Under the Carls Jr. Franchise Agreement, will I receive an exclusive territory?

You will not receive any exclusive territory under the Franchise Agreement. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. You do not receive the right, under the Franchise Agreement, to develop or operate more than one Franchised Restaurant. Our prior written consent is required before you relocate the Franchised Restaurant. If your right to possession of the Franchise Restaurant premises is lost through no act or failure to act on your part, you may relocate the Franchised Restaurant if: (1) we accept the new location; (2) you construct and equip a Franchised Restaurant at the new location in accordance with the then-current System standards and specifications; (3) a Franchised Restaurant at the new location is open to the public for business within 6 months after the loss of possession of the original franchised location; and (4) you reimburse us for all reasonable expenses actually incurred by us in connection with the acceptance of the new location.

You may only sell or distribute products identified by some or all of the Proprietary Marks from the Franchised Location; you may not use any other method or channel of distribution. We do not impose any geographic restrictions on your ability to solicit customers; however, see Item 13 for Internet restrictions. In addition, you must participate in all online ordering and delivery programs that we may designate from time to time and comply with the terms and conditions of such programs, including any geographic or other delivery restrictions. There are no restrictions on our ability to solicit customers, nor must we pay any compensation to you for soliciting or accepting orders. We reserve all rights to use and license the Carl's Jr. System other than those we expressly grant to you. We reserve the right to merchandise and distribute goods and services identified by the Proprietary Marks (or different proprietary marks) through any method or channel of distribution, including the Internet.

As noted in Item 1, pursuant to the Management Agreement, CKR, at all times acting on our behalf, may fulfill all of our duties and obligations under all existing and future Franchise Agreements and Development Agreements, including managing the Carl's Jr. System; marketing and offering new and renewal Franchise Agreements and Development Agreements as our franchise broker; training franchisees and their employees; and providing the required support to franchisees. Pursuant to the same Management

Agreement, CKR, also fulfills all of HR's duties and obligations under all existing and future franchise agreements and development agreements for Hardee's Restaurants, which are quick service restaurants identified in whole or in part by the name "Hardee's." Except in limited circumstances, Carl's Jr. Restaurants are not located in the same geographic area as Hardee's Restaurants. In the limited circumstances where there is overlap, HR and its franchisees may solicit or accept orders within the same area served by Restaurants operated by Carl's Jr. franchisees, and any potential conflict between the franchisees of each system will be resolved on a case by case basis.

Source: Item 12 — TERRITORY (FDD pages 55–56)