How is the Protected Territory for a Canine Dimensions franchise delineated?

Y

You will receive an exclusive territory called the "Protected Territory." Your Protected Territory will be defined as having approximately 150,000 households and will be delineated by zip codes, or geographical boundaries (such as streets, towns or counties). We (and any affiliates that we periodically might have) will not establish, nor allow another franchise owner to establish, another Franchised Business located within your Protected Territory.

You will have the right to establish your franchised business at an "Approved Location," which must be within your Protected Territory. The Approved Location will be your home. The Approved Location must be approved by us.

We have the right to terminate our grant, or reduce the size, of your Protected Territory if you default under the Franchise Agreement for, among other things, failing to maintain our standards or failure to pay royalty and other fees when they become due. Otherwise, continuation of your territorial exclusivity does not depend on your achieving a certain sales volume, market penetration, or other contingency, and there are no other circumstances when your Protected Territory may be altered. There are not any other circumstances that permit us to modify your territorial rights.

We and our affiliates retain all rights with respect to Canine Dimensions Businesses, the Marks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire, including, but not limited to the following rights:

• (1) The right to operate, and to grant others the right to operate Canine Dimensions Businesses located anywhere outside your Protected Territory under any terms and conditions we deem appropriate and regardless of proximity to your Franchised Business.
• (2) The right to provide, offer and sell and to grant others the right to provide, offer and sell goods that are identical or similar to and/or competitive with those provided at your Franchised Business, whether identified by the Marks or other trademarks or service marks, through dissimilar channels of distribution (including retail stores, the Internet, and electronic media) both inside and outside your Protected Territory and on any terms and conditions we deem appropriate.
• (3) The right to merge, combine, acquire, or be acquired by (regardless of the form of transaction), by a business providing products and services similar to those provided at Canine Dimensions Businesses, or by another business, even if such business operates, franchises, and/or licenses competitive businesses within your Protected Territory. We will not, however, permit any such business located within your Protected Territory to operate under our Marks.
• (4) The right to engage in any other business activities not expressly prohibited by the Franchise Agreement, both within and outside your Protected Territory.

We are not required to pay you if we exercise any of the rights specified above within your Protected Territory. Continuation of your rights in the Protected Territory does not depend on your achieving a certain level of sales.

You may not relocate your Franchised Business without our consent, which will not be unreasonably withheld. Your new location must be within your Protected Territory, except that if you choose to move your home to a location outside of your Protected Territory, we may require you to obtain rented space within the Protected Territory from which to operate the Franchised Business. If you do relocate your Franchised Business, your territorial boundaries will not change.

You may provide services only to customers and prospective customers who live in your Protected Territory. You may not engage in any promotional activities or sell any products or services, directly or indirectly, through or on the Internet, the World Wide Web, or any other alternative distribution channels (collectively, "Alternative Distribution Channels") directed sent or directed to customers or prospective customers located outside of your Protected Territory.

Source: Item 12 — TERRITORY (FDD pages 23–25)