What specific rights does Zoomin Groomin grant to the franchisee?

id="page-74-1">1. Scope

1.1.Franchise Relationship

A. Grant of Franchise

Zoomin Groomin grants you the right to operate a company ("Franchised Business" or "Unit Franchise") using our System and our Marks to deliver Services solely within the geographic boundaries identified in Schedule 1 (the "Territory") during the Term by and through the Franchisee Business Entity identified on the Summary Page and signature page of this Agreement (or as a sole proprietor or partnership if there is no business entity), subject to the terms and conditions of this Agreement.

B. Independent Contractors

Your relationship with us is that of an independent contractor. This Agreement does not create a partnership, joint venture, or any other entity between the Parties. Neither Party has a fiduciary duty or other special duty respect to the other party. You are not a third-party beneficiary to any contract between us and any other franchisee.

C. Your Employees

As a separate Franchise Business, you have sole and exclusive control over your employees. Neither you nor your employees and agents may make a claim as employees or agents of us for any purpose including participation in an employee benefit plan, stock option program, or workers compensation law.

D. No Unauthorized Commitments

Similarly, you will not make any promises, guarantees or warrantees to any third party that would create a binding obligation for us without our prior written consent.

E. Reserved Rights

We, our parent, and our affiliates reserve all rights not expressly granted in the Franchise Agreement. For example, we, our parent, and our affiliates have the right to:

• (i) use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing sales, to solicit or accept customers within your Territory using our principal trademarks (or another trademark) without any compensation to you;
• (ii) implement cross-territorial protocols and other guidelines applicable to such situations as group advertising buys by multiple franchisees which may extend into multiple territories, solicitation of orders of individuals who may reside in one Territory, yet work in another, and other cross-territorial situations;
• (iii) establish and operate, and grant rights to others to establish and operate a Franchised Business or similar businesses at any locations outside of the Territory and on any terms and conditions we deem appropriate;
• (iv) own, develop, acquire, be acquired by, merge with, or otherwise engage in any transaction with another businesses (competitive or not), which may offer products and services like your Franchised Business and may have one or more competing outlets within your Territory, however, we will not convert any acquired business in your Territory to a franchise using our primary trademarks during the Term of your Franchise Agreement;
• (v) operate or franchise a business under a different trademark which such business sells or will sell goods or services like those you will offer, anywhere;
• (vi) negotiate purchase agreements with vendors and suppliers which we reasonably believe are for the benefit of our franchisees; and,
• (vii) engage in any other business activities not expressly prohibited by the Franchise Agreement, anywhere.

1.2.Term and Renewal

A. Term

This Agreement will commence upon its Effective Date and will last for a term of ten (10) years (the "Term").

B. Renewal and Subsequent Renewals

Upon the completion of the Term, or a renewal term as the case may be, if you are in compliance with this Agreement and meet other conditions for renewal, you may enter into a new contract, on the then current form of the Franchise Agreement. We will neither change your Territory nor Royalty rate in your renewals. The current form will not contain any changes of a material nature without your consent.

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