Under what circumstances can a Learningrx Area Developer grant sub-franchises in the Development Territory?

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.

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