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ANYTIME FITNESS FRANCHISE DISCLOSURE DOCUMENT

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ITEM 12.<br />

TERRITORY<br />

When you sign a Franchise Agreement, you will receive the right to operate 1 Anytime Fitness center. If<br />

the site for that center has been identified before you sign the Franchise Agreement, then you must<br />

operate the center at that site. If the site becomes unavailable to you for any reason, it is your obligation<br />

to select a new location, and to obtain our approval of that location before you acquire the site,<br />

and before you obtain any rights in the location. If a site has not been identified, then we will<br />

designate an area, and you may locate your Anytime Fitness Center at any place within that area, so long<br />

as the site you select is not also within a territory of another Anytime Fitness center. Thus, until a site has<br />

been identified, you will not have any exclusive rights in the area identified in the Franchise Agreement.<br />

Once the location for your Anytime Fitness Center has been approved, we will give you a protected<br />

territory. The limitations on us in that territory are described below. We may attach a map to your<br />

Franchise Agreement that will identify the territory or we may simply describe an area surrounding your<br />

location. The map or description may not be a specific radius from your center, because it will take into<br />

account traffic patterns and natural boundaries. However, the territory will range from approximately<br />

one-half mile from your center (in densely populated metropolitan areas) to as much as 5 miles (in small<br />

towns). You may locate your Anytime Fitness center at any place within that territory, so long as the site<br />

you select is not also within the territory of another Anytime Fitness center. Territories may overlap, but<br />

we will not approve anyone opening an Anytime Fitness center, or relocating an Anytime Fitness center,<br />

into a territory given to another Anytime Fitness center. (By way of example, one person may have an<br />

Anytime Fitness center in the center of City A, with a territory of 3 miles in all directions, while another<br />

person has an Anytime Fitness center in the center of City B, located 4 miles away from the site of the<br />

first franchisee's Anytime Fitness center, and also with a territory of3 miles. While the territories<br />

overlap, each franchisee's business is located outside the territory of the other franchisee, and it cannot be<br />

relocated within the other franchisee's territory). We do not have the right to unilaterally change your<br />

territory, and there are no minimum quotas required; as long as your Franchise Agreement is in effect,<br />

you will retain the rights described in this paragraph.<br />

The criteria we use for determining the boundaries of the territory include density of population, growth<br />

trends of population, apparent degree of affluence of population, the density of residential and business<br />

entities, traffic generators, driving time, and natural boundaries. During the term of your Franchise<br />

Agreement, we will not place or license to anyone else the right to place an Anytime Fitness or Anytime<br />

Fitness Express center in your territory. However, we do have the right to place Anytime Fitness or<br />

Anytime Fitness Express centers, or grant others the right to do so, outside your territory, even if they<br />

compete for members with your center, and even if the territorial boundaries for that franchise overlap<br />

with the boundaries for your territory.<br />

We do not restrict the customers you may serve, and you may solicit customers outside your territory,<br />

including through channels of distribution such as the Internet, telemarketing or other direct marketing<br />

sales. We and our affiliates also have the right to operate, and to grant franchises or licenses to others to<br />

operate, fitness centers and other businesses offering similar services in your territory under trademarks<br />

other than "Anytime Fitness®" or "Anytime Fitness Express®," but we do not have any plans to do so at<br />

this time. In addition, we and our affiliates have the right to sell products and services (like apparel or<br />

health-related services) to your members and to others in and outside your territory, using the "Anytime<br />

Fitness®" or "Anytime Fitness Express®" name, or using any other name, through any channel of<br />

distribution, including the Internet, catalog sales, telemarketing, or other direct marketing, and may do so<br />

in your territory.<br />

FDD 29

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