RECITALS

• A. We and our principals and affiliates have expended a considerable amount of time, effort, and money to develop a system for the establishment and operation of gourmet bakeries offering and selling specialty bundt cakes, other food items, and retail merchandise (the "Products") under the "Nothing Bundt Cakes®" mark (each a "Bakery").
  • B. We grant qualified persons the right to operate a single Bakery.
• C. You wish to enter into an agreement with us to obtain the right to operate a Bakery using our proprietary system, the characteristics of which include: (a) proprietary recipes, methods and standards for preparing, decorating, and presenting gourmet cakes and other baked goods (the "Proprietary Recipes"); (b) specifications for Bakery furniture, fixtures, equipment and interior and exterior design, layout and construction; (c) an online order fulfillment system; (d) sales techniques; (e) merchandising, marketing, advertising and inventory management systems; and (f) other general procedures for operating and managing a bakery, including the Operations Manual (as defined in Section 5.5 below) (the "System").
• D. The System is identified by proprietary trademarks, including "Nothing Bundt Cakes®", our distinctive trade dress and any other trademarks, service marks, logos, and indicia of origin we may now or in the future designate in connection with the System (the "Marks"). The rights to all such Marks as are now, or will hereafter be, designated as part of the System will be owned exclusively by us or our affiliates and will be used by us, our affiliates and System franchisees to identify to the public the source of the products and services marketed thereunder. We may continue to develop, expand, use, control, and add to the Marks and System for the benefit of itself, its affiliates, and its franchisees and licensees in order to identify for the public the source of products and services marketed thereunder and to represent the System's high standards of quality and service.
• E. You applied for a franchise, and we have approved your application in reliance on the representations made therein.
• F. You acknowledge that adherence to the terms of this Agreement and our standards and specifications are essential to the operation of a Nothing Bundt Cakes® Bakery and our System.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises, commitments and understandings set forth herein, and subject to the terms and conditions of this Agreement, the parties agree as follows:

ARTICLE 1 GRANT OF FRANCHISE

1.1 Grant of Franchise.

We hereby grant, upon the express terms and conditions contained in this Agreement, and you hereby accept, a non-exclusive license to establish and operate one Bakery under the System and Marks, and the right to use the System and Marks to operate the Bakery. We have the right to supplement, improve, or otherwise modify the System from time to time at our discretion, and you must comply with all changes, which may include, without limitation, the offer and sale of new or different products and services.

1.2 Protected Territory

Except as otherwise provided for in Sections 1.3 or 4.7 of this Agreement, as long as you are compliant with the terms and conditions hereof, we will not establish or license any third party the right to establish another Nothing Bundt Cakes® Bakery at any location within the protected geography granted to you after a location is chosen for your Bakery and described in the Data Sheet, which is hereby incorporated into the Franchise Agreement (the "Territory"). Your limited territorial rights will not be exclusive in terms of marketing rights, delivery or clientele.

Source: Item 23 — RECEIPTS (FDD pages 93–309)