What rights does the Area Developer obtain from Learningrx regarding the development of Centers?

understands and accepts the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain Franchisor's high standards of quality and service and the uniformity of those standards at all facilities which operate pursuant to the System and thereby to protect and preserve the goodwill of the System and the Marks; and

WHEREAS, Area Developer understands and acknowledges the importance of Franchisor's uniformly high standards of quality and service and the necessity of operating the Centers in strict conformity with Franchisor's quality control standards and specifications.

NOW THEREFORE, the parties, in consideration of the promises, undertakings and commitments of each party to the other party set forth herein, hereby mutually agree as follows:

1. GRANT

• 1.01. Appointment. Franchisor hereby grants to Area Developer the right and license to develop, construct, operate and manage Centers in strict accordance with the System and under the Marks within the Development Schedule and Territory described in Schedule A. Each Center shall be operated according to the terms of the individual franchise agreement with respect thereto.
• 1.02. Territory. If the Area Developer complies with the terms of this Agreement, the Development Schedule and the individual franchise agreement for each Center, then Franchisor will not franchise or license others, nor will it itself directly or indirectly develop, own, lease, construct or operate in any manner, any Centers in the Development Territory during the term of this Agreement; however, Franchisor reserves the right to sell products and services, under the Marks or any other marks, through any other retail location, including kiosks, malls, airports, college campuses, at special events or through any other channels of distribution, including through mail order, catalogue sales or over the Internet. Upon the expiration or termination of this Agreement, the Area Developer will no longer have a Development Territory and each Center will be limited to operation in its own territory described in the individual franchise agreement.
• 1.03. Governing Agreement. This Agreement is not a franchise agreement and Area Developer shall have no right to use, in any manner, the Marks or System by virtue of this Agreement. Each Center will be governed by the individual franchise agreement executed by Franchisor and Area Developer for each Center.
• 1.04. Investment. The Area Developer must contribute some amount of its personal capital to the development of each Center and must own at least a seventy percent (70%) equity

interest in each Center developed under this Agreement. Each of the Area Developer's general managers is strongly encouraged to own at least a ten (10%) equity interest in the Center that the general manager supervises.

• 1.05. Additional Requirements. As added requirements to open another Center as provided for in this Agreement:
• A. Area Developer's current Center(s) each must have collected revenue of at least One hundred, thousand and 00/100 Dollars ($100,000.00) per quarter for the two (2) most recently completed quarters for each Center this franchisee operates;
• B. Area Developer must have liquid assets greater than One hundred, fifty thousand and 00/100 Dollars ($150,000.00) per territory under seventy-five thousand (75,000) in population or greater than Two hundred, thousand and 00/100 Dollars ($200,000.00) per territory over seventy-five thousand (75,000) in population; and
• C. Area Developer's current Center(s) must meet and be in full compliance with all minimal LearningRx operating standards and offer acceptable customer service.

2. TERM

• 2.01. Initial Term. Unless sooner terminated pursuant to the provisions of Section 6, the term of this Agreement shall expire upon the earlier of the number of months described in Schedule A from the Effective Date, or (b) completion of the term of the Development Schedule.
• 2.02. Renewal.

Source: Item 23 — RECEIPT (FDD pages 54–209)