FRANCHISE AGREEMENT
BETWEEN
NEW WORLD COFFEE & BAGELS
AND
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NEW WORLD COFFEE & BAGELS
FRANCHISE AGREEMENT
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I
GRANT OF FRANCHISE. . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II
DEVELOPMENT AND OPENING OF THE STORE. . . . . . . . . . . . . .3
ARTICLE III
PROPRIETARY MARKS AND GOODWILL. . . . . . . . . . . . . . . . .6
ARTICLE IV
TERM AND RENEWAL. . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE V
INITIAL AND CONTINUING FEES PAYABLE TO FRANCHISOR . . . . . . .9
ARTICLE VI
TRAINING AND COMMENCEMENT OF BUSINESS . . . . . . . . . . . . 10
ARTICLE VII
OBLIGATIONS OF FRANCHISOR . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII
ADDITIONAL OBLIGATIONS AND DUTIES OF FRANCHISEE . . . . . . . 12
ARTICLE IX
ADVERTISING AND PROMOTIONAL ACTIVITIES. . . . . . . . . . . . 16
ARTICLE X
REPORTS TO FRANCHISOR . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XI
CONFIDENTIAL OPERATIONS MANUAL. . . . . . . . . . . . . . . . 19
ARTICLE XII
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XIII
RELATIONSHIP OF THE PARTIES: INDEMNIFICATION . . . . . . . . 21
ARTICLE XIV
COVENANTS NOT TO COMPETE. . . . . . . . . . . . . . . . . . . 22
ARTICLE XV
MODIFICATION OF THE SYSTEM. . . . . . . . . . . . . . . . . . 23
ARTICLE XVI
FRANCHISEE. . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XVII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XVIII
RIGHTS AND DUTIES OF THE PARTIES
UPON EXPIRATION OR TERMINATION. . . . . . . . . . . . . . . . 27
ARTICLE XIX
COMMENCEMENT AND HOURS OF OPERATIONS. . . . . . . . . . . . . 28
ARTICLE XX
TRANSFERABILITY OF INTEREST . . . . . . . . . . . . . . . . . 28
ARTICLE XXI
DEATH OR INCAPACITY OF FRANCHISEE . . . . . . . . . . . . . . 32
ARTICLE XXII
OPERATION IN THE EVENT OF
ABSENCE OR DISABILITY . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XXIII
INJUNCTIVE RELIEF . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXIV
RISK OF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXV
OTHER OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XXVI
FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XXVII
WAIVER OF VIOLATION OR DEFAULT. . . . . . . . . . . . . . . . 34
ARTICLE XXVIII
NOTICE AND TIME . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XXIX
GOVERNING LAW AND VENUE . . . . . . . . . . . . . . . . . . . 35
ARTICLE XXX
DISPUTE RESOLUTION. . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XXXI
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XXXII
ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XXXIII
JOINT AND SEVERAL OBLIGATION. . . . . . . . . . . . . . . . . 38
ARTICLE XXXIV
SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XXXV
COUNTERPART; PARAGRAPH HEADINGS; PRONOUNS . . . . . . . . . . 38
ARTICLE XXXVI
SEVERABILITY AND CONSTRUCTION . . . . . . . . . . . . . . . . 38
EXHIBITS:
"A" LOCATION AND EXCLUSIVE TERRITORY
"B" GUARANTY
"C" CONDITIONAL LEASE ASSIGNMENT PROVISIONS
"D" UNIT FRANCHISE OWNER DEVELOPMENT AGREEMENT
"E" SUBLEASE AGREEMENT
"F" TRANSFER OF FRANCHISE TO CORPORATION
"G" NON-DISCLOSURE AND NON-COMPETITION AGREEMENT
"H" ADDENDUM TO NEW WORLD AGREEMENT FOR A SATELLITE
UNIT
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NEW WORLD COFFEE & BAGELS
UNIT FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT, made this _____ day of __________________
19__, by and between New World Coffee & Bagels, Inc. a Delaware corporation
with its principal office at 000 Xxxx Xxxxxxxx; Xxx Xxxx, XX 00000
(hereinafter referred to as the "Franchisor") and
residing at
(hereinafter referred to as "Franchisee").
WITNESSETH:
WHEREAS, the Franchisor franchises certain specialty food
establishments, known as "New World Coffee & Bagels" stores, selling and
serving proprietary coffee ("Proprietary Products"), and such non-proprietary
products as salads, soups, bagels and beverage items for on-premises and
carry-out consumption ("Products"). Such stores are operated under certain
trademarks, service marks, logos and other commercial symbols, including
without limitation "New World Coffee & Bagels" ("Marks") which are owned by
Franchisor, and pursuant to certain confidential information and trade
secrets. Such stores are operated with uniform formats, designs, systems,
methods, specifications, standards and procedures, all of which may be
improved, further developed or otherwise modified from time to time by the
Franchisor ("System"); and
WHEREAS, the Franchisor grants to persons who meet the Franchisor's
qualifications and who are willing to undertake the investment and effort to
establish and develop a "New World Coffee & Bagels" store franchise and to
own and operate such a store, offering the Proprietary Products, Products and
services approved by the Franchisor and utilizing the Franchisor's formats,
designs, methods, specifications, standards, operating procedures and the
Marks; and
WHEREAS, Franchisee acknowledges that he/she has read this Agreement and
the Franchisor's Offering Circular and that he/she understands and accepts
the terms, conditions and covenants contained in this Agreement as being
reasonably necessary to maintain the Franchisor's high standards of quality
and service and the uniformity of those standards at all "New World Coffee &
Bagels" stores in order to protect and preserve the goodwill of the Marks;
and
WHEREAS, Franchisee acknowledges that he/she has conducted an
independent investigation of the business contemplated by this Agreement and
recognizes that, like any other business, the nature of the business
conducted by "New World Coffee & Bagels" stores may evolve and change over
time, that an investment in a "New World Coffee & Bagels" store involves
business risks and that the success of the venture is largely dependent upon
the business abilities and efforts of Franchisee; and
WHEREAS, Franchisee acknowledges that he/she has not received or relied
on any representations about the franchise by the Franchisor, or its
officers, directors, employees or agents, that are contrary to the statements
made in the Franchisor's Offering Circular or to the terms and conditions
contained herein, and further represents to the Franchisor, as an inducement
to his/her entry into this Agreement, that Franchisee has made no
misrepresentations in obtaining the franchise; and
WHEREAS, Franchisee has applied for a franchise to own and operate a
single "New World Coffee & Bagels" store at the premises identified in
Article I hereof, and such application has been approved by the Franchisor in
reliance upon all of the representations made therein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
premises and covenants hereinafter made, Franchisor and Franchisee do hereby
agree as follows:
ARTICLE I
GRANT OF FRANCHISE
1.1 Subject to the terms and conditions contained herein, the
Franchisor hereby grants to Franchisee the right to own and operate a "New
World Coffee & Bagels" store at, and only at, the premises approved by the
Franchisor in accordance with the provisions of this Agreement (the "Store"),
and to use the Marks in the operation thereof.
1.2 Exhibit "A" attached hereto, requires Franchisee to approve the
location of the Store within a specified geographical area (subject to the
Franchisor's approval) within one hundred eighty (180) days after the date of
this Agreement.
1.3 It is agreed that the "New World Coffee & Bagels" franchise herein
granted is exclusive and the Franchisor hereby covenants with Franchisee
that, during the term of this Agreement and all extensions hereof, Franchisor
will neither establish a company-owned, nor franchise to any third party a
"New World Coffee & Bagels" franchise within Franchisee's trading area
(hereinafter referred to as "Exclusive Territory").
1.4 The franchise location set forth in Exhibit "A" or Franchisee's
Exclusive Territory may not be altered or changed by the Franchisee without
Franchisor's prior written approval. In the event there is such an approval,
the new franchise location, and/or Exclusive Territory shall become the
"Franchise Location and/or Exclusive Territory," under the terms of this
Agreement.
1.5 Franchisee hereby acknowledges Franchisor's right to develop and
franchise other similar franchises or different franchise systems outside of
Franchisee's Exclusive Territory without offering same to the Franchisee.
1.6 Franchisee further acknowledges that Franchisor will have the right
to sell or market its coffee and proprietary products under Franchisor's
trademarks, service marks and logos on a wholesale level to institutions and
supermarkets inside or outside of Franchisee's Exclusive Territory.
1.7 Franchisee acknowledges and understands that within Franchisee's
Exclusive Territory there may be in existence or there may be developed in
the future, what is known as an institutional facility, which would include,
without limitation, airports; hospitals; universities; schools; factories;
workplace cafeterias; federal or state military bases; theaters (both movie
and stage); federal, state or local government buildings and establishments;
beaches, parks and other seasonal facilities; and any other such institution
("Institutional Location"). In the event Franchisor is able to sell a
franchise for such Institutional Location, then it shall give Franchisee the
right of first refusal to purchase the franchise for such Institutional
Location. If Franchisee elects not to purchase this Institutional Location,
then Franchisor shall have the right to either franchise it to a third party
or retain it as a company-owned Store.
1.7.1 Franchisee acknowledges and understands that an
Institutional Location which is in existence or which may be developed in
his/her Exclusive Territory may not be available as a franchise to
Franchisee. Therefore, Franchisor reserves the right, in its sole
discretion, to negotiate a franchise agreement with any institutional feeder,
as defined herein, serving an Institutional Location, that is within
Franchisee's Exclusive Territory. Institutional feeders are defined as third
parties who are entitled (through ownership, license or otherwise) to operate
restaurants, cafeterias, lunchrooms, dining rooms, snack bars, lounges,
"snack trucks" or other species of food or beverage retail outlet whatsoever,
on the premises of an Institutional Location.
1.8 Franchisee further acknowledges that either Franchisor or its
designee, may sell, on a wholesale basis, fresh or packaged products,
including, but not limited to, coffee and proprietary products to customers
such as supermarkets, groceries, gas stations and convenience stores, within
Franchisee's Exclusive Territory, provided, however, that such wholesale
sales shall not be made to an establishment which conducts business primarily
as a coffee and bagel store.
ARTICLE II
DEVELOPMENT AND OPENING OF THE STORE
Lease of Store Premises:
2.1 Upon Franchisee's approval, Franchisee shall lease from the prime
landlord or sublease from Franchisor or its designee the premises for the
Store. The Franchisor shall have the right in its sole discretion, to
require:
A. Franchisee to execute a Single Unit Development Franchise
Owner Agreement in the form attached hereto as Exhibit "D";
B. Franchisee to execute Franchisor's standard sublease for such
premises and sign for sublease personally, in the form attached
hereto as Exhibit "E" in the event franchisor or its designee
executes the lease directly from the prime landlord;
C. In the event Franchisor does not sublet the premises to
Franchisee, Franchisee must conditionally assign the lease for
the premises to the Franchisor (with the consent of the lessor,
if required). This will be done by conditional lease assignment
provisions in the form annexed to Franchise Agreement as Exhibit
"C" in order to secure performance of any and all of Franchisee's
obligations to the Franchisor;
D. The lease shall contain substantially the following
provisions:
1. "Anything contained in this lease to the contrary
notwithstanding, Lessor agrees that without its consent,
this lease and the right, title and interest of the Lessee
hereunder may be assigned by the Lessee to New World Coffee
& Bagels, Inc., a Delaware corporation or its designee."
2. "Lessee hereby agrees that Lessor may, upon the written
request of New World Coffee & Bagels, Inc., disclose to New
World Coffee & Bagels, Inc., all reports, information or
data in Lessor's possession respecting sales made in, upon
or from the leased premises."
3. "Lessor shall give written notice to New World Coffee &
Bagels, Inc. (concurrently with the giving of such notice to
Lessee) of any default by Lessee under the lease and New
World Coffee & Bagels, Inc. shall have the right,in its sole
discretion, to cure any such default. Such notice shall be
sent to New World Coffee & Bagels, Inc., at its New York
office, or such other address as New World Coffee & Bagels,
Inc. may, from time to time, specify in writing to Lessor."
2.2 In the event the Franchisor cures any default by Franchisee under
such sublease, the total amount of all costs and payments incurred by the
Franchisor in effecting such cure shall be immediately due and owing by
Franchisee to the Franchisor.
2.3 Franchisee's execution of a sublease or lease for the location for
his/her Store shall constitute acceptance by Franchisee of such location and
site and the terms of such sublease or lease and shall constitute a waiver of
any claim or rights against the Franchisor relating to Franchisee's choice of
such site and location and of the terms of such sublease or lease.
Development of Store
2.4 The Franchisor will furnish to Franchisee prototype or protostyle
plans and specifications for a "New World Coffee & Bagels" Store reflecting
the Franchisor's requirements for dimensions, exterior design, interior
design and layout, image, building materials, fixtures, equipment, furniture,
signs and decor.
2.5 Within fifteen (15) days after signing the Single Unit Franchise
Owner Development Agreement and having been furnished with the above-
described plans and specifications, Franchisee shall do or cause to be done
the following:
A. Make application for preliminary approval for all financing
required to fully develop the Store;
B. Prepare, at Franchisee's expense, and submit to the Franchisor
for approval (which approval may be granted or withheld at the
Franchisor's sole discretion) any proposed modifications to the
Franchisor's prototype or protostyle plans and specifications,
which may be modified only to the extent necessary to comply with
applicable ordinances, building codes, permit requirements and
lease or deed requirements and restrictions, all such
modifications being subject to prior notification to, and
approval by, the Franchisor;
C. Obtain and pay for all required building, utility, sign,
health, sanitation and business permits and licenses, and any
other required permits and licenses;
2.6 Within seventy-five (75) days from receipt of all permits,
construct all required improvements to the premises, purchase and install all
required fixtures and equipment and decorate the premises in compliance with
plans and specifications approved by the Franchisor; and purchase, in
accordance with the Franchisor's specifications and requirements, an opening
inventory of proprietary food items, Products, ingredients and other products
and supplies required for the opening of the Store.
2.7 Upon Franchisee's written request, Franchisor shall make all
arrangements for the interior build-out of the Store and for the purchase and
installation of the equipment discussed in Section 2.8 below, all at
Franchisee's sole cost and expense.
Fixtures, Equipment, Furniture and Signs
2.8 Franchisee shall use, in the construction and operations of the
Store, only those brands, types or models of construction and decorating
materials, fixtures, equipment, furniture and signs that the Franchisor has
approved for "New World Coffee & Bagels" Stores as meeting its specifications
and standards for quality, design, appearance, function and performance.
Franchisee further agrees to place or display at the premises of the Store
only such signs, emblems, lettering, logos and display materials that are,
from time to time, approved in writing by the Franchisor. Franchisee may
purchase approved types or models of construction and decorating materials,
fixtures, equipment, furniture and signs from any supplier approved or
designated by the Franchisor (which may include the Franchisor and/or its
affiliates), which approval may not be unreasonably withheld. If Franchisee
proposes to purchase any type or model of construction or decorating
material, fixture, equipment, furniture or sign not then approved by the
Franchisor, and/or any such items from any supplier who is not then approved
by the Franchisor, Franchisee shall first notify the Franchisor in writing
and shall submit to the Franchisor sufficient specifications, photographs,
drawings and/or other information or samples for a determination by the
Franchisor of whether such brand or type of construction or decorating
material, fixture, equipment, furniture or sign complies with its
specifications and standards. The Franchisor may, in its sole discretion,
refuse to approve any such item(s) and/or supplier(s) that does not meet the
Franchisor's standards or specifications.
Store Opening
2.9 Franchisee shall not open the Store for business until:
A. The Franchisor determines that the Store has been constructed
and equipped in accordance with approved plans and specifications
B. Training of Franchisee and his/her manager(s) has been
completed to the Franchisor's reasonable satisfaction;
C. The Initial Franchise Fee and all other amounts due to the
Franchisor under this Agreement and any other related agreements
to which he/she is a party have been paid;
D. The Franchisor has been furnished with copies of all insurance
policies required by Article XII hereof, or such other evidence
of insurance coverage as the Franchisor requests; and
E. Franchisor's personnel are available to assist and be present
at the opening of the Store if the Franchisor, in its sole
discretion, deems it necessary.
F. Franchisee has purchased his/her opening inventory package
from the Franchisor.
2.10 The Franchisee agrees to have the Store ready to open for business
within seventy-five (75) days after receipt of all permits. Final approval
by the Franchisor of the opening of the Store shall be given in writing and
shall be in the Franchisor's sole discretion. Franchisee agrees to open the
Store for business within seven (7) days after receipt of such written notice
from Franchisor.
Relocation of Store
2.11 If Franchisee's lease or sublease for the premises of the Store
terminates without fault of Franchisee, or if the premises are damaged,
condemned or otherwise unusable, or if in the reasonable judgment of the
Franchisor and Franchisee there is a change in the character of the location
of the Store sufficiently detrimental to its business potential to warrant
its relocation, the Franchisor shall grant permission to Franchisee for
relocation of the Store to a location approved by the Franchisor which may or
may not be within the Franchisee's Exclusive Territory. Any such relocation
shall be at Franchisee's sole expense and the Franchisor shall have the right
to charge Franchisee for costs and expenses incurred by the Franchisor in
connection therewith, however, no new franchise fee will be charged. The
term of this Agreement shall continue at the new location.
2.12 Franchisee agrees that in the event of a relocation of the
Store, Franchisee shall promptly remove from the first Store premises, and
discontinue using for any purposes, any and all signs, fixtures, furniture,
posters, furnishings, equipment, menus, advertising materials, stationery
supplies, forms and other articles which display any of the Marks or any
distinctive features or designs associated with "New World Coffee & Bagels"
Stores. Furthermore, Franchisee shall, at his/her expense, immediately make
such modifications or alterations as may be necessary to distinguish the
first Store so clearly from its former appearance and from other "New World
Coffee & Bagels" Stores and to prevent any possibility of confusion therewith
by the public (including, without limitation, removal of all distinctive
physical and structural features identifying "New World Coffee & Bagels"
Stores and removal of all distinctive signs and emblems). Franchisee shall,
at his/her expense, make such specific additional changes as the Franchisor
may reasonably request for this purpose. If Franchisee fails to initiate
immediately or complete such alterations within such period of time as the
Franchisor deems appropriate, Franchisee agrees that the Franchisor or its
designated agents may enter the premises of the first Store and adjacent
areas at any time to make such alterations, at Franchisee's sole risk and
expense, without responsibility for any actual or consequential damages to
the property of Franchisee or others, and without liability for trespass or
other tort or criminal act. Franchisee expressly acknowledges that his/her
failure to make such alterations will cause irreparable injury to the
Franchisor and consents to entry, at Franchisee's expense, of an ex-parte
order by and court of competent jurisdiction authorizing the Franchisor or
its agents to take such action, if the Franchisor seeks such an order.
Compliance with the foregoing shall be a condition subsequent to the
Franchisor's approval of any relocation request by Franchisee, and in the
event complete de-identification of the former Store premises is not promptly
and completely undertaken, the Franchisor may then revoke its permission for
relocation and declare a default under this Agreement pursuant to Article
XVII hereof.
ARTICLE III
PROPRIETARY MARKS AND GOODWILL
3.1 When used in this Agreement, "Marks" mean the "New World Coffee &
Bagels" and/or "New World Coffee & Bagels" trademark and service xxxx which
are used to identify "New World Coffee & Bagels" Stores or Proprietary
Products and to distinguish it from that of any other business, and the
trademarks, service marks, trade names, logos and commercial symbols as may
be designated by the Franchisor from time to time for use in connection with
the System.
3.2 Franchisee is authorized to use the Marks, goodwill and trade
secrets in the operation of the "New World Coffee & Bagels" Store only at the
location specified in Article I. Nothing in this Agreement shall be
construed as authorizing or permitting their use at any other location or for
any other purpose except as may be authorized in writing by Franchisor.
3.3 Franchisee acknowledges that the ownership of all of the Marks,
goodwill and trade secrets remains solely with Franchisor and that Franchisee
shall not register or attempt to register the Marks or to assert any rights
in them other than as specifically granted in this Agreement.
3.4 At Franchisor's request, Franchisee shall assign, transfer or
convey to Franchisor, in writing, all additional rights, if any, that may be
acquired by Franchisee as a result of its use of Marks.
3.5 Franchisee shall only use the Marks, logos, trade styles, color
combinations, designs, signs, symbols and slogans of Franchisor, and only in
the manner and to the extent specifically permitted by this Agreement or in
any manuals, directives or memos (hereinafter collectively referred to as
"Confidential Operations Manuals") prepared by Franchisor. Franchisee shall
not use any confusingly similar Marks in connection with its franchise or any
other business in which it has an interest.
3.6 Franchisor reserves the right to approve all signs, memos,
stationery, business cards, advertising material forms and all other objects
and supplies using the Franchisor's Marks. All advertising, publicity, point
of sale materials, signs, decorations, furnishings, equipment, or other
materials employing the words "New World Coffee & Bagels" shall be in
accordance with this Agreement and the Confidential Operations Manuals, and
Franchisee shall obtain Franchisor's approval prior to such use.
3.7 Franchisor reserves the right to adopt new or modified Marks at any
time, following notice to Franchisee. In such event and at Franchisor's
direction, Franchisee shall adopt, use and display only such new or modified
Marks and shall promptly discontinue the use and display of outmoded or
superseded marks.
3.8 Upon the expiration, termination or non-renewal of this Agreement,
Franchisee shall immediately cease using Franchisor's Marks, color
combinations, designs, symbols or slogans; and Franchisor may cause
Franchisee to execute such documents and take such action as may be necessary
to evidence this fact. After the effective date of expiration, termination
or non-renewal, Franchisee shall not represent or imply that he/she is
associated with Franchisor. To this end, Franchisee irrevocably appoints
Franchisor or its nominee, to be Franchisee's attorney-in-fact to execute, on
Franchisee's behalf, any document or perform any legal act necessary to
protect Franchisor's Marks from unauthorized use. Franchisee acknowledges
and agrees that the unauthorized use of Franchisor's Marks will result in
irreparable harm to Franchisor for which Franchisor may obtain injunctive
relief, monetary damages, reasonable attorneys' fees and costs.
3.9 Franchisee shall immediately notify Franchisor of any apparent
infringement of or challenge to Franchisee's use of the Marks, or any claim,
demand, or suit based upon or arising from the unauthorized use of, or any
attempt by any other person, firm, or corporation to use, without
authorization, or any infringement of or challenge to, any of Franchisor's
Marks. Franchisee shall immediately notify Franchisor of any other
litigation instituted by any person, firm, corporation or governmental entity
against Franchisor or Franchisee.
3.10 Franchisor shall undertake the defense or prosecution of any
litigation concerning Franchisee that relates to any of Franchisor's Marks or
that, in Franchisor's judgment, may affect the goodwill of the System; and
Franchisor may, in such circumstances, undertake any other action which it
deems appropriate. Franchisor shall have sole and complete discretion in the
conduct of any defense, prosecution or other action it chooses to undertake.
In that event, Franchisee shall execute those documents and perform those
acts which, in the opinion of Franchisor are necessary for the defense or
prosecution of the litigation or for such other action as may be undertaken
by Franchisor.
3.11 In order to develop and maintain high uniform standards of quality
and service and to protect the reputation and goodwill of Franchisor,
Franchisee shall do business and advertise using only the Marks designated by
the Franchisor. Franchisee shall not do business or advertise using any
other name. Franchisee is not authorized to and shall not use the words "New
World Coffee & Bagels" by itself, as a part of the legal name of any
corporation, partnership, proprietorship or other business entity to which
Franchisee is associated, or with a bank account, trade account or in any
legal or financial connection.
3.12 In order to preserve the validity and integrity of Franchisor's
Marks, and to assure that Franchisee is properly employing them in the
operation of Franchisee's business, Franchisor and its agents shall have the
right at all reasonable times to inspect Franchisee's business, financial
books and records, and operations. Franchisee shall cooperate with and
assist Franchisor's representative in such inspection.
3.13 Franchisee shall be required to affix the or symbol upon all
advertising, publicity, signs, decorations, furnishings, equipment or other
printed or graphic material employing the words "New World Coffee & Bagels"
or any other of Franchisor's Marks, whether presently existing or developed
in the future.
3.14 Franchisee acknowledges that it does not have any right to deny the
use of Franchisor's Marks to any other "New World Coffee & Bagels"
franchisees. In consideration therefore, Franchisee shall execute all
documents and take such action as may be requested to allow Franchisor or
other "New World Coffee & Bagels" franchisees to have full use of the Marks.
3.15 If, during the term of this Agreement, there is a claim of prior
use of the "New World Coffee & Bagels" name or any other of Franchisor's
Marks in the area in which Franchisee is doing business or in another area or
areas, Franchisee shall so use any of Franchisor's Marks in such a way and at
Franchisor's discretion in order to avoid a continuing conflict, including
but not limited to using a different Xxxx, as determined by Franchisor.
3.16 The Franchisor shall indemnify and hold Franchisee harmless
against, and to reimburse Franchisee for all damages for which he/she is held
liable in any proceeding in which Franchisee's use of any Xxxx pursuant to
and in compliance with this Agreement is held to constitute trademark
infringement, unfair competition or dilution, and for all costs reasonably
incurred by Franchisee in the defense of any such claim brought against him
or in any such proceedings in which he/she is named as a party, provided that
Franchisee has timely notified the Franchisor of such claim or proceedings,
has otherwise complied with this Agreement and has tendered complete control
of the defense of such to the Franchisor. If the Franchisor defends such
claim, the Franchisor shall have no obligation to indemnify or reimburse
Franchisee with respect to any fees or disbursements of any attorney retained
by Franchisee.
ARTICLE IV
TERM AND RENEWAL
4.1 Except as otherwise provided in this Agreement, the initial term of
this "New World Coffee & Bagels" franchise shall be for a period commencing
upon the execution of this Agreement (the "Initial Term") and conclude on the
tenth (10th) year anniversary of the date of execution of this Agreement or
the end of the term of the Lease including Options, whichever is longer.
4.2 Subject to the conditions specified in Section 4.3 hereof, the
Franchisee shall have the right to renew this Agreement for one additional a
period of ten (10) years from the date of the expiration of the Initial Term.
4.3 The Franchisee's right of renewal pursuant to Section 4.2 above
shall be subject to the following conditions precedent:
A. Neither this Agreement nor the lease or sublease agreement
shall have been terminated for any reason, and that the lease or
sublease is renewable;
B. The Franchisee shall not be in default of any provision of
this Agreement, any amendment hereof or successor hereto, any
sublease agreement, or any other agreement between Franchisor or
any subsidiary and/or affiliated corporation and Franchisee has
substantially complied with all of the terms and conditions of
such agreements during their terms;
C. The Franchisee shall have served notice of his/her intention
to exercise his/her right of renewal not less than six (6) months
nor more than eighteen (18) months prior to the expiration of the
Initial Term;
D. The Franchisee shall have effected the improvements to his/her
"New World Coffee & Bagels" Store and its operations required by
the Franchisor pursuant to Section 4.4 below;
E. The Franchisee has satisfied all monetary obligations due and
owing to Franchisor, any subsidiary of Franchisor and/or any
affiliated corporations of Franchisor and Franchisee has timely
met these obligations throughout the term of this Agreement and
any other agreement in effect and any renewals thereof;
F. Franchisee shall execute, upon renewal, Franchisor's then-
current form of Unit Franchise Agreement, which agreement shall
supersede this Agreement in all respects and terms, and which may
differ from the terms of this Agreement, including, without
limitation, a higher royalty fee and higher advertising
contribution, but in no event will an Initial Franchise Fee be
imposed for any renewal hereof;
G. Franchisee shall execute a general release, in a form
prescribed by Franchisor on any and all claims against Franchisor
any subsidiary of Franchisor and/or affiliated corporation of
Franchisor, and their respective officers, directors, agents and
employees.
H. Franchisee shall comply with Franchisor's then-current
reasonable qualification and training requirements;
4.4 Upon receipt of a notice to renew from the Franchisee pursuant to
Section 4.2 hereof, the Franchisor shall prepare a renewal report which
report shall be completed within three (3) months of the receipt of said
notice and shall specify the modifications and improvements and repairs, if
any, required by the Franchisor and which Franchisee must make to his/her
"New World Coffee & Bagels" Store which must be in conformity with the then
existing standards, and specifications pertaining to his/her "New World
Coffee & Bagels" Store.
4.5 The Franchisor expressly reserves the right to deny Franchisee's
renewal in the event that Franchisee abandons his/her "New World Coffee &
Bagels" Store and or the Franchisee ceases to operate and maintain his/her
"New World Coffee & Bagels" Store in accordance with the terms of this
Agreement.
4.6 The Franchisor is not required to renew this Franchise Agreement if
the Franchisee has received three default notices during the term hereof.
ARTICLE V
INITIAL AND CONTINUING FEES PAYABLE TO FRANCHISOR
5.1 In consideration of the execution of this Agreement and
Franchisor's granting to Franchisee the "New World Coffee & Bagels" franchise
covered hereby, Franchisee agrees to pay to Franchisor an Initial Franchise
Fee of Twenty-Five Thousand ($25,000) Dollars (the "Initial Franchise Fee").
Fifteen Thousand ($15,000) Dollars is payable upon the execution of this
Agreement and the balance of Ten Thousand ($10,000) Dollars is payable upon
the earlier of the execution of a sublease, lease or Exhibit "D" hereof or
one hundred and eighty (180) days from the date hereof. This sum shall be
deemed fully earned by Franchisor upon execution of a lease or a sublease by
Franchisee and is non-refundable, except as described below.
If, however, within the one hundred and eighty (180) day period
from the date hereof, the Franchisor has located an acceptable site and
Franchisee rejects this site, the Franchisor shall have the option to
terminate this Agreement and refund, without interest, all but $2,500 of the
Initial Franchise Fee.
5.2 In consideration of this franchise granted hereby, the services to
be provided by Franchisor hereunder, the right to prepare and sell the
certain Proprietary Products and the Products to the general public, and for
the use of the Marks during the term hereof and any subsequent renewals,
Franchisee shall pay to Franchisor, in addition to the Initial Franchise Fee
set forth herein, a royalty fee equal to five percent (5%) of the gross sales
generated by, from, or through the Franchisee's "New World Coffee & Bagels"
Store ("Royalty Fee").
5.3 The term "Gross Sales" as used herein is defined to mean receipts
from gross sales of Franchisee from all business conducted upon or from the
"New World Coffee & Bagels" Store by Franchisee and whether such sales be
evidenced by check, credit, charge account, exchange or otherwise, and shall
include, but not be limited to, the amounts received from the sale of goods,
wares and merchandise and for services performed at the leased premises
whether such orders be filled from the leased premises or elsewhere, and
whether such sales be made wholesale or retail. Gross Sales shall not
include sales for which cash has been refunded, or allowances made on
Products claimed to be unsatisfactory, provided they shall have been included
in gross sales. All sales must be rung in the register at the time they
occur and reported in weekly sales reports. Gross sales shall not include
the amount of any sales, use or gross receipts tax imposed by any federal,
state, municipal or governmental authority directly on sales and collected
from customers, provided that the amount thereof is added to the selling
price or absorbed therein and paid by the Franchisee to such governmental
authority. Each charge or sale upon credit shall be treated as a sale for
the full price in the week during which such charge or sale shall be made,
irrespective of the time when Franchisee shall receive payment (whether full
or partial) therefor.
5.4 Royalty Fees are due and payable on the Wednesday of each week,
which week shall end on the preceding Sunday ("Payment Date").
5.5 Royalty Fees or any and all other payments provided for in this
Agreement not received by Franchisor within three (3) days of the Payment
Date shall be subject to interest on a daily basis at one and one-half
percent (1 1/2%) per month, or the then highest legal rate, whichever is
less.
5.6 Acceptance by Franchisor of the payment of any Royalty Fee or any
and all other payments provided for in this Agreement shall not be conclusive
or binding on Franchisor with respect to the accuracy of such payment until
two (2) years after the effective date of termination or non-renewal of this
Agreement. Acceptance of any payment on account of Royalty Fees or any and
all other payments provided for in this Agreement does not constitute any
waiver of Franchisor's rights under Article XVIII hereof.
5.7 Franchisee's obligations for the full and timely payment of the
Royalty Fees and all other amounts provided for in this Agreement shall be
absolute, unconditional and fully earned by Franchisor, except in those
instances where Franchisor is in breach hereunder and has failed to cure such
breach although obligated to do so. Franchisee shall not delay or withhold
the payment of all or any part of the fees for any reason, put the same in
escrow or set-off same against any and all claims or alleged claims
Franchisee may allege against Franchisor.
5.8 At Franchisor's option, Franchisee shall authorize Franchisor, on
a form to be signed by Franchisee, to debit from Franchisee's business
operating account, any funds due and payable to Franchisor. Under this
procedure, Franchisee shall authorize Franchisor to initiate debit entries
and/or credit collection entries to a designated checking or savings account
for the weekly payment of any fees due and payable to Franchisor, which fees
shall include, but not be limited to royalty fees, advertising fees and
product purchases. Franchisee shall make the funds available for withdrawal
by electronic transfer by Franchisor on the Wednesday of each week.
ARTICLE VI
TRAINING AND COMMENCEMENT OF BUSINESS
6.1 During the time period prior to the opening of Franchisee's "New
World Coffee & Bagels" Store, Franchisee and his/her manager, if any, shall
attend Franchisor's initial training program, which shall be conducted at
Franchisor's headquarters or at an alternate location and at Franchisee's
Store, and complete said training course to Franchisor's satisfaction.
Franchisee shall be responsible for all travel and living expenses which
Franchisee and his/her manager incur in connection with the initial training
program. During the training program, Franchisee shall receive instruction,
training and education in the operation of the "New World Coffee & Bagels"
Store and indoctrination into the System.
6.1.l In the event Franchisee purchases additional Stores, the
above initial training program shall be attended by the Franchisee's
designated and approved Store manager.
6.2 Franchisee may attend such periodic refresher and supplemental
training programs or meetings at such locations as Franchisor may from time
to time direct. All expenses of Franchisee incurred in connection with
attendance at any such refresher or supplemental training programs or
meetings shall be borne solely by Franchisee.
6.3 Franchisee shall maintain at all times during the term of this
Agreement or any renewal thereof, a staff of trained employees sufficient to
operate the "New World Coffee & Bagels" Store in accordance with this
Agreement and the Franchisor's standards. Franchisee shall not employ any
person who may reasonably be required by Franchisor to complete a training
program but who fails to do so for any reason whatsoever.
ARTICLE VII
OBLIGATIONS OF FRANCHISOR
7.1 In order to assist Franchisee in constructing his/her "New World
Coffee & Bagels" Store, Franchisor shall furnish to Franchisee a set of
prototypical plans and specifications for the Franchisees approved "New World
Coffee & Bagels" Store, including requirements for exterior and interior
design, layout, equipment and sign placement and decor scheme, all as
included in the System.
7.2 Franchisor may assist Franchisee in Franchisee's selection of, and
contracting with appropriate architects, engineers, contractors, and
subcontractors for construction of all leasehold improvements at Franchisee's
"New World Coffee & Bagels" Store in accordance with the plans and
specifications approved by Franchisor.
7.3 Franchisor shall make available to Franchisee any further
assistance that Franchisor may deem is required, based on the experience and
judgment of Franchisor in pre-opening, opening and initial business operation
of the Franchisee's "New World Coffee & Bagels" Store, which assistance shall
conform to that furnished to other existing franchisees. Such assistance
will include providing Franchisee with the services of one (1) employee of
the Franchisor for no more than seven (7) days for supervisory assistance and
guidance in connection with the opening and initial operations of the Store.
The Franchisor shall have the right to determine the time or times at which
such employee shall be made available to Franchisee.
7.4 Franchisor shall assist Franchisee in implementing and designing
his/her grand opening promotions and advertising program.
7.5 Franchisor shall maintain an advisory relationship with Franchisee
including ongoing telephone consultation to aid in the proper and effective
operation of the System, the frequency and duration of which shall be in the
sole discretion of Franchisor. Such operating assistance may consist of
advice and guidance with respect to:
A. Methods and operating procedures utilized by "New World Coffee
& Bagels" Stores;
B. Additional food and beverage products and services authorized
for sale by "New World Coffee & Bagels" Stores;
C. Selection, purchasing and preparation of food products,
beverages and other approved products, materials and supplies;and
D. The establishment and operation of administrative,
bookkeeping, accounting, inventory control, sales and general
operating procedures for proper operation of "New World Coffee &
Bagels" Stores.
7.6 Franchisor or its designees or agents shall visit and inspect, from
time to time, Franchisee's "New World Coffee & Bagels" Store and evaluate the
proper execution of the System, and confer with Franchisee and Franchisee's
employees in connection therewith in order to assist in the proper business
operation of Franchisee's "New World Coffee & Bagels" Store. Franchisor or
its designees or agents shall have the absolute right to make inspections at
such times and frequencies, during normal business hours, as Franchisor may
determine. Franchisee will cooperate with Franchisor's representatives in
such inspections, render such assistance to them as they may reasonably
request and immediately correct any failure to comply with the System and
this Agreement as brought to Franchisee's attention by such representative.
7.7 Franchisor shall use its reasonable efforts to require maintenance
of high and uniform standards in the execution of the System at all "New
World Coffee & Bagels" Stores utilizing the System thus protecting and
enhancing the reputation of Franchisor and its Marks.
7.8 In order to insure that the distinguishing characteristics of the
System are uniformly maintained, Franchisor may establish from time to time,
standards for certain proprietary food items, products, equipment,
commodities and supplies for the use of same by Franchisee in the execution
of the System and may, in conjunction therewith develop new proprietary food
items, products, programs and develop new equipment and new techniques which
Franchisee shall be required to use and/or purchase in the operation of
his/her "New World Coffee & Bagels" Store. The purchase of any new equipment
will not materially increase the economic burden of Franchisee.
7.9 Neither Franchisor's approval of a specific location for
Franchisee's "New World Coffee & Bagels" Store, nor any other service
provided by Franchisor pursuant to this Article shall be deemed a
representation, warranty or judgment by Franchisor as to the likely success
of the Franchisee's "New World Coffee & Bagels" Store at such location with
the specified personnel or as to the relative desirability of such location
in comparison to others that might have been available to Franchisee.
7.10 Franchisor or its designees shall sell to Franchisee all of
Franchisee's requirements of the Proprietary Products, as is set forth in
Article VIII hereof, unless prevented from so doing by Force Majeure,
governmental restrictions, labor disputes, inability to obtain or manufacture
supplies, or products, or other contingency or situation, that is beyond
Franchisor's control. Under these circumstances, the Franchisor will not be
responsible or liable for any business losses or interruption, and
Franchisee, during these situations, may seek alternate, but approved,
sources of supply, provided such products meet Franchisor's specifications as
to quality and availability.
ARTICLE VIII
ADDITIONAL OBLIGATIONS AND DUTIES OF FRANCHISEE
8.1 Franchisee or a designated and approved manager, shall, during the
term of this Agreement and any renewal thereof, devote full time, energy and
best efforts to the management and operation of the "New World Coffee &
Bagels" Store franchised hereunder, except as otherwise approved in writing
by Franchisor, including, but not limited to keeping "New World Coffee &
Bagels" Store operating and open for business at the times specified in the
Confidential Operations Manuals or as required by Franchisee's lease or
sublease.
8.2 Franchisee shall maintain, at his/her own expense, at all times,
the interior and exterior of his/her "New World Coffee & Bagels" Store and
all fixtures, furnishings, signs and equipment in the highest degree of
cleanliness, orderliness, sanitation and repair, as determined by Franchisor,
and to make no material alteration, addition, replacement or improvement in
or to, the interior or exterior of the "New World Coffee & Bagels" Store
without the prior written consent of Franchisor, except that Franchisee shall
be required to periodically renovate, refurbish and update his/her "New World
Coffee & Bagels" Store so that it is in substantial conformity with the
Franchisor's then-current "New World Coffee & Bagels" Store design, which
renovations shall not be excessive and shall not exceed 25% of the original
cost of construction of the Store.
8.3 Franchisee acknowledges and agrees that the Proprietary Products
produced by the Franchisor are produced and manufactured in accordance with
secret formulae and processes, that these particular Proprietary Products are
uniquely suited for distribution and sale at "New World Coffee & Bagels"
Stores and, in the mind of the public, are inextricably interrelated to the
Marks, and in order to safeguard the integrity of the Marks and to maintain
the uniformity of these Proprietary Products, Franchisee agrees that he/she
shall purchase from Franchisor or from sources designated by Franchisor,
his/her entire requirements of the Proprietary Products offered for
consumption to any purchaser as set forth in the Confidential Operations
Manuals. Franchisee shall purchase such requirements from Franchisor or its
designee, at prices reasonably set by Franchisor, or by its designee, which
prices shall be charged to all franchisees, subject to Franchisor or its
designee having the right, but not the obligation, to increase or decrease
the price charged in the event that any of the cost of the items increase or
decrease during the term of this Franchise Agreement, provided such increases
or decreases are passed along to all franchisees, without discrimination.
Franchisee agrees to rely solely on Franchisor's, or its designee's
determination of price from time to time. Payment, therefore, shall be made
by Franchisee to Franchisor or its designee upon terms and conditions
established by Franchisor or its designee, from time to time.
8.4 Franchisee agrees to allow Franchisor, from time to time, to obtain
and take samples of ingredients, products and supplies from Franchisee's "New
World Coffee & Bagels" Store for testing by the Franchisor in order to assure
that Franchisee complies with Franchisor's reasonable standards and
specifications.
8.5 Franchisee agrees to maintain a high moral and ethical standard in
the operation and conduct of his/her "New World Coffee & Bagels" Store so as
to create and maintain goodwill among the public for the name "New World
Coffee & Bagels" and supervise and evaluate the performance of his/her staff
to insure that each renders competent, efficient and quality service to the
general public.
8.6 Franchisee recognizes that it is essential to the proper marketing
of the Proprietary Products and to the preservation and promotion of the "New
World Coffee & Bagels" reputation and acceptance by the public at large, that
standards of quality be maintained. Franchisee therefore shall, as part of
the consideration for this Agreement, at all times sell, to retail customers
only, or offer for sale to retail customers, only the Proprietary Products
and Products and render only such services as shall meet the reasonable
specifications and standards from time to time approved in writing by
Franchisor, as permitted by law, and as permitted under the lease or
sublease. In furtherance thereof, Franchisee shall be required to purchase
from Franchisor or its designee, any new "New World Coffee & Bagels"
Proprietary Products, which may be introduced, from time to time, by
Franchisor and be required to offer same to the consuming public for its
consumption, this may include, but is not limited to, utilization of delivery
service or a catering division.
8.7 In connection with the operation of the Franchisee's "New World
Coffee & Bagels" Store, the Franchisee is required to purchase certain items
of equipment, if applicable, and also certain containers, packaging supplies,
paper goods and other product service items for the preparation and serving
of the Proprietary Products. To the extent that Franchisor is able to supply
the same, Franchisee shall have the right to purchase the same if he/she so
desires from Franchisor, at prices established by Franchisor from time to
time. Franchisee's obligations under this Section 8.7 shall be satisfied so
long as Franchisee equips his/her "New World Coffee & Bagels" Store and keeps
it maintained in accordance with Franchisor's strict specifications and
standards for the items. In the event that Franchisee desires to purchase
containers, packaging supplies, paper goods and product service items from
sources other than Franchisor, Franchisor shall, without charge, make a
license available to such other sources of such products to print the
required name, trademarks, and text thereon, but in no event shall Franchisee
be entitled to use any containers, packaging supplies, paper goods and other
product service items at his/her "New World Coffee & Bagels" Store which do
not duplicate those authorized by the Franchisor for use in connection with
the service of the Proprietary Products and before use of any such items,
Franchisee shall have requested in writing and obtained Franchisor's written
approval to have the required name, trademark, and text printed thereon in
the form and style directed by Franchisor, and also have had the same so
imprinted on the goods prior to using them.
8.8 In connection with the operation of his/her "New World Coffee &
Bagels" Store, the Franchisee is required to purchase certain other food
products, beverages and other similar products and other items offered for
consumption to the retail purchaser as set forth in the Confidential
Operations Manual. Franchisee's obligation under this Section 8.8 shall be
satisfied so long as Franchisee purchases the stated products from sources of
supply approved by Franchisor, subject to same meeting the strict
specifications of Franchisor which may be changed, modified or updated from
time to time. Nothing herein shall be construed as an attempt to
unreasonably limit the sources from which Franchisee may procure such food
products, beverages, products and similar other items. Rather, it is the
intention of the Franchisor that such items conform to the Franchisor's
strict standards and strict specifications of consistent quality and
uniformity. Nothing contained herein shall be deemed to require the
Franchisor to approve an inordinate number of suppliers of a given item
which, in the reasonable judgment of the Franchisor, would result in higher
costs generally to the Franchisee or prevent effective and economical
supervision of suppliers by the Franchisor. Requests for approval of
additional suppliers shall be in writing and shall contain such information
as the Franchisor may reasonably request. The Franchisor reserves the right
to charge back to the Franchisee or the proposed supplier, all reasonable
expenses incurred in considering requests for approval. Franchisor shall,
within a reasonable time, notify Franchisee whether or not such proposed
supplier is approved. The Franchisor may impose limits on the number of
suppliers for any ingredient or food or beverage item used or served by the
Store.
8.9 Franchisee acknowledges that in purchasing or leasing supplies,
equipment and/or materials from Franchisor or from suppliers approved by
Franchisor, FRANCHISOR EXPRESSLY DISCLAIMS ANY WARRANTIES OR REPRESENTATIONS
AS TO THE CONDITION OF SAME, INCLUDING WITHOUT LIMITATIONS, EXPRESS OR
IMPLIED WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR ANY INTENDED PURPOSE.
FRANCHISEE AGREES TO LOOK SOLELY TO THE MANUFACTURER OF SAME IN THE EVENT OF
ANY DEFECTS THEREIN. The foregoing shall not apply to the Proprietary
Products or to supplies, equipment or materials purchased directly from the
Franchisor.
8.10 The Franchisor possesses certain confidential information,
consisting of the ingredients, recipes and methods of preparation of food
products sold at "New World Coffee & Bagels" Stores and the methods, formats,
recipes, specifications, food preparation procedures, know-how information,
and knowledge of the operation and franchising of "New World Coffee & Bagels"
Stores (the "Confidential Information"). The Franchisor will disclose the
Confidential Information to Franchisee in furnishing Franchisee the training
programs, the Confidential Operations Manual and in guidance provided to
Franchisee during the term of the Franchise. Franchisee acknowledges and
agrees that he/she will not acquire any interest in the Confidential
Information, other than the right to utilize it in the development and
operation of the "New World Coffee & Bagels" Store during the term of the
this Agreement or any renewals thereof. Franchisee acknowledges and agrees
that the Confidential Information is proprietary and is a trade secret of the
Franchise, and is disclosed to Franchisee solely on the condition that
Franchisee agrees that he/she: (1) will not use the Confidential Information
in any other business or capacity; (2) will maintain the absolute
confidentiality of the Confidential Information during and after the term of
the Franchise; and (3) will not make unauthorized copies of any portion of
the Confidential Information disclosed in written form; and (4) will execute
the Non-Disclosure and Non-Competition Agreement annexed hereto us Exhibit
"G".
8.11 Franchisee shall only sell or offer for sale, such products as
described in the prime lease, and which are defined as Proprietary Products
by the Franchisor, from time to time; and Franchisee must obtain Franchisor's
written approval for all contemplated menu changes and all additions to
and/or deletions in items sold in the Franchisee's "New World Coffee &
Bagels" Store with the exception of the Proprietary Products, which, under no
circumstances, may be substituted for or replaced on the menu.
8.12 Franchisee shall comply with all the terms, conditions,
requirements, covenants and obligations set forth in this Agreement and any
renewals thereof and supply Franchisor with such information (in addition to
that otherwise provided for in this Agreement) as may be reasonably requested
by Franchisor.
8.13 Franchisee shall use a standard menu and menu format as required by
Franchisor. Franchisee may employ any reputable printer to reproduce
Franchisee' menus using Franchisor's format and specifications. This
provision shall not constitute a license of any copyright or trademark to the
prospective printer of such menus. Any changes in the menu used at the "New
World Coffee & Bagels" Store shall be approved in writing by Franchisor prior
to use. At the Franchisor's discretion the standard menu format may contain
advertising reference to other "New World Coffee & Bagels" Stores.
8.14 Franchisee shall promptly pay, when due, all taxes levied or
assessed, including, without limitation federal income taxes, sales taxes,
unemployment taxes and all indebtedness attributed to Franchisor and incurred
by Franchisee in the conduct of the business licensed by this Agreement,
including any taxes levied upon Franchisor by virtue of Franchisee's use of
the Marks.
8.15 Franchisee shall comply with all federal, state and local laws,
rules and regulations; and shall timely obtain any and all permits,
certificates, or licenses necessary for the full and proper conduct of the
business licensed by this Agreement, including, without limitation, operation
licenses, licenses to do business and fictitious name registration.
8.16 Franchisee shall notify Franchisor, in writing, within five (5)
days of the commencement of any action, claims, suit or proceeding, and of
the issuance of any order, writ, injunction, suit or proceeding, and of the
issuance of any order, writ, injunction, award or decree of any court, agency
or other governmental instrumentality which may adversely affect the
operation or financial condition of the Store.
8.17 Franchisee shall not pledge Franchisor's credit or bind Franchisor
to any obligation, nor shall it hold himself or herself out as being
authorized to do so.
8.18 Franchisee shall be responsible for having all personnel employed
by Franchisee wear standard related uniforms and attire during business hours
in order to further enhance Franchisor's product and format. Franchisee
shall be permitted to purchase such uniforms and attire from manufacturers or
distributors approved by Franchisor, which uniforms and attire must be in
strict accordance with Franchisor's design and other specifications.
8.19 Franchisor and Franchisee understand and agree that the operation
of the "New World Coffee & Bagels" Store, maintenance of its premises and
equipment, conduct and appearance of its personnel, and the preparation and
sale of products therefrom are all regulated by governmental statutes and
regulations. To this end, the Franchisor and Franchisee agree that
Franchisee owes an obligation to the patrons of his/her "New World Coffee &
Bagels" Store, to Franchisor, and to himself/herself, to fully and faithfully
comply with all those applicable governing authorities, and all of the same,
are made a part of this Franchise Agreement as if fully set forth herein. It
is further agreed that in the event any product dispensed at the Franchisee's
"New World Coffee & Bagels" Store evidence adulteration from the standards of
Franchisor's Proprietary Products or are in violation of applicable law or
regulations or in the event the Proprietary Products, premises, equipment,
personnel or operation of the "New World Coffee & Bagels" Store fail to be
maintained in accordance with the governmental requirements incorporated in
this Agreement as aforesaid, Franchisee shall immediately close his/her "New
World Coffee & Bagels" Store, terminate selling operations thereat, destroy
all contaminated or adulterated products and eliminate the source thereof and
remedy all unsanitary conditions present, reopening for business only after
Franchisor's inspection and laboratory analysis from samples obtained for
that purpose by Franchisor, evidence a compliance with the applicable
governmental requirements and with the standards of Franchisor's proprietary
products. In the event Franchisee or his/her agents or employees fail or
refuse to comply with all of the foregoing remedial measures or in the event
of any repetition of any adulteration or palming off or failure of sanitation
in the "New World Coffee & Bagels" Store:
A. The prevailing party shall be paid the costs and expenses,
including attorney's fees, of both parties, incurred in enforcing
the provisions of this Subsection or any provision of this
Agreement in obtaining Franchisee's compliance herewith. The
remedies set forth herein are in addition to and not in
substitution for those set forth in Article XIX of this Agreement
B. In furtherance of the foregoing, Franchisee shall submit
copies of all health, sanitation or other regulatory agency
inspection reports to Franchisor immediately upon receipt thereof
8.20 The Franchisor may, from time to time, conduct market research and
testing to determine consumer trends and the salability of new food products
and services. Franchisee shall cooperate by participating in the Franchisor's
market research programs, test marketing of new food products and services in
the Store and providing the Franchisor with timely reports and other relevant
information regarding such market research. In connection with any such test
marketing, Franchisee shall purchase a reasonable quantity of the tested
products and effectively promote and make a reasonable effort to sell such
products.
8.21 Franchisee shall be absolutely prohibited from having any vending
machines, lottery games or games of chance, juke boxes, gum or candy
machines, games, pinball machines, video games, rides or other mechanical or
electronic devices installed or operated at the Store.
ARTICLE IX
MARKETING AND PROMOTIONAL ACTIVITIES
9.1 The Franchisee is required to spend four (4%) of gross sales on
marketing, including local store marketing, advertising, and public
relations.
A. Recognizing the value of uniform advertising to the
goodwill and public image of all "New World Coffee & Bagels"
Stores, once there are twenty-five (25) franchises sold, the
Franchisee shall contribute to the marketing fund ("Marketing
Fund") on a weekly basis simultaneously with the payment of the
Royalty Fee required to be paid, pursuant to Section 5.2 of this
Agreement, a sum equal to two (2%) percent of gross sales
("Marketing Fee") which shall count towards two (2%) percent of the
Franchisee's required marketing spending as required above. Such
payments shall be for such marketing, advertising or public
relations programs as the Franchisor, in its discretion, may deem
necessary or appropriate markets to advertise or promote "New World
Coffee & Bagels" Stores.
9.2 Franchisee agrees that Franchisor may maintain and administer the
Marketing Fund for the System subject to the following conditions:
A. Franchisor shall direct all advertising programs with sole
discretion over creative concepts, materials and media used in
such programs and the placement and allocation thereof;
B. Franchisor shall determine the best method to maximize public
recognition and acceptance of the "New World Coffee & Bagels"
System and Marks;
C. Franchisor will use good faith efforts to develop, implement
or administer the Marketing Fund to make expenditures for
Franchisee, which are equivalent or proportionate to his
contribution, and to ensure that any particular Franchisee
benefits directly or pro rata from the placement of advertising;
and
D. Franchisee agrees that the Marketing Fund may be used to meet
any and all costs of preparing national, regional or local
advertising materials, including, without limitation, the cost of
preparing and conducting television, radio, billboard, magazine
and newspaper advertising campaigns and other public relations
and media programs and activities; employing advertising agencies
to assist therewith; and providing promotional brochures and
other marketing materials to all franchisees throughout the "New
World Coffee & Bagels" System and to regional and local
advertising cooperative of "New World Coffee & Bagels" Stores.
9.3 All sums paid by Franchisees to the Marketing Fund shall be
maintained in a bank account segregated from the other funds of Franchisor
and shall not be used to defray any of Franchisor's general operating
expenses, but may be used to defray administrative costs of the Marketing
Fund. An annual accounting of the Marketing Fund shall be made available to
Franchisee upon request.
9.4 The form, content, time and medium for all advertising and
promotional activities conducted pursuant to this Article shall be
determined by Franchisor in its sole and absolute discretion, and
Franchisee agrees to permit Franchisor to use its discretion in conducting
all advertising.
9.5 Franchisee shall spend no less than $2,000-$5,000 to conduct a
grand opening advertising campaign, grand opening promotion and advertising
program within (4) four weeks of the opening of the Store.
9.6 Franchisee understands and acknowledges that every detail of the
"New World Coffee & Bagels" System is important to Franchisor, to the
Franchisee and to other franchisees, in order to develop and maintain high
standards of cleanliness, appearance, service, facilities, methods and
management techniques of operations to develop and increase patrons for all
"New World Coffee & Bagels" Stores, and to protect and enhance the reputation
and goodwill of Franchisor and all franchisees utilizing the system.
Therefore, Franchisee:
A. Acknowledges that periodic rebates, give-aways and other
promotions and programs are an integral part of the "New World
Coffee & Bagels" System. Accordingly, Franchisee at its sole
cost and expense, from time to time, shall, issue and offer such
rebates, give-aways and promotions in accordance with any
reasonable advertising programs established by the Franchisor,
and further agrees to honor rebates, give-aways and other
promotions issued by other "New World Coffee & Bagels"
franchisees as long as all of the above do not contravene
regulations and laws of appropriate governmental authorities;
B. Shall make such refunds as are required by reason of
complaints to the Better Business Bureau or other similar offices
or organizations. Franchisee shall immediately inform and forward
from patrons or others all complaints to Franchisor;
C. Shall make customer service comment cards available to the
consumers on a daily basis, and retain same for inspection by
Franchisor.
D. Shall make "Franchises Available" cards available to
consumers.
9.7 In addition to making the Marketing Fund contributions when
required under this Section, Franchisee must participate in local advertising
cooperatives which shall be administered locally by the participating
franchisee. All activities carried on by each such cooperative shall be done
by a majority vote of its members.
9.8 Prior to use by Franchisee, samples of all local advertising and
promotional materials not prepared or previously approved by the Franchisor
shall be submitted to the Franchisor for approval, which shall not be
unreasonably withheld. If written approval, is not received by Franchisee
within fifteen (15) days from the date of receipt by the Franchisor of such
materials, the Franchisor shall be deemed to have not given the required
approval. Franchisee shall not use any advertising or promotional materials
that the Franchisor has disapproved. Franchisor may withhold approval of
previously approved materials at its discretion.
9.9 In the event Franchisor receives any rebates from food or beverage
suppliers, those monies will be directed to the Marketing Fund for the
benefit of all Franchisees.
ARTICLE X
REPORTS TO FRANCHISOR
10.1 Franchisee shall keep full, complete and accurate books and
accounts in accordance with generally accepted accounting principles and in
accordance with the System, and Franchisee shall:
A. Submit to Franchisor concurrently with the payment of the
Royalty Fees, on a form supplied or approved by Franchisor, a
signed and verified statement of gross sales in cash, credit and/
or other charges, and when Franchisee is tied into the
computerized POSitouch system, then such reports shall be
transmitted electronically and also via written report;
B. Submit to Franchisor within fifteen (15) days after the close
of each month, a monthly profit and loss statement for the Store
and a balance sheet for that period. These monthly reports shall
be certified by the Franchisee as true and correct.
C. Submit to Franchisor within ninety (90) days after the close
of each twelve (12) month period, an annual profit and loss
statement for the Store for such year and a balance sheet for the
Store, as of the end of such year, reviewed by an independent
certified public accountant. Franchisor may randomly select a
franchisee or franchisees who will be required to have an audited
financial statement prepared by a certified public accountant
selected by Franchisee, but who shall be acceptable to Franchisor
which opinion may be qualified only to the extent reasonably
acceptable to the Franchisor;
D. Submit to Franchisor a copy of all of Franchisee's Federal,
State and Local tax returns for the Store; and a certificate from
said accountant that all Social Security payments, taxes and fees
required to be paid by Franchisee have been paid and that there
is no reason to believe that Franchisee's corporate status, if
Franchisee is a corporation, has been impaired;
E. Submit to Franchisor such other periodic forms and reports as
may be reasonably prescribed by Franchisor.
10.2 Franchisee shall preserve for a period of not less than three (3)
years during the term hereof and, for not less than three (3) years following
the termination, expiration or non-renewal hereof, in the English language,
all accounting records and supporting documents relating to the operations
under this Agreement, or any sublease between Franchisee, including but not
limited to:
A. Daily cash reports;
B. Cash receipts journal and general ledger;
C. Cash disbursements and weekly payroll journal and schedule;
D. Monthly bank statements, daily deposit slips and canceled
checks;
E. All tax returns;
F. Supplier's invoices (paid and unpaid);
G. Dated daily and weekly POSitouch journal and "Z" statements;
H. Semi-annual balance sheets and monthly profit and loss
statements;
I. Daily xxxxx'x schedule, waste, employee and Franchisee
consumption and weekly inventory records;
J. Records of promotion and coupon redemptions;
K. Records of all wholesale and catering sales;
L. Such other records as Franchisor may from time to time
request.
10.3 Franchisee shall record, in a manner approved and designated by
Franchisor at the time of receipt, all sales of all products sold by
Franchisee from his/her "New World Coffee & Bagels" Store in a computerized
POSitouch System of a type designated by Franchisor. The system is a
required part of New World Coffee & Bagels operations.
10.4 In order to determine whether Franchisee is complying with this
Agreement, the Franchisor or its designated agents shall have the right, at
any time during reasonable business hours, to examine, at its expense, the
books, records, cash control devices, income tax returns, bank statements,
sales records of the Store, and the books and records of any corporation or
partnership which owns the Franchise. Franchisor shall also have the right,
at any time, to have an independent audit made of the books of Franchisee.
If an inspection or audit should reveal that gross sales and/or payments have
been understated in any report to Franchisor, by more than three (3%)
percent, then Franchisee shall, upon fifteen (15) days notice, pay to
Franchisor the amount understated upon demand, and in addition, reimburse
Franchisor for any and all costs and expenses connected with the inspection
(including without limitation, reasonable accounting and attorneys', fees
travel expenses, room and board and compensation of employees of the
Franchisor). The foregoing remedies shall be in addition to any other
remedies Franchisor may have hereunder or under applicable law.
ARTICLE XI
CONFIDENTIAL OPERATIONS MANUAL
11.1 Franchisor shall lend to Franchisee a confidential operations
manual published by Franchisor (the "Confidential Operations Manual") which
includes, in part, the business procedures, technical advice and rules and
regulations for the operating of the business.
11.2 Franchisee acknowledges and agrees that:
A. The Confidential Operations Manual is the property of the
Franchisor during the term of this Agreement and any renewal
hereof;
B. The Confidential Operations Manual contains confidential
information which Franchisee will protect as a trade secret, and
that its loss will cause substantial damage to Franchisor and
other franchisees, although the amount of such loss would be
incalculable with any degree of accuracy. Consequently, in the
event of loss of this Confidential Operations Manual, Franchisee
agrees to pay to Franchisor the sum of Five Hundred Fifty
Dollars ($550);
C. Franchisee shall not reprint or reproduce any portion of the
Confidential Operations Manual for any reason whatsoever; and
D. Upon termination of this Agreement for any reason, the
Confidential Operations Manual will be immediately returned to
Franchisor.
11.3 Franchisor may reasonably add to or otherwise modify the
Confidential Operations Manual, from time to time, whenever it considers such
additions or modifications desirable to improve or maintain the standards of
the "New World Coffee & Bagels" System and the efficient operation thereof,
or to protect or maintain the goodwill associated with the "New World Coffee
& Bagels" name and Marks or to meet competition, provided such additions or
modifications are system-wide in nature and do not substantially increase
Franchisee's economic burden.
11.4 From the date of the opening of the business by Franchisee, the
mandatory specifications, standards and operating procedures prescribed by
Franchisor and communicated to Franchisee in writing, shall constitute
provisions of this Agreement as if fully set forth herein. All references
herein to this Agreement shall include the provisions of the Confidential
Operations Manual and all such mandatory specifications standards and
operating procedures.
ARTICLE XII
INSURANCE
12.1 Franchisee shall obtain and place at his/her sole cost and expense,
with an insurer rated "AAA" in Best's Directory who is authorized to do
business in the state in which the Franchisee's "New World Coffee & Bagels"
Store is located, and to keep in full force and effect during the terms of
this Agreement, insurance coverage on an "occurrence basis" naming
Franchisor, its officers, directors and shareholders and any designated
primary and secondary lessor as additional insureds (such insurance policies
hereinafter referred to collectively as "Insurance") as follows:
A. Broad Form Comprehensive General Liability with limits of no
less than One Million ($1,000,000) Dollars in case of damage or
injury to one or more persons, including indemnification coverage
and property damage insurance of Five Hundred Thousand Dollars
($500,000); both of which shall be considered primary policies;
B. All risk coverage on all personal property covering his/her
"New World Coffee & Bagels" Store and premises and contents
thereof, including, without limitation, all supplies, inventory,
fixtures, and equipment and business interruption in amounts not
less than is sufficient to meet the co-insurance requirements of
Franchisee's policies, and contain a replacement value
endorsement in an amount not less than ninety percent (90%) of
the replacement value thereof, and any loss shall be payable to
Franchisor and Franchisee as their interests may appear;
C. Worker's Compensation and Disability Insurance as may be
required by law;
D. Products Liability Insurance in an amount not less than One
Million ($1,000,000) Dollars, which policy shall be considered
primary;
E. Insurance in an amount covering three (3) years of rent and
other charges for the Store; and
F. Any other insurance coverage as required by the State, Federal
or local municipality in which the franchised premises is
located.
12.2 The insurance shall cover the acts or omissions of each and every
one of the persons who perform services of whatsoever nature at the
Franchisee's "New World Coffee & Bagels" Store, and shall protect against all
acts of any persons who patronize the "New World Coffee & Bagels" Store and
shall contain a waiver of subrogation against Franchisor.
12.3 Prior to the opening of Franchisee's "New World Coffee & Bagels"
Store, Franchisee shall deliver to Franchisor certificates of the Insurance,
together with the copies of the actual policies issued, and will promptly pay
all premiums thereon as and when the same become due. All policies shall
provide that they are non-cancelable as to Franchisor in the absence of
thirty (30) days written notice to Franchisor. Franchisor shall have the
right, but shall not be obligated, to pay premiums due and unpaid by
Franchisee or else to obtain substitute coverage in the case of cancellation.
Any cost thereof to Franchisor shall be added to the Royalty Fees otherwise
payable to Franchisor under this Agreement, provided, however, that same
shall be due and payable to Franchisor by the Franchisee within five (5) days
of demand therefore.
12.4 Franchisor reserves the right to demand that Franchisee obtain
Insurance from time to time which is different in coverage, risks, amount or
otherwise from the foregoing in order to protect fully the parties having
insurable interests in the Franchisee's "New World Coffee & Bagels" Store,
provided such Insurance is reasonably common in the area for similar
operations.
12.5 Franchisee shall immediately notify Franchisor, in writing, of any
accidents, injury, occurrence or claim that might give rise to a liability or
claim against Franchisor or which could materially affect Franchisee's
business, and such notice shall be provided no later than the date upon which
Franchisee notifies his/her insurance carrier.
ARTICLE XIII
RELATIONSHIP OF THE PARTIES: INDEMNIFICATION
13.1 Relationship between Franchisor and Franchisee is strictly that of
a franchisor and franchisee, and Franchisee shall be deemed to be an
independent contractor. This Agreement does not create a fiduciary
relationship between Franchisor and Franchisee, joint venture, partnership,
or agency and any act or omission of either party shall not bind or obligate
the other except as expressly set forth in this Agreement.
13.2 Franchisee recognizes that Franchisor has entered into this
Agreement in reliance upon and in recognition of the fact that Franchisee
will have full responsibility for the management and operation of the
business and that the amount of profit or loss resulting from the operation
of the business will be directly and solely attributable to the performance
of Franchisee.
13.3 Except as expressly granted herein, Franchisee recognizes that
nothing contained in this Agreement shall be construed as giving to
Franchisee or to any other person or entity, any right or interest in the
Franchisor's names, Marks, trade secrets, methods, procedures or techniques
developed by Franchisor and used in the System. Further, except as
specifically set forth in Article I hereof, nothing contained herein shall be
construed as limiting Franchisor's right, title or interest in the "New World
Coffee & Bagels" name, Marks, trade secrets, methods, procedures and
techniques which are a part of the System or Franchisor's sole and exclusive
right to register, trade secrets, methods, procedures and techniques.
13.4 In all public records and prominently displayed in Franchisee's
"New World Coffee & Bagels" Store and in Franchisee's relationship with third
parties, as well as on letterheads, business forms, Franchisee shall indicate
clearly the independent ownership of the Franchisee's "New World Coffee &
Bagels" Store, and that the operations of same are separate and distinct from
the operation of Franchisor's business. Franchisor shall have the absolute
right to approve and/or supply any sign displays containing the foregoing.
13.5 The Franchisor shall have no liability for any sales, use, excise,
gross receipts, property or other taxes, whether levied upon Franchisee, the
Store or its assets, or upon the Franchisor in connection with sales made,
services performed or business conducted by Franchisee.
13.6 Franchisee shall indemnify and hold the Franchisor and its
subsidiaries, affiliates, stockholders, directors, officers, employees,
agents and assignees harmless against, and to reimburse them for, any loss,
liability, taxes or damages (actual or consequential) and all reasonable
costs and expenses of defending any claim brought against any of them or any
action in which any of them is named as a party (including, without
limitation, reasonable accountants', attorneys' and expert witness fees,
costs of investigation and proof of facts, court costs, other litigation
expenses and travel and living expenses) which any of them may suffer,
sustain or incur by reason of, arising from or in connection with
Franchisee's ownership or operation of the "New World Coffee & Bagels" Store,
which is due to Franchisee's negligence, breach of contract or other civil
wrongs, unless such loss, liability or damage is solely due to the gross
negligence of the Franchisor (or any of its affiliates, i.e., any
controlling, controlled by, or under common control with the Franchisor) in
producing, handling or storing the Proprietary Products sold to Franchisee
(provided Franchisee shall have established that Franchisee inspected such
Proprietary Products in accordance with the procedures set forth in the
Confidential Operations Manual and could not have reasonably discovered the
adulteration or other defect in such Proprietary Products which was the cause
of such loss, liability or damage). Franchisee acknowledges and agrees that
any action or inaction by any third party (e.g., an independent carrier)
which is not an affiliate of the Franchisor, in connection with handling or
storing the Proprietary Products shall not be attributable to or constitute
negligence of the Franchisor.
13.7 The Franchisor shall indemnify and hold Franchisee harmless
against, and to reimburse him/her for, any loss, liability or damage (actual
or consequential) and all reasonable costs and expenses of defending any
claim expenses of defending any claim brought against him/her or any action
in which he/she is named as a party (including, without limitation,
reasonable accountants', attorneys' and expert witness fees, costs of
investigation and proof of facts, court costs, other litigation expenses and
travel and living expenses) which he/she may suffer, sustain or incur solely
by reason of, arising from or in connection with the gross negligence of the
Franchisor (or any of its affiliates, i.e., any controlling, controlled by
or under common control with the Franchisor) in producing, handling or
storing the Proprietary Products (provided Franchisee shall have established
that Franchisee inspected such Proprietary Products in accordance with the
procedures set forth in the Confidential Operations Manual and could not have
reasonably discovered the adulteration or other defect in such Proprietary
Products which was the cause of such loss, liability or damage). Franchisee
acknowledges and agrees that any action or inaction by any third party (e.g.,
an independent carrier) which is not an affiliate of the Franchisor, in
connection with handling or storing of the Proprietary Products shall not be
attributable to or constitute negligence of the Franchisor.
ARTICLE XIV
COVENANTS NOT TO COMPETE
14.1 During the term of this Agreement, or any extension thereof,
neither Franchisee, nor any partner, if the Franchisee is a partnership, nor
any shareholder if the Franchisee is a corporation, shall either directly or
indirectly for himself or herself or on behalf of, or in conjunction with any
other person, persons, partnership association or corporation, own, maintain,
engage in, participate or have any interest in the operation of any
enterprise which is the same or substantially similar to the "New World
Coffee & Bagels" franchise, or any other business which distributes, produces
or sells gourmet coffee or bagels or bagel products, provided, however, that
this prohibition should not apply to the ownership by the Franchisee of
additional "New World Coffee & Bagels" Stores.
14.2 For a period of two (2) years following termination, expiration, or
non-renewal of this Agreement, except where the termination occurs due to the
fault or action of the Franchisor and not due to default of the Franchisee or
any partner, if the Franchisee is a partnership, or any shareholder if the
Franchisee is a corporation, the Franchisee shall not, except with respect to
the ownership or operation by Franchisee of additional "New World Coffee &
Bagels" Stores:
A. Engage, employ or compensate or seek to employ any person who
is at that time engaged, operating or employed by or at any other
"New World Coffee & Bagels" Stores, or to otherwise directly or
indirectly induce such person to leave his or her employment
thereat;
B. Either directly or indirectly for himself or on the behalf of,
or in conjunction with any other person, persons, partnership,
association or corporation, own, maintain, engage in, participate
in, or have any interest in the operation of any enterprise which
directly or indirectly competes with or is the same or
substantially similar to the "New World Coffee & Bagels"
franchise covered by this Agreement, or which distributes,
produces or sells gourmet coffee or bagels or bagel products
within the "Minimum Area of Competition." The "Minimum Area
of Competition" shall be deemed to be that area which is
within a radius of twenty-five (25) miles from Franchisee's
Store, or any "New World Coffee & Bagels" Exclusive Territory
or any other "New World Coffee & Bagels" Store in operation
on the effective date of termination or expiration, whether
franchised or company-owned.
14.3 In the event Franchisee fails or refuses to comply with the
in-term or post-term covenants of this Article, even if such failure or
refusal is based upon a claim that the laws of any particular jurisdiction
excuse such non-compliance or make the provision of said paragraph
unenforceable in whole or in part, and provided that the jurisdiction in
which Franchisee's "New World Coffee & Bagels" Store is located permits,
Franchisee hereby separately covenants and agrees that while this Agreement
is in effect and for two (2) years after its termination, except where
termination occurs due to the fault or action of Franchisor and not due to
default of Franchisee, Franchisor shall have the right to require that all
sales made in the operation of any business which directly or indirectly
competes with it or with a "New World Coffee & Bagels" Store or to the
System, or which distributes, produces or sells gourmet coffee or bagels or
bagel products anywhere, if this Agreement is then in effect, or within the
Minimum Area of Competition, if this Agreement has been terminated, shall be
reported to Franchisor and Franchisee agrees to pay Franchisor upon demand,
the weekly fee of Five Hundred Dollars ($500) on the times and in the manner
specified in Article V hereof all without being deemed to revive, modify or
expand this Agreement. The covenants of this Article shall survive the
termination or expiration of this Agreement.
14.4 Franchisee shall not, during the term of this Agreement or
after its termination or non-renewal, communicate or divulge to any other
person, persons, partnership or corporation, any Confidential Information or
knowledge concerning the methods of operation used in a "New World Coffee &
Bagels" Store franchise nor shall Franchisee disclose or divulge, in whole or
in part, any trade secrets of Franchisor or its affiliated companies or
subsidiaries thereof.
14.5 The parties agree that the covenants contained in Sections 14.2 and
14.3 above shall be construed as independent of any other covenant or
provision of this Agreement. If all or any portion of a covenant in this
Article is held unreasonable or unenforceable by a court or agency having
valid jurisdiction in any unappealed final decision to which Franchisor is a
party, Franchisee expressly agrees to be bound by any lesser covenant
subsumed with the terms of such covenant that imposes the maximum duty
permitted by law, as if the resulting covenant were separately stated and
made a part of this Article.
14.6 Franchisee covenants and agrees that he/she shall not, during
the term hereof, any renewals hereof, and for two (2) years after
termination, cancellation, non-renewal or expiration, in any communications
with any customer, employee, contractor, supplier, vendor, business or legal
associate, or other franchisee or master franchisee of Franchisor or any of
it's affiliates, subsidiaries or successors and assigns, criticize, ridicule,
or make any statement (written or oral) which disparages, or is derogatory of
or detrimental to the Franchisor, its affiliates, subsidiaries, franchisees,
successors, assigns, or any of its past or present officers, directors,
agents or employees. Franchisee hereby acknowledges that any breach of this
covenant will result in immediate, irreparable, quantifiable harm to the
Franchisor, and that Franchisor shall be entitled to any and all remedies at
law or in equity for damages, directly or indirectly caused by such breach.
14.7 Franchisee acknowledges that the foregoing restrictions are
reasonable, are not vague or indefinite, and are designed to protect
legitimate business interests of Franchisor, and that in the event of a
breach of covenants contained in this paragraph, the damage to Franchisor
would be difficult to ascertain, and in addition to the liquidated damages
payable to Franchisor as hereinafter provided for the breach of any or all of
said covenants, Franchisor shall be entitled to seek injunctive and/or other
equitable relief against the violation of any said covenants, together with
reasonable attorneys' fees and costs.
14.8 Covenants contained in this Article shall be construed as
severable and independent and shall be interpreted and applied consistently
with the requirements of reasonableness and equity. Any judicial reformation
of these covenants consistent with this interpretation shall be enforceable
as though contained herein and shall not affect any other provisions or terms
of this Agreement.
14.9 Franchisee and his/her Store manager, if one exists, shall be
obligated to execute Exhibit "G" to this Franchise Agreement.
ARTICLE XV
MODIFICATION OF THE SYSTEM
Franchisee recognizes and agrees that from time to time hereafter,
Franchisor may change or modify the System presently identified by its Marks,
including the adoption and use of new or modified trade names, service marks,
trade names, or copyrighted materials, new products, product specifications,
changes or modifications, new equipment including, but not limited to, trade
dress, awnings, or new techniques, and new technological developments, and
that Franchisee will accept and use for the purpose of this Agreement any
such change in the System, including new or modified trade names, service
marks, trademarks, or copyrighted materials, new products, new equipment or
new techniques, as if they were part of this Agreement at the time of
execution hereof, provided the financial burden placed upon Franchisee is not
substantial. Franchisee will make such expenditures and such changes or
modifications in the System as Franchisor may reasonably require.
ARTICLE XVI
FRANCHISEE
The term "Franchisee" shall include all persons who succeed to the
interest of the original Franchisee by transfer or operation of law and shall
be deemed to include not only the individual or entity defined as
"Franchisee" in the introductory paragraph of this Agreement, but shall also
include partners of the entity that executes this Agreement, in the event
said entity is a partnership, and all shareholders, officers and directors of
the entity that executes this Agreement, in the event said entity is a
corporation. By their signatures hereto, all partners, shareholders,
officers and directors of the entity that signs this Agreement as Franchisee
acknowledges and accepts the duties and obligations imposed upon each of
them, individually, by the terms of this Agreement. The singular usage
includes the plural and the neuter and masculine usages include the other and
the feminine.
ARTICLE XVII
TERMINATION
17.1 Franchisor may terminate this Agreement upon the occurrence of any
of the following events of default:
A. Failure by Franchisee to make complete and timely payment of
any and all fees and xxxxxxxx due Franchisor or any of its
subsidiary or affiliated corporations;
B. Failure to comply with the reporting or record keeping
requirements of this Agreement, and/or the under-reporting of
gross sales by two (2%) percent or more;
C. The misstatement by Franchisee of any material fact, or
failure to disclose or understatement of any material fact in any
report furnished to the Franchisor pursuant to this Agreement or
the Confidential Operations Manual, whether or not such
misstatement or failure to disclosure or understatement is
intentional;
D. A breach by Franchisee of any provision of this Agreement, any
material provision of the Confidential Operations Manual, or any
other agreement between Franchisor and Franchisee or any of its
subsidiary or affiliated corporations; including but not limited
to Franchisee's sublease;
E. Failure by Franchisee to make good faith efforts to carry out
the provisions of this Agreement;
F. Franchisee's engaging in any conduct or practice that in the
reasonable opinion of Franchisor, is detrimental or harmful to
the good name, goodwill or reputation of Franchisor or its
Proprietary Products or other franchisees, or the public;
G. Franchisee's engaging in any conduct or practice that is a
fraud upon consumers, or is an unfair, unethical, or deceptive
trade, act or practice;
H. Any pledge or attempted pledge of Franchisor's credit by
Franchisee, or an attempt by Franchisee to bind Franchisor to any
obligation;
I. Failure by Franchisee to participate in the advertising,
promotional, or marketing activities, services, and programs that
are established by Franchisor or Franchisor's Marketing Fund;
J. Unauthorized or improper use by Franchisee of Franchisor's
Marks;
K. Misuse or unauthorized disclosure by Franchisee of the
Confidential Operations Manual, information or materials;
L. Failure to use or sell any of the Proprietary Products to the
exclusion of those of any competitors and the failure to perform
all of the services required by Franchisor, including but not
limited to the forwarding of copies of all health or sanitation or
other regulatory agency reports to Franchisor immediately upon
receipt thereof;
M. Failure to open Franchisee's "New World Coffee & Bagels" Store
at the location mutually agreed upon in the Single Unit Franchise
Owner Development Agreement within the time specified in the lease
or sublease;
N. Except as otherwise provided herein, failure by Franchisee to
purchase his/her entire requirement of any of the Proprietary
Products either from Franchisor or from sources of supply
designated by Franchisor and to sell the same to the consuming
public using his/her best efforts;
O. Failure to correct any local, state or municipal health or
sanitation law or code violation within seventy-two (72) hours
after being cited for such violation;
17.2 To terminate Franchisee for default of this Agreement pursuant to
Section 17.1 above, Franchisor shall first provide Franchisee with written
notice of termination, which notice shall specify the reason for and the
Effective Date of Termination. This Agreement shall terminate on the date
specified therein, which shall not be less than thirty (30) days from the
posted day of the notice, except that in those instances where the default is
based upon monies due and owing, the notice shall be seven (7) days (or such
longer period as provided by State law), unless:
A. Franchisee cures the default or reason for termination during
the notice period; or
B. Franchisee has, in good faith, initiated a cure of the default
or reason for termination within the notice period, and such
default or reason cannot be completely cured during the notice
period because of factors reasonably beyond the exclusive control
of Franchisee, in which event, Franchisor, by notice, shall permit
Franchisee a reasonable opportunity, in light of such factors, to
effect a complete cure;
C. The provisions of Subsection 17.2 A and B notwithstanding,
this Agreement shall nonetheless terminate if the default or reason
for termination has been set forth in three (3) prior notices of
termination within any prior twelve (12) month period, and/or if
two (2) or more health code violations have been committed within
any prior twelve (12) month period, or if Franchisee is terminated
as a result of under-reporting Gross Sales by two (2%) percent or
more.
17.3 Upon written notice to Franchisee, Franchisor may without right to
cure, immediately terminate this Agreement upon the occurrence of any of the
following events of default:
A. Any action by Franchisee, any of his partners, if Franchisee
is a partnership, or any of its officers, directors or
stockholders of Franchisee is a corporation, which results in:
(i) An affirmative act of insolvency;
(ii) An assignment for the benefit of creditors; or
(iii) The filing of a petition under any bankruptcy,
reorganization, insolvency, or moratorium law, or any
law for the relief of, or relating to, debtors, except
with respect to any relief permitted under the Federal
Bankruptcy Code.
B. The filing of any involuntary petition under any bankruptcy
statue against Franchisee, any of its partners, or any of its
stockholders owning at least 25% of any class of stock, or the
appointment of any receiver or trustee to take possession of
property of Franchisee, any of its partners, or any of its
stockholders owning 25% of any class of stock of Franchisee;
C. Failure by Franchisee to satisfy fully a civil judgment
obtained against Franchisee for a period of more than thirty (30)
days after all rights of appeal have been exhausted, or execution
of such a judgment, execution of a lien, or foreclosure by a
secured party or mortgage against Franchisee's property, which
judgment, execution of a lien, for foreclosure by a secured party
or mortgage would have an adverse or detrimental effect upon
Franchisee's franchised operation;
D. Conviction of Franchisee, or any partner of Franchisee or any
officer, director, or stockholder owning at least 25% of any class
of stock of Franchisee, of any crime which in the reasonable
business judgment of Franchisor would adversely affect the goodwill
or interest of Franchisee's Franchised Business;
E. The uncured default by Franchisee under any lease or sublease
of Franchisee's "New World Coffee & Bagels" Store which could
possibly result in the loss by Franchisee of the right to
possession, therein, for any reason whatsoever;
F. A final judgment or the unappealed decision of a court,
regulatory officer, agency, or quasi-regulatory agency that results
in the temporary or permanent suspensions or revocation of any
permits or licenses, possession of which is a prerequisite to the
operation of Franchisee's business or is required under applicable
law;
G. The direct or indirect assignment, transfer, sale or
encumbrance by Franchisee of this Agreement or franchise or any of
his rights or privileges contrary to this Agreement, or any attempt
by Franchisee to sell, assign, transfer or encumber the Franchised
Business contrary to the terms of this Agreement;
H. Failure by Franchisee to remain open for business as required
by this Agreement or as may be required by the Confidential
Operating Manual, as may be limited by local law, or the prime
landlord, or the abandonment or vacating by Franchisee of his/her
"New World Coffee & Bagels" Store for three (3) or more consecutive
days (or for such other period as would be grounds for termination
of Franchisee's sublease); or
I. Dissolution, judicial or otherwise, or liquidation of
Franchisee, if Franchisee is a corporation or partnership.
J. Failure by the franchisee to correct a violation which puts
the well-being of the public in danger.
ARTICLE XVIII
RIGHTS AND DUTIES OF THE PARTIES
UPON EXPIRATION OR TERMINATION
18.1 For the purpose of this Agreement, the "Effective Date of
Termination" shall be the date indicated in any notice of termination sent
pursuant to Section 17.2 or 17.3 of this Agreement or the day after the Term,
as set forth in Section 4.1 of this Agreement.
18.2 Upon the Effective Date of Termination, Franchisee shall no longer
be an authorized "New World Coffee & Bagels" Franchisee and Franchisee shall
pay all sums of money due Franchisor or any of its subsidiary or affiliated
corporations within fifteen (15) days of the Effective Date of Termination,
unless Franchisor gives written notice of an extension of this period.
18.3 Upon the Effective Date of Termination, Franchisee shall
discontinue the use of all Marks owned by or associated with Franchisor and
all similar names and marks, or any other designation or xxxx associating
Franchisee with the "New World Coffee & Bagels" System. If Franchisee is a
corporation or partnership and, notwithstanding the prohibition of utilizing
the "New World Coffee & Bagels" name in its corporate or partnership name,
has used the "New World Coffee & Bagels" name or any names, marks or
designations that associate Franchisee with Franchisor in its corporate or
partnership name, Franchisee shall, within fifteen (15) days of the Effective
Date of Termination, take all necessary steps to eliminate "New World Coffee
& Bagels" from its corporate or partnership name, at his own cost and
expense.
18.4 Upon the Effective Date of Termination, Franchisee shall cease
displaying and using all signs, stationery, letterheads, forms, manuals,
printed matter, advertising, and other material containing the Marks, "New
World Coffee & Bagels" or any other names, marks, or designations that
associate Franchisee with the "New World Coffee & Bagels" System.
18.5 After the Effective Date of Termination, Franchisee shall refrain
from taking any action indicating or implying that he is an authorized "New
World Coffee & Bagels" franchisee.
18.6 Franchisee shall maintain all financial records and reports
required pursuant to this Agreement or the Confidential Operations Manual for
a period of not less than three (3) years after the Effective Date of
Termination. Franchisee shall permit Franchisor to make final inspection of
Franchisee's financial records, books, tax returns, and other accounting
records within three (3) years of the Effective Date of Termination.
18.7 Upon the Effective Date of Termination, Franchisee shall, pursuant
to the lease or sublease or conditional lease assignment and upon demand of
Franchisor, vacate and surrender the Store premises in accordance with the
terms and conditions under the terms of the lease, sublease and/or
conditional lease assignment.
18.8 Upon the Effective Date of Termination, Franchisee shall cease all
use of telephone numbers used by Franchisee while conducting business as a
"New World Coffee & Bagels" Franchisee and shall promptly execute such
documents or take such steps necessary to remove Franchisee's listing as a
"New World Coffee & Bagels" franchise, and shall promptly execute such
documents or take such steps necessary to remove Franchisee's listing as a
"New World Coffee & Bagels" franchise from the "Yellow Pages," all other
telephone directories, and all other trade or other business directories.
18.9 Within fifteen (15) days from the Effective Date of Termination of
this Agreement, Franchisee shall immediately turn over to Franchisor all
manuals, including the Confidential Operations Manual, records, files,
instructions, recipes, menus, correspondence, any and all materials relating
to the operation of the Franchised Business in Franchisee's possession, and
all copies of such written materials (all of which are acknowledged to be
Franchisor's property), and shall retain no copy or record of any of the
foregoing, except only Franchisee's copy of this Agreement and of any
correspondence between the parties, and any other documents which the
Franchisee reasonably needs for compliance with any provision of law and the
records described in Section 18.8 hereof.
18.10 Franchisor shall have the right (but not the duty) to be
exercised by notice of intent to do so within ten (10) days after the
Effective Date of Termination, to purchase any or all of the Proprietary
Products, signs, advertising material, supplies, equipment and any items
bearing Franchisor's Marks at Franchisee's cost or fair market value,
whichever is less. If the parties cannot agree on fair market value, within
a reasonable time, an independent qualified appraiser shall be designated by
each party and their determination shall be binding on both parties. If
these appraisers are unable to arrive at a fair market value, they will
designate a third approved appraiser whose determination shall be binding
upon both parties. If Franchisor elects to exercise any option to purchase
herein provided, it shall have the right to set off all amounts due from
Franchisee under this Agreement, and the cost of the appraisal, if any,
against any payment therefor.
18.11 Franchisor shall have the right to enter the Store for the
purpose of maintaining the operation of the Store on a daily basis. Pursuant
to this right, Franchisor shall have the right to assume the equipment lease
or note payments until such time as the Store is either sold to a new
franchisee or closed.
18.12 No right or remedy herein conferred upon or reserved to
Franchisor is exclusive of any other right or remedy herein or by law or
equity provided or permitted, but each shall be cumulative of every other
right or remedy given hereunder.
18.13 Nothing contained herein shall be deemed to relieve Franchisee
of any obligations or responsibilities or liabilities incurred by Franchisee
during the term of this Agreement or any renewals hereof, or his/her lease or
sublease and which obligations, responsibilities or liabilities shall survive
the termination, expiration or non-renewal of this Agreement, lease or
sublease.
ARTICLE XIX
COMMENCEMENT AND HOURS OF OPERATIONS
Franchisee recognizes that continuous and daily availability of any of
the proprietary products to the public is essential to the adequate promotion
of Franchisee's "New World Coffee & Bagels" Store and that any failure to
provide such availability affects Franchisor both locally and nationally.
Franchisee shall make himself or herself personally available to sell the
Proprietary Products and Products to the consuming public at a minimum of
twelve (12) hours per day, seven (7) days per week, or as required by any
lease or sublease if different, except where prohibited or otherwise
regulated by a governmental authority, including any state or local licensing
authority and shall otherwise conduct the business in accordance with
generally accepted business standards or where business activity warrants
less. These requirements may be changed by Franchisor from time to time,
upon reasonable notice to Franchisee and may differ from one franchisee to
another based upon the specific characteristics of a particular location.
ARTICLE XX
TRANSFERABILITY OF INTEREST
20.1 Franchisee understands and acknowledges that the rights and duties
created by this Agreement are personal to him or her (or to Franchisee's
owners if Franchisee is a corporation or a partnership), therefore, neither
this Agreement, nor the franchise granted hereby shall be assignable or
transferable by Franchisee, nor may the same be mortgaged, pledged or
encumbered by him or her without the express prior consent of Franchisor, and
any purported assignment, mortgage, pledge or encumbrance thereof, without
the consent of Franchisor, shall be null and void. The issuance or transfer
of any stock (including by way of any public stock offering) or partnership
interest(s) in Franchisee or its merger, a consolidation or dissolution, if
the Franchisee is a corporation or a partnership, shall be deemed an
assignment of this Agreement and of the franchise granted herein.
20.2 If Franchisee is an individual, Franchisor hereby consents, upon
thirty (30) days prior written notice, to the assignment by Franchisee of all
of his/her rights and benefits under this Agreement to a corporation of which
Franchisee owns at least a majority of the voting and equity stock, provided
that:
A. Such corporation is newly organized and its activities and
corporate purposes are confined exclusively to acting as a "New
World Coffee & Bagels" Store franchise under this Agreement;
B. Such corporation and all stockholders thereof execute a
Transfer of Franchise to a Corporation form, or such other form as
shall be provided or approved by Franchisor, in which they jointly
and severally assume all of the past and future obligations of
Franchisee under this Agreement, to the same extent as if they had
originally executed this Agreement as Franchisee;
C. Franchisee or his designated manager actively manages such
corporation and continues to devote his best efforts and full and
exclusive time to the day-to-day operation and development of the
franchise and the business of the "New World Coffee & Bagels" Store
and Franchisee shall remain personally liable in all respects under
this Agreement, including but not limited to payment for the
purchase of any of the proprietary products, jointly and severally
with such corporation and any and all other stockholders thereof
and;
D. All stock certificates of such corporation bear the following
legend, which shall be printed legibly and conspicuously on the
front of each such stock certificate:
"The transfer of this stock certificate is subject to the
terms and conditions of a certain Franchise Agreement
entered into with New World Coffee & Bagels, Inc. dated
________, 19____."
20.3 In the event Franchisee, any stockholder or partner of a corporate
or partnership Franchisee, or any legal heir or legatee of any deceased
Franchisee, or of any deceased stockholder or partner of any corporate or
partnership Franchisee, desire to effect any sale or assignment of any
partnership, stock or other interest in this Agreement, or of Franchisor's
rights and benefits under this Agreement, and has been a Franchisee for a
period of three (3) years or more, including, without limitation, the
franchise granted hereby, and/or the ownership or sublease for the "New World
Coffee & Bagels" Store franchised hereby, Franchisee or such other authorized
person or party shall give Franchisor written notice of all of the terms of
any such bona fide offer within fifteen (15) days after receipt of such
offer, including providing Franchisor with all other documents and data
required prior to the Franchisor approving the sale. Franchisor shall have
the right of first refusal, for a period of fifteen (15) days after receipt
of such notice to notify Franchisee or such other person or party of
Franchisee's desire, to exercise such option under the same terms and
conditions as the aforesaid bona fide offer. If Franchisor fails to exercise
such option in the time period allotted, then Franchisee shall be free to
contract with the person who made such bona fide offer solely on the same
terms and conditions thereof, subject, of course, to Franchisee's compliance
with all of the other terms and provision of this Agreement. In the event
the terms of such bona fide offer change, then Franchisee shall be obligated
to re-offer the franchise to Franchisor for an additional fifteen (15) day
period.
20.4 In addition to all of the other conditions set forth in Sections
20.2 and 20.3 hereof which pertain to the right of Franchisee to assign,
transfer or sell the license created hereunder, Franchisee hereby agrees that
any and all rights of assignment, transfer or sale by Franchisee of this
franchise and the rights therein are conditioned upon compliance with each of
the following:
A. Any such assignment, transfer, or sale shall be subject to
the approval by Franchisor of such assignee and of the moral and
credit background of such assignee and any and all stockholders or
partners thereof, which approval shall not be unreasonably
withheld;
B. The assignee, transferee, or purchaser and all stockholders or
partners thereof if same is a corporation or partnership, shall at
Franchisor's option, either personally assume in writing all of the
obligations of Franchisee, either disclosed or undisclosed and
under this Agreement or execute the then-current Franchise
Agreement, in the form used by Franchisor, except that Royalty Fee
and Advertising Fee thereunder shall not be greater than that
provided by Article V and IX hereof for the remainder of what would
have been the initial term of this Agreement. However, Franchisor
shall have the right to reasonably increase the Royalty Fee and the
Advertising Fee in conformity with the "New World Coffee & Bagels"
System, during any renewals thereof;
C. Franchisee, such assignee, transferee or purchaser and any and
all stockholders or partners of all thereof, shall execute a
general release in favor of Franchisor, its officers, directors,
and employees, of any and all claims and cause of action that they
may have against Franchisor or its subsidiary or affiliated
corporations in any way relating to this Agreement or the
performance or non-performance thereof by Franchisor;
D. All prior obligations and debts of Franchisee or corporate
assignee of Franchisee owed to Franchisor under or in connection
with this Agreement shall be paid concurrently with such
assignment;
E. Franchisee must not be in default under this Agreement or any
renewals thereof or of any lease or sublease agreement to which
Franchisee is a party;
F. Assignee, transferee, or purchaser shall not be in the same
business as Franchisor either as a franchisor, licensor, as an
independent operator, franchisee of any chain or network which is
similar in nature or in competition with Franchisor except that the
assignee, transferee or purchaser may be an existing franchisee of
Franchisor;
G. Prior to the effective date of the assignment, transfer or
sale, the assignee, transferee, or purchaser must satisfactorily
complete the Franchisor's training program required of all new
franchisees;
H. Assignee, transferee, or purchaser shall, prior to any such
assignment, pay to Franchisor a non-refundable training and
transfer fee of $2,500, to reimburse Franchisor for its legal and
accounting fees, credit investigation, training expenses, and other
charges and expenses in connection with such assignment, transfer
or sale; and
I. Franchisee shall enter into an agreement with the Franchisor
agreeing to subordinate to such assignee, transferee or purchaser's
obligations to the Franchisor, including, without limitation, any
Royalty Fees and Advertising Fees, any obligations of such
assignee, transferee or purchaser to make installment payments of
the purchase price to Franchisee.
20.5 Franchisor shall have the right, without the need for Franchisee's
consent, to assign, transfer or sell its rights under this Agreement to any
person, partnership or corporation provided that the transferee agrees in
writing to assume all obligations undertaken by Franchisor herein and
Franchisee receives a statement from both Franchisor and its transferee to
that effect. Upon such assignment and assumption, Franchisor shall be under
no further obligation hereunder, except for accrued liabilities, if any.
20.6 In addition to the requirements of this Article, Franchisee must
promptly ("promptly" herein defined as within fifteen (15) days of receipt of
an offer to buy) give Franchisor additional written notice whenever
Franchisee has received an offer from a third party to buy Franchisee's
business franchised hereunder. Franchisee must also give Franchisor written
notice simultaneously with any offer to sell Franchisee's "New World Coffee
& Bagels" Store made by, for, or on behalf of Franchisee. The purpose of
this subsection is to enable Franchisor to comply with any applicable state
or federal franchise disclosure law or rules. Franchisee agrees to indemnify
and hold Franchisor harmless for Franchisee's failure to comply with this
subsection.
20.7 The Franchisor's consent to an assignment of any interest subject
to the restrictions hereof shall not constitute a waiver of any claims it may
have against the assignor, nor shall it be deemed a waiver of the
Franchisor's right to demand exact compliance with any of the terms or
conditions of this Agreement by the assignee, transferee or purchaser.
20.8 In the event Franchisee shall, subject to the restrictions and
conditions of transfer contained in this Article, attempt to raise or secure
funds by the sale of securities (including, without limitation, common or
preferred stock, bonds, debentures or general or limited partnership
interests) in Franchisee or any affiliates of Franchisee, Franchisee,
recognizing that the written information used with respect thereto may
reflect upon the Franchisor, agrees to submit any such written information to
the Franchisor prior to its inclusion in any registration statement,
prospectus or similar offering circular or memorandum and to obtain the
written consent of the Franchisor to the method of financing prior to any
offering or sale of such securities. The written consent of the Franchisor
pursuant to this Section 20.8 shall not imply or constitute the approval of
the Franchisor with respect to the method of financing, the offering
literature submitted to the Franchisor or any other aspect of the offering.
No information respecting the Franchisor or any of its affiliates shall be
included in any securities disclosure document, unless such information has
been furnished by the Franchisor, in writing, pursuant to the written request
of the Franchisee, in which the Franchisee states the specific purpose for
which the information is to be used. Should the Franchisor, in its sole
discretion, object to any reference to the Franchisor or any of its
affiliates or any of their businesses in such offering literature or
prospectus, such literature or prospectus shall not be used unless and until
the objections of the Franchisor are withdrawn. The Franchisor assumes no
responsibility for the offering whatsoever.
A. The prospectus or other literature utilized in any such
offering shall contain the following language in bold-face type on
the first textual page thereof:
"NEITHER NEW WORLD COFFEE & BAGELS, INC., NOR ANY OF ITS
AFFILIATES ASSUMES ANY RESPONSIBILITY WITH RESPECT TO THIS
OFFERING AND/OR THE ADEQUACY OR ACCURACY OF THE INFORMATION
SET FORTH HEREIN, INCLUDING ANY STATEMENTS MADE WITH RESPECT
TO ANY OF THEM. NEITHER NEW WORLD COFFEE & BAGELS, INC., NOR
ANY OF ITS AFFILIATES ENDORSES OR MAKES ANY RECOMMENDATION
WITH RESPECT TO THE INVESTMENT CONTEMPLATED BY THIS OFFERING."
B. Franchisee and each of its owners shall indemnify, defend and
hold harmless the Franchisor and its affiliates, and their
respective officers, directors, employees and agents, from any and
all claims, demands, liabilities, and all costs and expenses
(including, without limitation, reasonable attorneys' fees)
incurred in the defense of such claims, demands or liabilities,
arising from the offer or sale of such securities, whether asserted
by a purchaser of any such security or by a governmental agency.
The Franchisor shall have the right (but not the obligation) to
defend any such claims, demands or liabilities and/or to
participate in the defense of any action to which the Franchisor or
any of its affiliates or any of their respective officers,
directors, employees or agents is named as a party.
ARTICLE XXI
DEATH OR INCAPACITY OF FRANCHISEE
21.1 In the event of the death, permanent incapacity or disability of
Franchisee, i.e., he/she is unable to operate the Franchised Business, as an
individual Franchisee, or any partner of a Franchisee which is a partnership,
or any shareholder owning fifty percent (50%) or more of the capital stock of
a franchisee which is a corporation, the Franchisor shall consent to a
transfer of said Franchisee's interest to his/her heirs, beneficiaries or
family designees, (hereinafter referred to in this Article as "Transferee")
without payment of a transfer fee, subject to the following conditions:
A. The Transferee must complete and be approved through
Franchisor's standard franchise selection process including
satisfactorily demonstrating to Franchisor that he/she meets the
financial character and managerial criteria as Franchisor shall
then be applying in considering applications for new Franchisees;
B. The Transferee shall agree, in writing, to personally assume
liability for and to perform all the terms and conditions of this
Agreement to the same extent as the original Franchisee; and
C. The transfer occurs within thirty (30) days following the
death, permanent incapacity or disability of Franchisee.
21.2 If the Transferee is not approved, the Franchisee or his/her legal
representative shall use his/her best efforts to sell the "New World Coffee
& Bagels" Store to a party acceptable to Franchisor, within twelve (12)
months from the date of the Franchisee's death or permanent incapacity or
disability and Franchisor shall have the option, but not the obligation, to
operate and/or manage the "New World Coffee & Bagels" Store for the account
of Franchisee's estate until the deceased or incapacitated Franchisee's
interest is transferred to another party acceptable to Franchisor. Should
Franchisor elect to operate and/or manage the franchised Store, Franchisor
shall make a complete accounting and shall forward fifty percent (50%) of the
net income for the operation of the Store to Franchisee's estate. If the
conveyance of the "New World Coffee & Bagels" Store to a party acceptable to
Franchisor has not taken place within the twelve (12) month period,
Franchisor shall have the option but not the duty to purchase the "New World
Coffee & Bagels" Store and its equipment therein at the fair market value
thereof as determined by independent qualified appraisers selected by the
Franchisor and the estate. In the event that these appraisers cannot agree
on a fair market value, a third appraiser shall be selected by the other two
appraisers and his determination shall be binding on both parties. However,
if the Franchisor chooses not to repurchase the "New World Coffee & Bagels"
Store, then it may elect to terminate this Agreement, in which event the
Franchised Business hereunder will automatically revert back to the
Franchisor, with the Franchisor being obligated to purchase the equipment and
trade fixtures at their book value, as set forth in the last certified
financial statement of Franchisee.
ARTICLE XXII
OPERATION IN THE EVENT OF
ABSENCE OR DISABILITY
In order to prevent any interruption of the Store operations which would
cause harm to the Franchised Business, thereby depreciating the value
thereof, Franchisee authorizes Franchisor, who may, at its option, in the
event that Franchisee is absent for any reason or is incapacitated by reason
of illness and is unable, in the sole and reasonable judgment of Franchisor,
to operate the Franchised Business, operate the Franchised Business for so
long as Franchisor deems necessary and practical, and without waiver of any
other rights or remedies Franchisor may have under this Agreement. All
monies from the operation of the Franchised Business during such period of
operation by Franchisor shall be kept in a separate account, the expenses of
the Franchised Business, including reasonable compensation and expenses for
Franchisor's representative, shall be charged to said account. If, as herein
provided, Franchisor temporarily operates the Franchised Business franchised
herein for Franchisee, Franchisee shall indemnify and hold harmless
Franchisor and any representative of Franchisor who may act hereunder, from
any and all acts which Franchisor may perform, as regards the interests of
Franchisee or third parties.
ARTICLE XXIII
INJUNCTIVE RELIEF
23.1 In the event that Franchisee is in default, except for default with
respect to monies required to be paid by Franchisee to Franchisor, under any
provisions of this Agreement, Franchisor shall be entitled to seek a
permanent injunction and any preliminary or temporary equitable relief in
connection therewith, in order to restrain the violation of this Agreement by
Franchisee or any person acting for him or in his behalf. In addition,
Franchisor shall be entitled to its reasonable attorney's fees and court
costs, in connection therewith or in connection with any other remedy sought
by Franchisor. This remedy shall be cumulative to any other remedy available
to Franchisor and shall be subject to the terms and conditions of Article XXX
hereof.
23.2 Franchisee agrees that it is impossible to measure in money the
damages which Franchisor will sustain in the event of Franchisee's breach of
this Agreement and, therefore, in the event Franchisor institutes injunctive
proceedings under this Article, Franchisee hereby waives the defense that
Franchisor has an adequate remedy at law.
ARTICLE XXIV
RISK OF OPERATIONS
FRANCHISEE RECOGNIZES THAT THERE ARE MANY UNCERTAINTIES AND RISKS OF
THIS BUSINESS, AND THEREFORE, FRANCHISEE AGREES AND ACKNOWLEDGES THAT, EXCEPT
AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NO REPRESENTATION, WARRANTIES,
GUARANTIES OR AGREEMENTS HAVE BEEN MADE TO FRANCHISEE, EITHER BY FRANCHISOR
OR BY ANYONE ACTING ON ITS BEHALF OR PURPORTING TO REPRESENT LEVEL OF
BUSINESS OR PROFITS THAT FRANCHISEE MIGHT REASONABLY EXPECT, THE
DESIRABILITY, PROFITABILITY OR EXPECTED CUSTOMER VOLUME OF THE "New World
Coffee & Bagels" STORE. FRANCHISEE HEREBY ACKNOWLEDGES THAT ALL SUCH FACTORS
ARE NECESSARILY DEPENDENT UPON VARIABLES WHICH ARE BEYOND FRANCHISOR'S
CONTROL, INCLUDING, WITHOUT LIMITATION, THE ABILITY, MOTIVATION, AMOUNT AND
QUALITY OF EFFORT EXPENDED BY FRANCHISEE. FRANCHISEE THEREFORE RELEASES
FRANCHISOR, ITS SUBSIDIARY OR AFFILIATED CORPORATIONS, OFFICERS, DIRECTORS,
AFFILIATES AND EMPLOYEES FROM ANY CLAIMS, SUITS AND LIABILITY RELATING TO THE
OPERATION OF FRANCHISEE'S "New World Coffee & Bagels" STORE INCLUDING, BUT
NOT LIMITED TO, THE RESULTS OF ITS OPERATIONS, EXCEPTS TO THE EXTENT THAT THE
SAME IS PREDICATED UPON THE BREACH OF A SPECIFIC WRITTEN OBLIGATION OF
FRANCHISOR CONTAINED IN THIS AGREEMENT.
ARTICLE XXV
OTHER OBLIGATIONS
Nothing contained in this Agreement shall inhibit or limit the
unrestricted right of Franchisor to enter into or engage in any business or
in the sale itself or the licensing to others for the sale of the proprietary
food items other than the limitations imposed upon Franchisor by Article I
hereof; Franchisee shall have no rights, benefits or entitlement with respect
thereto.
ARTICLE XXVI
FORCE MAJEURE
Neither party shall be responsible to the other for non-performance or
delay in performance occasioned by, and causes beyond its control, including
without limiting the generality of the foregoing acts or omission of other
party, acts of civil or military authority, strikes, lockouts, embargoes,
insurrections or acts of God, inability of Franchisor to purchase, deliver
and/or manufacture of any of the Proprietary Products, provided that
inability of a party to obtain funds shall be deemed to be a cause within the
control of such party. If any such delay occurs, any applicable time period
shall be automatically extended for a period equal to the time lost, provided
that the party affected makes reasonable efforts to correct the reason for
such delay and gives to the other party prompt notice of any such delay.
ARTICLE XXVII
WAIVER OF VIOLATION OR DEFAULT
Waiver by Franchisor or Franchisee of any violation or default hereunder
shall not alter or impair either party's right with respect to any subsequent
violation or default nor shall any delay or omission on the part of either
party to exercise any right arising from such violation of default, alter or
impair such party's rights as to the same or any future violation or default.
An acceptance by Franchisor or any payment from the Franchisee after the date
on which such payment is due shall not operate as a waiver of Franchisee's
default or violation hereunder, nor alter or impair Franchisor's rights with
respect to such violation or default.
ARTICLE XXVIII
NOTICE AND TIME
28.1 All communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally or by fax transmission, or one (1) business day after
being sent by overnight commercial courier service for next business day
delivery, or five (5) days after being deposited in the United States mail,
for certified or registered delivery, return receipt requested, postage
prepaid. Notice to Franchisor shall be addressed to:
New World Coffee & Bagels, Inc.
000 Xxxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
COPY TO: Xxxxxx X. Xxxxxxxxxx, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Notice to Franchisee shall be addressed to:
Either party may designate another address at any time by written notice
to the other. Additionally, all payments and reports required to be made by
Franchisee under this Agreement shall be given to Franchisor at the above
address, except that regular reports may be sent by regular mail.
28.2 Time is of the essence of this Agreement with respect to each and
every provision in which time is a factor. Whenever this Agreement refers to
a period of days, the first day to be counted shall be the first day
following the designated action or event. For any period of five (5) or
fewer days, only business days (excluding Saturdays, Sundays and national
holidays) shall be counted. Unless expressly stated otherwise, any period
longer than five (5) days shall be measured by calendar days, except that if
the last day of any such period is not a business day, the period shall
automatically be extended to the next business day.
ARTICLE XXIX
GOVERNING LAW AND VENUE
29.1 This Agreement takes effect upon its acceptance and execution by
the Franchisor in New York, and shall be interpreted and construed under the
laws thereof, which laws shall prevail in the event of any conflict of law,
except to the extent that the Federal Arbitration shall apply in accordance
with Article XXX below.
29.2 No right to remedy conferred upon or reserved to the Franchisor or
Franchisee by this Agreement is intended to be, nor shall be deemed,
exclusive of any other right or remedy herein or by law or equity provided or
permitted, but each shall be cumulative of every other right or remedy.
29.3 Franchise acknowledges that he/she has and will continue to develop
a substantial and continuing relationship with Franchisor at is principal
offices in the State of New York, where Franchisor's decision making
authority is vested and franchise operations are conducted and supervised.
Therefore, the parties herein irrevocably agree and consent that in any
action or proceeding hereafter brought by either party to this Agreement,
each will submit to the exclusive jurisdiction and venue of the Superior
Court, Manhattan, or, where applicable, the United States District Court for
the District of New York.
29.4 The parties hereto agree to waive now and forever, any and all
rights either may have under the federal statute known as RICO.
29.5 The parties irrevocably waive trial by jury in any action,
proceeding or counterclaim, whether at law or in equity, brought by either of
them.
29.6 In the event either party is required to employ legal counsel or to
incur other expense to enforce any obligation of this Agreement, or to defend
against any claim, demand, action or proceeding by reason of either party's
failure to perform any obligation imposed by this Agreement, the prevailing
party shall be entitled to recover from the losing party the amount of all
reasonable attorney's fees of such counsel and all other expenses incurred in
enforcing such obligation or in defending against such claim, demand, action,
or proceeding, whether incurred prior to or in preparation for or
contemplation of the filing of such action or thereafter.
29.7 Franchisee agrees that he/she will not, on grounds of the alleged
non-performance by Franchisor of any of his/her obligations hereunder
withhold payment of any Royalty Fee, advertising contributions or any other
amounts due to Franchisor.
ARTICLE XXX
DISPUTE RESOLUTION
30.1 If both Franchisor and Franchisee agree, any dispute may, before
commencing arbitration, be submitted to non-binding mediation in accordance
with the mediation procedures of the American Arbitration Association.
Franchisor and Franchisee agree to equally share the costs of the mediation,
including the mediator's fee.
30.2 The mediator will be appointed by the American Arbitration
Association in accordance with their procedure, and must be acceptable to
both parties. The mediator must have experience in franchising, and shall
not have been employed by either party or have any conflict of interest in
any later court proceeding or arbitration. Mediation proceedings will be
completely confidential, not discoverable and shall take place at the office
of the American Arbitration Association in Manhattan, New York.
30.3 Except as otherwise provided in Subsection 30.11 below, any
controversy or dispute arising out of or relating to the franchise or this
Agreement including, but not limited to, any claim by the Franchisee or any
person in privity with or claiming through, on behalf of or in the right of
the Franchisee, concerning the entry into, performance under, non-renewal or
termination of this Agreement; any claim against a parts or present employee,
officer, director or agent of the Franchisor or any of its affiliated
companies; any claim of breach of this Agreement; and any claims arising
under state or federal laws, shall be submitted to final and binding
arbitration as the sole and exclusive remedy for any such controversy or
dispute. Persons in privity with or claiming through, on behalf of or in the
right of franchisee include, but are not limited to, spouses and other family
members, heirs, executors, representatives, successors and assigns.
30.4 Unless prohibited by applicable law, any claim shall be made by
filing a written demand for arbitration within one (1) year following the
conduct, act or other event or occurrence first giving rise to the claim,
otherwise, the right to any remedy shall be deemed forever waived and lost.
30.5 The right and duty of the parties to this Agreement to resolve any
disputes by arbitration shall be governed exclusively by the Federal
Arbitration Act, as amended, and arbitration shall take place according to
the commercial arbitration rules of the American Arbitration Association in
effect as of the date the demand for arbitration is filed. The arbitration
shall be held at the office of the American Arbitration Association in
Manhattan, New York.
30.6 Arbitration shall be conducted before one arbitrator appointed by
the American Arbitration Association. The fees for arbitration shall be
divided equally between the parties. The arbitrator shall have no authority
to amend or modify the terms of this Agreement.
30.7 Each party further agrees that, unless such a limitation is
prohibited by applicable law, the other party shall not be liable for
punitive or exemplary damages and the arbitrator shall have no authority to
award the same. The award or decision by the arbitrator shall be final and
binding on the parties and may be enforced by court judgment or order. The
parties consent to the exercise of personal jurisdiction over them and to the
propriety of venue of the courts set forth in Article XXIX for the purpose of
carrying out this provision; and they waive any objections that they would
otherwise have to the same.
30.8 No arbitration under this Agreement shall include by consolidation,
joinder or in any other manner, any person other than the Franchisee and the
Franchisor and any person in privity with or claiming through, in the right
of or on behalf of Franchisee or Franchisor unless both Franchisee and
Franchisor consent in writing. To the extent permitted by applicable law, no
issue of fact or law shall be given preclusive or collateral estoppel effect
in any arbitration here under except to the extent such issue may have been
determined in another proceeding between Franchisee and Franchisor or any
person in privity with or claiming through, in the right of or on behalf of
Franchisee or Franchisor.
30.9 In the event any provision in this Article XXX is determined by a
court of competent jurisdiction to be legally invalid or unenforceable under
the law applicable in a particular case, then it is the intention of the
parties to this Agreement that such provision be deemed inoperative and
stricken from this Agreement, and that the remainder of this Article, to the
extent not legally invalid or unenforceable under applicable law, be enforced
as written and as if the invalid or unenforceable provision or provisions had
not been included in this Article XXX.
30.10 Each party shall have the right to seek from the courts set
forth in Article XXIX, provisional remedies including, but not limited to,
temporary restraining orders or preliminary injunctions before, during or
after arbitration. Neither party need await the outcome of the arbitration
before seeking provisional remedies. Seeking any such remedies shall not be
deemed to be a waiver of either party's right to compel arbitration. Any
such action shall be brought by Franchisor or Franchisee in accordance with
this Article XXX or in the county or similar political unit or federal
judicial district where the Franchisee conducts business or where any
property that may be the subject of the action is located. The parties
consent to the exercise of personal jurisdiction and to the propriety of
venue in such courts for the purpose of carrying out this provision; they
waive any objections that they would otherwise have to the same; and they
waive the right to have any such action decided by a jury.
30.11 Franchisor and Franchisee shall maintain all aspects of the
arbitration proceeding in confidence, and shall not disclose any information
about the proceeding to any third party other than legal counsel who shall
also be required to maintain the confidentiality thereof.
ARTICLE XXXI
ACKNOWLEDGMENTS
31.1 FRANCHISEE ACKNOWLEDGES THAT HE/SHE HAS CONDUCTED AN INDEPENDENT
INVESTIGATION OF THE FRANCHISED BUSINESS, AND RECOGNIZES THAT THE BUSINESS
VENTURE CONTEMPLATED BY THIS AGREEMENT INVOLVES BUSINESS RISKS AND THAT ITS
SUCCESS WILL BE LARGELY DEPENDENT UPON THE ABILITY OF FRANCHISEE AS AN
INDEPENDENT BUSINESS PERSON.
31.2 FRANCHISEE ACKNOWLEDGES THAT HE/SHE HAS RECEIVED, READ, AND
UNDERSTOOD THIS AGREEMENT, INCLUDING THE EXHIBITS HERETO; THAT THE FRANCHISOR
HAS FULLY AND ADEQUATELY EXPLAINED THE PROVISIONS OF EACH TO FRANCHISEE'S
SATISFACTION; AND THAT THE FRANCHISOR HAS ACCORDED FRANCHISEE AMPLE TIME AND
OPPORTUNITY TO CONSULT WITH ADVISORS OF HIS/HER OWN CHOOSING ABOUT THE
POTENTIAL BENEFITS AND RISKS OF ENTERING INTO THIS AGREEMENT.
31.3 FRANCHISEE ACKNOWLEDGES AND IS AWARE OF THE FACT THAT SOME
FRANCHISEES OF FRANCHISOR MAY OPERATE UNDER DIFFERENT FORMS OF AGREEMENTS
AND, CONSEQUENTLY, THAT FRANCHISOR'S OBLIGATIONS AND RIGHTS IN RESPECT TO ITS
VARIOUS FRANCHISEES MAY DIFFER MATERIALLY IN CERTAIN CIRCUMSTANCES.
ARTICLE XXXII
ENTIRE AGREEMENT
This Agreement, and any other Franchise Agreements thereunder,
constitutes the entire agreement between Franchisor and Franchisee with
respect to the subject matter hereof, and this Agreement supersedes all prior
and contemporaneous agreements between Franchisor and Franchisee in
connection with the subject matter of this Agreement. In the event of any
conflict between the terms of this Agreement, or any other Franchise
Agreement, the terms of this Agreement shall prevail. No officer, employee
or other servant or agent of Franchisor or Franchisee is authorized to make
any representation, warranty or other promise not contained in this
Agreement. No change, termination or attempted waiver of any of the
provisions of this Agreement shall be binding upon Franchisor or Franchisee
unless in writing and signed by Franchisor and Franchisee.
ARTICLE XXXIII
JOINT AND SEVERAL OBLIGATION
If the Franchisee consists of more than one person, their liability
under this agreement shall be deemed to be joint and several.
ARTICLE XXXIV
SECURITY INTEREST
Franchisee hereby grants to Franchisor a security interest in all of
Franchisee's interest in all leasehold improvements, furniture, furnishings,
fixtures, equipment, inventory and supplies located at or used in connection
with the Franchised Business, now or hereafter leased or acquired, together
with all attachments, accessions, accessories, additions, substitutions and
replacements therefore, and all cash and non-cash proceeds derived from
insurance or the disposition of such collateral, to secure payment and
performance of all debts, liabilities and obligations of any kind, whenever
and however incurred, of Franchisee to Franchisor. Franchisee agrees to
execute and deliver to Franchisor in a timely manner, all financial
statements and other documents necessary, or desirable, to evidence, perfect
and continue the priority of such security interests under the Uniform
Commercial Code. For such purposes the address of Franchisee and Franchisor
are set forth in Article XXVIII of this Agreement. If Franchisee is in good
standing, Franchisor agrees, upon request, to execute subordinations of its
security interest to suppliers, lenders and/or lessors furnishing equipment
or financing for the Franchised Business.
ARTICLE XXXV
COUNTERPART; PARAGRAPH HEADINGS; PRONOUNS
This Agreement may be executed in any number of counterparts, all of
which, taken together shall constitute one and the same instrument. The
paragraph headings in this Agreement are for convenience of reference only
and shall not be deemed to alter or affect any provision thereof. Each
pronoun used herein shall be deemed to include the other number of genders.
ARTICLE XXXVI
SEVERABILITY AND CONSTRUCTION
36.1 Each section, part, term and provision of this Agreement shall be
considered severable, and if, for any reason, any section, part, term or
provision herein is determined to be invalid and contrary to, or in conflict
with, any existing or future law or regulation, such shall not impair the
operation of, or affect the remaining portions, parts, terms or provisions of
this Agreement, and the latter will continue to be given full force and
effect and bind the parties hereto, and said invalid sections, parts, terms
or provisions shall be deemed not to be a part of this Agreement, provided,
however, that if Franchisor determines that said finding of illegality
adversely affects the basic consideration of this Agreement, Franchisor and
Franchisee may terminate this Agreement.
36.2 Anything to the contrary herein notwithstanding, nothing in this
Agreement is intended, nor shall be deemed, to confer upon any person or
legal entity other than Franchisor or Franchisee and such of their respective
successors and assigns as may be contemplated by this Agreement, any rights
or remedies under or by reason hereof.
36.3 Franchisee expressly agrees to be bound by any promise or covenant
imposing the maximum duty permitted by law which is subsumed within the terms
of any provision hereof, as though it were separately articulated in and made
a part of this Agreement, that may result from striking from any of the
provisions hereof any portion or portions which a court may hold to be
unreasonable and unenforceable in a final decision to which Franchisor is a
party, or from reducing the scope of any promise or covenant to the extent
required to comply with such a court order.
36.4 All captions herein are intended solely for the convenience of the
parties, and none shall be deemed to affect the meaning or construction of
any provision hereof.
36.5 This Agreement shall be executed in duplicate and each copy so
executed shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal on the date first written above.
NEW WORLD COFFEE & BAGELS, INC.
FRANCHISOR
________________________
By:__________________________
WITNESS
FRANCHISEE
_________________________
By:___________________________
WITNESS
PRINT NAME:__________________
(This Page Intentionally Left Blank)
NEW WORLD COFFEE & BAGELS
UNIT FRANCHISE AGREEMENT
EXHIBIT "A"
The Franchisee's Location and Exclusive Territory shall be as Follows:
1) Location:
2) Exclusive Territory:
NEW WORLD COFFEE & BAGELS, INC.
By:___________________________
______________________________
FRANCHISEE
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NEW WORLD COFFEE & BAGELS
UNIT FRANCHISE AGREEMENT
EXHIBIT "B"
GUARANTY
(TO BE EXECUTED ONLY IF FRANCHISEE IS A CORPORATION)
In consideration of the execution by New World Coffee & Bagels, Inc. of
the within Franchise Agreement, and acknowledging that undersigned will
benefit directly or indirectly from the execution thereof, the undersigned,
being all of the shareholders, directors, and officers of the Franchisee,
agree to be jointly and severally bound by, and agree to guaranty the
performance of all of the terms and conditions of the Franchise Agreement,
and any amendments thereto to renewals thereof, and do hereby execute this
Franchise Agreement for the purpose of binding and obligating themselves to
the terms and conditions of the aforesaid Franchise Agreement and any
amendments thereto or renewals thereof.
1. The guarantors hereunder hereby waive notice of termination of
default under the Franchise Agreement.
SIGNATURES OF ALL SHAREHOLDERS, DIRECTORS AND OFFICERS
______________________________
Name
______________________________
Address
______________________________
Name
______________________________
Address
______________________________
Name
______________________________
Address
______________________________
Name
______________________________
Address
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NEW WORLD COFFEE & BAGELS
UNIT FRANCHISE AGREEMENT
EXHIBIT "C"
Conditional Lease Assignment Provisions
The clauses referred to in Article 2.1 of the attached Unit Franchise
Agreement are as follows:
(i) The premises being leased hereunder shall be used solely for the
operation of a "New World Coffee & Bagels" Store.
(ii) Lessor has examined Franchisor's standard design concepts and
specifications and consents to Lessee's use of same and of Franchisor's
Marks and such signage as the Franchisor may prescribe for the "New
World Coffee & Bagels" Store.
(iii) Lessee may not sublease or assign all or any part of its occupancy
rights, or extend the term or renew the lease, without Franchisor's
prior written consent.
(iv) Lessor shall furnish Franchisor a copy of the executed lease, including
all attachments thereto and related agreements, if any, within five (5)
days after its execution, and no change or amendment to such lease
affecting the above terms and conditions shall be effective without
Franchisor's prior written approval.
(v) Notwithstanding anything to the contrary contained in this Lease, it is
expressly understood and agreed that if the Unit Franchise Agreement
dated the _______day of _________, 199__ between the Lessee and the
Franchisor expires or is terminated for any reason whatsoever, the
Lessee's rights hereunder shall, at the option of the Franchisor, be
transferred and assigned to it. Said option may be exercised by the
Franchisor giving the Lessor notice in writing within thirty (30) days
following the expiration or termination of the said Franchise Agreement,
such notice to specify, inter alia, the date of such expiration or
termination. The Lessee acknowledges and agrees that the Lessor may
rely upon such notice and shall not be required to inquire into the due
execution thereof or the accuracy of the statements set forth therein.
It is further agreed that such notice shall, without further act or
formality, operate as an effective assignment of the Lessee's right
hereunder to the Franchisor and the assumption by the Franchisor of the
covenants herein required to be observed or performed by the Lessee.
The Franchisor shall thereafter have the right to assign or sublet the
Premises to such person as it may designate, provided that in such event
that this clause be contained therein. Notwithstanding the foregoing,
the Franchisor shall, forthwith upon exercise of such option, execute
such documents evidencing its agreement to thereafter keep and perform
or cause to be kept or performed all of the obligations of the Lessee
arising under this Lease from and after the time of the exercise of such
option.
(vi) In the event Franchisor elects not to exercise the above option, Lessor
shall permit Franchisor to enter the premises in order to make any
modification necessary to protect Franchisor's Marks.
(vii) The Lessor shall give written notice to the Franchisor
(concurrently with the giving of such notice to the Lessee) of any
default by the Lessee under the Lease and the Franchisor shall have,
after the expiration of the period during which the Lessee may cure such
default, and additional fifteen (15) days to cure, at its sole option,
any such default, providing that if such default arises by reason of the
bankruptcy or insolvency of the Lessee or the appointment of a receiver
over the Lessee's assets or part thereof, the Franchisor shall have the
right to assume this Lease upon payment of any arrears of rental to such
date. In the event of any such assumption, the Lessee shall cease to
have any further rights hereunder.
(viii) The Lessor acknowledges that the said Franchise Agreement contains
a right on the part of the Franchisor, in the event of expiration or
termination of the said Franchise Agreement for any reason whatsoever,
to enter the premises hereby demised and to operate the Franchised
Business for the account of the Lessee for a period as set forth in the
said Unit Franchise Agreement. The Lessor further acknowledges that
such entry by the Franchisor shall not constitute an assignment of the
Lease, nor a subletting of the premises hereby demised.
(ix) The Lessor acknowledges that the Franchisor is executing this Lease
solely for the purpose of acknowledging the provisions contained in the
foregoing clauses (iii) to (viii) and agrees that such execution by the
Franchisor shall in no way be construed so as to obligate the Franchisor
for the performance of any of the terms, conditions, obligation and
covenants contained herein.
The foregoing provisions shall be incorporated into Franchisee's lease or
sublease agreement.
EXHIBIT "D"
NEW WORLD COFFEE & BAGELS
SINGLE UNIT FRANCHISE
OWNER DEVELOPMENT AGREEMENT
AGREEMENT dated this ____ day of _________________, 19___, by and
between New World Coffee & Bagels, Inc., a Delaware corporation with
principal offices at 000 Xxxx Xxxxxxxx; Xxx Xxxx, XX 00000 (hereinafter the
"Company") and _________________________________________ with principal
offices at _______________________________________________________
(hereinafter the "Undersigned").
A. The Undersigned is desirous of developing a New World Coffee &
Bagels Unit within an existing building, or on a parcel or lot of land
located at __________________________ (hereinafter the "Site"). The parties
acknowledge that this agreement contemplates that either the Undersigned
introduced the Company to the Site or the Company introduced the Undersigned
to the Site, as the case may be.
B. The Company is willing to review the Site for suitability as a New
World Coffee & Bagels Unit location and, if approved, to grant to the
Undersigned a franchise to operate under a New World Coffee & Bagels Unit on
the Site, provided that the Undersigned meet(s) all of the Company's
qualifications and requirements for new, or if appropriate, multi-unit
franchise owners.
C. This Agreement shall enumerate the respective responsibilities of
the parties with respect to the Undersigned undertaking to develop a New
World Coffee & Bagels Unit on the Site.
AGREEMENTS
In consideration of the terms, covenants and conditions hereinafter
set forth, the Undersigned and the Company hereby agree as follows:
Section I: Approval of the Site
1. The Undersigned should retain an attorney and other advisors to
review all agreements with the Company.
2. The development of the proposed Site as a New World Coffee & Bagels
Unit must be approved by the Company, as evidenced solely by written notice
sent to the Undersigned; (a) said approval is subject to the Undersigned
obtaining all necessary permits, licenses and local governmental approvals;
and (b) such other contingencies as the Undersigned's attorney may
recommend, if applicable. The Undersigned will provide the Company with a
copy of any deed or lease for the Site, within ten (10) days after the
execution and delivery thereof to the Undersigned or execute a sublease with
New World Coffee & Bagels if New World Coffee & Bagels is the Lessee. The
cost is the responsibility of Franchisee even if New World Coffee & Bagels,
secures permits and builds Unit.
3. If, the Undersigned decides to proceed with development of a New
World Coffee & Bagels Unit on the Site, the Undersigned must promptly hire a
licensed architect whose responsibility shall be (i) to adapt the Company's
generic plans and specifications to the specific requirements of the Site,
the building codes and ordinances pertinent to the Site, (ii) to oversee the
contractor's completion of construction of the New World Coffee & Bagels Unit
on the Site, and (iii) such other duties as the Company may require.
4. The Company's approval of the site merely means that the minimum
criteria which the Company has established for identifying sites for proposed
New World Coffee & Bagels Units have been met. Due to the fact that Unit
development is not a precise science, the Undersigned agrees that the
Company's approval or disapproval of a development shall not impose any
liability or obligation on the Company. The decision to accept or reject a
particular site is the Undersigned's, subject to the Company's final
approval.
Section II: Execution of Documents
1. Simultaneously with the execution of this Agreement, the Undersigned
has executed and delivered to the Company, in triplicate, the New World
Coffee & Bagels Franchise Agreement for the Site.
2. The Undersigned shall execute such other documents and agreements as
are customarily required by the Company or that the Company has an interest.
3. If the Unit Franchise Agreement expires or is terminated for any
reason the Undersigned, including all successor(s) or assign(s), as Franchise
Owner, and the owner of the real estate Site must agree to complete
de-identification of the interior and exterior of the New World Coffee & Bagels
Unit, upon the Company's request. Such de-identification is to be completed
at no expense to the Company and within thirty (30) days after expiration or
termination of the Unit Franchise Agreement.
Section III: Financing
Prior to the commencement of construction of the New World Coffee &
Bagels Unit on the Site, the Undersigned shall provide evidence satisfactory
to the Company that cash and/or financing is in place, sufficient to fund
completion of construction and purchase of necessary equipment and signs.
Section IV: Development of the New World Coffee & Bagels Unit
The New World Coffee & Bagels Unit must be developed and constructed in
strict accordance with the Company's current minimum standards, procedures,
plans, specifications and documentation (hereinafter collectively the
"Requirements").
1. Prior to the commencement of construction of the New World Coffee &
Bagels Unit on the Site, the plans and specifications prepared by the
Undersigned's architect must be reviewed by the Company's Construction
Department and approved for compliance with the Company's design
Requirements.
2. The Company's Construction Department shall have the right of entry
upon the Site at all times, to inspect the construction in progress for the
purpose of ensuring that all requirements are being met. The Company's
Construction Manager will not act as an architect or agent of the
Undersigned. The Construction Manager's duties are limited solely to
ensuring that the Company's requirements are met on the Site. The
Undersigned shall not rely upon any opinions expressed by the Construction
Manager regarding structural integrity, safety or construction procedures,
building codes or ordinances or other matters properly within the
responsibility of the Undersigned's architect. The Company assumes no
liability or responsibility for architectural or engineering judgments
outside the scope of the Construction Manager's stated duties.
3. Before the Unit is opened to the public, the Undersigned must obtain
the Company's approval of the construction of the building, site improvements
and the installation of all signs and equipment. The Company's approval of
construction of the New World Coffee & Bagels Unit is not a representation or
a warranty that the New World Coffee & Bagels Unit has been constructed in
accordance with any architectural or engineering standards for design or
workmanship. It merely means that the Company is satisfied that the minimum
requirements which the Company has established for consistency of design and
layout have been met. The Undersigned agrees that the Company's approval of
construction of the New World Coffee & Bagels Unit shall not impose any
liability or obligation upon the Company. The Undersigned also agrees that
all franchise and real estate documentation must be complete and all initial
payments must be received by the Company before the New World Coffee & Bagels
Unit is opened.
4. In addition to the foregoing, the Undersigned shall obtain, and
shall present to the Company, copies of all required permits, approvals and
certificates required for occupancy of the New World Coffee & Bagels Unit.
Section V: General Provisions
1. This Agreement does not constitute that the Undersigned is an agent,
legal representative, joint venture, partner, employee or servant of the
Company for any purpose whatsoever; the Undersigned shall be an independent
contractor and is in no way authorized to make any contract, agreement,
warranty or representation on behalf of the Company or to create any
obligation, express or implied, on behalf of the Company. The parties agree
that this Agreement doe not create a fiduciary relationship between the
Company and the Undersigned.
2. Under no circumstances shall the Company be liable for any act,
omission, debt or any other obligation of the Undersigned. The Undersigned
shall indemnify and save the Company harmless against any such claim and the
cost of defending against such claims arising directly or indirectly from, or
as a result of, or in connection with, the Undersigned's development of a New
World Coffee & Bagels Unit on the Site.
3. No failure of the Company to exercise any power reserved to it
hereunder, or to insist upon strict compliance by the Undersigned with any
obligation or condition hereunder, and no custom or practice of the parties
in variance with the terms hereof, shall constitute a waiver of the Company's
right to demand strict compliance with the terms hereof. Waiver by the
Company of any particular default by the Undersigned shall not affect or
impair the Company's right with respect to any subsequent default of the same
or of a different nature.
4. All notices hereunder shall be delivered as set forth in Paragraph
28.1, Article XXVIII of the Franchise Agreement.
5. This Agreement, and the documents referred to herein shall be the
entire, full and complete agreement between the Company and the Undersigned
concerning the subject matter hereof, and supersedes all prior agreements.
No other representation induced the Undersigned to execute this Agreement;
and there are no representations, inducements, promises or agreements, oral
or otherwise, between the parties not embodied herein, which are of any force
or effect with reference to this Agreement or otherwise. No amendment,
change or variance from the Agreement shall be binding on either party unless
executed in writing. Each section, part, term and provision of this
Agreement shall be considered severable, and if, for any reason, any section,
part, term or provision herein is determined to be invalid and contrary to,
or in conflict with, any existing or future law or regulation of a court or
agency having valid jurisdiction, such shall no impair the operation or
affect the remaining portions, section, parts, terms or provision of this
Agreement, and the latter will continue to be given full force and effect and
bind the parties hereto; and said invalid section, part, term or provision
shall be deemed not to be a part of this Agreement.
6. This Agreement shall be interpreted, construed and governed by the
laws of the State of New York and any claim, action or lawsuit shall be
commenced in the State of New York, County of Manhattan.
7. Nothing herein contained shall bar the right of either party to
obtain injunctive relief against threatened conduct that will cause loss or
damages, under the usual equity rules, including the applicable rules for
obtaining preliminary injunctions.
8. The Undersigned represents that the Undersigned has received the
Company's Uniform Franchise Offering Circular from the Company at least ten
(10) business days prior to the date of the Undersigned executing this
Agreement.
9. The Company and the Undersigned agree that time is of the essence in
the Undersigned's performance of his/her obligations hereunder. Any failure
by the Undersigned to meet the time limits or obligations imposed under this
Agreement shall constitute a default under Article XVII of the Unit Franchise
Agreement, for which the Company may terminate the Agreement and the
Franchise Agreement upon notice to the Undersigned.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
on the date first written above.
Attest NEW WORLD COFFEE & BAGELS, INC.
________________________________ By______________________________
Witness/Attest: THE UNDERSIGNED:
________________________________ ________________________________
NEW WORLD COFFEE & BAGELS FRANCHISE AGREEMENT
EXHIBIT "E"
SUBLEASE AGREEMENT
THIS SUBLEASE made as of this ______ day of ______________, 19____
("Sublease"), by and between New World Coffee & Bagels, Inc., a Delaware
corporation having its office at 000 Xxxx Xxxxxxxx; Xxx Xxxx, XX 00000
(hereinafter "Sublessor"), and _____________________________________, having
his/her principal residence at __________________________________________
(hereinafter "Sublessee"):
1. Sublease:
(a) This Sublease is subject to and subordinate in all respects to
that certain lease (hereinafter "Head Lease") to be entered into between the
Sublessor herein as the Lessee and
__________________________________________________________________ as the
Lessor, a copy of which Head Lease in substantial form is attached hereto as
Exhibit "A"; and by this reference made a part hereof as if fully set forth
herein.
(b) Sublessee agrees that nothing herein contained shall be deemed
to grant Sublessee any rights which would conflict with any of the covenants
and conditions of said Exhibit "A" and Sublessee agrees that he will do
nothing in, on or about the demised Premises or fail to do anything which
would result in a breach of Sublessor of its undertakings and obligations
under the Head Lease.
(c) Nothing contained herein shall be construed as a guarantee by
Sublessor of any of the obligations, covenants, warranties, agreements, or
undertakings of Lessor in the Head Lease nor as an absolute or unconditional
undertaking by Sublessor to perform the obligations of Lessor on the same
terms as are contained in the Head Lease.
2. Premises:
(a) Sublessor hereby subleases to Sublessee and Sublessee hires
from Sublessor, the premises known as
____________________________________________ and the building located thereon
(hereinafter "Premises"), to be used by Sublessee only as a franchisee of New
World Coffee & Bagels, Inc. (hereinafter "Franchisor") for the sole purpose
of operating a "New World Coffee & Bagels" store ("Store") subject to the
terms of a certain Franchise Agreement entered into by and between Sublessor
and Sublessee, dated ___________________. 19____ ("Franchise Agreement").
(b) Sublessee acknowledges that the Premises is not presently
suitable for use as a Store and agrees to complete those leasehold
improvements at Sublessee's sole cost and expense in conformity with all of
the terms of the Head Lease and in general conformity with the prototype
plans and designs for the Store.
(c) Sublessee shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of federal, state and
local governments and of any and all their departments and bureaus applicable
to said Premises.
(d) Before commencing any work or installing any equipment in
connection with repair or alteration of the Premises, Sublessee shall:
1. Obtain the necessary consents, authorizations and
licenses from the federal, state and/or municipal authorities asserting
jurisdiction over the work to be done, and no work shall be started or
equipment installed unless and until all such necessary consents,
authorizations and licenses shall first have been duly obtained by the
Sublessee and/or his contractor or other persons doing the work or installing
the equipment on behalf of Sublessee. The foregoing shall not apply if
Sublessor assumes responsibility for obtaining the foregoing;
2. Enter into proper contracts with contractors,
subcontractors and materialmen, which contracts will provide, among other
things, that said work shall be done and equipment installed in good
workmanlike manner and in accordance with the plans and specifications
previously approved, and consents, authorizations and licenses previously
obtained, and which contracts shall provide that the contractor or other
persons referred to above will look solely to the Sublessee for payment and
will hold the Sublessor and the Demised Premises free from all liens and
claims of any persons furnishing labor or furnishing materials therefor, or
both, and will also provide similar waivers or rights to file liens obtained
from any and all of said contractors, subcontractors and materialmen; copies
of said contracts together with duly executed waivers of the right to file
liens executed by the contractors or other persons referred to above shall be
furnished to the Sublessor;
3. Sublessee shall also indemnify and save harmless
Sublessor against any and all bills for labor performed and equipment,
fixtures and material furnished to Sublessee in connection with said work as
aforesaid, and against any and all liens, bills or claims therefor or against
the Demised Premises; and within twenty (20) days, bond or discharge any such
liens, the failure to do so shall be deemed a material breach of this
Sublease; and
4. Sublessee, at his own cost and expense, with respect to
any repairs or alterations made by him, shall promptly comply with all laws,
ordinances, orders, rules and regulations of each and every department and
bureau of the city and state and the United States and any other lawful
authority asserting jurisdiction over the Premises, and shall reimburse
Sublessor for any expenses incurred on account of failure by Sublessee to
comply with any such requirements, and any expenses so incurred by Sublessor
as aforesaid, shall be deemed "additional rent" under this Sublease and due
and payable by Sublessee to Sublessor on the first day of the month following
the payment of same by Sublessor. Sublessee, or any contractors employed by
Sublessee, or any other persons who will do the work or install the equipment
as aforesaid, shall be fully covered by Worker's Compensation Insurance and
liability insurance in the minimum amount of $1,000,000/$2,000,000 and
certificates thereof shall be furnished to Sublessor before commencement of
any work by any such contractor or persons as aforesaid.
(e) If Sublessee requests Sublessor to guarantee an obligation to
the architect or contractor commissioned by Sublessee for the improvements,
and Sublessor agrees to do so in a separate instrument, Sublessee agrees that
any default in payment by Sublessee to the architect or contractor shall
constitute a material breach hereof and shall be treated as though Sublessee
has defaulted in the payment of rent hereunder. Sublessee acknowledges that
any such guarantee will be given by Sublessor merely as an accommodation to
Sublessee and Sublessee agrees to hold Sublessor harmless thereunder. This
provision shall not be construed to be an agreement by Sublessor to make such
a guarantee, which can only be made in a separate instrument.
3. Term:
(a) This Sublease shall commence on the date hereof and shall end
one day prior to the end of the Head Lease.
(b) Sublessee shall have such options to renew this Sublease as
are provided to Sublessor in the Head Lease to renew same, if any, which
options shall be conditioned upon Sublessor exercising in each instance, the
option in the Head Lease to which Sublessee's option relates and shall be
conditioned upon the Franchise Agreement being in full force and effect and
Sublessee being in full compliance therewith.
(c) Each option period, if any, shall run for one (1) day less
than the period available to Sublessor under the Head Lease and shall
therefore expire one (1) day prior to the end of the then-current term.
4. Rental:
(a) The fixed minimum rental payable by Sublessee shall be
___________________ Dollars ($________________________).
The above rental is the net minimum rental and shall be
absolutely net to the Sublessor without any right of offset, claim or
withholding.
(b) In the event the Head Lease contains a provision which may
result in the rental payable by Sublessor under the Head Lease being adjusted
on the basis of percentage rent charges, or being adjusted during the term
hereof or in any renewal term because of cost of living index changes or
other incremental increases, and in the event such an adjustment is in fact
made under the Head Lease, the fixed minimum rental payable hereunder shall
be adjusted by the same percentage as the rent under the Head Lease is
adjusted.
(c) The fixed monthly rental installments and additional rents and
charges shall be paid directly to Lessor in accordance with the terms of the
Head Lease, unless otherwise directed by Sublessor.
(d) Any monies due to Franchisor from Sublessee or other payments
to be made by Sublessee pursuant to the Franchise Agreement shall be deemed
additional rent hereunder.
5. Sublessee's Franchise from Franchisor:
(a) Simultaneously with, or prior to, execution of this Sublease,
Sublessee has also entered into the Franchise Agreement solely for the
operation of the Store at the Demised Premises. Sublessee agrees that if the
aforesaid Franchise Agreement shall be terminated either by Sublessee or by
Franchisor for any reason, Sublessor shall, in either event, then have the
unqualified and absolute right to terminate this Sublease upon five (5) days'
written notice, and at the end of said five (5) day notice period, the
Sublessor may re-enter or may institute summary or holdover proceedings to
evict Sublessee and all those in possession of the Premises by reason of the
termination of this Sublease as herein provided.
(b) Any uncured default under the Franchise Agreement by Sublessee
shall constitute a material default hereunder and shall entitle Sublessor to
re-enter the Premises, without being liable for trespass, or institute
summary or holdover proceedings to evict Sublessee and all those in
possession in the event such default remains uncured. And, wherever the
default under the Franchise Agreement shall pertain to the payment of money
by Sublessee, such default thereunder shall constitute a default in the
payment of rent hereunder and Sublessee shall have all remedies available to
it hereunder as though the same were a default in the payment of the fixed
minimum rental.
6. Head Lease Inclusions and Exclusions:
(a) The parties hereby agree that all of the other covenants and
agreements by the Franchisor or Sublessor, including all extra charges and
obligations, if any, which are contained in the aforesaid Head Lease,
including all riders and addenda hereto (being Exhibit "A" hereto) are hereby
assumed by Sublessee and by this reference are made a part hereof and
included in this Sublease as if herein fully written and as if the words
"Sublessor" and "Sublease: were originally wherever the words "Lessor" and
"Lessee" appear therein.
(b) With reference to the included paragraphs of said Head Lease,
pertaining to the insurance obligations of Sublessor which along with all
others are hereby taken over from the Sublessor and assumed by Sublessee, it
is agreed that the insured parties under all of said insurance policies shall
be as their interest may appear (in addition to Sublessee).
7. Tax Deposit:
When and if requested, Sublessee agrees to pay to Sublessor in
advance, on each monthly rental payment date, an additional amount equal to
one twelfth (1/12) of the annual taxes and assessments levied against the
demised Premises for the period for which collected. Sublessor shall use
such monies for payment of such taxes or assessments as they become due and
payable. In the event such monies are insufficient for such purpose,
Sublessee shall immediately, upon notice, pay the difference to Sublessor.
In remitting such taxes or assessments, Sublessor shall not be responsible
for their validity, accuracy or reasonableness and shall not be required to
make advances thereof. Sublessor shall not be required to pay any interest
on any payments made hereunder by Sublessee and Sublessee hereby expressly
waives any right, statutory or otherwise, to have Sublessor pay interest on
said payment.
8. Assignment and Subletting:
Sublessee shall not assign or sublet the Demised Premises nor any
part thereof. Sublessor shall be under no obligation whatsoever to consent
to, approve or submit to any assignment or subletting and may withhold such
consent or approval for any reason or no reason.
9. Notices:
All notices to be given to the Sublessor or Sublessee may be given
in writing personally or by certified mail, return receipt requested, postage
prepaid; sent to Sublessee at the Demised Premises and to the Sublessor at
000 Xxxx Xxxxxxxx; Xxx Xxxx, XX 00000. Delivery thereof shall be
conclusively presumed as having been made within three (3) days from the date
of mailing.
10. Default and Remedies:
(a) Any monetary obligation of Sublessee, including rental
payments which are not paid when due, shall bear interest from the due date
at a rate per annum of two (2) percentage points above the prime lending rate
of Citibank, N.A., in effect on the first day of each month for the period
during which any such amount is outstanding. This provision does not limit
any other remedies as provided hereunder.
(b) If any voluntary or involuntary petition in bankruptcy shall
be filed by or against Sublessee, or any voluntary or involuntary proceedings
in any court or tribunal shall be instituted to declare Sublessee insolvent
or unable to pay its debts, then upon such occurrence, but with or without
entry or other action by Sublessor, this Sublease and Franchise Agreement
shall immediately terminate, and, notwithstanding any other provisions of
this Sublease, Sublessor shall forthwith upon such termination be entitled to
recover damages in an amount equal to the rental herein provided for the
residue of the term hereof.
(c) If Sublessee defaults in the payment of rent, or, if Sublessee
defaults in the prompt and full performance of any other provision of this
Sublease and such other default continues for ten (10) days after Sublessor's
written notice thereof to Sublessee, or if Sublessee makes an assignment for
the benefit of creditors, or if a receiver be appointed for the property of
Sublessee or if Sublessee abandons or vacates the Premises, then, and in any
such event, Sublessor may, if Sublessor so elects, but not otherwise, and
with or without notice of such election and with or without any demand
whatsoever, either forthwith terminate this Sublease and Sublessee's right to
possession of the Premises, or without terminating this Sublease, terminate
Sublessee's rights to possession of the Premises, and terminate the Franchise
Agreement.
(d) In addition to the remedies of Sublessor specified in the
aforesaid paragraphs, the parties hereto agree that the only notices
necessary to terminate this Sublease and Franchise Agreement are those
enumerated herein, with all other notices and demands required by statute or
law being hereby waived by Sublessee, and further that this Sublease and the
Franchise Agreement may also be terminated at the election of Sublessor
without further notice or demand in the following event:
(i) If Sublessee establishes a pattern of repeated defaults
in that Sublessee fails to make any payment of money under this
Sublease when due, or defaults in the performance of any covenants,
undertakings, or obligations other than for the payment of money
required by this Sublease to be performed by Sublessee, in three (3)
consecutive calendar months or in any four (4) months during the same
calendar year (whether the same or different failures or defaults are
involved), then notwithstanding that Sublessee has cured within the
times prescribed for any such failures and defaults occurring in the
first two (2) consecutive months or in any three (3) months in the
same calendar year, it is nevertheless agreed that the occurrence of
such failure of default for the third consecutive calendar month or
for the fourth month in the same calendar year shall be conclusively
deemed to be an immediate material breach of this Sublease permitting
termination without further demand or notice of any kind and without
any right on the part of Sublessee to cure; and
(ii) If Sublessee willfully falsifies any statement or report
required to be submitted to Sublessor under the terms of this
Sublease.
(e) If Sublessee attempts to or actually does pledge, hypothecate
or mortgage this Sublease to any third party, this Sublease shall immediately
terminate.
(f) In addition to all other remedies available to Sublessor
hereunder, and not by way of limitation, if Sublessee shall default in the
observance or performance of any term or covenant on its part to be performed
or observed under or by virtue of any of the terms of provisions in any
article of this Sublease, Sublessor, without being under any obligation to do
so and without thereby waiving such default, may remedy such default for the
account and at the expense of Sublessee. Such sums paid or obligations
incurred with interest and costs shall be deemed to be additional rent
hereunder and shall be paid to Sublessor by Sublessee.
11. Right of Entry and/or Possession:
If, for any reason, Sublessee should be in default of his/her
obligations hereunder or in his/her obligations under the Franchise
Agreement, or any stipulation signed by Sublessee, the Sublessor shall have
the right to enter upon the Premises of Sublessee at any hour, not just
Sublessee's business hours, to take possession of the Store and Sublessee
agrees that the Sublessor shall not be required to obtain prior permission to
enter upon the premises and operate the Store; Sublessee hereby grants the
Sublessor the limited power of attorney to obtain an order and judgment in
the Sublessee's behalf in any court of competent jurisdiction to order and
authorize the entry of the Sublessor on the premises and the operation of the
Store. Franchisee further agrees that if the Sublessor is forced to resort
to this procedure by any interference with the Sublessor's rights hereunder
or for any other reason, Sublessee shall pay all attorney's fees and other
costs associated with the Sublessor's obtaining such order and judgment on
its behalf.
12. Abandoned Property:
Any personal property or equipment of Sublessee which is removable
by Sublessee pursuant to the Head Lease, if not removed within ten (10) days
of Sublessee's vacating of the demised Premises for any reason, shall at the
option of Sublessor, be deemed to have been abandoned and in such event
shall, in consideration of the making of this Sublease, thereupon become the
property of Sublessor.
13. Guaranty By Sublessee:
In consideration of the making of this Sublease by Sublessor, the
undersigned Sublessee does hereby guarantee to Sublessor the payment of all
rent, additional rent, impositions and charges of any kind required herein to
be paid by Sublessee and the performance by Sublessee of all of the terms and
conditions of this Sublease. Sublessee hereby waives any notices hereunder
or acceptance hereof and consents to any extension of time, indulgence or
waivers granted by Sublessor to Sublessee or any other action or modification
of the Sublease terms regardless of whether they affect the extent or nature
of the obligations of the Sublessee and Sublessee agrees to pay all of the
Sublessor's expense, including attorneys fees incurred by Sublessor in
enforcing this Guaranty or the obligations of the Sublessee herein.
14. Miscellaneous:
(a) The words "Sublessor" and "Sublessee" shall mean respectively
all parties of Sublessor or Sublessee, regardless of number, and the word
"he" shall be synonymous with "she", "it" and "their".
(b) All remedies of the parties hereto are cumulative.
(c) No waiver by Sublessor of any provision or undertaking
hereunder shall be valid unless in writing signed by an authorized officer of
Sublessor. No waiver by either party hereto of any provision of default
hereunder, whether in a single instance or repeatedly, shall be deemed a
future waiver of such provision or default. Receipt of acceptance of rent by
Sublessor shall not be deemed a waiver of any default under the covenants,
agreements, terms, provisions and conditions of this Sublease, or of any
right which Sublessor may be entitled to exercise under this Sublease.
IN WITNESS WHEREOF, the parties have executed this instrument the day
and year first above written.
SUBLESSOR: SUBLESSEE:
BY:___________ ______________________
WITNESS: WITNESS:
_________________ _________________
EXHIBIT "F"
TRANSFER OF FRANCHISE TO A CORPORATION
The undersigned, an officer, director and owner of a majority of issued and
outstanding voting stock of the corporation set forth below and the
Franchisee of the "New World Coffee & Bagels", Store under a Unit Franchise
Agreement executed on the date set forth below, between himself and "New
World Coffee & Bagels, Inc." As Franchisor, granting him a franchise to
operate at the location set forth below and the other undersigned directors,
officers and shareholders of the corporation, who together with Franchisee
constitute all of the shareholders of the corporation, in order to induce
Franchisor to consent to the assignment of the Franchise Agreement to the
corporation in accordance with the provisions of Article XX of the Unit
Franchise Agreement, agree as follows:
1. The undersigned Franchisee shall remain personally liable in all
respects under the Unit Franchise Agreement and all the other undersigned
officers, directors and stockholders of the corporation intending to be
legally bound hereby, agree jointly and severally to be personally bound by
the provisions of the Unit Franchise Agreement, including the restrictive
convenants contained in Article XIV thereof, to the same extent as if each of
them were the Franchisee's obligations set forth in the Agreement.
2. The undersigned agree not to transfer any stock in the corporation
without the prior written approval of the Franchisee and agree that all stock
certificates representing shares in the corporation shall bear the following
legend:
"The shares of stock represented by this certificate are subject to the
terms and conditions set forth in a Unit Franchise Agreement dated
_______________, 19___, between ____________________ and New World Coffee &
Bagels, Inc.
3. _________________________________ or his designee shall devote his
best efforts to the day-to-day operation and development of "New World Coffee
& Bagels" Store.
4. _________________________________ Hereby agrees to become a party to
and to be bound by all of the provisions of the Unit Franchise Agreement
executed on the date set forth below between Franchise and New World Coffee
& Bagels, Inc., to the same extent as if it were named as the Franchisee
herein.
FRANCHISOR:
NEW WORLD COFFEE, INC.
By:______________________________
FRANCHISEE:
By:______________________________
(This Page Intentionally Left Blank)
EXHIBIT "G"
TO FRANCHISE AGREEMENT
DATED __________, ____ BETWEEN
NEW WORLD COFFEE & BAGELS AND
-----------------
NON-DISCLOSURE AND NON-COMPETITION AGREEMENT
THIS AGREEMENT is made by and between NEW WORLD COFFEE & BAGELS, INC.,
a Delaware corporation (the "Franchisor") and
(the "Franchisee"), and (the "Manager"), both of whom
shall be collectively referred to as "Franchisee".
WHEREAS, the Franchisor has developed an established business and is
engaged in the development, marketing and sale to franchisees of an efficient
and distinctive system of training employees, preparing, serving,
merchandising, and selling proprietary coffee, bagels and bakery products,
salads, fancy cream cheeses, deli products and other non-alcoholic beverages,
served by a distinctively uniformed staff, and well trained, in distinctively
designed, furnished, decorated and equipped stores under the name "New World
Coffee & Bagels"; and
WHEREAS, the Franchisor has developed and uses the name "New World
Coffee & Bagels" and associated service marks, designs, and symbols in the
design and appearance of its stores (collectively referred to as the
"Marks"), identifying the goodwill which the Franchisor has developed in
connection with the operation of "New World Coffee & Bagels" stores by the
Franchisor and its franchisees (all of which is hereinafter referred to as
the "System"); and
WHEREAS, the Franchisor desires to preserve the Marks and the System,
and has plans, where profitable, to increase the number of "New World Coffee
& Bagels" stores within the United States and elsewhere; and
WHEREAS, the Franchisee desires to obtain and maintain the right to own
and operate one or more "New World Coffee & Bagels" stores and the Franchisor
desires to grant such right to Franchisee subject to the terms set forth
below.
WHEREAS, the Franchisee's store Manager has been hired by Franchisee to
run the day to day activities of Franchisee's store and such Manager must
therefore be bound by the same confidentiality and non-competition agreement
that Franchisee is bound by.
IN CONSIDERATION of these premises, and the conditions stated herein,
the parties agree as follows:
1. Purpose of Agreement. The Franchisor is placing the Franchisee in
a position of trust and confidence in order to aid the Franchisor in its
development, marketing, sale and expansion of the System. As a precondition
of the grant of the right to own and operate a "New World Coffee & Bagels"
store, the Franchisor desires to receive from the Franchisee (i) an agreement
not to disclose certain information relating to the Franchisor's business,
(ii) an agreement not to compete against the Franchisor for a certain period
of time and (iii) an agreement concerning the ownership of certain
information. This Agreement sets forth the terms of their agreements and
understandings.
2. Franchisor Ownership of Materials. All information, ideas,
research, methods, techniques, specifications, guidelines, secret recipes,
manuals, procedures, systems, improvements, notes, data, tapes, reference
items, financial information, literature, files, supplier lists, notebooks,
calendars, sketches, drawings, memoranda, records and copyrighted and other
materials, including the Franchisor's Confidential Operating Manual, and the
goodwill associated with them, which in any way relate to the Franchisor's
past, present or potential business or which were prepared or received by the
Franchisee as a franchisee of the Franchisor and a participant in the System
(hereinafter collectively referred to as "Confidential Information") are the
exclusive property of the Franchisor. Franchisee agrees to deliver to the
Franchisor all copies of such materials including the Franchisee's own
personal work papers, which are in the Franchisee's possession or under the
Franchisee's potential control at the request of the Franchisor or, in the
absence of such a request upon the termination of that certain Franchise
Agreement dated even date herewith between Franchisor and Franchise (the
"Franchise Agreement").
3. Confidential Information. The Franchisee acknowledges that the
Franchisor's Confidential Information is a valuable and unique asset which
the Franchisee holds in trust for the Franchisor's sole benefit. The
Franchisee agrees that the Franchisee shall not, at any time during and for
a period of fifty (50) years after the Franchisee ceases to be a franchisee
of the Franchisor or a participant in the System, use for itself or for
others, or disclose to any person, corporation or other entity for any
reason, any of the Franchisor's Confidential Information, without the prior
written consent of the Franchisor.
4. Trade Secrets. The Franchise acknowledges that the Franchisor's
Confidential Information and its methods and techniques of operation, and
food preparation, merchandising, recipes, specifications, its financial
condition, customer service, marketing and pricing strategies, as well as the
information compiled and developed regarding improvements or enhancements to
the System, including the Confidential Operating Manual, are uniquely
valuable to the Franchisor and have been developed through considerable
expense and effort, and thus are not usually ascertainable by a competitor
without considerable investment of effort and expense ("Trade Secrets").
In light of the need to protect and preserve the confidentiality of
these Trade secrets and in consideration of Franchisee's continued right to
own and operate a "New World Coffee & Bagels" store, the Franchisee agrees,
at all times while a franchise of the Franchisor and for as long as
Franchisor remains in business anywhere in the world, to respect the
confidentiality of the Franchisor's Trade Secrets, to use them solely for the
benefit of the Franchisor's business, and to refrain from disclosing or
making available the Trade Secrets to any third party without the prior
written consent of the Franchisor. The Franchisee further agrees to take all
reasonable security measures to ensure that the Franchisee's employees comply
with this Agreement and such other security measures as are reasonably
requested by the Franchisor to prevent accentual disclosure.
5. Assignment of Inventions. All ideas, improvements, processes,
names, menu items, and enhancements to the System or which relate to or are
useful to the Franchisor's business which the Franchisee, alone or with
others, may invent, discover, make or conceive ("Inventions") are the
exclusive property of the Franchisor, and the Franchisee shall promptly and
fully disclose them of the Franchisor. At any time, at the Franchisor's
request and expense, the Franchisee shall, without further compensation: (i)
promptly record such Inventions with the Franchisor; (ii) execute any
assignments and other documents the Franchisor deems desirable to protect its
rights in the Inventions; and (iii) assist the Franchisor in enforcing its
rights with respect to these Inventions.
6. Restrictions on Unfair Competition. It is recognized by the
Franchisee that as the natural result of the Franchisee's participation in
the System as a franchisee of the Franchisor, Franchisee will gain access to
the Franchisor's Trade Secrets and Confidential Information, and will gain
the trust, confidence and respect of the Franchisor's landlord's, customers
and suppliers. The Franchisee acknowledges that the Franchisor has a
legitimate need to protect itself against unfair competition by its
franchisees and their employees. Therefore, in consideration for the
Franchisee's participation in the System as a franchisee of the Franchisor,
the Franchisee agree that while a franchisee of the Franchisor and for two
(2) years after termination of the Franchise Agreement, regardless of the
circumstances giving rise to the termination, or after the Franchisee ceases
to be a participant in the System, and within the Area of Minimum Competition
as defined in Article XIV of the Franchise Agreement, Franchisee shall not:
(a) Have or acquire an interest in a similar business to that
offered or developed by the Franchisor which provides the same or
substantially similar products as those sold, distributed, manufactured or
furnished by the Franchisor during the term of the Franchise Agreement. For
purposes of this Agreement, "similar business" means a food service outlet
that sells bagels or cream cheese or muffins or coffee. ("Products");
(b) Engage, directly or indirectly, on the Franchisee's own
behalf, or on behalf of any other person, firm, partnership or corporation,
in providing, assisting, instructing or supervising the marketing,
distribution or sale of the Products of any similar business to those offered
and provided or manufactured by the Franchisor as of the termination of this
Agreement;
(c) Compete, directly or indirectly, with the Franchisor in the
offering, distribution or sale of products similar to the Products offered or
provided or manufactured by Franchisor as of the termination of this
Agreement. Prohibited competition under this subsection (c) may include, but
is not limited to, the solicitation of, attempted solicitation, or other
contacts with franchisees, landlords, suppliers and customers of the
Franchisor for the purpose of offering, providing or delivering Products or
services similar to those offered and provided by the Franchisor to the
public; or the request, suggestion or advice to Franchisees, landlords,
suppliers or customers, either directly or indirectly, to withdraw, curtail,
limit or cancel their business with the Franchisor; or to disclose, directly
or indirectly, to any other person the names and addresses of franchisees,
landlords, suppliers and customers of the Franchisor; or the terms and
conditions of the Franchisor's contracts with suppliers of these
Products;
(d) Hire or engage, or attempt to hire or engage, directly or
indirectly, any individual who is an employee of the Franchisor at the time
of such solicitation, or was an employee during the calendar year immediately
preceding the Franchisee's termination as a participant in the System as a
franchisee of Franchisor, whether such actions are undertaken on behalf of
the Franchisee or on behalf of another entity; or
(e) Otherwise take direct actions to disrupt the operations of the
Franchisor or interfere with the Franchisor's performance of its contracts
with third parties.
7. Enforcement.
(a) Injunction. The Franchisee understands and agrees that the
Franchisor will suffer irreparable harm if Franchisee breaches any of
Franchisee's obligations under this Agreement, and that monetary damages
shall be inadequate to compensate the Franchisor for any such violation.
Accordingly, the Franchisee agrees that in the event Franchisee violates or
threatens to violate any of the provisions of this Agreement, the Franchisor,
in addition to all other remedies or damages which it may have, shall be
entitled to seek an injunction to prevent or to restrain any such violation
by the Franchisee or by any or all of the Franchisee's directors,
stockholders, officers, partners, employees, agents or any other person
directly or indirectly acting for, on behalf of or with the Franchisee. The
Franchisee consents to the seeking of the injunction as being a reasonable
measure to protect the Franchisor's rights.
(b) Jurisdiction. The Franchisee agrees that any lawsuit brought
by the Franchisor to enforce its rights under this Agreement shall be brought
in the appropriate court located in the State of New York, County of
Manhattan, and the Franchisee agrees and consents to the jurisdiction of such
court to resolve all disputes which arise out of this Agreement or any
alleged breach thereof in a state court, regardless of Franchisee's residency
at the time such suit is filed. Any lawsuit brought against the Franchisor
or its officers, directors or agents arising out of this Agreement, or any
alleged breach thereof, must be brought within one (1) year of the event
giving rise to the cause of action. The failure to commence such action by
or on behalf of the Franchisee within this time period shall serve to bar any
rights the Franchisee may have against the Franchisor or its officers,
directors and agents.
(c) Costs. The Franchisee further agrees that if he/she acts in
any manner which causes the Franchisor to seek any form of judicial relief or
remedy against Franchisee, the Franchisor, in addition to its other remedies,
shall be entitled to recover from the Franchisee all costs incurred,
including its attorney's fees.
8. Reasonableness of Restrictions: Severability. The Franchisee has
read and considered carefully the provisions of sections 1 through 7 of this
Agreement, and agrees that the restrictions are fair and reasonably required
for the protection of the interests of the Franchisor, its business and its
officers, directors and employees, even though no geographic limitation is
included because of the national nature of the franchise business. The
Franchisee further agree that the restrictions set forth in this Agreement
shall not impair Franchisee's ability to secure employment or acquire an
interest in a business in another field of choice, other than the restricted
field described in section 6.
9. Miscellaneous.
(a) All agreements and covenants contained herein are severable.
If any of them, or any part or parts of them, shall be held invalid by any
court of competent jurisdiction for any reason, then the Franchisee agrees
that the court shall have the authority to reform and modify that provision
in order that the restriction shall be the maximum necessary to protect the
Franchisor's legitimate business needs as permitted by applicable law and
public policy. In so doing, the Franchisee agrees that the court shall
impose the provision with retroactive effect as close as possible to the
provision held to be invalid. Further, the Franchisee agrees that a breach
or alleged breach by the Franchisor of any obligation owed by the Franchisor
shall not affect the validity or enforceability of the provisions of this
Agreement.
(b) This Agreement was entered into and shall be governed by the
laws of the state of New York.
(c) No delay or failure by the Franchisor to exercise any right
under this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right provided herein, and no waiver
of any violation of any terms and provisions of this Agreement shall be
construed as a waiver of any succeeding violation of the same or any other
provision of this Agreement.
(d) In the event that any provision of this Agreement, or a
portion thereof, shall be held to be invalid or unenforceable, this ruling
shall not effect in any manner the validity of the remaining provisions.
(e) The rights and obligations of the Franchisor under this
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto, as well as the affiliates of the Franchisor and any future successors
and assigns of the Franchisor.
(f) No modification of this Agreement shall be valid unless it is
in writing and signed by both the Franchisee and an authorized representative
of the Franchisor. This Agreement contains the entire agreement between the
parties and is expressly intended by the Franchisee and the Franchisor to
supersede and replace any prior agreements on these issues between the
parties.
(g) The Manager, if any, hereby executes this Agreement to
evidence his/her or their consent to be bound by each and every provision.
IN WITNESS WHEREOF, the Franchisor and the Franchisee attest that each
has read and understands the terms of this Agreement, and voluntarily signed
this Agreement on this ____ day of __________, 19__.
FRANCHISOR:
NEW WORLD COFFEE & BAGELS, INC.
By:______________________________
FRANCHISEE:
By:______________________________
MANAGER:
By:
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EXHIBIT "H"
ADDENDUM TO NEW WORLD COFFEE & BAGELS AGREEMENT
FOR A SATELLITE UNIT
Type of Units: ______ Satellite ______ Cart ______ Kiosk ______ Branded Case
______ Other:________
Date of Franchise Agreement:
_____________________________________________________________
Franchisee:
____________________________________________________________________________
Addendum to Introduction: The Producing Unit
Products sold at the New World Coffee & Bagels Unit shall be produced in the
New World Coffee & Bagels unit owned by FRANCHISEE (or, if applicable, the
partners or shareholders of FRANCHISEE) located at
__________________________________________ (the "Producing Unit"), except as
New World Coffee & Bagels, Inc. may otherwise authorize and direct in
writing.
FRANCHISEE shall also participate in and make additional payments to the Fund
with respect to all advertising, marketing and other New World Coffee &
Bagels programs as from time to time are supported or required to be
supported by the Producing Unit.
Addendum to Article V: Initial and Continuing Fees Payable to Franchisor
5.9 The initial franchise fee for the Satellite Unit described herein shall
be _______________. Said fee shall be due and payable upon the execution of
this Addendum.
Addendum to Article VIII: Additional Obligations and Duties of Franchisee
8.22 The New World Coffee & Bagels unit is a non-producing New World Coffee
& Bagels sales outlet. Accordingly, FRANCHISEE shall not, without prior
written consent of New World Coffee & Bagels, manufacture any product at the
New World Coffee & Bagels unit, except as authorized or directed by New World
Coffee & Bagels, Inc. New World Coffee & Bagels reserves the right, in its
sole and absolute discretion, to require FRANCHISEE to manufacture, in whole
or in part, and at the New World Coffee & Bagels Unit products now or
hereafter designated as approved for sale at the New World Coffee & Bagels
Unit. Products not manufactured at the New World Coffee & Bagels Unit shall
be manufactured at the Producing Unit and at no other place unless prior
written approval is granted by New World Coffee & Bagels, Inc.
8.23 FRANCHISEE shall transport products and supplies from the Producing
Unit to this New World Coffee & Bagels Unit on a schedule and in a manner
acceptable to New World Coffee & Bagels, Inc. that ensures compliance with
federal, state and local regulation as well as New World Coffee & Bagels
quality, freshness and other standards and that an adequate supply of product
is available for sale.
8.24 FRANCHISEE shall purchase such refrigeration and or cooler equipment
that meets New World Coffee & Bagels's specifications. Such equipment shall
be required for all Branded Case Units.
Addendum to Article XII: Insurance
FRANCHISEE shall also maintain a policy or policies of product liability,
vehicle liability, and non-owned vehicle liability insurance coverages, in
the amounts set forth in Paragraph 12.1 A & D of the Franchise Agreement.
Addendum Article XVII.: Termination
17.1P FRANCHISEE shall be default under this Franchise Agreement if
FRANCHISEE (or, if applicable, the partners or shareholders of FRANCHISEE)
fails to comply with all the requirements imposed by the Franchise Agreement
for the Producing Unit.
Addendum to Article XVII.: Termination
17.1Q FRANCHISEE shall be in default under this Franchise Agreement if the
Franchise Agreement for the Producing Unit is terminated.
Addendum to Article XVII.: Termination
17.2D A thirty day cure period shall apply if FRANCHISEE (or, if applicable,
the partners or shareholders of FRANCHISEE) fails to comply with any of the
requirements imposed by the Franchise Agreement for the Producing Unit.
Addendum to Article XVII.: Termination
17.2E No cure period shall be available if the Franchise Agreement for the
Producing Unit is terminated.
Addendum to Article XX: Transferability of Interest
20.9 If a transfer, alone or together with other previous, simultaneous or
proposed transfers, whether related or unrelated, would have the effect of
transferring an interest of fifty percent (50%) or more of the franchise of
the New World Coffee & Bagels Unit or the entity holding such franchise, to
someone other than an original signatory of this Franchise Agreement, the
following provisions shall apply: The proposed transferee must satisfy New
World Coffee & Bagels then current multi-unit owner guidelines; have
ownership interest in a full producing New World Coffee & Bagels unit at the
time of transfer (and continuously thereafter during the term of the
transferee's Franchise Agreement for the New World Coffee & Bagels unit),
which New World Coffee & Bagels, Inc., in its sole and absolute discretion,
authorizes as the Producing Unit for the New World Coffee & Bagels Unit.
Addendum to Article XX: Transferability of Interest
20.10 If a transfer, alone or together with other previous, simultaneous or
proposed transfers, whether related or unrelated, would have the effect of
transferring an interest of fifty percent (50%) or more of the franchise
licensed by the Franchise Agreement for the Producing Unit, or the entity
holding such franchise, to someone other than an original signatory of the
Franchise Agreement for the Producing Unit, such transferee must also qualify
as a transferee of the New World Coffee & Bagels unit and purchase an
equivalent interest in the franchise for the New World Coffee & Bagels Unit.
FRANCHISEE and the partners or shareholders thereof shall execute an
amendment to the Franchise Agreement for the Producing Unit in a form
satisfactory to New World Coffee & Bagels, Inc.
Miscellaneous
In all other respects, except as specifically modified herein, the parties do
hereby ratify and affirm the terms of the Franchise Agreement.
The Addendum is attached to and made a part of the Franchise Agreement.
NEW WORLD COFFEE & BAGELS, INC.
By:___________________________
FRANCHISEE
___________________________
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