Effective Date: October 15, 2026 Version: 1.0 Applies to: All Franchisees, and the Company as franchisor, in respect of the grant, scope, and protection of franchise territory.
Article 1: Introduction and Scope
1.1 This Policy states how franchise territory is defined, the scope of exclusivity and the limits on exclusivity, the remedy for encroachment, and the manner in which a territory is modified. Territory is the geographic protection at the center of the franchise grant: the Franchisee invests capital in a defined market, and the Company states in this Policy and in the territory exhibit the protection the Company gives for that investment and the channels the Company reserves.
1.2 The territory exhibit to the signed Franchise Agreement controls for each Franchisee. This Policy states the program terms the exhibit implements. Where the exhibit and this Policy differ, the exhibit controls for that Franchisee.
1.3 The Franchise Disclosure Document controls the offer and sale of franchises. No policy, portal page, or representative of the Company makes any earnings claim or financial performance representation; a financial performance representation, if made at all, appears only in Item 19 of the Franchise Disclosure Document. Where the franchise law of the state in which the franchised business is located gives the Franchisee rights greater than this Policy, that law prevails to the extent of the conflict.
1.4 If a provision of this Policy conflicts with the Terms of Use, this Policy controls for the subject it governs.
Article 2: Definitions
2.1 Account: the account a person or business establishes with the Company to use the Platform.
2.2 Company: All About Pawz, LLC, a Tennessee limited liability company, acting as franchisor.
2.3 Exclusivity: the Company's undertaking in Article 4.1 not to grant another franchise for, and not to operate a Company-owned location of, the same brand within the Territory, subject to the reservations in Article 5.
2.4 Franchise Agreement: the written franchise agreement between the Company and a Franchisee, signed by both parties after delivery of the Franchise Disclosure Document.
2.5 Franchise Disclosure Document: the disclosure document the Company furnishes to a prospective Franchisee under the Federal Trade Commission Franchise Rule, 16 CFR Part 436.
2.6 Franchisee: a person or business that holds a signed Franchise Agreement.
2.7 Platform: the websites, applications, and services the Company operates under the name All About Pawz, including aapawz.com.
2.8 Products: goods offered for sale through the Platform.
2.9 Services: services offered through the Platform, including grooming, veterinary, pharmacy, and fulfillment services, as applicable.
2.10 Territory: the geographic area described in the territory exhibit to the Franchise Agreement, defined with sufficient precision to be mapped without dispute, by a list of postal codes, a radius from the Franchise Location, a municipal boundary, or an attached map.
2.11 User: any person who accesses or uses the Platform, whether or not the person holds an Account.
Article 3: Grant of Territory
3.1 Each Franchisee receives one Territory per Franchise Agreement, described in the territory exhibit with the precision Article 2.10 requires. The exhibit includes the map or the postal code list that defines the Territory. A general description of a market area is not a Territory description and does not satisfy this Article.
3.2 Territory size, including any population, household, or radius basis for a standard Territory and the terms on which a multi-unit territory is offered, is stated in the Franchise Disclosure Document and in the Franchise Agreement for the Franchisee. This Policy states no separate size standard.
3.3 Territory is granted for the term of the Franchise Agreement and renews with the agreement as the Franchise Renewal Policy provides. Territory does not expand automatically with population growth or market change. The Territory is the area the exhibit describes, and a boundary change requires a signed amendment under Article 7.
Article 4: Exclusivity and Its Scope
4.1 Subject to Article 5, the Company shall not grant another franchise for the same brand within the Territory and shall not operate a Company-owned location of the same brand within the Territory during the term of the Franchise Agreement.
4.2 Exclusivity is a negative undertaking within a defined area. Exclusivity does not grant the Franchisee all commerce within the Territory, does not grant a right in any channel Article 5 reserves, and does not restrict a customer within the Territory from purchasing from any seller or channel the customer chooses.
Article 5: Reserved Channels and Limits on Exclusivity
5.1 Even within an exclusive Territory, the Company reserves each of the following, and no reservation in this Article is encroachment: (a) online sales: sales through the Platform and the Company's online store to customers in every territory, including the Territory; the Territory protects the Franchisee's physical operations, and an online Order delivered to a customer in the Territory is a reserved sale and not a breach of Article 4.1; (b) national accounts and partnerships: enterprise contracts and partnerships the Company negotiates at system level, including an employee program of a national brand and a partnership with a veterinary group; a sale under such a contract or partnership within the Territory is a reserved sale; (c) non-traditional venues: locations in airports, stadiums, universities, hospitals, and military bases, granted by separate agreement and not governed by Territory boundaries; and (d) acquisitions: the Company's right to acquire a competing business and to operate the acquired business, including within the Territory, under a brand other than the brand granted to the Franchisee. The Franchisee's grant is a Territory for the granted brand, not a covenant against the Company's corporate development under other brands.
5.2 Each reservation in Article 5.1 is stated in the territory exhibit to the Franchise Agreement, adjacent to the description of the Territory. The Company shall not rely on a reservation that the exhibit does not state. A Franchisee that signed an exhibit stating a reservation has received disclosure of the reservation in the operative document.
Article 6: Encroachment and Remedy
6.1 A grant of another franchise for the same brand within the Territory, or the operation by the Company of a Company-owned location of the same brand within the Territory, in violation of Article 4.1 and not within a reservation in Article 5, is encroachment.
6.2 Right of first refusal. Where the Company determines that the Territory can support an additional unit, based on population growth, demand data, or the capacity of the existing unit, the Company shall offer the additional unit to the existing Franchisee first, on the then-current terms, before offering the unit to another person. The offer is in writing and states a response period of thirty (30) days. Failure to respond within the period is a decline of the offer.
6.3 Remedy. A Franchisee that claims encroachment shall give written notice to legal@aapawz.com stating the act claimed as encroachment and the provision of the exhibit relied on. The dispute proceeds under the Franchise Dispute Resolution Policy and Article 10: negotiation, then mediation, then the dispute procedure the Franchise Agreement states. The Franchisee's operations continue in the ordinary course during the dispute. Where encroachment is established, the remedy is as the Franchise Agreement states, including withdrawal of the encroaching grant or location where the agreement so provides, in addition to each remedy the dispute procedure provides. The first question in an encroachment dispute is whether the act falls within a reservation in Article 5; an act within a stated reservation is not encroachment and gives rise to no remedy under this Article.
6.4 Illustrative application. A Franchisee holds an exclusive Territory defined by a list of postal codes that includes the postal code of an airport. The Company negotiates a location inside the airport. The act falls within the non-traditional venue reservation in Article 5.1(c) as stated in the exhibit, and is not encroachment. The Company may, as a matter of relationship and not of obligation, offer the airport unit to the Franchisee under Article 6.2 before proceeding with another operator.
Article 7: Modification of Territory
7.1 A Territory boundary changes only by a signed amendment to the Franchise Agreement, in one of the following cases: (a) mutual agreement of the Company and the Franchisee; (b) a transfer under the Franchise Transfer Policy, in which the transferee's Territory is restated in the new agreement; or (c) a split of the Territory with the Franchisee's consent and with consideration to the Franchisee, including a fee reduction, development rights, or other agreed value. In case (c) the Company purchases back a portion of the exclusivity granted, and consideration is a condition of the split.
7.2 The Company shall not reduce a Territory unilaterally during the term of the Franchise Agreement, including for system optimization or market realignment. The exhibit is a term of the contract and does not change by notice.
Article 8: Liability
8.1 Exclusion of certain damages. To the fullest extent permitted by law, neither party is liable to the other for indirect, incidental, special, punitive, or consequential damages, or for lost profits, lost revenue, or loss of goodwill, arising out of or relating to this Policy, even if the party has been advised of the possibility of those damages.
8.2 Cap. To the fullest extent permitted by law, the Company's total liability arising out of or relating to this Policy shall not exceed the greater of (a) the amounts the Franchisee paid to the Company under the Franchise Agreement in the twelve months before the event giving rise to the claim, or (b) one hundred dollars ($100).
8.3 Carve-outs. This Article does not limit (a) a party's indemnification obligations under this Policy; (b) liability for fraud or willful misconduct; (c) amounts the Franchisee owes under the Franchise Agreement; (d) a remedy for encroachment established under Article 6.3 and the Franchise Agreement; or (e) liability that cannot be limited under applicable law.
8.4 Essential purpose. The parties agree that this Article allocates risk between them, that it is an essential part of the basis of their bargain, and that it applies even if a limited remedy fails of its essential purpose.
Article 9: Indemnification
9.1 Duty. The Franchisee shall indemnify, defend, and hold harmless the Company and its members, managers, employees, and agents from and against every claim, demand, action, loss, liability, judgment, settlement, cost, and expense (including reasonable attorneys' fees) arising out of or relating to: (a) the Franchisee's breach of this Policy or of the Franchise Agreement; (b) the Franchisee's operation of the franchised business within or outside the Territory, including a hold-out of exclusivity the exhibit does not grant; (c) the Franchisee's violation of any law or of the rights of any person; and (d) taxes for which the Franchisee is responsible under the Company's documents or the Franchise Agreement.
9.2 Procedure. The Company shall give prompt written notice of a claim under this Article. The Franchisee shall control the defense with counsel reasonably acceptable to the Company. The Company may participate in the defense at its own expense. The Franchisee shall not settle a claim in a manner that imposes any obligation or restriction on the Company, or that does not release the Company fully, without the Company's prior written consent.
9.3 Survival. This Article survives the termination of this Policy.
Article 10: Enforcement and Appeals
10.1 Investigation. The Company may investigate any suspected violation of this Policy. The Franchisee shall cooperate with an investigation and shall produce the records this Policy requires the Franchisee to keep, including the territory exhibit and each amendment to the exhibit.
10.2 Notice. If the Company determines that the Franchisee has violated this Policy, the Company shall give written notice stating the provision violated and the facts relied on, except where notice would compromise an investigation of fraud or a legal obligation.
10.3 Opportunity to cure. Where a violation is capable of cure, the Franchisee has ten (10) business days from notice to cure it and to confirm the cure in writing, except that a cure period stated in the Franchise Agreement or in the Franchise Termination Policy for the same ground controls. No cure period applies to fraud, unlawful conduct, or a violation that by its nature cannot be cured.
10.4 Measures. If a violation is established and is not cured within the period allowed, the Company may, proportionate to the violation and subject to the Franchise Agreement and the Franchise Termination Policy: (a) issue a written warning; (b) suspend the Account or program participation, in whole or in part; (c) terminate the Franchise Agreement as Article 11 provides; and (d) exercise any other right or remedy available under the Company's documents or at law.
10.5 Appeal. The Franchisee may appeal a measure under this Article by written notice to legal@aapawz.com within thirty (30) days of the measure, stating the grounds and attaching the records relied on. The appeal is decided by a person who did not make the original decision. The Company's decision on appeal is final. A measure remains in effect during an appeal unless the Company directs otherwise in writing. An encroachment claim under Article 6.3 proceeds under the Franchise Dispute Resolution Policy and is not an appeal under this Article.
10.6 No waiver by delay. The Company's delay in acting on a violation is not a waiver of the violation or of any later violation of the same kind.
Article 11: Term and Termination
11.1 The term of the franchise, the grounds for termination, the cure periods by ground, and the post-termination duties are stated in the Franchise Agreement and in the Franchise Termination Policy, which are incorporated into this Policy by reference and govern in place of a general termination article. Territory rights end as the Franchise Termination Policy provides on termination of the Franchise Agreement.
11.2 This Policy takes effect for a Franchisee on execution of the Franchise Agreement and continues while the Franchise Agreement remains in effect. The Definitions, Liability, Indemnification, Enforcement and Appeals (for measures taken before termination), Dispute Resolution, and General Provisions Articles survive the end of the franchise, together with each duty the Franchise Termination Policy states as a surviving duty.
Article 12: Dispute Resolution
12.1 Any dispute arising out of or relating to this Policy, or to the relationship it governs, is governed by the Dispute Resolution Policy, which is incorporated into this Policy by reference. The Franchise Dispute Resolution Policy states the program procedure that applies in addition to the Dispute Resolution Policy.
Article 13: General Provisions
13.1 Amendments. The Company may amend this Policy by posting the amended Policy in the Document Center and giving notice to the Franchisee at the email address in the Account. An amendment that materially increases the Franchisee's obligations takes effect thirty (30) days after notice; other amendments take effect on posting. Continued participation in the Program after the effective date of an amendment is acceptance of it. An amendment to this Policy does not amend a territory exhibit; Article 7 governs changes to an exhibit.
13.2 Notices. Legal notices under this Policy, including an encroachment notice under Article 6.3, shall be sent to legal@aapawz.com. Operational notices and all other communications shall be sent to support@aapawz.com. A notice to the Company is effective when the Company acknowledges receipt or, for email, one business day after sending, whichever is earlier. Notices to the Franchisee are effective when sent to the email address in the Account or posted to the Account's notice facility in the portal, whichever occurs first. The Franchisee shall keep the email address in the Account current.
13.3 Governing law. This Policy is governed by the laws of the State of Tennessee, without regard to its conflict-of-laws rules. Subject to the Dispute Resolution Policy, any proceeding arising out of this Policy shall be brought in the state or federal courts located in Shelby County, Tennessee, and the parties consent to personal jurisdiction there. Where the franchise law of the state in which the franchised business is located gives the Franchisee rights greater than this Policy, that law prevails to the extent of the conflict.
13.4 Severability. If any provision of this Policy is held unenforceable, the provision shall be enforced to the fullest extent permitted, and the remaining provisions continue in full effect.
13.5 Entire agreement. The signed Franchise Agreement and its territory exhibit, together with the documents the agreement incorporates by reference, are the entire agreement between the Company and the Franchisee for territory and supersede every prior or contemporaneous statement, communication, or agreement on that subject, whether written or oral.
13.6 Assignment. The Franchisee shall not assign this Policy, the Franchise Agreement, or any right or obligation under either document without the Company's prior written consent, as the Franchise Transfer Policy further provides, and an assignment without consent is void. The Company may assign this Policy to an affiliate or in connection with a sale of all or part of its business, on notice to the Franchisee.
13.7 Waiver. A waiver of any provision of this Policy is effective only in writing and only for the instance stated. No waiver is a waiver of any other provision or instance.
13.8 Interpretation. Headings are for convenience only. "Including" means "including without limitation." This Policy shall not be construed against a party as its drafter, except as the Franchise Agreement Policy provides for a Franchise Agreement. The English-language text controls over any translation.
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