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ITEM 12 TERRITORY

Your Bumper Business will be located within a designated geographic area ("the Designated Area") as described in Exhibit D of the Franchise Agreement. We determine the Designated Area by the specific geographic and market factors affecting the Designated Area and by our overall plan for development of the Designated Area. These factors may include: the number of Major Dealerships, number of local and regional dealerships and the size and demographics of the local population. You do not have the right to use alternative channels of distribution (as further described below) in connection with offering bumper repair services and related products of the Bumper Man system unless otherwise approved by us.

We will not, during the term of your Franchise Agreement, operate or grant others the right to operate a Bumper Man repair services business in the Designated Area. Subject to certain rights reserved to us (as described below), only you will be authorized to market and perform Bumper Man bumper repair services in the Designated Area. If the demographics substantially change within your Designated Area, and we determine that the Designated Area may no longer be adequately serviced in accordance with our standards for customer service by a single Bumper Man franchisee, we: (i) may reduce the size of the Designated Area, so long as your Designated Area contains a minimum of

35 Major Dealerships; or (ii) offer the opportunity for you to retain the services of a certified technician that satisfies our then-current criteria for certified technicians and is approved by us in writing within 30 days of our notice of intent to modify the Designated Area. If we offer you the opportunity to retain the services of a certified technician, then within 60 days following our approval of your certified technician, you and the certified technician will execute our then-current form of certified technician addendum and the certified technician will pay the certified technician fee and complete Initial Training. Your Franchise Agreement does not give you any options, rights of first refusal or similar rights to acquire additional franchises. You are permitted only to operate one Bumper Business according to the terms of a single Franchise Agreement, although you may request our consent to transfer your Franchise Agreement subject to satisfying the conditions for consent to transfer and acquire the right to operate a Bumper Business in a new Designated Area (subject to availability).

You will not relocate your Bumper Business. With our prior written consent, you may transfer the Bumper Business to another Person and enter into our then-current Franchise Agreement for a new Designated Area, subject to your compliance with the terms and conditions for transfer set forth in the Franchise Agreement and the Manual.

We will not, except as provided below, and as long as you are in full compliance with the Franchise Agreement, establish and operate or license or authorize any other party to establish or operate a Bumper Business within the Designated Area for the term of the Franchise Agreement. Except as expressly limited by the previous sentence, we and our affiliates retain all rights with respect to Bumper Businesses, the Marks, the sale of similar or dissimilar products and services and any other activities we deem appropriate whenever and wherever we desire. Specifically, we and our affiliates reserve the following rights:

• (1) Advertise and promote the Bumper Man system within and outside the Designated Area;
• (2) Operate, and license others to operate, a Bumper Business at any location outside the Designated Area, including locations that are adjacent to the Designated Area;
• (3) Establish and operate, and license others to establish and operate, any business other than a Bumper Man business, including other automotive repair businesses, under the Marks or under other marks; and
• (4) Establish and operate and license others to establish and operate any auto repair businesses or other businesses that Franchisor or its Affiliates may operate as a result of any acquisition, consolidation, or merger.

You will not receive an exclusive territory. You may face competition from other businesses, from outlets that we own or from other channels of distribution or competitive brands that we control. As of the issuance date of this disclosure document, we do not own any outlets or control any other channels of distribution or competitive brands. In addition, you will receive a Designated Area in which we will not operate or grant others the right to operate a Bumper Man business, subject to the conditions set forth in this Item 12.

Source: Item 12 — TERRITORY (FDD pages 27–29)