Will a Buff City Soap franchisee receive compensation if Buff City Soap exercises its reserved rights?

e Agreement. The Protected Area will be determined by us and stated in an Exhibit G of the Franchise Agreement that we send you.

The continuation of territorial protection under the Franchise Agreement does not depend on the achievement of any specific sales volume, market penetration or other contingency. We retain no rights to modify your Protected Area.

We retain all rights within and outside the Protected Area except those that are expressly granted to you in the Franchise Agreement. You will receive no compensation if we exercise our reserved rights. Without limiting the preceding sentence, we retain the right:

(1) to advertise and promote the System within and outside the Protected Area;

• (2) to operate and license or franchise other persons to operate a BCS Makery at any location outside of your Protected Area;
• (3) except for the restriction against the establishment of another BCS Makery in the Protected Area, to offer and sell, and authorize others to offer and sell, any products and services, including those offered and sold at BCS Makeries (such as packaged personal care products, clothing, merchandise and other Buff City Soap memorabilia), under the Marks or other trademarks at or from any location or through any channel of distribution (spas, salons, boutiques, supermarkets, discount stores, department stores and convenience stores, hospitals, health care facilities, airports, stadiums, business or industry locations (e.g. manufacturing site, office building, distribution facilities), military installations, military commissaries, universities, schools, the internet (or any other existing or future form of electronic commerce), other retail locations or wholesale channels and other retail facilities such as kiosks and multi-brand facilities providing a limited number or representative sample of the Products and services normally offered by a BCS Makery);
• (4) to establish and operate, and license others to establish and operate, any business other than a BCS Makery, including other shops or retail businesses, under the Marks or under other marks, including Makeries or other businesses that we or its affiliates may operate, acquire, be acquired by, or be merged or consolidated with; and
• (5) to establish and operate and license others to establish and operate, BCS Makeries and other retail facilities in any Reserved Area whether or not located within the Protected Area. A Reserved Area is any location that by its nature is unique and separate in character from locations generally developed as BCS Makeries, which include military bases, airports, shopping malls, hospitals, campuses, schools, hotels, casinos and other mass gathering locations or events. Because we may operate and authorize others to operate BCS Makeries in any Reserved Area, 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.

Source: Item 12 — TERRITORY (FDD pages 43–45)