Is Deka Lash territorial exclusivity dependent upon meeting a development schedule?

opened according to the Development Schedule described in the Area Development Agreement, which will specify the number of Franchised Businesses to be open and the time frames within which they must be open.

Area Development Territorial Exclusivity. Your territorial exclusivity is not dependent upon meeting the development schedule, achievement of a certain sales volume, market penetration or any other contingency. However, you can lose all rights to the undeveloped portion of a development area for failure to meet a development schedule.

Area Development Schedule Extension & Fees. In the event that you fail to meet your Area Development obligations under your Area Development Agreement, and you are (a) current on your obligations owed to us, (b) in compliance with your franchise agreement(s) and (c) showing a good faith effort in trying secure and open your next scheduled studio, then following will occur:

• a) Extension with Release (6 months). Per written notice to us and execution of a general release in our favor, we will grant you a one-time, six-month extension to your development schedule with no Delayed Opening Fee. This six-month extension can only be used once during your development agreement and delays all subsequent development dates by 6 months. Pursuant to COMAR 02.02.08.16L, the general release required as a condition of sale, or transfer, shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
• b) Delayed Opening Fee Assessed (for up to 12 months). For each month you are behind on your Development Schedule (Extension with Release excluded), you will be charged a Delayed Opening Fee of $500 for each territory when that territory is due. This Development Schedule Extension Fee must be paid to us with our then-current royalty collections process. For each month this is paid, your development schedule for each of

• those unit rights will be extended by one month. We will allow you to pay a Delayed Opening Fee for up to 12 months.
• c) Loss of Protected Territory and Transferability. If at any point you (a) do not pay your delayed opening fee, (b) stop or refute our ability to ACH this transaction, (c) notify us, in writing, that you no longer want to be charged the delayed opening fees, or (d) after a period of 12 months of paying the delayed opening fee, you will immediately lose your protected territory rights and all accompanying transferability rights therein. Franchisor additionally retains all rights to approve the studio location(s).

If at any point, you are (a) not current on your obligations owed to us, (b) not in compliance with your Franchise Agreement(s) or Development Agreement, or (c) not showing a good faith effort in trying to secure and open your next scheduled studio, your territory and remaining development rights will be immediately terminated.

Source: Item 12 — TERRITORY (FDD pages 40–44)