Are the obligations outlined in the Zoomin Groomin Franchise Agreement considered dependent on other provisions within the agreement?

franchisee of ours. Any permission we grant for you to operate outside of the Territory will be freely revocable by us for any reason or no reason at all.

b.) Acknowledgment

You acknowledge that any permission granted pursuant to this Section 1.3.C. is only temporary in nature and the only way for you to gain protection over any geographical region outside of your Territory is to purchase franchise rights over such geographical area pursuant to the then-current disclosure document and franchise agreement. By offering Services or otherwise operating outside of your Territory, you acknowledge and accept that you may cultivate business relationships that must be transitioned to someone else. You acknowledge that any undeveloped area could be sold to a new franchisee at any point in time, and you have no right of first refusal in such area. By requesting permission and by offering Services or otherwise operating your Franchised Business outside of your Territory, you agree to follow our plans and guidance for transitioning business to a new owner upon notification by us that a new franchisee has acquired the right to operate within such area.

c.) Procedure on Withdrawal of Permission

You will immediately stop providing Services to Clients located outside of your Territory and stop all activities associated with the operation of your Franchised Business outside of the Territory upon notification from Zoomin Groomin that a new franchisee has purchased franchise rights over such territory. Furthermore, you will provide a list of all Clients served by you in such area to the new franchisee and make commercially reasonable efforts to transition all business to the new franchisee. Time is of the essence when complying with a transition to a new franchisee.

d.) Consequences of Operating Without Permission

Operating outside of your Territory without our permission is grounds for termination, but termination is not our exclusive remedy. In the event you operate outside the rights and permissions granted in this Section 1.3 within the territory of another franchisee of ours, then any funds you obtain will be passed over to the new franchisee as provided in Section 1.7 (D) of this Agreement.

1.4.Operation

A. Start

You must commence operations within your Territory within thirty (30) days of receipt of your initial Vehicle. If you do not, more time will be given (up to a maximum of twelve (12) months), but you will remain subject to minimum Royalty Fees during the extension.

B. Repair

You will take all commercially reasonable efforts to maintain and keep your Vehicle's body and mechanical components in a pristine and safe condition. If, for whatever reason, you are unable to safely operate your Vehicle(s) or it otherwise becomes unavailable for more than ten (10) business days, then you will repair or replace it as soon as practical. If it remains out of service for more than thirty (30) days, then we can terminate without any refund to you.

C. Replace

Vehicles kept past their lifecycles are less efficient and incur greater fuel costs and maintenance costs. This leads to breakdowns, closures, and unhappy employees and Clients. You will plan for vehicle replacement as reasonably needed during the Term.

1.5.Additional Territories

We may grant you additional franchise territories if available in your area and we feel you have the time, energy, capital, and management structure to be able to successfully open and operate more outlets. You do not have options, rights of first refusal, or similar rights to acquire additional franchises.

1.6.Minimum Requirements

Continuation of your Territorial rights does not depend on achieving a certain sales volume, growth or market share percentage; however, you will be subject to minimum monthly royalty payments for the entirety of this Agreement. A year will include each fiscal year (including any partial year) ending on December 31.

1.7.Dual Distribution

A. Protected Territory

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. However, you will receive a protected territory, meaning a geographical area within which we promise not to establish a Zoomin Groomin company owned or franchised outlet. You may not accept orders from consumers to provide Services outside of your Territory, nor may you use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales outside your Territory without our prior written approval as provided in Section 1.3 (C) of this Agreement.

B. Limitations on Exclusivity

Your right to exclusivity is limited by our Reserved Rights under Section 1.1. (E) of this Agreement and this Section 1.7. You may also face competition from other franchisees, outlets that we own, other channels of distribution or competitive brands that we control for a Client that resides in your Territory.

C. Other Brands

We or an affiliate may make sales within your Territory using trademarks different from the ones you will use under this Agreement. As of the Effective Date, we and our parent plan to establish (or acquire) and operate or franchise a business under a different trademark which will sell goods or services similar to those you will offer. Under this plan, franchisees will offer pet grooming services through brick-and-mortar locations under a different trademark. As the new franchise system develops, the new franchisor or its franchisees who use the different trademark will solicit and accept orders within your Territory.

D. Profit Passover

We are not obligated to pay compensation to you for soliciting or accepting sales from a Client inside your Territory. However, we will normally direct all inquiries for mobile pet grooming from within your Territory to your Franchised Business. Should you (i) provide Services or otherwise operate your Franchised Business in another franchisee's territory or (ii) fail to strictly comply with Section 1.3 (C) within fifteen (15) days after being advised that our permission to provide Services or otherwise operate the Franchised Business outside the Territory is revoked because a new franchisee purchased certain rights, then you will pay to the franchisee in whose territory such Services were provided an amount equal to 100% of all grooming and convenience fees charged. Furthermore, you must notify such franchisee who has rights in such territory and provide payment to them within ten (10) days of receipt of payment by you.

1.8.Advertising

A. Grand Opening Advertising

We do not require you to spend a certain amount on Grand Opening Advertising; however, we recommend that you spend between $500 and $5,000 on your initial local advertising which includes local advertising and promotion of your Franchise Business from one month before opening through three months after you open. We recommend you spend a minimum of $1,200 per year on local advertising.

B. Local Advertising and Promotions

Your advertising and promotions will conform to the following requirements:

• 1. You will advertise and promote only in a manner that will reflect favorably on us.
• 1. You will participate in all promotional programs that we create, offer or advertise.
• 1. Your advertising must comply with federal, state, and local laws.

C.

Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)