What is the basis for Central Bark Doggy Day Care granting the Development Obligation to the franchisee?

1. |

• A. We own a uniform System for the establishment and operation of businesses under the Marks used in connection with the development of canine care facilities offering day care, boarding services, grooming services, training, a specialty retail boutique for dogs, and other products and services authorized by us, under the name Central Bark® and other Marks (each a "Central Bark Facility" and more than one, the "Central Bark Facilities").
• B. We desire to expand and develop the Central Bark brand in the Multi-unit Territory, and you wish to open and operate Central Bark Facilities in the Multi-unit Territory, upon the terms and conditions as set forth in this Agreement.

The parties therefore agree as follows:

ARTICLE 1. GRANT OF MULTI-UNIT FRANCHISE RIGHT

1.1 Grant of Multi-Unit Franchise Right

• (a) Upon the terms and subject to the conditions of this Agreement, we hereby grant to you, and you hereby accept, the right and obligation, during the Term, to open Central Bark Facilities solely at Venues within the Multi-unit Territory. Each Central Bark Facility shall be operated according to the terms of an individual Franchise Agreement. An increase or decrease in the size of the cities, counties or political subdivisions, if any, included within the Multi-unit Territory will have no effect on the Multiunit Territory as it is described in Addendum 1.
• (b) No right or license is granted to you hereunder to use any Marks, trade dress or designs owned by us or our Affiliate, such right and license being granted solely pursuant to Franchise Agreements. Nothing in this Agreement will permit you to own or operate a Central Bark Facility, except pursuant to a valid Franchise Agreement. You shall not use the Marks in any manner or for any purpose, including in connection with any offering of securities or any request for credit, without our prior express written approval.

1.2 Exclusivity

• (a) During the Term of this Agreement, we and our Affiliates will not operate or grant a license or franchise to any other person to operate Central Bark Facilities at any Venue within the Multiunit Territory.
• (b) Except as provided in Section 1.2(a), we expressly reserve all other rights, including but not limited to the exclusive, unrestricted right, in its discretion, directly and indirectly, through its employees, Affiliates, representatives, licensees, assigns, agents and others:
  • (i) To use, and to license other persons to use, the Marks and System for the operation of Central Bark Facilities at any location other than in the Multi-unit Territory, regardless of proximity to the Multi-unit Territory, and regardless of whether such other businesses draw customers from the Multi-unit Territory;

Source: Item 1 — Franchisee shall have paid all Royalty Fees, advertising fund contributions, LAC contributions, amounts owed for purchases by Franchisee from Franchisor, or Franchisor's affiliates, and all other amounts owed to Franchisor, Franchisor's affiliates, and third-party creditors, and shall have submitted to Franchisor all required reports and statements; (FDD pages 106–233)