/or our affiliates may engage in any business activity we choose in or outside the Development Territory except as we are restricted as described above, and the Area Development Agreement does not confer upon you any right to participate in or benefit from any other business activity (regardless of whether it is conducted under the Proprietary Marks or not). We thus may engage in, or authorize others to engage in, any form of business offering and selling any type of product or service except as restricted as described above. For example, we and/or our affiliates may own, operate or authorize others to own or operate any type of business at any location we choose, including within your Development Territory, so long as the other business does not sell under the Proprietary Marks the type of products or services which your franchised Bonchon Businesses offer and sell (except as permitted below). Further, we and/or our affiliates may own, operate or authorize others to own or operate Bonchon Businesses at any location outside of your Development Territory (including immediately proximate to it).

In addition, we and/or our affiliates alone have the right to offer and sell within and outside your Development Territory, and under the Proprietary Marks, any and all products or services and/or components or ingredients (including those used or sold by your franchised Bonchon Businesses), and whether or not a part of the Bonchon System, through any alternate channels of distribution, that is, any method of distribution other than a Bonchon Business situated within your Development Territory, including, without limitation, the internet/worldwide web; any other form of electronic commerce; "800" or similar toll-free telephone numbers; mail order; catalogs; television sales (including "infomercials"); telemarketing or other direct marketing sales; or, any other channel of distribution except for a Bonchon Business. You will not be entitled to any compensation in connection with these sales within your Development Territory.

We and/or our affiliates alone have the right to offer and sell Bonchon System products and services at any and all nontraditional locations, including nontraditional locations situated in your Development Territory, through the establishment of Bonchon Businesses, kiosks, mobile units, concessions or "shop in shops", and you may not engage in this activity. "Nontraditional Locations" includes sports arenas and venues; theaters; resorts; food retailers (including supermarkets, grocery stores and convenience stores); malls; schools and universities; hospital and healthcare facilities; airports; guest lodging facilities; day care facilities of any type; government facilities;

Source: Item 12 — TERRITORY (FDD pages 60–65)