DOMINO'S PIZZA INTERNATIONAL, INC.
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MASTER FRANCHISE AGREEMENT
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THIS AGREEMENT is made the 28th day of August, 1997
BETWEEN
DOMINO'S PIZZA INTERNATIONAL, INC., a Delaware Corporation, of 30 Xxxxx Xxxxx
Xxxxxx Xxxxx, X.X. Xxx 000, Xxx Xxxxx, Xxxxxxxx 00000-0000, XXX (the
"Franchisor" or "DPII");
AND KROLEWSKA PIZZA SP. Z.O.O. (the "Master Franchisee").
WHEREAS:
A. Domino's Pizza, Inc. a corporation of the State of Michigan, United
States of America ("Domino's") has developed a method of preparing pizza and a
chain of stores known as Domino's Pizza stores which specialize in the sale of
pizza, feature carry-out and delivery services and operate with a uniform
business format, specially designed equipment, recipes, methods, procedures and
designs (the "Domino's System");
X. Xxxxxx'x owns, uses, promotes and licenses certain trade and
business names, trade and service marks and commercial symbols in connection
with the operation of Domino's Pizza stores, including the xxxx "DOMINO'S PIZZA"
and those marks and names (the "Marks") more particularly described in the
Schedule One attached hereto;
C. The Domino's System is a comprehensive system for the retailing of a
limited menu of uniform and quality food products, emphasizing prompt and
courteous service in a clean and wholesome atmosphere. The foundation and
essence of the Domino's System is the adherence by franchisees to standards and
policies of Domino's and its related corporations providing for the uniform
operation of all Domino's Pizza stores including, but not limited to, serving
designated food and beverage products; the use of only prescribed equipment and
building layout and designs; and strict adherence to designated food and
beverage specifications and to prescribed standards of quality, service and
cleanliness (the "Domino's Specifications") in store operation. Compliance by
franchisees with the foregoing standards and policies in conjunction with
Domino's trademarks, service marks and trade names provides the basis for the
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valuable goodwill and wide acceptance of the Domino's System. Moreover, the
establishment and maintenance of a close personal working relationship with the
franchisee in the conduct of his Domino's Pizza store business, his
accountability for performance of the obligations contained in this Agreement,
and his adherence to the tenets of the Domino's system constitute the essence of
the franchise provided for herein.
D. Pursuant to a License Agreement dated January 4, 1988 (the
"International Agreement") Domino's has granted the Franchisor the right to
grant franchises for Domino's Pizza stores including the right to license use of
the Marks outside of the United States of America.
E. The Master Franchisee has applied to the Franchisor for a Master
Franchise to develop, operate and to grant sub-franchises of Domino's Pizza
stores.
NOW, THEREFORE, in consideration of the mutual agreements and promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. GRANT OF MASTER FRANCHISE
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1.1 GRANT. Subject to the provisions of this Agreement, the Franchisor
hereby grants to the Master Franchisee the exclusive right (the "Franchise") (a)
during the Development Term, to develop and operate and to sub-license the right
to develop and operate Domino's Pizza Stores (the "Stores") and to use and
sub-license the use of the Domino's System and the Marks in the operation of the
Stores in Poland (the "Territory"). (The foregoing rights shall be called "the
Development Rights.") and (b) during the Agreement Term to maintain its entire
right, title and interest, and all liabilities and obligations, as the party
executing each Franchise Agreement as the Franchisor thereof in accordance with
the terms contained in this Agreement and to use and sub-license the use of the
Domino's System and the Marks in the operation of the Stores in the Territory
("the Operation Rights"). The Master Franchisee acknowledges that the Franchisor
and its related group of companies reserve the right to supply materials to all
the Stores in the Territory through their commissary operations or to separately
grant the Master Franchise or its designee the right to operate a commissary to
serve the Territory as specified in section 1.5 hereof. Operation rights for
each Domino's Pizza delivery store will be granted pursuant to a Franchise
Agreement in accordance with sub-clause 2.3 and clause 3 of their Agreement.
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1.2 TERM. The Agreement Term (the Agreement Term") shall commence on the
date of this Agreement and shall expire on the date on which all franchise
agreements entered into pursuant to this Agreement with either the Master
Franchisee or its sub-franchisees (the "Franchise Agreements") have expired or
been terminated.
The Development Term ("Development Term") shall commence on the date
of this Agreement and shall expire on December 31, 2003. If Franchisor and
Master Franchisee shall have agreed to renew the exclusive development rights
pursuant to Section 1.3 hereof, the "Development Term" shall include each such
Successor Development Term as defined in Section 1.3.
1.3 OPTION TO ACQUIRE ADDITIONAL DEVELOPMENT RIGHTS. If, upon the
expiration of the Development Term, the Master Franchisee is in compliance with
all material provisions of this Agreement, including without limitation, Master
Franchisee's obligations under Section 2.2 hereof, Master Franchise shall have
the option to request additional right to grant franchises for Domino's Pizza
stores ("Additional Development Rights") for an additional development term of
ten (10) years (the "Successor Development Term") in accordance with Minimum
Development Quotas which Master Franchisee and Franchisor may agree upon by
execution of an amendment to this Agreement, as provided below.
Master Franchisee shall give Franchisor written notice ("Renewal
Offer") of its request to acquire Additional Development Rights at least six (6)
months but not more than twelve (12) months prior to the expiration of the then
current Development Term. The Renewal Offer shall contain a proposed amendment
to the Agreement, containing new Minimum Development Quotas for the proposed
Successor Development Term as Master Franchisee in good faith believes to be
consistent with its obligation to promote, enhance and exploit the commercial
potential of Domino's Pizza stores in the Territory ("Renewal Proposal").
Franchisor agrees to consider in good faith the Renewal Proposal and to deliver
to Master Franchisee within ninety (90) days after delivery of the Renewal Offer
a written notice ("Renewal Response"), containing an acceptance or counter-
proposal to the proposal set forth in the Renewal Offer. If the Renewal Response
does not contain an unconditional acceptance, the Renewal Response shall contain
a proposed amendment to this Agreement, containing new Minimum Development
Quotas for the proposed Successor Development Term as Franchisor in good faith
believes to be consistent with Master Franchisee's obligations hereunder
("Renewal Counter-proposal").
Master Franchisee and Franchisor each agrees to negotiate in good
faith, until the expiration of the then-current Development Term, to resolve any
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differences between the Renewal Proposal and Renewal Counter-proposal in order
to renew the development rights granted hereunder on terms that are mutually
beneficial to the parties hereto. If the parties hereto agree upon the terms and
conditions of any Additional Development Rights, the parties shall duly execute
and deliver a mutually acceptable amendment to this Agreement, reflecting the
rights of Master Franchisee to grant Franchises for Domino's Pizza stores in
accordance with this Agreement (as so amended) during such Successor Development
Term.
1.4 RIGHT TO OPERATE ON EXPIRATION OF DEVELOPMENT TERM. After expiration
of a Development Term without renewal in accordance with Section 1.3, (a) Master
Franchisee shall continue to have the rights under Section 1.1(b), including the
right to continue to act as Franchisor with respect to Franchise Agreements
executed prior to and in effect as of the expiration of the Development Term;
(b) Master Franchisee shall have no further right to grant any Franchise or
enter into any Franchise Agreement for a Domino's Pizza store, other than upon
assignment or renewal of a franchise agreement for a Domino's Pizza store open
as of the expiration of the Development Rights; and (c) Franchisor shall have
the right to operate and franchise, or grant to another person the right to
operate and franchise, Domino's Pizza stores within the Territory, subject to
any territorial rights of franchisees under franchise agreements executed with
Master Franchisee.
1.5 COMMISSARY. The Franchisor irrevocably agrees to grant the Master
Franchisee the exclusive right to establish a commissary or commissaries to be
owned and operated by the Master Franchisee, for the purpose of supplying food
products and ingredients, beverage products and other supplies and materials for
sale to consumers, to all the stores in the Territory. The Franchisor shall not
establish a competing commissary to serve the Territory. In connection with this
exclusive right the Franchisor shall provide ongoing support and assistance to
the commissary. To cover administrative costs which the Franchisor shall
experience in connection with the commissary the Franchisor and the Master
Franchisee shall enter into an Agreement to clarify such fees and support in the
form attached hereto as Annexure C.
2. DEVELOPMENT RIGHTS AND OBLIGATIONS
2.1 EXCLUSIVITY. Franchisor shall not during the Development Term
operate nor grant any person any right relating to the operation of a Domino's
Pizza store or the use of the Marks within the Territory otherwise than to the
Master Franchisee and in accordance with this Agreement.
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2.2 GROWTH. Master Franchisee shall open and maintain in operation in
the Territory (whether itself or through sub- franchisees) at least the number
of Stores referred to in Schedule Two ("Minimum Development Quota"). The Master
Franchisee understands and agrees that the Franchisor may terminate the
Development Rights if the Master fails to meet the Minimum Development Quotas,
and the Franchisor thereupon shall have the right to undertake such development
itself or through another party.
2.3 MASTER FRANCHISEE STORES. This Agreement does not authorize the
Master Franchisee to itself open nor to grant any person the right to open any
Store other than pursuant to Franchise Agreement. The Master Franchisee shall
not itself open any Store unless it has been granted the right to open that
Store pursuant to a standard franchise agreement between the Master Franchisee,
as Franchisor, and its subsidiary, affiliate or division that will be operating
the store in the form of the Agreement contained in Annexure "A" hereto or in
such other form as may be agreed by the Franchisor and has delivered an executed
copy of the agreement to the Franchisor together will the certificate set forth
in Annexure B hereto.
Master Franchisee shall submit to Franchisor for its approval, which
approval shall not be unreasonably withheld or delayed, proposed changes to the
franchise agreement attached hereto as Annexure A to conform to local laws and
customs and to enhance the commercial success of Domino's stores in Poland. Such
approved form of franchise agreement shall be deemed "the Franchise Agreement
for purposes of this Agreement".
2.4 CAPITALIZATION REQUIREMENT. The Master Franchisee shall maintain
sufficient capital at all times to meet its obligations hereunder. The Master
Franchisee acknowledges that its failure to maintain sufficient capital shall
constitute a default hereunder. Further, a default of the Shareholders Covenants
attached hereto shall constitute a default hereunder.
3. SUB-FRANCHISES AND AREA AGREEMENTS
3.1 SUB-FRANCHISE/AREA STORES; CRITERIA. The Master Franchisee shall
grant a person ("Sub-Franchisee") the right to open and operate any Store or to
use any Xxxx only with prior written approval of the Franchisor. Each
Sub-Franchisee shall execute a Franchise Agreement for each Domino's Store. To
provide protection for the Franchisor's industrial and intellectual property
rights and to ensure the common identity and reputation of the Domino's System,
the Franchisor shall have the right to approve all Sub-Franchisees and each
Store to be opened in the Territory, which approval will not be unreasonably
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withheld or delayed. The Master Franchisee shall forward to the Franchisor an
original executed copy of all Franchise Agreements entered into during the term
or any renewal of this Agreement.
3.2 OPENING NOTICE. The Store opening approval (opened by the Master
Franchisee and/or Sub-Franchisees) shall be made pursuant to the certificate as
set out in Annexure "B" or any other form mutually agreed upon.
3.3 UNAPPROVED SUB-FRANCHISEES. In the event that the Master Franchisee
has entered into an agreement with a Sub-Franchisee otherwise than in accordance
with sub-clause 3.1, the Master Franchisee shall, on receipt of the Franchisor's
written request to so do, terminate the agreement with the Sub-Franchisee at its
sole cost and expense.
3.4 STORE OPENING CONSENT. The Master Franchisee shall not enter into
any Franchise Agreement with a proposed Sub-Franchisee without the prior written
consent of the Franchisor in the event that the Master Franchisee is in breach
of this agreement and has received a notice of default hereunder, which default
remains uncured. The Franchisor may provide its consent conditionally upon the
Master Franchisee correcting any such breach.
4. PAYMENTS
4.1 MASTER FRANCHISE FEE. Master Franchisee has paid to Franchisor the
sum of $300,000 as a development fee. This fee is deemed fully earned and is
non-refundable.
4.2 STORE FRANCHISE FEES.
4.2.1 Upon the earlier to occur of the signing of a Franchise
Agreement or the opening of each new Store in the Territory (whether by the
Master Franchisee or by a Sub-Franchisee) the Master Franchisee shall pay the
Franchisor a non-refundable store opening fee of one half (1/2) of the initial
franchise and/or development fee charged by Master Franchisee, up to a maximum
cap of US $5,000, less all applicable withholding taxes paid by Master
Franchisee.
The maximum fee charged by Master Franchise under a Franchise
Agreement shall be Thirty Thousand US Dollars (US $30,000).
The Master Franchisee shall provide the Franchisor relevant
information regarding any development fees or consideration in kind to be paid
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to the Master Franchisee pursuant to Franchise or Area Agreements. The Master
Franchisee acknowledges that any such development fees to be paid by a
Sub-Franchisee shall, in the Master Franchisee's reasonably held opinion, (i) be
reasonable given local market conditions and (ii) not substantially impair the
Sub-Franchisee's ability to perform the relevant Franchise or Area Agreement.
4.3 ROYALTY FEE.
The Master Franchisee shall pay the Franchisor a continuing royalty
fee (the "Royalty Fee") in US Dollars or, at DPII's option, in local currency
equal to the percentage set out below of the Sales of each Store in the
Territory franchised by the Master Franchisee hereunder which shall be payable
and received by the Franchisor in cleared funds by 3:30 p.m. Ann Arbor, Michigan
time on the thirtieth (30th) day of each month on Sales for the preceding month.
For the purposes of this Agreement, the term "Sales" shall mean the total
receipts from all sales by Stores in the Territory of all pizza and beverages
and other approved items offered by the Master Franchisee, but excluding sales
and equivalent taxes and coupon and similar discounts or beverage container
deposits approved by the Franchisor.
4.4 ROYALTY FEE AMOUNT. The percentage Royalty Fee referred to in
sub-clause 4.3 shall be 3% of Sales, less all applicable withholding taxes paid
by Master Franchisee.
4.5 CONVERSION OF PAYMENTS. All fees and all other amounts owed to the
Franchisor in US Dollars will be computed at the telegraphic transfer selling
rate for US Dollars quoted by Bank of America International as quoted in The
Wall Street Journal with respect to the actual currency for the date of payment,
or if that date is not a business day, for the next business day. If the
exchange rate at the time of remittance, as opposed to the exchange rate on the
due date, must be used, you will compensate us for any resulting loss. If at any
time legal restrictions shall be imposed upon the purchase of US Dollars or the
transfer to or credit of a non-resident corporation with payments in such
currency, the Master Franchisee will notify the Franchisor immediately, and both
parties will use their respective best efforts to obtain any consents or
authorizations which may be necessary in order to effect payment. The Franchisor
may direct the Master Franchisee to make the payments in such other currency and
in such other territory or jurisdiction as the Franchisor may select, or (to the
extent permissible by law) to make such payments to a designated account for the
Franchisor's exclusive and sole use and benefit, and the Master Franchisee will
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provide evidence to the Franchisor of such payments. The Franchisor's acceptance
of payment in a currency other than US Dollars will not relieve or release the
Master Franchisee of or from the obligation to make future payments in US
Dollars to the extent permitted by law.
If, despite the parties' best efforts, any such legal restriction
prevents payment to Franchisor in US Dollars for a period of one (1) year or
more, Franchisor shall have the right to terminate this Agreement, effective on
hundred and eighty (180) days after written notice of termination is delivered
to Master Franchisee.
4.6 TAX. The Master Franchisee must pay to the local tax authorities, on
the Franchisor's behalf, withholding payments required by law and provide the
Franchisor with an official receipt for payment of these withholding taxes. The
Master Franchisee may deduct the amount of any of these withholding taxes from
the royalty payments to the Franchisor. If the Master Franchisee fails to pay
withholding taxes, he will indemnify the Franchisor for the full amount of such
taxes, including any losses occasioned by his failure to withhold any taxes
imposed by any local jurisdiction on amounts payable by you pursuant to this
Agreement and the agreements issued pursuant to this Agreement, and for any
liability (including penalties, interest, and expenses) arising from or
concerning the payment of such taxes, whether such withholding taxes were
correctly or legally asserted or not. All other taxes imposed, such as without
limitation turnover taxes, payroll taxes, sales taxes or value-added taxes, if
any, which may be imposed now or in the future, will be the Master Franchisee's
responsibility and will not affect your obligations to make payments as required
under this Agreement.
4.7 ADVERTISING. The Master Franchisee shall collect from each of its
Sub-Franchisees in the manner set out in the relevant provisions of the
Franchise Agreement and shall itself pay in accordance with the relevant
provisions of the Franchise Agreement an advertising fee (the "Advertising Fee")
(as defined therein) of 4% of monthly sales into a separate advertising fund
(the "Advertising Fund"). It is also agreed that the advertising services of an
agency must be approved by the Franchisor, which approval shall not be
unreasonably withheld or delayed.
4.7.1 STANDARDS.
All advertising and promotion by the Master Franchisee or its
Sub-Franchisees shall be completely factual and shall conform to the highest
standards of ethical advertising as defined by the Franchisor from time to time
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and to the policies prescribed from time to time by the Franchisor, including
policies contained in the Franchisor's corporate identity manuals. The Master
Franchisee shall submit to the Franchisor its advertising plans for the Stores
for Franchisor's review and approval and copies of all advertising and
promotional materials and plans to be used by the Master Franchisee or by its
Sub-Franchisees.
4.7.2 ADVERTISING PRACTICES.
The Master Franchisee shall use reasonable efforts to ensure
that the Stores' advertising policies and practices shall be generally
consistent with the Franchisor's advertising practices taking into account the
local rules and practices in the Territory. The Franchisor shall notify the
Master Franchisee of any generally inconsistent advertising practices and permit
the Master Franchisee a reasonable period of time to correct the inconsistency,
failing which the Franchisor shall have the right to direct and administer the
Advertising Fund.
4.7.3 FRANCHISOR OBLIGATIONS.
Notwithstanding the relevant provisions of the Franchise
Agreement, the Franchisor shall not be obligated to formulate, develop, produce
or conduct advertising and promotion programs, films, videos, color separations
or printed materials (collectively, "Ad Materials") for use in the Territory,
provided, however, that the Franchisor shall, to the extent it is legally
permitted to do so, allow the Master Franchisee reasonable access to, and copies
at Master Franchisee's cost, of any Ad Materials developed by the Franchisor for
use elsewhere in the world and provided further that such Ad Materials may not
be used in the Territory unless (i) they reasonably conform to all local laws
and standards and (ii) Franchisor provides its written consent, which consent
shall not be unreasonably withheld.
4.8 SET OFF. The Franchisor shall have the right in its sole discretion
to apply as it sees fit any payment received from the Master Franchisee to any
past indebtedness of the Master Franchisee due to the Franchisor or its related
corporations whether for fees, advertising contributions, purchases, interest or
for any other matter, regardless of how the Master Franchisee may designate a
particular payment to be applied.
4.9 INTEREST ON LATE PAYMENTS. All amounts owed by the Master Franchisee
to the Franchisor under this Agreement or for any other reason whatsoever shall,
in the absence of an agreement to the contrary, be immediately payable on demand
and shall bear interest from the due date to the date of payment at a rate equal
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to two percent above the Corporate Loan Reference Rate (or its replacement) then
quoted by the London Interbank Offered Rate (LIBOR). Payment of any such
interest shall be without prejudice to any other remedy available to the
Franchisor.
4.10 PLACE OF PAYMENT Subject to Section 4.5, all payments required to be
made to the Franchisor pursuant to this Agreement shall be made to the
Franchisor at such address as is notified in writing by the Franchisor to the
Master Franchisee from time to time provided that if such payment is required to
be made to a place other than Poland or the United States of America then the
Franchisor shall bear any additional costs that would or do become payable by
the Franchisee in consequence thereof.
5. MASTER FRANCHISEE'S OBLIGATIONS
5.1 FULL TIME EFFORTS. The Master Franchisee shall, subject to the
approval of the Franchisor, appoint an individual who shall devote his full time
and best endeavors to the development, management and supervision of Stores
within the Territory.
5.2 CONFIDENTIALITY. Upon the Franchisor's request the Master Franchisee
shall advise the Franchisor of the names of all of its management, sales,
purchasing and technical employees and, if requested by the Franchisor, shall
require each such employee who has access to the Franchisor's confidential
information to enter into an agreement in the form reasonably approved by the
Franchisor which shall include provisions relating to confidentiality as
referred to in sub-clause 8.1.
5.3 SUB-FRANCHISEE. The Master Franchisee shall at all times comply with
each provision of this Agreement and shall use its best endeavors to ensure that
each of its Sub-Franchisees complies with their Franchise Agreement and, without
limiting the generality of the foregoing, if in the Franchisor's opinion any
Sub-Franchisee is in breach of its Franchise Agreement, the Master Franchisee
shall take all steps reasonably required by the Franchisor to ensure that each
Sub-Franchisee corrects any such breach.
5.4 INSPECTION. The Franchisor shall have, and the Master Franchisee
shall ensure that Franchisor shall have, the right at any time during business
hours and without prior notice to the Master Franchisee to enter and inspect all
Stores in the Territory and the business records, bookkeeping records, sales
slips, D.O.O.R. sheetmasters, coupons, cash register tapes, purchase orders,
invoices, payroll records, check stubs, sales tax records and returns and other
supporting records and documents of the Stores and the Master Franchisee or its
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Sub-Franchisees, and to take an inventory of the assets of the Stores. Such
inspections shall be made at the Franchisor's expense PROVIDED THAT if, the
Franchisor is required to make two (2) inspections within a period of six (6)
months in connection with the Master Franchisee's or any of its Sub-
Franchisee's repeated or continuing failure to comply with any Franchise
Agreement, the Franchisor shall have the right to charge the Master Franchisee
for the reasonable out-of-pocket costs of making all further inspections in
connection with such failure to comply, including without limitation travel and
accommodation of the Franchisor's employees.
5.5 AUDIT RIGHT. The Franchisor shall have the right to audit or cause
to be audited the Advertising Fund and all sales reports, financial statements
and tax returns which the Master Franchisee is required to submit under clause
5.7 of this Agreement. In the event any such audit shall disclose a discrepancy
in the Advertising Fund or an understatement of the sales of the Stores in the
Territory for any period or periods, the Master Franchisee shall pay to the
Franchisor (or to the Advertising Fund as appropriate), within fifteen (15) days
after receipt of the audit report, the Royalty Fee and the Advertising Fee in
respect of such discrepancy or understatement. In the event that such
understatement for any period or periods shall be five percent (5%) or more of
the sales of the Stores for such period or periods, the Master Franchisee shall
reimburse the Franchisor for the reasonable cost of such audit, including
without limitation the charges of an independent certified public accountant (or
equivalent) and the travel and accommodations expenses of employees of the
Franchisor. The Master Franchisee agrees to cooperate with all personnel
conducting such audit and shall ensure that its Sub-Franchisees co-operate with
all such personnel.
5.6 RECORDKEEPING. The Master Franchisee shall establish a bookkeeping
and record keeping system conforming to the requirements prescribed by the
Franchisor, relating without limitation, to the use and retention of sales
slips, D.O.O.R. sheetmasters, coupons, cash register tapes, purchase orders,
invoices, payroll records, check stubs, bank statements, sales tax records and
returns, cash receipts and disbursements, journals and general ledgers.
5.7 STORE REPORTS. The Master Franchisee shall submit to the Franchisor:
5.7.1 MONTHLY: concurrently with the payment of royalty fees a
monthly report of the sales and products sold by all Stores franchised by the
Master Franchisee hereunder in the Territory for the preceding month and such
other information and supporting records as the Franchisor reasonably requires;
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5.7.2 QUARTERLY UNAUDITED STATEMENTS: within thirty (30) days of the
end of each fiscal quarter, an unaudited balance sheet as at the end of such
month and unaudited statements of profit and loss of the Stores, the Master
Franchisee and the Advertising Fund for the preceding quarter;
5.7.3 ANNUAL UNAUDITED STATEMENTS: within ninety (90) days of the
end of each fiscal year, an unaudited balance sheet as at the end of such year,
unaudited annual statements of profit and loss and financial condition of the
Master Franchisee, the advertising fund and for each of the Stores prepared by
an independent certified public accountant (or the equivalent) in the manner
reasonably prescribed by the Franchisor; and
5.7.4 TAX RETURNS: upon the written request of the Franchisor, exact
copies of the Master Franchisee's income tax returns and sales tax or equivalent
tax returns for any period.
5.7.5 OTHER: such other information as the Franchisor may reasonably
request in order for it to determine the Master Franchisee's compliance with
this Agreement or to assist the Master Franchisee in the operation of the Stores
or to otherwise evaluate the performance of the Stores or the Master Franchisee.
5.8 MASTER FRANCHISEE REPORTS. The Franchisor may require the Master
Franchisee to obtain at his expense and submit to the Franchisor within ninety
(90) days an audited statement of profit and loss and financial condition of the
Stores or the Master Franchisee for any financial year if the Franchisor
reasonably believes that the Master Franchisee has submitted sales reports,
unaudited profit and loss statements or tax returns containing material
inaccuracies. In the event that the said audited statement of profit and loss
and financial condition reveals a discrepancy in any material particular of less
than five percent (5%) the cost of such audit shall be paid by the Franchisor.
5.9 PRODUCTS; SUPPLIES. The Master Franchisee shall not use or approve
for use by its Sub-Franchisees any ingredients, supplies or materials used in
the preparation, packaging and delivery of pizza unless they or their supplier
have been previously approved in writing by the Franchisor which approval shall
not be unreasonably withheld or delayed. The Franchisor shall have the right
from time to time without notice to examine the facilities of any approved
supplier (including the Master Franchisee) and to test or inspect the
ingredients, materials or supplies to determine whether they meet the quality
standards and specifications of the Franchisor. The Franchisor reserves the
right to re-inspect the facilities and products of any approved supplier from
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time to time and to revoke its approval of the supplier upon the failure of the
supplier to meet its quality standards and specifications. The Franchisor shall
have the right to charge the Master Franchisee a reasonable fee for testing and
evaluating proposed and approved suppliers and examining commissary operations.
The Master Franchisee shall not resell to any third party (other than
Sub-Franchisees) any ingredients, products, supplies or materials which bear the
Marks or which have been prepared in accordance with the Domino's Specifications
and which it has purchased or acquired from the Franchisor or its related
corporations or from an approved supplier.
Franchisor acknowledges and agrees that neither Franchisor nor any
of its affiliates shall be entitled to the benefit of any discounts, volume
rebates, administration fees, commissions, advertising allowances or other
similar advantages from any supplier of products or supplies to Master
Franchisee or its franchisees, except as otherwise expressly permitted
hereunder.
5.10 MASTER FRANCHISEE'S OBLIGATIONS ON SUB-FRANCHISING
5.10.1 The Master Franchisee where applicable shall prepare and
issue the sub-franchise agreement based on the terms and conditions of the
Franchise Agreement;
5.10.2 The Master Franchisee shall diligently recruit suitable
sub-franchisee in the Territory;
5.10.3 The Master Franchisee shall adequately staff facilities
to ensure compliance with this agreement and sub- franchise agreements entered
into with sub-franchisees;
5.10.4 The Master Franchisee shall ensure that the Franchise
Agreements are entered into for each store opened within the Territory;
5.10.5 The Master Franchisee shall ensure that all local laws
and regulations are complied with pursuant to this agreement and also franchise
agreements;
5.10.6 The Master Franchisee shall provide adequate training
and support, including a training center, for the sub- franchisees. This support
shall include but not be limited to, store operations training, ongoing support
as well as lease and site selection. The training support provided by the Master
Franchisee to its sub-franchisees shall be similar to training provided for by
the Franchisor in markets where it acts as a Master Franchisee. This training
shall be sufficient and adequate to ensure that proper and adequate operation
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procedures and standards are maintained within each Store. The Master Franchisee
shall also provide to each Store training materials in Polish for initial store
opening operations as well as ongoing support materials as stipulated and
approved by the Franchisor.
5.10.7 The Master Franchisee shall comply with all and its
obligations, as set out in each sub-franchise agreement and/or other related
agreements;
5.10.8 Notwithstanding any provision to the contrary in any
sub-franchise agreement, the Master Franchisee shall not assign any such
agreement without the prior written consent of the Franchisor which written
consent shall not be unreasonably withheld and which shall be given if the
Franchisor agrees to transfer the interest of the Master Franchisee in this
Agreement or agrees to enter a Master Franchise Agreement with any other person
(being the same person as shall be the Assignee as aforesaid) in substitution or
novation of this Agreement.
5.11 TRAINING OF STORE MANAGERS AND EMPLOYEES. The Master Franchisee
shall provide adequate training and support for managers and employees of its
own stores, head office and of any commissary it operates. The Master Franchisee
shall ensure that this training is sufficient and adequate to ensure that proper
and adequate operation procedures and standards are maintained within each Store
and that such training complies with the training to be provided by the Master
Franchisee pursuant to the Franchise Agreements.
5.12 DATA AND VOICE COMMUNICATIONS SYSTEMS
5.12.1 The Master Franchisee acknowledges that efficient data
and voice communications are important to the operation of the Domino's System
and coordination of the respective responsibilities of the Master Franchisee and
the Franchisor. Accordingly, the Master Franchisee agrees that, upon receipt of
a written request from the Franchisor, the Master Franchisee shall immediately
take steps to acquire and shall install or cause to be installed in its head
office within ninety (90) days from the date of such request a communications
systems and necessary peripheral equipment and software which shall permit both
voice and data communications with the Franchisor (the "Communications
Package"). The Franchisor shall not make such a request unless it is
commercially reasonable.
5.12.2 The Franchisor agrees to provide the Master Franchisee
with its hardware and software specifications and requirements and to provide
such other technical information and pricing information as is available to the
Franchisor to assist and facilitate the acquisition, installation and operation
of the Communications Package by the Master Franchisee.
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5.12.3 The Franchisor reserves the right to require the Master
Franchisee to acquire and install a Communications Package meeting certain
specifications and either from the Franchisor or its related corporations or
from an approved supplier. The Master Franchisee agrees that the Communications
Package shall meet the technical specifications supplied by the Franchisor from
time to time, including up-dates, so that such Communications Package shall at
all times be compatible with the communications system employed by the
Franchisor.
5.12.4 It is understood and agreed that the Master Franchisee
shall bear the entire cost and expense of the acquisition, installation and
operation of the Communications Package. The Master Franchisee agrees to execute
such contract and/or proprietary agreements or licenses as may be required by
the Franchisor or the seller of the Communications Package to protect the
proprietary rights of the Franchisor and/or such seller in any aspect of the
Communications Package.
6. FRANCHISOR'S OBLIGATIONS
6.1 US TRAINING. The Franchisor shall provide the Master Franchisee and
its employees and Sub-Franchisees with reasonable access for up to Ten (10)
individuals to Domino's on-going training program in the United States of
America during the first two (2) years of this Agreement, at no additional cost
to the Master Franchisee, save that the Master Franchisee shall bear all travel,
accommodation and living expenses in relation to the training of any such
person;
6.2 Franchisor shall from time to time furnish reasonable guidance to
Master Franchisee, at no additional charge to Master Franchisee, with respect to
the Domino's System, including any new ideas, concepts, methods and techniques
approved by Franchisor for use in the Territory. Such guidance shall, at
Franchisor's discretion, be furnished in the form of the Operating Manual,
bulletins or other written, electronic or audio visual media, consultation by
telephone or in person.
6.3 Upon thirty (30) days prior written notice from Master Franchisee,
Franchisor will make available experienced staff from its various departments,
i.e., architecture, advertising, marketing, franchise, etc., available at
Franchisor's headquarters for consultation with representatives of Master
Franchisee's staff on matters concerning programs and methods used by Franchisor
and XXX.
00\00\00 -00- XXXXXX MFA
6.4 Franchisor shall, at its expense, inspect the Domino's stores and
related staff and training functions as Franchisor may reasonably determine not
less than three (3) times per year (i) to determine if such stores are complying
with this Agreement and the Domino's System, (ii) to offer suggestions on the
operation of the Store, and also suggestions of general application, and (iii)
to consult during such inspections with Master Franchisee on such operational
subjects as Master Franchisee may reasonably request.
6.5 ASSISTANCE WITH POLISH TRAINING PROGRAM. Master Franchisee shall
develop and implement a formal Domino's training program in Poland no later than
the end of the first Agreement Year. Franchisor shall train Master Franchisee's
director of training in the US for a period of time which Franchisor reasonably
deems sufficient to qualify such individual as the chief instructor and provide
reasonable assistance in developing the curriculum and programs for the training
of managers of Domino's stores in Poland. Master Franchisee shall pay the
compensation, travel and other expenses of such Director.
6.6 ADAPTATION OF OPERATING MANUAL. Franchisor shall furnish to Master
Franchisee two (2) copies of all of its manuals (and other materials describing
the Domino's System), containing specifications, standards and operating
procedures prescribed by Franchisor for the development and operation of
Domino's Stores and which comprise the Domino's System. Master Franchisee shall
submit for review and approval by Franchisor any modifications to the Domino's
System that Master Franchisee reasonably believers to be necessary to comply
with legal requirements of Poland or for the commercial success of Domino's
Stores operating in Poland. Franchisor agrees not to unreasonably withhold or
delay its approval of any such proposed modification. Any rejection of any
proposed modification shall specify the reasons for such rejection. The modified
Domino's System developed as herein, provided, shall be reflected in two (2)
official English language manuals, which shall be completely and accurately
translated at Master Franchisee's expense into Polish (herein the "Operating
Manual").
Further suggestions for changes to the Operating Manual may be
made by Master Franchisee from time to time, subject to the prior approval of
Franchisor, which approval will not be unreasonably withheld or delayed. Any
rejection of a proposed modification shall specify the reasons for such
rejection.
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Franchisor shall have the right from time to time to add to,
and otherwise modify, the Operating Manual to reflect changes in authorized
products and services and specifications, standards and operating procedures of
Domino's Stores. In the event a change is proposed by Franchisor, Master
Franchisee must abide by such change, provided that implementation of such
change will not: (a) prevent Master Franchisee from complying with applicable
Polish law; (b) have a materially adverse commercial effect on the operations of
Domino's Stores in Poland; or (c) have a materially adverse effect on Master
Franchisee's fundamental status and rights under this Agreement. In the event
Master Franchisee objects to any change proposed by Franchisor on any of the
grounds listed above, Master Franchisee will specify those grounds, and the
parties agree to negotiate the matter in good faith. If, after presentation of
such objections, the parties are unable to negotiate a mutually acceptable
revision and Franchisor insists upon implementation of the change, the matter
will be submitted to arbitration.
7. NAMES AND MARKS
7.1 USE OF MARKS. The Master Franchisee acknowledges that Domino's is
the owner of all the Marks licensed to the Master Franchisee by this Agreement
and all usage thereof by the Master Franchisee and any goodwill established
thereby shall enure to the exclusive benefit of Domino's.
The Master Franchisee further agrees to use each of the Marks in
full compliance with the Operating Manual rules prescribed from time to time by
the Franchisor. The Master Franchisee will not directly or indirectly contest
the validity of Domino's ownership of or the Franchisor's right to use and
license the use of the Marks, nor will it attempt to register any Xxxx or any
derivative thereof. Upon termination or expiration of this Agreement the Master
Franchisee shall not be entitled to any compensation for goodwill associated
with its use of the Domino's System or the Marks. The Master Franchisee shall
not use any of the Marks as part of any corporate name or with any prefix,
suffix or other modifying words, terms, designs or symbols (other than logos
licensed to the Master Franchisee hereunder), nor may the Master Franchisee use
any of the Marks in connection with the sale of any unauthorized product or
service or in any other manner not explicitly authorized in writing by the
Franchisor. The Master Franchisee may with the prior written consent of the
Franchisor which consent shall not be unreasonably withheld, use and register a
business name approved by the Franchisor ("the Business Name") as the sole name
to identify the business carried on by the Master Franchisee pursuant to this
Agreement. The Master Franchisee shall use the Business Name in the manner
06\09\93 -17- POLAND MFA
prescribed by the Franchisor from time to time and shall not use any other
business or corporate name or any trade marks other than the Marks in relation
to the business carried on in the Stores. The Master Franchisee shall:
7.1.1 register the Business Name with the relevant government
authority in its State or Territory;
7.1.2 execute and deliver to the Franchisor any documents
which the Franchisor may require, signed but not dated, which may be used by the
Franchisor to transfer or terminate the registration of the Business Name on
termination or expiration of this Agreement. The Master Franchisee irrevocably
appoints each of the directors of the Franchisor from time to time as its
attorney to complete, date and lodge such documents upon the expiration or
termination of this Agreement;
7.1.3 upon the expiration or termination of this Agreement
take all other steps which may be necessary to transfer the Business Name to the
Franchisor or its nominee.
Any forms relating to the transfer or cessation of business names
registered by Sub-Franchisees shall be held by the Master Franchisee on trust
for the Franchisor and shall be executed and delivered to the Franchisor upon
request.
7.2 REGISTERED USER. The Master Franchisee shall upon request by the
Franchisor at Franchisor's expense execute all such documents as the Franchisor
may reasonably require in order to appoint the Master Franchisee as the
registered user of some or all of the Marks in the Territory. The Franchisor
agrees to appoint the Master Franchisee as a registered user if required in the
Territory. Without limiting the generality of the foregoing, the Master
Franchisee shall at the time of execution of any registered user agreement sign
an undated consent to cancellation of its registration as registered user and
hereby irrevocably appoints the Franchisor as its lawful attorney to date,
complete and lodge such consent with the Polish Trade Marks Office.
7.3 INFRINGEMENT; INDEMNIFICATION. The Master Franchisee shall
immediately notify the Franchisor of any infringement of or challenge to the
Master Franchisee's use of any of the Marks or any claim by any person of any
rights in any of the Marks, or any suspected passing-off or unfair competition
involving the Marks or the Domino's System and the Master Franchisee shall not
communicate with any person other than the Franchisor and its counsel in
connection with any such infringement, challenge or claim. The Franchisor shall
have sole discretion to take such action as it deems appropriate. The Franchisor
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hereby agrees to indemnify the Master Franchisee against and to reimburse the
Master Franchisee for all monetary relief for which he is held liable in any
proceeding arising out of the use of any Xxxx in compliance with this Agreement
and for all costs reasonably incurred by the Master Franchisee in connection
with any such claim brought against him or in any such proceeding in which he is
named as a party. The Master Franchisee hereby agrees to indemnify the
Franchisor against and to reimburse the Franchisor in any proceeding arising out
of the use of any Xxxx by the Master Franchisee otherwise than in accordance
with this Agreement. The Franchisor shall have the right but not the obligation
to exclusively control any litigation or Patent and Trade Xxxx Office proceeding
arising out of such infringement, challenge or claim or otherwise relating to
any of the Marks and the Master Franchisee hereby agrees to execute any and all
instruments and documents, render assistance and do such acts and things as may,
in the opinion of the Franchisor's counsel, be necessary or advisable to protect
and maintain the interests of the company in any such litigation or Patent and
Trademark Office proceeding or to otherwise protect and maintain the interest of
the Franchisor in the Marks.
To the extent Domino's or Franchisor or any of its affiliates
obtains any monetary award or payment in connection with any such litigation or
proceeding, or the settlement thereof, that reflects the lost profits or damages
incurred by Master Franchisee or any of its franchisees, Master Franchisee shall
be entitled to such award or payment. If, in the reasonable judgment of the
Franchisor, it becomes advisable at any time due to conflicting trademark rights
(other than identified in Section 7.4) for the Master Franchisee to modify or
discontinue use of any of the Marks and/or use one or more additional or
substitute marks, the Master Franchisee agrees to do so within a reasonable
period of time and the sole obligation of the Franchisor in any such event shall
be to reimburse the Master Franchisee for his tangible costs of complying with
this obligation.
7.4 Franchisor represents and warrants to Master Franchisee that to the
best of its knowledge Domino's owns all rights, title and interests to the Marks
and that Franchisor has fully disclosed rights, title and interests in Poland of
any third party to any of the Marks or any other marks that may be confusingly
similar to any of the Marks. The parties hereto acknowledge that there exists a
prior registration in Poland of the xxxx "Domino's" by Fast Foods, Inc. ("the
Infringing Registration") and that there is a pizza store in Warsaw unaffiliated
with Franchisor that uses the xxxx "Domino Pizza" both with and without
Franchisor's distinctive design ("the Infringing Use"). Franchisor agrees as
follows:
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(a) Franchisor shall exert its best efforts to promptly obtain
registration in all pertinent international classifications in Poland of the
marks identified in Exhibit A, attached hereto; and
(b) Prior to the later to occur of Master Franchisee's opening of
its first store or January 1, 1994, Franchisor at its expense shall have
obtained cancellation or acquired all right, title and interest to the
Infringing Registration and shall have obtained cessation of the Infringing Use.
Master Franchisee agrees to reasonably cooperated with Franchisor in connection
with the foregoing. In the event that the Franchisor is unable to obtain the
cancellation or acquisition of the Infringing Registration and cessation of the
Infringing use, as set forth above the Master Franchisees' exclusive remedy for
the franchisor's failure to meet this condition is a return of the One Hundred
Thousand Dollars (US $100,000) development fee. In such an event the Master
Franchisee shall return all materials provided to it by the Franchisor.
8. TRADE SECRETS, NEW PROCESSES, CONCEPTS AND IMPROVEMENTS
8.1 CONFIDENTIAL INFORMATION. The Master Franchisee acknowledges and
agrees that its entire knowledge of the operation of the Domino's System, is and
will be derived from information disclosed to the Master Franchisee by the
Franchisor and that such information is and shall at all times remain
confidential and a trade secret of the Franchisor. The Master Franchisee agrees
that it will maintain the absolute confidentiality of such information during
and after the Term, disclosing same only to the Master Franchisee's employees
(who shall have executed, upon request by the Franchisor, an agreement in the
form satisfactory to the Franchisor agreeing not to divulge or disclose any
trade secret and to keep confidential all proprietary information and that they
will not use such information in any other business or in any manner not
specifically authorized or approved in writing by the Franchisor.
8.2 Notwithstanding anything to the contrary contained in this
Agreement, the restrictions on disclosure and use of any information shall not
apply to: (a) information, processes or techniques which are or become generally
known in the fast food industry or (b) disclosure of Information in judicial or
administrative proceedings, to the extent that Master Franchisee is legally
compelled to disclose such information, provided Master Franchisee shall have
used its best efforts, and shall have afforded Franchisor the opportunity, to
obtain an appropriate protective order or other assurance satisfactory to
Franchisor of confidential treatment for the information required to be so
disclosed.
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8.3 IMPROVEMENTS. The Master Franchisee agrees that if it shall develop
any new concept, process or improvement in relation to the Domino's System, it
shall promptly notify the Franchisor and shall provide the Franchisor with all
necessary information with respect thereto without compensation for it.
Franchisor shall have a non-exclusive right to incorporate same in the Domino's
System for use in all Domino's stores.
9. THE MASTER FRANCHISEE'S COVENANTS NOT TO COMPETE
9.1 IN-TERM COVENANT. The Master Franchisee and its controlling
shareholders covenant and agree that they will not (and shall ensure that its
related corporations shall not) directly or indirectly during the Term without
the prior written approval of the Franchisor have any interest as an owner,
investor, partner, licensee, lender, director, officer, employee, consultant,
representative or agent, or in any other capacity, in any business primarily
engaged in sit-down, delivery or carry-out pizza (except Domino's Pizza stores
operated under franchise agreements heretofore or hereafter entered into between
the Master Franchisee and the Franchisor) or in any business or entity which
franchises or licenses or otherwise grants to others the right to operate a
business primarily engaged in sit-down, delivery or carry-out pizza stores which
is located in the Territory.
9.2 POST-TERM COVENANT. The Master Franchisee and its controlling
shareholders covenant and agree that upon termination of this Agreement by
Franchisor pursuant to Section 13 hereof, (subject, however, to any Franchise or
Sub-Franchise Agreements, which may remain outstanding) it shall not (and shall
ensure that its related corporations shall not) for a period of one (1) year
commencing on the effective date of termination of this Agreement directly or
indirectly, engage as an owner, investor, partner, licensee, lender, director,
officer, employee, consultant, representative or agent, or in any other
capacity, in any business or entity which operates or franchises or licenses or
otherwise grants to others the right to operate a business primarily engaged in
sit-down, delivery or carry-out pizza stores within the Territory, without the
prior written consent of the Franchisor.
9.3 FIVE PERCENT (5%) EXCEPTION. The covenants contained in this Clause
9 shall not apply to the ownership by the Master Franchisee of less than a five
percent (5%) beneficial interest in the securities of any corporation listed on
a recognized stock exchange.
9.4 NO SOLICITATION. The Franchisor and Master Franchisee each
acknowledges and agrees that during the term of this Agreement neither of them
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shall (and shall ensure that its related corporations shall not) directly or
indirectly solicit any person employed by the other or their affiliates, nor
will it induce or attempt to induce any such person to leave their employment
without the other's prior written consent.
10. COMPLIANCE WITH LAWS AND BUSINESS PRACTICES
The Master Franchisee shall secure and maintain in force during the Term
all required licenses, permits and certificates and shall operate its Stores and
shall ensure that its Sub-Franchisees operate their Stores in full compliance
with all applicable laws, ordinances, and regulations, including without
limitation all government regulations relating to occupational health and
safety, consumer protection, unfair and deceptive practices, trade regulation,
workers' compensation, unemployment, insurance and the payment of withholding
and income tax and such other taxes as may be levied in respect of the operation
of Stores by the Master Franchisee or its Sub-Franchisees. The Master Franchisee
shall pay when due all amounts payable pursuant to any provision of this
Agreement or any other agreement or arrangement with the Franchisor or its
related corporations or pursuant to any agreement or arrangement with any other
creditor or supplier of its Stores.
11. PRICES TO BE DETERMINED BY THE MASTER FRANCHISEE
The Franchisor may from time to time offer guidance to the Master
Franchisee in relation to prices for the products and services of the Stores
which in the Franchisor's judgment constitutes good business practice.
Notwithstanding anything herein contained, the Master Franchisee shall have the
sole right to determine the prices to be charged from time to time by its Stores
and its sub-Franchisees shall have the sole right to determine the prices to be
charged from time to time by their Stores and no such guidance shall be deemed
or construed to impose upon the Master Franchisee or any of its Sub-Franchisees
any obligation to charge any fixed minimum or maximum prices for any product or
service offered for sale by the Stores. The Master Franchisee shall and shall
ensure that its Sub-Franchisees shall charge the same price for products offered
by the Stores whether delivered or sold over the counter in the Store. The
Master Franchisee shall not and shall ensure that its Sub-Franchisees shall not
enter into any agreement, arrangement or understanding or engage in any
concerted practice with Domino's Pizza stores or others relating to the prices
at which products or services will be sold by it or by other Domino's Pizza
stores.
06\09\93 -22- POLAND MFA
12. TERMINATION BY THE MASTER FRANCHISEE
12.1 If the Franchisor breaches this Agreement and fails to cure such
breach within thirty (30) days after written notice thereof is delivered to the
Franchisor, or such other period as may be reasonable given the nature of the
breach, the Master Franchisee may terminate this Agreement and the Master
Franchise effective ninety (90) days after delivery to the Franchisor of notice
thereof.
12.2 Notwithstanding anything otherwise contained in this Agreement,
Master Franchisee shall have the right to terminate this Agreement, effective
upon notice, upon the occurrence of any one or more of the following events:
12.2.1 if Franchisor ceases or takes material steps to cease
carrying on business, or takes any action to liquidate its assets, if Franchisor
files a voluntary petition in bankruptcy or for arrangement, reorganization or
other relief under any bankruptcy legislation or any similar law, now or
hereafter in effect; or files an answer or other pleading in any proceeding
admitting insolvency, bankruptcy or inability to pay its debts as they mature;
or within thirty (30) days after filing of any involuntary proceedings under any
bankruptcy legislation or similar law, now or here after in effect, such
proceeding shall not have been vacated; or all or a substantial part of it
assets are attached, seized, subjected to a writ or distress warrant, or are
levied upon, unless such attachment, seizure, writ warrant or levy is vacated
within thirty (30) days; or shall be adjudicated a bankrupt; or shall make an
assignment for the benefit or creditors or shall admit in writing its inability
to pay its debts generally as they become due or shall consent to the
appointment of a receiver or trustee or liquidator of all or the substantial
part of its property; or any order appointing a receiver, trustee or liquidator
of Franchisor or any of its shareholders or all or a substantial part of the
property of any of them is not vacated within thirty (30) days resolution passed
for the winding-up or the liquidation of Franchisor or if Franchisor adopts or
takes any corporate proceedings for its dissolution or liquidation;
12.2.2 if the Commissary Agreement is terminated by Master
Franchisee for any reason whatsoever.
13. TERMINATION BY THE FRANCHISOR
13.1 In addition to all other rights of the Franchisor to terminate this
Agreement as provided herein, the Franchisor may terminate this Agreement and
the Master Franchise effective upon delivery of a notice of termination to the
Master Franchisee, if:
06\09\93 -23- POLAND MFA
13.1.1 the Master Franchisee makes an assignment for the
benefit of or enters into any arrangement with creditors or stops payment or is
unable to pay its debts within the meaning of the Michigan Company or Insolvency
Code or the relevant law of the Country under which the Master Franchisee was
incorporated or was originated or if the Master Franchisee goes into liquidation
or if an order is made or a resolution is passed for the winding-up of the
Master Franchisee or if the Master Franchisee commits any act of bankruptcy; or
13.1.2 the Master Franchisee on three (3) or more occasions
within any one (l) year period fails to submit when due, sales reports or
financial statements or to pay when due the Royalty Fee, Advertising Fee or
other payments to the Franchisor or its related corporations; or
13.1.3 the Master Franchisee is convicted of any offense or
crime or engages in any conduct which the Franchisor in its reasonable opinion
believes may substantially impair the goodwill associated with the Marks; or
13.1.4 the Master Franchisee has made any material
misrepresentation to the Franchisor in relation to its application for the
Franchise; or
13.1.5 the Master Franchisee intentionally under- reports the
sales of the Store(s) for any period or periods or if an audit by the Franchisor
discloses an understatement of sales by any Stores owned by Master Franchisee
and the Master Franchisee fails to pay the applicable fees to the Franchisor
together with interest due thereon within five (5) days after receipt of the
final audit report; or
13.1.6 the Master Franchisee is in breach of any of the
provisions contained in Clauses 7.1, 8.1, 9.1 or 15 of this Agreement; or
13.1.7 the Master Franchisee fails to properly execute any
documents required by this Agreement or which is reasonably necessary to
properly implement or effect any of the provisions of this Agreement and they
fail to correct such failure within thirty (30) days after written notice is
delivered to them; or
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13.1.8 the Master Franchisee or any of its related corporations
directly or indirectly contest the validity of the Marks or Domino's ownership
of the Marks or the Franchisor's right to use or to license others to use the
Marks; or
13.1.9 the designated representative ceases to be actively and
substantially engaged in the management and operation of the business of the
Master Franchisee and Master Franchisee fails to replace such designated
representative within 90 days; or
13.1.10 there is any change in the beneficial or legal
shareholding of the controlling ownership interest Master Franchisee without
prior written consent of the Franchisor.
13.2 CURE PERIOD. Without limiting the generality of clause 13.1 hereof,
the Franchisor shall have the further right to terminate this Agreement and the
Franchise, effective upon delivery of a notice of termination to the Master
Franchisee, if the Master Franchisee fails to comply with any other provision of
this Agreement and fails to correct such failure within:
13.2.1 seven (7) days if such failure relates to the use of any
of the Marks or the quality of pizza or any beverage sold by or the cleanliness
or sanitation of any Store owned by Master Franchisee;
13.2.2 thirty (30) days if such failure is to pay any money due
and payable by the Master Franchisee pursuant to any provision of this
Agreement, or any other agreement between the Franchisor or its affiliates or
its subsidiaries; and
13.2.3 If the Master Franchisee breaches this Agreement and
fails to cure such breach within thirty (30) days after written notice thereof
is delivered to the Master Franchisee, or such other period as may be reasonable
given the nature of the breach, the Franchisor may terminate this Agreement and
the Master Franchise effective ninety (90) days after delivery to the Master
Franchisee of notice thereof.
13.3 SUSPENSION OF NEW AGREEMENTS. Effective immediately upon receipt of
notice of termination, the Master Franchisee's right to enter into new franchise
agreements shall be suspended. In addition, the Master Franchisee shall cease
all actions and discussions with sub-franchisees or potential sub-franchisees
regarding new stores or new franchise agreements.
13.4 OPTION TO PURCHASE ASSETS/SHARES. In the event that the Franchisor
terminates this Agreement pursuant to sub-clause 13.1 and requires the Master
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Franchisee to effect the assignment referred to sub-clause 14.6 the Franchisor
shall have the option (but not the obligation) exercisable within thirty (30)
days of such termination to purchase, at its option, all of the assets of each
Store owned or controlled by the Master Franchisee. Upon execution of the option
of the Franchisor to purchase the assets of each store, the Franchise Agreement
for such store shall be terminated. The purchase price for the assets or the
shares of the Master Franchisee shall be calculated in accordance with the
relevant provisions of the Franchise Agreement.
14. MASTER FRANCHISEE'S OBLIGATIONS UPON TERMINATION OR EXPIRATION
Subject to any Franchise Agreements or other agreements between the
Franchisor and the Master Franchisee which may continue to apply notwithstanding
the termination of expiration of this Agreement:
14.1 PAYMENTS. The Master Franchisee hereby agrees, upon the termination
or expiration of this Agreement and the Franchise, to pay to the Franchisor
within seven (7) days after the effective day of such termination or expiration
any Royalty Fee, Advertising Fee and other charges as have or will thereafter
become due hereunder and are then unpaid together with all damages, costs and
expenses including legal fees incurred by the Franchisor or its related
corporations relating to any breach of this Agreement. The Master Franchisee
hereby further agrees that upon the termination or expiration of the Franchise,
he will immediately return to the Franchisor all copies of the Operating Manual
which have been loaned to him by the Franchisor together with all other records
and correspondence containing confidential information relating to the operation
of its Sub-Franchisees and its Stores, which is acknowledged to be the property
of Domino's or the Franchisor and the Master Franchisee shall not retain any
copy of or extract from any such material;
14.2 NAME REGISTRATIONS. The Master Franchisee hereby agrees that, upon
the termination or expiration of this Agreement and the Franchise, he will take
all such action as may be required to cancel or transfer (at the Franchisor's
option) all business name registered user or other registrations relating to the
use of the Marks and to notify the telephone company and all listing agencies of
the termination or expiration of the Master Franchisee's right to use any of the
Marks in connection with its telephone numbers and all classified and other
directory listings of its Stores;
14.3 TELEPHONE LISTING. The Master Franchisee hereby acknowledges that
the Franchisor has the sole rights to and interest in all registrations relating
06\09\93 -26- POLAND MFA
to the use of the Marks, telephone numbers and directory listings associated
with the Marks and its Stores, and hereby irrevocably appoints the Franchisor as
its lawful attorney to direct the telephone company and all listings agencies,
upon any termination of this Agreement by Franchisor in accordance with Section
13 to transfer such numbers and listings to the Franchisor or its nominee and to
sign, complete and lodge all and any documents required to cancel or transfer
(at the Franchisor's option) all registrations relating to the Marks to the
Franchisor or its nominee;
14.4 CONFIDENTIAL INFORMATION AND MARKS. The Master Franchisee agrees
that upon termination or expiration of this Agreement for any reason, it shall
immediately and permanently cease to use or display in any manner whatsoever any
confidential information, trade secrets, or confidential methods, procedures and
techniques associated with the Domino's System, the Marks and all signs,
advertising, material, displays, stationery, forms, products and other articles
displaying the Marks nor will they use any Xxxx which is confusingly similar to
or a colorable imitation of any of the Marks nor shall they use any designation
of origin or description or representations which may suggest a continuing
association with the Domino's System. In the event that the Master Franchisee
does not immediately and permanently cease to use or display any items including
the Marks, the Franchisor shall be entitled to enter any premises occupied by
the Master Franchisee to remove the Marks from such items or, at its option, to
remove the items containing the Marks from the premises.
14.5 SURVIVAL. Any provisions of this Agreement which refer to periods
after the termination or expiration of this Agreement (which shall be deemed to
include, without limitation, Clauses 8, 9, 10 and 14) shall survive the
termination or expiration of this Agreement.
14.6 ASSIGNMENT OF FRANCHISE AGREEMENTS. Upon any termination of this
Agreement by Franchisor in accordance with Section 13.1 of this Agreement,
Franchisor shall have the right to have a determination made of the "Fair Market
Value" (as defined below) of master Franchisee's rights and interests, as
sub-franchisor, in all Franchise Agreements, exercisable by delivering written
notice thereof to Master Franchisee ("Appraisal Notice") within (10) days after
such termination.
Upon delivery of the Appraisal Notice, Master Franchisee shall give
Franchisor (or its designated agents) and the "Appraiser" (as defined below)
full access to all of Master Franchisee's books and records relating to its
business operated hereunder at any time during customary business hours in order
to determine the purchase price for the Franchise Agreements.
06\09\93 -27- POLAND MFA
The Fair Market Value shall be the amount that an arm's length
purchaser would be willing to pay for the Franchise Agreements, as mutually
agreed upon by Franchisor and Master Franchisee; provided, however, that if
Franchisor and Master Franchisee are unable to agree on the Fair market Value of
the Franchise Agreements within thirty (30) days after delivery of the Appraisal
Notice, then Fair Market Value shall be determined by one (1) person with
experience in the valuation of fast food or restaurant franchise businesses in
Poland or Eastern Europe who is a member of an internationally recognized
accounting firm (the "Appraiser"). Franchisor shall notify Master Franchisee of
the identity of one (1) proposed Appraiser concurrently with the Appraisal
Notice, and Master Franchisee shall have the right to select a second Appraiser
and notify Franchisor thereof within thirty (30) days after the date of the
Appraisal Notice.
Within ten (10) days after Master Franchisee's notice of selection
of an Appraiser, both Appraisers shall select and agree upon a third proposed
Appraiser and deliver a notice to both Franchisor and Master Franchisee with the
identity of the third proposed Appraiser. Within five (5) days of the notice of
the third proposed Appraiser, Master Franchisee shall dismiss one of the
proposed Appraisers and notify Franchisor thereof, and within five (5) days
thereafter Franchisor shall do likewise. The remaining proposed Appraiser shall
act as Appraiser hereunder.
The Appraiser shall make his determination of Fair Market Value,
which shall be final and binding on the parties, and submit a written report
thereof ("Appraisal Report") to Franchisor and Master Franchisee as soon as
practicable, but in no event more than sixty (60) days after his appointment.
Each party may submit in writing to the Appraiser its judgment of Fair Market
Value (together with its reasons therefor); however, the Appraiser shall not be
limited to these submissions and may make such independent investigations as he
determines to be necessary. The Appraiser's fees and costs shall be borne
equally by the Franchisor and Master Franchisee.
Franchisor shall have the option, exercisable by delivering written
notice thereof within thirty (30) days after submission of the Appraisal Report
(or the date on which the parties agree, without the use of an Appraiser, to the
Fair Market Value of the Franchise Agreements), to purchase the Franchise
Agreements at the Fair Market Value.
06\09\93 -28- POLAND MFA
The closing of the purchase of the Franchise Agreements shall occur
at the place, time and date designated by Franchisor but no later than sixty
(60) days after Franchisor's exercise of its option to purchase the Franchise
Agreements. At the closing (a) Master Franchisee shall duly execute and deliver
to Franchisor (or its designee) an assignment agreement, containing such terms
and conditions as Franchisor may reasonably require, transferring Master
Franchisee's entire right, title and interest (free and clear of all liens,
encumbrances and restrictions) under the Franchise Agreements to Franchisor (or
its designee); (b) Master Franchisee shall deliver the original of each
Agreement and copies of all files, correspondence and memoranda and other
materials regarding each Franchisee under each such Agreement as Franchisor may
reasonably request, including applications, inspection reports and financial
information; and (c) upon receipt of such assignment agreement, documents and
files, Franchisor (or its designee) shall pay Master Franchisee the Purchase
Price in US Dollars. Thereupon, Master Franchisee shall have no further right,
title or interest as Franchisor under any of the Franchise Agreements.
In the event there are any unresolved issues in connection with the
closing of the purchase of the Franchise Agreements, the closing may at
Franchisor's option be accomplished through an escrow on such terms and
conditions as Franchisor deems reasonably appropriate (including the making of
payments, deductible from the purchase price, directly to third parties claiming
an interest in the Franchise Agreements) in order to obtain clear title to the
Franchise Agreements.
14.7 STORE FRANCHISE AGREEMENTS. Upon the expiration or termination of
this Agreement, each Franchise Agreement then in force (unless terminated
pursuant to Section 13.5 hereof) with respect to Domino's Pizza Stores owned or
controlled by the Master Franchisee shall remain in force and effect in
accordance with its provisions.
14.8 OPERATING MANUAL The Master Franchisee hereby further agrees that
upon the termination or expiration of the Franchise, it will immediately return
to the Franchisor all copies of the Operating Manual which have been loaned to
it by the Franchisor together with all other records and correspondence
containing confidential information relating to the operation of its
Sub-Franchisees and its Stores, which is acknowledged to be the property of
Domino's or the Franchisor and the Master Franchisee shall not retain any copy
of or extract from any such material;
06\09\93 -29- POLAND MFA
15. ASSIGNMENTS
15.1 BY DPII. This Agreement is fully assignable by the Franchisor at any
time by written notice to the Master Franchisee and shall enure to the benefit
of any assignee or other legal successor to the interests of the Franchisor
herein. In the event that the Franchisor assigns this Agreement, the Franchisor
shall use its best efforts to ensure that the assignee agrees to observe and
perform all the terms and conditions on the part of the Franchisor contained in
this Agreement.
15.2 BY MASTER FRANCHISEE. This Agreement and the Master Franchise are
personal to the Master Franchisee and neither this Agreement, the Franchise, nor
any part of the direct or indirect controlling ownership interest of the Master
Franchisee (which shall mean and include voting shares and securities
convertible thereto, in the Master Franchisee) may be (and the Master Franchisee
shall ensure that they are not) voluntarily, involuntarily, directly or
indirectly assigned or otherwise transferred or encumbered by the Master
Franchisee without the consent of Franchisor, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, Master
Franchisee shall be permitted to transfer this Agreement to an affiliate
controlled by Master Franchisee so long as applicable withholding taxes does not
exceed Ten percent (10%) with respect to all fees and royalties due and payable
under this Agreement. Any purported assignment, transfer or encumbrance in
violation of this Agreement shall be void and shall constitute a breach of this
Agreement.
16. INDEPENDENT CONTRACTORS/INDEMNIFICATION
16.1 NO AGENCY. The parties hereto are independent contractors and the
Master Franchisee is not and shall in no event hold itself out as an agent of
the Franchisor for any purpose.
16.2 COSTS. The Franchisor shall not be obligated by any agreements,
representations or warranties made by the Master Franchisee nor shall the
Franchisor be obligated for any costs, claims, demands, penalties or damages to
any person or property directly or indirectly arising out of any act or omission
by the Master Franchisee under or relating to this Agreement caused by the
Master Franchisee's negligent or willful action or failure to act. The Master
Franchisee hereby agrees to indemnify the Franchisor against and to reimburse
the Franchisor for all such obligations, costs, claims, penalties and damages
for which it is held liable and for all costs incurred by it in the defense of
any such claim brought against it or in any action in which it is named as a
party, including without limitation legal fees, costs of investigation and proof
of facts, court costs, other litigation expenses and travel and living expenses.
The Franchisor shall have the right to defend any such claim.
06\09\93 -30- POLAND MFA
16.3 COSTS. Master Franchisee shall not be obligated by any agreements,
representations or warranties made by the Franchisor nor shall the Master
Franchisee be obligated for any costs, claims, demands, penalties or damages to
any person or property directly or indirectly arising out of any act or omission
by the Franchisor under or relating to this Agreement caused by the Franchisor's
negligent or willful action or failure to act. The Franchisor hereby agrees to
indemnify the Master Franchisee against and to reimburse the Master Franchisee
for all such obligations, costs, claims, penalties and damages for which it is
held liable and for all costs incurred by it in the defense of any such claim
brought against it or in any action in which it is named as a party, including
without limitation, legal fees, costs of investigation and proof of facts, sour
costs, other litigation expenses and travel and living expenses. The Master
Franchisee shall have the right to defend any such claim.
17. GOVERNING LAW; ARBITRATION
This Agreement shall be governed by the laws of the state of
Michigan. All claims arising out of, or relating to, this agreement shall, on
demand of either party, be submitted for arbitration to, and conducted at, the
office of the American Arbitration Association located in Washington D.C. Such
arbitration proceedings shall be heard by one arbitrator in accordance with the
then current commercial arbitration rules of the American Arbitration
Association. The arbitrator shall have the right to include in his award any
relief which he deems proper in the circumstances, including, without
limitation, money damages (with interest on unpaid amounts for the due date),
specific performance, injunctive relief and attorneys' fees and costs. The award
and decision of the arbitrator shall be conclusive and binding upon all parties
to the arbitration proceeding, and judgment upon the award may be entered in any
court of competent jurisdiction. Each party to the arbitration proceeding agrees
to contest any such award only in the district in which the arbitration award
was entered. This agreement to arbitrate shall continue in full force and effect
subsequent to and notwithstanding the expiration or termination of this
agreement.
18. Franchisor shall not unreasonably withhold or delay any written request
for consent or approval and any such withholding or approval of consent shall
specify the reason therefor and shall be delivered within thirty (30) days after
the written request. If Franchisor shall have failed to consent to any request
within thirty (30) days of a written request by Master Franchisee, Franchisor
will be deemed to have approved the request.
06\09\93 -31- POLAND MFA
19. A general covenant of good faith and fair dealing shall be applicable to
this Agreement, requiring both parties to this Agreement to act reasonably and
in good faith toward each other. Additionally, Franchisor agrees not to act
arbitrarily or capriciously with respect to Master Franchisee when compared to
Franchisor's actions in other similar circumstances.
20. The party prevailing in a judicial or arbitration proceeding or appeal
thereof shall be awarded its costs and expenses including, but not limited to,
reasonable accounting, paralegal, legal, expert witness, attorneys' fees and
arbitrators' fees, whether incurred prior to, in preparation for or in
contemplation of the filing of any written demand, claim, action, hearing or
proceeding to enforce the obligations of this Agreement.
21. BINDING EFFECT
This Agreement is binding upon the parties hereto and their respective
heirs, assigns and successors in interest.
22. NO WAIVER
No delay or omission by the Franchisor or Master Franchisee to exercise
any right or power arising from any default shall impair any right or power or
shall be construed to be a waiver of any right or any such default by the other
under this Agreement or acquiescence therein. No waiver of any breach of any of
the covenants of this Agreement shall be construed, taken or held to be a waiver
of any other breach or waiver, acquiescence in or consent to any further or
succeeding breach of the same covenant. Neither the rights herein given to
receive, collect, xxx for or distrain for any fees, moneys or payments or to
enforce the terms, provisions and conditions of this Agreement or to prevent the
breach or non- observance thereof or the exercise of any such right or of any
other right or remedy hereunder or otherwise granted or arising shall impair the
right or power of the Franchisor to declare the Term ended and to terminate this
Agreement because of any default in or breach of any of the covenants,
provisions or conditions of this Agreement.
23. ACCORD AND SATISFACTION
No payment by the Master Franchisee or any third party or receipt by the
Franchisor of a lesser amount than any fee payable hereunder shall be deemed to
be other than on account of such fee nor shall any endorsement or statement on
06\09\93 -32- POLAND MFA
any check or any letter accompanying any check or payment be deemed an accord
and satisfaction. The Franchisor may accept such check or payment without
prejudice or its rights to recover the balance of such fee or pursue any other
remedy provided for in this Agreement.
24. FORCE MAJEURE
Neither party shall be in default of its delay in performance or failure
to perform any of its obligations hereunder, when and if the delay or failure
arises from a cause which is beyond the control of the party failing to perform.
Such force majeure (which includes, inter alia, strikes, acts of God, acts of
war, laws and regulations) would suspend the fulfillment of the obligations
under this Agreement until it is over. If the force majeure lasts more than one
(1) year, the party adversely affected by such force majeure shall have the
right to terminate this Agreement.
25. COSTS
The Master Franchisee shall bear all legal and other costs and expenses of
preparing, stamping and registering this Agreement and any lease, license,
security arrangement or other agreement entered into in connection with this
Agreement. Such costs and expenses shall be deemed to include any fines and/or
penalties imposed for failure to stamp or adequately stamp or stamp within
prescribed time limits the document or documents concerned.
26. INTERPRETATION
26.1 REFERENCES. In this Agreement unless the context otherwise requires:
26.1.1 a reference to one gender shall include a reference to
the other gender;
26.1.2 a reference to a person shall include a reference to
that person's successors and permitted assigns;
26.1.3 a reference to the singular shall include a reference to
the plural and vice versa;
26.1.4 a reference to a person includes a reference to a
company, corporation, partnership, joint venture or trust or other entity and
vice versa;
26.1.5 a reference to a related company or corporation shall
mean a related corporation as defined by Michigan Corporations Act;
06\09\93 -33- POLAND MFA
26.1.6 a reference to any legislation shall include a reference
to any amendments, modifications or re-enactments or replacements thereof.
26.2 ENTIRE AGREEMENT; HEADINGS. The preamble, recitals, schedule and
annexures hereto and other documents expressly incorporated herein are a part of
this Agreement, which along with the Commissary Agreement constitutes the entire
agreement between the parties hereto and there are no other oral or written
understandings or agreements between the Franchisor and Master Franchisee
relating to the subject matter of this Agreement. The headings of the clauses
hereof are for convenience only and do not define, limit or construe the
contents of such paragraphs.
26.3 SEVERABILITY. The language of all provisions of this Agreement shall
be construed simply according to its fair meaning and not strictly against the
Franchisor or the Master Franchisee. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible. Accordingly, if any part of this Agreement for any reason shall be
declared invalid and unenforceable, such provision shall be severed (and this
shall not affect the validity of the remaining provisions) or, if possible,
modified to best preserve the intentions of the parties and this Agreement, so
modified, shall remain in full force and effect. If any applicable law or rule
requires a greater prior notice of the termination of or election not to renew
this Agreement, or the taking of some other action hereunder, than is required
hereunder, the prior notice or other requirements required by such law or rule
shall be substituted for the notice requirements hereof.
26.4 AMENDMENTS. This Agreement may not be amended except in writing
signed by an authorized representative of the Franchisor and the Master
Franchisee.
26.5 REMEDIES. No right or remedy herein conferred upon or reserved to
the Franchisor or Master Franchisee is exclusive of any other right or remedy
provided or permitted to it by law or equity.
27. NOTICES
Any notices or other communications to be given under this Agreement shall
be in writing, delivered by hand, telegram, certified or registered mail,
facsimile or courier service to the following address (which may be changed by
written notice):
06\09\93 -34- POLAND MFA
To DPII: Domino's Pizza International, Inc.
30 Xxxxx Xxxxx Xxxxxx Xxxxx
X.X. Xxx 000
Xxx Xxxxx, Xxxxxxxx 00000-0000 XXX
Attn.: Legal Department
Facsimile: 000-000-0000
To Master Franchisee: Krolewska Pizza Sp. z.o.o.
Xxxxxxxx Xxxx Xxxx - Poland
xx. Xxxxxxxxxx Xxxxxxxxxxxx 0/0, #000
Xxxxxx 00-000, Xxxxxx
Attn.: Xxxxxx Xxxxxxxx, Esquire
Facsimile No.: (00-00) 000 00 00
AND
International Fast Food Corporation
0000 Xxxxxxx Xx
Xxxxx Xxxxx, XX 00000
Attn.: Xxxxxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
Notice by mail shall be deemed received upon actual receipt.
28. ACKNOWLEDGEMENT
28.1 The Master Franchisee acknowledges and agrees that it has read this
Agreement and that it has been given the opportunity to clarify any provision
and information that it did not understand and to consult with a solicitor or
other professional adviser. The Master Franchisee further acknowledges that it
understands the terms, conditions and obligations of this Agreement and the
Master Franchise and agrees to be bound thereby.
28.2 The Master Franchisee acknowledges that it has conducted an
independent investigation of the business contemplated by this Agreement and
recognize that it involves business risks making the success of the venture
largely dependent upon the business abilities of the Master Franchisee. The
Franchisor expressly disclaims the making of and the Master Franchisee
acknowledges it has not received or relied upon any warranty or guarantee
expressed or implied as to the potential volume, profits or success of the
business venture contemplated by this Agreement.
29. GOVERNMENT APPROVALS
The Master Franchisee shall be solely responsible for obtaining all
governmental approvals and consents, if any, required in respect to this
Agreement or the matters contemplated by this Agreement. Certified copies of all
06\09\93 -35- POLAND MFA
such approvals and consents shall be furnished by Master Franchisee to
Franchisor on request. The Master Franchisee's failure to obtain and maintain
any approval or consent necessary to carry out the matters contemplated by this
Agreement in accordance with their terms shall constitute a material breach of
this Agreement, entitling the Franchisor to terminate this Agreement upon
immediate written notice to the Master Franchisee.
30. CONTROLLING LANGUAGE
The parties hereto confirm that it is their wish that this Agreement, as
well as all other documents relating hereto, including notices, shall be drawn
up in the English language only. This Agreement may be translated; in case of
any difference between the two versions, the English version shall control. All
costs in connection with the translation shall be borne by the Master
Franchisee.
31. COUNTERPARTS
This agreement may be signed in counterparts.
IN WITNESS WHEREOF, the parties hereto set their hands and seals the day and
year first hereinbefore written.
DOMINO'S PIZZA INTERNATIONAL, INC. KROLEWSKA PIZZA SP. Z.O.O.
/s/ Xxxxxxx Xxxxxx /s/ Xxxxx X. Xxxxxx
----------------------------------- --------------------------------
By: Xxxxxxx X. Xxxxxx By: Xxxxx X. Xxxxxx
Its: Senior Vice President Its: Authorized Signer
and General Counsel
Date: Aug 28, 1997 Date: 8/28/97
06\09\93 -36- POLAND MFA
COVENANTS OF SHAREHOLDERS
The undersigned individual represents and warrants that he is the
controlling shareholder of International Fast Food Corporation which has direct
control over the Master Franchisee. Accordingly, to induce the Franchisor to
enter into this Agreement and grant the master franchise to the Master
Franchisee, the undersigned individual hereby agrees to be bound by, and
personally liable for his breach of, the provisions of Sections 9 and 15 of this
Agreement.
/s/ Xxxxxxxx Xxxxxxxx
-----------------------------
Xxxxxxxx Xxxxxxxx
06\09\93 -37- POLAND MFA
COVENANTS OF SHAREHOLDERS
The undersigned represents and warrants that International Fast Food
Corporation has direct control over the Master Franchisee. Accordingly, to
ensure that adequate capital is available to the Master Franchisee, the
undersigned shall have contributed, or shall ensure that other entities have
contributed equity to the Master Franchisee in a minimum amount of the US Dollar
equivalent of 2,000,000.00 by 12/31/97. Any additional capital required over and
above that two million dollar amount will also be dedicated to Krowleska Pizza,
Sp.zo.o. as needed to allow it to meet the growth requirements referenced in
Schedule Two of this Agreement. A default of this covenant shall constitute a
default of this Agreement.
INTERNATIONAL FAST FOOD CORPORATION
/s/ Xxxxxxxx Xxxxxxxx
---------------------------
By: Xxxxxxxx Xxxxxxxx
---------------------------
Its: President
06\09\93 -38- POLAND MFA
SCHEDULE ONE
------------
MARKS
DPI has filed for the registration of its marks in Poland.
XXXX CLASS REGISTRATION NO.
---- ----- ----------------
DOMINO'S PIZZA 30 & 42 #0-000-000
DOMINO'S PIZZA &
DOMINO DESIGN 30 & 42 #0-000-000
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SCHEDULE TWO
------------
(Clause 2.2)
YEAR END, DEC. 31: ADDITIONAL STORES TOTAL STORES
------------------ ----------------- ------------
1997 1 5*
1998 5 10
1999 6 16
2000 7 23
2001 8 31
2002 9 40
2003 10 50
*includes 4 Stores existing on the date of this agreement
A. All stores in Warsaw shall be corporate stores.
B. Franchise Stores shall not exceed 25% of the number of opened and
operating stores.
06\09\93 -40- POLAND MFA
ANNEXURE "B"
STORE CERTIFICATION AGREEMENT
This Store Certification Agreement is made effective ___________, the opening
date of the Domino's Pizza Store (hereinafter "Store") No. __________ located in
_________________, by and between Domino's Pizza International, Inc., a
corporation having a principal place of business at 30 Xxxxx Xxxxx Xxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxx, 00000, XXX (hereinafter referred to as "Franchisor"), and
Krolewska Pizza Sp Z o.o., corporation organized under the laws of Poland,
having its principal place of business at
_____________________________________(hereinafter referred to as "Master
Franchisee").
1. FRANCHISEE:
Name:
Corporation:
Address:
2. STORE LOCATION:
City:
Street Address:
Building Type and Description:
3. AGREEMENT:
Term: 10 Years (subject to renewal), commencing on _______________, the
date of the Standard Franchise Agreement to be attached hereto upon execution by
the Franchisee.
4. SUBMISSION AND CERTIFICATION:
Master Franchisee hereby requests and Franchisor hereby acknowledges,
accepts and certifies the location referred to above in Section 2 as being the
authorized location for Store No.___________. By executing this certificate, the
Master Franchisee certifies that the Franchisee of the proposed store has met
all of the requirements and submitted all paperwork necessary to ensure the
Franchisee is able and prepared both legally and financially to open such store,
in accordance with the standard store opening process including, specifically,
the items on the attached list.
06\09\93 -41- POLAND MFA
For Submission: For Acceptance and Certification:
--------------- ---------------------------------
Franchisee: Krolewska Pizza Sp Z o.o.: Franchisor: Domino's Pizza
International, Inc.
/s/ Xxxxxxx Xxxxxx
--------------------------------
By: By: Xxxxxxx X. Xxxxxx
Title: Title: Senior Vice President
Date: Date: Aug 28, 1997
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MASTER FRANCHISE
STORE OPENING CHECKLIST
To open a store a franchisee must be current on its royalties and must submit
the following documentation to DPII for approval:
- Three (3) area delivery maps outlining store location, area of primary
responsibility and delivery area, MUST BE SIGNED AND DATED by you and your
Operations Representative.
- Site Approval form, must be filled out by Operations Representative.
- Floor Plan, MUST BE SIGNED AND DATED by you and your Operations
Representative.
- Executed Lease (with required Lease provisions)
- Insurance Certificate (with appropriate Domino's Pizza entity named
as additional insured)
- Store information including: store address and phone number and
manager's name.
- Grand Opening Plans
- Certificate of Good Standing for your corporation
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ANNEXURE "A"
Note: Amendments to be mutually agreed upon for use in Xxxxxx
00\00\00 -00- XXXXXX MFA
