What is the dependency between identifying the Protected Area and the restrictions on Buff City Soap operating or franchising another BCS Makery in the Designated Area?

According to Buff City Soap's 2025 Franchise Disclosure Document, the identification of a franchisee's Protected Area directly impacts the restrictions on Buff City Soap's ability to operate or franchise another location within the Designated Area. Initially, when a franchisee signs the Franchise Agreement but hasn't yet secured a specific location, a Designated Area is assigned, defined by zip codes, maps, or shopping areas. During the 60-day period to find a location, Buff City Soap agrees not to grant another franchise or open a company-owned store within that Designated Area.

However, once the franchisee finds an acceptable location and Buff City Soap approves it, a Protected Area is defined within the Designated Area. After the Protected Area is identified, Buff City Soap is restricted from operating or franchising another BCS Makery within that Protected Area during the term of the Franchise Agreement, provided the franchisee is not in default. This territorial protection does not depend on achieving specific sales volumes or market penetration.

It's important to note that this restriction does not apply to any Buff City Soap location already operating or under development within the Designated Area as of the Franchise Agreement's effective date. Furthermore, Buff City Soap retains rights within and outside the Protected Area, except those expressly granted to the franchisee, and the franchisee receives no compensation if Buff City Soap exercises these reserved rights. The size of the Protected Area can vary, ranging from a specific street address to a zip code, depending on the location of the Makery, with metropolitan areas typically receiving smaller Protected Areas than suburban or rural areas.