How is the territory for an Extreme Art Studio franchise determined and documented?

n the Effective Date and expires ten years from that date, unless sooner terminated as provided herein.

• 1.5 TERRITORY. Provided that you are in full compliance with the terms and conditions of this Franchise Agreement and all other agreements with us and our affiliates, we will not establish or operate, or franchise any entity to establish or operate, an Extreme Art Studio Business using the Marks and System at any location within the Territory (as defined below) of any of your Extreme Art Studio Businesses, once such Territory has been determined. The "Territory" shall be the specific geographical area we specify for the applicable Extreme Art Studio Business and may be described in terms of contiguous zip codes, street boundaries, and county boundaries or depicted on a map included on Attachment B-1 or the applicable Extreme Art Rider. .
• 1.6 TERRITORIAL RIGHTS WE RESERVE. Except as expressly limited by Section 1.5 above, you acknowledge and agree that we (and our affiliates) retain all rights with respect to the placement of Extreme Art Studio Businesses and other businesses using the Marks, the sale of similar or dissimilar products and services, and any other activities. These rights include, without limitation:
  • 1.6.1 the right to establish and operate, and allow others to establish and operate, other Extreme Art Studio Businesses and other art studio businesses and/or businesses offering On the Go Services using the Marks and the System, holding classes at any location outside the Territory of your Extreme Art Studio Businesses and on such terms and conditions we deem appropriate;
  • 1.6.2 the right to establish and operate businesses similar to the Extreme Art Studio Business anywhere under other trade names, trademarks, service marks and commercial symbols different from the Marks;
  • 1.6.3 the right to use the Marks and the System to sell any products or services the same as or similar to those that you will sell through any alternative channels of distribution within or outside of the Territory including retail locations and other channels of distribution such as television, mail order, catalog sales, wholesale to unrelated retail outlets, or over the Internet;
  • 1.6.4 the right for us and our affiliates to offer, franchise and license the right to offer each of the modules described in Section 3.7 of this Franchise Agreement;
  • 1.6.5 the right to merge, develop or acquire, or be acquired by (whether through acquisition of assets, ownership interests, or otherwise, regardless of the form of transaction), one or more additional concepts or businesses: (i) providing products and services similar to those provided at Extreme Art Studio Businesses; and/or (ii) creating or maintaining franchises, licenses, or similar arrangements with respect to these businesses, wherever these businesses (or the franchise owners or licensees of these businesses) are located or operating (including in the Territory of any of your Extreme Art Studio Businesses);
  • 1.6.6 the right to offer products and services offered by Extreme Art Studio Businesses under the Marks or any other trade names, trademarks, service marks, or commercial symbols that are the same as or different from Extreme Art Studio Businesses, at any special event, conference, exhibition, or temporary venue (including in the Territory of any of your Extreme Art Studio Businesses);
  • 1.6.7 the right to advertise, solicit, accept orders and offer and sell products and services to customers located outside the Territory of your Extreme Art Studio Businesses, including via the System Website, and the right to allow other Extreme Art Studio Businesses to do the same;
    • 1.6.8 the right to use and license the use of technology to non-franchisee locations inside and outside the Territory; and

1.6.9 the right to engage in all other activities not expressly prohibited by this Franchise Agreement.

We are not required to pay you if we exercise any of the rights specified above inside or outside your Territory including for our soliciting or accepting orders or for other franchisees soliciting or accepting orders. You agree that you may face competition from us, from other franchisees and from other channels of distribution or competitive brands that we control within the Territory.

1.7 MODIFICATION OF SYSTEM. Because complete and detailed uniformity under many varying conditions might not be possible or practical, you acknowledge that we specifically reserve the right and privilege, as we consider being best, in our sole opinion, to vary System Standards (as defined in Section 4.2) for any franchise owner based upon the peculiarities of any condition that we consider important to that franchise owner's successful operation. We may choose not to authorize similar variations or accommodations to you or other franchise owners.

2. DEVELOPMENT AND OPENING OF THE FRANCHISED BUSINESS.

• 2.1 EXTREME ART STUDIO BUSINESS. You agree not to operate the Franchised Business at any location outside of your Territory, except as provided in Section 1.6. In addition, if you operate an Extreme Art Studio Business, the following provisions in this Section Error! Reference source n ot found. shall apply to your Extreme Art Studio Business:
  • 2.1.1 You are responsible for selecting each Studio location for the Extreme Art Studio Business. We will provide you with assistance, including site selection, site evaluation, lease review, and construction project management for any Extreme Art Studio Business, as outlined in the Franchise Operations Manual. You may not lease or purchase a site for your Extreme Art Studio Business until after we have approved the site in writing. We will provide you with mandatory and suggested criteria for Studio locations for the Extreme Art Studio Business. We may inspect a Studio that you propose before we grant our approval. You acknowledge and agree that our approval of any Studio is merely our determination, entirely for our own purposes, that the Studio site meets our current criteria. Our consent does not constitute a representation or warranty of any kind, express or implied, of the Studio's suitability, and you confirm that you have not relied, and will not rely, on our approval for that purpose. You recognize that demographic and/or other factors could change at any time before or during the term of this Franchise Agreement, altering the Studio's potential and suitability. Your selection of the Studio is based on your own independent investigation of, or agreement in the future to investigate, the Studio's suitability.

Source: Item 22 — CONTRACTS (FDD page 49)