What is a Buff City Soap franchisee required to do to maintain their Protected Area?

• (1) Franchisee must operate the Makery at a site within the Designated Area.

Upon Franchisor's approval of the Premises and the Parties' execution of Exhibit G identifying the location of the Premises, Franchisee's Protected Area will be described in Exhibit G and deemed incorporated herein.

Except as otherwise provided in this Agreement (including without limitation Franchisor's reserved rights set forth in Section 2(e)), and subject to Franchisee's full compliance with this Agreement and any other agreement between Franchisee or any of its Affiliates and Franchisor or any of its Affiliates, neither Franchisor nor any Affiliate will operate or authorize any Person other than Franchisee to operate a Buff City Soap makery in the Designated Area until Franchisee's Protected Area is identified, and thereafter will not operate or authorize any Person other than Franchisee to operate a Buff City Soap makery in the Protected Area during the Term.

Notwithstanding the foregoing, this Section 2(d) will not apply to any Buff City Soap makeries operating or in development by any Person within the Designated Area as of the Effective Date.

• (2) The Protected Area described above will affect where Franchisee may solicit business sell products and services.

Franchisee can sell services and products to anyone from anywhere so long as such sales do not result from any direct solicitation activities outside of Franchisee's Protected Area and the services provided and products sold are being performed within the Protected Area.

Franchisee acknowledges and understands that Franchisor, other franchisees, licensees and company-owned businesses reserve the same right to service customers and sell services and products to anyone from anywhere without compensation to Franchisee.

Franchisee is prohibited from soliciting and marketing by any means (i.e. promotional materials, advertisements, Internet, social media, mobile applications, SMS texting, telephone, or any other means, electronic or otherwise) outside of its Protected Area and must not specifically engage in target marketing (defined below) within the Protected Area of another Buff City Soap® Makery (franchise and/or a company/affiliate owned business).

Target Marketing means a concerted effort by a franchisee to solicit and obtain customers through any type of advertisement or marketing, directed at all or a portion of another franchisee's Protected Area.

Franchisee may sell and ship products to people located outside of its Protected Area so long as its sales are not the result of solicitations outside its Protected Area or the result of Target Marketing activities by Franchisee.

• (3) Franchisee does not have the right to establish any additional or alternative channels of distribution (i.e. the Internet, Social Media or any other electronic means, including the telephone and SMS texting) without the express written permission of Franchisor, which may be withheld in our sole discretion.

• (e) Reserved Rights.

Franchisor retains all rights inside and outside the Protected Area except those that are expressly granted to Franchisee in this Agreement.

Without limiting Franchisor's and its

Affiliate's rights described in this Section 2(e), Franchisor and its Affiliates and any other authorized Person may, among other things:

• (1) Advertise and promote the System within and outside the Protected Area;
• (2) Operate, and license others to operate, Buff City Soap makeries at any location outside the Protected Area, including locations that are adjacent to the Protected Area;
• (3) Except for the restriction against the establishment of another Buff City Soap makery in the Protected Area, offer and sell, and authorize others to offer and sell, any products and services, including those offered and sold at Buff City Soap 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 (including, but not limited to, 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 Buff City Soap makery);
• (4) Establish and operate, and license others to establish and operate, any business other than a Buff City Soap makery, including other shops or retail businesses, under the Marks or under other marks, including makeries or other businesses that Franchisor or its Affiliates may operate, acquire, be acquired by, or be merged or consolidated with; and
• (5) Establish and operate and license others to establish and operate, Buff City Soap makeries and other retail facilities in any Reserved Area whether or not located within the Protected Area.

Source: Item 23 — Receipts (FDD pages 69–186)