What conditions must be met before a Precision Door Service franchisee can develop a Business?

WHEREAS, Franchisor and Franchisee have contemporaneously herewith entered into a Franchise Agreement (the "Agreement") pursuant to which Franchisor granted Franchisee a license to use the Marks and the System to operate a Precision Garage Door Service® franchise in a specified geographical area more fully described in the Agreement (the "Territory"), and Franchisee desires and Franchisor is willing to grant Franchisee an Option to acquire the territory described on Exhibit "A" hereto (the "Additional Territory").

NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Franchisor acknowledges that Franchisee has paid Franchisor the non-refundable sum of ____________ (the "Deposit"), which shall be credited toward the initial franchise fee of ___________ for the Additional Territory (the "Initial Franchise Fee") upon Franchisee's exercise of this Option.

Franchisee is hereby granted an Option, for a period of eighteen (18) months from the Effective Date (the "Option Period"), to acquire the rights to the Additional Territory so long as the foregoing conditions are fulfilled:

• a.

Franchisee must be in compliance with the Agreement during the Option Period in order to exercise its Option hereunder.

All rights created hereunder shall terminate should Franchisee at any time be in material breach of the Agreement.

• b.

Franchisee may exercise this Option at any time during the Option Period by notifying Franchisor in writing of Franchisee's intent to purchase the Additional Territory (if Franchisee does not notify Franchisor by the end of the Option Period, this Option will expire and the consideration paid will be forfeited).

• c.

Franchisee must meet Franchisor's then-current qualifications for expansion.

• d.

Source: Item 23 — Receipts (FDD pages 92–433)