Under what conditions will Monicals Pizza refrain from establishing or licensing others to establish a Monicals Pizza restaurant within a Developer's territory?

If you are a Developer, we will grant you a development territory. The development territory will vary in size depending upon the number of Monical's restaurants you intend to develop and the population density and demographics of the area under consideration. So long as you meet the minimum development schedule, comply with all other provisions described in the Development Agreement and otherwise comply with the provisions of each related Franchise Agreement, we will not establish or operate, or license others to establish or operate, a Monical's restaurant or substantially similar business in your development territory.

Franchisor shall not, so long as this Development Agreement is in force and effect and Developer is not in default under any of the terms hereof or of any Franchise Agreement for any Monical's Restaurant, establish, own or operate, or license others to establish, own or operate, any Monical's Restaurant within the Development Territory other than to Developer pursuant to this Development Agreement; provided, however, Franchisor and its Affiliates retain the right:

• 2.2.1 to continue to own and operate, and allow others to continue to own and operate, Monical's Restaurants existing inside of the Development Territory as of the date of this Development Agreement;
• 2.2.2 to establish, or grant to others the right to establish, Monical's Restaurants outside of the Development Territory;
• 2.2.3 to establish and operate, and license others to establish and operate, businesses under other systems using other proprietary marks, both within and outside the Development Territory;
• 2.2.4 to purchase or otherwise acquire the assets or controlling ownership of one (1) or more businesses identical or similar to Monical's Restaurants (and/or acquire franchise, license and/or similar agreements for such businesses), some or all of which may be located anywhere, including within the Development Territory. If Franchisor purchases or acquires franchises or licenses, Franchisor may, in its sole discretion, act as franchisor or licensor with respect to such franchisees or licensees wherever located, pursuant to the individual franchise or license agreement(s) between Franchisor and such franchisee(s) or licensee(s). If Franchisor purchases or acquires such businesses within the Development Territory which are not franchised or licensed, Franchisor may, in its sole discretion:

Following the expiration of this Development Agreement, Franchisor shall have the right to reevaluate the prospects for the establishment of Monical's Restaurants in the Development Territory, and Franchisor may determine that the Development Territory can be further developed by opening additional Monical's Restaurants in the Development Territory without having an unreasonably adverse effect on the Monical's Restaurants already existing within the Development Territory. During a one (1) year period beginning on the day after the Development Agreement expires, if Franchisor elects to further develop the Development Territory, Developer shall have the right to establish, own and operate any additional Monical's Restaurant Franchisor proposes to locate within the Development Territory, if Developer meets all other terms and conditions stated in this Development Agreement. Franchisor shall give Developer written notice of its proposal to develop additional Monical's Restaurants within the Development Territory and Developer shall have thirty (30) days to accept in writing Franchisor's proposal to own and operate such additional Monical's Restaurants. Developer's ownership and operation of such additional Monical's Restaurants shall be subject to the terms and conditions set forth in Franchisor's written proposal, which may vary in form and substance from the terms, conditions and economics set forth in this Development Agreement. If Developer fails to accept in writing Franchisor's written proposal within such thirty (30) day period (or if Developer fails to comply with the terms of the proposal), then Franchisor shall have the right to establish, own and operate, or license others to establish, own and operate, Monical's Restaurants in the Development Territory.

Source: Item 12 — TERRITORY (FDD pages 27–28)