EXHIBIT 10.8
FORM OF FRANCHISE AGREEMENT
BETWEEN
PIZZA WORLD SUPREME, INC.
AND
-----------------------------------
PIZZA WORLD SUPREME, INC.
FRANCHISE AGREEMENT
TABLE OF CONTENTS
PARAGRAPH PAGE NO.
1. GRANT OF FRANCHISE..................................................1
2. RELOCATION..........................................................2
3. PROTECTED TERRITORY.................................................2
4. OFF-SITE DELIVERY...................................................2
5. TERM OF AGREEMENT...................................................5
6. RENEWAL OF FRANCHISE................................................5
7. FEES................................................................6
8. DUTIES OF FRANCHISOR................................................7
9. DUTIES OF FRANCHISEE...............................................10
10. NON-COMPETITION....................................................18
11. RIGHT OF FIRST REFUSAL.............................................19
12. TRANSFER AND ASSIGNMENT............................................19
13. OPERATION IN THE EVENT OF ABSENCE, DISABILITY OR DEATH.............22
14. DEFAULT AND TERMINATION............................................23
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15. UNAVOIDABLE DELAYS.................................................25
16. SEVERABILITY AND CONSTRUCTION......................................25
17. RELATIONSHIP BETWEEN PARTIES.......................................26
18. WAIVER.............................................................26
19. NOTICES............................................................26
20. APPLICABLE LAW AND JURISDICTION....................................27
21. TERMINOLOGY........................................................27
22. STATUS OF AGREEMENT................................................27
23. AMENDMENT OF AGREEMENT.............................................27
24. COSTS AND EXPENSES OF ENFORCEMENT..................................27
25. CAPTIONS...........................................................28
26. CONSENT AND APPROVAL...............................................28
27. REPRESENTATIONS....................................................28
28. EFFECTIVE DATE.....................................................29
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ME-N-ED'S PIZZERIA
FRANCHISE AGREEMENT
THIS AGREEMENT is entered into at Fresno, California, by and
between PIZZA WORLD SUPREME, INC. ("PWS"), a Nevada corporation with
headquarters located at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, and
______________________________________________________________________________
(the "Franchisee"), whose address is: ________________________________________
_____________________________________________________________________________.
This Agreement is for the establishment of one Me-N-Ed's
Pizzeria or Slices Pizza Bar (the "Me-N-Ed's Pizzeria" or the "Pizzeria") to be
located at:___________________________________________________________________,
with the specific opening date to be determined in accordance with the terms of
this Agreement.
RECITALS
A. PWS has established a method and system (the "System") for the
development and operation of Me-N-Ed's Pizzerias and Me-N-Ed's Slices Pizza Bars
(collectively "Me-N-Ed's Pizzerias" or "Pizzerias") which includes, without
limitation: The marks "Me-N-Ed's," "Me-N-Ed's Pizza Parlor & Pizza Design,"
"Me-N-Ed's Guys With Pizza Design," "Me-N-Ed's Slices," "Me-N-Ed's Pizzeria,"
and all related names, trademarks, service marks, logos, copyrights and
associated goodwill (the "Proprietary Marks"); distinctive building designs,
decor, color schemes and trade dress and signage; an operating manual
incorporating required standards, procedures, policies, and techniques; secret
food formulae; and advertising, marketing and promotional programs.
B. Pursuant to PWS's continuing efforts to develop its chain of
pizzerias, PWS desires to grant to the Franchisee, and the Franchisee desires to
obtain from PWS, the right to establish and operate the Pizzeria in accordance
with and under the System.
C. This Agreement is for the establishment of a single Me-N-Ed's Pizzeria
at a specific location. It does not grant to the Franchisee any rights to
develop or operate any other Me-N-Ed's Pizzeria at any other locations other
than the single location designated on page 1 of this Agreement.
IN CONSIDERATION OF THE COVENANTS CONTAINED HEREIN, IT IS AGREED AS FOLLOWS:
1. GRANT OF FRANCHISE
Subject to all the terms and conditions of this Agreement, PWS
grants to the Franchisee the nonexclusive right to use the System to establish
and operate the Pizzeria. The Franchisee acknowledges that adherence to the
standards and policies of the System, as changed
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from time to time, is absolutely essential for the continued operation of the
franchise granted by this Agreement.
2. RELOCATION
The Franchisee shall have the right to establish and operate
the Pizzeria only at the single location designated above. Any relocation of the
Pizzeria shall require PWS's prior written consent. Such consent may be withheld
in PWS's sole discretion unless the lease for the site of its Pizzeria expires
or terminates without fault of the Franchisee, or if the site is destroyed,
condemned or otherwise rendered unusable, in which case PWS will grant
permission for relocation of the Pizzeria to a location and site meeting PWS's
then-current standards. PWS has the right, but is not required, to charge the
Franchisee a Relocation Fee to cover PWS's costs in approving and processing the
request for relocation. Such fee is payable upon approval by PWS at such
location. Any relocation will be at the Franchisee's sole expense.
3. PROTECTED TERRITORY
(a) Trade Area: While this Agreement is in force, the
Franchisee shall have the exclusive right to operate the Pizzeria within a two
mile radius of the location of the Pizzeria, except that if the Franchisee's
Pizzeria is located in a mall or within certain areas as may be designated from
time to time by PWS, no such exclusive right shall be granted. The radius around
the location of each Pizzeria in which PWS agrees not to grant any other
franchises is referred to as the "trade area" of the applicable Pizzeria.
Neither PWS nor an affiliate will operate or grant a franchise for the operation
of a sit down, carry-out or delivery pizza restaurant business whose trade area
overlaps the Pizzeria's trade area; except nothing in this Agreement shall
prohibit PWS from operating or franchising a Pizzeria in a mall that overlaps
trade areas with the trade area of the Pizzeria.
(b) Alteration of Trade Area: From time to time, PWS may
designate certain areas within which PWS will not grant exclusive rights, but
the Franchisee's trade area may not be altered except by the mutual written
agreement of the Franchisee and PWS.
(c) Shopping Center: For purposes of this Agreement, a
mall means a shopping center of not less than 250,000 square feet of gross
leasable area where stores front on both sides of a pedestrian walkway which may
be enclosed or open. Any trade area granted to the Franchisee herein is with
respect to the establishment of other Pizzeria locations only, and shall not be
deemed to grant to the Franchisee any exclusive market area or territory.
4. OFF-SITE DELIVERY
The Franchisee must offer delivery services a minimum of six
hours each day, from 4:00 p.m. to 10:00 p.m. and may offer such services during
lunch hours, subject to PWS's approval, except that the Franchisee will not have
any delivery obligations whatsoever if its Pizzeria is located in a mall,
although the Franchisee may offer delivery services in accordance with this
Agreement if its Pizzeria is located in a mall. The scope of the delivery area
will be congruent with the scope of the trade area (as discussed in Paragraph
3(a) of this Agreement).
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Due to fluctuations in population density and vehicular traffic patterns over
time, PWS may, in its sole discretion, extend the radius in which the Pizzeria
must offer delivery services. PWS may subsequently reduce this delivery area due
to further changes in population density, vehicular traffic patterns or the
opening of another Pizzeria in a proximate location, although such delivery area
may not be reduced to less than an area having a two mile radius. The Franchisee
acknowledges that the size of the delivery area is based on quality control and
related operational considerations and is not related to any protected territory
granted the Franchisee with respect to the establishment of Pizzeria locations.
(a) Certain Standards and Requirements:
(i) The Franchisee shall ensure that any and all
vehicles utilized for off-site delivery: (a) are maintained in good condition
and repair and comply with all requirements for the safe and lawful operation of
such vehicles on the streets and highways of all applicable localities; and (b)
are operated, at all times, by employees of the Franchisee, who shall be duly
qualified, authorized and licensed to operate such vehicles and who shall
maintain insurance covering liability as a driver as required by this Paragraph
of this Agreement. The Franchisee shall further undertake all necessary action
to assure that employees operate delivery vehicles safely and lawfully.
Subcontracting of or for off-site delivery services is prohibited.
(ii) In the discretion of the Franchisee, vehicles
used for off-site delivery services may bear signage indicating that the vehicle
is delivering Me-N-Ed's pizza products; provided, however, such signage must be
professionally manufactured or produced and shall be subject to approval by PWS
prior to any public display or use by the Franchisee. If requested by PWS, the
Franchisee shall exhibit on all delivery vehicles (or on car top signs on all
delivery vehicles) signs of sufficient prominence and wording as PWS may
prescribe from time to time so as to advise the public that the Pizzeria is
owned, operated and maintained by the Franchisee and that each such delivery
vehicle is owned, operated and maintained by the Franchisee or the driver of the
vehicle, as the case may be. The Franchisee shall at all times carry insurance,
in accordance with Paragraph 4(b) of this Agreement, covering any and all
vehicles used for off-site delivery services.
(iii) PWS reserves the right, in its discretion,
to designate those food and beverage products which may be offered by the
Franchisee for off-site delivery. UNDER NO CIRCUMSTANCES MAY ALCOHOLIC BEVERAGES
BE OFFERED FOR OFF-SITE DELIVERY. Moreover, the Franchisee will take all steps
necessary to ensure that alcoholic beverages are not available to employees
operating delivery vehicles.
(iv) All pizza and other food and beverage
products approved for off-site delivery sales shall be prepared at the Pizzeria,
in full compliance with all specifications, standards, operating procedures and
rules relating to the quality, taste, ingredients and uniformity, and manner of
preparation, of pizza, food and beverage items sold at the Pizzeria.
(v) The Franchisee shall employ all efforts
necessary to assure that pizza and other food products offered for sale and sold
by off-site delivery are delivered to
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customers fresh and hot, and are of uniform high quality. Such efforts shall
include, but are not limited to, the use of PWS-approved packaging and
containers for all off-site delivery sales.
(vi) PWS has the right in its sole discretion, to
approve or disapprove any and all advertising in any way related to off-site
delivery sales.
(b) Indemnification and Insurance: The Franchisee shall
indemnify, defend and hold PWS and its affiliates and successors, and their
respective officers, directors, shareholders, employees and agents, harmless
from and against any and all claims, costs, damages or liability of any nature
whatsoever, arising out of or in any way related to off-site delivery services
by the Franchisee. At all times that the Franchisee conducts off-site delivery
services, it shall maintain in full force and effect, in addition to all
insurance coverage required by this Agreement, automobile liability insurance
including, but not limited to, contractual liability coverage, liability
coverage for vehicles owned, hired or borrowed by the Franchisee ("owned auto"
and "hired auto" coverage, respectively), and liability coverage for vehicles
owned by others ("non-owned auto" coverage), with limits of not less than
$1,000,000 per occurrence of bodily injury and property damage combined,
together with an umbrella liability policy with minimum limits of $3,000,000,
and together with any other or increased amounts of insurance which PWS may from
time to time require.
(c) Insurance: The Franchisee shall provide PWS with
certificates of insurance evidencing the required coverage, which certificates
shall be renewed and provided annually and shall contain such detailed
information as PWS may from time to time request, and the Franchisee shall also
provide PWS with full and complete copies of any and all of the above policies,
including copies of any renewals or modifications thereto upon request by PWS.
All insurance policies must be (i) issued by an insurance company licensed to do
business in the state where the Pizzeria is located and (ii) rated A or better
by A.M. Best & Company, Inc. or approved in writing by PWS, in PWS's sole
discretion. The Franchisee shall also cause the companies to agree by
endorsement or separate written document that PWS shall be given at least 30
days prior written notice of termination, expiration, cancellation, modification
or reduction in coverage limits of any such policy. Upon failure of the
Franchisee to maintain in effect any of the insurance required, or to furnish to
PWS satisfactory evidence of such insurance, PWS may, in its discretion, obtain
insurance coverage on behalf of the Franchisee, and the Franchisee agrees to
promptly execute any applications or instruments required to obtain any such
insurance and to pay to PWS, on demand, any costs and premiums incurred by PWS.
The Franchisee shall additionally require each of its employees who at any time
operates a vehicle in connection with off-site delivery services which is owned
by a person other than the Franchisee to maintain insurance covering the
employee's liability as driver of the vehicle in an amount no less than the
minimum amount required by law, and the Franchisee shall require and maintain at
the Pizzeria evidence of such insurance coverage, which evidence the Franchisee
shall provide to PWS upon request. The Franchisee expressly waives and releases
PWS and its affiliates and successors, and the respective officers, directors,
shareholders, employees and agents, from any obligation or responsibility with
respect to any claim asserted, or which may be asserted, by a third party or
parties, arising out of or relating to the Franchisee's conduct of off-site
delivery services.
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(d) Fees and Reports: All receipts of any kind or nature
derived from off-site delivery sales shall be included for purposes of computing
all fees payable to PWS under this Agreement; specifically, but without
limitation, any additional charges to customers the Franchisee may choose to
make for off-site delivery services are included within the definition of
"Adjusted Gross Sales" (see Paragraph 7(e) of this Agreement) without limitation
or offset for cost incurred by the Franchisee in connection with providing such
services to the customer. Off-site delivery sales shall be recorded by the
Franchisee and reported to PWS at the same time or times, and in the same
manner, as all other sales from the Franchisee's Pizzeria operation, provided,
further, the Franchisee shall report off-site delivery sales as a separate
subtotal of total reported sales for each reporting period. In addition, the
Franchisee shall provide PWS with such further information relating to off-site
delivery sales as PWS may from time to time request, including separate reports
of costs of operation for off-site delivery services and the like.
5. TERM OF AGREEMENT
(a) Term: The term of this Agreement shall commence on
the date of execution of this Agreement by PWS, and shall expire 10 years after
the date the Pizzeria opens for business or the length of the lease, whichever
occurs first. The Franchisee may request that the term of this Agreement be
lengthened to be congruent with the term of the lease for the Pizzeria premises.
PWS may grant or withhold consent to such request, in PWS's sole discretion.
Once the Pizzeria opens for business, PWS shall insert the exact opening or
transfer date in Exhibit "A" attached hereto and incorporated herein by
reference.
(b) Termination: In the event that (i) the Franchisee
fails to obtain an on-sale beer and wine license for the Pizzeria prior to the
date the Franchisee opens the Pizzeria for business, unless otherwise agreed to
in writing by PWS, (ii) the Franchisee fails to open the Pizzeria within 12
months after PWS's execution of this Agreement, or (iii) the Franchisee fails to
complete or achieve a passing grade in the customary training course concerning
the operation of the Pizzeria by the earlier of (a) three months prior to the
opening of the Pizzeria or (b) 180 days after the date a final location of the
Pizzeria is obtained, then this Agreement shall terminate, and PWS shall refund
to the Franchisee the Initial Franchise Fee paid by the Franchisee to PWS, less
expenses incurred by PWS in connection with this Agreement, as determined in
PWS's sole discretion.
6. RENEWAL OF FRANCHISE
(a) Renewal Conditions: The Franchisee, at its option,
shall have the right to renew the franchise granted herein for the term and upon
conditions contained in the then-current standard
Franchise Agreement in use by
PWS on the date of renewal, provided that:
(i) The Franchisee is not in default of any
provision of this Agreement or any other agreement with PWS or its subsidiaries
or affiliates or any other creditor or supplier of the Pizzeria, and has
substantially complied with all the terms and conditions of these agreements
substantially in accordance with their terms and has satisfied all monetary
obligations owed to these parties;
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(ii) The Franchisee is able to maintain possession
of the site of its Pizzeria or to secure and develop a suitable alternative site
approved by PWS;
(iii) The Franchisee agrees to refurbish the site
in accordance with Paragraph 9 of this Agreement;
(iv) The Franchisee executes a general release, in
a form satisfactory to PWS, of any and all claims it may have against PWS and
its officers, directors, shareholders, agents, and employees, in their corporate
and individual capacities; and
(v) The Franchisee, or a representative approved
by PWS, attends and satisfactorily completes any retraining or refresher
training program that PWS may require, in its sole discretion.
(b) Renewal Fee: In connection with this renewal, the
Franchisee must execute PWS's then-current standard
Franchise Agreement and all
other agreements customarily used by PWS in the renewal of franchises, which may
provide for higher Royalty Fees and for greater expenditures for advertising and
promotion than were provided for under this Agreement, and may contain other
fees and terms materially different from the terms of this Agreement. The trade
area of the Pizzeria will not be modified unless such modification is consistent
with criteria then in effect for comparable market areas. There will be no
Initial Franchise Fee upon the renewal of the franchise, but the Franchisee
shall pay PWS the sum of $1,500 to offset expenses incurred in connection with
the renewal.
(c) Other Obligations: PWS will send all agreements
relating to renewal of the franchise for the Franchisee's review and execution
not less than 12 months prior to the expiration of this Agreement along with a
notification of the expiration of this Agreement. PWS's notice will also state
what actions, if any, the Franchisee must take to correct the deficiencies in
the operation of the Pizzeria and will specify the time period in which these
deficiencies must be corrected. Renewal of the franchise will be conditioned
upon the Franchisee's continued compliance with all the terms and conditions of
this Agreement and all other agreements with PWS and its affiliates and
subsidiaries and all other creditors and suppliers of the Pizzeria up to the
date of expiration. Failure by the Franchisee to return these agreements to PWS
within 30 days after receipt will be deemed an election not to renew the
franchise. The Franchisee will have no right to renew the franchise upon the
expiration of the first additional term.
7. FEES
(a) Initial Franchise Fee: In consideration of the
franchise granted herein, the Franchisee opening a new Pizzeria at its first
franchise location shall pay to PWS an Initial Franchise Fee of $______, payable
upon the execution of this Agreement. For each subsequent franchise which may be
granted, the Franchisee shall pay one-half of the Initial Franchise Fee then
required by PWS for new the Franchisees.
(b) Initial Advertising Fee: Upon execution of this
Agreement, the Franchisee shall pay to PWS's advertising fund (the "Advertising
Fund") a nonrefundable Initial
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Advertising Fee of $_____, which shall be disbursed by the Advertising Fund at
PWS's sole discretion (see Paragraph 8(h) of this Agreement).
(c) Royalty Fee: In consideration of the franchise
granted herein and the continuing right to use the System, the Franchisee agrees
to pay to PWS, commencing from the date the Pizzeria opens, a Royalty Fee of 5%
of the Adjusted Gross Sales generated monthly by the Pizzeria, or the sum of
$_____, whichever is greater. Payment of the Royalty Fee shall be made on or
before the fifth day of each month for the preceding calendar month.
(d) Periodic Advertising Fee: Commencing from the date
the Pizzeria opens, the Franchisee shall pay to the Advertising Fund an
Advertising Fee of 4% of the Adjusted Gross Sales generated monthly by the
Pizzeria. Such fee shall be paid at the same time as the Royalty Fee with a late
charge computed and assessed in the same manner as may be imposed for any late
payment of a Royalty Fee. The Advertising Fund shall be administered by PWS in
accordance with Paragraph 8(h) below. PWS may, in its sole discretion, from time
to time credit against the obligation of the Franchisee to contribute to the
Advertising Fund up to an amount equal to the Franchisee's obligation to
contribute to the Advertising Fund for amounts expended by the Franchisee in the
applicable period on local advertising and promotional campaigns. Such local
advertising and promotions shall be subject to PWS's prior written consent.
(e) Adjusted Gross Sales: The term "Adjusted Gross
Sales" as used herein means the total gross receipts from all sales by the
Pizzeria of all pizza and other food, beverages, coin operated games, juke
boxes, and vending machines and other products or services authorized for sale
at the Pizzeria, including off-site delivery, without reserve or deduction for
inability or failure to collect, and exclusive of sales and equivalent taxes and
coupon and similar discounts approved by PWS (but in no event will coupons and
similar discounts reduce Adjusted Gross Sales by more than ___%).
(f) Late Payment Charges: If the Franchisee is late in
paying the Royalty Fee, periodic Advertising Fee, or the amount owed for the
special spice blend, the special flour blend and related food products delivered
pursuant to this Agreement, a late charge at the maximum rate permitted by state
law shall be payable on the unpaid fees from the date such payments were due,
and PWS may require the Franchisee to pay both the Royalty Fee and periodic
Advertising Fee on a weekly basis. If PWS requires the Franchisee to make weekly
payments, such payments shall be based on the Adjusted Gross Sales generated
weekly by the Pizzeria and shall be made on or before Wednesday of each week for
the preceding week.
8. DUTIES OF FRANCHISOR
(a) Location: Unless noted otherwise in writing by PWS,
the Franchisee shall have received PWS's evaluation of a site for the Pizzeria
prior to PWS's execution of this Agreement. The Franchisee may not execute a
lease or a purchase agreement for the Pizzeria which has not been reviewed by
PWS. The Franchisee shall provide PWS with any and all documents relating to a
site under consideration and the lease or purchase agreement for such site when
seeking PWS's review of such site. While it is the Franchisee's obligation to
find a suitable location for the Pizzeria which meets PWS's criteria, PWS may
have assisted the
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Franchisee with the search for a suitable location by advising and consulting
with the Franchisee, if requested to do so by the Franchisee. The Franchisee
acknowledges that PWS's review of a location does not constitute a
representation or guaranty by PWS that the location will be a successful
location for the Pizzeria.
(b) Training: Prior to the public opening of the
Pizzeria, PWS will make available to the Franchisee and two designated persons
approved by PWS, PWS's customary training and indoctrination course concerning
the operation of the Pizzeria, as described in Paragraph 9(h) of this Agreement.
At its discretion, PWS may also offer additional training programs and refresher
courses to the Franchisee during the term of this Agreement, at the Franchisee's
expense.
(c) Operating Manual and Other Manuals: PWS shall loan
to the Franchisee during the term of the franchise one or more copies of an
operating manual or operational bulletins or similar materials containing
mandatory and suggested specifications, standards and operating procedures and
rules prescribed from time to time by PWS and information relative to other
obligations of the Franchisee under this Agreement and the operation of its
Pizzeria and copies of other manuals that may be developed by PWS (collectively,
the "Manuals"). PWS has the right to add to and otherwise modify the Manuals
from time to time, if deemed necessary to improve the standards of service or
product quality or the efficient operation of the Pizzeria, to protect or
maintain the goodwill associated with the Proprietary Marks or to meet
competition. However, no such addition or modification will alter the
Franchisee's fundamental status and rights under this Agreement. The provisions
of the Manuals, as modified from time to time, and mandatory specifications,
standards and operating procedures and rules prescribed from time to time by PWS
and communicated to the Franchisee in writing, will constitute provisions of
this Agreement.
(d) Design: PWS shall designate the standard design,
color scheme, trade dress and motif for the Pizzeria.
(e) Fixture, Sign, Equipment, Inventory and Supply
Specifications: PWS shall designate standard fixtures, signs, equipment, and
initial and continuing inventory and supplies for placement in and use at the
Pizzeria.
(f) Advice and Consultation:
(i) PWS shall advise and consult with the
Franchisee periodically in connection with the development and operation of the
Pizzeria. The Franchisee shall submit to PWS within six months prior to the
opening of the Pizzeria, a business plan setting forth the proposed prices,
expenses and other operational items reasonably requested by PWS so that PWS may
provide guidance to the Franchisee in the initial operation of the Pizzeria. PWS
shall communicate to the Franchisee its know-how, new developments, techniques,
and improvements in restaurant management, food preparation, and services which
are pertinent to the operation of the Pizzeria in accordance with the System,
all subject to the Franchisee's obligation to maintain in confidence such
information as would not ordinarily be disclosed during operation of the
Pizzeria.
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(ii) PWS will advise the Franchisee from time to
time of operating problems of its Pizzeria disclosed by reports submitted to or
inspections made by PWS. PWS will make no separate charge to the Franchisee for
such operating or marketing assistance, except that PWS may make reasonable
charges for forms and other materials supplied to the Franchisee and for
operating assistance made necessary in its judgment as a result of the
Franchisee's failure to comply with any provision of this Agreement or for
operating assistance requested by the Franchisee in excess of that normally
provided by PWS.
(iii) PWS will make available to the Franchisee
from time to time, the services of certain principals, employees,
representatives or agents of PWS on a consulting basis. Such individuals will
provide, at the Franchisee's request and at such individual's then-current rates
and charges, extraordinary services above and beyond the operational assistance
customarily provided by PWS.
(g) Independent Status of Franchisee: PWS shall not
establish requirements regarding: (i) the Franchisee's employment policies,
assignment or direction of the Franchisee's employees, wages or hours of labor
(except to the extent specified in Paragraphs 9(m) and 9(n) of this Agreement);
(ii) the prices charged by the Franchisee for products sold at the Pizzeria;
(iii) the customers to whom such products may be sold; or (iv) the sources from
which the Franchisee obtains any item or services used in the Pizzeria (except
as provided in Paragraph 9(g) of this Agreement). PWS shall not be involved to
any extent in the management or day-to-day operation of the Pizzeria.
(h) Advertising:
(i) PWS shall administer the Advertising Fund
referred to in Paragraphs 7(b) and (d). The Advertising Fund exists for the
primary purpose of promoting the System through advertising, promotional
programs and materials, and various marketing techniques. The Franchisee
acknowledges that the Advertising Fund, which may hire employees, agents and
firms to carry out its purpose, shall be used to meet any and all costs, direct
and indirect, incident to marketing the System including, without limitation,
those incurred in administering the Advertising Fund, developing advertising and
promotional programs and materials, conducting market and consumer research,
employing individuals, and implementing other marketing activities. In its sole
discretion, PWS shall determine the media, markets, and content of all
advertising programs. PWS is not obligated to account to the Franchisee for any
expenditures of the Advertising Fund.
(ii) The Franchisee acknowledges the need for
uniformity in the Me-N-Ed's Pizzeria image; therefore, except for all
advertising and/or promotional materials prepared or previously approved by PWS,
no advertising and/or promotional materials shall be used by the Franchisee
until such time as the Franchisee has submitted the materials to PWS and the use
of such materials has not been disapproved by PWS within a period of 10 days
after the date of PWS's receipt of the materials.
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9. DUTIES OF FRANCHISEE
In addition to its duties as set forth elsewhere in this
Agreement, the Franchisee agrees to perform the following:
(a) Preparation of Location: Within 12 months after
PWS's execution of this Agreement, the Franchisee shall totally equip and ready
the location of the Pizzeria for occupancy. Immediately upon receipt of written
acknowledgment from PWS that the Pizzeria complies with the System's
specifications and requirements, the Franchisee shall commence operation of the
Pizzeria.
(b) Lease and Purchase Agreement Responsibilities:
Except as otherwise provided herein, the Franchisee shall be responsible for all
terms and conditions of the lease or purchase agreement covering the Pizzeria
location, including any required security deposit and prepaid rent. The
Franchisee shall provide to PWS a copy of the fully executed lease (and any
assignments and/or subleases thereto) or purchase agreement within 15 days after
PWS's execution of this Agreement.
(c) Beer and Wine License: Within five days after PWS's
execution of this Agreement, the Franchisee shall apply to the appropriate state
and/or local authorities for an on-sale beer and wine license for the Pizzeria.
The Franchisee shall be solely responsible for obtaining such license prior to
the opening of the Pizzeria for business. In the event of regulatory delays,
which could not reasonably have been avoided by the Franchisee, PWS may, in its
sole discretion, and upon terms and conditions it may require, authorize the
Franchisee to open the Pizzeria for business prior to timely obtaining such
license. Written application for such exemption from this licensing requirement
must be made to PWS no later than 45 days prior to the opening of the Pizzeria
and must be accompanied by a copy of the completed license application, as
filed.
(d) Construction Standards: The Franchisee shall be
responsible for the establishment and completion of the Pizzeria, including
construction or remodeling and equipment installation. The Franchisee agrees
that in constructing or remodeling the Pizzeria, it shall secure all necessary
permits and adhere to the plan, design, color scheme and motif as specified by
PWS, provided that the Franchisee may make minor changes to the standard plans
and specifications, if necessary, to meet the requirements of local codes and
regulations. The Franchisee shall submit all building plans and specifications
to PWS and shall not proceed with construction until PWS's written approval has
been obtained. In the event the Franchisee commences construction, remodeling,
installation, or other work on the premises without the prior written approval
of PWS, or contrary to the specifications and directions of PWS, the Franchisee
shall upon notice from PWS and solely at the Franchisee's expense, promptly
remove or appropriately modify all objectionable items so as to comply with
PWS's specifications and directions. The Franchisee shall also obtain all
required zoning changes, all required building, driveway, utility, health,
sanitation and sign permits and any other required permits and shall obtain all
customary contractor's sworn statements and partial and final waivers of lien
for construction, remodeling, decorating and installation services, and other
materials or labor liens.
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(e) Fixture and Equipment Standards: The Franchisee
shall lease and/or purchase all fixtures and equipment designated by PWS and
shall install, or have installed, in the Pizzeria all such fixtures and
equipment. The Franchisee has the right to lease and/or purchase the fixtures
and equipment from any source; provided, however, all fixtures, furnishings,
color schemes, machinery, equipment, and accessories shall conform to
specifications of design, color, quality, performance, and utility designated
and approved by PWS.
(f) Sign Standard: The Franchisee shall prominently
display and maintain in good appearance and condition on the land and building
comprising the Pizzeria all signs of such nature, form, color, illumination, and
size, and containing such legends and symbols as PWS shall require. The
Franchisee shall not display at the Pizzeria any signs to which PWS objects.
(g) Inventory and Supply Specifications:
(i) The Franchisee shall purchase spice blend,
flour blend and such other proprietary products as may be designated by PWS that
are made in accordance with PWS's special and trade secret recipe only from
suppliers designated by PWS to sell such spice blend, flour blend or other
products. PWS reserves the right to be either the sole source of supply or the
sole designator of suppliers who will provide the spice blend, the flour blend
and any other designated products. The Franchisee shall not maintain inventories
of the spice blend or flour blend in excess of any amount necessary to conduct
pizza sales operations for 60 days. This inventory shall be based on the average
requirements of the Franchisee's past six months' operation or, if the
Franchisee has not been in business for six months, on a reasonable estimate of
the inventory required for sales over such a period of time. Except as noted
above, the Franchisee is not required to purchase or lease from PWS or its
designee goods, services, supplies, fixtures, equipment, inventory or real
estate as a condition of establishing or operating the franchised business. All
pizza ingredients, beverage products, cooking materials, containers, packaging
materials, other paper and plastic products, utensils, required clothing and
color scheme, menus, forms, cleaning and sanitation materials and other supplies
and materials used in the operation of the Pizzeria must conform to the
specifications and quality standards established by PWS from time to time.
(ii) The Franchisee must use in the operation of
its Pizzeria boxes, containers and other paper or plastic products imprinted
with the Proprietary Marks as prescribed by PWS from time to time. Any
ingredient, supply or material not previously approved by PWS as conforming to
its specifications and quality standards must be submitted for examination
and/or testing prior to use. PWS has the right to examine the facilities of any
approved supplier or distributor and to test or inspect the ingredients,
materials or supplies to determine whether they meet PWS's standards and
specifications. PWS has the right to charge fees for testing and evaluating any
new equipment, fixture, furniture, or sign proposed for use by the Franchisee as
well as for testing and evaluating proposed and approved suppliers or
distributors. PWS also may impose reasonable limitations on the number of
approved suppliers or distributors of any product. PWS will notify the
Franchisee within a reasonable time (generally not to exceed 30 days) whether
any ingredients, supplies, materials, suppliers or distributors submitted or
proposed by the Franchisee meet with its approval. PWS also may
11
revoke for any reason its previous approval of any ingredient, supply, material,
supplier or distributor, and such revocation becomes effective when the
Franchisee is put on notice thereof. The Franchisee shall have certain other
limited additional rights to advertise on the boxes constituting the packaging
for the pizza and related food items, upon PWS's prior consent. Such
advertisement may be in the form of "trade-outs" and other advertising benefits.
(h) Training: The Franchisee (or the controlling
shareholder or partner if the Franchisee is a corporation or partnership) must
enroll in, complete and achieve a passing grade in all training programs and
classes which PWS requires for the operation of a Me-N-Ed's Pizzeria by the
earlier of (i) three months prior to the opening of the Pizzeria or (ii) 180
days after the date that a location for the Pizzeria is obtained. All classes
will be held at such times and places as PWS designates. PWS will not charge a
training fee for the initial training class. The initial training class required
of the Franchisee is for up to three persons (the Franchisee and two managers).
In addition, PWS may require that the Franchisee attend and achieve a passing
grade in supplemental or additional training classes which may be offered from
time to time during the term of the franchise. The fee for such additional
training will range from $___ to $_____ per training class which fee will
include all training materials. The Franchisee will be responsible for all
travel, living expenses, compensation, benefits and other costs incurred by all
persons attending any training programs and classes on the Franchisee's behalf.
(i) Confidential Information and Manuals: The Franchisee
and its owners are obligated to maintain the absolute confidentiality of the
Manuals and all other information concerning the PWS's System during and after
the term of the franchise, disclosing this information to the other employees of
the Pizzeria only to the extent necessary for the operation of the Pizzeria in
accordance with this Agreement. The Franchisee and its owners may not use any
such information in any other business or in any manner not specifically
authorized or approved in writing by PWS. The customer lists and all historical
data relating to the sale of all pizza and beverage products at or from the
Pizzeria (the "Customer Lists") also are confidential. The Franchisee: (i)
acknowledges that the Customer Lists are a valuable asset of PWS; (ii) may not
use the Customer Lists in any other business or capacity; and (iii) must
maintain the absolute secrecy and confidentiality of the Customer Lists.
(j) Operation of Pizzeria: The Franchisee, the
controlling shareholder or partner of the Franchisee or, if the Franchisee has
also entered into a development agreement with PWS, an operator who satisfies
the requirements set forth in such development agreement, must devote his or her
full time and efforts in managing the general business matters and operations of
the Pizzeria or other Pizzerias (or other related activities approved by PWS).
Further, the Franchisee, its owners and its operator, if any, may not, during
the term of this Agreement, engage in any conflicting enterprises or any
business activity which would be detrimental or interfere with the operation or
management of the Pizzeria. In addition, the Pizzeria must be at all times under
the direct, on-premises supervision of the Franchisee or the Franchisee shall
employ a manager for such purpose, who shall have met the following
requirements: (i) he or she has been properly trained by the Franchisee; (ii)
his or her identity has been disclosed in writing to PWS; and (iii) he or she
has executed, at PWS's request, an agreement in the form provided by PWS
agreeing not to divulge any trade secret or confidential or proprietary
information, including the contents of the Manuals, or to engage in or have any
12
interest in any other sit-down, carry-out or delivery pizza business. The
Franchisee must offer for final consumption, and not for resale, except in
certain retail markets that are authorized in writing by PWS, all pizza and
beverage products which PWS from time to time authorizes. PWS may change the
types of authorized and required goods and services at any time and for any
reason, and the Franchisee is required to comply with these changes within 60
days after receiving notice of such and must offer the carry-out services and
the delivery services described in Paragraph 4 of this Agreement. The Franchisee
is prohibited from offering or selling any products or services not authorized
by PWS and from using the premises of the Pizzeria for any purpose other than
the operation of the Pizzeria (or other related activities approved by PWS). The
Franchisee shall conspicuously post at the Pizzeria a notice to the effect that
the Pizzeria is a franchised business operated independently of Pizza World
Supreme, Inc., the franchisor of Me-N-Ed's Pizzerias.
(k) Sanitation and Maintenance Standards: At its sole
expense, the Franchisee shall at all times maintain the interior and exterior of
the Pizzeria premises, including all of the fixtures, signs, and equipment, in a
good, clean, attractive, and safe condition and repair.
(l) Improvements: The Franchisee shall refurbish its
Pizzeria (in addition to regular maintenance and repair) within six months after
receipt of written notice from PWS, as PWS from time to time requires to
maintain or improve the appearance and efficient operation of the Pizzeria, to
increase the sales potential or to comply with PWS's standards and identity.
Refurbishing may include: (i) replacement of worn out or obsolete equipment,
fixtures, furniture and signs; (ii) the substitution or addition of new or
improved equipment, including computer hardware and software, and safes,
fixtures, furniture and signs; (iii) redecorating; (iv) repair of the interior
and exterior of the premises and repair and resurfacing of parking facilities;
and (v) structural modifications and remodeling of the premises. The Franchisee
will not be required to make aggregate expenditures for refurbishing in excess
of $______ or, except in connection with a renewal of the franchise, to effect
any refurbishing of the Pizzeria during the last 12 months of the term of the
franchise.
(m) Dress and Grooming Standards: The Franchisee shall
maintain an adequate number of neat, clean, competent, and courteous employees
at the Pizzeria to insure maximum customer satisfaction and consistent service.
The Franchisee shall require all employees to wear Appropriate Clothing, as
defined below, of such color, design, and other specifications as PWS may
designate from time to time. "Appropriate Clothing," as used in this Agreement,
means everyday clothing that can be worn outside of the establishment and does
not constitute a uniform of any kind.
(n) Hours of Operation: The Franchisee shall operate the
Pizzeria at such minimum hours and on such days as may from time to time be
prescribed by PWS (except when the Pizzeria is untenable as a result of fire or
other casualty) and shall maintain sufficient supplies of goods and products so
as to operate the Pizzeria at maximum capacity and efficiency.
(o) Sales Records and Financial Statements: The
Franchisee is required to use PWS's designated PIZZAnet System to record sales
and to track inventory and other related expenses. The PIZZAnet System shall be
linked to PWS's corporate office as a
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means of evaluating and monitoring individual Pizzeria performance. The
Franchisee will maintain, repair, upgrade, and update the PIZZAnet System as
required by PWS during the term of this Agreement. The Franchisee agrees to
furnish PWS with a report of Adjusted Gross Sales for the prior month, including
a tabulation of daily cash register tape or computer totals, certified to be
true and correct by the Franchisee, on or before the 5th day following the end
of each month during the term of this Agreement. The Franchisee agrees to
maintain its accounting records in accordance with the accounting system
employed by PWS which system reflects the costs of all saleable products and
services. The Franchisee shall also furnish PWS on or before the 20th day
following the end of each month with an updated profit and loss or operating
statement prepared by a licensed public accountant or certified public
accountant, which will provide PWS with current results of the Franchisee's
operations. All financial statements shall be supported by actual physical
inventories of supplies and products on hand at the beginning and end of each
monthly or other reporting period. All financial statements shall be prepared
following the format used by the PWS presently or as changed from time to time.
If requested by PWS, the Franchisee shall furnish more frequent reports of
Adjusted Gross Sales by telephone or as otherwise specified by PWS. The
Franchisee shall, upon request of PWS, deliver to PWS copies of all sales tax
reports and tax returns. In addition, the Franchisee shall keep all such records
for at least five consecutive years. PWS reserves the right to audit or cause to
be audited the sales reports, financial statements and tax returns which the
Franchisee is required to submit to PWS. In the event any audit discloses an
understatement of the Adjusted Gross Sales of the Franchisee's Pizzeria for any
period or periods, the Franchisee must immediately pay to PWS the due and unpaid
fees, all advertising contributions due under this Agreement and the amount, if
any, required to be paid to the Advertising Fund, plus interest due on these
amounts. Further, in the event such understatement for any period or periods is
2% or more of the Adjusted Gross Sales of the Pizzeria or such inspection or
audit is made necessary by the Franchisee's failure to furnish reports,
supporting records, financial statements or other information required by this
Agreement, or to furnish these reports, records, information or financial
statements on a timely basis, the Franchisee is obligated to reimburse PWS for
the cost of such audit, including the charges of any independent certified
public accountant and the travel expenses, room and board and compensation of
PWS's employees incurred in conducting such audit.
(p) Entertainment and Vending Machines: Unless first
approved in writing by PWS, the Franchisee shall neither allow any product,
vending machine or entertainment device to be sold, displayed, situated, or used
at the Pizzeria, nor permit any live entertainment, musicians, motion pictures,
television, or other entertainment, including dancing, at the Pizzeria. Under no
circumstances will pool tables or gaming machines be allowed on Pizzeria
premises.
(q) Trade Name and Proprietary Marks:
(i) PWS's trade name, and the service marks and
trademarks licensed hereunder are the sole and exclusive property of PWS. The
Franchisee shall acquire no right to use, or to license the use of, any name,
xxxx, or other intangible property right granted or to be granted herein, or any
name or xxxx confusingly similar thereto, except in connection with the
operation of the Pizzeria. The Franchisee shall not incorporate or form a
partnership or joint
14
venture under any names, in whole or in part, referred to in this Agreement or
otherwise belonging to PWS or any name or xxxx confusingly similar thereto. The
Franchisee shall use its best efforts to promote and protect the Franchisee's
and PWS's business interests and protect the goodwill and trade name of
Me-N-Ed's Pizzerias and the Proprietary Marks. The Franchisee also shall
immediately notify PWS of any infringement of or challenge to the Franchisee's
use of PWS's trademarks, service marks, trade names, logo types or other
commercial symbols. PWS, though, is not obligated to protect the Franchisee's
right to the use of PWS's trademarks, service marks, trade names, logo types or
other commercial symbols and further, is not obligated to protect the Franchisee
against any claim of infringement or unfair competition with respect to the
names, marks and symbols. PWS is not obligated to indemnify the Franchisee
against nor to reimburse the Franchisee for any damages for which the Franchisee
is held liable in any proceeding arising out of the Franchisee's use of PWS's
trademarks, service marks, or other commercial symbols under this Agreement.
(ii) The Franchisee agrees to consistently use the
xxxx "Me-N-Ed's" and/or such other name(s) as designated by PWS on all signs,
decorations, advertising, menus, letterhead, telephone listings, and other
printed and decorative materials used in or on the premises or with which the
Pizzeria is identified. The Franchisee shall not use the "Me-N-Ed's" name,
service xxxx, and/or trademark on any automobile or truck or otherwise, except
as expressly authorized by this Agreement. As used in this Paragraph and
throughout this Agreement, "Proprietary Marks" shall be deemed to refer to and
include "Me-N-Ed's," "Me-N-Ed's Pizza Parlor & Pizza Design," "Me-N-Ed's Guys
With Pizza Design," "Me-N-Ed's Slices," "Me-N-Ed's Pizzeria" and any other
"Me-N-Ed's"-based marks, and (for the sake of convenience), shall further
include all marks of PWS which the Franchisee has or shall be authorized to use
which are not based upon the words "Me-N-Ed's."
(iii) If there should be asserted a claim of prior
use of any of the trade names, trademarks, service marks, slogans or visual
indicia used in the Pizzeria, the Franchisee, at its expense, shall use such
name or marks as may then be provided by PWS, or if no such substitutes are
provided by PWS, the Franchisee's own name and such marks or words as shall
clearly avoid any possible confusion between the business of the Pizzeria and
the business of the claimant, and the Franchisee shall have no claim against PWS
for any damages due to the change in names or marks.
(iv) If it becomes advisable at any time in PWS's
sole discretion for the Franchisee to modify or discontinue use of any
Proprietary Xxxx, the Franchisee must do so. PWS's sole obligation in such an
event is to reimburse the Franchisee for its actual, out-of-pocket costs
incurred in complying with this obligation, unless PWS shall have given the
Franchisee six months prior written notice of such requirement, in which case
PWS shall have no obligation to reimburse the Franchisee.
(v) PWS retains and reserves the right in its sole
discretion to manufacture and distribute anywhere in the world, including the
Franchisee's trade area, products under PWS's Proprietary Marks or other
products through retail food stores and other channels of distribution, without
limitation, regardless of whether such products are authorized for sale in
Me-N-Ed's Pizzerias.
15
(r) Legal Compliance: At its sole expense, the
Franchisee shall secure and maintain in force all required licenses, permits and
certificates and shall operate its Pizzeria in full compliance with all
applicable federal, state and local laws, ordinances and regulations. In
addition, the Franchisee shall require each delivery driver to submit proof of
insurance not less frequently than once every 90 days, or as required by the
Franchisee's insurance company, if it requires more frequent showing of such
proof. PWS also shall not provide customers of the Pizzeria with a guarantee of
time within which a delivery will be made.
(s) Right of Inspection: PWS has the right, at any time
during business hours and without prior notice to the Franchisee, to conduct
reasonable inspections of the Pizzeria and its business records wherever
located. Inspections of the Pizzeria will be made at PWS's expense, unless PWS
is required to make any additional inspections in connection with the
Franchisee's failure to comply with this Agreement. In such event, PWS has the
right to charge the Franchisee for the costs of making all additional
inspections in connection with such failure to comply including, without
limitation, travel expenses, room and board, compensation of its employees, and
the total cost of having a representative of PWS stay in the Pizzeria until PWS
shall determine that there is compliance.
(t) Insurance: The Franchisee must at all times during
the term of this Agreement maintain in force at its sole expense: (i) property
insurance on a replacement cost basis at a minimum limit based on the total
value of the Franchisee's assets (including, but not limited to, fire, extended
coverage, vandalism and malicious mischief); (ii) commercial general liability
insurance, including contractual liability, products-completed operations,
personal and advertising injury and liquor liability with minimum limits of
liability for each type of insurance of $1,000,000 general aggregate, $1,000,000
products-completed operations aggregate, $1,000,000 personal and advertising
injury, $1,000,000 each occurrence, $50,000 fire damage, $1,000 medical expense
and $1,000,000 liquor liability; (iii) primary automobile liability insurance as
described in Paragraph 4(b) of this Agreement; (iv) workers' compensation
insurance (in the Franchisee's name) as required by applicable law; and (v)
business interruption insurance of at least $1,000 per day. In addition, the
Franchisee is required to carry an umbrella policy for excess coverage on the
policies described above up to $3,000,000 of coverage. The Franchisee may not
self-insure nor participate in any self-insurance program. All insurance
policies must be issued by an insurance carrier rated A or better by Xxxxxx X.
Best & Company, Inc. or an alternative company approved in writing by PWS, in
PWS's sole discretion. All liability insurance policies must name PWS and the
subsidiaries and affiliates which it designates, as additional insureds entitled
to the coverage afforded to all named insureds, without regard to any other
insurance or self-insured program which PWS may have in effect, and must also
provide that PWS receive 30 days prior written notice of termination,
expiration, cancellation, modification, or reduction in coverage or limits of
any such policy. PWS may also reasonably increase the minimum liability
protection requirement annually and require different or additional kinds of
insurance to reflect inflation, changes in standards of liability, higher damage
awards in public, product or motor vehicle litigation or other relevant changes
in circumstances. The Franchisee must submit to PWS annually a copy of the
certificate of or evidence of the renewal or extension of each such insurance
policy or any modifications to any such insurance policy. If the Franchisee at
any time fails or refuses to maintain in effect any insurance coverage required
by PWS, or to furnish satisfactory evidence of such insurance, PWS
16
may, at its option and in addition to PWS's other rights and remedies under this
Agreement, obtain such insurance coverage, on behalf of the Franchisee, and the
Franchisee must promptly execute any applications or other forms or instruments
required to obtain any such insurance. The Franchisee shall also promptly pay to
PWS on demand any costs and premiums incurred by PWS, together with an amount
equal to ___% of the premium charged, as a fee to PWS. The Franchisee's
obligation to obtain and maintain the insurance described in this Agreement will
not be limited in any way by reason of any insurance maintained by PWS.
(u) Notification of Legal Proceedings: The Franchisee
shall notify PWS in writing within 10 days after the commencement of any action,
suit or proceeding, or of the issuance of any order, writ, injunction, award, or
decree of any court or government agency which may adversely affect the
Franchisee's financial condition or ability to perform its duties or meet its
obligations hereunder.
(v) Indemnity: The Franchisee shall pay all bills,
debts, obligations and liabilities incurred in the operation of the Pizzeria and
in the performance of off-site delivery services and shall indemnify and hold
each Indemnified Party (as defined below) harmless therefrom. If an Indemnified
Party is subjected to any claim demand or liability or becomes a party to any
suit or other judicial or administrative proceeding by reason of any claimed act
or omission of the Franchisee, its employees or agents, or by reason of any act
or omissions occurring on the Pizzeria premises or otherwise relating to the
business or operation of the Pizzeria, including acts or omissions relating to
off-site delivery services, the Franchisee shall indemnify each Indemnified
Party and hold each Indemnified Party harmless from and against all judgments,
settlements, penalties and expenses, including attorneys' fees, court costs and
other expenses of litigation or administrative proceeding, incurred by or
imposed on any Indemnified Party in connection with the investigation or defense
related to such claim or litigation or administrative proceeding. The defense of
such claim, litigation or administrative proceeding by an Indemnified Party, or
by the Franchisee on an Indemnified Party's behalf, shall be at the sole cost
and expense of the Franchisee, who shall hold each Indemnified Party free and
harmless from all such obligations and liabilities and shall reimburse the
Indemnified Party for all expenses incurred therein, including attorneys' fees.
Further, the Indemnified Party shall have the right independently to take any
action it may deem necessary, in its sole discretion, to protect and defend
itself against any threatened action subject to indemnification hereunder,
without regard to expense, forum or other parties that may be involved. As used
in this Agreement, the term "Indemnified Party" means PWS and any subsidiary or
affiliated company of PWS, including any officer, director, shareholder,
employee or agent of PWS or of any such subsidiary or affiliated company. The
Franchisee's indemnification obligations described above will continue in full
force and effect after the expiration or termination of this Agreement.
(w) Copyrights: PWS owns rights under the Copyright Act
in various creative works. PWS shall have the right, in its sole discretion, to
grant to the Franchisee a revocable, non-exclusive, royalty-free license to
reproduce, copy, and distribute copyrighted works selected and made available to
the Franchisee (except confidential and trade secret information) by PWS from
time to time, but any such license shall not include the right to make
adaptations or derivative works based upon the licensed works. PWS and the
Franchisee have
17
the same rights and obligations in relation to copyrights as they do,
respectively, in relation to PWS's Proprietary Marks under Paragraph 9(q) of
this Agreement.
(x) Home Page: The Franchisee will not establish a
website or home page on the Internet (the "Home Page") to advertise or promote
its Pizzeria without the prior written consent of PWS. All features of any
proposed Home Page, including its domain name, content, format, and links to
other websites, must be approved by PWS prior to activation of the Home Page.
The Franchisee's Home Page must advertise only the Franchisee's Pizzeria, and
all content and information maintained by the Franchisee on the Home Page will
at all times be subject to the provisions of this Agreement including, without
limitation, provisions of this Agreement relating to trademark usage, conditions
on the business to be conducted by the Franchisee pursuant to this Agreement,
advertising approval, confidentiality, and product and service limitations. The
Franchisee will not link its Home Page to any Internet site without PWS's prior
written approval.
10. NON-COMPETITION
(a) Covenant Not to Compete: Neither the Franchisee nor
its owners may, either directly or indirectly, for the benefit of the Franchisee
or its owners or through or on behalf of or in conjunction with any other
person, partnership or corporation, own, engage in, be employed by, advise,
assist, invest in, franchise, make loans to, or have any interest, whether
financial or otherwise, in any other sit-down, carry-out or delivery pizza
restaurant business or any other fast service restaurant business which is
located within a radius of __ miles of the Pizzeria and is substantially similar
to the Pizzerias operated by PWS or by other the Franchisees under active
franchises granted by PWS (except for other Pizzerias operated under
Franchise
Agreements entered into by the Franchisee with PWS or other Pizzerias in which
the Franchisee or its owners have an ownership interest). This covenant not to
compete shall be effective during the term of this Agreement and any renewal of
the franchise, and for a period of three years thereafter where the franchise is
terminated by PWS for cause or by the Franchisee without cause, or if the
franchise has been sold, assigned, or transferred by the Franchisee.
(b) Damages: The Franchisee acknowledges that the
damages to PWS arising from a violation of this covenant by the Franchisee are
difficult to ascertain and agrees that, for each month that the Franchisee
operates a business in violation of this Paragraph 10, PWS shall be entitled to
liquidated damages, in addition to its other remedies under law or equity, equal
to the average Royalty Fee paid or owed to PWS during the most recent six months
of full operation of the Pizzeria that the Franchisee operates or operated
pursuant to this Agreement. If the Franchisee has not operated the Pizzeria for
six months or more, the Franchisee shall have to pay to PWS the average Royalty
Fee paid or owed to PWS during the actual period that the Franchisee operated
the Pizzeria pursuant to this Agreement.
(c) Other Activities: Neither the Franchisee nor any of
its owners, if the Franchisee is a corporation or partnership may, without PWS's
prior written consent, engage in any other active business activity during the
term of this Agreement, except passive investments as permitted by PWS.
18
(d) Employees: Neither the Franchisee nor its owners
may, during the term of this Agreement, directly or indirectly solicit or employ
any person who is employed by PWS, by any entity controlled by PWS or by any
other of its the Franchisees, nor may the Franchisee or its owners induce or
attempt to induce any of these people to leave their employment without PWS's
prior written consent and the consent of their employers. PWS will not induce or
attempt to induce the Franchisee's employees to leave their employment with the
Franchisee and become employed by PWS or its subsidiaries or affiliates without
the Franchisee's consent.
(e) Public Companies: These covenants will not apply to
ownership by the Franchisee or its owners of less than a 5% beneficial interest
in the outstanding equity securities of any corporation whose stock is publicly
traded.
11. RIGHT OF FIRST REFUSAL
If the Franchisee or its owners propose to sell the Pizzeria
(or its assets) or if the Franchisee is a corporation or partnership, any
ownership interest in the corporation or partnership, and the Franchisee or its
owners obtain a bona fide executed written offer to purchase this interest, the
Franchisee or its owners must deliver a copy of the bona fide offer to PWS along
with all documents to be executed by the Franchisee or its owners and the
proposed assignee or transferee. PWS will, for a period of 30 days after the
date of delivery of such offer to it, have the right, exercisable by written
notice to the Franchisee or its owners, to purchase the Pizzeria (or its assets)
or such ownership interest for the price and on the terms and conditions
contained in such offer. If the offer is to purchase the interest of a
controlling shareholder or partner and is for less than all of the outstanding
interests of the corporation or partnership, PWS also has the right, during the
30 day period upon written notice to the other owners, to purchase the remaining
shares of capital stock or partnership interest at a per share or per unit or
interest price equivalent to the price being offered under the bona fide offer
to the controlling shareholder or partner. If PWS does not exercise this right
of first refusal, the offer may be accepted by the Franchisee or its owners,
subject to PWS's prior written approval. If the offer is not accepted within 60
days, PWS will again have the right of first refusal described in this
Paragraph.
12. TRANSFER AND ASSIGNMENT
(a) Transfer by Franchisee: This Agreement is personal
to the Franchisee and its owners. Accordingly, neither this Agreement, nor any
interest in this Agreement or if the Franchisee is a corporation or partnership,
any interest in the corporation or partnership, may be assigned or transferred
except as specifically authorized under this Agreement. A transfer of ownership
of the Pizzeria (or its assets) may only be made in conjunction with a transfer
of this Agreement. Any such assignment, transfer or encumbrance without PWS's
approval will have no effect and will constitute a breach of this Agreement. PWS
will permit sales, transfers or assignments of this Agreement or an ownership
interest of an owner, if the Franchisee is a corporation or partnership, to
others provided:
(i) The Franchisee (or any of its owners) is not
in default under this Agreement or any other agreement with PWS or its
subsidiaries or affiliates or any other creditor or supplier of the Pizzeria;
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(ii) All obligations of the Franchisee created by
this Agreement and all other related franchise documents, and the relationship
created hereunder are assumed by the proposed transferee or assignee (and its
controlling shareholder or partner and all other owners if it is a corporation
or partnership);
(iii) All debts of the Franchisee to PWS are paid
in full prior to such transfer;
(iv) The Franchisee executes a general release, in
a form satisfactory to PWS, of any and all claims against PWS and its past and
present officers, directors, shareholders, employees and agents, in their
corporate and individual capacities including, without limitation, claims
arising under federal, state, and local laws, rules, and ordinances;
(v) The proposed transferee or assignee (and its
controlling shareholder or partner and all other owners if it is a corporation
or partnership) meets PWS's standards for the Franchisees or owners including,
but not limited to, good reputation and character, business experience,
operational ability, financial strength and other business considerations;
(vi) The proposed transferee or assignee (and its
owners) is not operating, franchising or licensing the operation of any
sit-down, carry-out or delivery pizza business except other Me-N-Ed's Pizzerias;
(vii) The proposed transferee or assignee (and its
owners) agrees to sign PWS's then-current standard
Franchise Agreement for a
term equal to, at PWS's election, the remaining term of this Agreement, the
remaining term of the existing lease for the Pizzeria premises, or the term set
forth in the then-current standard
Franchise Agreement;
(viii) The proposed transferee or assignee (or the
person designated by PWS) completes all required training to the extent required
by PWS;
(ix) At PWS's request, the proposed transferee or
assignee refurbishes the Pizzeria in the manner and subject to the provisions
prescribed in Paragraph 9(l) of this Agreement;
(x) The proposed transferee or assignee pays a
Transfer Fee of $2,500 to cover PWS's costs in approving and processing the
assignment; and
(xi) The proposed transferee qualifies as a
transferee of the alcohol beverage license application to the Pizzeria premises.
The provisions of Paragraph 12(a)(vi), (vii) and (ix) above
will not apply to an approved sale, transfer or assignment by a shareholder or
partner owning a 30% or less interest in the corporation or partnership, except
that the proposed transferee or assignee must guarantee the performance by the
Franchisee of its obligations under this Agreement and agree to be bound by all
of the provisions of this Agreement in the form prescribed by PWS. In connection
with
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any assignment permitted under this Agreement, the Franchisee must provide PWS
with all documents to be executed by the Franchisee and the proposed assignee or
transferee at least 30 days prior to signing.
The Franchisee acknowledges that PWS may, in its sole
discretion and as it may deem necessary in particular circumstances, vary and/or
waive conditions or requirements which PWS deems necessary for the operation of
the franchised business in connection with its approval of a transfer.
(b) Transfer to Corporation: PWS will allow the
Franchisee to assign this Agreement and the Pizzeria (and its assets) to a
corporation or partnership, for convenience of ownership of the Pizzeria,
provided:
(i) The partnership or corporation conducts no
business other than the Pizzeria (or other related businesses authorized by
PWS);
(ii) The corporation or partnership is actively
managed by the Franchisee;
(iii) The person designated as the controlling
shareholder or partner owns and controls not less than 70% of the general
partnership interest or the equity and voting power of all issued and
outstanding capital stock of the corporation; and
(iv) All other shareholders and partners meet the
requirements established by PWS from time to time in its sole discretion and
agree to guarantee the obligations of the Franchisee under this Agreement and be
bound by the terms of this Agreement in the manner prescribed by PWS. The
articles of incorporation or the organization documents of any partnership or
corporation must recite that they are subject to all restrictions contained in
this Agreement. PWS also has the right to require, as a condition of any
assignment of this Agreement to a corporation or partnership or the operation of
a franchise by a corporation or partnership, that the shareholders or partners
enter into a buy/sell agreement among themselves in a form and containing such
terms as PWS prescribes for transfers of ownership interests in such corporation
or partnership.
(c) No Subfranchise Rights: The Franchisee does not have
the right to grant a subfranchise or similar rights.
(d) Offerings by Franchisee: Securities or partnership
interests in the Franchisee may be offered by private offering or otherwise,
only with the prior written consent of PWS. All materials required for such
offering by federal or state law shall be submitted to PWS for review 30 days
prior to their use or filing with any government agency, and any materials to be
used in any offering exempt from federal or state securities laws shall be
submitted to PWS for review 30 days prior to their use. No offering by the
Franchisee shall imply by use of the Proprietary Marks or otherwise that PWS is
participating in underwriting, issuing, or offering securities of the Franchisee
or PWS. PWS's review of any offering materials shall be limited solely to
matters deemed relevant by PWS, and PWS's failure to comment on any items shall
not be deemed approval. The Franchisee and the other participants in the
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offering must fully indemnify PWS in connection with the offering. For each
proposed offering, the Franchisee shall pay to PWS a non-refundable fee not to
exceed PWS's reasonable costs and expenses associated with reviewing the
proposed offering including, without limitation, legal and accounting fees.
(e) Transfer by PWS: PWS shall have the right to sell,
assign, or transfer all or any part of its interests herein to any person or
entity without prior notice to or consent of the Franchisee. Except as otherwise
expressly provided herein, this Agreement shall inure to the benefit of and
shall bind the heirs, executors, personal representatives, administrators,
successors, and assigns of PWS and the Franchisee.
13. OPERATION IN THE EVENT OF ABSENCE, DISABILITY OR DEATH
(a) Death of Franchisee: Upon the death or permanent
disability of the Franchisee or the death or permanent disability of the
controlling shareholder or partner, this Agreement or the ownership interest of
the deceased or permanently disabled shareholder or partner must be transferred
to a party approved by PWS. Any transfer including, without limitation,
transfers by devise or inheritance or trust provisions, will be subject to the
same conditions for transfers which are contained in this Agreement. Except as
otherwise prescribed in writing by PWS, the Franchisee's personal representative
or the personal representative of such shareholder or partner must submit to PWS
a proposal meeting the requirements for transfer of this Agreement or such
ownership interest within 120 days after the Franchisee's death or permanent
disability or the death or permanent disability of such shareholder or partner.
PWS will communicate its approval or disapproval of any such proposal within 15
days after receipt. PWS will not unreasonably withhold its consent to the
transfer of this Agreement or such ownership interest to the Franchisee's
spouse, heirs or relatives or the spouse, heirs or relatives of such deceased or
permanently disabled shareholder or partner, provided the requirements of
Paragraph 12 of this Agreement are satisfied. PWS, during such 120 day period,
will evaluate any proposal regarding transfer of this Agreement or such
ownership interest, including any request that PWS consider purchasing the
franchise or such ownership interest. The Franchisee's personal representative
or the personal representative of such deceased or permanently disabled
shareholder or partner must complete the transfer of this Agreement or such
ownership interest within 60 days after the date of PWS's approval of any such
proposal. Upon the death of any other owner, the interest of such owner must be
transferred within a reasonable time to a person meeting PWS's requirements. All
such transfers must also comply with Paragraph 12 of this Agreement, including
qualification as transferee of the alcoholic beverage license applicable to the
Pizzeria premises. The Franchisee's or any of its owner's failure to transfer
the interest in accordance with the provisions of this Paragraph will be
considered a breach of this Agreement.
(b) Permanent Disability: The Franchisee will be deemed
to have a "permanent disability" if the Franchisee's or its owners' usual,
active participation in the Pizzeria as contemplated by this Agreement is for
any reason curtailed for a continuous period of six months.
(c) Appointment of Manager: PWS has the right to appoint
a manager for the Pizzeria if in PWS's judgment the Pizzeria is not being
managed properly after the
22
Franchisee's death or permanent disability (or the death or permanent disability
of an owner if the Franchisee is a corporation or partnership). The manager
appointed by PWS may be PWS, in its capacity as a restaurant management
business. In no event will PWS charge more to the Franchisee's Pizzeria in
management fees than it charges its own affiliated entities. All funds from the
operation of the Pizzeria during the management by PWS's appointed manager will
be kept in a separate fund, and all expenses of the Pizzeria, including
compensation, other costs and travel and living expenses of PWS's manager will
be charged to this fund. In managing the Pizzeria, PWS's obligation will be to
use its reasonable efforts and PWS will not be liable for any debts or
obligations of the Pizzeria, or to any of the Franchisee's creditors for any
products, materials, supplies or services purchased by the Pizzeria prior to or
during PWS's management.
14. DEFAULT AND TERMINATION
(a) Grounds for Termination: PWS has the right to
terminate this Agreement and the franchise effective upon delivery of notice of
termination to the Franchisee, if:
(i) The Franchisee or any of its owners have made
any material misrepresentations on its application for the franchise or has made
any representation or warranty or provided PWS with any information which is
untrue or inaccurate in any material respect;
(ii) The Franchisee does not open the Pizzeria
within 12 months after the date of execution of this Agreement;
(iii) The Franchisee fails to apply for an on-sale
beer and wine license for the Pizzeria on or before the expiration of five days
after the execution of the lease for the Pizzeria premises;
(iv) The Franchisee fails to attend, complete
and/or achieve a passing grade in any required course given by PWS subsequent to
the opening of the Pizzeria;
(v) The Franchisee's on-sale beer and wine license
is suspended for a period in excess of 65 days, or is revoked;
(vi) The Franchisee or any of its owners is judged
a bankrupt, becomes insolvent, makes an assignment for the benefit of creditors,
is unable to pay its debts as they become due, a petition under any bankruptcy
law is filed against the Franchisee or any of its owners or a receiver or other
custodian is appointed for all or substantially all of the assets of the
Pizzeria;
(vii) The Franchisee abandons or fails to
continuously and actively operate the Pizzeria;
(viii) The lease or sublease for the Pizzeria is
terminated or cancelled or the Franchisee is unable to renew or extend the lease
or sublease or the Franchisee
23
fails to maintain possession of the Pizzeria premises (unless the Franchisee is
permitted to relocate the Pizzeria as provided in this Agreement);
(ix) The Franchisee or any of its owners is
convicted of a felony or other crime which substantially impairs the goodwill
associated with the Proprietary Marks or engages in any misconduct which, in
PWS's judgment, adversely affects the reputation of the Pizzeria or the goodwill
associated with the Proprietary Marks;
(x) The Franchisee intentionally underreports the
Adjusted Gross Sales of the Pizzeria for any period or periods;
(xi) Any other
Franchise Agreement between the
Franchisee or any of its owners and PWS is terminated by PWS for cause;
(xii) The Franchisee fails to obtain or maintain
insurance required by PWS and does not correct such failure within 48 hours
after written notice is delivered to the Franchisee; provided, however, that PWS
will not exercise its right to terminate this Agreement if the Franchisee
immediately ceases operating the Pizzeria and obtains all such insurance within
10 days after written notice is delivered to the Franchisee;
(xiii) The Franchisee fails to comply with any
provision of this Agreement or any specification, standard or operating
procedure or rule prescribed by PWS relating to the use of any Proprietary Xxxx
or the quality of pizza or any beverage sold or the cleanliness or sanitation of
the Pizzeria and does not correct such failure within seven calendar days after
written notice is delivered to the Franchisee;
(xiv) The Franchisee or any of its owners fails to
comply with any other provision of this Agreement or any specification, standard
or operating procedure and fails to correct this failure within 30 calendar days
after written notice is delivered to the Franchisee;
(xv) The Franchisee fails to pay any amount owed
to PWS, its affiliates or subsidiaries, or any creditor or supplier of the
Franchisee or the Pizzeria or any taxing authority for federal, state or local
taxes (other than amounts being bona fide disputed through appropriate
proceedings) and does not correct such failure within 10 calendar days after
written notice is delivered to the Franchisee; or
(xvi) The Franchisee or any of its owners on three
or more occasions within any one year period fails to comply with any one or
more provisions of this Agreement including, without limitation, the obligation
to submit when due, sales reports or financial statements, to pay when due the
Royalty Fees, Advertising Fees, or other payments to PWS or its affiliates or
subsidiaries or any other creditors or suppliers of the Franchisee or the
Pizzeria, whether or not such failure to comply is corrected after notice is
delivered to the Franchisee.
(b) Obligations upon Termination: Upon termination or
expiration of the franchise, the Franchisee is required to immediately pay PWS
all Royalty Fees, Advertising
24
Fees and other charges which are due and owing under this Agreement. The
Franchisee must also immediately return to PWS all copies of the Manuals and
take such action as may be required to cancel all assumed name or equivalent
registrations relating to the use of any Proprietary Xxxx, notify the telephone
company and all listing agencies of the termination or expiration of the
Franchisee's right to use all telephone numbers and all classified and other
directory listings of the Pizzeria, and authorize transfer of these to PWS or
its the Franchisee or designee; and make the Pizzeria accessible and available
for PWS to operate if PWS elects to do so. If the Franchisee fails to take any
of these measures, it shall pay to PWS a fee of $2,500 for the expense of
handling these matters which PWS requires the Franchisee to specifically perform
with respect to its obligations under this Paragraph. Upon termination or
expiration of this Agreement, the Franchisee must, at its own expense, and
within 45 days of termination or expiration of this Agreement, make such
reasonable modifications in the exterior and interior decor of the Pizzeria as
PWS requires to eliminate its identification as a Me-N-Ed's Pizzeria and cease
identifying the Pizzeria as a Me-N-Ed's Pizzeria or as being associated with PWS
and the Proprietary Marks.
(c) Purchase of Pizzeria Assets: Upon the termination or
expiration of the franchise, except termination by the Franchisee for cause, PWS
has the option, but not the obligation, exercisable for 30 days, to purchase the
assets of the Pizzeria. The formula purchase price for such acquisition will be
an amount calculated by determining the net after tax earnings of the Pizzeria
during the immediately preceding three years, multiplied by five, and divided by
three.
15. UNAVOIDABLE DELAYS
In the event of failure to perform or delays in the
performance of any duties hereunder caused by forces not within the reasonable
preventive control of the party due to perform, for example (without
limitation), government regulations, fire, flood, labor disputes, natural
disasters, acts of God, civil disorders, riots, insurrections, work stoppages,
slowdowns or disputes, or other similar events, such failures or delays shall
not cause a default in performance, but, in the event of delay, the parties
shall extend the time of performance for a period of time equivalent to the
length of delay, or for such other reasonable period of time as agreed to
between the parties, provided that such extension shall not enlarge or extend
the term of this Agreement set forth in Paragraph 5 of this Agreement.
16. SEVERABILITY AND CONSTRUCTION
(a) Severability: Except as expressly provided to the
contrary herein, each portion, section, part, term, and/or provision of this
Agreement shall be considered severable, and if, for any reason, any section,
part, term, and/or provision herein is determined to be invalid and contrary to,
or in conflict with, any existing or future law or regulation by a court or
agency having valid jurisdiction, such shall not impair the operation of, or
have any other effect upon, such other portions, sections, parts, terms, and/or
provisions of this Agreement as may remain otherwise intelligible, and the
latter shall continue to be given full force and effect and bind the parties
hereto; and the invalid portions, sections, parts, terms, and/or provisions
shall be deemed not to be part of this Agreement.
25
(b) No Rights to Others: Except as expressly provided to
the contrary herein, nothing in this Agreement is intended, nor shall be deemed,
to confer upon any person or legal entity other than the Franchisee, PWS, PWS's
officers, directors, and employees, and such of the Franchisee's and PWS's
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
(c) Court Decisions: The Franchisee expressly agrees to
be bound by any promise or covenant imposing the maximum duty permitted by law
which is subsumed within the terms of any provision hereof, as though it were
separately articulated in and made a part of this Agreement, that may result
from striking from any of the provisions hereof any portion or portions which a
court may hold to be unreasonable and unenforceable in a final decision to which
PWS is a party, or from reducing the scope of any promise or covenant to the
extent required to comply with such a court order.
17. RELATIONSHIP BETWEEN PARTIES
(a) No Fiduciary Relationship: It is understood and
agreed by the parties hereto that this Agreement does not create a fiduciary
relationship between them, that the Franchisee is an independent contractor, and
that nothing in this Agreement is intended to constitute either party an agent,
legal representative, subsidiary, joint venturer, partner, employee, or servant
of the other for any purpose whatsoever.
(b) Independent Contractors: The Franchisee shall hold
itself out to the public to be an independent contractor operating pursuant to
this Agreement. The Franchisee agrees to take such actions as shall be necessary
to that end.
(c) Indemnification: The Franchisee understands and
agrees that nothing in this Agreement authorizes the Franchisee to make any
contract, agreement, warranty, or representation on PWS's behalf, or to incur
any debt or other obligations in PWS's name, and that PWS shall in no event
assume liability for, or be deemed liable hereunder as a result of, any such
action, or by reason of any act or omission of the Franchisee or any claim or
judgment arising therefrom. The Franchisee shall indemnify and hold PWS, its
subsidiaries and affiliates, and their respective officers, directors,
shareholders, employees and agents harmless against any and all such claims
arising directly or indirectly from, as a result of, or in connection with the
Franchisee's activities hereunder, as well as the costs, including attorneys'
fees, of defending against them.
18. WAIVER
No failure of PWS to exercise any power given to it hereunder,
or to insist on strict compliance by the Franchisee with any obligation or
condition hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of PWS's right to demand exact
compliance with the terms hereof. Waiver by PWS of any particular default by the
Franchisee shall not affect or impair PWS's rights with respect to any
subsequent default of the same or of a different nature; nor shall any delay or
omission of PWS to exercise any rights arising from a default affect or impair
PWS's rights as to the default or any subsequent default.
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19. NOTICES
All notices hereunder shall be hand delivered or sent by
express mail or air courier or by registered or certified mail to PWS and the
Franchisee at the respective addresses set forth on the first page of this
Agreement, unless PWS and/or the Franchisee shall from time to time change the
addresses by written notice to the other as provided herein. Notice may also be
given to the Franchisee at the Pizzeria location specified herein after the date
the Pizzeria is first open for business. Any notice given by registered or
certified mall shall be deemed received by the party to whom it is addressed on
the third day after such notice is deposited in the United States mail with
postage thereon fully prepaid, return receipt requested.
20. APPLICABLE LAW AND JURISDICTION
This Agreement shall be governed in all respects and aspects
by the laws of the state in which the Pizzeria is located, and the parties
hereby agree that any legal action concerning this Agreement shall be brought in
a court of competent jurisdiction.
21. TERMINOLOGY
All terms and words used in this Agreement, regardless of the
number and gender in which they are used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine,
feminine, or neuter, as the context or sense of this Agreement or any section,
paragraph, or clause herein may require, as if such word had been fully and
property written in the appropriate number and gender.
22. STATUS OF AGREEMENT
(a) Entire Agreement: This Agreement and the exhibits
attached hereto and incorporated herein, if any, contain the entire agreement of
the parties and there are no representations, inducements, promises, agreements,
arrangements or undertakings, oral or written, between the parties hereto other
than those set forth and duly executed in writing in this Agreement.
(b) Other Agreements: Upon execution of this Agreement
by PWS, all previous agreements, contracts, arrangements or undertakings of any
kind relative to the franchise granted herein are cancelled, and as between the
parties hereto, all claims and demands are fully satisfied; provided, however,
that this subparagraph shall have no effect upon written agreement(s) signed by
both parties, whenever executed, except to the extent that such written
agreement specifically refers to and modifies or cancels this Agreement.
23. AMENDMENT OF AGREEMENT
This Agreement shall not be modified or amended except by
written agreement executed by both parties hereto.
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24. COSTS AND EXPENSES OF ENFORCEMENT
The prevailing party shall recover the reasonable costs and
expenses, including reasonable attorneys' fees, incurred by such party in
connection with any legal proceeding involving the enforcement of any of the
provisions of this Agreement.
25. CAPTIONS
The Paragraph headings throughout this Agreement are for
convenience and reference only, and the words contained therein shall not be
held to expand, modify, amplify, or aid in the interpretation or construction of
this Agreement.
26. CONSENT AND APPROVAL
Whenever either of the parties is required herein to obtain
the consent or approval of the other party, such consent or approval shall not
be unreasonably withheld.
27. REPRESENTATIONS
NO REPRESENTATION, PROMISE, GUARANTY OR WARRANTY WAS MADE TO INDUCE THE
EXECUTION HEREOF OR IN CONNECTION HEREWITH WHICH IS NOT EXPRESSLY CONTAINED
HEREIN. THE FRANCHISEE RECOGNIZES THAT NEITHER PWS NOR ANY OTHER PERSON CAN
GUARANTEE THE FRANCHISEE'S SUCCESS IN THE FRANCHISED BUSINESS. BY THE EXECUTION
AND ACCEPTANCE OF THIS AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE
READ THE SAME AND UNDERSTAND EACH PROVISION HEREOF. THIS AGREEMENT, ALTHOUGH
DRAWN BY PWS, SHALL BE CONSTRUED FAIRLY AND REASONABLY, AND NOT MORE STRICTLY
AGAINST ONE PARTY THAN AGAINST THE OTHER PARTY HERETO.
(a) Business Risks: The Franchisee acknowledges that the
success of the business venture contemplated by this Agreement involves
substantial business risks and will be largely dependent upon the ability of the
Franchisee as an independent business person. PWS expressly disclaims the making
of, and the Franchisee acknowledges not having received, any warranty or
guaranty, express or implied, as to the potential volume, profits, or success of
the business venture contemplated by this Agreement.
(b) Review of Agreement: The Franchisee acknowledges
that the Franchisee has received and read, and understands, this Agreement, the
exhibits attached hereto, and agreements relating hereto, if any; and that PWS
has accorded the Franchisee ample time and opportunity to consult with advisors
of the Franchisee's own choosing about the potential benefits and risks of
entering into this Agreement.
(c) Receipt of Offering Circular: The Franchisee
acknowledges that it received a complete copy of this Agreement, the exhibits
hereto, and agreements relating hereto, if any, at least five business days
prior to the date on which this Agreement was executed. The Franchisee further
acknowledges that it has received the disclosure statement required by law
28
and entitled "Me-N-Ed's Pizzerias Franchise Offering Circular" at least 10
business days prior to the date on which this Agreement was executed.
28. EFFECTIVE DATE
This Agreement shall become effective and binding on the
date of execution by PWS as set forth below.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement.
DATED:
Franchisee (Print Name)
By:
Title:
DATED: PIZZA WORLD SUPREME, INC.
----------------------------
By:
Title:
29
EXHIBIT A
On _______________, _____, __________________________ opened
(Name of Franchisee)
a Me-N-Ed's Pizzeria pursuant to the
Franchise Agreement, dated ______________,
_____, and located at ________________________________________________________.
DATED:
Franchisee (Print Name)
By:
Title:
DATED: PIZZA WORLD SUPREME, INC.
----------------------------
By:
Title:
30
