12 TERRITORY

Franchise Agreement

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

The Franchise Agreement grants you the right to operate a Del Taco restaurant at a single location selected by you and approved by us. If an approved location has not been identified when you execute the Franchise Agreement, a Site Selection Addendum to the Franchise Agreement will identify market points as determined by us (the "Site Selection Area") which will be within an approximate one-mile radius in which you may search for a site. When establishing market points, we consider various information, such as the locations of other restaurants, direct and indirect competition, store characteristics, historical consumer source surveys, sales history, mobile customer data, demographics, and psychographics, among others. Once approved by us, we will list the Restaurant's approved location on Exhibit A of the Franchise Agreement.

Subject to certain reserved rights in the Franchise Agreement, we will grant you a protected area around the approved location of the Restaurant (the "Protected Area"). The Protected Area is a circular area within

^** Certified Training Restaurants may be franchised or company-owned Restaurants and are located in various states. You may attend training at the Certified Training Restaurant nearest to you.

a one-mile radius from the front door of your Del Taco Restaurant, excluding Alternative Points of Distribution (described in the Franchise Agreement).

You are required to operate the Restaurant only at the location we approve. You may not operate the Restaurant or offer or sell any products or services at or from any location other than the approved location identified in Exhibit A of the Franchise Agreement. We do not restrict you from soliciting or accepting food or beverage orders from consumers outside your Protected Area, including the internet, catalog sales, telemarketing, or direct marketing. However, we have the right to approve all advertising and marketing media and materials you wish to use. No restrictions exist that prevent us from soliciting or accepting orders from consumers inside your Protected Area in the same manner, and we will owe you no compensation if we do so. You may not relocate the Restaurant without our prior written consent. You must comply with our then-current site selection and construction standards.

We will not operate or license others the right to operate any Del Taco Restaurant at a physical premises located within the Protected Area (subject to the reservations and limitations described in the Franchise Agreement) during the term of your Franchise Agreement. Except as expressly limited by the previous sentence, we and our affiliates retain all rights with respect to Del Taco restaurants, other branded, cobranded, or multi-branded restaurants, the Proprietary Marks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire.

The restrictions on our right to operate in your Protected Area do not apply to any Del Taco Restaurant existing or under development on the date the Franchise Agreement is signed. We are not required to pay you if we or our affiliates exercise any of the rights specified above inside or outside your Protected Area.

Source: Item 12 — TERRITORY (FDD pages 38–40)