• B. Franchisee has acquired the right and has undertaken the obligation to develop and operate a Degree Wellness Studio pursuant to the terms and conditions of a certain franchise agreement between Franchisee and Franchisor ("Franchise Agreement").

1. 1 Term; Reference to Exhibit 1. You have applied for a franchise to own and operate a Degree Wellness Studio, and we have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you

• a Franchise to operate a Studio offering all products, services, and proprietary programs of ours in accordance with all elements of the System, that we may require for Degree Wellness Studios.

You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for an "Initial Term" of 10 years.

• 2.2 Full Term Performance.

You specifically agree to be obligated to operate the Franchise, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the business of the Franchise for the entire Initial Term, and any subsequent renewal or extension of the Term of this Agreement.

• 2.3 Protected Territory; Reference to Exhibit 1; Reservation of Rights.

You acknowledge that the Franchise granted by this Agreement gives you the right to operate your Franchise only at the Premises.

Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Studio franchise physically located within the territory described in Exhibit 1 (the "Protected Territory").

16. RIGHTS AND OBLIGATIONS OF COMPANY AND FRANCHISE OWNER UPON TERMINATION OR EXPIRATION OF THE FRANCHISE.

• 16.1 Payment of Amounts Owed to Degree Wellness. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid including, without limitation, any unpaid Initial Franchise Fee, any unpaid Continuing Franchise Fees, and any termination fee, damages, costs or expenses owed by you pursuant to Section 15.3, together with any audit costs and expenses owed by you pursuant to Section 13.2.
• 16.2 Marks. Use of the Marks and Copyrightable Works after the termination or expiration of the Studio Franchise will constitute the unlawful use of our intellectual property rights, which include trademarks and service marks. You agree that after the termination or expiration of the Franchise you will:
• a. not directly or indirectly at any time identify any business with which you are associated as a current or former Degree Wellness franchise or franchisee;
• b. not use any Mark, any colorable imitation of any Mark, or any Copyrightable Works in any manner or for any purpose, or use for any purpose any trademark or other commercial symbol that suggests or indicates an association with us;
• c. return to us or destroy (whichever we specify) all customer lists, forms and materials containing any Mark or any Copyrightable Works or otherwise relating to a Degree Wellness franchise;
  • d. remove all Marks affixed to uniforms or, at our direction, cease to use those uniforms; and

e. take any action that may be required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark.

• 16.3 De-Identification.

If you retain possession of the Premises, you agree to completely remove or modify, at your sole expense, any part of the interior and exterior decor that we deem necessary to disassociate the Premises with the image of a Degree Wellness franchise, including any signage, posters, furniture, equipment, products, or display units bearing the Marks.

You agree that during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at Degree Wellness Studio franchises

Source: Item 23 — Receipts (FDD pages 66–257)