the hiring or training of your employees.

TERRITORY

Under the Franchise Agreement, you are granted the right to operate a Punch King Fitness Training Facility (Model Concept) Franchised Business. The site for a Punch King Fitness Training Facility Franchised Business is a real property space (the Site). We approve the Site for your Franchised Business.

You may relocate the Site of your Franchised Business so long the new Site meets our then-current Site requirements, and you reimburse us for any costs and expenses we incur in your relocation. Currently, for relocation and Site selection, the Site must be approved by us, and we provide building specifications for your real property space, we review your design plans, you must retain a licensed architect, and you must obtain a feasibility study prepared by a qualified third party. You are obligated to reimburse us for any cost and expense we incur reviewing or approving your relocation as a relocation fee.

Subject to the Franchise Agreement Terms, you are granted an exclusive territory, which is an geographic area encompassing a population of 100,000 persons ("Territory"). You may advertise, solicit, offer, accept orders, and sell within the Territory. You do not have the right to use other channels of distribution such as the internet, catalog sales, telemarketing, or other direct marketing, to make sales outside of your

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Territory unless we give you written consent to serve another specified area where no other Punch King Fitness franchise or company-owned unit is located. If you are granted consent to service another specified area, you shall be obligated to pay us royalty fees and other fees for the services performed or products sold.

The continuation of you territorial exclusivity is dependent upon achieving certain sale volumes, performance standards, and compliance with you franchise agreement. market penetration or any other contingency. If you are not in compliance with the Franchise Agreement or if you fail to meet performance standards outlined in your Franchise Agreement, we may operate or authorize anyone else to operate a business using the same Punch King Fitness Model Concept and System as your Franchised Business in your Territory.

We are not obligated to ensure that no other franchise will conduct operations in your Territory. Although such activities are discouraged, we reserve the right to determine how to respond to any such situation. We are not required to pay you any compensation for us or other franchisees soliciting or accepting orders in your Territory.

Your Franchise Agreement does not give you any other options, rights of first refusal, or similar rights to acquire additional franchises within the territory or contiguous territories.

We reserve the right to limit your Territory as follows:

Own, acquire, establish, operate, and license others to establish and operate businesses like the Franchised Business or substantially similar to the Franchised Business, whether under the Marks or other proprietary marks outside the Territory.

Acquire a system of Competitive Businesses with units located within your Territory or outside the Territory.

Establish or license another to establish a Punch King Fitness Model Concept, such as, for example only, storefront, brick and mortar, co-branded, pop-up, virtual, or mobile outlets that are different than your Model Concept within or outside the Territory under the Punch King Fitness Marks or other marks, trademarks, or services.

Sell or franchise others to sell the services and products authorized for Punch King Fitness Franchised Businesses using the Punch King Fitness Marks or other trademarks, service marks, and commercial symbols through alternate channels of distribution; venues;

Source: Item 12 — TERRITORY (FDD pages 35–38)