What are the restrictions on a Degree Wellness franchisee's ability to operate outside their protected territory, considering the obligations outlined in Item 9 and the territory definition in Item 12?

regoing, under no other circumstances may your Protected Territory be altered or modified by us.

You may solicit, accept and sell authorized services and products (including, if permitted under the Franchise Agreement, the services and products under our optional programs) to customers who reside outside your Protected Territory without having to pay any special compensation to us or any other Degree Wellness Studio franchisee. You are permitted to use other channels of distribution, such as the internet, email, social media, telemarketing, or other direct marketing, to make or solicit such sales outside of your Protected Territory. Likewise, Studios owned by us or other Degree Wellness franchisees may solicit, accept, and sell authorized services and products to customers residing in your Protected Territory without having to pay you any special compensation. Studios owned by us and other Degree Wellness franchisees are permitted to use other channels of distribution, such as the internet, email, social media, telemarketing, or other direct marketing, to make or solicit such sales inside of your Protected Territory using the Marks. You may not discount your pricing to attract customers who live in the Protected Territory of another Degree Wellness Studio. Except as otherwise granted pursuant to a Development Agreement, you have no options or rights of first refusal to acquire or purchase additional Degree Wellness Studios. We will not solicit customers from within your Protected Territory and have therefore not established a method compensation for doing so.

Development Agreement

If you enter into a Development Agreement, provide a Development Schedule and assign a Site Selection Area for all Studios that will be developed. The size of the Site Selection Area will likely vary among new prospects and developers, with the size of your Site Selection Area typically depending on the demographics of the area in and around the region you wish to develop.

We typically identify your initial Site Selection Area, early during the franchise due diligence and offer process, based on where you tell us you wish to operate, and the agreed-to geographic description is inserted into your Development Agreement before you sign it. The Site Selection Area may not be modified at any time during the term of the Development Agreement unless the parties mutually agree to the modification in a separate signed writing. Site Selection Areas are exclusive, and will not allow other franchisees into your Site Selection Area as long as you are compliant with your Development Agreement.

Once you have secured a Premises for a given Studio to be developed per your Development Agreement, we will grant you a Protected Area around that Studio as described above. Each new site approved pursuant to your Development Agreement will be approved in accordance with our then-current site criteria.

Development Schedule

Your Development Schedule will depend on the number of units you acquire the rights to develop in your Development Agreement. If you enter into an agreement granting you the rights to develop three units, your Development Schedule will be as follows:

Reservation of Rights

We and our affiliates reserve the right to engage in any activities we deem appropriate that your Franchise Agreement does not expressly prohibit, whenever and wherever we desire, including the right to (a) operate, or grant to others the right to operate, Degree Wellness Studio franchises physically located outside of your Protected Territory on terms and conditions we deem appropriate; and (b) offer or operate other healthcare-related companies or franchises, or enter into other lines of business, offering products and services that are similar or dissimilar to those offered by Degree Wellness franchises, both in and outside of your Protected Territory, under trademarks and service marks other than the Marks without any compensation to you, and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s);