Exhibit 10.21
April 30, 1999
Xxxxxx Xxxxxxxx'x, Inc.
Mr. Xxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Dear Xxxxx:
This letter hereby amends the Xxxxxx Xxxxxxxx'x/Miami Subs Development Program
Master Agreement dated August 13, 1998.
1. Xxxxxx Xxxxxxxx'x, Inc. ("Xxxxxx Xxxxxxxx'x") agrees to grant Miami Subs USA,
Inc. ("MSUSA") the exclusive (United States only) right to co-brand Xxxxxx
Xxxxxxxx'x concept and products. MSUSA shall have the exclusive right to (a) co-
brand Xxxxxx Xxxxxxxx'x in existing Miami Subs restaurants; (b) co-brand Xxxxxx
Xxxxxxxx'x in new restaurants within the Miami Subs system which may or may not
include co-branding with Nathan's, Xxxxx Xxxxxx, or Miami Subs; and (c) co-
brand with any other fast-food restaurant or fast-food restaurant company;
provided, however, Xxxxxx Xxxxxxxx'x has the right to enter into a co-branding
arrangement with Riese Restaurant in Manhattan, Pudgies Chicken and Sylvia's.
Xxxxxx Xxxxxxxx'x recognizes that Miami Subs co-brands with other concepts
(including Xxxxxx-Xxxxxxx, Nathan's and Xxxxx Xxxxxx) and plans to expand this
program to other cc-branding partners and is developing co-branded units which
may or may not include a Miami Subs or an Xxxxxx Xxxxxxxx'x.
Xxxxxx Xxxxxxxx'x may not operate or license others to operate a standard Xxxxxx
Xxxxxxxx'x restaurant within a one (1) mile radius (or within ten (10) city
blocks in any urban market) of any Miami Subs restaurant or co-brand restaurant
In the Miami Subs system. Xxxxxx Xxxxxxxx'x agrees to enter into franchise
agreements or license agreement with each co-brand restaurant designated by
Miami Subs permitting the sale of Xxxxxx Xxxxxxxx'x products at such co-branded
restaurant. Xxxxxx Xxxxxxxx'x retains all retail rights to Xxxxxx Xxxxxxxx'x
products and the right to license non-chain (multi-unit) non-fast food,
restaurants to sell Xxxxxx Xxxxxxxx'x products.
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2. An initial franchise fee associated with entering into an Xxxxxx Xxxxxxxx'x
Franchise Agreement under this program shall be no less than Five Thousand
Dollars ($5,000.00). Miami Subs will collect the franchise fee from the
franchisee and will remit Two Thousand Five Hundred Dollars ($2,506.00)
collected from any existing Miami Subs Restaurant and any existing Miami Subs
franchisee who are opening a new restaurant, to Xxxxxx Xxxxxxxx'x within 15 days
following the collection of the initial franchise fee. There shall be no
separate franchise fee due to Xxxxxx Xxxxxxxx'x for Miami Subs company operated
co-branded restaurants; however, Miami Subs shall reimburse Xxxxxx Xxxxxxxx'x
for approved direct, out- of-pocket expenses incurred by Xxxxxx Xxxxxxxx'x in
participating in the unit opening. For prospective franchisee to the Miami Subs
or Nathan's system whose principle(s) are not currently a franchisee with the
Miami Subs or Nathan's system, Miami Subs will remit Five Thousand Dollars
($5,000.00) to Xxxxxx Xxxxxxxx'x within fifteen (15 days following collection
from such prospective franchisee of the initial franchise fees associated with
entering into an Xxxxxx Xxxxxxxx'x Franchise Agreement under this program. Miami
Subs may, in its sole discretion, charge each co-brand restaurant an opening
fee.
3. For any prospective cc-brand restaurant whose principle(s) are not currently
a franchisee with the Miami Subs System, Miami Subs shall remit to Xxxxxx
Xxxxxxxx'x a royalty fee of two percent (2%) of the total Xxxxxx Xxxxxxxx'x
products Gross Revenue in the Restaurant on a monthly basis within ten (10) days
following the month tat the entire royalty fee is collected from the owner of
the co-brand restaurant.
4. Xxxxxx Xxxxxxxx'x further agrees to two (2) Nathan's Famous, Inc.
("Nathan's)/Xxxxxx Xxxxxxxx'x test units. There will be no royalty fees due
Xxxxxx Xxxxxxxx'x from the Nathan's/Xxxxxx Xxxxxxxx'x test units for one hundred
and twenty (120) days from the opening of each Nathan's/Xxxxxx Xxxxxxxx'x test
unit. After one hundred and twenty (120) days from the opening of each
Nathan's/Xxxxxx Xxxxxxxx'x test unit, Xxxxxx Xxxxxxxx'x shall receive a royalty
fee of two percent (2%) of the total Xxxxxx Xxxxxxxx'x gross revenue in the test
unit on a monthly basis within ten (10) days following the month the revenues
were collected. There will be no initial franchise fee charged for either of the
Nathan's/Xxxxxx Xxxxxxxx'x test units. Upon termination or expiration of the
test period, Xxxxxx Xxxxxxxx'x shall provide the owner/operator with the
approved Xxxxxx Xxxxxxxx'x franchise agreement for use with this program.
5. To maintain the exclusivity granted to Miami Subs by Xxxxxx Xxxxxxxx'x, Miami
Subs agrees that 1) between the date hereof and April 30, 2001, twelve (12)
existing Miami Subs restaurants shall be converted into co-branded restaurants
which include Xxxxxx Xxxxxxxx'x and there will be twenty-five (25) new co-
branded restaurants which include Xxxxxx Xxxxxxxx'x a 2) by April 30, 2002 there
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will be an additional twenty-five (25) new co-brandedrestaurants which include
Xxxxxx Xxxxxxxx'x be opened; and 3) each twelve (12) months thereafter there
will be an additional forty (40) new co-branded restaurants which include Xxxxxx
Treache to be opened. If there are more than the required approved in any year,
the excess will be applied to meet the requirements in the following year.
Should Miami Subs fail to meet the above schedule, Miami Subs shall lose its
right to exclusivity but shall continue to have all other rights set forth
herein and in the Miami Subs/Xxxxxx Xxxxxxxx'x Development Program Master
Agreement, including, without limitation, the right to open co-branded
restaurants with Xxxxxx Xxxxxxxx'x.
If Xxxxxx Xxxxxxxx'x is acquired by an entity which desires to terminate Miami
Subs exclusive rights to co-brand with Xxxxxx Xxxxxxxx'x, Xxxxxx Xxxxxxxx'x has
the right to terminate Miami Subs exclusivity by paying Miami Subs Fifteen
Thousand Dollars ($15,000.00) for each existing or approved Xxxxxx Xxxxxxxx'x
co-branded restaurant and Ten Thousand Dollars ($10,000.00) for each co- branded
restaurant that would have been developed or approved in accordance with the
schedule set forth above bad Miami Subs continued to have the exclusive right to
co-brand with Xxxxxx Xxxxxxxx'x for the three (3) years following the date Miami
Subs exclusivity was terminated (ie., if Miami Subs exclusivity is terminated on
April 29, 2002, then Xxxxxx Xxxxxxxx'x would pay Miami Subs $ 15)000.00 for each
existing or approved co-branded restaurant and $250,000 for the first year
following the termination and $400,000 for each of the two years thereafter).
If Xxxxxx Xxxxxxxx'x desires to cancel this Agreement for any other reason,
other than its' being acquired, then it may do so under the same terms and
conditions outlined herein, provided it so advises Miami Subs at least six (6)
months prior to the proposed date of cancellation.
In the event the exclusivity outlined herein is terminated, Miami Subs (or its
corporate affiliates) shall continue to have all other rights set forth herein,
including, without limitation, the right to open co-branded restaurants serving
Xxxxxx Xxxxxxxx'x products.
6. If Xxxxxx Xxxxxxxx'x files for bankruptcy, Xxxxxx Xxxxxxxx'x desires and
grants Miami Subs the right to continue to use the Xxxxxx Xxxxxxxx'x trademarks,
recipes, operational procedures, and other items necessary to continue to
develop and operate the co-branded restaurants, ten existing or to be opened.
Miami Subs shall retain all rights it has under this Agreement and the same
rights tat other Xxxxxx Xxxxxxxx'x franchisees have during a pending bankruptcy,
including the right to order from Xxxxxx Xxxxxxxx'x suppliers.
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7. Except as amended hereby, all of the terms arid conditions of the Development
Program Master Agreement shall continue in full force and effect and the
representation, warranties and covenants contained in the Development Program
Master Agreement shall be read to give effect to the amendments contained
herein. In the event this letter conflicts with the Development Program Master
Agreement, this letter governs.
Please execute below acknowledging your acceptance of the terms of this letter.
Sincerly,
Miami Subs Corporation
Xxxxxx Peflyn
President and
Chief Operating Officer
ACCEPTED AND AGREED:
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Chairman of the Board
Date: 05/04/99
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