Under what conditions does FSI grant the right to operate a Fat Shack Restaurant?

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2. GRANT OF FRANCHISE

2.1. Grant of Franchise

FSI grants to Franchisee, and Franchisee accepts from FSI, the right to use the Marks and Licensed Methods in connection with the establishment and operation of a FAT SHACK Restaurant, at the location described in Section 3.1. Franchisee agrees to use the Marks and Licensed Methods, as they may be changed, improved, and further developed by FSI from time to time, only in accordance with the terms and conditions of this Agreement.

2.2. Scope of Franchise Operations

Franchisee agrees at all times to faithfully, honestly and diligently perform Franchisee's obligations hereunder, to use best efforts to promote its FAT SHACK Restaurant and to not engage in any other business or activity that conflicts with the operation of the FAT SHACK Restaurant in compliance with this Agreement. Franchisee agrees to utilize the Marks and Licensed Methods to operate all aspects of Franchisee's FAT SHACK Restaurant in accordance with the methods and systems developed and prescribed from time to time by FSI, all of which are a part of the Licensed Methods. Franchisee's FAT SHACK Restaurant shall offer all products and services designated by FSI. Franchisee shall implement any additions and changes to the products and services offered by its FAT SHACK Restaurant that FSI requires.

3. RESTAURANT LOCATION AND TARGET AREA

3.1. Restaurant Location

Franchisee is granted the right to own and operate one FAT SHACK Restaurant at the address and location ("Restaurant Location") set forth in the Addendum to Franchise Agreement attached hereto as Exhibit I (the "Addendum"). If a specific address has not been chosen as of the date this Agreement is signed, then Franchisee shall choose and acquire a location for its FAT SHACK Restaurant within the nonexclusive Target Area set forth in the Addendum. Franchisee shall select and propose to FSI for approval a specific site for the Restaurant Location within the Target Area, which FSI shall have the right to approve or disapprove in accordance with the terms set forth in this Agreement. If the Addendum lists only a Target Area and not the Restaurant Location, then the Restaurant Location Supplement to Franchise Agreement attached hereto as Exhibit II will be executed by FSI and Franchisee upon FSI's later approval of the Restaurant Location. Franchisee acknowledges and agrees that the Restaurant Location will be a specific numbered street or mall address at which Franchisee's FAT SHACK Restaurant will be physically located. The Restaurant Location cannot and will not under any circumstances be defined as a geographic area or be described in terms other than a specific numbered street or mall address. During and after the term of this Agreement, neither Franchisee nor Franchisee's successors and assigns shall use the Restaurant Location for any purpose other than operating a FAT SHACK Restaurant.

3.2.

Source: Item 23 — Receipts (FDD pages 53–223)