What guidelines does Brueggers Bagels provide for site selection?

Before acquiring a site for the Bakery, you must submit any information that we reasonably request to evaluate the proposed site. In order to accomplish this, you must provide fully executed site control documentation, related addenda, a preliminary site plan, and a site selection form. The criteria that we evaluate in the site approval process include, but are not limited to, accessibility, visibility, traffic counts, traffic patterns, demographics, available parking, and local competition. We will provide the standard site selection assistance for each Bakery. We may physically review your proposed sites and provide on-site evaluations, if we deem them advisable. We will accept or reject the proposed site in writing within 30 days after we receive all requested information from you for a proposed site. After site approval, we will provide you with a Franchise Agreement or License Agreement for that site. The site that we approved will be designated as the "Premises" in Exhibit A to the Franchise Agreement. If we reject your proposed site, we will encourage you to submit alternative site(s). If we do not approve a site, and accordingly you are not open and in operation within nine months after signing the Franchise Agreement, the Franchise Agreement will terminate.

Any binding commitment to purchase or lease the site must be made contingent upon our approval of the site and the preliminary site drawings. You must submit a copy of the proposed lease or purchase agreement for the site to us for approval. Our approval of the lease or purchase agreement will be conditioned upon the inclusion in the lease or purchase agreement of terms acceptable to us.

We may condition our decision to approve or reject the lease on the following factors:

• 1. The lessor must consent to your use of the Proprietary Marks and required signs.
• 1. The lease must restrict the use of the Premises solely to the operation of the Bakery at the time you sign the Franchise Agreement.
• 1. The lease must prohibit you from subleasing or assigning all or any part of your occupancy rights without our prior written consent. The lease must also prohibit extension of the term or renewal of the lease without our prior written consent.
• 1. The lessor must provide us with copies of all notices of default given to you under the lease.
• 1. We must have the right to enter the Premises to make modifications necessary to protect the Proprietary Marks or the System or to cure any default under the applicable Franchise Agreement or under the lease.
• 1. We must have the option, upon default, expiration, or termination of the applicable Franchise Agreement, and upon notice to the lessor, to assume all of your rights under the lease, including any right to assign or sublease, and to require landlord to terminate your lease and enter into a new lease with us for the balance of the term of the lease upon the same terms and conditions.
• 1. You must have the right to remodel the Premises without the lessor's prior approval.
• 1. You must have the right, without the lessor's prior approval, to assign the lease or sublet the leased Premises to us, any of our affiliates, any other person or entity we designate, or any franchisor, franchisee or developer of Bruegger's Bakeries.
• 1. The lessor must agree not to lease space in property owned, managed or controlled by it within one mile of the Premises to any Competing Business, as defined below. "Competing Business" includes any entity that is open for both breakfast and lunch and whose primary business consists of the sale of both: 1) freshly-baked bakery goods such as breads and/or bagels, muffins, scones, Danishes or other pastries, and 2) made-toorder café items such as sandwiches, salads, soups, and desserts. The lessor must also agree to insert in any lease, deed or other agreement affecting the shopping center property a restrictive clause prohibiting use of the property in any way that conflicts with the lease for the Premises.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, MANUALS AND TRAINING (FDD pages 32–42)