Limitation on Development Rights. 2.1 Developer must open to the public the number of El Pollo Loco restaurants each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” attached hereto and made a part hereof. 2.2 For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Franchise Agreement (“Franchise Agreement”) for any such development. 2.3 Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants within the Territory, as set forth on Exhibit “A”, all restaurants developed under this Agreement must be duly licensed through individual Franchise Agreements. Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site. 2.4 Developer must satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity. 2.5 Developer shall submit a proposed site for each franchised unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Developer shall: a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Developer; (i) owns the site; or (ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or (iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits. (iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement. 2.6 Franchisor shall retain the right to: a) Open and operate El Pollo Loco restaurants or franchise others to open and operate El Pollo Loco restaurants, at all universities, colleges, hospitals, municipal facilities, public transportation facilities, shopping malls, stadiums, amusement parks and similar locations of a “non-standard” nature, regardless of location within the Territory; b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiums, etc.); and c) Open and operate or franchise others to open and operate El Pollo Loco restaurants located within the Territory which have been acquired by El Pollo Loco on or after the date of this Agreement. 2.7 The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco System. The acquisition of existing El Pollo Loco restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 2 contracts
Samples: Franchise Development Agreement, Franchise Development Agreement (El Pollo Loco, Inc.)
Limitation on Development Rights. 2.1 Developer must submit one or more site(s) for approval, enter into binding leases or purchase agreements and open to the public the number of El Pollo Loco restaurants Loco® restaurant(s) on such approved sites each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” attached hereto and made a part hereof.
2.2 For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants Loco® restaurant(s) outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Loco® Franchise Agreement (“Franchise Agreement”) for any such development.
2.3 Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants Loco® restaurant(s) within the Territory, as set forth on Exhibit “A”, all restaurants restaurant(s) developed under this Agreement must be duly licensed through individual Franchise AgreementsAgreement(s). Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular Disclosure Document then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site.
2.4 Developer must satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s 's execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s 's financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s 's request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity.
2.5 Developer shall use its best efforts to retain qualified real estate professionals (including licensed brokers) to locate proposed sites for the Restaurant(s). Developer shall submit a proposed site sites for each franchised franchise Restaurant unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site, no later than the dates set forth in Exhibit “B” as RESAC Submittal Dates, the first of which shall be approximately ninety (90) days after execution of this Agreement. Franchisor shallmay require, provided as a condition to its approval of a site, a site description and analysis, traffic and other demographic information, all in such format as the Franchisor may require, which information shall include, without limitation, a study prepared by a third party reasonably acceptable to the Franchisor analyzing the impact of the proposed site on other franchised restaurants surrounding or within the vicinity of such proposed site. All such analyses, information and studies shall be prepared at the sole cost and expense of Developer. Franchisor shall send representatives to evaluate proposed site(s) for each Restaurant to be developed under this Agreement, and Franchisor will do so at its own expense for the first two proposed sites for each Restaurant. If Franchisee proposes, and Franchisor evaluates, more than two sites for each Restaurant, then Franchisee shall reimburse Franchisor for the reasonable costs and expenses incurred by Franchisor’s representatives in connection with the evaluation of such additional proposed site(s), including, without limitation, the costs of lodging, travel and meals. In addition, as a condition to reviewing a proposed site for the Restaurant, and to determine the impact a proposed site may have on other existing restaurants operating under the El Pollo Loco® System, Franchisor may require Franchisee to pay for a market study conducted by a third party of the proposed site and the surrounding geographic area.
2.6 Provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, Franchisor shall evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days promptly after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the site.
2.7 No later than the Site Commitment Dates set forth in Exhibit “B”, Developer shall submit for the approved site to Franchisor for its review and approval of:
(i) a fully negotiated but unexecuted lease, which may only subject to obtaining necessary governmental permits and for which the term with renewal options is not less than the initial term of the Franchise Agreement. The unexecuted form of the lease must be submitted to Franchisor to review for the required terms and conditions listed in this Section 2.7 prior to full execution of the lease. Franchisor will notify Developer upon their approval of the inclusion of such required terms and conditions. Developer will then provide a final executed copy of the lease to Franchisor; and
(ii) a purchase agreement . Should Developer purchase the site using another entity other than the franchise entity, Developer must then enter into a lease with the Franchise entity as the lessee and the purchasing entity as the lessor and must comply with all the requirements of Section 2.7). Any lease to be entered into by Developer shall include the following terms and conditions which may be contained in the body of the lease or in a signed addendum to the lease in a form approved by Franchisor:
a) The landlord consents to Developer’s use of the premises as an El Pollo Loco restaurant and such restaurant may be open for business during the required days and hours set forth in the Operations Manual from time to time;
b) The landlord agrees to furnish the Franchisor with copies of any and all notices of default, if any, pertaining to the lease and the premises, at the same time that such notices are sent to Developer;
c) The landlord agrees that, subject to any other applicable provisions in the Franchise Agreement, the Franchisor shall have the right, at its sole option and without any obligation whatsoever to do so, to assume Developer’s occupancy rights under the lease for the remainder of the term upon Developer’s default or termination under such lease, the termination of the Franchise Agreement or the exercise by the Franchisor of its right of first refusal or right to purchase as set forth in the Franchise Agreement; and
d) That upon termination or expiration of the lease for any reason, Developer shall, upon Franchisor’s demand, remove all of the El Pollo Loco Marks from the Restaurant and the premises and modify the décor of the Restaurant so that it no longer resembles, in whole or in part, an “El Pollo Loco” Restaurant and that if Developer shall fail to do so, Franchisor may be given written notice and the right to enter the premises to make such alterations in which event Developer shall reimburse Franchisor for all direct and indirect costs and expenses it may incur in connection therewith, including attorneys’ fees. Franchisor shall have no liability under any lease or purchase agreement for the any Restaurant location developed under this Agreement and shall not guaranty Developer’s obligations thereunder. Upon approval by Franchisor of the form of Developer’s lease and execution of a lease for a site by Developer, Developer shall furnish to Franchisor a fully executed copy of such lease and any amendments thereto within fifteen (15) calendar days of such execution. Franchisor shall have no obligation to assist Developer to negotiate its leases. The lease may not contain a non-competition covenant which restricts Franchisor or any franchisee or licensee of Franchisor, from operating an El Pollo Loco Restaurant or any other retail restaurant, unless such covenant is approved by Franchisor in writing prior to the execution by Developer of the lease. Each subsequent site to be developed pursuant to the Development Schedule shall be submitted for approval by RESAC by the date set forth in Exhibit “B”. Similarly, each fully executed lease (executed upon prior review and approval by Franchisor) or purchase agreement (with all contingencies to Developer’s obligations waived or satisfied, except permitting contingencies) relating to each subsequent site shall (1) be delivered to Franchisor on or before the Site Commitment Date for each respective Restaurant as set forth in Exhibit “B” and (2) prior to the commencement of construction of the Restaurant and the execution of your Franchise Agreements and (3) the payment of your initial Franchise Fees for each site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing completing the purchase or leasing lease of the proposed site. Within ninety site within sixty (9060) days after approval of the site by the Franchisor.
2.8 Developer acknowledges that time is of the essence in this Agreement. If Developer has not obtained approval and entered into a binding lease or purchase agreement for each site for Restaurant(s) to be developed under this Agreement by the applicable Site Commitment Date, Developer shall be in default of its obligations under the Development Schedule and Franchisor shall be entitled to exercise its rights and remedies under this Agreement, up to and including termination of this Agreement. Without limiting Franchisor’s site acceptancerights and remedies under this Agreement, should Developer fail to meet its obligations under the Development Schedule to deliver a binding lease or purchase agreement to Franchisor for each Restaurant by the Site Commitment Date, Developer shall:
a) Submit may, among other things, and at Franchisor’s election and upon written notice by Franchisor as set forth in writing Section 11.3 below, lose its exclusive rights in the Territory. Developer also acknowledges that it is required pursuant to this Agreement to open Restaurants in the future pursuant to dates set forth in the Development Schedule attached as Exhibit “B”. If Developer fails to meet the opening date for any Restaurant to be developed under this Agreement, Developer shall be in default and Franchisor shall be entitled to exercise all rights and remedies available to Franchisor, satisfactory proof including rights set forth in Sections 11.1 and 11.2 and the remedies set forth in Section 11.3. Developer acknowledges that if Developer fails to open Restaurants in a timely manner pursuant to the Development Schedule, Franchisor will suffer lost revenues, including royalties and other fees which would be difficult to calculate and which Franchisor would have received had Developer met the agreed schedule or had Franchisor had the right to grant development rights to others in the Territory. Developer acknowledges that the estimated initial investment and estimated expenses set forth in Items 6 and 7 of our Uniform Disclosure Document are subject to and likely to increase over time, and that future Restaurants will likely involve a greater initial investment and operating capital requirements than those stated in the Disclosure Document provided to you prior to your execution of this Agreement. Developer understands and acknowledges that in accepting Developer;
(i) owns ’s proposed site or by granting a franchise for each approved site, Franchisor does not in any way, endorse, warrant or guarantee either directly or indirectly the suitability of such site or the success of the franchise business to be operated by Developer at such site; or
(ii) has leased . The suitability of the site for a term which, with renewal options is not less than and the initial term success of the Franchise Agreement; or
(iii) has entered into franchise business depend upon a written agreement number of factors outside of Franchisor’s control, including, but not limited to, the Developer’s operational abilities, site location, consumer trends and such other factors that are within the direct control of the Developer. Developer also acknowledges that it is required pursuant to purchase or this Agreement to lease retain only those design and construction professionals for the approved site on terms provided herein, subject, only to obtaining necessary governmental permitsconstruction of the Restaurant who have met our criteria and have signed the Preferred Development Professional Agreement in the form attached hereto as Exhibit “D”.
(iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement.
2.6 2.9 Franchisor shall retain the right to:
a) Open and operate El Pollo Loco Loco® non-traditional restaurants or franchise others to open and operate El Pollo Loco Loco® non-traditional restaurants, at all universities, colleges, airports, hospitals, municipal facilities, public transportation facilities, shopping mallsmalls (not including out parcels), stadiums, amusement parks and similar locations of a “non-standard” natureparks, regardless of location within the Territory;
b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiumsstadiums and similar locations of a "non-standard" nature, etc.); andregardless of location within the Territory;
cb) Open and operate Operate or franchise others to open and operate operated an El Pollo Loco restaurants restaurant located within the Territory which have been acquired by El Pollo Loco on either as of or after the date of this Agreement;
c) Sell the same or similar products (using the Marks or not) to customers at retail locations, through internet, telemarketing or direct marketing means. We reserve the right to operate and franchise other restaurants having the same or similar menu items; and
d) Convert the Territory from an exclusive to a non-exclusive Territory upon sixty (60) days written notice in the event Franchisor completes an acquisition of ten (10) or more real estate locations in a single transaction (“Acquisition Locations”), some or all of which are located within the Territory, including restaurants operating under another trade name. Notwithstanding the foregoing, Franchisor shall grant Developer a fifteen (15) day right of first refusal to acquire Franchisor’s rights in Acquisition Locations in the Territory at the same purchase price paid by Franchisor for each location, including reasonable closing costs. If Developer submits written notice of its intent to exercise the right of first refusal in a timely manner, it shall complete the transaction for the Acquisition Locations within sixty (60) days from the date of its notice and retain its exclusive rights to the Territory.
2.7 2.10 The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco Loco® System. The acquisition of existing El Pollo Loco Loco® restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 1 contract
Samples: Franchise Development Agreement (EPL Intermediate, Inc.)
Limitation on Development Rights. 2.1 Developer must open to the public the number of El Pollo Loco restaurants each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” attached hereto and made a part hereof.
2.2 For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Franchise Agreement (“Franchise Agreement”) for any such development.
2.3 Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants within the Territory, as set forth on Exhibit “A”, all restaurants developed under this Agreement must be duly licensed through individual Franchise Agreements. Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site.
2.4 Developer must satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity.
2.5 Developer shall submit a proposed site for each franchised unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Developer shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Developer;
(i) owns the site; or
(ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or
(iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits.
(iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement.
2.6 Franchisor shall retain the right to:
a) Open and operate El Pollo Loco restaurants or franchise others to open and operate El Pollo Loco restaurants, at all universities, colleges, hospitals, municipal facilities, public transportation facilities, shopping malls, stadiums, amusement parks and similar locations of a “non-standard” nature, regardless of location within the Territory;
b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiums, etc.); and
c) Open and operate or franchise others to open and operate El Pollo Loco restaurants located within the Territory which have been acquired by El Pollo Loco on or after the date of this Agreement.
2.7 The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco System. The acquisition of existing El Pollo Loco restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 1 contract
Samples: Franchise Development Agreement (El Pollo Loco Holdings, Inc.)
Limitation on Development Rights. 2.1 2.1. Developer must submit one or more site(s) for approval, enter into binding leases or purchase agreements and open to the public the number of El Pollo Loco restaurants Loco® Restaurant(s) on such approved sites each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” attached hereto and made a part hereof.
2.2 2.2. For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants Loco® Restaurant(s) outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Loco® Franchise Agreement (“Franchise Agreement”) for any such development.
2.3 2.3. Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants Loco® restaurant(s) within the Territory, as set forth on Exhibit “A”, all restaurants Restaurant(s) developed under this Agreement must be duly licensed through individual Franchise AgreementsAgreement(s). Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular Agreement and Franchise Disclosure Document then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site.
2.4 2.4. Developer must satisfy all Franchisor’s financial and operational criteria then in effect and in addition, if Developer is also a Franchisee of one or more El Pollo Loco Restaurants, Franchisee must also be in good standing with Franchisor and satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s 's execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s 's financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s 's request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity.
2.5 2.5. Developer shall use its best efforts to retain qualified real estate professionals (including licensed brokers) to locate proposed sites for the El Pollo Loco® Restaurant(s). Developer shall submit a proposed site sites for each franchised El Pollo Loco® Restaurant unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site, no later than the dates set forth in Exhibit “B” as RESAC Submittal Dates, the first of which shall be approximately ninety (90) days after execution of this Agreement. Should the site be accepted by RESAC, it will be referred to as the “Approved Site”. Such acceptance will expire one (1) year from the RESAC approval date. Franchisor shallmay require, provided as a condition to its approval of a site, a “Market Study”, which shall include a site description and analysis, traffic and other demographic information and an analysis of the impact of the proposed site on other company owned and franchised El Pollo Loco restaurants surrounding or within the vicinity of such proposed site all in such format as the Franchisor may require. All such analyses, information and studies shall be prepared at the sole cost and expense of Developer.
2.6. Franchisor shall send representatives to evaluate proposed site(s) for each El Pollo Loco® Restaurant to be developed under this Agreement, and Franchisor will do so at its own expense for the first two (2) proposed sites for each El Pollo Loco® Restaurant. If Developer proposes, and Franchisor evaluates, more than two (2) sites for each El Pollo Loco® Restaurant, then Developer shall reimburse Franchisor for the reasonable costs and expenses incurred by Franchisor’s representatives in connection with the evaluation of such additional proposed site(s), including, without limitation, the costs of lodging, travel, meals and wages.
2.7. Provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, Franchisor shall evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days promptly after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the sit
2.8. If RESAC determines through its evaluation of the proposed site that the proposed site may impact sales at any company-owned El Pollo Loco® Restaurant, Franchisor has the sole and absolute right to accept or reject the proposed site, without any obligation to discuss a possible resolution with Developer. However, Franchisor may elect to discuss with Developer a possible resolution with regard to the proposed site; however, if such an agreement cannot be reached, Franchisor has the sole and absolute right to reject the proposed site. If RESAC determines through its evaluation of the proposed site that the proposed site may potentially impact sales at any existing El Pollo Loco® franchisee’s restaurant, Franchisor shall notify Developer of the existing El Pollo Loco® franchisees’ location(s) and contact information. If nevertheless Developer wishes to try to proceed with that site, Developer must obtain a written waiver from those existing El Pollo Loco® franchisees of any claims they might have against Developer and Franchisor with respect to the proposed new El Pollo Loco® Restaurant. Such waiver, if obtained, must be submitted along with the evaluation information required pursuant to this Section.
2.9. No later than the Site Commitment Dates set forth in Exhibit “B”, Developer shall submit for the Approved Site to Franchisor for its review and approval of:
a. A fully negotiated but unexecuted lease, which may only subject to obtaining necessary governmental permits. The unexecuted form of the lease must be submitted to Franchisor to review for the required terms and conditions listed in Sections 2.9, 2.10, 2.11 and 2.12 below prior to full execution of the lease. Franchisor will promptly notify Developer upon their approval of the inclusion of such required terms and conditions. Developer will promptly then provide a final executed copy of the lease to Franchisor; or
b. A purchase agreement. Should Developer purchase the site using another entity other than the franchise entity, Developer must then enter into a lease with the Franchise entity as the lessee and the purchasing entity as the lessor and must comply with all the requirements of this Sections 2.9, 2.10, 2.11 and 2.12 below).
2.10. Any lease to be entered into by Developer shall include the terms and conditions set forth below and in a form approved by Franchisor:
a. The tenant entity on the lease must match the franchise entity on the franchise agreement; and
b. The term (with renewal options) of the lease must match at least the initial term of the franchise agreement; and
c. The landlord consents to your use of the premises as an El Pollo Loco® restaurant which will be open during the required days and hours set out in the Operations Manual.
2.11. Franchisor shall have no liability under any lease or purchase agreement for any El Pollo Loco® Restaurant location developed under this Agreement and shall not guarantee Developer’s obligations thereunder. Upon approval by Franchisor of the form of Developer’s lease and execution of a lease for a site by Developer, Developer shall furnish to Franchisor a fully executed copy of such lease and any amendments thereto within fifteen (15) calendar days of such execution. Franchisor shall have no obligation to assist Developer to negotiate its leases.
2.12. The lease or deed may not contain a non-competition covenant which restricts Franchisor or any franchisee or licensee of Franchisor, from operating an El Pollo Loco® Restaurant or any other retail restaurant, unless such covenant is approved by Franchisor in writing prior to the execution by Developer of the lease.
2.13. Each subsequent site to be developed pursuant to the Development Schedule shall be submitted for approval by RESAC by the date set forth in Exhibit “B”. Similarly, each fully executed lease (executed upon prior review and approval by Franchisor) or purchase agreement (with all contingencies to Developer’s obligations waived or satisfied, except permitting contingencies) relating to each subsequent Approved Site shall: (1) be delivered to Franchisor on or before the Site Commitment Date for each respective El Pollo Loco® Restaurant as set forth in Exhibit “B” and (2) prior to the execution of your Franchise Agreements (3) prior to the payment of your initial Franchise Fees for each site and (4) prior to the commencement of construction of the El Pollo Loco® Restaurant.
2.14. RESAC site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing completing the purchase or leasing lease of the proposed site. Within ninety site within sixty (9060) days after Franchisor’s site acceptance, Developer shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Developer;
(i) owns the site; or
(ii) has leased approval of the site for a term which, with renewal options is not less by the Franchisor or no later than the initial term dates set forth in Exhibit “B” as Site Committment Dates.
2.15. Developer acknowledges that time is of the Franchise essence in this Agreement; or
(iii) . If Developer has not obtained approval and entered into a written binding lease or purchase agreement for each site for El Pollo Loco® Restaurant(s) to purchase or to lease be developed under this Agreement by the approved site on terms provided hereinapplicable Site Commitment Date, subject, only to obtaining necessary governmental permits.
(iv) If Developer has leased shall be in default of its obligations under the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement.
2.6 Development Schedule and Franchisor shall retain the right to:
a) Open be entitled to exercise its rights and operate El Pollo Loco restaurants or franchise others remedies under this Agreement, up to open and operate El Pollo Loco restaurants, at all universities, colleges, hospitals, municipal facilities, public transportation facilities, shopping malls, stadiums, amusement parks and similar locations of a “non-standard” nature, regardless of location within the Territory;
b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiums, etc.); and
c) Open and operate or franchise others to open and operate El Pollo Loco restaurants located within the Territory which have been acquired by El Pollo Loco on or after the date including termination of this Agreement.
2.7 2.16. Developer also acknowledges that it is required pursuant to this Agreement to open El Pollo Loco® Restaurants in the future pursuant to dates set forth in the Development Schedule attached as Exhibit “B”. If Developer fails to meet the opening date for any El Pollo Loco® Restaurant to be developed under this Agreement, Developer shall be in default and Franchisor shall be entitled to exercise all rights and remedies available to Franchisor set forth in Section 11. Developer acknowledges that if Developer fails to open El Pollo Loco® Restaurants in a timely manner pursuant to the Development Schedule, Franchisor will suffer lost revenues, including royalties and other fees which would be difficult to calculate and which Franchisor would have received had Developer met the agreed schedule or had Franchisor had the right to grant development rights to others in the Territory.
2.17. Developer acknowledges that the estimated initial investment and estimated expenses set forth in Items 6 and 7 of our Franchise Disclosure Document are subject to and likely to increase over time, and that future El Pollo Loco® Restaurants will likely involve a greater initial investment and operating capital requirements than those stated in the Franchise Disclosure Document provided to you prior to your execution of this Agreement.
2.18. Developer understands and acknowledges that in accepting Developer’s proposed site or by granting a franchise for each approved site, Franchisor does not in any way, endorse, warrant or guarantee either directly or indirectly the suitability of such site or the success of the franchise business to be operated by Developer at such site. The suitability of the site and the success of the franchise business depend upon a number of factors outside of Franchisor’s control, including, but not limited to, the Developer’s operational abilities, site location, consumer trends and such other factors that are within the direct control of the Developer.
2.19. The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco Loco® System. The acquisition of existing El Pollo Loco Loco® restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 1 contract
Samples: Franchise Development Agreement (El Pollo Loco Holdings, Inc.)
Limitation on Development Rights. 2.1 Developer must submit one or more site(s) for approval, enter into binding leases or purchase agreements and open to the public the number of El Pollo Loco restaurants Loco® restaurant(s) on such approved sites each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” attached hereto and made a part hereof.
2.2 For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants Loco® restaurant(s) outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Loco® Franchise Agreement (“Franchise Agreement”) for any such development.
. 2.3 Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants Loco® restaurant(s) within the Territory, as set forth on Exhibit “A”, all restaurants restaurant(s) developed under this Agreement must be duly licensed through individual Franchise AgreementsAgreement(s). Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular Disclosure Document then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site.
. 2.4 Developer must satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s 's execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s 's financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s 's request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity.
2.5 Developer shall submit a proposed site for each franchised unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Developer shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Developer;
(i) owns the site; or
(ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or
(iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits.
(iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement.
2.6 Franchisor shall retain the right to:
a) Open and operate El Pollo Loco restaurants or franchise others to open and operate El Pollo Loco restaurants, at all universities, colleges, hospitals, municipal facilities, public transportation facilities, shopping malls, stadiums, amusement parks and similar locations of a “non-standard” nature, regardless of location within the Territory;
b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiums, etc.); and
c) Open and operate or franchise others to open and operate El Pollo Loco restaurants located within the Territory which have been acquired by El Pollo Loco on or after the date of this Agreement.
2.7 The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco System. The acquisition of existing El Pollo Loco restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 1 contract
Samples: Franchise Development Agreement
Limitation on Development Rights. 2.1
2.1. Developer must submit one or more site(s) for approval, enter into binding leases or purchase agreements and open to the public the number of El Pollo Loco restaurants Loco® Restaurant(s) on such approved sites each calendar year as required on the Development Schedule, all as set forth on Exhibit “B” B attached hereto and made a part hereof..
2.2 2.2. For purposes of the Development Schedule in Exhibit “B”, no credit will be given for the development of El Pollo Loco restaurants Loco® Restaurant(s) outside the Territory, regardless of the fact that Developer may, upon proper application, obtain from Franchisor an El Pollo Loco Franchise aFranchise Agreement (“Franchise Agreement”) for any such development.
2.3 Although . Exhibit G of Multi-State Disclosure Document (Control No. 032922) Franchise Development Agreement - Page 5 of 29 2.3.Although this Agreement affords the Developer the right to develop and open El Pollo Loco restaurants Loco® Restaurant(s) within the Territory, as set forth on Exhibit “A”, all restaurants El Pollo Loco® Restaurant(s) developed under this Agreement must be duly licensed through individual Franchise AgreementsAgreement(s). Developer will execute El Pollo Loco’s then standard Franchise Agreement in use at the time of execution for each restaurant developed under this Agreement, and agrees to pay Franchisor the current fees, royalties and other required payments in accordance with the Uniform Franchise Offering Circular Agreement and Franchise Disclosure Document then in effect. Execution of the appropriate Franchise Agreement and payment of the initial franchise fee and/or any other required fees must be accomplished prior to the commencement of construction at any site..
2.4 2.4. Developer must satisfy all Franchisor’s financial and operational criteria then in effect and in addition, if Developer is also a Franchisee of one or more El Pollo Loco® restaurants, Franchisee must also be in good standing with Franchisor and satisfy all Franchisor’s financial and operational criteria then in effect prior to El Pollo Loco’s 's execution of each standard Franchise Agreement issued pursuant to this Agreement. Developer shall provide Franchisor with current information pertaining to Developer’s 's financial condition and the financial condition of the majority and managing members/partners/shareholders of Developer at any time upon El Pollo Loco’s 's request and in no event less than once annually. Developer acknowledges that, among other things, it will be required to submit annual financial statements of Developer and personal financial statements of each of its principal owners and Managing Members to be eligible for financial approval by El Pollo Loco. In the event any of the majority owners of Developer shall also be the Managing Members and/or majority owners of any other entity which is a franchisee of El Pollo Loco, then each such franchisee entity must be operationally and financially approved by Franchisor before approval for expansion will be granted to any one franchisee entity. “Managing Members” shall be any individuals who are designated as the primary decision makers or general managers of the franchisee entity and those individuals who (individually or collectively) own at least 51% interest in the franchisee entity.
2.5 Developer shall submit a proposed site for each franchised unit to be developed under this Agreement for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Developer under this Agreement or any other development, franchise or other agreement between Franchisor and Developer, evaluate each site proposed for which Developer has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Developer’s proposal, send to Developer written notice of acceptance or non-acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Developer shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Developer;
(i) owns the site; or
(ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or
(iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits.
(iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 of the Franchise Agreement.
2.6 Franchisor shall retain the right to:
a) Open and operate El Pollo Loco restaurants or franchise others to open and operate El Pollo Loco restaurants, at all universities, colleges, hospitals, municipal facilities, public transportation facilities, shopping malls, stadiums, amusement parks and similar locations of a “non-standard” nature, regardless of location within the Territory;
b) Open and operate or franchise others to open and operate non-standard El Pollo Loco restaurants within the Territory under the El Pollo Loco System (e.g., within drug stores, supermarkets, department stores, truck stops, hotel or motel chains, stadiums, etc.); and
c) Open and operate or franchise others to open and operate El Pollo Loco restaurants located within the Territory which have been acquired by El Pollo Loco on or after the date of this Agreement.
2.7 The purpose of this Agreement is to promote orderly incremental growth within the El Pollo Loco System. The acquisition of existing El Pollo Loco restaurants by Developer does not represent incremental growth and, therefore, does not satisfy the terms of this Agreement pertaining to development.
Appears in 1 contract
Samples: Franchise Development Agreement (El Pollo Loco Holdings, Inc.)
