any advertising/marketing material that We have disapproved for any of the reasons set forth in this Section.

• (d) You shall adopt and use CINCH I.T. Licensed Rights only in the manner expressly approved by Us.

4. TERRITORY

• (a) You shall have the right to operate a CINCH I.T. Franchised Business, and to use the Licensed Rights in a Designated Territory that contains an approximate business population of three thousand (3,000) to three thousand five hundred (3,500) businesses defined as businesses with ten (10) or more employees. The businesses in Your Designated Territory will be determined by a review of any combination of records of business establishments and agencies or commissions which track business population count in Your Designated Territory. We will not grant to others (nor reserve unto ourselves except as specified in this Agreement) the right to operate a CINCH I.T. business within Your Designated Territory.
• (b) We reserve the right to use and franchise within Your Designated Territory any other trade names and trademarks that We might develop and not designate as Licensed Rights in the future, for use with similar or different franchise systems. You are granted no automatic rights to acquire additional franchises within Your Designated Territory, or within any contiguous territories.
• (c) Notwithstanding the provisions of the above Subsection 4(a), We specifically reserve the right to develop, grant, license or use additional distribution methods for the sale of Our trademarked merchandise, including wholesalers and retailers within Your Designated Territory.
• (d) As long as You are in compliance with all terms and conditions of this Agreement, We may not otherwise alter Your Designated Territory, as it is defined in this Agreement, and as it is more specifically identified in Addendum A to this Agreement.

(e) You agree that You will not actively advertise or market for clients outside of Your Designated Territory without Our prior written approval. We do not restrict You from passively attracting clients from outside Your Designated Territory and likewise We do not restrict other franchisees from passively attracting clients from outside their designated territory which may include Your Designated Territory. In addition, with Our prior written permission, You may attend national, regional or extra-territorial tradeshows, meetings and events anywhere, including territories owned by other franchisees, however, You cannot actively use telemarketing, direct marketing or other channels of distribution to advertise outside of Your Designated Territory unless specifically authorized in the Operations Manual or in written communication from Us.

Except for the limitations on advertising and marketing outside of Your Designated Territory, You have no restrictions on who Your clients are or where they come from. You may accept business from outside of Your Territory without permission or special payment.

5. TERM

The term of this Agreement shall commence on the date first set forth above and shall continue for a term expiring upon the date five (5) years following, unless earlier terminated pursuant to the terms of Section 32 of this Agreement.

6. RENEWAL

You may renew the franchise to own and operate the Franchised Business and the right to use the Licensed Rights for three (3) additional successive five (5) year terms; provided that, prior to the expiration of the applicable initial or renewal term:

• (a) You provide Us written notice of Your election to exercise the renewal option not less than six (6) months, nor more than twelve (12) months, prior to the end of the then-current term;
• (b) When such notice is given, and thereafter up to and including the date of renewal, You are not in default of any provision of this Agreement, or any other agreement between You and Us or any of Our subsidiaries or affiliates, including any other franchise agreement, and have substantially complied with the terms and conditions of all such agreements during the term of this Agreement;
• (c) You have not received three (3) or more notices of default from Us during the then-current term of this Agreement;
• (d) All monetary obligations owed by You to Us and any of Our subsidiaries and affiliates have been satisfied and paid when due throughout the initial and all prior renewal terms of this Agreement;
• (e) You execute Our then-current standard form of franchise agreement (with appropriate modifications to reflect that such agreement relates to the grant of a renewal franchise) being

executed by franchisees for new CINCH I.T. franchised businesses, which agreement shall supersede in all respects this Agreement and which may contain terms and conditions substantially different from those set forth in this Agreement, including, without limitation, a different royalty fee, different advertising expenditure requirements, and a smaller Designated Territory;

Source: Item 23 — RECEIPTS (FDD pages 60–269)