g development schedules for such restaurants, will be set out in Exhibit A to the Development Agreement (the "Development Schedule").

You will not receive an exclusive territory in the Development Area. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. During the term of the Development Agreement, as long as you and your affiliates are in compliance with the agreement and all other agreements with us or any of our affiliates (including Franchise Agreements signed under the Development Agreement), we will: (a) grant to you, in accordance with Section 3 of the Development Agreement, at least that cumulative number of franchises for Checkers Restaurants or Rally's Restaurants set forth in Exhibit A to the Development Agreement, all of which are to be located within the Development Area (the locations of which we will approve in accordance with our then current criteria for selection of a Checkers Restaurant or Rally's Restaurant site); and (b) not operate (directly or through an affiliate), nor grant the right to operate, any Checkers Restaurants or Rally's Restaurants located within the Development Area, except for: (1) franchises granted pursuant to the Development Agreement; (2) Restaurants open (or under commitment to open) as of the date of the Development Agreement; (3) Checkers Restaurants, Rally's Restaurants or other restaurants using any part or all of the System and/or Marks at Non-Traditional Sites; and (4) restaurants that we purchase (or as to which we purchase the rights as franchisor) that are part of another franchise system or chain, regardless whether such restaurants are converted to operations as Checkers Restaurants or Rally's Restaurants using any of the

Marks and/or the System or whether such restaurants operate under other trademarks, service marks or trade dress and/or use other operating systems.

Except as otherwise expressly provided in the Development Agreement, we and all of our affiliates (and our or their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights and discretion with respect to the Marks, the System and Restaurants anywhere in the world, and the right to engage in any business whatsoever (without compensation to you), including the right to: (a) operate, and grant to others the right to operate, Restaurants at such locations and on such terms and conditions as we deem appropriate; (b) sell any products or services under the Marks, or under other trademarks, service marks or trade dress, through alternative channels of distribution (including the internet or similar electronic media and supermarkets); (c) operate, and grant to others the right to operate, restaurants identified by trademarks, service marks or trade dress, other than the Marks, under the terms and conditions we deem appropriate; and (d) be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at Checkers Restaurants or Rally's Restaurants, or by another business, even if such business operates, franchises and/or licenses Competitive Businesses in the Development Area.

You must be developing, or have open and operating in the Development Area, at least the cumulative number of Checkers Restaurants or Rally's Restaurants set out in the Development Schedule. We have no obligation under any circumstances to extend the Development Schedule. Your failure to develop and operate Checkers Restaurants or Rally's Restaurants in accordance with the Development Schedule will be a material breach of the Development Agreement; however, our right to terminate the Development Agreement will be our exclusive remedy for your failure to meet the Development Schedule. Except as noted above, a Developer's exclusivity in the Protected Area is not dependent on achieving certain sales volume, market penetration or any other contingency.

Competing Businesses

Company-owned and/or franchised Checkers Restaurants and Rally's Restaurants may compete with your Franchised Restaurant generally, although we do not currently intend to establish or franchise Checkers Restaurants in any Rally's franchisee's general market area, or Rally's Restaurants in any Checkers franchisee's general market area. Consequently, we do not anticipate any conflict(s) between the 2 systems. We intend to resolve any potential conflicts that may arise between a Checkers Restaurant and a Rally's Restaurant on a case-by-case basis.

We have integrated and will continue to integrate aspects of the Checkers and Rally's concepts. Although we intend to maintain separate brand names, outlets of both brands offer many of the same menu items and use a common restaurant design we have developed for both systems.

We have entered into agreements with independent third party food manufacturers and suppliers to produce, offer and sell certain food products to be distributed under the Marks in supermarkets, club stores, grocery stores, vending racks, and other retail outlets that may be located within the general market area of your Franchised Restaurant.

ITEM 13 TRADEMARKS

Status of Principal Marks

We registered the following principal Marks on the Principal Register of the United States Patent and Trademark Office ("PTO"):

Checkers Marks

Rally's Marks

| Mark | Registration Number | Registration Date | |---|---|---| | RALLY’S AND MAN DESIGN | Registration No. 1,362,660 | September 24, 1985 | | RALLY’S BURGERS FRIES | Registration No. 2,592,669 | July 9, 2002 | | COLAS Design Logo | | | | Mark | Registration Number | Registration Date | |---|---|---| | RALLY’S BURGERS FRIES | Registration No. 2,595,536 | July 16, 2002 | | COLAS Design Logo | | | | RALLY’S | Registration No. 1,735,052 | November 24, 1992 | | RALLY'S CRAZY GOOD | Registration No. 4,475,418 | January 28, 2014 | | FOOD | | | | RALLY'S CRAZY GOOD | Registration No. 4,475,419 | January 28, 2014 | | FOOD | | | All required affidavits of use and renewals have been filed.

Source: Item 12 — TERRITORY (FDD pages 57–60)