FRANCHISE AGREEMENT
-------------------
THIS AGREEMENT, made this 22nd day of February 1982 by and between
STUCKEY'S, INC. (hereinafter called "Company"), and XXXXXX'X INC. a Corporation
whose address is 000 XXXXXXXXX XX, XXXXXXXXXXX, XXX XXXXXX, 00000 (hereinafter
called "Dealer"), who is, or is to be, the owner lessee, or tenant of the
premises described in Section 1 herein.
W I T N E S S E T H:
THIS AGREEMENT is executed with the franchisee as a result of his
purchase of the franchise from franchisees to whom the Company originally
granted the franchise covered by this agreement. There is, therefore, no
provision in this agreement for an initial franchise fee.
WHEREAS, Company warrants that it is the owner of the entire right,
title and interest, together with all the good will connected therewith, in
various registered and common law trademarks and service marks, including,
although not limited to, the following:
(1) Registered Trademarks:
x. XXXXXXX'X
x. XXXXXXX'X with Carriage and Lace Design
x. XXXXXX'X
x. XXXXXXX'X GASOLINE
(2) Registered Service Xxxx:
STUCKEY'S
(3) Unregistered Service Xxxx:
STUCKEY'S PECAN SHOPPE
all of which are used in the business of Stuckey's Inc.: and
WHEREAS, the Company manufactures, distributes and sells certain
products under the trademarks listed above; and
WHEREAS, the Company has created and developed a chain of distinctive
style and type of drive-in confection and gift stores operated under the name
STUCKEY'S PECAN SHOPPE, in which it distributes and sells pecans, pecan
products, jellies, jams, preserves, foods and confections, souvenirs, gifts and
novelties, petroleum products, and other approved commodities, and wherein it
also provides a fast food service with distinguishing characteristics, all of
which, in part or otherwise, may be changed, added to, improved and further
developed from time to time; and
WHEREAS, by reason of maintaining high standards of quality for the
goods it manufactures and sells and for the goods of others offered for sale in
its STUCKEY'S PECAN SHOPPE stores, and by reason of maintaining high standards
of service specifications in connection with the sale of such products in, and
the operation of, such stores, both those of its ownership as well as those
stores owned by others and operated under licenses from the Company, the Company
has successfully developed and built a strong demand for the products sold and
the services provided in its stores, and has successfully established a
reputation and good will related to its stores operated under the name STUCKEY'S
PECAN SHOPPE: and
WHEREAS, the Dealer, being fully informed as to the good reputation,
required high standards and legal rights of the Company, desires to engage in
the business of conducting a STUCKEY'S PECAN SHOPPE at and from the premises
described in Section 1 on the terms and conditions herein set forth; and
WHEREAS, the Company is ready and willing to license the Dealer to
establish and operate a STUCKEY'S PECAN SHOPPE outlet at the location described
in Section 1 on the terms and conditions hereinafter set forth for the selling
of products manufactured or distributed by the Company and other merchandise
approved by the Company, and providing of services identified with the operation
of a STUCKEY'S PECAN SHOPPE, all in accordance with standards of service
specified by the Company;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and promises herein made by the parties to each other and for other
good consideration acknowledged by each to be satisfactory, the parties hereto
agree as follows:
1. GRANT OF FRANCHISE:
------------------
The Company hereby grants to Dealer, and Dealer hereby accepts, subject
to the terms and conditions hereof, a franchise and license to operate a
STUCKEY'S PECAN SHOPPE and to use in connection therewith the trade names,
trademarks and service marks set forth in the prefatory language to this
franchise agreement. The franchise and license herein established are granted in
respect to the specific location at and defined as:
STUCKEY'S PECAN SHOPPE Located in Xxxxxxx 0, Xxxxxxxx 00,
XXXXXXXXX XXXXXXXX Range 00 Xxxx
XXXXXXXXXX 00 & XXXXX XX. 000
DEMING, NEW MEXICO 88036
While this agreement shall be and remain in effect,
(a) Dealer shall use the said premises exclusively for the
business of a STUCKEY'S PECAN SHOPPE, including the operation
of a fast food service, according to standards adopted by the
Company for its STUCKEY'S PECAN SHOPPE system, and such other
features and services as may be adopted from time to time by
Company in the operation of the system and Dealer shall not
use, allow or permit the said premises to be used for any
other purpose unless approved in writing by the Company;
(b) Dealer shall have the non-exclusive privilege of selling
Company's products and the non-exclusive privilege of using
the name "STUCKEY'S" as applied to STUCKEY'S pecans, pecan
meat, pecan candies and other pecan products, jellies, jams,
preserves, confections, souvenirs, gifts and novelties, and
the privilege of using other trademarks and service marks of
Company related to the operation of a STUCKEY'S PECAN SHOPPE,
including a fast food service and such other features and
services as may from time to time be made a part of and
identified with the STUCKEYS PECAN SHOPPE system;
-2-
(c) Dealer may advertise the business operated under this license
under the name "STUCKEY'S PECAN SHOPPE". and Dealer may use on
said premises the Company's trade names, trademarks, designs,
advertising and form of structure.
2. LOCATION CLAUSE:
---------------
The Dealer acknowledges that the franchise and license granted under
this Agreement are solely for the specific location set forth in Section 1.
Nothing in this Agreement shall be construed to authorize or permit Dealer to
use any right, privilege or license herein granted at or in any other location
or for any other purpose; and Dealer shall not, except pursuant to agreement in
writing with the Company, engage in the business of this franchise at Any place
other than the place described above, provided, however, that Dealer shall be
permitted to erect billboards at other locations consistent with Company's
policies regarding outdoor advertising, and Dealer shall be permitted to engage
in other advertising and promotions of its franchise and license granted by this
Agreement.
3. RESTRICTION ON GRANT OF FRANCHISES WITHIN SPECIFIC AREA:
-------------------------------------------------------
The Company agrees that it shall not, during the term of this
Agreement, grant a similar franchise or license to any other person,
partnership, corporation, or other entity to operate or own a STUCKEY'S PECAN
SHOPPE, or erect a Company owned STUCKEY'S PECAN SHOPPE within the below
described area:
Deming, New Mexico: Beginning at the present store location on
Interstate 10, 100 miles on the same side of the highway in both
directions and 50 miles on Interstate 10 in both directions on the
opposite side of the highway.
4. PURCHASE OF TRADEMARK PRODUCTS:
------------------------------
Company will sell to Dealer all products bearing any trademark
identified in the preamble to this Agreement, subject to the availability
thereof, that Dealer shall order for the business licensed hereunder; and
subject to the terms and conditions hereof, Dealer will purchase, stock, offer
and sell all products usually offered and sold in STUCKEY'S PECAN SHOPPESL it
being the purpose of this provision to assure that all STUCKEY'S PECAN SHOPPES
are (i) supplied with Stuckey's manufactured and trademarked products, and (ii)
are identified with the national image of the STUCKEY'S PECAN SHOPPES and the
products and services available therein. Dealer shall have the obligation to
develop and promote diligently the sale of Stuckey's products from the premises
above and otherwise to use his best efforts in developing and promoting the
business of the franchise herein granted.
Dealer will not sell from the above premises any products manufactured
or sold by others unless the same are approved by the Company, which approval
the Company shall not unreasonably withhold. A dealer desiring to sell products
and services or to use supplies other than those offered by the Company shall
submit samples thereof to the Company in accordance with reasonable procedures
established by the Company. If necessary, the Company shall have sufficient time
to test, make laboratory analysis, or other review of the samples before
approving or rejecting the submittal. Company shall advise Dealer of its
approval or rejection within forty-five (45) days of Dealer's submittal in
respect to a request for approval. Any rejection shall be given in writing. An
approval shall be deemed given after the expiration of the forty-five (45) days
referred to above.
5. COMPANY TRADEMARKS:
------------------
Dealer acknowledges the validity and the ownership in the
Company of the trade names, trademarks, service marks and designs employed by
the Company in the operation of
-3-
STUCKEY'S PECAN SHOPPES. Dealer shall use his best efforts in developing and
promoting such trade names, trademarks, service marks and designs. Dealer agrees
to use such trade names, trademarks, service marks and designs only as permitted
by the Company, and all good will created from such usage and developed in
conducting the business of the STUCKEY'S PECAN SHOPPE covered by this Agreement
shall inure to the benefit of the Company.
Dealer shall not use the name STUCKEY'S, or any name visually or
phonetically similar thereto as part of any corporate name, or as any prefix,
suffix or other modifying word, phrase, term, sign or symbol not expressly
authorized by Company. Dealer shall not use the name STUCKEY'S or any name
visually or phonetically similar thereto, on any product other than those
manufactured and sold by Company, unless expressly approved by the Company in
writing.
6. STANDARDS:
---------
During the term of this Agreement, from time to time, the Company shall
determine and approve standards of quality for all commodities bought, used or
sold on the above described premises, standards of service in connection with
their sale, standards of quality for all furnishings and equipment required in
the conduct of the business, and generally all specifications, standards and
operating procedures for the STUCKEY'S PECAN SHOPPES, including, but not limited
to, specifications, standards and operating procedures relating to:
(a) The safety, maintenance, cleanliness, function and appearance of
the Dealer's premises and its fixtures, equipment and signs;
(b) Qualifications, dress, general appearance and demeanor of
employees;
(c) Quality, style, warranty, and other characteristics of all
clothing and other merchandise carried for sale and all bags,
boxes and other packaging used in the sale thereof;
(d) Hours during which the store will be opened for business;
(e) Merchandise inventory requirements;
(f) Advertising and promotion;
(g) Use of standard forms;
(h) Extension of credit and acceptance of credit cards;
(i) Use and illumination of exterior and interior signs, posters,
designs and similar items;
(j) Government regulations;
(k) Physical and other inventories;
(1) Bookkeeping and record keeping; and
(m) The handling of returns and customer complaints and adjustments.
Company agrees to use its best efforts to impose these standards on all
other STUCKEY'S PECAN SHOPPES, whether Company owned or franchised.
-4-
To attain further uniformity in the operation of the STUCKEY'S PECAN
SHOPPES and in the use of the trademarks and service marks licensed hereunder,
Dealer shall display only such signs or advertising as permitted by the Company.
All accoutrements such as cups, napkins, matches, bags, paper goods and the like
shall be of a quality consistent with that prescribed by the Company and shall
bear only such designs, colors, names and symbols as specified and approved by
the Company.
The Company shall disclose to and keep Dealer informed of its standard
operating procedures, and shall make available and provide Dealer with the
latest editions of its Store Operations Manual, Food Service Manual, and any
other relevant manual in effect from time to time, or other rule, regulation or
standard involving any other relevant manual in effect from time to time, or
other rule, regulation or standard involving any other items set forth in this
section. The Dealer shall comply with the standards and procedures prescribed
and communicated to him by the Company in order to assure the uniform
maintenance of the distinguishing characteristics of the STUCKEY'S PECAN
SHOPPES. In the event that the Company makes any significant policy change in
the STUCKEY'S PECAN SHOPPES system, including but not limited to the following:
the marketing of new products, modification of products, discontinuance of
products, additions, changes or modifications in the design of the exterior or
the interior of the building structure, and the like, the Company shall discuss
such proposed change with the Franchise Advisory Board before notifying Dealer
thereof.
7. TRAINING:
--------
To assist the Dealer in meeting and complying with the Company's
standard operating procedures, Company shall train the person engaged by Dealer
from time to time to be manager of the STUCKEY'S PECAN SHOPPE licensed by this
Agreement, in all phases of the operation of the business of a STUCKEY'S PECAN
SHOPPE in a training course specifically designed for such purpose. Expenses
incurred by the Dealer, including transportation and living expenses, wages and
other employee costs during such period of training shall be borne by Dealer;
but no charge shall be made by Company to Dealer for the training so provided.
Company shall maintain supervisory personnel for the purpose of
monitoring the conduct of all STUCKEY'S PECAN SHOPPES and effecting compliance
with operating procedures established for them in a manner consistent with and
which will not adversely affect the image of the STUCKEY'S PECAN SHOPPES, and
for the further purpose of giving such assistance to the Dealer as may be needed
and agreed upon from time to time, all without any additional charge to the
Dealer.
8. RIGHT TO INSPECTION:
-------------------
Company shall have the right at alltimes during Dealer's normal
business hours to enter upon the premises set forth above and to inspect
Dealer's facilities and operations to determine and assure compliance by Dealer
with the standards of quality and service prescribed by Company. Company shall
make available to Dealer within a reasonable period of time any report of such
inspections.
9. LAWS AND ORDINANCES:
-------------------
Dealer shall have the obligation to ensure that its business and
premises are conducted and maintained in compliance with all applicable laws and
ordinances.
10. SALES STAFF:
-----------
Dealer shall maintain an adequate staff of sales people and clerks and
a manager of the store who shall meet the standards prescribed by Company for
managers.
-5-
11. BUILDING, CONSTRUCTION AND MAINTENANCE:
--------------------------------------
In the event a STUCKEY'S PECAN SHOPPE building is to be constructed on
the premises covered by this Agreement, Dealer shall not undertake construction,
and no reconstruction or alteration of an existing STUCKEY'S PECAN SHOPPE
structure, shall be undertaken without the written approval of the Company,
which approval shall not be unreasonably withheld and no substantial change or
modification shall be made in any building plan or specification without the
prior written consent of the Company, which approval shall not be unreasonably
withheld. The Company shall furnish plans and specifications for a STUCKEY'S
PECAN SHOPPE building to be constructed; and may supervise construction or
alteration so as to conform therewith. Dealer shall keep all structures in good
repair and well painted inside and outside. It shall at all times maintain the
premises, interior and exterior of buildings, salesroom, restrooms, storerooms,
and service station in a clean, orderly and sanitary condition satisfactory to
Company. Dealer shall do reasonable redecorating, restoration and repair as from
time to time may be reasonably required by the Company to meet the standards of
a STUCKEY'S PECAN SHOPPE operation.
12. SIGNS:
-----
Dealer shall prominently display on said premises advertising signs of
such nature, form, color, number, location, and size and composed of such
material as the Company shall direct or approve in writing.
In the event the Company disapproves of any Dealer's sign, the Company
shall give written notice to such Dealer and to the Franchise Advisory Board
explaining why such sign is not satisfactory to Company, and if such disapproved
sign is not corrected to Company satisfaction within a reasonable period of time
after written notice is received by the Dealer, provided that the Company
disapproval is not unreasonable, then Company shall have the right to enter upon
the premises for the purpose of removal thereof without paying therefor and
without being deemed guilty of trespass or any other tort.
In order properly to advertise the business, Dealer shall also erect
and maintain an adequate number of road signs upon a basis mutually satisfactory
to Dealer and the Company. Dealer shall incur all costs for such signs,
including, but not limited to, the construction, maintenance and insurance for
such signs.
13. ACCOUNTING AND FINANCIAL RECORDS:
--------------------------------
Dealer shall keep complete and up to date records regarding sales and
inventory, profit and loss from operations and financial standing of the Dealer,
and will permit the Company during normal business hours to inspect such records
and any tax returns of the Dealer. Dealer shall use cash registers having a
capacity to accumulate sales and otherwise of a number and type approved by the
Company.
In order to further the maintenance of a uniform accounting system and
practice, Company will advise and assist in setting up Dealer's books at no
extra charge to the Dealer and Dealer will permit an examination of his accounts
and records to be made by a person or persons, either in the employ of the
Company or acceptable to the Company, at such time or times as the Company may
designate in writing. A copy of a report of any such examination shall be
furnished both to Company and the Dealer. In the event that the books and
records of account of the Dealer are maintained by the Company on behalf of the
Dealer, the obligation of the Dealer under this paragraph shall be deemed to be
met. Company shall not be obligated to keep books of accounts for Dealer without
compensation.
-6-
14. INSURANCE:
---------
Dealer shall purchase and keep in force during the term of this
Agreement public liability and other insurance in amounts and with carriers
meeting the minimum requirements as specified by the Company from time to time
in writing to the Dealer, which insurance shall cover public liability risk of
all kind including claims of product liability; and all such liability insurance
policies shall include Pet Incorporated and Stuckey's Inc. as named insureds.
Dealer shall file with the Company appropriate certificates of insurance and
provide for copies of all notices of renewal or cancellation to be sent to the
Company. The types of insurance required of the Dealer by the Company and the
limits therefor initially are as follows:
15. CUSTOMER COMPLAINTS:
-------------------
Dealer shall give Company immediate notice of any injury to person or
damage to property occurring on Dealer's premises or arising out of the
operation of its business as a STUCKEY'S PECAN SHOPPE. Dealer will receive,
investigate and adjust all complaints, whether received directly by Dealer or
forwarded to Dealer by the Company, arising out of the operation of its
business, all with a view to securing and maintaining the good will of the
public toward STUCKEY'S products and services. Dealer shall indemnify Company
and save Company harmless from and against all claims for damages to person or
property occurring on Dealer's premises or arising out of the operation of
Dealer's business, unless occurring as a result of a breach by the Company of
its obligations set forth in the next succeeding section of this Agreement.
16. PRODUCT WARRANTY:
----------------
Company warrants that all food products sold by it shall be as of the
date of delivery to Dealer neither adulterated nor misbranded within the meaning
of the Federal Food, Drug and Cosmetic Act, as amended, or pure food laws or
ordinances of the state or city in which Dealer is located, and will be products
which are not proscribed from introduction into interstate commerce under the
Federal Food, Drug and Cosmetic Act. Company shall indemnify Dealer and save
Dealer harmless and shall defend Dealer from and against any and all charges,
actions and proceedings, whether instituted by any government or any private
individual or entity, on account of any alleged adulteration or misbranding
which is in violation of the foregoing warranty.
17. ADVERTISING FEE:
---------------
Dealer shall pay to Company with each billing an amount equal to 4% of
the products sold through the warehouse with respect to which the company
customarily assesses an advertising fee on sales in transfers to franchisee and
company-owned pecan shoppes. These monies shall be placed in a special fund,
which shall consist of contributions of all STUCKEY'S PECAN SHOPPES (including
Company owned shoppes) and, shall be used in the advertising and promotion of
STUCKEY'S PECAN SHOPPES. Such advertising and promotion shall be created and
executed by the Company and the time for, methods of, and extent of all such
programs shall be determined solely by the Company.
Dealer may also establish advertising and promotional programs and
materials of its own, provided, however, that all advertising and promotional
material proposed by Dealer shall be approved by the Company prior to use.
18. PETROLEUM PRODUCTS:
------------------
It is an integral part of the style and pattern of business of
STUCKEY'S PECAN SHOPPES to provide for the sale of petroleum products. Company
shall, during the term
-7-
hereof, provide specifications and standards to the Dealer for the operation of
such facilities and shall render such supervision as to assure compliance
therewith. It shall further establish procedures for the use of appropriate
credit cards in the purchase of petroleum products and shall advise and keep
Dealer informed thereof and furnish Dealer with supplies to be used in such
credit procedures.
The Dealer and Company both acknowledge and Dealer agrees, that Company
in negotiating contracts for the purchase of gasoline, may be paid a gasoline
commission or fee arising out of the sale of gasoline dispensed by Dealer at
Dealer's location.
19. APPLICATION OF AGREEMENT TO LOCATION FOLLOWING CONDEMNATION:
-----------------------------------------------------------
Should the specific location set forth in Section 1 be condemned by
governmental authority or any part thereof be condemned so that the location may
no longer be suitable for the operation of the STUCKEY'S PECAN SHOPPE franchise
granted by this Agreement, this Agreement shall be applicable to a new franchise
location that may be agreed upon between the Company and the Dealer provided,
however, that should a new location not be agreed upon between the Company and
the Dealer within two (2) years after the condemnation, then this Agreement
shall terminate. If for any other reason the Company and Dealer agree that it is
in the best interest of a franchise to discontinue the operation of the
STUCKEY'S PECAN SHOPPE at the specific location set forth in Section 1, the
parties may agree to move the franchise to another location and all the terms
and provisions of this Agreement shall continue in full force and effect
applicable to the franchise at such new location provided, however, that such
agreement shall be evidenced in writing and further provided that this section
shall not be construed to impose any costs of purchasing land, constructing
buildings, or otherwise related to said move, on the Company.
20. TERM OF AGREEMENT AND TERMINATION:
---------------------------------
Unless terminated as otherwise herein provided, the term of this
Agreement shall be for ten (10) years from the date hereof, and may be extended
thereafter at the option of the Franchisee for successive terms of five (5)
years upon Franchisee giving at least ninety (90) days' written notice of
extension prior to the end of the term of this Agreement or the end of any
extended term hereof, provided that Franchisee shall not be in default of any
provision of this Agreement, and provided, further, that Franchisee shall
execute Company is then current standard form franchise agreement, which may
include higher percentage royalty and advertising fees than provided for herein.
During the life of this agreement, it is anticipated that Stuckey's
will continue to provide additional services, management expertise and
profitable growth opportunities. Some of which may require increases in the
royalty and/or advertising fee rate, subject to mutual agreement.
Notwithstanding the provisions of the foregoing paragraph, Franchisee may
terminate this Agreement at any time by giving Company ninety (90) days' written
notice of termination, and the Company may terminate this Agreement at any time
by giving ninety (90) days' written notice of termination to the Franchisee or
by giving written notice of termination to the Franchisee upon any of the
following conditions:
(a) The filing of a petition in bankruptcy by or against the
Franchisee, or any partner if the Franchise is a partnership;
(b) The making of an assignment for the benefit of creditors or
the institution of any proceeding under any state insolvency
law by the Franchisee, or any partner if the Franchise is a
partnership;
-8-
(c) The breach by Franchisee of any obligation of Franchisee under
this Agreement and the failure of the Franchisee to correct
such breach to the satisfaction of the Company upon demand and
within thirty (30) days thereafter.
Waiver, however occurring, by the Company of any specific default by
the Franchisee shall not affect or impair the Company's rights in respect to any
subsequent default whether of the same or a different kind. No delay or omission
of the Company to exercise any right arising from a default shall affect or
impair the Company's rights as to any such default or a future default. In the
event any bankruptcy or insolvency proceeding involves less than all parties
constituting the Franchisee, the Company shall not have the right to terminate
this Agreement as to the parties involved in such bankruptcy or insolvency
proceeding, provided said other parties elect in writing, within a reasonable
period of time after the filing of any such bankruptcy or insolvency proceeding,
to continue the STUCKEY'S PECAN SHOPPE established pursuant hereto and agree to
the terms and provisions of this Agreement for the unexpired term thereof.
21. ASSIGNMENT:
----------
Dealer shall not sell, transfer or assign this Agreement, or any
interest herein, and shall not sell, transfer, assign, lease or sublet or offer
to sell, transfer, assign or sublet (except as security for indebtedness
incurred in connection with the business being conducted hereunder) any interest
in the premises, or any part thereof, used in the operation of this franchise,
or in the business thereon conducted, or in any equipment or furnishings located
thereon which are standard to STUCKEY'S PECAN SHOPPES, without first offering
the same to the Company in writing at a stated price and upon stated terms which
offer the Company may accept within sixty (60) days, and if the Company does not
accept such offer with the sixty day period, then Dealer may within the sixty
days thereafter, sell, transfer, assign, lease or sublet such interest as the
case may be, but not at a lower price nor on more favorable terms than offered
to the Company, provided, however, that no sale, transfer, assignment, lease or
subletting to a third party shall be made without the prior written consent of
the Company, which consent the Company will not unreasonably withhold, and
provided further that it shall not be deemed unreasonable for the Company to
withhold its consent to a sale, transfer or assignment of this Agreement, or any
interest herein, if the transferee shall not agree in writing to take subject to
the terms and provisions of this Agreement for the unexpired term thereof.
Notwithstanding any of the foregoing,
(i) If Dealer hereunder constitutes more than one individual,
corporation, partnership or other entity, any one thereof
shall have the right to sell, transfer, assign, lease or
sublet any interest in the premises on which the franchise is
located, any interest in the franchise itself, or any interest
in the franchise itself, or any interest in the building
inventory, equipment, furniture or furnishings used for the
business of the franchise to any other individual,
corporation, partnership or other entity who, at the time of
such sale, transfer, assignment, lease or subletting is also
one of the individuals, corporations, partnerships, or other
entities constituting the Dealer under this Agreement;
(ii) Dealer, or any individual Dealer if Dealer is more than one
person, may during his lifetime, give to any trust, person,
corporation or other Donee whatsoever any interest in the
premises on which the franchise is located, any interest in
the franchise itself, or any interest in the building,
inventory, equipment, furniture, or furnishings used in the
business of the franchisee and said Donee shall be entitled to
all rights hereunder previously
-9-
held by the Dealer or such individual; provided, however, that
the Donee agrees in writing addressed to Company within a
reasonable period of time after such gift to be bound by the
terms and provisions of this Agreement;
(iii) Any legatee or heir of the Dealer or individual Dealer if
Dealer is more than one person, shall upon the death of the
Dealer be entitled to all the rights hereunder previously held
by the Dealer or such member; provided, however, that such
legatee or heir agrees in writing within a reasonable period
of time after receiving any such property to be bound by the
terms and provisions of this Agreement;
(iv) Dealer may incorporate its business and may assign its
interest in this Agreement to such corporation provided that
Dealer shall be the owner of at least fifty-one percent (51%)
of the stock of such corporation and that the activities of
the corporation are confined exclusively to the operation of
the STUCKEY'S PECAN SHOPPE hereby licensed. In the event
Dealer is a corporation, or becomes a corporation and assigns
this Agreement to said corporation, then at any time that
persons other than Dealer become directly or indirectly the
owners or controllers of more than forty-nine percent (49%) of
the stock of said corporation, this Agreement shall become
immediately terminable at the option of Company. Further, in
the event Dealer is a corporation, it shall not be deemed a
breach of this section for any shareholder in Dealer to sell,
assign, or transfer any shares to a member of his immediate
family.
22. OBLIGATIONS AFTER TERMINATION:
-----------------------------
Upon the sale by Dealer of the premises or property to the Company or
to a third party under the provisions of the preceding section, the obligations
and rights of this Agreement shall terminate, except in regard to the
obligations of Dealer to take action or to abstain from taking action after the
termination of this Agreement and the payment of all outstanding accounts.
In the event of termination of this Agreement without a concurrent
execution or assumption of Dealer's obligations hereunder by any assignee or
other successor in interest as herein permitted, the Company shall purchase from
the Dealer and the Dealer shall sell to the Company:
(a) All merchandise that is in a saleable condition manufactured,
distributed and/or packed under the STUCKEY'S label on hand in
Dealer's place of business or in Dealer's possession at
Dealer's net cost exclusive of transportation charges;
(b) Electrically lighted STUCKEY'S signs displayed on the building
or elsewhere on the premises that had been purchased from the
Company. The purchase price will be based upon 10%
depreciation per year, and with consideration given to the
condition of the sign with particular regard to unusual
deterioration, if any.
Upon the termination of this Agreement for whatever reason, Dealer
shall immediatel discontinue use of the name STUCKEY'S or any name visually or
phonetically similar, and shall discontinue at the above described premises the
use of all trade names, trademarks, service marks, signs, structures and form of
advertising indicative of a STUCKEY'S PECAN SHOPPE, or the business or products
thereof, and in the event said premises are not purchased by the Company, or are
not used with permission of Company by another in the business
-10-
of a STUCKEY'S PECAN SHOPPE, Dealer shall make such changes in signs or
buildings so as effectively to distinguish it from its former use and from other
STUCKEY'S PECAN SHOPPES.
If Dealer, after termination of this Agreement, shall refuse or neglect
to keep or perform the provisions of this section, Dealer shall reimburse
Company for all costs, attorneys' fees, and other expenses incurred in
connection with legal actions to require Dealer to comply herewith and, in
addition, Dealer shall pay to Company the sum of $500 per day as damages for all
the time that Dealer displays the name STUCKEY'S on outdoor advertising or on a
sign at the front of or on the building after thirty (30) days after the
termination date.
23. COVENANT NOT TO COMPETE:
-----------------------
While this Agreement is in effect, Dealer shall not engage in any
business the same as or similar to the business covered by this Agreement
located within the area set forth in Section 3.
24. DEALER NOT AN AGENT OR LEGAL REPRESENTATIVE OF COMPANY:
------------------------------------------------------
This Agreement shall not constitute Dealer the agent or employee, or
legal representative of the Company for any purpose whatsoever. The Company and
the Dealer are not and shall not be considered as joint venturers or partners or
as agents of each other. No representations shall be made by either party that
would create apparent agency, and neither party shall have the power to bind or
obligate the other except as provided in this Agreement
25. NOTICES:
-------
Any notice required to be given by either party to the other under or
in connection with this Agreement shall be in writing and delivered personally
or by certified or registered mail, return receipt requested, with adequate
postage thereon. Notices to Dealer shall be directed to Dealer or his
representative at Dealer's place of business. Notices to Company shall be
directed to the President, Stuckey's, Inc., 4501 Circle 00 Xxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx, 00000.
26. SEVERABILITY:
------------
If any provision of this Agreement shall be construed to be illegal or
invalid, the validity of any of the remaining portions of this Agreement shall
not be affected thereby.
27. ARBITRATION:
-----------
Any controversy or claim arising out of or related to this Agreement,
or the breach thereof, shall be settled by arbitration. The party initiating the
arbitration proceedings shall give written notice to the other party indicating
such party's desire to arbitrate, the section of this Agreement in dispute, and
the reasons therefor, and the name of the arbitrator selected by such party. The
other party shall give written notice within thirty (30) days thereafter,
indicating the name of the arbitrator selected by such party. The two
arbitrators so selected shall within a reasonable period of time select a third
arbitrator. The arbitration proceedings shall be held within a reasonable period
of time as selected by the arbitrators at a site located in the area set forth
in Section 3 selected by the arbitrators. Each party shall bear the expenses and
fee of the arbitrator selected by him but all other expenses and fees shall be
borne equally by the two parties. Judgment upon an award of a majority of the
arbitrators shall be binding and may be entered in any court having jurisdiction
thereof. Except as otherwise expressly provided, the proceedings shall be
conducted in accordance with the rules then prevailing of the American
Arbitration Association.
-11-
28. GENERAL:
-------
This Agreement cancels and supersedes any and all other agreements,
oral or written, among the parties with respect to the subject matter hereof and
contains all covenants and agreements between the parties with respect thereto.
No change in, addition to or erasure of any printed portion of this
Agreement (except filling in blank lines) shall be valid or binding upon the
Company unless the same is approved in writing by the President of the Company.
No agreement between the parties which is at variance with any of the
provisions of this Agreement or which imposes definite obligations upon either
party not specifically imposed by this Agreement or which is intended to be
effective or performed following the expiration or the termination of this
Agreement and imposes obligations or extends the time for performance thereof
other than as provided in this Agreement shall be binding upon either party
unless executed by Dealer and the President or Executive Vice President of
Company.
STUCKEY'S INC. XXXXXX'X, INC.
--------------------------
BY Xxx Xxxxxx Xxxxxxx X. Xxxxxx
----------------------------------- --------------------------
XXX XXXXXX, PRESIDENT XXXXXXX X. XXXXXX
Subject to Mutual
Acceptance of Attached
"Addendum"
NOTARY PUBLIC: Xxxxxx Xxxxxxx
-----------------
Notary Public, Georgia, State at Large
My Commission expires: My Commission Expires October 25, 1985
-------------------------------------------
ADDENDUM TO FRANCHISE AGREEMENT
INTERPRETATION AND COMMENT OF CERTAIN PROVISIONS IN STUCKEY'S, INC.,
FRANCHISE AGREEMENT AS AGREED UPON IN A TELEPHONE CONVERSATION BETWEEN
DEALER AND COMPANY HELD ON MARCH 24, 1982.
1. Page 3, Article 4, Paragraph 2, states that a dealer desiring to sell
products other than those offered by the Company must submit samples and
allow forty-five (45) days for Company approval. After discussion and
interpretation of this provision by X. X. Xxxxxx, Executive Vice President,
Xxxxxx'x Incorporated, (hereinafter called "Dealer"), and Xxx Xxxxxx,
President, Stuckey's Incorporated, (hereinafter called "Company"), it was
mutually agreed that this requirement be waived. Both Dealer and Company
acknowledge that the intent of this section is to prevent the introduction
of directly competing products that are otherwise identical to the
trademarked products supplied by Company. Further, Dealer hereby agrees not
to introduce such identical products or business format not consistent with
a Stuckey's Pecan Shoppe without approval of Company.
2. Pages 4 and 5, Article 6, states that Company shall keep Dealer informed of
the standard operating procedures by providing Dealer with the current
editions of its store Operations Manual, Food Service Manual, and any other
relevant manuals, regulations, or standards that may be in effect. During
the discussion of this provision, Dealer was assured by Company that all
manuals would be provided, and that the policies contained therein are
prudent and reasonable.
3. Page 6, Article 11, states that no alteration of an existing Stuckey's
Pecan Shoppe structure shall be undertaken without written approval of the
Company. As a result of the disucssion of this provision by Dealer and
Company, it was mutually agreed that written approval is not needed for the
changing or altering of the display sales areas of the store as long as
such alterations do not involve the relocating of fixed partitions or
walls, or other substantial structural changes.
4. Page 7, Article 14, states the necessity of Dealer provided insurance that
protects the interests of both Dealer and Company, but the paragraph does
not detail the exact amount and types of insurance required. Company
informed Dealer that the Dealer's customary and usual insurance coverage is
acceptable. Further, Dealer will instruct its insurance agent to provide
whatever documentation Company desires upon receiving a written request for
same.
5. Page 11, Article 23, states that during the term of this Agreement that
Dealer shall not compete by engaging in any similar business for a distance
of 100 miles in both directions on the same side of the highway and 50
miles in both directions on the opposite side of the highway. Dealer
informed Company that Dealer presently operates the following stores within
a 50 and 100 mile radius in both directions:
Page 2 / ADDENDUM TO FRANCHISE AGREEMENT
(1) Approximately 25 miles West on the same side of the highway known as
Xxxxxx'x Continental Divide Trading Post; (2) Approximately 5 miles West on
the same side of the highway known as Xxxxxx'x Tepee Store; (3)
Approximately 35 miles East on the opposite side of the highway known as
Xxxxxx'x Xxxxx Flats Trading Post; (4) Approximately 55 miles East on the
opposite side of the highway known as Xxxxxx'x Old West Trading Post.
Company acknowledges that the existence of these similar and competing
businesses shall not violate Article 23, or any other provisions of the
Franchise Agreement, and further, that any "covenants not to compete"
contained in the Franchise Agreement are hereby waived with respect to the
businesses mentioned herein.
6. Page 11, Article 25, states that notices shall be directed to Dealer at his
place of business. Dealer requests that all notices by directed to the
following address:
Xxxxxx'x Incorporated
000 Xxxxxxxxx X.X.
Xxxxxxxxxxx, XX 00000
7. Page 12, Article 28, states that no changes in, or additions to, the
.Franchise Agreement shall be binding upon either party unless executed in
writing by both Dealer and the President or Vice President of Company.
Dealer therefore requests that Company sign this Addendum to Franchise
Agreement and that this Addendum shall be attached to, and become a part
of, that Agreement. Further, that no other changes in this agreement shall
be binding unless acknowledged in writing and signed by both parties.
STUCKEY'S INC. XXXXXX'X INC.
BY /s/ Xxx Xxxxxx BY /s/ X.X. Xxxxxx
-------------------------- ------------------------------------
XXX XXXXXX, PRESIDENT X. X. XXXXXX, EXECUTIVE VICE PRESIDENT
STATE OF Georgia )
---------- ) ss
COUNTY OF Xxxx )
-----------
Before me on this 31th day of March, 1986, personally appeared Xxx Xxxxxx
to me know to be the persons who executed the foregoing instrument and
acknowledged same to be their free act and deed.
/s/ Xxxxxx Xxxxxxx
------------------------
Notary Public
My Commission Expires: Notary Public, Georgia,
My Commission Expires October 25, 1985
Page 3 / ADDENDUM TO FRANCHISE AGREEMENT
STATE OF New Mexico )
------------ ) ss
COUNTY OF Bernalillo )
------------
Before me on this 26th day of March, 1982, personally appeared X.X. Xxxxxx
to me know to be the persons who executed the foregoing instrument and
acknowledged same to be their free act and deed.
/s/ Signature Illegible
----------------------------
Notary Public
My Commission Expires: 6/30/83
PERSONAL GUARANTY AND INDEMNITY
-------------------------------
THIS GUARANTY AND INDEMNITY is made by XXXXXXX X. XXXXXX and XXXXXX X.
XXXXXX, of 000 XXXXXXXXX XX, XXXXXXXXXXX, XXX XXXXXX, 00000, hereinafter
referred to individually and collectively as "Guarantors";
As an inducement for Stuckey's Inc., a Delaware corporation herein
referred to as "Stuckey's", to extend credit to XXXXXX'X INC. a CORPORATION,
herein referred to as "Franchisee". in the course of selling supplies and making
purchases of petroleum products and other materials for the Franchisee's
account, Guarantors represent, warrant, and agree as follows:
1. Guarantors do hereby absolutely and unconditionally guarantee the
full and complete performance by Franchisee of all the terms, covenants and
conditions of the Franchise Agreement between Stuckey's and Franchisee, whether
entered into contemporaneously with this Guaranty or not, and do further
guarantee the payment of all amounts due Stuckey's from Franchisee.
2. Guarantors do agree to indemnify and hold Stuckey's harmless from
and against all liability, losses, damages, costs and expenses (including
reasonable attorneys fees) suffered or incurred by Stuckey's arising out of the
Franchisee's failure to pay any and all amounts due third parties.
3. Guarantors within ten days of receipt of written demand from
Stuckey's, shall pay to Stuckey's any and all losses, damages, costs and
expenses (including reasonable attorneys! fees) suffered or incurred by
Stuckey's as a result of any default by Franchisee or the breach of any
agreement by Franchisee. Stuckey's shall not be required to exhaust its legal
remedies against Franchisee before making written demand of Guarantors. If there
is more than one Guarantor, each makes this Guaranty both jointly and severally.
4. Execution of this Guaranty and performance of its terms shall not
result in the breach of any term or provision, or constitute a default under,-
any indenture, mortgage, deed of trust, security agreement, financial agreement
or contract to which Guarantors are a party or are otherwise bound.
5. In the event the Guarantors shall pay to Stuckey's any obligation of
Franchisee as provided herein, Guarantors shall be subrogated to Stuckey's right
of recovery against Franchisee to the extent of any such payment made by
Guarantors.
6. This Guaranty shall inure to the benefit of Stuckey's, its parent
company, Pet Incorporated, their successors and assigns, and shall be binding
upon Guarantors, their successors, assigns, heirs and legal representatives.
7. Guarantors expressly agree that this Guaranty and its provisions
shall not be modified, amended or waived in any manner except by written
instrument signed by Stuckey's.
IN WITNESS WHEREOF, Guarantors have executed and delivered this
Guaranty this 24th day of March, 1982.
GUARANTORS:
XXXXXXX X. XXXXXX /s/ XXXXXXX X. XXXXXX
--------------------- ---------------------------------
(Signature of Guarantor)
XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
--------------------- ---------------------------------
(Signature of Guarantor's Spouse)
STATE OF New Mexico )
------------)ss
COUNTY OF Bernalillo)
----------
Before me on this 24th day of March , 1982, personally appeared Xxxxxxx
X. & Xxxxxx X. Xxxxxx to me know to be the persons who executed the foregoing
instrument and acknowledged same to be their free act and deed.
Signature Illegible
----------------------------
Notary Public
My Commission Expires: 6/30/83
-2-
