Where will the specific geographical area of a Fitstop franchisee's territory be defined?

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Designated Territory

As of the Issue Date, we expect and intend to grant you certain territorial rights within a geographical area that will be designated in your Franchise Agreement at the time you execute the same, which we refer to as your "Designated Territory" throughout this Disclosure Document.

Subject to our reserved rights set forth more fully below in this Item, we will not open or operate, or license any third party a license to own or operate, a System Business that operates under the Proprietary Marks from a premises that is physically located within your Designated Territory. You will be afforded this territorial right until such time that the Franchise Agreement governing the Designated Territory at issue expires or is terminated.

As of the Issue Date, we expect that a typical Designated Territory will contain a population of approximately 40,000. We do not, however, have a minimum geographical area that we must afford to a given System franchisee, and we expect that your Designated Territory will vary from the territory granted to other System Business owners due to variance in the population, demographics, corporate/work population and density, proximity of competitors and/or related historical market saturation information. When analyzing and/or determining your Designated Territory on population, we will use publicly-available data and information published as part of the U.S. Census Bureau or comparable source/organization when analyzing the population and other demographics of the area surrounding your Designated Territory.

In certain situations where you have not secured an approved Premises at the time your Franchise Agreement is executed, we may determine to (i) designate a Designated Territory wherein you must locate and secure that Premises, and (ii) adjust the boundaries of the Designated Territory to a comparable geographical region that immediately surrounds the Premises, which we will provide to you in writing as part of our response to our site proposal so you can evaluate before securing the proposed site (if and as we determine appropriate). Otherwise, we may not modify the boundaries of your Designated Territory unless the parties mutually agree to the same in a separate agreement.

Approved Premises and Relocation

You must operate your Franchised Business from an approved Premises that you must secure within the Designated Territory granted to you at the time you execute your Franchise Agreement with us.

Once we agree upon and you secure your Premises, we will designate the same and, if applicable, any adjustment to the Designated Territory, in an amendment to the Franchise Agreement that you will be required to execute at or around the time you execute a lease for said Premises. You may not relocate the Premises of your Franchised Business without our written consent, which we will not unreasonably withhold provided: (i) the new location is located within your Designated Territory and meets our thencurrent criteria for a System-associated Premises; and (ii) you pay our then-current relocation fee (if any).

Source: Item 12 — TERRITORY (FDD pages 35–37)