EXHIBIT 10.11
DRAFT #
DATE:
EXHIBIT A TO DEVELOPMENT AGREEMENT
DATE:____________ , 19__
(TO BE REVIEWED FOR CHANGES UNDER LOCAL LAW BEFORE SIGNING)
FRANCHISE AGREEMENT
T.G.I. FRIDAY'S RESTAURANT
[IDENTIFICATION OF SPECIFIC SITE]
[COUNTRY]
DATED AS OF _________________
T.G.I. FRIDAY'S RESTAURANT
FRANCHISE AGREEMENT
[IDENTIFICATION OF SPECIFIC SITE]
[COUNTRY]
TABLE OF CONTENTS
1. DEFINITIONS.................................................................1
2. EXCLUSIVE RIGHTS; TERM......................................................6
3. FEES AND PAYMENTS...........................................................6
4. REPRESENTATIVE; DIRECTOR OF OPERATIONS; MANAGERS; TRAINING..................7
5. RESTAURANT LOCATION; OCCUPANCY CONTRACT.....................................9
6. RESTAURANT CONSTRUCTION....................................................10
7. RESTAURANT OPERATIONS; MANUALS.............................................11
8. CONFIDENTIAL INFORMATION...................................................14
9. PROPRIETARY MARKS..........................................................15
10. ADVERTISING...............................................................17
11. INSURANCE.................................................................18
12. ACCOUNTING AND RECORDS....................................................19
13. FRANCHISEE'S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND
NEGATIVE COVENANTS........................................................20
14. TRANSFER..................................................................22
15. CONSENT AND WAIVER........................................................24
16. DEFAULT AND REMEDIES......................................................24
17. OBLIGATIONS UPON TERMINATION OR EXPIRATION................................26
18. ARBITRATION...............................................................28
19. INDEMNIFICATION...........................................................29
20. NOTICES...................................................................31
21. FORCE MAJEURE.............................................................31
22. SEVERABILITY..............................................................31
23. INDEPENDENT CONTRACTOR....................................................32
24. DUE DILIGENCE AND ASSUMPTION OF RISK......................................32
25. MISCELLANEOUS.............................................................32
26. ENTIRE AGREEMENT..........................................................33
ATTACHMENT A- COMMENCEMENT DATE AGREEMENT
ATTACHMENT B- PROPRIETARY MARKS
ATTACHMENT C- COVENANT AND AGREEMENT FOR CONFIDENTIALITY (PRINCIPALS)
ATTACHMENT D- COVENANT AND AGREEMENT FOR CONFIDENTIALITY (EMPLOYEES)
SCHEDULE 3.01.A - CALCULATION OF FRANCHISE FEE
SCHEDULE 3.01.B - CALCULATION OF ROYALTY FEE
FRANCHISE AGREEMENT
This FRANCHISE AGREEMENT is entered into as of the ___ day of
_________________, ______, by and among TGI FRIDAY'S INC., a New York
corporation, with its principal place of business in Dallas, Texas, United
States of America, [FRANCHISEE NAME], with its principal place of business in
[Place of Business] and [Principals?].
RECITALS
WHEREAS, Franchisor has developed in the United States and owns the
System;
WHEREAS, Franchisor intends to identify the System in the Territory
with the Proprietary Marks;
WHEREAS, Franchisor continues to develop, use and control the use of
the Proprietary Marks to identify the source of services and products
marketed under the System and to represent the System's high standards;
WHEREAS, Franchisor and Franchisee have entered into the Development
Agreement;
WHEREAS, Franchisee wishes to obtain certain rights to use the
System in connection with the operation of the Restaurant and to receive
training and other assistance provided by Franchisor in connection therewith
as described herein; and
WHEREAS, ________ and ________ own and have the right to vote __%
and ___% respectively (collectively 100%), of the Securities of Franchisee.
NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments set forth herein, agree as follows:
1. DEFINITIONS
As used in this Agreement the following words and phrases shall have the
meanings attributed to them in this Section:
ACCOUNT - an account designated by Franchisor to receive Payments
ACTION - any cause of action, suit, proceeding, claim, demand, investigation or
inquiry (whether a formal proceeding or otherwise) with respect to which
Franchisee's indemnity described in Section 19 applies
AFFILIATE - Xxxxxxx Restaurants Worldwide Inc. or any subsidiary thereof or
of Franchisor
AGREEMENT - this Franchise Agreement
BUSINESS DAYS - each calendar day except Saturday, Sunday and national legal
holidays under the laws of the country of the recipient of the notice
COMMENCEMENT DATE - the first to occur of the date the Restaurant opens for
business to the public or the date Franchisee is required to open the
Restaurant for business pursuant to the terms hereof
COMMENCEMENT DATE AGREEMENT - an agreement memorializing the Commencement
Date in the form of ATTACHMENT A hereto
COMPETING BUSINESS - a restaurant business offering the same or similar products
and services as offered by restaurants in the System, including, without
limitation, waiter/waitress service, sit-down dining and bar services
CONFIDENTIAL INFORMATION - the terms of the Development Agreement and Franchise
Agreement and any amendments thereto, the System, the Development Manual, the
Manuals, other manuals, the Standards, written directives and all drawings,
equipment, recipes, computer and point of sale programs (and output from such
programs); and all other information, know-how, techniques, material and data
imparted or made available by Franchisor which is (i) designated as
confidential, (ii) known by Franchisee to be considered confidential by
Franchisor, or (iii) by its nature inherently or reasonably considered
confidential
DEVELOPER - [Developer Name]
DEVELOPMENT AGREEMENT - that certain Development Agreement dated [Dev Agmt
Date], between Franchisor and Developer, relating to the development of T.G.I.
Friday's restaurants in the Territory
DEVELOPMENT MANUAL - Franchisor's manual, as amended from time to time in
Friday's reasonable discretion, describing (generally) the procedures and
parameters for the development of T.G.I. Friday's restaurants
DEVELOPMENT MATERIALS - a description of the Site, a feasibility study
(including, without limitation, demographic data, photographs, maps, artists'
renderings, site plans, a summary (in English) of the Occupancy Contract, and
documentation indicating Franchisee's prospects to acquire the Site) and such
other information as Franchisor reasonably requests
DIRECTOR OF OPERATIONS - an individual designated as described in Section 4.02
who shall devote his full time and best efforts to the management and
supervision of (i) Franchisee's duties and obligations hereunder; and (ii) the
operation of (a) the Restaurant and (b) all T.G.I. Friday's restaurants
developed pursuant to the Development Agreement
EVENT OF DEFAULT - as defined in Section 16.02
FRANCHISE FEE - a fee in United States dollars calculated as described in
Schedule 3.01.A. paid by Franchisee to Franchisor reflecting, in part, certain
expenses incurred or to be incurred by Franchisor in providing services
hereunder and in consideration of, in part, the right to develop and operate the
Restaurant at the Site under the System
FRANCHISEE - [Franchisee Name]
FRANCHISOR - TGI FRIDAY'S INC., a New York (U.S.) corporation
FURNISHINGS - all of Franchisee's decorative memorabilia, furnishings, signs,
equipment, advertising materials, inventory and other assets used in connection
with Restaurant operations
GROSS SALES - The total of:
(1) the entire, actual sales price (whether for cash, credit
or other consideration) of all food, beverages, merchandise and services
(including service charges added to a customer's xxxx) occurring in, on or from
the Restaurant, including receipts from mail or telephone orders received or
filled from the Restaurant;
(2) all deposits not refunded to purchasers;
(3) orders taken at the Restaurant, although filled
elsewhere;
(4) payments to Franchisee by any concessionaire,
licensee or third party in respect of use of the Restaurant; and
(5) promotional or other allowances to customers in an
amount equal to the retail price therefor, to the extent that said amount for
promotional allowances exceeds two and one-half percent (2.5%) of Gross Sales
calculated without inclusion of said amount (promotional allowances provided
in exchange for goods or services shall be included in Gross Sales without
exclusion).
Each charge or sale upon installment or credit shall be treated
as a sale for the full price in the accounting month during which such
charge or sale is made.
"Gross Sales" shall not include receipts from sales of furniture,
trade fixtures or other extraordinary items (unless bearing any Proprietary
Xxxx) made outside the ordinary course of business.
There shall be deducted from "Gross Sales" to the extent previously
included therein:
(A) the amount of any BONA FIDE cash or credit refunds made upon any
sale where the food, beverages, merchandise or services sold is returned by the
customer and accepted by Franchisee;
(B) sales tax or other taxes required to be separately accounted for
and collected by Franchisee directly from Franchisee's customers and paid by
Franchisee to a taxing authority; and
(C) shift meals served to employees while the employees are on duty.
HEADQUARTERS - the location(s) in the United States designated from time to time
by Franchisor where Franchisee's personnel shall complete training
IN-COUNTRY EXPENSES - costs and expenses incurred by or assessed with respect to
Franchisor's (or other described party's) employees, agents and/or
representatives in connection with travel to or activities in the Territory
pursuant to this Agreement, including, without limitation, hotel/lodging,
transportation and meals and, with respect to the NSO-Team only, a per diem
stipend (a daily charge determined by advance agreement for incidental expenses
incurred by such personnel, such as meals, laundry and/or telephone expenses)
INDEMNITEES - Franchisor and its directors, officers, employees, agents,
shareholders, affiliates, successors and assigns and the respective directors,
officers, employees, agents, shareholders and affiliates of each
INITIAL TERM - a period commencing as of the date hereof and continuing until
the fifteenth (15th) anniversary of the Commencement Date
LESSOR - the party owning or controlling the Site and being a party (with
Franchisee) to the Occupancy Contract
LOSSES AND EXPENSES - compensatory, exemplary or punitive damages; fines,
penalties, charges and fees (including reasonable attorney's, accounting and
consultant fees); interest, court costs, settlement or judgment amounts and
other similar amounts incurred or suffered by the Indemnitees in connection
with any Action; PROVIDED, HOWEVER, that Losses and Expenses shall not
include consequential damages or loss of reputation, goodwill or other losses
of a similar nature
MANUALS - Franchisor's United States confidential operating manuals, as amended
from time to time
MULTI-UNIT MANAGER(S) - an/the individual(s) designated as described in Section
4.05 who shall be solely dedicated to the management and supervision of the
Restaurant and certain other T.G.I. Friday's restaurants developed pursuant to
the Development Agreement
NSO-TEAM - a "new store opening team" consisting of Franchisor's employees and
certain of Franchisee's employees to whom Franchisor has consented, which shall
perform the functions described in Section 4.09
OCCUPANCY CONTRACT - the agreement pursuant to which Franchisee shall occupy
the Site
PAYMENTS - all transfers of funds from Franchisee to Franchisor, including,
without limitation, the Franchise Fee, the Royalty Fee and reimbursement of
expenses
PERMANENT DISABILITY - any physical, emotional or mental injury, illness or
incapacity which would prevent the afflicted person from performing his
obligations hereunder for more then ninety (90) consecutive days as determined
by a licensed physician selected by Franchisor
PRE-PAID FRANCHISE FEE - a fee in United States dollars paid to Franchisor
pursuant to the Development Agreement which will be credited toward the
Franchise Fee as described in the Development Agreement
PRELIMINARY SITE CONSENT - written communication from Franchisor to
Franchisee notifying Franchisee that a proposed site has received the consent
of the Franchisor's Site Review Committee
PRINCIPAL(S) - ___________ and ___________ who are (and such other persons or
entities which are from time to time) the record and beneficial owners of,
------------and have the right to vote, __% and __% (collectively 100%), of
the Securities of Franchisee
PROJECT MANAGER - an individual designated as described in Section 4.04 who
shall devote his full time and best efforts to the coordination and
completion of Restaurant construction
PROPRIETARY MARKS - certain trademarks, trade names, service marks, emblems and
indicia of origin designated by Franchisor from time to time in connection with
the operation of T.G.I. Friday's restaurants pursuant to the System in the
Territory
PUBLICLY-HELD ENTITY - a corporation or other entity whose equity securities are
(i) registered pursuant to applicable law; (ii) widely held by the public; and
(iii) traded on a public securities exchange (or otherwise publicly traded)
pursuant to applicable law
RENEWAL TERM - a period commencing upon expiration of the Initial Term and
continuing for five (5) years
REPRESENTATIVE - an individual, designated as described in Section 4.01,
authorized to act on behalf of, and bind, Franchisee with respect to this
Agreement
RESTAURANT - the T.G.I. Friday's restaurant to be developed and operated
pursuant to this Agreement
ROYALTY FEE - a continuing monthly fee in United States dollars, calculated
as described on Schedule 3.01.B., payable by Franchisee to Franchisor based
upon Gross Sales at the Restaurant in consideration of, in part, certain
expenses to be incurred by Franchisor in providing on-going services
hereunder and the continued right to operate the Restaurant at the Site under
the System
SECURITY - the capital stock of, partner's interest in, or other equity interest
(including the right to vote) in Franchisee, including such interests issued or
created subsequent to the date hereof
SITE - the location of the Restaurant, being ________________________________
STANDARDS - the standards and specifications, as amended from time to time,
contained in, and being a part of, the Confidential Information pursuant to
which Franchisee shall develop and operate the Restaurant at the Site
SYSTEM - a unique, proprietary system developed and owned by Franchisor for
the establishment and operation of T.G.I. Friday's restaurants, including,
without limitation, distinctive exterior and interior design, decor, color
scheme and furnishings; special recipes, menu items and full service bar;
uniform standards, products, services and specifications; procedures with
respect to operations and inventory and management control (including
accounting procedures and policies); training and assistance; and advertising
and promotional programs (as further developed by Franchisor from time to
time)
TERM - the period constituting the Initial Term and, if properly and
effectively exercised, the Renewal Term
TERRITORY - [Country], as geographically constituted on the date of the
Development Agreement
TGIFM - TGI Friday's of Minnesota Inc., a Minnesota (U.S.) corporation and a
subsidiary of Franchisor
TRADEMARK ACTION - an action, suit, proceeding, claim, demand, inquiry or
investigation alleging infringement or "passing-off" brought or made against
Franchisee or any Principal in connection with Franchisee's use (as directed
by the Franchisor) of any Proprietary Xxxx pursuant to this Agreement
TRADEMARK DAMAGES - all fines, expenses, reasonable attorneys' fees, court
costs, settlement amounts, judgments, reasonable costs of advertising
material and media time/space, and costs of changing, substituting or
replacing the same, and all expenses of recall, refunds, public notices and
other such amounts incurred by Franchisee and directly and proximately
attributable to a Trademark Action; PROVIDED, HOWEVER, that Trademark Damages
shall not include compensatory, consequential, exemplary or punitive damages,
lost sales or profits, damage to goodwill or reputation, costs or damages
resulting from delay or other costs, expenses or other damages not directly
or proximately attributable to the Trademark Action
TRADEMARK REPRESENTATIVE - Franchisor or such other person or firm designated
by Franchisor in writing
TRANSFER - the sale, assignment, conveyance, pledge, mortgage or other
encumbrance, whether direct or indirect, of (i) this Agreement or the
Development Agreement; (ii) any or all rights or obligations of Franchisee
herein; or (iii) any interest in any Security, including the issuance of any
new Securities
UNCITRAL ARBITRATION RULES - the arbitration rules of the United Nations
Commission on International Trade Law
WAGE EXPENSES - such wages and/or salaries (including a reasonable allocation
of the cost of benefits) of, or with respect to, Franchisor's (or other
described party's) employees, agents and/or representatives to be reimbursed
to Franchisor or such party as described herein
2. EXCLUSIVE RIGHTS; TERM
2.01 Franchisor grants to Franchisee the right, and Franchisee accepts
the obligation, subject to the terms and conditions herein, to develop and
operate the Restaurant pursuant to the System at the Site and to use, solely in
connection therewith, the Proprietary Marks. During the Term and for so long as
no Event of Default has occurred under this Agreement and is continuing and no
event has occurred under this Agreement which, with the giving of notice or
lapse of time, or both, would constitute an Event
of Default, Franchisor will not establish, nor authorize any other person to
establish, a T.G.I. Friday's restaurant under the System within ( )
[TO BE ESTABLISHED IN GOOD FAITH BY MUTUAL AGREEMENT] of the Restaurant
(except that T.G.I. Friday's restaurants may be located within airport
properties or rail depots that are within such radius).
2.02 Unless sooner terminated as provided herein, this Agreement
shall commence on the date hereof and continue until the expiration of the
Term. Within thirty (30) days after the Commencement Date, the parties shall
execute the Commencement Date Agreement.
2.03 If no Event of Default has occurred under this Agreement and is
continuing and no event has occurred under this Agreement which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, Franchisee may renew this Agreement for the Renewal Term, subject to
the satisfaction of the following conditions:
A. Franchisee shall give notice of such extension not
less than six (6) months nor more than twelve (12) months prior to the end
of the Initial Term;
B. Franchisee shall repair or replace Restaurant equipment,
signs, interior and exterior decor items, fixtures and furnishings and shall
offer such products and services such that Restaurant appearance and
operations reflect the current Standards and image of the System;
C. Franchisee and each Principal shall execute and deliver
a general release of any and all claims against the Indemnitees, including,
without limitation, claims arising under this Agreement, in a form acceptable
to Franchisor; and
D. Franchisee shall comply with Franchisor's current
qualification and training requirements.
3. FEES AND PAYMENTS
3.01 A. Upon execution of this Agreement, Franchisee shall pay
the Franchise Fee. The Pre-Paid Franchise Fee shall be credited toward the
Franchise Fee as described in Section 4.A. of the Development Agreement.
B. Franchisee shall pay the Royalty Fee on or before the
fifteenth (15th) day of each month with respect to Gross Sales at the
Restaurant in the preceding accounting month.
C. Franchisee acknowledges and agrees that (i) the
Franchise Fee reflects, in part, certain expenses incurred or to be incurred
by Franchisor in providing services hereunder and is in consideration of, in
part, the grant to Franchisee herein of the right to develop and operate the
Restaurant at the Site under the System; and (ii) the Royalty Fee is in
consideration of, in part, certain expenses to be incurred by Franchisor in
providing on-going services hereunder and the continued right to operate the
Restaurant at the Site under the System.
3.02 A. All Payments shall be made in United States dollars by
deposit in the Account in immediately available funds. If United States
dollars are not available in the local currency market, Payments shall be
made in a currency and/or other jurisdiction designated by Franchisor.
Acceptance of any Payment in a currency other than United States dollars
shall not release Franchisee's obligation to make future Payments in United
States dollars.
B. To the extent any Payment requires conversion, such
amount shall be converted using the "interbank" exchange rate (or other rate
Franchisor reasonably designates) using the "buy rate"
United States dollar purchase price (or at the purchase price for such other
currency Franchisor designates pursuant to Section 3.02.A.) as published at
end of the day by such financial institution Franchisor designates on (i) the
date of Franchisor's invoice therefor; or (ii) the date due, in the case of
the Franchise Fee and the Royalty Fee. All costs of currency exchange and all
currency risk shall be borne by Franchisee.
C. Payments shall be deposited (i) upon (a) execution hereof
in the case of the Franchise Fee and (b) as described in Section 3.01.B., in the
case of the Royalty Fee; or (ii) not more than thirty (30) days after date of
invoice. Delinquent Payments shall bear interest from the due date until
deposited at eighteen percent (18%) per annum or the maximum rate permitted by
law, whichever is less. Conversion of any interest amounts into United States
dollars shall occur on the due date or the date of the applicable invoice.
3.03. A. Subject to Section 3.03.B, all Payments shall be made net
of, and Franchisee shall pay from its own funds to the appropriate taxing
authority, any and all applicable withholding tax, value added tax or similar
tax or fee, it being the parties' intention that all Payments to Franchisor
hereunder shall be absolutely net. Franchisee shall deliver to Franchisor
receipts certifying that such taxes or fees have been paid. Any taxes or
duties imposed upon or with respect to this Agreement or any materials,
supplies or specifications acquired by or provided to Franchisee pursuant to
or in connection with this Agreement shall be paid by Franchisee.
B. Notwithstanding Section 3.03.A., Franchisee shall (i)
withhold from Payments of the Franchise Fee and the Royalty Fee any applicable
withholding tax, value added tax or similar tax or fee; (ii) pay such tax to the
appropriate authority; and (iii) deliver to Franchisor receipts therefor as
described in Section 3.03.A. Such tax amounts shall be deducted only from the
Franchise Fee or the Royalty Fee.
3.04 Franchisee shall not withhold or offset any portion of any
Payment due to Franchisor's alleged non-performance hereunder.
3.05 All In-Country Expenses are incurred for the account of, and
directly billed to, Franchisee. When such direct billing is not feasible,
Franchisee shall reimburse such expenses to Franchisor upon receipt of invoice.
4. REPRESENTATIVE; DIRECTOR OF OPERATIONS; MANAGERS; TRAINING
4.01 Franchisee hereby designates [Rep Name] as the Representative.
Any replacement Representative shall be designated within ten (10) days of
the prior Representative's resignation or termination. Each Representative
shall attend and successfully complete at Headquarters Franchisor's "Owner's
Orientation Program" (currently approximately four (4) weeks). The
Representative hereunder and under the Development Agreement shall be the
same individual.
4.02 Franchisee hereby designates [Dir of Ops Name] as the Director of
Operations. Any replacement Director of Operations shall be designated within
ten (10) days of the prior Director of Operations' resignation or termination.
Each Director of Operations shall attend and successfully complete at
Headquarters within six (6) months of appointment Franchisor's training program
required for general managers (SEE Section 4.03). The Director of Operations
hereunder and under the Development Agreement shall be the same individual.
4.03 [FIRST RESTAURANT ONLY - At least six (6) managers (general
manager, assistant general manager, kitchen manager and other managers) are
initially required for the Restaurant. Such managers shall attend and
successfully complete at Headquarters Franchisor's training program for managers
of
T.G.I. Friday's restaurants in the United States (currently approximately
twenty-one (21) weeks).] [SECOND AND SUBSEQUENT RESTAURANTS -Franchisee's
general manager(s) of the Restaurant shall attend and successfully complete at
Headquarters, if not previously trained at Headquarters, Franchisor's training
program for managers of T.G.I. Friday's restaurants in the United States
(currently approximately twenty-one (21) weeks).] Subject to Franchisor's
approval, subsequent managers (except general managers) may be trained by
Headquarters-trained general managers in training restaurants (developed
pursuant to the Development Agreement) to which Franchisor has consented. Any
previously trained manager who is to become a general manager shall attend and
successfully complete at Headquarters Franchisor's training program required for
general managers of T.G.I. Friday's restaurants in the United States (currently
approximately four (4) weeks). Franchisor may require general and kitchen
managers, at Franchisee's expense, to attend and successfully complete
additional training at Headquarters.
4.04 Not less than sixty (60) days prior to the commencement of
Restaurant construction, Franchisee shall designate the Project Manager. Any
replacement Project Manager shall be designated within ten (10) days of the
prior Project Manager's resignation or termination. Prior to commencement of
construction, the Project Manager shall attend and successfully complete
Franchisor's construction training program at Headquarters (currently
approximately two (2) weeks).
4.05 When a franchise agreement for the third Restaurant to be
developed under the Development Agreement is executed, Franchisee shall
designate the Multi-Unit Manager. Additional Multi-Unit Managers shall be
designated from time to time as reasonably required by Franchisor. Prior to
assuming his duties, each Multi-Unit Manager shall have successfully completed
training as a general manager and shall attend at Headquarters and successfully
complete Franchisor's training program for multi-unit managers (currently
approximately four (4) weeks).
4.06 Franchisor shall have the right to interview and consent to each
Director of Operations, each Multi-Unit Manager, each Project Manager and all
Restaurant managers. Franchisor shall endeavor to conduct such interviews in the
Territory, but Franchisor may require that such interviews occur at Headquarters
at Franchisee's expense.
4.07 Franchisee shall bear all costs and expenses relating to the
training of any Representative, Director of Operations, Multi-Unit Manager,
Project Manager, general, assistant, kitchen and other managers.
4.08 Franchisor shall provide instructors, facilities and materials
for Headquarters training. All personnel trained at Headquarters and all
management employees at each Restaurant shall be fluent in [native language]
and in the English language. All training shall be in the English language.
In the event a translator is required for training of Franchisee's employees,
at the Site, Franchisee shall provide, at its expense, such translator (to
whom Franchisor must consent).
4.09 The NSO-Team shall assist in (i) training Franchisee's employees
at the Site; and (ii) the opening of the Restaurant. The NSO-Team shall consist
of approximately twelve (12) people (actual number of members shall be
determined by Franchisor), depending upon the number of T.G.I. Friday's
restaurants already being operated by Franchisee and such other criteria as
Franchisor deems reasonable. Franchisor shall provide the following number of
employees as members of each NSO-Team:
--------------------------------------- ----------------------------------
RESTAURANT NO. OPENED NO. OF FRANCHISOR'S EMPLOYEES
BY DEVELOPER ON THE NSO-TEAM
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
1 12
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
2 6
--------------------------------------- ----------------------------------
3 through 5 3
--------------------------------------- ----------------------------------
6 and thereafter 1
--------------------------------------- ----------------------------------
The Restaurant is the [NUMBER] restaurant developed pursuant to the Development
Agreement. The balance of each NSO-Team shall be comprised of Franchisee's
employees to whom Franchisor has consented; PROVIDED, HOWEVER, if Franchisee
fails or is unable to timely provide such employees, Franchisor may, but shall
not be obligated to, staff the NSO-Team with Franchisor's employees. The cost of
international travel and In-Country Expenses with respect to NSO-Team members
employed by Franchisor shall be borne or reimbursed by Franchisee. In addition,
with respect to any NSO-Team members employed by Franchisor supplied as a result
of Franchisee's failure or inability to provide Franchisee employees, Franchisee
shall additionally reimburse the Wage Expenses of such employees in connection
with their participation on the NSO-Team.
4.10 Franchisee shall comply with the employee training and testing
procedures and requirements reasonably prescribed in the Manuals or otherwise in
writing. In the event any such procedures or requirements contemplate the
performance of such training and testing by Franchisor in the Territory,
Franchisee shall bear or reimburse to Franchisor such employees' cost of
international travel and In-Country Expenses.
4.11 Franchisor may create an audio and/or video recording of any
training programs at Franchisor's expense.
4.12 Unless otherwise provided herein, any materials provided by
Franchisor at Franchisee's request shall be paid for by Franchisee at
Franchisor's cost, plus ten percent (10%), in consideration of Franchisor's
overhead and administrative expenses.
5. RESTAURANT LOCATION; OCCUPANCY CONTRACT
5.01 Franchisee shall not relocate the Restaurant from the Site
without Franchisor's written consent.
5.02 The Occupancy Contract shall be executed by all necessary parties
within ten (10) days of the date hereof. Franchisee shall furnish Franchisor a
complete copy of the Occupancy Contract within ten (10) days after execution.
Such copy may be in [native language] if accompanied by Franchisee's certificate
to the effect that (i) the terms and conditions of the Occupancy Contract are
not inconsistent with the summary delivered as part of the Development
Materials; and (ii) the following covenants are included therein and directing
Franchisor to such covenants:
(A) Lessor shall deliver to Franchisor, simultaneously with
delivery to Franchisee, any notice alleging Franchisee's default under the
Occupancy Contract which threatens or purports to terminate the Occupancy
Contract;
(B) Franchisor may enter the Restaurant premises to protect
the Proprietary Marks or the System or to cure any Event of Default or
default under the Occupancy Contract;
(C) Franchisee may assign the Occupancy Contract to
Franchisor without any fee or modification thereof and Franchisor may assign
or sublease the Occupancy Contract or license the Restaurant premises for any
part of the remaining term of the Occupancy Contract, each without Lessor's
consent; and
(D) Lessor and Franchisee shall not amend the Occupancy
Contract in any way
which is inconsistent with the provisions of Sections 5.02(A) through (D),
inclusive.
5.03 Notwithstanding the terms of Section 5.02, Franchisee shall:
(A) deliver to Franchisor, immediately after delivery to or
by Franchisee, any notice of default under the Occupancy Contract which
threatens or purports to terminate the Occupancy Contract;
(B) permit Franchisor to enter the Restaurant premises to
protect the Proprietary Marks or the System or to cure any Event of Default or
default under the Occupancy Contract; and
(C) not amend the Occupancy Contract in any way which is
inconsistent with the provisions described in Sections 5.02(A) through (D),
inclusive.
6. RESTAURANT CONSTRUCTION
6.01 The Project Manager shall ensure that (i) materials satisfying
the Standards are utilized in construction; (ii) such materials are purchased
from approved suppliers as described in Sections 6.06 and 6.07; and (iii)
construction plans are implemented in accordance with the Standards.
Franchisee shall propose appropriate adaptations of site plans, building
plans and specifications, architectural guidelines, decor and construction
guidelines to the local market, but any such adaptations are subject to
Franchisor's prior written consent.
6.02 Franchisee shall employ a qualified architect and licensed
general contractor, but such appointment shall be subject to Franchisor's
consent. Franchisee shall provide to Franchisor (i) design concept drawings
for Franchisor's review and consent; and (ii) upon request of Franchisor, copies
of architectural or construction contracts applicable to the Restaurant.
6.03 Following Franchisor's consent to design concept drawings,
Franchisee shall, pursuant to the Manuals, (i) submit for Franchisor's review
construction plans and specifications based upon the standard construction plans
provided to Franchisee, adapted to Franchisee's design for the Restaurant, (ii)
modify such plans and specifications as reasonably required by Franchisor, (iii)
submit such modified plans and specifications to Franchisor, and (iv) construct
the Restaurant pursuant to the plans and specifications to which Franchisor has
consented. The construction plans and specifications to which Franchisor has
consented shall not be modified without Franchisor's consent. Prior to the
commencement of construction, Franchisee shall deliver a construction schedule
and thereafter shall deliver monthly revisions thereof indicating construction
progress.
6.04 Franchisee shall obtain all permits and licenses required in
connection with the construction of the Restaurant. Upon request of Franchisor,
copies of such permits and licenses shall be provided to Franchisor.
6.05 Franchisee shall commence construction within six (6) months
after the date of Preliminary Site Consent and shall complete construction no
later than _______ [TO BE AGREED PRIOR TO EXECUTION OF EACH FRANCHISE AGREEMENT]
(_________) months thereafter (and sooner, if so required by the opening
dates mandated by the Development Agreement). Construction shall be deemed to
have been commenced upon the commencement of site work by heavy equipment or,
in the event the Restaurant is to be located in existing shell space,
commencement of construction-related work. Franchisee shall, within ten (10)
days after commencement of construction, advise Franchisor of such
commencement date. Franchisor may inspect construction at the Restaurant
premises. Franchisee shall make all necessary arrangements to ensure
Franchisor's access to the Restaurant premises.
6.06 Franchisee shall acquire from Franchisor, or a supplier
satisfying the requirements of
Section 6.07, all (i) fixtures, furnishings, signs, equipment and other
products and materials required for the development of the Restaurant; (ii)
decorative memorabilia; (iii) Restaurant equipment; and (iv) millwork for the
Restaurant. Such memorabilia, equipment and millwork shall be installed at
Franchisee's expense by Franchisor or such vendor. The purchase price and
charge for installation shall be reasonably established by Franchisor or such
vendor. If installed by Franchisor, installation costs shall include the cost
of international travel, In-Country Expenses and Wage Expenses. Franchisee
acknowledges that Franchisor may (a) profit from such sale and installation;
or (b) receive consideration from such vendor with respect to such sale and
installation.
6.07 Franchisee's suppliers shall (a) demonstrate the ability to meet
the Standards, (b) possess quality controls and capacity to supply Franchisee's
needs promptly, reliably and in a manner consistent with the Standards and the
System, (c) not have been rejected in writing by Franchisor, and (d) have
attended and successfully completed, at such supplier's expense, such training
as reasonably required by Franchisor in the United States. Franchisee shall
provide Franchisor with a current list of suppliers (current supplier lists
shall thereafter be provided upon request). Franchisee shall bear or reimburse
to Franchisor all In-Country Expenses incurred in connection with Franchisor's
review and consent to suppliers. Franchisor may provide a list of suppliers for
such items to whom Franchisor consents in the United States.
6.08 Franchisor reserves the right to consent to, or require, limited
variations from the Standards with respect to the development of other
restaurants in the System.
7. RESTAURANT OPERATIONS; MANUALS
7.01 The Restaurant shall open for business (i) only with Franchisor's
consent; and (ii) promptly after completion of appropriate training pursuant to
the System (as reasonably determined by Franchisor). Upon opening and
thereafter, the Restaurant shall be operated pursuant to the Standards, the
System and this Agreement.
7.02 Franchisee acknowledges that (i) every component of the System is
material to (a) Franchisor, (b) other franchisees in the System and (c) the
operation of the Restaurant; and (ii) compliance by all franchisees with the
Standards and the System is (a) fundamental to the value of the System and to
this Agreement, and (b) the basis for the broad public acceptance of the System
and the goodwill associated therewith.
7.03 Franchisee shall designate and maintain continuously during the
Term the requisite number of general, kitchen and other managers for the
Restaurant, each of whom shall have successfully completed appropriate training
as described herein.
7.04 Except as otherwise provided herein, Franchisee shall:
A. use the Restaurant premises solely for the operation of
the Restaurant pursuant to the terms hereof;
B. keep the Restaurant operating pursuant to the terms hereof
for such minimum hours and days as from time to time prescribed in the Manuals
or otherwise in writing, except as restricted by local law;
C. obtain and maintain all permits and licenses required for
Restaurant operation and comply with all applicable laws and regulations;
D. refrain from using any juke box, video machine or other
coin or token operated
machine, or any film or video device to which Franchisor has not consented;
E. refrain from (i) offering for sale any tickets,
subscriptions or chances; (ii) conducting any pools, raffles or related
activities, (iii) using or allowing any gaming, dancing or live entertainment;
or (iv) using or providing any form of delivery service at, from or on the
Restaurant premises without Franchisor's consent;
F. permit Franchisor to enter upon the Restaurant premises at
any time to inspect the Restaurant and the products and materials used by
Franchisee, cooperate with such inspection and take such steps as may be
necessary to correct any deficiencies discovered during such inspection
(Franchisee acknowledges that Franchisor may re-inspect the Restaurant and such
products or materials or any supplier and revoke its approval should such
supplier fail to meet the Standards) (the cost of such inspection shall be paid
by Franchisee in accordance with Section 7.16.C.) (the cost of such inspection
shall be paid to Franchisee in accordance with Section 7.16.C.); and
G. permit Franchisor to remove from the Restaurant samples of
any inventory items (without payment) in amounts reasonably necessary for
testing to determine if such samples meet the Standards (without limiting
Franchisor's other rights hereunder, Franchisee shall bear or reimburse all
costs of international travel, In-Country Expenses and Wage Expenses incurred if
the sample does not conform to the Standards).
7.05 Franchisee acknowledges that a material aspect of the System is
the (i) breadth of palate range; and (ii) quality of, and Standards relating to,
food and beverage. Franchisee's obligation to adapt the menu and menu items
shall be limited as follows:
A. with Franchisor's consent, Franchisee may limit the total
number of menu items offered on the menu; PROVIDED, HOWEVER, that (i) such menu
shall include (a) a minimum of ninety percent (90%) of the menu items on
Franchisor's then current standard menu (as determined or designated by
Franchisor) for Franchisor-operated T.G.I. Friday's restaurants in the United
States or (b) substitutions or additions thereto to which Franchisor has
consented; and (ii) Franchisor may require that certain menu items offered on
Franchisor's then current standard menu be offered on Franchisee's menu; and
B. Franchisee may include other menu items to which
Franchisor consents; PROVIDED, HOWEVER, that the number of such items shall not
exceed ten percent (10%) of the total number of items offered on Franchisee's
menu.
Menu modifications within the System (which may require acquisition of
additional equipment) may be required by Franchisor once each calendar year.
7.06 Franchisee shall (i) sell or offer only such products and
services to which Franchisor has consented and which are prepared in
accordance with the Standards; (ii) sell or offer for sale all products and
services required by Franchisor; (iii) refrain from any deviation from the
Standards without Franchisor's consent; and (iv) discontinue selling or
offering any products and services to which Franchisor has not consented or
has withdrawn consent in writing.
7.07 Franchisee shall purchase Franchisor's proprietary spice packs
from Franchisor or its designated vendor at a reasonable price established by
Franchisor or such vendor. Franchisee acknowledges that Franchisor may (i)
profit from its sale of spice packs to Franchisee; or (ii) receive consideration
from such vendor with respect to Franchisee's purchases of spice packs.
7.08 Franchisee shall (i) maintain the Restaurant (and all fixtures,
furnishings, signs and equipment) in good order and condition and/or repair any
damage or destruction to the Restaurant, all in compliance with System image and
the Standards, and (ii) as reasonably required by Franchisor, upgrade
the Restaurant to the System image and the Standards. Such upgrade shall not
be required by Franchisor more than once every three (3) years and the cost
thereof shall not exceed Fifty Thousand United States dollars
(U.S.$50,000.00), unless at least twenty-five percent (25%) of
Franchisor-operated T.G.I. Friday's restaurants in the United States have
been so modernized, in which event such cost shall not be so limited.
Franchisee shall undertake and complete such modernization within a
reasonable time specified by Franchisor.
7.09 Franchisee shall (i) acquire all inventory, supplies and other
products and materials required for the operation and maintenance of the
Restaurant solely from suppliers who (a) demonstrate the ability to meet the
Standards, (b) possess quality controls and capacity to supply Franchisee's
needs promptly, reliably and in a manner consistent with the Standards and the
System, and (c) have not been rejected in writing by Franchisor; and (ii)
provide Franchisor with a current list of suppliers (current supplier lists
shall thereafter be provided upon request). Consent to a supplier shall be
within the sole discretion of Franchisor. Franchisee shall bear or reimburse to
Franchisor all of the In-Country Expenses incurred in connection with consent to
suppliers. Franchisor may provide a list of suppliers for such items to whom
Franchisor consents in the United States. Franchisee shall maintain sufficient
amounts of, and shall utilize at all times, such inventory, supplies and other
products or materials.
7.10 Franchisor shall provide Franchisee with one (1) set of the
Manuals "on loan". The Manuals and all materials to be provided hereunder shall
be in the English language. Franchisee acknowledges Franchisor's ownership of
any copyright rights in or to the Manuals. Franchisee shall observe such
reasonable requirements concerning copyright notices as Franchisor requests. The
Manuals shall be returned to Franchisor immediately upon request or upon
termination or expiration of this Agreement. Replacement Manuals and updates to
the Manuals will be made available to Franchisee at an additional cost.
7.11 Franchisee shall operate the Restaurant in accordance with the
System, the Manuals, the Standards, written directives (whether or not such
directives are made part of the Manuals or the Standards) and other manuals
prepared for use in Restaurant operations. The Manuals, the Standards, other
manuals and such written directives may be revised from time to time.
7.12 The Manuals, other manuals, such written directives and any
Confidential Information shall be kept in a secure location in the Restaurant
and returned to Franchisor immediately upon request or upon termination or
expiration of this Agreement.
7.13 Franchisee shall keep the Manuals, the Standards, other manuals
and such written directives up-to-date. In the event of any dispute as to the
contents of the Manuals, the Standards, other manuals or written directives, the
copy thereof maintained by Franchisor shall control.
7.14 Franchisee shall establish prices charged for products or
services sold in the Restaurant.
7.15 Franchisee shall obtain such copyright licenses as may be
necessary to authorize the playing of recorded music in the Restaurant.
Franchisee shall change such recorded music as required from time to time in the
Manuals or otherwise in writing.
7.16 Franchisor shall provide to Franchisee:
A. access, together with other franchisees, to new System
developments and Franchisee may be required to attend meetings in the United
States at its expense to discuss such developments;
B. access to and written materials concerning improvements to
the System which may include, without limitation, new products, recipes,
equipment, specifications and menu formats. At
Franchisee's request, Franchisor shall provide training or demonstrations at
the Restaurant of new products or other changes to the System. Franchisee
shall bear or reimburse to Franchisor all costs of international travel,
In-Country Expenses and Wage Expenses in connection with such demonstrations;
and
C. periodic inspection and evaluation of the Restaurant as
reasonably required by Franchisor. Franchisee shall bear or reimburse the
In-Country Expenses incurred in connection with the first two (2) inspections
each calendar year. If additional inspections are (i) requested by Franchisee;
or (ii) reasonably required by Franchisor, Franchisee shall additionally bear or
reimburse all costs of international travel in connection with such additional
inspections. If Franchisee operates other T.G.I. Friday's restaurants under the
System in the vicinity of the Restaurant, Franchisor shall endeavor to perform
multiple inspections and evaluations on a single inspection trip.
7.17 Franchisor reserves the right to consent to, or require, limited
variation from the Standards with respect to the operation of other T.G.I.
Friday's restaurants in the System.
8. CONFIDENTIAL INFORMATION
8.01 Neither Franchisee nor any Principal shall communicate, disclose
or use any Confidential Information except as (i) permitted herein, or (ii)
required by law. Confidential Information shall be disclosed only to such
employees of Franchisee as is required in connection with performance of job
functions. Neither Franchisee nor any Principal shall, without Franchisor's
prior consent, copy, duplicate, record or otherwise reproduce any Confidential
Information. Confidential Information may be provided to consultants and
contractors only to the extent necessary for such parties to provide services to
Franchisee. Franchisee shall indemnify the Indemnitees from any damages, costs
or expenses resulting from or related to any disclosure or use of Confidential
Information by its agents, employees, consultants and contractors.
8.02 Franchisee and each Principal acknowledge Franchisor's exclusive
ownership of the Confidential Information and the System, and TGIFM's exclusive
ownership of, and Franchisor's license with respect to, the Proprietary Marks.
Neither Franchisee nor any Principal shall, directly or indirectly, contest or
impair Franchisor's or TGIFM's exclusive ownership of, and/or license with
respect to, the Confidential Information, the System or the Proprietary Marks.
8.03 If Franchisee develops improvements (as determined by Franchisor)
to the Confidential Information, Franchisee and the Principals shall each
execute an amendment to this Agreement reflecting such improvements and
Franchisor's or TGIFM's exclusive ownership thereof. All such improvements shall
be Confidential Information.
8.04 Each Principal shall execute and deliver to Franchisor a covenant
in the form attached as ATTACHMENT C. Franchisee shall cause each Director of
Operations, Representative, Multi-Unit Manager, Project Manager, general,
kitchen and other Restaurant managers and such other employees of Franchisee
whom Franchisor shall designate to execute and deliver to Franchisor a covenant
in the form attached as ATTACHMENT D. Notwithstanding the execution of such
covenant, Franchisee shall indemnify the Indemnitees from any damages, costs or
expenses resulting from or related to any disclosure or use of Confidential
Information by any Principal, Director of Operations, Representative, Multi-Unit
Manager, Project Manager, general, kitchen and other Restaurant managers and
other employees of Franchisee.
8.05 Immediately upon any termination or expiration of this Agreement,
Franchisee and each Principal shall return to Franchisor the Confidential
Information (and any copies thereof), including that portion of the Confidential
Information which consists of analyses, compilations, studies or other documents
containing or referring to any part of the Confidential Information prepared by
Franchisee or
such Principal, their agents, representatives or employees.
9. PROPRIETARY MARKS
9.01 Franchisor grants to Franchisee the non-exclusive right and
license to use the Proprietary Marks listed on ATTACHMENT B (subject to the
terms thereof and hereof) during the Term in accordance with the System, the
Standards and as prescribed by Franchisor from time to time. In connection
therewith, Franchisee agrees that:
A. Franchisee shall use (i) only such of the Proprietary
Marks as are designated by Franchisor for Franchisee's use; and (ii) such marks
only in the manner specified by Franchisor in writing. Any other use of any
Proprietary Xxxx shall constitute an infringement of Franchisor's and TGIFM's
rights therein.
B. Franchisee shall use the Proprietary Marks only (i) for
the operation of the Restaurant; (ii) at the Site or in advertising related to
the Restaurant; and (iii) during the Term. Franchisee shall cease (a) any
unauthorized use of any Proprietary Xxxx upon demand; and (b) all use upon the
termination or expiration of this Agreement.
C. (1) Franchisor shall indemnify and defend Franchisee
and each Principal from all Trademark Damages incurred in connection with a
Trademark Action; PROVIDED, HOWEVER, that, as express conditions precedent to
such indemnity, Franchisee and the Principals shall (i) immediately advise
Franchisor of such Trademark Action; and (ii) fully cooperate with Franchisor
and its representatives in the defense or settlement of the Trademark Action.
Franchisor shall have the right (to the exclusion of Franchisee and each
Principal) to (a) select such counsel and other representatives to represent
Franchisor, Franchisee and Principals in connection with the Trademark Action;
(b) make all decisions, judgments and elections in connection with the Trademark
Action; and (c) settle or compromise the Trademark Action in its sole
discretion.
(2) Franchisee and each Principal recognize that others
may have acquired or attempted to acquire rights in or to colorable variations
or copies of the Proprietary Marks in [Country]. Franchisor does not represent,
warrant or covenant that it or TGIFM has any right to use the Proprietary Marks
in [Country] or that the use of any of the Proprietary Marks does not violate
the rights of any other person.
(3) Subject only to the provisions of Section
9.01.C.(1), Franchisor reserves the right to substitute, at Franchisor's
expense, different trade names, service marks, trademarks, logos, emblems,
symbols and indicia of origin for the Proprietary Marks for use in
identifying the System and the business operated thereunder.
D. During the Term, Franchisee shall identify itself as a
"licensed franchisee" of Franchisor (i) in conjunction with any use of the
Proprietary Marks, including, but not limited to, on invoices, order forms,
receipts, contracts and business cards; (ii) in a notice posted at conspicuous
locations in the Restaurant; (iii) on any authorized delivery vehicles; and (iv)
in any other manner as Franchisor may designate in writing.
E. Franchisee shall not pledge, mortgage or otherwise
encumber its rights to use any of the Proprietary Marks.
F. Franchisee shall not use any of the Proprietary Marks as
part of its corporate or other name. Franchisee shall comply with Franchisor's
instructions, and shall execute any documents deemed necessary by Franchisor or
its counsel, in filing and maintaining any requisite trade name or
fictitious name registrations in connection with the Proprietary Marks.
G. (1) Subject to Section 9.01.C., Franchisee and each
Principal hereby waives any claim with respect to, and releases Franchisor and
TGIFM from, any liability or obligation with respect to (i) its use of any of
the Proprietary Marks; or (ii) any Trademark Action.
(2) Franchisee shall immediately notify Franchisor of
any (i) infringement of the Proprietary Marks or challenge to the use of any
thereof; or (ii) claim by any person of any rights in or to any of the
Proprietary Marks. Franchisee and each Principal shall not communicate with any
person except Franchisor and Franchisor's counsel in connection with any such
infringement, challenge or claim. Franchisor in its sole discretion may take
such action as it deems appropriate, and shall exclusively control, any
litigation or proceeding arising from any infringement, challenge, claim or
otherwise relating to any of the Proprietary Marks. Franchisee shall execute any
and all instruments and documents, render such assistance and do such acts and
things as may, in the opinion of Franchisor or its counsel, be necessary or
advisable in any such litigation or proceeding or to otherwise protect or
maintain Franchisor's or TGIFM's rights and interest in the Proprietary Marks.
H. Neither Franchisee nor any Principal shall, directly or
indirectly, apply for, register, attempt to or obtain control of, or interfere
with Franchisor's or TGIFM's efforts to obtain registration or ownership of any
name, trademark, service xxxx or other identifying name anywhere in the world.
I. Franchisee shall cooperate with Franchisor to prove the
continuous and effective use of the Proprietary Marks, including in connection
with any registration (if obtained) or any renewal thereof.
9.02 Franchisee and each Principal agree and acknowledge that:
A. Franchisor or TGIFM is the exclusive owner of all right,
title and interest in and to the Proprietary Marks and the goodwill associated
therewith;
B. the Proprietary Marks identify Franchisor and TGIFM as the
source of origin of goods and services provided under such marks and the System;
C. Franchisee shall not directly or indirectly contest
Franchisor's or TGIFM's ownership or the validity of, or interest in, the
Proprietary Marks;
D. Franchisee does not have, and shall not acquire by use
pursuant to this Agreement, any ownership or other interest in or to the
Proprietary Marks, except the right and license granted herein, subject in all
respects to the terms hereof;
E. any and all goodwill arising from Franchisee's use of the
Proprietary Marks shall inure exclusively to Franchisor or TGIFM without
compensation; and
F. Franchisee's right and license to use the Proprietary
Marks is non-exclusive and, subject to Section 2.01 hereof, Franchisor or
TGIFM has and retains all rights relating to the Proprietary Marks and the
use thereof, including, without limitation, the right to:
(1) grant other licenses to use the Proprietary Marks;
(2) develop and establish other systems using the
Proprietary Marks or other names or marks and to grant licenses thereto without
providing any rights therein to Franchisee; and
(3) engage, directly or indirectly, at
wholesale, retail or otherwise, in (a) the production, distribution,
license and/or sale of products and services under the Proprietary Marks or
other names or marks, and (b) the use, in connection with such production,
distribution and sale, of any and all trademarks, trade names, service marks,
logos, insignia, slogans, emblems, symbols, designs and other identifying
characteristics as may be developed or used from time to time by Franchisor.
9.03 If required by applicable law, Franchisee shall cooperate with
Franchisor in (i) registering Franchisee as an authorized user of the
Proprietary Marks; and (ii) canceling such registration at Franchisor's
request or upon any termination or expiration of this Agreement. Franchisor
shall appoint the Trademark Representative to obtain registration, or to
terminate the registration, of Franchisee as an authorized user of the
Proprietary Marks. Franchisee shall execute an irrevocable power of attorney
contemporaneously herewith in a form acceptable to Franchisor pursuant to
which Franchisee shall authorize the Trademark Representative to register
Franchisee as an authorized user of the Proprietary Marks and to cancel such
registration as described above. Such power of attorney shall continue in
effect notwithstanding the termination or expiration of this Agreement. Any
costs or expenses incurred in connection with any such registration or
termination will be paid by Franchisee.
10. ADVERTISING
10.01 Franchisee recognizes (i) the value of advertising; and (ii)
that standardized advertising programs enhance the goodwill and public image
of the System.
A. Franchisee shall expend not less than two percent (2%)
of Gross Sales, measured over continuing six (6) month periods, for local
advertising. Franchisee's local advertising may utilize media to which
Franchisor has consented, including:
(1) newspapers, magazines and other
periodicals;
(2) radio/ television;
(3) outdoor advertising (E.G., billboards or
signs);
(4) transit advertising;
(5) direct mail; and
(6) such other media to which Franchisor consents.
Expenditures made for participation in (i) advertising and
promotional programs described in Section 10.01.B.; and (ii) Franchisor's
international or regional advertising funds described in Section 10.02.A.
shall be credited to Franchisee's local advertising obligation. Franchisor
may audit Franchisee's books and records to confirm local advertising
expenditures.
B. Franchisor may, from time to time, develop and
administer advertising and sales promotion programs in which Franchisee may
participate, upon terms and conditions established by Franchisor.
10.02 A. Franchisor shall have the right to establish international
or regional advertising funds. If such fund(s) are established and if
advertising to be purchased therewith shall reach local media in the
Territory, Franchisor shall provide notice to Franchisee and Franchisee shall
contribute to such fund(s) on a monthly basis in an amount determined by
Franchisor, such amount not to exceed two percent (2%) of Gross Sales per
month.
B. Franchisor or its designee shall (i) administer such
funds, (ii) direct all advertising programs, and (iii) shall have sole
discretion to consent to or reject all creative concepts, materials and media
and the placement and allocation thereof. Franchisor and its designees
undertake no obligation to (a) make expenditures in the Territory which are
equivalent or proportionate to Franchisee's contribution, or (b) ensure that
any particular franchisee benefits directly or PRO RATA from the placement of
such advertising. Such funds may be applied to Franchisor's costs of
maintaining, administering, directing and preparing advertising; PROVIDED,
HOWEVER, that such funds shall not be used to defray Franchisor's general
operating expenses (except reasonable administrative costs and overhead
related to the administration or direction of such funds and programs). Such
funds shall be maintained in a separate account and an annual statement of
fund expenditures shall be delivered to Franchisee upon request.
10.03 All advertising and promotion by Franchisee shall conform to
the Standards. Prior to use Franchisee shall submit all advertising and
promotional plans and materials not prepared by Franchisor or not previously
consented to by Franchisor during the prior twelve (12) months. Franchisor
shall consent to or reject such plans and materials within thirty (30) days
of receipt. Franchisee shall not use such plans or materials until
Franchisor's consent is received. Franchisee shall promptly discontinue any
advertising or promotional plans or materials, whether or not previously
consented to, upon notice from Franchisor.
11. INSURANCE
11.01 Franchisee shall obtain, at least thirty (30) days prior to
commencement of Restaurant construction, and maintain throughout the Term,
such property, casualty and general liability insurance as may be (i)
required by law; or (ii) reasonably designed to protect Franchisee from the
risks inherent in construction and Restaurant operation. The types and
amounts of coverage and the issuing companies are subject to Franchisor's
consent, which consent will not be unreasonably withheld. Such insurance
shall:
(a) name the Indemnitees as additional insured parties;
(b) contain no provision which limits or reduces
coverage in the event of a claim by any one (1) or more of the Indemnitees;
(c) provide that policy limits shall not be reduced,
coverage restricted, canceled, allowed to lapse or otherwise altered or such
policy(ies) amended without Franchisor's consent; and
(d) be obtained from reputable insurance companies
authorized to do business in all jurisdictions in which the Restaurant is
located.
11.02 Such insurance may provide for reasonable deductible
amounts, but the deductible amounts shall be subject to Franchisor's
review and consent.
11.03 A certificate of insurance shall be submitted for Franchisor's
consent prior to the commencement of construction and thereafter to evidence
uninterrupted coverage. Franchisee shall deliver a complete copy of such
policy(ies) within ten (10) days of request by Franchisor.
11.04 Franchisee shall hold the Indemnitees harmless from any and
all liability or expense arising from any claim, demand, action, suit or
other proceeding resulting from or connected with the operation of the
franchised business by Franchisee and Franchisee's employees or agents, and
Franchisee shall fully indemnify the Indemnitees for any loss sustained in
connection therewith.
11.05 Franchisee's obligation to obtain and maintain insurance or to
indemnify any Indemnitee
shall not be limited by reason of any insurance which may be maintained by
any Indemnitee, nor shall such insurance relieve Franchisee of any liability
under this Agreement. Franchisee's insurance shall be primary to any policies
maintained by any Indemnitee.
11.06 If Franchisee fails to obtain or maintain such insurance,
Franchisor may acquire such insurance at Franchisee's expense. The cost
thereof, together with a reasonable fee for Franchisor's expenses in so
acting and interest at eighteen percent (18%) per annum from the date
acquired, shall be payable by Franchisee upon notice.
12. ACCOUNTING AND RECORDS
12.01 Franchisee shall prepare and preserve, in accordance with the
System and the Manuals, complete and accurate books, records and accounts
with respect to the Restaurant. Franchisee shall prepare reports or
disclosures required or permitted herein and in the Manuals and shall
maintain and preserve the underlying records, including, without limitation,
sales slips, coupons, purchase orders, invoices, payroll records, check
stubs, bank statements, sales tax records and returns, cash receipts and
disbursements, journals and ledgers, in a form and manner prescribed in the
Manuals or otherwise prescribed by Franchisor in writing. Franchisee shall
adopt such accounting periods as Franchisor shall prescribe.
12.02 Franchisee shall submit to Franchisor (i) a monthly accounting
of Gross Sales simultaneously with the Payment of the Royalty Fee therefor;
and (ii) an annual accounting of Gross Sales within thirty (30) days after
the end of each accounting year. Each such report shall reflect Gross Sales
in [Currency].
12.03 Franchisee shall submit to Franchisor such additional reports,
records, data, information, financial statements (including guest counts) as
Franchisor may reasonably require or as specified from time to time in the
Manuals in the form reasonably required by Franchisor. Franchisor may
inspect, copy and audit all such information (Sections 12.01, 12.02 and
12.03) and the books, records and tax returns of Franchisee upon five (5)
days' prior notice.
12.04 If any audit discloses an (i) understatement of Gross Sales
for the period subject to audit of one percent (1%) or more; or (ii)
underpayment of the Royalty Fee for the period subject to audit of five
percent (5%) or more, Franchisee shall reimburse (in addition to payment of
such Royalty Fee) any and all costs and expenses incurred connected with such
audit, including, without limitation, the costs of international travel,
In-Country Expenses and Wage Expenses of the auditors.
12.05 The annual accounting of Gross Sales required in Section 12.02
and other financial statements requested by Franchisor shall be audited by an
independent certified public accountant or its equivalent to whom Franchisor
has consented. All financial statements or reports shall be accompanied by a
certificate of Franchisee's treasurer or chief financial officer to the
effect that such statements or reports fairly and accurately reflect the
matters reported therein and are complete and correct.
13. FRANCHISEE'S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND
NEGATIVE COVENANTS
13.01 Franchisee represents and warrants to Franchisor as follows:
A. Franchisee is a corporation or partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with all requisite power and authority to
own, operate and lease its assets (real or personal), to carry on its
business, to enter into this Agreement and perform its obligations hereunder.
Franchisee is duly qualified to do business and is in good standing in each
jurisdiction in which its business or the ownership of its assets requires.
B. The execution, delivery and performance by Franchisee of
this Agreement and all other agreements contemplated herein has been duly
authorized by all requisite corporate or partnership action and no further
action is necessary to make this Agreement or such other agreements valid and
binding upon it and enforceable against it in accordance with their
respective terms. Neither the execution, delivery nor performance by
Franchisee of this Agreement or any other agreements contemplated hereby will
conflict with, or result in a breach of any term or provision of Franchisee's
certificate or articles of incorporation, corporate charter, by-laws or
partnership agreement or under any indenture, mortgage, deed of trust or
other contract or agreement to which Franchisee is a party or by which it or
any of its assets are bound, or breach any order, writ, injunction or decree
of any court, administrative agency or governmental body.
C. Franchisee's certificates or articles of incorporation,
corporate charter, by-laws, partnership agreement and other governing
documents expressly limit Franchisee's business activities solely to the
development and operation (pursuant to the Development Agreement and this
Agreement or other franchise agreements with Franchisor) of "Restaurants" (as
defined in the Development Agreement).
D. Certified copies of Franchisee's certificate or articles
of incorporation, corporate charter, by-laws, partnership agreement, other
governing documents and any amendments thereto, including board of director's
or partner's resolutions authorizing this Agreement, each translated into the
English language, have been delivered to Franchisor.
E. Certified list of the shareholders of Franchisee,
including the number and type of shares owned by each shareholder.
F. Franchisee's certificate or articles of
incorporation, corporate charter or partnership agreement limit Transfers
as described in Sections 14.02 and 14.03.
G. If Franchisee is (i) a corporation, each Security shall
bear a legend (in a form to which Franchisor consents) indicating that; or
(ii) a partnership, its partnership agreement shall provide (in a form to
which Franchisor consents) that, any Transfer is subject to Sections 14.02
and 14.03.
13.02 Franchisee affirmatively covenants with Franchisor as follows:
A. Franchisee shall perform its duties and obligations
hereunder and shall require each Director of Operations, Multi-Unit Manager,
Project Manager and general, assistant general, kitchen and other managers to
dedicate their respective full time and best efforts to the development,
construction, management, operation, supervision and promotion of the
Restaurant.
B. Franchisee shall promptly provide to Franchisor, without
charge, any information concerning any new process or improvements in the
development, construction, management, operation, supervision or promotion of
the Restaurant developed by Franchisee or any Principal. Any such process or
improvement shall be Franchisor's exclusive property.
C. Franchisee shall comply with all requirements of
applicable rules, regulations and ordinances.
D. Franchisee shall maintain a current list of all Principals
and deliver a certified
copy thereof to Franchisor upon (i) any Transfer; or (ii) request.
E. Each Security issued subsequent to the date hereof shall
bear a legend (in a form acceptable to Franchisor) indicating that any
Transfer is subject to Sections 14.02 and 14.03.
13.03 Franchisee acknowledges to and/or negatively covenants with
Franchisor as follows:
A. Franchisee shall not amend its certificate or articles
of incorporation, corporate charter, by-laws, partnership agreement or other
governing documents in a manner which is inconsistent with Sections 13.01.C,
14.02 and 14.03.
B. Franchisee shall not remove or permit removal from any
Security or its partnership agreement, or issue any Security that does not
have endorsed upon it, the legend described in Section 13.01.G.
C. Franchisee and each Principal shall receive valuable,
unique training, trade secrets and the Confidential Information which are
beyond the present skills, experience and knowledge of Franchisee, any
Principal and Franchisee's employees. Franchisee and each Principal
acknowledge (i) that such training, trade secrets and the Confidential
Information (a) are essential to the development of the Restaurants and (b)
provides a competitive advantage to Franchisee; and (ii) access to such
training, trade secrets and the Confidential Information is a primary reason
for their execution of this Agreement. In consideration thereof, Franchisee
and each Principal covenant that, during the Term and for a period of two (2)
years after the expiration or termination of this Agreement, neither
Franchisee nor any Principal shall, directly or indirectly:
(1) employ or seek to employ any person (or
induce such person to leave his or her employment) who is, or has within
one (1) year been, employed (i) by Franchisor; (ii) by any developer or
franchisee of Franchisor; or (iii) in any other concept or system owned,
operated or franchised by an Affiliate, as a director, officer or in any
managerial capacity;
(2) own, maintain, operate or have any
interest in any Competing Business;
(3) own, maintain, operate or have any
interest in any Competing Business which business is, or is intended to
be, located in the Territory; or
(4) own, maintain, operate or have any
interest in any Competing Business which business is, or is intended to
be, located within a twenty (20) kilometer radius of any restaurant in the
System (for purposes of enforcement of this Section 13.03.C.(4) the law of
the jurisdiction where such restaurant is located shall control).
D. Sections 13.03.C (2), (3) and (4) shall not apply to the
acquisition by Franchisee of an interest for investment only of five percent
(5%) or less of the capital stock of a Publicly-Held Entity if such owner is
not a director, officer or manager therefor or consultant thereto.
13.04 Each of the foregoing covenants is independent of each
other covenant or agreement contained in this Agreement.
13.05 Franchisor may, in its sole discretion, reduce the area,
duration or scope of any covenant contained in Section 13.03 without
Franchisee's or any Principal's consent, effective upon notice to Franchisee.
Franchisee and each Principal shall comply with any covenant as so modified.
13.06 Franchisee's representations, warranties, covenants and
agreements herein are continuing representations, warranties, covenants and
agreements, each of which shall survive the expiration or termination hereof.
14. TRANSFER
14.01 Franchisor may assign this Agreement, or any of its rights or
obligations herein, to any person or entity without Franchisee's or any
Principal's consent; PROVIDED, HOWEVER, that any such assignment shall not
affect Franchisee's rights hereunder.
14.02 A. Franchisee and each Principal acknowledge that Franchisee's
rights and obligations herein and in each Franchise Agreement are personal to
Franchisee and that Franchisor has entered into this Agreement relying upon
the business skill, experience and aptitude, financial resources and
reputation of Franchisee and each Principal. Therefore, neither Franchisee
nor any Principal, or their respective successors or permitted assigns, shall
complete, or allow to be completed, any Transfer without Franchisor's
consent. Any purported Transfer, by operation of law or otherwise, without
Franchisor's consent shall be null and void and constitute an Event of
Default.
B. Franchisor may require satisfaction of any of the following
conditions, and such other conditions as Franchisor may reasonably require,
prior to consenting to any Transfer:
(1) (i) no Event of Default shall have occurred
under this Agreement and be continuing, and (ii) no event shall have
occurred under this Agreement which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default;
(2) Franchisee and/or any affected Principal
shall deliver a general release of any and all claims against the
Indemnitees, including, without limitation, claims arising under this
Agreement, in a form acceptable to Franchisor;
(3) Franchisee and/or any affected Principal
shall remain liable for the performance of its obligations, covenants and
agreements herein through the date of Transfer and shall execute all
instruments reasonably requested by Franchisor to evidence such liability;
(4) the transferee and all owners of any record
or beneficial interest in the capital stock (or other interest) thereof shall
(i) make each of Franchisee's and Principal's representations and warranties;
(ii) assume full, unconditional, joint and several liability for, and agree
to perform from the date of Transfer, each of Franchisee's and Principal's
obligations, covenants and agreements herein; and (iii) execute all
instruments (in a form acceptable to Franchisor) reasonably requested by
Franchisor to evidence the foregoing;
(5) the transferee shall satisfy, in Franchisor's
reasonable judgment, Franchisor's then existing criteria for international
franchisees or principals, including, without limitation: (i) education;
(ii) business skill, experience and aptitude; (iii) character and reputation;
and (iv) financial resources;
(6) the transferee and all of its owners shall
execute (without extending the Term) the standard form of franchise
agreement then being offered to new System franchisees in international
markets or other form of this Agreement and such other ancillary agreements
as Franchisor may request, all of which shall supersede this Agreement and
its ancillary documents and the terms of which may differ from the terms
hereof including, without limitation, higher Franchise and Royalty Fees and
advertising contributions;
(7) the transferee at its expense shall satisfy
the requirements of Sections 2.03.B. hereof as if Franchisee had exercised
a Renewal Term; and
(8) at the transferee's expense, the transferee's
Representative, any Multi-Unit Manager(s), Director of Operations, Project
Manager, general manager(s) and other managers shall complete such training
as then required (if not previously trained pursuant to the terms hereof),
upon such terms and conditions as Franchisor may reasonably require.
14.03 Franchisee and each Principal agree that (i) no Transfer
(including the issuance of any new Securities) shall occur without
Franchisor's prior written consent; (ii) Franchisor shall have and is hereby
granted a right of first refusal and option with respect to any Transfer;
(iii) should any Principal desire to accept a BONA FIDE offer to so Transfer
or should Franchisee desire to issue or sell any new Securities, such party
shall promptly notify Franchisor thereof and shall provide such information
and documents relating thereto as Franchisor may require; (iv) within thirty
(30) days after receipt of such notice and documents, Franchisor may notify
such party that it intends to complete such Transfer upon such terms and
conditions (PROVIDED, HOWEVER, that (a) Franchisor may elect to make payment
in United States dollars or such other currency Franchisor designates and (b)
such transaction shall be consummated within a reasonable period of time
after Franchisor has given such notice); (v) any material change in the terms
of any offer or any change in the identity of the proposed transferee shall
constitute a new offer subject to Franchisor's right and option; and (vi)
Franchisor's failure to exercise such right and option shall not constitute a
waiver of such right and option with respect to future offers.
14.04 In the event Franchisee requests Franchisor's consent to any
proposed Transfer, there shall be paid to Franchisor a non-refundable fee to
compensate Franchisor for its costs and expenses associated with reviewing
the proposed Transfer, including, without limitation, travel costs and
expenses, legal and accounting fees and diversion of employee resources. No
such fee shall be payable with respect to a transaction with Franchisor
described in Section 14.03.
14.05 In the event any Principal is a natural person, Franchisee
shall promptly notify Franchisor of the death or Permanent Disability of such
Principal. Any Transfer upon death or Permanent Disability shall be subject
to the terms and conditions described in Sections 14.02 and 14.03 and shall
be completed prior to a date which is (i) one (1) year after date of death;
or (ii) ninety (90) days after the date such Principal becomes, or is deemed
to be, Permanently Disabled. Any Principal refusing to submit to examination
with respect to Permanent Disability shall be deemed Permanently Disabled.
14.06 Franchisor's consent to any Transfer shall not constitute a
waiver of (i) any claims it may have against the transferor; or (ii) the
transferee's compliance with terms hereof.
15. CONSENT AND WAIVER
15.01 When required, Franchisee or any Principal shall make written
request for Franchisor's consent in advance and such consent shall not be
deemed given by Franchisee unless it is set forth in writing. Franchisor's
consent shall not be unreasonably withheld, except as expressly provided
herein.
15.02 Except as expressly made herein, Franchisor makes no
representations or warranties upon which Franchisee or any Principal may rely
and assumes no liability or obligation to Franchisee, any Principal or any
third party by providing any waiver, approval, advice, consent or services to
Franchisee or due to any delay or denial thereof.
16. DEFAULT AND REMEDIES
16.01 The following shall constitute Events of Default by Franchisee:
(i) failure to
(a) commence or complete construction of the Restaurant or (b) open and
thereafter continually operate the Restaurant, as described herein; (ii) the
breach or falsity of any representation or warranty herein; (iii) failure to
deliver executed covenants as required in Section 8.04; (iv) failure to
comply with or perform its covenants, obligations and agreements herein; (v)
any Transfer that (a) occurs other than as provided in Section 14, or (b)
fails to occur within the time periods described in Section 14
(notwithstanding any lack of, or limits upon, the enforceability of any term
or provision of Sections 13.01.F. or 14.02; (vi) failure to make any Payment
on or before the date payable; (vii) failure to meet and/or maintain the
Standards; (viii) Franchisee (a) is adjudicated, or is, bankrupt or
insolvent, (b) makes an assignment for the benefit of creditors, or (c) seeks
protection from creditors by petition in bankruptcy or otherwise or there is
filed against Franchisee a similar petition which is not dismissed within
thirty (30) days; (ix) the appointment of a liquidator or receiver that is
not dismissed within thirty (30) days of appointment for (a) all or
substantially all of Franchisee's assets or (b) the Restaurant; (x) breach or
failure to perform any other term or condition of this Agreement; (xi)
Franchisee or any Principal pleads guilty to or is convicted of a felony or a
crime involving moral turpitude or any other crime or offense that Franchisor
reasonably believes is likely to adversely affect the System or the goodwill
associated therewith (whether in the United States, the Territory or
elsewhere) or Franchisor's interest therein; or (xii) any (a) two (2) or more
Events of Default shall arise under any single Section of this Section 16.01
or (b) three (3) or more Events of Default shall arise under this Section
16.01, in any continuous twelve (12) month period notwithstanding the
previous cure of such Events of Default.
Franchisor shall not exercise any remedies available
hereunder with respect to the following described Events of Default unless
such Events of Default remain uncured after notice from Franchisor thereof
and the expiration of the following cure periods:
(a) with respect to any Event of Default arising under
Section 16.01 (vi) - ten (10) days; or
(b) with respect to any Event of Default arising under
Sections 16.01 (i) - (v) inclusive, (vii) and (x) - thirty (30) days.
No such limitation upon Franchisor's right to exercise
remedies shall exist with respect to Events of Default risen under Sections
16.01 (viii), (ix), (xi) or (xii).
16.02 Upon the occurrence of an Event of Default, Franchisor
may exercise one or more of the following remedies or such other remedies as
may be available at law or in equity:
A. cure such Event of Default at Franchisee's expense and,
in connection therewith, Franchisee (i) hereby grants to Franchisor all
rights and powers necessary or appropriate to accomplish such cure; (ii)
shall indemnify and hold the Indemnitees harmless from and against all costs,
expenses (including reasonable fees of counsel and other engaged
professionals), liabilities, claims, demands and causes of action (including
actions of third parties) incurred by or alleged against any Indemnitee in
connection with Franchisor's cure; and (iii) shall reimburse or pay such
costs or damages within ten (10) days of receipt of Franchisor's invoice
therefor;
B. in the event of a material Event of Default, terminate
this Agreement and all rights granted hereunder, upon notice to Franchisee,
without waiving any (i) claim for damages suffered by Franchisor; or (ii)
other rights, remedies or claims; or
C. with respect to an Event of Default arising from a
breach of covenant contained in Section 13.03.C (1), the affected former
employer shall be compensated by the breaching party (and Franchisee shall be
additionally liable for breaches by any Principal) for the reasonable costs
and expenses incurred by such employer in connection with training such
employee. Franchisee and each Principal acknowledge that such expenses are
impossible to accurately quantify and agree that, as
liquidated damages and not as a penalty, an amount equal to such employee's
annual rate of compensation in the final twelve (12) months of employment (or
an annualized rate if employed for a shorter period) by such former employer
shall be paid by the breaching party to the former employer at such time as
such employee commences employment.
For purposes of this Section 16, "material" shall mean
substantial deviation from the performance required. The parties agree that
Events of Default arising under Section 16.01(i), (iii), (iv) [with respect
to Events of Default arising, without limitation, under Sections 9.01 through
9.03, inclusive], (v), (vi), (viii), (ix), (xi) or (xii) (without limitation)
shall constitute material Events of Default.
D. Franchisee and each Principal agree that Franchisor's
exercise of the rights and remedies set forth herein are reasonable.
Franchisor may, in addition to pursuing any other remedies, specifically
enforce such obligations, covenants and agreements or obtain injunctive or
other equitable relief in connection with the violation or anticipated
violation of such obligations, covenants and agreements without the necessity
of showing (i) actual or threatened harm; (ii) the inadequacy of damages as a
remedy; or (iii) likelihood of success on the merits, and without being
required to furnish bond or other security. Nothing in this Agreement shall
impair Franchisor's right to obtain equitable relief.
16.03 Franchisor's rights and remedies shall be cumulative, and not
exclusive, of any other right or remedy described herein or available at law
or in equity. The expiration or termination of this Agreement shall not
release Franchisee or any Principal from any liability or obligation then
accrued or any liability or obligation continuing beyond, or arising from,
such expiration or termination.
16.04 Franchisor's failure to exercise any right or remedy or to
enforce any obligation, covenant or agreement herein shall not constitute a
waiver by, or estoppel of, Franchisor's right to enforce strict compliance
with any such obligation, covenant or agreement. No custom or practice shall
modify or amend this Agreement. Franchisor's waiver of, or failure or
inability to enforce, any right or remedy shall not impair Franchisor's
rights or remedies with respect to subsequent Events of Default of the same,
similar or different nature. Franchisor's delay, forbearance or failure to
exercise any right or remedy in connection with any Event of Default or
default by other franchisees shall not affect, impair or constitute a waiver
of such rights or remedies. Acceptance of any Payment shall not waive any
Event of Default.
16.05 Franchisee and each Principal shall, jointly and severally,
pay all costs and expenses (including reasonable fees of counsel and other
engaged professionals) incurred by Franchisor in successfully enforcing this
Agreement. The existence of any claims, demands or actions which either
Franchisee or any Principal may have against Franchisor, whether arising from
this Agreement or otherwise, shall not constitute a defense to Franchisor's
enforcement of Franchisee's or any Principal's representations, warranties,
covenants, agreements or obligations herein.
16.06 During the Term, the parties acknowledge that:
A. if any governmental authority expropriates or threatens
to expropriate any of the assets of Franchisee;
B. if any governmental authority expropriates or
threatens to expropriate any assets (including, but not limited to, the
intellectual property rights) of Franchisor; or
C. if Franchisee is prevented by any governmental authority
whether due to foreign exchange restrictions or for any other reason from
paying any Royalty Fee or making any other payment to Franchisor in United
States Dollars for a period of twelve (12) months, Franchisor or Franchisee
may, at either party's option, terminate this Agreement on the giving of
thirty (30) days notice in writing to the other party.
17. OBLIGATIONS UPON TERMINATION OR EXPIRATION
17.01 Upon any termination or expiration of this Agreement, and
subject to Section 2.A (second sentence) of the Development Agreement (if
then if effect), Franchisor may establish, or authorize others to establish,
T.G.I. Friday's restaurants in the Territory.
17.02 Upon any termination or expiration of this Agreement, all
rights granted to Franchisee herein shall terminate and Franchisee shall:
A. immediately cease to operate the Restaurant under
the System;
B. immediately cease to use (subject to other franchise
agreements executed pursuant to the Development Agreement (if then in
effect)) (i) any Confidential Information; (ii) the System and the Standards;
and (iii) the Proprietary Marks and other distinctive signs, symbols and
devices associated with the System;
C. immediately deliver to Franchisor all Confidential
Information and all copies thereof, retaining copies thereof only as
reasonably required to comply with law; and
D. cancel any assumed name or equivalent registration
which contains any of the Proprietary Marks or any other name, service xxxx
or trademark of Franchisor or TGIFM.
Franchisee shall furnish evidence of compliance with these
obligations within five (5) days after any termination hereof.
17.03 A. Franchisee grants to Franchisor the option, exercisable
upon notice within thirty (30) days after any such termination or expiration
of this Agreement, to acquire Franchisee's rights and obligations under the
Occupancy Contract.
B. If Franchisor exercises such option, Franchisee grants
to Franchisor the further option, to be exercised within thirty (30) days
after taking possession of the Restaurant premises, to purchase the
Furnishings at Franchisee's then current book value or fair market value,
whichever is less, free and clear of all liens, encumbrances or claims. For
purposes of computing book value, depreciation shall be calculated on a
straight-line basis, using useful lives as recommended by the
[LOCAL ACCOUNTING BOARD]. If the parties cannot agree on the fair market
value within fifteen (15) days, fair market value shall be determined by
arbitration pursuant to Section 18 hereof. Franchisor's purchase shall be
completed not later than thirty (30) days after the book and fair market
value are established (by agreement or arbitration). Such amount, less any
sums otherwise due Franchisor from Franchisee, shall be paid to Franchisee at
a closing which shall take place at Headquarters. At such closing, the
parties shall execute such instruments of conveyance and/or transfer as
reasonably required by Franchisor.
C. In the event Franchisor does not elect to purchase the
Furnishings, Franchisee shall, at its expense, remove the Furnishings from
the Restaurant within ten (10) days after notice or ten (10) days after
expiration of the option granted in Section 17.03.B, whichever first occurs.
If Franchisee fails to so remove the Furnishings, Franchisor may remove same
at Franchisee's expense.
17.04 If Franchisor does not exercise its option to acquire the
Occupancy Contract, Franchisee shall, within thirty (30) days after any
termination or expiration of this Agreement, make such alterations to the
Restaurant as may be necessary, in Franchisor's reasonable judgment, to
distinguish the appearance of the Site from that of other T.G.I. Friday's
restaurants in the System, including, but not limited to:
A. removal of decorative memorabilia, including wall
hangings, the racing xxxxx, gas
pumps or street lamps and brass railings;
B. removal of stained glass and Xxxxxxx lamps and
chandeliers;
C. removal of proprietary phone booth;
D. removal of red and white striped outside awnings;
E. removal or painting of interior awnings and exterior
and interior walls to a solid color other than a color specified in the
Standards;
F. removal of signage; and
G. removal of all items, such as menus, recipes or
any other items bearing any Proprietary Xxxx and all other proprietary items
or inventory, including, without limitation, china, service xxxx, uniforms,
tablecloths and spice packs.
17.05 Subsequent to any termination or expiration of this Agreement,
Franchisee shall not (i) use any reproduction, counterfeit, copy or colorable
imitation of any of the Proprietary Marks which could cause confusion,
mistake or deception as to source of origin or which could dilute
Franchisor's rights in and to any of the Proprietary Marks; (ii) utilize any
designation of origin, description or representation which suggests an
association or connection with Franchisor; or (iii) utilize the System or any
part thereof.
17.06 Until all Payments are made and any damages, costs or expenses
incurred or suffered by Franchisor have been paid, Franchisor shall have, and
Franchisee shall be deemed to have granted, a lien against any and all of the
Furnishings and Franchisee's interest in the Occupancy Contract and Site.
17.07 Franchisee shall execute an irrevocable power of attorney
contemporaneously herewith, in such form as Franchisor shall provide, pursuant
to which Franchisee shall authorize its attorney-in-fact designated therein to
carry out Franchisee's obligations in this Section 17.
17.08 Franchisee and each Principal shall, jointly and severally, pay
all costs and expenses (including reasonable attorneys' fees) incurred by
Franchisor in connection with the successful enforcement of this Section 17. In
the event Franchisee fails to comply with this Section 17, Franchisor may enter
upon the Site, without being guilty of trespass or otherwise liable, for the
purpose of making or causing to be made such alterations at Franchisee's
expense.
17.09 Franchisee expressly and irrevocably waives any and all rights
and/or remedies which may now or hereafter exist or arise to post-termination or
post-nonrenewal indemnity or compensation from Franchisor (including, without
limitation, for loss of goodwill or future business) and any such rights and/or
remedies are hereby assigned to Franchisor.
18. ARBITRATION
18.01 EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED HEREIN, ANY DISPUTE
UNDER THIS AGREEMENT NOT SETTLED BY AGREEMENT SHALL BE REFERRED TO ARBITRATION.
ARBITRATION MAY BE INITIATED AND ARBITRATORS CHOSEN AS PROVIDED IN THE UNCITRAL
ARBITRATION RULES.
18.02 NO ARBITRATOR CHOSEN PURSUANT TO SECTION 18.01 SHALL BE RELATED
TO OR AFFILIATED WITH FRANCHISOR, FRANCHISEE, EITHER PARTY'S AFFILIATES, ANY
PRINCIPAL, THE REPRESENTATIVE OR THE DIRECTOR OF OPERATIONS. ALL ARBITRATORS
SHALL BE FLUENT IN THE ENGLISH LANGUAGE.
18.03 THE ARBITRAL PROCEEDINGS SHALL BE CONDUCTED IN (i) ACCORDANCE
WITH AND SHALL BE SUBJECT TO THE UNCITRAL ARBITRATION RULES IN EFFECT FROM TIME
TO TIME; AND (ii) THE ENGLISH LANGUAGE. THE ARBITRATION PROCEEDINGS SHALL BE
CONDUCTED IN THE CITY IN WHICH THE RESPONDENT PARTY'S CORPORATE HEADQUARTERS IS
LOCATED.
18.04 THE DECISION IN WRITING OF THE ARBITRATOR(S) SHALL BE (i) IN THE
ENGLISH LANGUAGE AND (ii) FINAL AND BINDING. THE COSTS AND EXPENSES OF
ARBITRATION SHALL BE BORNE 50% BY FRANCHISOR AND 50% BY FRANCHISEE. EACH PARTY
SHALL BEAR THE COSTS AND EXPENSES OF THE ARBITRATOR IT HAS CHOSEN AND THE COSTS
AND EXPENSES OF ANY ADDITIONAL ARBITRATORS SHALL BE SHARED 50% BY FRANCHISOR AND
50% BY FRANCHISEE. EITHER PARTY MAY APPLY TO ANY COURT HAVING JURISDICTION FOR
AN ORDER CONFIRMING, OR TO ENFORCE, THE AWARD. ANY RIGHT OF EITHER PARTY TO
JUDICIAL ACTION ON ANY MATTER SUBJECT TO ARBITRATION HEREUNDER IS HEREBY WAIVED,
EXCEPT SUIT TO ENFORCE THE ARBITRATION AWARD.
18.05 THE ARBITRATOR(S) SHALL NOT EXTEND, MODIFY OR SUSPEND ANY OF THE
TERMS OF THIS AGREEMENT OR THE REASONABLE STANDARDS OF BUSINESS PERFORMANCE AND
OPERATION ESTABLISHED BY FRANCHISOR IN GOOD FAITH. A NOTICE OF, OR REQUEST FOR,
ARBITRATION WILL NOT OPERATE TO STAY, POSTPONE OR RESCIND THE EFFECTIVENESS OF
ANY DEMAND FOR PERFORMANCE OR NOTICE OF TERMINATION.
18.06 NOTWITHSTANDING THE FOREGOING, ACTIONS INITIATED OR MAINTAINED BY
FRANCHISOR FOR INJUNCTIVE OR OTHER EQUITABLE RELIEF ARE NOT LIMITED TO
ARBITRATION AND MAY BE BROUGHT IN ANY COURT HAVING JURISDICTION.
19. INDEMNIFICATION
19.01 Subject to Section 9.01.C. hereof, Franchisee and each Principal
shall, at all times, indemnify and hold harmless, to the fullest extent
permitted by law, the Indemnitees, from all "losses and expenses" (as defined
below) incurred in connection with any action, suit, proceeding, claim, demand,
investigation or inquiry (formal or informal), or any settlement thereof
(whether or not a formal proceeding or action has been instituted) which arises
out of or is based upon any of the following:
(1) The infringement, alleged infringement, or any other
violation or alleged violation by Franchisee or any Principal of any patent,
xxxx or copyright or other proprietary right owned or controlled by third
parties.
(2) The violation, breach or asserted violation or breach by
Franchisee or any Principal of any contract, federal, state or local law,
regulation, ruling, standard or directive or any industry standard.
(3) Libel, slander or any other form of defamation of
Franchisor or the System, by Franchisee or any Principal.
(4) The violation or breach by Franchisee or any Principal
of any warranty, representation, agreement or obligation in this Agreement.
(5) Acts, errors or omissions of Franchisee or any of its
agents, servants,
employees, contractors, partners, affiliates or representatives.
B. Franchisee and each Principal agrees to give Franchisor immediate
notice of any such action, suit, proceeding, claim, demand, inquiry or
investigation.
C. Franchisor shall at all times have the absolute right to retain
counsel of its own choosing in connection with any action, suit, proceeding,
claim, demand, inquiry or investigation. Franchisor shall at all times have the
absolute right to investigate any action, suit proceeding, claim or demand
itself.
D. Franchisee and each Principal shall indemnify Franchisor for its
attorneys' fees, expenses, and costs incurred in connection with the exercise of
Franchisor's rights under Section 19.01.C. This provision shall not be construed
so as to limit or in any way affect Franchisee's indemnity obligations pursuant
to the other provisions of Section 19.01.
E. In the event that Franchisor's exercise of its rights under Section
19.01.C actually results in Franchisee's insurer (with respect to insurance
required to be maintained by Franchisee pursuant to Section 11) (hereinafter,
the "Insurer") refusing to pay on a third-party claim, all causes of action and
legal remedies which Franchisee might have against the Insurer shall be
automatically assigned to Franchisor without the need for any further action on
Franchisor's or Franchisee's part. For the purposes of Section 19.01, "actually
results" means that, but for Franchisor's exercise of its rights under Section
19.01.C, the Insurer would not have refused to pay on said third-party claim.
F. In the event that Franchisor's exercise of its rights under Section
19.01.C actually results in the Insurer refusing to pay on a third-party claim,
Franchisee shall not be required to indemnify Franchisor for the Franchisor's
attorneys' fees, expenses and costs incurred in connection with that claim.
G. In the event that the Insurer subsequently reverses its previous
decision to not pay a claim, by in fact paying that claim, Franchisee shall be
required to indemnify Franchisor for the Franchisor's attorneys' fees, expenses
and costs incurred in connection with that claim, just as if the Insurer had
never denied the claim.
H. In the event that Franchisee encourages, requests, or suggests that
the Insurer deny a claim, Franchisee shall indemnify Franchisor for its
attorneys' fees, expenses and costs in connection with that claim.
I. Subject to the provisions of Section 19.01.B above, in order to
protect persons or property, or its reputation or goodwill, or the reputation or
goodwill of others, Franchisor may, at any time and without notice, as it, in
its judgment, deems appropriate, consent or agree to settlements or take such
other remedial or corrective action as it deems expedient with respect to the
action, suit, proceeding, claim, demand, inquiry or investigation if, in
Franchisor's sole judgment, there are reasonable grounds to believe that:
(1) any of the acts or circumstances enumerated in
Section 19.01.A above have occurred; or
(2) any act, error, or omission of Franchisee or any
Principal may result directly or indirectly in damage, injury or harm to any
person or any property.
J. In addition to its indemnity obligations under Section 19.01.D,
Franchisee and each Principal shall indemnify Franchisor for any and all losses,
compensatory damages, exemplary or punitive damages, fines, charges, costs,
expenses, lost profits, settlement amounts, judgments, compensation for damages
to the Franchisor's reputation and goodwill, costs of or resulting from delays,
financing, costs of advertising material and media time/space, and costs of
changing, substituting or replacing the same, and
any and all expenses of recall, refunds, compensation, public notices and
other such amounts incurred in connection with the matters described, which
result from any of the items set forth in Section 19.01.
K. Franchisor does not assume any liability whatsoever for acts,
errors, or omissions of those with whom Franchisee or any Principal may
contract, regardless of the purpose. Franchisee and Principal shall hold
harmless and indemnify Franchisor for all losses and expenses which may arise
out of any acts, errors or omissions of these third parties.
L. Under no circumstances shall Franchisor be required or obligated to
seek recovery from third parties or otherwise mitigate its losses in order to
maintain a claim against Franchisee or any Principal. Franchisee and each
Principal agree that the failure to pursue such recovery or mitigate losses will
in no way reduce the amounts recoverable by Franchisor from Franchisee or any
Principal.
M. Notwithstanding anything to the contrary contained in this
Agreement, Franchisee is not required to indemnify Franchisor with regard to any
infringement, alleged infringement or other violation or alleged violation by
Franchisee or any Principal of any patent, xxxx, or copyright or other
proprietary right owned or controlled by a third party, arising in connection
with the use of the Proprietary Marks and System franchised to Franchisee when
used in the manner authorized and required by Franchisor pursuant to this
Agreement. In the event Franchisee is involved in such an action, Franchisor
agrees to indemnify Franchisee and each Principal in connection with the defense
thereof, and to indemnify and hold Franchisee and each Principal harmless from
any and all losses, damages, claims, liabilities, expenses, including attorney's
fees (prior to litigation, during litigation, and on appeal) and all costs
(whether taxed or not taxed) in connection with proceedings regarding the same.
Franchisee shall give notice to Franchisor of any such claim no later than
fifteen (15) days after Franchisee becomes aware of same or is given notice
thereof. This indemnity shall be inoperative to the extent that failure to have
timely provided such notice to Franchisor materially impairs Franchisor's
ability to defend any such claim, in whole or in part, or to minimize the costs
of this indemnity. Franchisee shall not be required to defend Franchisor with
regard to Franchisee's utilization pursuant to this Agreement of the Proprietary
Marks and System provided such utilization is in strict compliance with that
authorized and required by Franchisor pursuant to this Agreement.
20. NOTICES
20.01 All notices required or desired to be given hereunder shall be in
writing and shall be sent by personal delivery, expedited delivery service or
facsimile to the following addresses (or such other addresses as designated
pursuant to this Section 20):
if to Franchisor: TGI FRIDAY'S INC.
Attention: General Counsel
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx XXX 00000
Facsimile No (1) (000) 000-0000
if to Franchisee or any Principal:
[Franchisee Name]
[Attention]
[Address1]
[Address2]
Facsimile No. (011) [Fax #]
Notices posted by personal delivery or given by facsimile shall be
deemed given upon receipt. Notices posted by expedited delivery service shall be
deemed received three (3) Business Days after the date of posting.
21. FORCE MAJEURE
21.01 No party shall be liable for any inability to perform resulting
from acts of God or other causes beyond their reasonable control; PROVIDED,
HOWEVER, that (i) nothing herein shall excuse or permit any delay or failure to
remit any Payment on the date due; (ii) financial inability or insolvency shall
never be deemed an act of God or other cause beyond a party's control; and (iii)
no such cause shall excuse or permit any delay or failure to perform for more
than one-hundred eighty (180) days. The party whose performance is affected by
an event of force majeure shall, within three (3) days of the occurrence of such
event, give notice thereof to the other party setting forth the nature thereof
and an estimate of its duration.
22. SEVERABILITY
22.01 Should any term, covenant or provision hereof, or the application
thereof, be determined by a valid, final, non-appealable order to be invalid or
unenforceable, the remaining terms, covenants or provisions hereof shall
continue in full force and effect without regard to the invalid or unenforceable
provision. In such event such term, covenant or provision shall be deemed
modified to impose the maximum duty permitted by law and such term, covenant or
provision shall be valid and enforceable in such modified form as if separately
stated in and made a part of this Agreement. Notwithstanding the foregoing, if
any term hereof is so determined to be invalid or unenforceable and such
determination adversely affects, in Franchisor's reasonable judgment,
Franchisor's ability to preserve its or TGIFM's rights (if any) in, or the
goodwill (if any) underlying, the Proprietary Marks, the System and/or the
Confidential Information, Franchisor may terminate this Agreement upon notice to
Franchisee.
22.02 Captions in this Agreement are for convenience only and shall not
affect the meaning or construction of any provision hereof.
23. INDEPENDENT CONTRACTOR
23.01 Franchisee is an independent contractor. Nothing herein shall
create the relationship of principal and agent, legal representative, joint
venturers, partners, employee and employer or master and servant between the
parties. No fiduciary duty is owed by, or exists between, the parties.
23.02 Nothing herein authorizes Franchisee or any Principal to make any
contract, agreement, warranty or representation or to incur any debt or
obligation in Franchisor's name.
24. DUE DILIGENCE AND ASSUMPTION OF RISK
24.01 Franchisee and each Principal (i) have conducted such due
diligence and investigation as it desires; (ii) recognize that the business
venture described herein involves risks; and (iii) acknowledge that the success
of such business venture is dependent upon the abilities of Franchisee and
Principals. FRANCHISOR EXPRESSLY DISCLAIMS THE MAKING OF, AND FRANCHISEE AND
EACH PRINCIPAL ACKNOWLEDGES THAT IT HAS NOT RECEIVED OR RELIED UPON, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE POTENTIAL PERFORMANCE
OR VIABILITY OF THE BUSINESS VENTURE CONTEMPLATED BY THIS
AGREEMENT.
24.02 Franchisee and each Principal have received, read and understands
this Agreement, the documents referred to herein and the Attachments and
Schedules hereto. Franchisee and each Principal have had ample time and
opportunity to consult with their advisors concerning the potential benefits and
risks of entering into this Agreement.
25. MISCELLANEOUS
25.01 Time is of the essence with respect to this Agreement.
25.02 Franchisor shall not be considered to be engaged in or doing
business in [Country] or in any political subdivision thereof by virtue of
being a party to this Agreement.
25.03 There are no third party beneficiaries to this Agreement, except
for the remedy provided for breach of Franchisee's or any Principal's covenant
contained in Section 13.03.C (1) and the provision for liquidated damages
contained in Section 16.02.C.
25.04 This Agreement may be executed in any number of counterparts,
each of which when so executed shall be an original, but all of which together
shall constitute one and the same instrument.
25.05 Franchisee and each Principal acknowledges that each has been
offered certain products and services in connection herewith and understands
that System franchisees are free to obtain these and any other products or
services used in the operation of the Restaurant from sources of their own
choosing, subject only to compliance with the Standards and the requirements of
Sections 6.06, 6.07, 7.07 and 7.09.
25.06 Except as otherwise provided in Section 13.03.C (4), this
Agreement shall be interpreted and construed under the laws of [Country].
25.07 All references herein to the masculine, neuter or singular shall
be construed to include the masculine, feminine, neuter or plural.
25.08 This Agreement shall be executed in English only. Franchisee may
translate this Agreement into [native language], but the English language
version of that this Agreement shall define the rights, duties and remedies of
the parties and shall control in all respects. Franchisee shall prepare all
correspondence, reports, notices and other materials required or permitted
hereunder in English. If required and upon notice to Franchisor, Franchisee may
translate, at its expense, any materials provided by Franchisor. Franchisee's
translator must be consented to by Franchisor. Any changes or improvements that
occur as a result of translation shall inure to the sole benefit of Franchisor.
25.09 Franchisee shall not use the words "Friday's," "T.G.I. Friday's,"
"TGIF" or "the American Bistro," or any part thereof, as part of its corporate
or other name.
26. ENTIRE AGREEMENT
26.01 This Agreement and the Attachments and Schedules hereto
constitute the entire agreement between Franchisor, Franchisee and the
Principals concerning the subject matter hereof. All prior agreements,
discussions, representations, warranties and covenants are merged herein. THERE
ARE NO WARRANTIES, REPRESENTATIONS, COVENANTS OR AGREEMENTS, EXPRESS OR IMPLIED,
BETWEEN THE PARTIES EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. Except
those permitted to be made unilaterally by Franchisor, any amendments or
modifications of this Agreement shall be in writing and executed by Franchisee
and Franchisor.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
Franchisor: TGI FRIDAY'S INC. Franchisee: [FRANCHISEE NAME]
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Title:_______________________ Title:________________________
EXHIBIT 10.11
(Principal's Name) acknowledges, covenants and represents
------------------------------------------
as follows:
(1) he/it has read the terms and conditions of this Agreement;
(2) he/it is a "Principal" as described in this Agreement;
(3) he/it is the owner of and has the right to vote_____percent (____%) of
the Securities of Franchisee;
(4) he/it makes all of the representations, warranties, covenants and
agreements of the Franchisee (including liability to make Payments) and
a Principal set forth in this Agreement (including, without limitation,
the covenants and agreements concerning Transfer and maintenance of
Confidential Information) and is obligated to perform thereunder;
(5) he/it has derived and expects to derive financial or other benefit,
directly or indirectly, from this Agreement and the transaction
described herein;
(6) he/it acknowledges that his/its execution of this Agreement, and
his/its undertakings and agreements herein, have induced Franchisor to
enter into the transactions described in, and to execute, this
Agreement; and
(7) he/it consents to and shall be bound by any amendment of this Agreement
made by Franchisor and Franchisee pursuant to the terms hereof.
Signed, sealed and delivered
in the presence of:
___________________________ Name:__________________________
Name:______________________ Date:__________________________
EXHIBIT 10.11
ATTACHMENT A TO FRANCHISE AGREEMENT
COMMENCEMENT DATE AGREEMENT
This COMMENCEMENT DATE AGREEMENT ("Agreement") is entered into this
____ day of ________, 19__ by and between TGI FRIDAY'S INC. ("Franchisor")
and [FRANCHISEE NAME] ("Franchisee").
WHEREAS, Franchisor and Franchisee have entered into a Franchise
Agreement dated ___________________, 19__ ("Franchise Agreement"), relating
to the operation of a T.G.I. Friday's Restaurant; and
WHEREAS, Franchisor and Franchisee desire to supplement the Franchise
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Franchisor and Franchisee agree as follows:
1. The Commencement Date of the term of the Franchise Agreement
is ___________________.
2. The term of the Franchise Agreement shall expire on
______________________ , unless sooner terminated as therein provided.
3. The street address of the Restaurant is
__________________________.
4. This Agreement shall not amend or otherwise modify the terms
and conditions of the Franchise Agreement or the interpretation of the rights
and duties of Franchisor and Franchisee thereunder.
IN WITNESS WHEREOF, Franchisor and Franchisee have caused this
Commencement Date Agreement to be executed as of the day and year first above
written.
TGI FRIDAY'S INC. [FRANCHISEE NAME]
By:___________________________ By:
Name:_________________________ Name:
Title:________________________ Title:
ATTACHMENT B TO FRANCHISE AGREEMENT
[ATTACHMENT B SHALL BE MODIFIED UPON EXECUTION OF EACH FRANCHISE AGREEMENT TO
REFLECT STATUS OF THE PROPRIETARY MARKS AT THE TIME]
PROPRIETARY MARKS - [COUNTRY]
TRADEMARK CLASS STATUS REGISTRATION/APPLICATION #
Any and all registrations or applications are held in the name of TGI
Friday's of Minnesota Inc. ("TGIFM") a wholly owned subsidiary of Franchisor.
Franchisee and each Principal acknowledge that there can be no
assurance that Franchisor or TGIFM will succeed in obtaining or maintaining
trademark or service xxxx registration in ________ of the marks "T.G.I.
Friday's Logo," "T.G.I. Friday's & Device," "T.G.I. Friday's" or "Friday's,"
any other of the Proprietary Marks or any other marks in all or any of the
classes described in this Attachment B. Franchisor or TGIFM shall pursue
registration in ________ of the marks "T.G.I. Friday's Logo," "T.G.I.
Friday's & Device," "T.G.I. Friday's" and "Friday's" (and other Proprietary
Marks) in the manner and to the extent determined by Franchisor or TGIFM in
their sole discretion. Franchisor or TGIFM may abandon all or any of such
registrations or applications therefor and any future applications for
trademark or such service xxxx registration in ________ at any time without
notice to, or consent of, Franchisee or any Principal.
Neither Franchisor nor TGIFM shall incur any liability or obligations
to Franchisee or any Principal by reason of (i) any of the foregoing or (ii) the
ownership of, or application for ownership of, any registrations of trademarks,
service marks, trade names, or other identifying names or marks in ____________
EXHIBIT 10.11
ATTACHMENT C TO FRANCHISE AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [PRINCIPAL'S NAME]
("Principal") and TGI FRIDAY'S INC. ("Franchisor"), a corporation organized
under the laws of the State of New York, United States of America, in
connection with that certain Franchise Agreement dated_________, 199__ (the
"Franchise Agreement"), by and between Franchisor and [Franchisee Name]
("Franchisee").
WHEREAS, Franchisor and Franchisee have entered into the Franchise
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Franchisor that are not generally known to, and are not legally available
to, third parties; and
WHEREAS, Franchisor has taken and intends to take all steps
necessary to maintain the confidentiality of the Confidential Information; and
WHEREAS, Principal will receive, and desires to receive, the
Confidential Information in his capacity as a Principal of Franchisee; and
WHEREAS, this Agreement is executed and delivered pursuant to
Section 8.04 of the Franchise Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Principal and Franchisor agree as follows:
1. Franchisor or Franchisee may disclose to Principal certain
Confidential Information which may be utilized by Principal solely (a) in
[his/its] capacity as a Principal of Franchisee and (b) in connection with
Franchisee's performance of its duties and obligations pursuant to the Franchise
Agreement. No other use or disclosure of any of the Confidential Information
shall be made by Principal. Principal acknowledges and agrees that Franchisor or
TGIFM is the exclusive owner of the Confidential Information, the System and the
Proprietary Marks. Principal shall not, directly or indirectly, contest or
impair Franchisor's or TGIFM's ownership of, or interest in, the Confidential
Information, the System or the Proprietary Marks.
2. Principal shall receive the Confidential Information in strict
confidence. The Confidential Information may be utilized by Principal only (a)
so long as Principal remains a Principal of Franchisee and (b) during the Term.
The Confidential Information shall not be used in any manner that is adverse or
detrimental to, or competitive with, Franchisor, TGIFM or Franchisee. Except as
permitted pursuant to the Franchise Agreement or this Agreement, the
Confidential Information shall not, without the prior written consent of
Franchisor, be (x) copied, (y) compiled (in total or in part) with other
information, or (z) disclosed to any third party.
3. Principal shall not communicate, disclose or use the Confidential
Information, or any part thereof, except as (a) permitted herein, or (b)
required by law. The Confidential Information may be disclosed to Principal's
agents, representatives and employees who need to know the Confidential
Information for the sole purpose of providing services to Principal in his
capacity as a Principal of Franchisee. Each of such agents, representatives and
employees shall have been advised by Principal, prior to disclosure of any
Confidential Information, of the confidential and proprietary nature of the
Confidential Information and each shall have agreed to be bound by the terms and
conditions of this Agreement. Notwithstanding such agreement, Principal shall
indemnify the Indemnitees from and against
any damages, costs (including attorney's fees) and expenses resulting from
any disclosure or use of the Confidential Information, or any part thereof,
by such agents, representatives or employees contrary to the terms hereof.
4. Immediately upon Franchisor's request or upon any termination of
the Term, Principal shall return to Franchisor the Confidential Information
(and any copies thereof), including that portion of the Confidential
Information which consists of analyses, compilations, studies or other
documents containing or referring to any part of the Confidential Information
prepared by Developer.
5. Each of the representations, warranties, covenants, acknowledgments
and agreements of Principal, and the rights and remedies of Franchisor in
connection therewith, contained in the Franchise Agreement, including, without
limitation, those contained in Sections 8, 9, 13.03.C., 14.02, 14.03, 14.04 and
16.02.C. of the Franchise Agreement, are incorporated in this Agreement by
reference as if fully set forth herein. In connection with Franchisor's
enforcement of such rights and remedies (or other rights and remedies of
Franchisor under this Agreement), any court of competent jurisdiction selected
by Franchisor shall have personal jurisdiction (to which Principal hereby
irrevocably consents) over Principal.
6. Franchisor may, in addition to pursuing any other remedies,
specifically enforce such obligations, covenants and agreements or obtain
injunctive or other equitable relief in connection with the violation or
anticipated violation of such obligations, covenants and agreements without the
necessity of showing (i) actual or threatened harm; (ii) the inadequacy of
damages as a remedy; or (iii) likelihood of success on the merits, and without
being required to furnish bond or other security. Nothing in this Agreement
shall impair Franchisor's right to obtain equitable relief.
7. Should any term, covenant or provision hereof, or the application
thereof, be determined by a valid, final, non-appealable order to be invalid or
unenforceable, the remaining terms, covenants or provisions hereof shall
continue in full force and effect without regard to the invalid or unenforceable
provision. In such event such term, covenant or provision shall be deemed
modified to impose the maximum duty permitted by law and such term, covenant or
provision shall be valid and enforceable in such modified form as if separately
stated in and made a part of this Agreement.
8. Any of Principal's agreements, obligations or covenants which
contemplate performance thereof after the termination or expiration of this
Agreement shall survive such termination or expiration.
9. Principal acknowledges and warrants that [he/it] has derived and
expects to derive financial or other advantage and benefit, directly or
indirectly, from the Franchise Agreement, this Agreement and/or the provision of
the Confidential Information to Franchisee and/or Principal.
10. Capitalized terms used herein and not otherwise defined shall have
the meanings attributed to them in the Franchise Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties on the dates indicated below.
------------------------- TGI FRIDAY'S INC.
Name: By:
-------------------- ----------------------
Date: Its:
-------------------- ----------------------
Date:
----------------------
WITNESS:
-------------------------
Date:
--------------------
EXHIBIT 10.11
ATTACHMENT D TO FRANCHISE AGREEMENT
COVENANT AND AGREEMENT FOR CONFIDENTIALITY
This agreement ("Agreement") is made by [EMPLOYEE'S NAME]
("Employee"), [Franchisee Name] ("Franchisee") and TGI FRIDAY'S INC.
("Franchisor"), a corporation organized under the laws of the State of New
York, United States of America, in connection with that certain Franchise
Agreement dated ____________, 199_ (the "Franchise Agreement"), by and
between Franchisor and Franchisee.
WHEREAS, Franchisor and Franchisee have entered into the Franchise
Agreement; and
WHEREAS, the Confidential Information provides economic advantages
to Franchisor that are not generally known to, and are not legally available
to, third parties; and
WHEREAS, Franchisor has taken and intends to take all steps
necessary to maintain the confidentiality of the Confidential Information; and
WHEREAS, it will be necessary for certain employees of Franchisee to
have access to and to use some or all of the Confidential Information in
connection with the performance of their job functions related to the
development, construction and operation of Restaurants under the System; and
WHEREAS, Employee is the [INSERT TITLE] of Franchisee; and
WHEREAS, Employee needs to receive, and desires to receive and use, the
Confidential Information in the course of his employment by Franchisee in order
to effectively perform his job function; and
WHEREAS, the Agreement is executed and delivered pursuant to Section
8.04 of the Franchise Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Employee, Franchisee and Franchisor agree as
follows:
1. Franchisor or Franchisee shall disclose to Employee certain
Confidential Information which may be utilized by Employee solely (a) in his
capacity as the [TITLE] of Franchisee and (b) in connection with Employee's
performance of his job functions. No other use or disclosure of any of the
Confidential Information shall be made by Employee. Employee acknowledges and
agrees that Franchisor or TGIFM is the exclusive owner of the Confidential
Information, the System and the Proprietary Marks. Employee shall not, directly
or indirectly, contest or impair Franchisor's or TGIFM's ownership of, or
interest in, the Confidential Information, the System or the Proprietary Marks.
2. Employee shall receive the Confidential Information in strict
confidence. The Confidential Information may be utilized by Employee only (a) so
long as Employee is employed by Franchisee and (b) during the Term. The
Confidential Information shall not be used in any manner that is adverse or
detrimental to, or competitive with, Franchisor, TGIFM or Franchisee. Except as
permitted pursuant to this Agreement, the Confidential Information shall not,
without the prior written consent of Franchisor, be (x) copied, (y) compiled (in
total or in part) with other information, or (z) disclosed to any third party.
3. Employee shall not communicate, disclose or use the Confidential
Information, or any part thereof, except as (a) permitted herein, or (b)
required by law. The Confidential Information may be disclosed to fellow
employees as necessary to train or assist such other employees of Franchisee in
the
performance of their job functions with respect to the development,
construction or operation of a Restaurant.
4. Immediately upon Franchisor's request, upon Employee's termination
of employment with Franchisee, or upon the conclusion of the use for which any
Confidential Information was furnished, Employee shall return to Franchisee or
Franchisor the Confidential Information (and any copies thereof), including that
portion of the Confidential Information which consists of analyses,
compilations, studies or other documents containing or referring to any part of
the Confidential Information.
5. In order to protect the goodwill and unique qualities of the System
and the confidentiality and value of the Confidential Information, and in
consideration of the disclosure to Employee of the Confidential Information,
Employee covenants that, during the period of his employment by Franchisee and
for a period of two (2) years following termination of such employment, Employee
shall not, directly or indirectly:
(a) employ or seek to employ any person (or induce such
person to leave his or her employment) who is, or has
within one (1) year been, employed (i) (by Franchisor
or Franchisee; (ii) by any other developer or
franchisee of Franchisor; or (iii) in any other
concept or system owned, operated or franchised by an
Affiliate, as a director, officer or in any
managerial capacity;
(b) own, maintain, operate or have any interest in any
business offering the same or similar products and
services as offered by restaurants in the System;
(c) own, maintain, operate or have any interest in any
business offering the same or similar products and
services as offered by restaurants in the System
which business is, or is intended to be, located in
the Territory; or
(d) own, maintain, operate or have any interest in any
business offering the same or similar products and
services as offered by restaurants in the System,
which business is, or is intended to be, located
within a radius of twenty (20) kilometers of any
restaurant in the System (for purposes of enforcement
of this Section (d) the law of the jurisdiction where
such restaurant is located shall control).
6. A. Franchisor may, in addition to pursuing any other remedies,
specifically enforce such obligations and covenants or obtain injunctive or
other equitable relief in connection with the violation or anticipated violation
of such obligations and covenants without the necessity of showing (i) actual or
threatened harm; (ii) the inadequacy of damages as a remedy; or (iii) likelihood
of success on the merits, and without being required to furnish bond or other
security. Nothing in this Agreement shall impair Franchisor's right to obtain
equitable relief.
B. With respect to Employee's breach of the covenants
contained in Section 5(a) hereof, the affected former employer shall be
compensated by Employee (and Franchisee shall be additionally liable for such
breach) for the reasonable costs and expenses incurred by such employer in
connection with training such employee. Franchisee and Employee acknowledge that
such expenses are impossible to accurately quantify and agree that, as
liquidated damages and not as a penalty, an amount equal to such employee's
annual rate of compensation in the final twelve (12) months of employment (or an
annualized rate if employed for a shorter period) by such former employer shall
be paid by Employee and Franchisee (jointly and severally) to the former
employer at such time as such employee commences employment.
C. In connection with Franchisor's enforcement of such rights
and remedies (or other rights and remedies of Franchisor under this Agreement),
any court of competent jurisdiction selected by Franchisor shall have personal
jurisdiction (to which Employee hereby irrevocably consents) over Employee.
7. Should any term, covenant or provision hereof, or the application
thereof, be determined by a valid, final, non-appealable order to be invalid or
unenforceable, the remaining terms, covenants or provisions hereof shall
continue in full force and effect without regard to the invalid or unenforceable
provision. In such event, such term, covenant or provision shall be deemed
modified to impose the maximum duty permitted by law and such term, covenant or
provision shall be valid and enforceable in such modified form as if separately
stated in and made a part of this Agreement.
8. Any of Employee's agreements, obligations or covenants which
contemplate performance thereof after the termination or expiration of this
Agreement shall survive such termination or expiration.
9. Franchisee undertakes to cause Employee to comply with the terms
and conditions of this Agreement. Franchisee shall indemnify and hold the
Indemnitees harmless from and against any damages, costs or expenses
resulting from any disclosure or use of Confidential Information, or any part
thereof, by Employee contrary to the terms hereof.
10. Capitalized terms used herein and not otherwise defined shall
have the meanings attributed to them on ANNEX A hereto.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the dates indicated below.
[EMPLOYEE] TGI FRIDAY'S INC.
--------------------------
Name: By:
--------------------- ------------------------
Date: Its:
--------------------- ------------------------
Date:
------------------------
WITNESS: [FRANCHISEE NAME]
-------------------------- By:
Name: ------------------------
--------------------- Its:
------------------------
Date:
------------------------
EXHIBIT 10.11
Annex A to Covenant and Agreement for Confidentiality
AFFILIATE - Xxxxxxx Restaurants Worldwide Inc. or any subsidiary thereof or
of Franchisor
COMMENCEMENT DATE - _____________, 19__
CONFIDENTIAL INFORMATION - the terms of the Development Agreement and
Franchise Agreement and any amendments thereto, the System, the Development
Manual, the Manuals, other manuals, the Standards, written directives and all
drawings, equipment, recipes, computer and point of sale programs (and output
from such programs); and all other information, know-how, techniques,
material and data imparted or made available by Franchisor which is
(i) designated as confidential, (ii) known by Franchisee or Employee to be
considered confidential by Franchisor, or (iii) by its nature inherently or
reasonably considered confidential
DEVELOPMENT MANUAL - Franchisor's manual, as amended from time to time,
describing (generally) the procedures and parameters required for the
development of T.G.I. Friday's restaurants
INDEMNITEES - Franchisor, its directors, officers, employees, agents,
shareholders, affiliates, successors and assigns and the respective
directors, officers, employees, agents, shareholders and affiliates of each
MANUALS - Franchisor's United States confidential operating manuals, as
amended from time to time
PROPRIETARY MARKS - certain trademarks, trade names, service marks, emblems
and indicia of origin designated by Franchisor from time to time in
connection with the operation of T.G.I. Friday's restaurants pursuant to the
System in the Territory
RESTAURANT - a T.G.I. Friday's restaurant developed and operated pursuant to
the Franchise Agreement
STANDARDS - the standards and specifications, as amended from time to time,
contained in, and being a part of, the Confidential Information pursuant to
which Franchisee shall develop and operate T.G.I. Friday's restaurants in the
Territory
SYSTEM - a unique, proprietary system developed and owned by Franchisor for
the establishment and operation of T.G.I. Friday's restaurants which
includes, without limitation, distinctive exterior and interior design,
decor, color scheme and furnishings; special recipes, menu items and full
service bar; employee uniform standards, products, services and
specifications; procedures with respect to operations and inventory and
management control (including accounting procedures and policies); training
and assistance; and advertising and promotional programs (as further
developed by Franchisor from time to time);
TERM - the duration of the Franchise Agreement commencing on the
Commencement Date and continuing until (15 years), 2__, or until _________, 2__,
if extended, unless sooner terminated
TERRITORY - [Country], as geographically constituted on [Dev Agmt Date]
TGIFM - TGI Friday's of Minnesota Inc., a Minnesota (U.S.) corporation and a
subsidiary of Franchisor
SCHEDULE 3.01.A. TO FRANCHISE AGREEMENT
CALCULATION OF FRANCHISE FEE
The Franchise Fee shall be calculated by dividing U.S. $100,000.00 by a
number equal to 1.00 minus any applicable withholding, value added or similar
tax or fee (expressed as a percentage; rate of "X") or:
U.S. $100,000.00 = Franchise Fee
-----------
1.00-X
Example: If the applicable withholding, value added or similar tax or fee
(expressed as a percentage) is 10%, the Franchise Fee is calculated as
follows:
U.S. $100,000.00 = $111,111.11
-----------
1.00-0.10
It is the intention of the parties that, after Franchisee's payment of
applicable taxes or fees as described in Section 3.03.B, the net amount
received by Franchisor shall be U.S. $100,000.00.
--------------------------------------------------------------------------------
SCHEDULE 3.01.B. TO FRANCHISE AGREEMENT
CALCULATION OF ROYALTY FEE RATE
The Royalty Fee rate (expressed as a percentage) shall be calculated by
dividing four percent (4%) by a number equal to 1.00 minus any applicable
withholding, value added or similar tax or fee (expressed as a
percentage-rate of "Y"), or:
4.00
----
1.00-X = Royalty Fee rate
Example: If rate of "X" is equal to 10%, the Royalty Fee rate is
calculated as follows:
4.00
----
1.00 - 0.10 = 4.444...%
It is the intention of the parties that, after Franchisee's payment of
applicable taxes or fees as described in Section 3.03.B., the net amount
received by Franchisor shall be four percent (4%) of Gross Sales.
