As a Floors To Go franchisee, what rights do I have as a member of the FTG System?

cts the use of the FTG System.

By signing this Membership Agreement (the "Agreement") you agree to the terms and conditions contained herein.

1. Our Relationship

• 1.1. Your Membership. You will have the right to (a) participate as a member in the FTG System for the purchase of floor coverings and window covering products, and to indicate to the public that your independent business is operated as part of the FTG System; (b) participate in the FTG CashBack Program (see Section 7.2 for details); and (c) adopt and use our selected trademarks, service marks, and trade names with our signs, emblems, and insignia.
• 1.2. Your Territory. You will be granted the right to conduct your business at the location designated on the attached Schedule "A" ("Your Territory" or "Showroom"). Your Territory will be determined based on the factors that we deem relevant, which might include population, traffic flow, presence of businesses, location of competitors (including other showrooms), demographics, and other market conditions. The Territory may be defined based on geographic boundaries, streets or other criteria, as we determine appropriate. On renewal or transfer of your franchised business, Your Territory may be modified. Depending on the then-current demographics of Your Territory, and on our then-current standards for territories, if Your Territory is larger than our then-current standard territory, we may require you or the transferee to accept a renewal territory or a transfer territory that is smaller than Your Territory. This means that we will not open or license any other person or entity to open a showroom using the "Floors To Go" trade name or trademarks within Your Territory. However, you may face competition from other outlets that we franchise or own, or from other channels of distribution or competitive brands we control, within Your Territory, including, but not limited to, competition from the FTG Shop At Home program. We will not prohibit you from selling products for installation outside of Your Territory nor will we prohibit you from offering other floor covering or window treatment

products for sale along with those products available through the FTG System. In other words, we will not restrict you from marketing or soliciting customers outside Your Territory.

2. Term

• 2.1. Duration/Renewal. Our relationship will begin on the date this Agreement is signed by you and us and will continue for a period of five (5) years (the "Original Term"). You will also have the right to renew your FTG membership for successive terms of five (5) years.
• 2.2. Conditions to Renewal. If you would like to renew your FTG membership for a successive term of five (5) years and you meet the conditions contained in this Section 2.2, you must provide us with written notice, by registered or certified mail, of your exercise of each option, not less than sixty (60) days prior to the expiration of your membership (each a "Renewal Term"). If you do not provide us with such notice and a renewal fee as set forth in Section 6.6, this Agreement will continue on a month-to-month basis until we either (i) send you notice of termination, or (ii) we agree to renew the Agreement pursuant to the terms provided herein, whichever occurs first.

Source: Item 23 — RECEIPTS (FDD pages 47–204)