Under the Area Development Agreement for Dermani Medspa, is the Development Area exclusive?

As described in Item 1, if you sign an Area Development Agreement, you will receive a Development Area in which you must develop multiple Franchised Businesses. The Development Area may be all or part of a Metropolitan Statistical Area (or "MSA") Your rights within the Development Area are non-exclusive, and we may award the same Development Area to multiple area developers, however, we will not sell the right to develop more dermani MEDSPA®s than the total number of available territories available in the Development Area. You will not receive an exclusive territory under your Development Agreement. You may face competition from other franchisees, from outlets that we control, or from other channels of distribution or competitive brands that we control.

Once you have secured an approved site for a given dermani MEDSPA® under a Franchise Agreement to fulfill your development obligations under your Development Agreement, we will grant you a Territory around that dermani MEDSPA® wherein you will have territorial protection as previously discussed in this Item 12.

We will retain all other rights, and therefore we retain the right (among others), and without granting to you:

• 1. the right to operate, and to grant others the right to operate, Franchised Businesses, dermani MEDSPA®s, and similar medical management businesses or similar medspas or medical centers under different names or marks located anywhere within or outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to any of your dermani MEDSPA®s or the Development Area;
• 1. the right to establish and operate (and to grant to others the right to establish and operate) any other businesses offering products and services that are different from the products or services offered at dermani MEDSPA®s through similar or dissimilar channels of distribution (including, but not limited to: (i) sales through direct marketing, such as over the Internet or through catalogs or telemarketing; (ii) sales through retail stores that do not operate under the Marks; and (iii) sales made at wholesale), at any locations inside or outside the Development Area under trademarks or service marks other than the Marks and on any terms and conditions we deem appropriate;
• 1. the right to acquire the assets or ownership interests of one or more businesses that operate, and/or has granted franchises, licenses, or similar rights to one or more third parties to operate, businesses similar to and/or competing with dermani MEDSPA®s and Franchised Businesses related to dermani MEDSPA®s, and/or the right to be acquired by a competing medical business or medical management business, or by another business, even if such business operates, franchises and/or licenses competitive businesses in the Development Area, and if we acquire, or are acquired by, such a competing business or chain, we may establish or grant franchises or licenses to establish new or additional competing businesses under the Marks or the acquired chain's marks in your Development Area, and we may rebrand such existing businesses in your Development Area to use the Marks and the System, and it is expressly acknowledged by you and us that any such business operations of the same or similar business that existed or operated at the time of such acquisition or transaction shall not constitute a breach of the Development Agreement;

Source: Item 12 — TERRITORY (FDD pages 43–46)