EXHIBIT 10.21
FRANCHISE AGREEMENT
This Agreement, made this 16th day of September, 1987,
by and between Ryan's Family Steak Houses, Inc., a
corporation formed and operated under the laws of the State
of South Carolina, having its principal place of business at
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(hereinafter referred to as "FRANCHISOR"), and Family Steak
Houses of Florida, Inc., a corporation formed and operated
under the laws of the State of Florida, having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as
"FRANCHISEE").
W I T N E S S E T H:
WHEREAS, as a result of the expenditure of time, effort
and money, FRANCHISOR has acquired unique experience,
special skills, technique and knowledge with reference to
the development, opening and operating of food and
restaurant facilities; and
WHEREAS, FRANCHISOR has devised a standard unique and
uniform system for the establishment, operation and
development of same in specially designed buildings with
distinctive fixtures, equipment, interior and exterior
accessories and color schemes, food formulas, inventory and
accounting system, and comprehensive management assistance,
which system is identified by the ▇▇▇▇, "▇▇▇▇'▇ Family Steak
House"; and
WHEREAS, FRANCHISOR is the sole and exclusive owner of
the entire right, title and interest, together with all the
goodwill connected therewith, in and to the service and
trademarks, "Ryan's Family Steak House" and other
proprietary marks, patent and copyrights, if any; and
WHEREAS, in connection therewith, FRANCHISOR has, by
maintenance of uniformity and high standards or quality and
service, established a reputation, demand and goodwill for
said food and restaurant facilities operated under such
system and in its name; and
WHEREAS, all of the foregoing have a distinctive and
valuable significance to the public, and FRANCHISEE, being
cognizant thereof, desires to make use of the name "Ryan's
Family Steak House" and enjoy the commercial benefits of
that name and the benefits of the merchandising system and
operating services related thereto throughout the State of
Florida (except for FRANCHISOR's Existing Florida
Restaurants, as defined below); and
WHEREAS, on or about January 21, 1986, FRANCHISOR and
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., entered into a franchise agreement
granting ▇▇. ▇▇▇▇▇ a nonexclusive right to make use of the
name "Ryan's Family Steak House" and operate Ryan's Family
Steak House restaurants within the State of Florida, and ▇▇.
▇▇▇▇▇, with the consent of FRANCHISOR, assigned such
franchise agreement to FRANCHISEE; and
Whereas, in September, 1987, FRANCHISEE acquired the
Ryan's Family Steakhouse Restaurant in Apopka, Florida,
owned by another FRANCHISEE of FRANCHISOR, and, in
connection with such acquisition, was assigned all rights of
such FRANCHISEE under a franchise agreement with FRANCHISOR,
which rights FRANCHISOR made exclusive franchise rights for
the applicable territory with a term of up to forty (40)
years; and
WHEREAS, FRANCHISOR and FRANCHISEE desire to enter into
this franchise agreement, amending and superceding the
franchise agreement entered into on January 21, 1986; and
the FRANCHISEE agreement relating to the Apopka, Florida,
Ryan's Family Steak House restaurant.
NOW, THEREFORE, the parties hereto intending to be
legally bound in consideration of the mutual agreements,
covenants and promises contained herein, do hereby agree as
follows:
I. APPOINTMENT AND FRANCHISE FEE
A. FRANCHISOR hereby grants unto FRANCHISEE the
right to use the registered ▇▇▇▇, "▇▇▇▇'▇ Family Steak
House", and all trademarks, logos, tradenames or service
marks adopted presently or subsequently, by FRANCHISOR; and
the right, franchise and privilege to use FRANCHISOR's
techniques in the operation of Ryan's Family Steak House
Restaurants (the "Restaurant" or "Restaurants"), under the
specific conditions hereinafter set forth, in the State of
Florida,
subject to location approval in accordance with paragraph
II.A, hereof. FRANCHISEE shall have the right to use such
marks in connection with the operation of FRANCHISEE's
business, including, without limitation, the use of the
registered ▇▇▇▇ as a fictitious name under which FRANCHISEE
transacts business at the Restaurants, and the use of such
marks, logos or insignia on the signs, stationery, business
cards and advertising in connection with the Restaurants,
and in, on, or in connection with the Offering Memorandum,
Registration Statements, Prospectuses or other documents
prepared or used by FRANCHISEE to offer, sell or register
with governmental agencies securities issued by FRANCHISEE.
B. The rights provided under this Franchise
Agreement to
FRANCHISEE will be exclusive with respect to the State of
Florida, except that FRANCHISOR reserves the right to
maintain and continue operating two (2) Restaurants within
the State of Florida, one (1) which the FRANCHISOR is
currently operating in Panama City, Florida and one (1)
which FRANCHISOR intends to construct on a site owned by
FRANCHISOR in Pensacola, Florida, and the right to construct
and operate additional restaurants within Escambia County,
Florida ("FRANCHISOR's Existing Florida Restaurants").
C. Provided that FRANCHISEE shall be in compliance
with
the requirements of paragraph I.H below, FRANCHISOR shall
not enfranchise any other Ryan's Family Steak Houses within
the State of Florida. FRANCHISEE will not, directly or
indirectly, construct, own or operate any Ryan's Family
Steak House within five (5) miles, measured from the center
of the building, of a site of FRANCHISOR's Existing Florida
Restaurants.
D. FRANCHISOR reserves the right, notwithstanding
any
rights granted elsewhere herein, to promote and conduct
special sales through mobile units or temporary locations at
special events such as fairs, conventions, athletic
contests, etc., in the territory granted to FRANCHISEE
hereunder; provided, however, that FRANCHISOR offers the
opportunity to conduct such promotions and special sales to
FRANCHISEE in writing thirty (30) days prior to such event
and FRANCHISOR does not receive written notice of
FRANCHISEE's acceptance of the aforesaid offer within ten
(10) days after offer.
E. FRANCHISOR retains the right to market
products under
the trademarks and Proprietary Marks licensed to FRANCHISEE
herein through grocery stores, supermarkets, and similar
outlets within the territory granted FRANCHISEE hereunder,
but not any products which FRANCHISEE is licensed to sell
under such trademarks and Proprietary Marks at its franchise
location.
F. FRANCHISOR retains the right to conduct
product
marketing tests in which FRANCHISEE may, but will not be
required to, participate.
G. Under FRANCHISOR approving a site, the terms
of this Agreement shall apply to such site and, within thirty
(30) days after a site is approved under Paragraph II,
FRANCHISEE
shall pay to FRANCHISOR the sum of Fifteen Thousand Dollars
($15,000.00) as a franchise fee for such location. In the
event the contract to purchase a site location is not
completed, then such franchise fee shall be applied to the
next location submitted for approval by FRANCHISEE to
FRANCHISOR.
H. FRANCHISOR shall not grant any franchise to a
party
other than FRANCHISEE to own or operate a Restaurant in the
counties of Decatur, Thomas, Lowndes, Camden and ▇▇▇▇▇
within the State of Georgia. From time-to-time, FRANCHISEE
may submit to FRANCHISOR a proposed site or sites within
such counties. FRANCHISOR shall determine*
I. As part of the consideration for the exclusive
franchise rights granted under this Franchise Agreement,
FRANCHISEE agrees to construct or acquire and commence
operations of additional Restaurants, such that FRANCHISEE
is operating in cumulative number (required minimum)
Restaurants on December 31 of each year, beginning in 1988
and ending in 1997, as indicated in the following table:
Cumulative Minimum Number
of Restaurants Required
Date to be in Operation
December 31, 1988 18
December 31, 1989 22
December 31, 1990 26
December 31, 1991 30
December 31, 1992 34
December 31, 1993 37
December 31, 1994 40
December 31, 1995 43
December 31, 1996 46
December 31, 1997, and all
Subsequent years during
the term of this
Agreement, including 49
renewal options
The failure of FRANCHISEE to comply with the
requirements of this subsection I shall not constitute a
basis for termination under Section XV of this Agreement,
but shall solely give FRANCHISOR the option to terminate the
exclusive nature of FRANCHISEE's franchise rights within the
State of Florida.
J. The terms of this Agreement shall apply to all
Restaurants owned and operated or to be owned or operated by
FRANCHISEE, or his assignees, and the terms of this
Agreement all supersede any prior agreements in effect with
respect to all Restaurants owned by FRANCHISEE.
II. LOCATION
A. At such time as FRANCHISEE desires to
construct an additional Restaurant, FRANCHISEE shall submit
a list of no more than three (3) proposed sites, in order of
preference of proposed sites for a Restaurant. There shall
be no more than three (3) alternative proposed sites
submitted for approval at any one time with respect to any
one Restaurant. FRANCHISOR shall then inspect and evaluate
the suitability of the proposed sites in the codes presented
until one location is found suitable. FRANCHISOR shall
notify FRANCHISEE of site approval or disapproval.
B. FRANCHISEE agrees at his expense to do or
cause to be done the acquiring, leasing or development of
the site approved by FRANCHISOR pursuant to Paragraph IIA,
above.
C. FRANCHISOR will furnish to FRANCHISEE design
development drawings for a Ryan's Family Steak House,
including requirements for lot and site dimensions, design,
image, interior and exterior layout, finish materials,
fixtures, equipment, signs and decor and will furnish
reasonable guidance to FRANCHISEE in the development of the
site.
D. FRANCHISEE agrees at his expense to do or
cause to be done the following:
1. Convert design development drawings into
construction documents.
2. Prepare and submit to the FRANCHISOR for
approval detailed site and building plans and specifications
for the Ryan's Family Steak House at the approved location,
which plans and specifications shall comply with the
FRANCHISOR's requirements and all applicable ordinances,
building codes, permit requirements and restrictions.
3. Obtain all required building, utility,
sign, health and business permits and licenses and any other
required permits and licenses.
4. Construct new building or alter existing
building in accordance with current plans and specifications
approved by the FRANCHISOR; provided, however, that
FRANCHISOR cannot require FRANCHISEE to meet any
specifications that are not required of FRANCHISOR's own
properties of similar size, age, function and design.
5. Purchase and install all fixtures,
furnishings, sign, decor, materials, equipment, etc.
required for the Ryan's Family Steak House in conformity
with current specifications.
6. Purchase an opening inventory of the needed
products, materials and supplies.
7. Secure all financing required to fully
develop the Ryan's Family Steak House and complete its
development within a reasonable time after obtaining site
approval.
III. PROPRIETARY MARKS
A. FRANCHISEE acknowledges that the name "Ryan's
Family
Steak House" is a valid service and/or trademark solely
owned by FRANCHISOR and that only the FRANCHISOR or its
designated FRANCHISEES have the right to use such trademark
and such other trademarks, services marks, trade names and
copyrights as may presently exist or be acquired by
FRANCHISOR and licenses for use by FRANCHISEE, along with
all ancillary signs, symbols or other indicia used in
connection or conjunction with said marks. FRANCHISEE
further acknowledges that valuable goodwill is attached to
such trademarks, services marks, trade names and copyrights
and that he will use same only in the manner and to the
extent specifically licensed by this Agreement.
1. FRANCHISEE understands and agrees that,
although its
license of said proprietary marks is exclusive in the State
of Florida, FRANCHISOR has the right itself to operate
Franchisor's Existing Florida Restaurants, under said marks.
2. FRANCHISEE expressly covenants that during the time of
this Agreement and after the expiration or termination
thereof, FRANCHISEE shall not directly or indirectly contest
or aid in contesting the validity or ownership of said
Proprietary ▇▇▇▇ and copyrights.
3. FRANCHISEE agrees to promptly notify
FRANCHISOR of any
claim, demand, or suit based upon or arising from, or of any
attempt by any other person, firm, or corporation, to use
the service and/or trademark licenses hereunder, or any
trademark, service ▇▇▇▇, symbol, trade names, copyright, or
colorable variation thereof, in which FRANCHISOR has a
proprietary interest. FRANCHISEE agrees also to promptly
notify FRANCHISOR of any litigation instituted by FRANCHISEE
or by any person, firm, corporation or government agency
against FRANCHISOR. In the event FRANCHISOR, pursuant to
the terms of this Section III, undertakes the defense or
prosecution of any litigation, FRANCHISEE agrees to execute
any and all documents and do such acts and things as may, in
the opinion of counsel for FRANCHISOR, be necessary to carry
out such defense or prosecution, either in the name of
FRANCHISOR or in the name of FRANCHISEE, as FRANCHISOR shall
elect.
B. It is expressly recognized that any and all
goodwill
associated with said proprietary marks and copyrights,
including any goodwill which might be deemed to have arisen
through FRANCHISEE's activities, inures directly and
exclusively to the benefit of FRANCHISOR.
C. FRANCHISEE shall not ▇▇▇ the words, "Ryan's
Family
Steak House" or the word "▇▇▇▇" as part of its corporate or
other business name. FRANCHISEE shall not license, register
or purchase vehicles, fixtures, products, supplies or
equipment, or perform any other activity or incur any
obligation or indebtedness except in its individual,
corporate or other business name.
D. FRANCHISEE understands and acknowledges that
each and
every detail of the FRANCHISOR's system is important to
FRANCHISOR, to FRANCHISEE, or to other licensed Ryan's
Family Steak House franchisees in order to develop and
maintain uniformity of facilities and services and,
therefore, to enhance the reputation, trade demand and
goodwill of Ryan's Family Steak House Restaurants.
FRANCHISEE accordingly covenants:
1. To operate, advertise, and promote its
franchise under
the name "Ryan's Family Steak House" without prefix or
suffix; and
2. To adopt and use the proprietary marks
licensed
hereunder solely in the manner prescribed by FRANCHISOR; and
3. To carry out its business under said
proprietary marks
in accordance with operational standards established by
FRANCHISOR and as set forth in the Confidential Operating
Manual and/or other documents.
E. In order to preserve the validity and
integrity of the
proprietary marks and copyrights licensed herein and to
insure the FRANCHISEE is properly employing the same in the
operation of its franchise, FRANCHISOR or its agents shall
at all reasonable times have the right to entry and
inspection of FRANCHISEE's premises and, additionally, shall
have the right to observe the manner in which FRANCHISEE is
rendering its services, to confer with FRANCHISEE's
employees and customers, and to select products and supplies
for test and evaluation purposes to make certain that the
quantities and ingredients are satisfactory and within the
quality control provisions established by FRANCHISOR.
IV. TRAINING AND ASSISTANCE
A. FRANCHISOR shall make available to FRANCHISEE
and
FRANCHISEE's designated managers, and FRANCHISEE's managers
shall attend and successfully complete, prior to opening for
business, a training and familiarization course at such
place and for such length of time as FRANCHISOR shall
designate. Said training program shall cover all aspects of
the operation of a Ryan's Family Steak House Franchise.
Accommodations, salaries, and travel expenses during this
period shall be borne by FRANCHISEE.
B. During the first week of operation by
FRANCHISEE of a
Ryan's Family Steak House, FRANCHISOR will furnish to
FRANCHISEE, at FRANCHISEE's option, at FRANCHISEE's premises
and at FRANCHISOR's expense, one of FRANCHISOR's
representatives for the purpose of facilitating the opening
of FRANCHISEE's location. Such representative will also
assist FRANCHISEE in establishing and standardizing
procedures and techniques essential to the operation of a
Ryan's Family Steak House and shall assist in training
personnel.
C. FRANCHISOR shall provide a continuing advisory
service
which shall include, but not be limited to, consultation on
promotional, business or operational problems with analysis
of FRANCHISEE's sales, marketing and financial data.
FRANCHISOR may make reasonable charges for operating
assistance required by FRANCHISEE in excess of that normal
provided.
D. FRANCHISOR shall, from time to time when
available,
send to FRANCHISEE operational materials and bulletins on
new sales, marketing developments, products and techniques.
E. The requirements contained in subparagraphs A
and B
above relating to training and opening assistance shall be
at the option of FRANCHISOR in instances wherein FRANCHISEE
is purchasing an existing operating unit or an existing unit
which had been in operation.
V. ADVERTISING
Recognizing the value of advertising and the
importance of the standardization of advertising and
promotion to the furtherance of the goodwill and public
image of Ryan's Family Steak House Restaurant, FRANCHISEE
agrees:
A. To submit to FRANCHISOR or its designated
agency, for
its prior approval, all sales promotion materials and
advertising to be used by FRANCHISEE, including, but not
limited to, newspapers, radio and television advertising,
specialty and novelty items, signs, boxes, matches, bags and
wrapping papers. In the event written or oral disapproval
of said advertising and promotional material is not received
by FRANCHISEE from FRANCHISOR or its designated agency
within fifteen (15) days from the date such material is
submitted to and received by FRANCHISOR, said materials
shall be deemed approved. Failure by FRANCHISEE to conform
with the provisions herein and subsequent non-action by
FRANCHISOR to this failure and default shall not be deemed
as a waiver of further or additional failures and defaults.
The submission of advertising to FRANCHISOR for approval
shall not affect FRANCHISEE's right to determine the prices
at which FRANCHISEE sells its products.
B. At such time as FRANCHISOR commences national
or
regional advertising, and upon written notice by FRANCHISOR
to FRANCHISEE, then and in that event, FRANCHISEE agrees to
pay to Ryan's Family Steak House Corporate Advertising Fund,
at the same time and in the same manner as, and in addition
to, the Continuing Services and Royalty Fee provided in
Paragraph XI herein, a sum equal to one percent (1%) of
FRANCHISEE's gross receipts, as defined in Paragraph XI,
which sum shall be expended by FRANCHISOR solely and
exclusively for the development of advertising materials and
for national and/or regional advertising or promotions of
FRANCHISOR and its products. FRANCHISOR will make available
to FRANCHISEE, advertising, marketing and promotional
material for use by FRANCHISEE billed at cost.
1. Upon the request of FRANCHISEE, FRANCHISOR
will provide
an annual accounting of the Corporate Advertising Fund.
2. The content of such advertising, as well as
the media
in which such advertising is to be placed, shall be
determined by FRANCHISOR or its designated agency.
C. FRANCHISEE shall not advertise or use any
other form of
promotion, the trademarks of FRANCHISOR without appropriate
copyright and registration marks.
VI. CONFIDENTIAL OPERATING MANUAL
A. In order to protect the reputation and goodwill
associated with the ▇▇▇▇, "▇▇▇▇'▇ Family Stead House" and to
maintain the uniform standards of operation thereunder,
FRANCHISEE shall conduct its Ryan's Family Steak House
franchise in strict accordance with FRANCHISOR's
Confidential Operation Manual.
B.
FRANCHISEE shall at all times treat as confidential, and
shall not at any time disclose, copy, duplicate, record or
otherwise produce, in whole or in part, or otherwise make
available to any unauthorized person or source, the contents
of said Manual.
C. The Confidential Operating Manual shall at
all times
remain the sole property of FRANCHISOR and shall promptly be
returned upon the expiration or other termination of this
Agreement.
D. FRANCHISOR may, from time to time, revise the
content
of said Manual so as to convey to FRANCHISEE advancements
and new developments in sales, marketing, operational
techniques and other items and procedures relevant to the
operation of a Ryan's Family Steak House franchised
business.
VII. MAINTENANCE AND REPAIRS
A. FRANCHISEE, at its expense, shall at all
times during
the term of this Agreement, maintain the interior and
exterior of the franchised premises, keep the equipment and
furnishings in good repair, and insure the attractive
appearance and sound operating condition of the facility.
FRANCHISEE, at the reasonable request of FRANCHISOR, shall
make necessary repairs to the premises in order to maintain
uniform appearance and protect the reputation of the Ryan's
Family Steak House system. FRANCHISEE shall not, without
prior written approval, make any changes in the layout and
decor of the Ryan's Family Steak House Restaurant franchised
hereunder.
B. In the event FRANCHISEE does not maintain the
premises
as required above, FRANCHISOR, after notice to FRANCHISEE,
and at its option, may order the necessary maintenance and
repairs and charge the cost of same to FRANCHISEE.
C. FRANCHISEE shall not, without the prior
written consent
of FRANCHISOR, place in, on or upon the location franchised
hereunder, or in any communication media, any form of
advertising related to the sale of the business franchised
or the rights granted hereunder.
VIII. ACCOUNTING AND RECORDS
A. To enable FRANCHISEE and FRANCHISOR to best
ascertain
their costs and maintain an economical method of operation,
FRANCHISEE agrees to keep and preserve, during the term of
the franchise granted hereunder, full, complete and accurate
books and accounts in an accounting form and manner as
prescribed in the Confidential Operating Manual.
B. FRANCHISEE shall submit to FRANCHISOR such periodic
reports, forms and records as specified, and in the manner
and at the time as specified, in the Confidential Operating
Manual.
C. FRANCHISOR's representatives shall have the
right at
any reasonable time to inspect FRANCHISEE's books, records
and cash control devices or systems. If such inspection
reveals that the gross receipts reported by FRANCHISEE to
FRANCHISOR are less than the gross receipts ascertained by
such inspection, then FRANCHISEE shall immediately pay to
FRANCHISOR the amount owed to FRANCHISOR in accordance with
the corrected gross receipts report. Upon the discovery of
discrepancy in the report of gross receipts of two percent
(2%) or more, FRANCHISEE shall pay and reimburse FRANCHISOR
for any and all expenses connected with said inspection,
including but not limited to, reasonable accounting and
legal fees, as well as interest on the unreported receipts
at the maximum rate permitted by law from the date said
payment was due. Such payments are without prejudice to any
other remedies FRANCHISOR may have under this Agreement.
IX. STANDARDS OF QUALITY
A. FRANCHISEE recognizes that it is essential to
the
proper marketing of Ryan's Family Stead House and to the
preservation and promotion of its reputation and acceptance
by the public at large, that uniform standards of quality,
food appearance, uniform quantities, volumes and types of
food be maintained. FRANCHISEE therefore agrees, as part of
the consideration for this Agreement, that FRANCHISEE will
at all times dispense, sell, or offer for sale to the
public, only such articles, foods or other products
(whatsoever) as shall meet the reasonable specifications and
standards from time to time designated in writing or
consented to in writing by an officer or person designated
by an officer of FRANCHISOR for sale and service from or at
the Ryan's Family Steak Houses licensed hereunder; and
FRANCHISEE shall sell, serve and dispense all such articles,
foods and other products as shall meet all such
specifications and standards designated by FRANCHISOR.
B. FRANCHISEE shall purchase all food products,
supplies
and materials required for the operation of the Ryan's
Family Steak House licensed hereunder, from manufacturers,
suppliers, or distributors designated by FRANCHISOR or from
such other suppliers who shall, with respect to such
products, supplies or materials, meet all of FRANCHISOR's
specifications and standards as to quality, taste, texture,
composition, strength, finish and appearance, and who shall
adequately demonstrate their capability and facilities to
supply the FRANCHISEE's needs in the quantities, at the
times, and with the reliability requisite to an efficient
operation.
1. In the event FRANCHISEE intends to
purchase food
products, supplies and materials from manufacturers,
suppliers or distributors other than those designated by
FRANCHISOR, FRANCHISEE shall, prior to purchasing any such
food products, supplies and materials, give FRANCHISOR
written "Notice for Intended Change of Supplier" on the form
provided for that purpose in the Confidential Operating
Manual.
2. In the event FRANCHISOR rejects
FRANCHISEE's intended
new manufacturer, supplier or distributor, FRANCHISOR must,
within sixty (60) days of the receipt of FRANCHISEE's
"Notice of Intended Change of Supplier", notify FRANCHISEE
in writing of its rejection. Said "Notice of Rejection"
must list in detail all areas wherein the intended supplier
fails to meet FRANCHISOR's product specifications and
standards or other requirements as contained herein.
Failure to so notify FRANCHISEE within such time period
shall constitute a waiver of any and all objections by
FRANCHISOR to the previously undesignated manufacturer,
supplier or distributor submitted by FRANCHISEE. FRANCHISOR
may continue from time to time to inspect any manufacturer's
or supplier's facilities and products to assure proper
production, processing, packaging, storing and
transportation of food products, supplies or materials to be
purchased by FRANCHISEE. Permission for such inspection
shall be a condition of the continued approval of such
manufacturer, supplier or distributor.
3. FRANCHISEE may, within thirty (30) days
of receipt of
FRANCHISOR's "Notice of Rejection" of the undesignated
manufacturer, supplier or distributor, invoke the provisions
relating to arbitration contained in this Agreement. The
cost of any such arbitration shall be borne by the losing
party.
4. All intended and previously undesignated
manufacturers,
suppliers or distributors, as a condition precedent to
acceptance, must agree to permit agents or representatives
of FRANCHISOR to inspect their facilities, both initially
and from time to time as may reasonably be required, to
assure FRANCHISOR of the proper production, processing,
packaging, storing and transportation of the food products,
supplies or materials to be purchased by FRANCHISEE.
5. FRANCHISOR may require that samples from
the supplier
be delivered to FRANCHISOR or to a designated independent
testing laboratory for testing prior to approval and use. A
charge not to exceed the actual cost of these tests may be
made by FRANCHISOR and shall be paid by FRANCHISEE.
X MODIFICATION OF THE SYSTEM
FRANCHISEE recognizes and agrees from time to time
hereafter FRANCHISOR may change or modify the system
presently identified by the ▇▇▇▇, "▇▇▇▇'▇ Family Steak
House" including the adoption and use of new or modified
trade names, trademarks, equipment or new techniques, and
the FRANCHISEE will accept, use and display for the purpose
of this Agreement any such changes in systems, including new
or modified trade names, trademarks, service marks or
copyrighted materials, new products, new equipment or new
techniques, as if they were part of this Agreement at the
time of execution hereof; provided, however, that
FRANCHISEE is not required to make any changes not required
of FRANCHISOR's own restaurants of similar size, age,
function and design.
XI. CONTINUING SERVICES AND ROYALTY FEE
A. Until December 30, 1987, FRANCHISEE shall pay
to
FRANCHISOR, so long as this Agreement shall be in effect, a
Continuing Service and Royalty Fee equal to four percent
(4%) of the total gross receipts from each Ryan's Family
Steak House franchised hereunder, said Fee to be paid
monthly in the manner specified below or otherwise
prescribed in the Confidential Operating Manual.
1. FRANCHISEE shall submit to FRANCHISOR,
on a form
approved by FRANCHISOR, a correct statement of gross
receipts signed by an appropriate officer of FRANCHISEE, no
later than the tenth (10th) day of each month. Each monthly
statement of gross receipts shall be accompanied by the
Continuing Services of Royalty Fee payment based on the
gross receipts reported in the statement so submitted.
FRANCHISEE will make available for reasonable inspection at
reasonable times by FRANCHISOR, all original books and
records that FRANCHISOR may deem necessary to ascertain
gross receipts.
2. The term "gross receipts" as used herein
shall mean the
total of all sales of merchandise and all business
transacted in, on, upon and from the premises of each Ryan's
Family Steak House franchised hereunder; provided, that the
term "gross receipts" shall not include the amounts
collected and paid to the governmental authorities wherein
the franchise is located, under the provisions of any Sales
Tax Act, Retailer's Occupation Tax Act, or similar Acts of
said governmental authorities.
B. Commencing on January 1, 1988, FRANCHISEE
shall pay to
FRANCHISOR, so long as this Agreement shall be in effect, a
Continuing Service and Royalty Fee, as follows:
1. With respect to Restaurants in operation
prior to
January 1, 1988:
(a) For the period commencing December 31,
1987, and ending
December 28, 1988, a fee equal to four and one-quarter
percent (4.25%) of the total gross receipts from such
Restaurants;
(b) For the period commencing December 29,
1988 and ending
January 3, 1990, a fee equal to four and one-half percent
(4.5%) of the total gross receipts from such Restaurants;
(c) For the period commencing January 4, 1990
and ending
January 2, 1991, a fee equal to four and three quarters
percent (4.75%) of the total gross receipts from such
Restaurants; and
(d) For the period commencing January 3,
1991, throughout the duration of this Agreement, a fee
equal to five percent (5%) of the total gross receipts
from such Restaurants.
2. With respect to Restaurants placed in
operation on or
after January 1, 1988, a fee equal to five percent (5%) of
the total gross receipts from such Restaurants.
3. Such fee shall be paid monthly in the
manner specified
above.
C. FRANCHISEE will supply to FRANCHISOR on or
before the
twentieth (20th) day of each month, in the form approved by
FRANCHISOR, an operating statement of receipts and
disbursements for the last preceding fiscal month (4 or 5
week period). In addition, within ninety (90) days after
the close of each twelve (12) month accounting period
(fiscal year) FRANCHISEE shall deliver to FRANCHISOR a
Profit and Loss Statement for the twelve (12) month period
and a Balance Sheet. Such statements shall be prepared in
accordance with generally accepted accounting principles,
applied on a consistent basis and audited by a Certified
Public Accountant.
D. In the event FRANCHISEE fails to pay any
Continuing
Service and Royalty Fee or any advertising payment due
pursuant to Paragraph V.B, within fifteen (15) days after it
is due, FRANCHISEE shall pay interest on the amount due at
the rate of one and one-half percent (1.5%) per month for
each and every month that said amount is not paid, but in no
event shall FRANCHISEE be compelled to pay interest at a
rate greater than the maximum permitted by applicable law.
XII. INSURANCE
A. FRANCHISEE shall procure for each Restaurant
before the
commencement of business, and maintain in full force and
effect during the entire term of this Agreement, at
FRANCHISEE's sole expense, an insurance policy or policies
protecting FRANCHISEE and FRANCHISOR and their officers and
employees against any loss, liability or expense whatsoever
from fire (including extended coverage), personal injury,
death, property damage, products liability or theft, arising
or occurring upon or in connection with such premises or by
reason of FRANCHISEE's operation upon, from, or occupancy
of, such premises. FRANCHISOR shall be an additional named
insured in such policy or policies (▇▇▇▇▇▇▇'▇ Compensation
excepted). Such policy or policies shall be written by a
responsible insurance company or companies satisfactory to
FRANCHISOR, and shall include the following:
Insurance Minimum Limits of Liability
Workmen's Compensation Statutory
General Liability, including $5,000,000
products and bodily injury
Property Damage $1,000,000
The insurance afforded by the policy or policies respecting
liability shall not be limited in any way by reason of any
insurance which may be maintained by FRANCHISOR. Within
thirty (30) days of the signing of this Agreement, but in no
event later than the day before the date on which FRANCHISEE
first opens its establishment for business at each
Restaurant, the Certificates of Insurance showing compliance
with the foregoing requirements shall be furnished by
FRANCHISEE to FRANCHISOR for approval. Such certificates
shall state that said policy or policies will not be
cancelled or altered without at least ten (10) days prior
written notice to FRANCHISOR. Maintenance of such insurance
and the performance by FRANCHISEE of the obligations under
this paragraph shall not relieve FRANCHISEE of liability
under the indemnity provision set forth in this Agreement.
Minimum limits as required above may be modified from time
to time, as conditions require, by written notice to
FRANCHISEE. FRANCHISOR need not be included in any fire
policy if he has no interest in said premises or the
equipment therein as owner, lessee, mortgagee or otherwise.
B. Should FRANCHISEE, for any reason, not
procure and
maintain such insurance coverage as required by this
Agreement,
Then FRANCHISOR shall have the right and authority, at its
option, to immediately procure such insurance upon notice,
and FRANCHISEE will pay and reimburse FRANCHISOR for all
costs of same.
XIII. TERM
A. This Agreement shall be effective and binding
from the
date of its execution and the initial term of this Franchise
shall continue until December 31, 2010.
B. At the end of said initial term, if FRANCHISEE
has
faithfully observed and performed all of its obligations
hereunder, FRANCHISEE may renew and extend the term of its
franchisee for two (2) separate additional ten (10) year
periods under the terms of this Agreement; provided, that at
the time of renewal:
1. FRANCHISEE gives FRANCHISOR written notice of
such
election to renew not less than twelve (12) months prior to
the end of the initial term;
2. FRANCHISEE executes and is obligated to
perform under
FRANCHISOR's then current standard from of Franchise
Agreement; provided, however, that the FRANCHISOR's then
current form of Franchise Agreement contains provisions in
substantially the same form as the provisions in this
Franchise Agreement.
3. FRANCHISEE executes a general release, under
seal, of
any and all claims against FRANCHISOR; provided, however,
that FRANCHISOR cannot refuse to pay any bonafide existing
debts asserted against FRANCHISOR by FRANCHISEE.
4. FRANCHISEE is not in default of any provision
of this
Franchise Agreement, or any amendment thereof or successor
hereto, and has fully and faithfully performed all
obligations throughout the term of this Franchise Agreement;
5. FRANCHISEE is not in default of any monetary
obligations owed by FRANCHISEE to FRANCHISOR and its
subsidiaries and affiliates and to any financial
institutions, lender, or other entity to whom FRANCHISOR
deems itself potentially liable in whole or in part as
guarantor, surety, or otherwise, and has timely met other
material obligations throughout the term of the Franchise
Agreement;
6. FRANCHISEE agrees to remodel and modernize
all of
FRANCHISEE's existing restaurants to the extent that such
remodeling and modernization is necessary to conform such
restaurants to FRANCHISOR's then current remodeling and
modernization plan for FRANCHISOR's own restaurants of
similar size, age, function and design.
XIV. COVENANTS
A. During the term of this Franchise Agreement
or any
extension thereof;
1. FRANCHISEE shall devote the resources
necessary to
manage and operate the Restaurants licensed hereunder in
accordance with the terms of this Agreement.
2. FRANCHISEE shall not, either directly or
indirectly,
for itself or on behalf of or in conjunction with any other
person, persons, partnership or corporation own, maintain,
engage in, participate or have any interest in, the
operation of any other steak house restaurant; provided,
however, that:
(a) The above provisions relating to
interests in other
restaurants shall not apply to any interest in additional
Ryan's Family Steak Houses.
(b) The above provisions relating to
interests in other
restaurants shall not apply to ownership by FRANCHISEE of
(i) any other business or restaurant other than a family-
oriented, steak house restaurant; or (ii) the outstanding
securities of any corporation whose securities are publicly
held and traded, provided that said securities are held by
FRANVHISEE for investment purposes only and that
FRANCHISEE's total holdings do not constitute more than five
percent (5%) of the outstanding securities of said
corporation.
B. FRANCHISEE further covenants that during the
term of
this Agreement or any extensions or renewals thereof, and
for a period of two (2) years thereafter, regardless of the
cause of termination, FRANCHISEE shall not:
1. Divert or attempt to divert any business
or any
customers of the Ryan's Family Steak Houses licensed
hereunder to any other competitive establishment, by direct
or indirect inducement or otherwise.
2. Employ or seek to employ any person
employed by
FRANCHISOR or any other person who is at the time operating
or employed by or at any other Ryan's Family Steak House, or
otherwise directly or indirectly induce such persons to
leave their employment thereat.
C. FRANCHISEE further covenants that for a period
of two
(2) years after the termination of the franchisee,
regardless of the cause of termination, it shall not, either
directly or indirectly, for itself, or on behalf of or in
conjunction with any other person, persons, partnership or
corporation, own, maintain, engage in, or participate in the
operation of any restaurant or eating establishment within a
radius of five (5) miles of any location franchised
hereunder or within a radius of five (5) miles of any other
Ryan's Family Steak House.
D. FRANCHISEE shall not, during the term of this
Agreement
or after its termination, communicate or divulge to any
other person, persons, partnership or corporation, any
information or knowledge concerning the methods of
manufacture, preparation, promotion, sale or distribution
used in a Ryan's Family Steak House nor shall FRANCHISEE
disclose or divulge in whole or in part any trade secrets or
private process of FRANCHISOR or its affiliated companies.
E. Covenants contained in this paragraph shall be
constructed as severable and independent and shall be
interpreted and applied consistent with the requirements of
reasonableness and equity. Any judicial reformation of
these covenants consistent with this interpretation shall be
enforceable as though contained herein and shall not affect
any other provisions or terms of this Agreement.
XV. TERMINATION AND DEFAULTS
A. In the event that the FRANCHISEE shall become
insolvent, under the equity theory of insolvency, or make an
assignment for the benefit of creditors, or if a petition in
bankruptcy is filed by FRANCHISEE or such petition is filed
against and consented to by FRANCHISEE, or a receiver is
appointed, or if FRANCHISEE is adjudicated bankrupt, or if a
▇▇▇▇ in equity or other proceeding for the appointment of a
receiver of FRANCHISEE or other custodian is appointed, or
if proceedings for composition with creditors under any
state or federal law should be instituted by or against
FRANCHISEE, or if the real or personal property of
FRANCHISEE shall be attached or levied upon by any sheriff,
marshall, or constable, to the extent that any of said
events materially affects the ability of FRANCHISEE to
operate any or all of its restaurants in a continuing
manner, then in any of said events, FRANCHISEE shall be
deemed to be in default under this Agreement and all rights
granted to FRANCHISEE hereunder shall thereupon terminate
upon the occurrence of the above event or events without
notice to FRANCHISEE. FRANCHISOR will be entitled to any
damages suffered by it as a result of this termination.
B. Except as provided in Paragraph XV.A of this
Agreement,
if FRANCHISEE shall be in default under the terms of this
Agreement and such default shall not be cured within thirty
(30) days after receipt of written "Notice to Cure" thereof
from FRANCHISOR, then in addition to all other remedies at
law or in equity, FRANCHISOR may immediately terminate this
Agreement. In the event FRANCHISEE is in default under the
terms of this Franchise Agreement within twelve (12) months
after a prior default, and FRANCHISOR has served FRANCHISEE
with a "Notice of Cure" with respect to prior such defaults,
this Agreement may be terminated without notice by
FRANCHISOR upon such subsequent default. Franchisee shall
be in default under this Agreement:
1. If FRANCHISEE fails, refuses or neglects to
promptly
pay to FRANCHISOR any monies owing to FRANCHISOR on date
due; or
2. If FRANCHISEE fails to submit reports or
financial data
which FRANCHISOR requires under this Agreement; or
3. If FRANCHISEE vacates or abandons a material
portion of
the Restaurants operated under the franchise granted herein,
or if FRANCHISEE loses or surrenders the right to the use of
a material portion of the Restaurants operated under the
franchise granted herein by reason of foreclosure, non-
payment of rent, waste, non-compliance with terms of a
lease, or for any similar reason, and such abandonment or
other loss of the use of the Restaurants materially,
adversely affects the FRANCHISEE's business as a whole;
provided, however, that the abandonment or loss of use of a
specific Restaurant by itself does not constitute default.
For the purposes of this subparagraph B.3., the abandonment
or loss of a "material portion" shall be deemed to be the
abandonment or loss of ten percent (10%) or more of the
total Restaurants operated by FRANCHISEE within a twelve
(12) month period.
4. If FRANCHISEE fails to comply with any of the
requirements imposed upon it by this Agreement, in the
Confidential Operating Manual, or other such operational
memoranda issued by FRAHCHISOR, or uses bad faith in
carrying out the terms of the franchise.
C. In addition to FRANCHISOR's right to
terminate this
Agreement, and not in lieu thereof, FRAHCNISOR, in the event
that FRANCHISEE shall not have cured a default under this
Agreement within the thirty (30) days after receipt of
written "Notice to Cure" from FRANCHISOR, may enter upon the
premises of any Ryan's Family Steak House licensed hereunder
and exercise complete authority with respect to the
operation of said restaurant until such time as FRANCHISOR
determines that the
default of FRANCHISEE has been cured and that
there is compliance with the requirements of this Agreement.
FRANCHISEE specifically agrees that a designated
representative of FRANCHISOR may take over, control, and
operate said restaurant and that FRANCHISEE shall pay his
salary plus all expenses reasonably incurred by such
representative so long as it shall be required by the
representative to enforce compliance herewith.
D. For the purposes of this Section, receipt of
notice is
defined in Paragraph XXIII.
XVI. RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR
TERMINATION
A. Upon termination or expiration of this
Agreement,
FRANCHISEE shall immediately cease to be a licensed Ryan's
Family Steak House franchisee and;
1. FRANCHISEE shall promptly pay FRANCHISOR all
sums owing from FRANCHISEE to FRANCHISOR under the terms of
this Agreement. Said sums shall include all damages, costs
and expenses, including reasonable attorneys' fees, incurred
by FRANCHISOR by reason of default on the part of
FRANCHISEE, whether or not such occur prior to or subsequent
to the termination or expiration of the franchise, and said
sums shall include all costs and expenses, including
reasonable attorneys' fees, incurred by FRANCHISOR in
obtaining injunctive or other relief to enforce the
provisions of this contract.
2. FRANCHISEE shall immediately thereafter cease
to use, by advertising or in any manner whatsoever, the name
"Ryan's Family Steak House" or any forms, manuals, slogans,
signs, marks, symbols, or devices used in connection with
the operation of a Ryan's Family Steak House franchise.
FRANCHISEE shall not represent or advertise that FRANCHISOR
or FRANCHISEE were formerly parties to this Franchise
Agreement or that FRANCHISEE did business under the
trademarks or name of FRANCHISOR.
3. FRANCHISEE shall take such action as shall be
necessary to cancel any assumed or equivalent registration
which contains the name "Ryan's Family Steak House" or any
other trademark of FRANCHISOR, and FRANCHISEE shall furnish
FRANCHISOR evidence satisfactory to FRANCHISOR of compliance
with this obligation within thirty (30) days after said
termination.
B. Upon termination or expiration of this
Agreement,
FRANCHISOR shall have a right of first refusal to purchase
from FRANCHISEE all or any part of the physical assets of
FRANCHISEE used in the operation of FRANCHISEE's restaurants
as such right
of first refusal is set forth in Section XIX of
this Agreement. FRANCHISOR may exercise the right of first
refusal by giving FRANCHISEE written notice thereof within
sixty (60) days after termination or not less than sixty
(60) days prior to expiration of this Agreement, as the case
may be.
C. The expiration or termination of this
Agreement shall
not prevent FRANCHISEE from maintaining and operating its
then currently owned Restaurants, or opening additional
restaurants, under a different name, provided, however, that
FRANCHISEE cannot use any trade name similar to, or that
represents an association with, FRANCHISOR.
D. No right or remedy herein conferred upon or
reserved to
FRANCHISOR is exclusive of any other right or remedy herein
or by law or equity provided or permitted; but each shall be
cumulative of every other right or remedy given hereunder.
XVII. COMMENCEMENT AND HOURS OF OPERATION
A. FRANCHISEE shall commence operation of a
Restaurant not
later than nine (9) months after a site for such Restaurant
has been approved by FRANCHISOR, and shall meet the
requirements for total number of units to be in operation
each year, as indicated in paragraph I.H.
B. FRANCHISEE recognizes that continuous and
daily
availability of products and service to the public is
essential to the adequate promotion of Ryan's Family Steak
House and that any failure to provide such availability
affects FRANCHISOR both locally and nationally. FRANCHISEE
shall keep each Restaurant open for business, as a minimum
schedule, during the hours of 11:00 a.m. to 10:00 p.m.
Sunday through Thursday and 11:00 a.m. to 11:00 p.m. Friday
and Saturday, and shall otherwise conduct the business in
accordance with generally accepted business standards.
These requirements may be changed by FRANCHISOR from time to
time.
XVIII. TRANSFERABILITY OF INTEREST
A. This Agreement and all rights hereunder may
be assigned
and transferred by FRANCHISOR and, if so, shall be binding
upon and inure to the benefit of FRANCHISOR's successors and
assigns.
B. This Agreement and all rights hereunder may
be assigned
and transferred by FRANCHISEE, and, if so, shall be binding
upon and inure to the benefit of Franchisee's successors and
assigns, subject only to the right of first refusal as set
forth in Paragraph XIX of this Agreement and subject to the
following conditions and requirements:
1. FRANCHISEE may not, without FRANCHISOR's
prior written
consent, by operation of law or otherwise, sell, assign,
transfer, convey, give away or encumber to any person, firm,
or corporation, its interest in this Agreement or any part
of this Agreement. Any purported assignment not having the
consent of FRANCHISOR shall be null and void and shall
constitute a material default hereunder.
2. FRANCHISOR shall not unreasonably withhold
its consent
to any transfer referred in Paragraph XVIII.B.1. of this
Agreement when requested; provided, however, that the
following conditions and requirements shall first be met to
the full satisfaction of FRANCHISOR:
(a) If the transfer, whether consummated alone or
together with other related previous, simultaneous, or
proposed transfers, would have the effect of transferring
control of the franchise licensed herein to an individual
or group of individuals or to a corporation or partnership
controlled by parties which is (are) neither a signatory,
nor an officer of a signatory, of this Agreement:
(1) The transferee(s), if an individual or
group of individuals, shall be of good moral character
and reputation. The transferee(s) shall have a good credit
rating and competent business qualifications reasonably
acceptable to FRANCHISOR. FRANCHISEE shall provide
FRANCHISOR with such information as FRANCHISOR may require
to make such determination concerning each such proposed
transferee(s).
(2) The transferee(s) or such other
individual(s) as shall
be the actual manager(s) of the franchise shall have
successfully completed and passed the training course then
in effect for FRANCHISEE, or otherwise demonstrated to
FRANCHISOR's satisfaction, sufficient ability to operate the
unit(s) being transferred.
(3) The transferee(s), shall jointly and
severally execute both or either (as FRANCHISOR shall direct):
aa. A Franchise Agreement and other standard
ancillary agreements with FRANCHISOR, on the current
standard forms being used by FRANCHISOR; and/or
bb. A written assignment with FRANCHISEE and
FRANCHISOR, under seal, (in a form satisfactory to
FRANCHISOR) assuming all of FRANCHISEE's obligations
hereunder.
(b) In the event FRANCHISOR is unsatisfied with the
financial qualifications of any proposed transferee(s), but
it otherwise satisfied with such proposed transferee(s),
FRANCHISOR may, at its election, consent to such transfer,
if FRANCHISEE shall, upon request of FRANCHISOR, under seal,
(in a form satisfactory to FRANCHISOR) guaranteeing the full
payment and performance of any obligations assumed by or
assigned to transferee(s).
(c) The term of any assignment made hereunder shall
be for
the unexpired term of this Agreement and for any extensions
or renewals as provided herein.
(d) If the transferee is a corporation, the capital stock
of which is not registered with the Securities and Exchange
Commission:
(1) Each stock certificate of the
transferee corporation shall have conspicuously
endorsed upon it a statement that it is held
subject to, and that further assignment or
transfer thereof is subject to, all restrictions
imposed upon assignments by this Agreement; and
(2) No new shares of common or preferred
voting stock in the transferee corporation shall
be issued to any person, partnership, trust,
foundation, or corporation without obtaining
FRANCHISOR's prior written consent.
3. FRANCHISEE shall have fully paid and
satisfied all of
FRANCHISEE's obligations to FRANCHISOR, its subsidiaries,
affiliates or assignees, and either the transferee or
FRANCHISEE shall have fully paid to FRANCHISOR a transfer
fee of Five Thousand Dollars ($5,000.00) for the training
course, supervision, administrative, accounting, legal
and/or other FRANCHISOR expenses in connection with the
transfer.
4. No sale, assignment, transfer, conveyance,
encumbrance,
or gift of any interest in this Agreement, or in its
franchise granted thereby, shall relieve FRANCHISEE and the
shareholders participating in any transfer of the
obligations of the covenant not to compete contained in
Section XIV, except where FRANCHISOR shall expressly
authorize in writing.
XIX. RIGHT OF FIRST REFUSAL
If at any time during the term hereof, as extended
by options, FRANCHISEE shall receive a bona fide offer to
purchase the franchise, in whole or in part, or a
Restaurant, and/or the equipment and chattels incidental
thereto, which offer FRANCHISEE is willing to accept,
FRANCHISEE shall communicate to an officer of FRANCHISOR in
writing, by certified mail, the full terms of said offer,
the name of the offeror, and reasonably current financial
reports and description of the business operations of the
offeror. FRANCHISOR may elect to purchase said franchise or
Restaurant, and/or the equipment and chattels incidental
thereto, on the terms as contained in the offer, and if
FRANCHISOR so elects, it shall give to FRANCHISEE a written
notice of such election within sixty (60) days after a
receipt of FRANCHISEE's communication of offer to
FRANCHISOR. If FRANCHISOR shall fail to give such written
notice of election within the sixty (60) days, FRANCHISEE
may sell to the offeror on the terms offered, subject to the
provisions relating to transferability as heretofore set
forth in Paragraph XVIII. In the event FRANCHISOR elects to
purchase, said purchase must be completed within one hundred
twenty (120) days from date of FRANCHISOR's notice of
election to purchase.
XX. TAXES AND PERMITS
A. FRANCHISEE shall promptly pay when due all
taxes and
assessments against the premises or the equipment used in
connection with FRANCHISEE's business, and all liens or
encumbrances or every kind and character created or placed
upon or against any of said property, and all accounts and
other indebtedness of every kind incurred by FRANCHISEE in
the conduct of said business.
B. FRANCHISEE shall comply with all federal,
state, and
local laws and regulations, and shall timely obtain any and
all permits, certificates, or licenses necessary for the
full and proper conduct of its Ryan's Family Steak House
Restaurants.
XXI. INDEPENDENT CONTRACTOR
A. This Agreement does not constitute FRANCHISEE
as an
agent, legal representative, joint venturer, partner,
employee, or servant of FRANCHISOR for any purpose
whatsoever; and it is understood between the parties hereto
that FRANCHISEE shall be an independent contractor and is in
no way authorized to make any contract, agreement, warranty
or representation on behalf of FRANCHISOR. FRANCHISEE shall
prominently display in its Restaurant a certificate from
FRANCHISOR stating that said Restaurant is operated by
FRANCHISEE as a FRANCHISEE of Ryan's Family Steak House, and
not as an agent thereof.
B. Under no circumstances shall FRANCHISOR be
liable for
any act, omission, debt or any other obligation of
FRANCHISEE. FRANCHISEE shall indemnify and save FRANCHISOR
harmless against any such claim and the cost of defending
against such claims arising directly or indirectly from, or
as a result of, or in connection with, FRANCHISEE's
operation of the franchised business.
XXII. NON-WAIVER
No failure of any party to exercise any power
reserved to it hereunder, or to insist upon strict
compliance by the other party with any obligation or
condition hereunder, and no custom or practice of the
parties in variance with the terms hereof, shall constitute
a waiver of any party's right to demand exact compliance
with the terms hereof. Waiver by any party of any
particular default by the other party shall not affect or
impair such party's right in respect to any subsequent
default of the same or of a different nature; nor shall any
delay, waiver, forbearance, or omission of such party to
exercise any power or right arising out of any breach or
default by the other party of any of the terms, provisions,
or covenants hereof, affect or impair such party's rights,
nor shall such constitute a waiver by such party of any
right hereunder or of the right to declare any subsequent
breach or default. Subsequent acceptance by a party of the
payments due to it hereunder shall not be deemed to be a
waiver by such party of any preceding breach by the other
party of any terms, covenants or conditions of this
Agreement.
XXIII. NOTICE
A. Whenever notice is required by provisions
of this
Agreement to be given to the FRANCHISOR, such notice shall
be in writing addressed to the FRANCHISOR as follows:
Ryan's Family Steak Houses, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other address as FRANCHISOR shall notify
FRANCHISEE in writing; and a copy of such notice given to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Wyche, Burgess, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B. Whenever notice is required by the provisions
of this
Agreement to be given to FRANCHISEE, such notice shall be
given in writing addressed to the FRANCHISEE as follows:
Family Steak Houses of Florida, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other address as FRANCHISEE shall notify
FRANCHISOR in writing; and a copy of such notice given to:
▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Martin, Ade, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
Post Office Box 59
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
C. Any notice shall be deemed to have been duly
given if
personally given or sent by United States mail, by
commercially recognized overnight delivery service, or by
telegram or telex confirmed by letter; and will be deemed
given, unless earlier received (i) if sent by certified or
registered mail, return receipt requested, or by first class
mail, five calendar days after being deposited in the United
States mail, postage prepaid; (ii) if sent by United States
Express mail, two calendar days after being deposited in the
United States mail, postage prepaid; (iii) if sent by
commercially recognized overnight delivery service, on the
date of receipt; (iv) if sent by telegram or telex or
facsimile transmission, on the date sent, provided
confirmatory notice is sent by first-class mail, postage
prepaid; and (v) if delivered by hand, on the date of
receipt.
XXIV. LIABILITY FOR BREACH
In the event of any default on the part of either
party hereto, in addition to any other remedies of the
aggrieved party, the party in default shall pay to the
aggrieved party all amounts due and all damages, costs and
expenses, including reasonable attorneys' fees incurred by
the aggrieved party as a result of any such defaults.
XXV. ENTIRE AGREEMENT
This Agreement, the attached Exhibits hereto, and
the documents referred to herein, shall be construed
together and constitute the entire, full and complete
agreement between FRANCHISOR and FRANCHISEE concerning the
subject matter hereof, and supersedes all prior agreements,
no other representation having induced FRANCHISEE to execute
this Agreement, and there are no representations,
inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein, which are of any
force or effect with reference to this Agreement or
otherwise. No amendment, change or variance from this
Agreement shall be binding on either party unless executed
in writing.
XXVI. SEVERABILITY
Each section, part, term and/or provision of this
Agreement shall be considered severable, and if, for any
reason, any section, part, term and/or provisions herein is
determined to be invalid and contrary to, or in conflict
with, any existing or future law or regulation, such shall
not impair the operation or affect the remaining portions,
sections, parts, terms and/or provisions of this Agreement,
and the latter will continue to be given full force and
effect and bind the parties hereto; and said invalid
sections, parts, terms and/or provisions shall be deemed not
be a part of this Agreement; provided, however, that if
FRANCHISOR determines that said finding of illegality
adversely affects the basic consideration of this Agreement,
FRANCHISOR may, at its operation, terminate this Agreement.
XXVII. APPLICABLE LAW
This Agreement was accepted in the State of South
Carolina and shall be interpreted and construed under the
laws thereof, which laws shall prevail in the event of any
conflict to laws.
XXVIII. ARBITRATION
Except as specifically otherwise provided in this
Agreement, the parties agree that any and all disputes
between them and any claim by either party that cannot be
amicably settled, shall be determined solely and exclusively
by arbitration in Atlanta, Georgia, in accordance with the
rules of the American Arbitration Association.
A. Each party shall select one arbitrator, and
the two so
designated shall select a third arbitrator. If either party
shall fail to designate an arbitrator within seven (7) days
after arbitration is requested, or if the two arbitrators
shall fail to select a third arbitrator within fourteen (14)
days after the arbitration is requested, then an arbitrator
shall be selected by the American Arbitration Association
upon application of either party. Arbitration proceedings
shall be conducted in compliance with the rules then
prevailing of the American Arbitration Association.
Judgment upon an award of the majority of the arbitrators
shall be binding, and shall be entered in a court of
competent jurisdiction.
B. Nothing herein contained shall bar the right
of either
party to obtain injunctive relief against threatened conduct
that will cause loss or damages under the usual equity
rules, including the applicable rules for obtaining
preliminary injunction, provided an appropriate bond against
damages be provided.
XXIX. FRANCHISEE
The term "FRANCHISEE" shall be deemed to include
all persons who succeed to the interest of the original
FRANCHISEE by transfer or operation of law in accordance
with provisions of this Agreement.
XXX. BUSINESS RISK OF FRANCHISEE
The success of the business venture contemplated
to be undertaken by FRANCHISEE by virtue of this Agreement
is speculative and depends, to a large extent, upon the
ability of FRANCHISEE as an independence businessman, as
well as other factors. FRANCHISOR does not make any
representation or warranty as to the potential success of
the business venture contemplated hereby.
FRANCHISEE acknowledges that it has entered into
this Agreement after making an independent investigation of
FRANCHISOR's operations and not upon any representation
which is not expressly set forth herein, to induce
FRANCHISEE to accept this franchise and execute this
Agreement.
XXXI. STATEMENT OF LEGAL COMPOSITION
As an inducement to FRANCHISOR entering into this
Franchise Agreement with the FRANCHISEE, the FRANCHISEE
hereby represents and warrants to FRANCHISOR, which
representations and warranties are all of material fact and
are and will be relied upon by FRANCHISOR, that FRANCHISEE
is a Florida corporation with its principal place of
business in Neptune Beach, Florida.
IN WITNESS WHEREOF, the parties hereto, intending
to be legally bound hereby, have duly executed, sealed and
delivered this Agreement in duplicate the day and year first
above written.
Signed, sealed and delivered
in the presence of: FRANCHISEE:
Family Steak Houses of Florida, Inc.
/s/ Signature Illegible____________
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ________ By:_/s/▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
___(SEAL)
AS TO FRANCHISEE ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., its
President
FRANCHISOR:
Ryan's Family Steak Houses, Inc.
/s/ ▇▇▇▇ ▇. Barfield____________
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇, ▇▇.______ By:_T. ▇▇▇▇ McCall______
(SEAL)
As to FRANCHISEE T. ▇▇▇▇ ▇▇▇▇▇▇, its
President
And Chief Executive Officer
(CORPORATE SEAL)
_______________________________
in its sole and absolute discretion whether to grant
FRANCHISEE a franchise within one or more of such counties.
