What constitutes a 'Competitive Business' that a Face Foundrie Area Developer is restricted from being involved in?

According to Face Foundrie's 2025 Franchise Disclosure Document, a 'Competitive Business' is defined in the context of restrictions placed on Area Developers. During the term of the Area Development Agreement, an Area Developer is restricted from owning, maintaining, operating, engaging in, being employed by, providing assistance to, or having any interest in a Competitive Business.

A Competitive Business includes any business operating or franchising an establishment where more than 10% of the offerings consist of facial services or beauty treatments for the face. Additionally, any business that offers waxing services is also considered a Competitive Business. This restriction aims to prevent Area Developers from using Face Foundrie's confidential information and specialized training to benefit a competing business.

However, there are exceptions to these competitive restrictions. The restrictions do not apply to the ownership or operation of other Face Foundrie Facial Bars that are licensed or franchised by Face Foundrie or its affiliates. Also, the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market, representing less than 5% of that class of securities, is also exempt from these restrictions. Furthermore, immediate family members of the Area Developer engaging in a Competitive Business can result in the Area Developer being considered in default of their agreement, leading to potential termination.