default of this Agreement, which may, among other things, be grounds for the termination of this Agreement.

Franchisee may not and is not granted 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 Territory or operate using other Model Concepts unless we give you written consent to serve another specified area where no other Punch King Fitness franchise or company-owned unit is located. Franchisee acknowledges and agrees to obtain the prior written consent of Franchisor before advertising, offering, or selling beyond the aforementioned grant herein. If Franchisee is granted consent to service another specified area, Franchisee covenants and agrees to be obligated to pay royalty fees and other fees to Franchisor for the services performed or products sold.

B. Franchisor Restrictions

Provided that Franchisee is in compliance with this Agreement and Franchisee is not in breach of this Agreement, and so long as Franchisee meets the Minimum Performance Standards as set forth in this Agreement, subject to the limitation, and except as otherwise set forth herein, Franchisor shall not establish or franchise another to establish the same Punch King Fitness Model Concept under the Punch King Fitness Marks within the Territory during the Term of this Agreement. If, for any reason, the boundaries of the Territory are moved, altered, or eliminated, Franchisor shall re-define the boundaries of the Territory to correspond as nearly as possible, in Franchisor's discretion, to Franchisee's original Territory and Franchisor's decision shall be final and binding upon both Franchisor and Franchisee. Franchisor is 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. Franchisor is not required to pay Franchisee any compensation for Franchisor or other franchisees soliciting or accepting orders in Franchisee's Territory. Under no circumstances will we be liable to you for violations by other Franchised Businesses of our policies on out-of-Territory sales and services.

C. Reserved Rights

Franchisor specifically reserves all rights not expressly granted to Franchisee in this Agreement. Without limiting the generality of the preceding sentence, Franchisor has the right to:

• 1. 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.
• 1. Acquire a system of Competitive Businesses (as defined herein) with units located within the Territory or outside the Territory, subject to the provisions of this Agreement.
• 1. Establish or license another to establish a Punch King Fitness Model Concept, including but not limited to a storefront, brick and mortar, co-branded, pop-up, virtual, or mobile outlets that are different than the Franchised Business Model Concept within or outside the Territory under the Punch King Fitness Marks or other marks, trademarks, or services.
• 1. Sell or franchise others to sell the services and products authorized for Punch King Fitness Franchised Business using the Marks or other trademarks, service marks, and commercial symbols through alternate channels of distribution, venues, sites, or Model Concepts other than the Model Concept of the Franchised Business (including but not limited to storefront, brick, and mortar, co-branded, pop-up, virtual, or mobile outlets, joint marketing with partner companies, direct mail, catalog sales, internet sites, and co-branding strategies, pursuant to such terms and conditions as Franchisor deems appropriate.
• 1. Franchisor, its affiliates, or a franchisee or licensee may advertise, promote, market, or sell goods or services using the Marks over the Internet, the world wide web, or any other electronic network.

TERM AND RENEWAL

A. Initial Term

Except as otherwise provided, the term of this Agreement shall be for a period of 10 years commencing on the date set forth on the cover hereof.

B. Renewal

Upon the expiration of the initial term or any renewal term hereof, Franchisee may, at its option, renew this Agreement for an additional term of 10 years (the "Successor Franchise"), provided that at the end of each term:

• 1. Franchisor is still offering Franchises at the time of each renewal period;

Source: Item 22 — CONTRACTS (FDD pages 56–215)