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EXHIBIT 10.34
▇▇▇▇▇'▇ ROADHOUSE, INC.
[FORM OF FRANCHISE AGREEMENT]
THIS AGREEMENT made and entered into by and among ▇▇▇▇▇'▇ ROADHOUSE, INC.,
a Tennessee corporation, having its principal office at Nashville, Tennessee,
hereinafter referred to as Franchisor, CMAC Incorporated, a Tennessee
corporation, hereinafter referred to as Franchisee, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇., hereinafter referred to as ▇▇▇▇▇▇▇▇▇ or as Principal.
W I T N E S S E T H
WHEREAS, Franchisor is engaged in the business of owning, operating, and
granting franchises with respect to certain restaurants serving meat products
and other dishes, which restaurants do business under the trade name "▇▇▇▇▇'▇
Roadhouse" (each such restaurant, a "▇▇▇▇▇'▇ Roadhouse Outlet" or "Outlet");
WHEREAS, in connection with its business, Franchisor has developed certain
recipes and seasonings for meats with distinctive flavor and unsurpassed
quality and consumer recognition, and is the owner of good and valuable
trademarks, trade names, service marks, certification marks, insignia, signs,
designs, emblems, color and patterns, and other distinctive features that
identify the ▇▇▇▇▇'▇ Roadhouse Outlets (such items, together with all of
Franchisor's other trade secrets and tangible and intangible property rights
relating to the development, ownership, and operation of a ▇▇▇▇▇'▇ Roadhouse
Outlet, are hereinafter referred to as the "▇▇▇▇▇'▇ Roadhouse System" or as
"System");
WHEREAS, Franchisor, Franchisee and ▇▇▇▇▇▇▇▇▇ have entered into an Area
Development Agreement dated March 17, 1997, (the "Area Development Agreement"),
relating to the development by Franchisee of ▇▇▇▇▇'▇ Roadhouse Outlets;
WHEREAS, Franchisor and Franchisee desire to enter into this Agreement to
set forth Franchisee's rights to own and operate a ▇▇▇▇▇'▇ Roadhouse Outlet in
that certain location specified herein;
NOW THEREFORE, in consideration of the agreements and covenants set forth
herein, and Franchisee's initial payment of the sum of $30,000.00 to Franchisor
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, it is hereby agreed as follows:
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PART I
SERVICES PROVIDED BY FRANCHISOR
▇. ▇▇▇▇▇ OF FRANCHISE: Franchisor hereby grants to Franchisee, for the
term stated below and subject to the covenants and conditions herein, a
franchise to use the ▇▇▇▇▇'▇ Roadhouse System incident to the operation of a
▇▇▇▇▇'▇ Roadhouse Outlet at the premises to be located on Beacon Drive,
Greenville, South Carolina.
B. FRANCHISOR'S RIGHT TO RETAIL SYSTEM: Franchisee does acknowledge and
recognize, and Franchisor does represent and warrant, Franchisor's interest in
and exclusive right, subject to the terms of this Agreement: (i) to the ▇▇▇▇▇'▇
Roadhouse System and to its distinguishing characteristics now and from time to
time hereinafter used as a part of or in conjunction with, or application to
said System, and in all word marks, slogans, copyrighted materials, designs,
name and matter now or hereafter displayed thereon or used as part thereof,
service ▇▇▇▇ or trademark registration, trade names and patents now or
hereafter applied for or granted in connection therewith; and (ii) to grant
this franchise and to grant franchises to others to use said System and the
conduct of ▇▇▇▇▇'▇ Roadhouse Outlets under said System. Franchisee agrees that
no expressed or implied right is conferred hereby or herein upon Franchisee to
sub-license or to franchise or in any other fashion convey a complete or
partial interest in the ▇▇▇▇▇'▇ Roadhouse System. Franchisor agrees to take
all action necessary to maintain, preserve, and protect Franchisor's rights
that are subject to this Agreement, including without limitation, the ▇▇▇▇▇'▇
Roadhouse System and any related rights, privileges, or licenses.
C. CONSULTATION: Franchisor shall advise and consult with Franchisee
periodically in connection with the operation of the Outlet, and at other
reasonable times upon Franchisee's request. Franchisee may contact Franchisor
by telephone to request consultation about Franchisee's business without any
expense to Franchisee. If Franchisee shall request consultation of a nature
which Franchisor deems to require the travel or on-site assistance of
Franchisor or its agents or authorized employees, Franchisee shall assume the
reasonable costs associated with travel, research and other support for
Franchisor or its agents or authorized employees.
D. OPENING ASSISTANCE: Franchisor will assist Franchisee in coordinating
the Outlet's pre-opening activities. For approximately eight (8) days prior to
the opening of the ▇▇▇▇▇'▇ Roadhouse Outlet operated by Franchisee and for the
first two (2) weeks that such Outlet is open for business, Franchisor shall
provide Franchisee, at Franchisee's expense, with the
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services of certain of Franchisor's personnel to facilitate proper operation of
the kitchen, bar and dining room areas during that period and to assist,
as more fully described and defined in the Logan's Operations Manual prepared
and provided by Franchisor (the "Operations Manual"), in correcting any
operational problems which may arise.
E. TRAINING:
1. TRAINING COURSE: Franchisor shall make its operations training course
available, at a minimum, to the Franchisee's General Manager (defined below)
and the Kitchen Manager (defined below). Before the Outlet opens for business,
and thereafter as replacement personnel are employed by Franchisee, the General
Manager and the Kitchen Manager shall attend Franchisor's operations training
course for such period of time as Franchisor shall deem reasonably necessary,
and shall complete that course to Franchisor's reasonable satisfaction. If the
General Manager and/or Kitchen Manager fails to complete Franchisor's
operations training course successfully, Franchisor may require designation of
a new General Manager and/or Kitchen Manager, as the case may be, and
Franchisee shall designate a new General Manager and/or Kitchen Manager, who
shall be required to complete successfully such training course. Additional
training involving Franchisor's training crew at Franchisee's Outlet shall be
conducted in accordance with the provisions of the Operations Manual.
2. EXPENSES: Franchisee shall pay all costs and expenses relating to the
attendance of Franchisee's personnel at any of Franchisor's training courses,
including, without limitation, the cost of travel, lodging, meals, uniforms and
other related and incidental expenses.
3. INADEQUATE TRAINING: Franchisee shall be responsible for the ▇▇▇▇▇'▇
Roadhouse Outlet's compliance with the operating standards, methods, techniques
and material taught at Franchisor's training course, and shall cause the
employees of the ▇▇▇▇▇'▇ Roadhouse Outlet to be trained in such standards,
methods and techniques as are relevant to the performance of their respective
duties. In the event that Franchisee fails to provide reasonably adequate
training of its ▇▇▇▇▇'▇ Roadhouse Outlet employees, Franchisor shall have the
right to require such training and may insert qualified personnel. Such
assistance shall be provided at the sole cost of the Franchisee.
F. PURCHASING: The significant market impact associated with the
purchases made collectively by the ▇▇▇▇▇'▇ Roadhouse System are of substantial
benefit and assistance to the Franchisee both from a cost standpoint as well as
the availability and delivery of products. In the event that Franchisor
undertakes to serve as a supplier for ▇▇▇▇▇'▇ Roadhouse Outlets, Franchisee
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may elect, but shall not be obligated to purchase any goods available
through the Franchisor. It is expressly understood and agreed that Franchisee
shall purchase and utilize all products and ingredients used in the ▇▇▇▇▇'▇
Roadhouse System, only from Franchisor or those manufacturers or distributors
and other sources approved by Franchisor. All items purchased from or through
Franchisor shall be made available to the Franchisee at a reasonable cost which
shall include a profit for Franchisor.
PART II
RIGHTS AND DUTIES OF FRANCHISEE AND PRINCIPAL
A. PROVIDE MANAGEMENT: The Franchisee or its designees shall have sole
managerial control and authority with respect to the ▇▇▇▇▇'▇ Roadhouse Outlet
franchise which is granted under the terms of this Agreement.
B. COMPLIANCE WITH THE SYSTEM:
1. Franchisee shall designate an individual who will supervise the ▇▇▇▇▇'▇
Roadhouse Outlet, and devote his or her full time, best efforts and constant
personal attention to the day-to-day operation of ▇▇▇▇▇'▇ Roadhouse Outlet (the
"General Manager"). Franchisor also shall designate an individual who will
supervise ▇▇▇▇▇'▇ Roadhouse Outlet kitchen, and devote his or her full time,
best efforts and constant personal attention to the day-to-day operation of
▇▇▇▇▇'▇ Roadhouse Outlet kitchen (the "Kitchen Manager").
2. Franchisee expressly agrees to:
(a) operate ▇▇▇▇▇'▇ Roadhouse Outlet in a clean, safe
and orderly manner, providing courteous, first-class service
to the public;
(b) diligently promote and make every reasonable effort to
increase the business of ▇▇▇▇▇'▇ Roadhouse Outlet;
(c) advertise the business of ▇▇▇▇▇'▇ Roadhouse Outlet by the
use of Franchisor's trade names, service marks and trademarks and
such other insignia, slogans, emblems, symbols, designs and other
identifying characteristics as may be developed or established from
time to time by Franchisor;
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(d) prohibit and, to the best of Franchisee's ability, prevent
the use of ▇▇▇▇▇'▇ Roadhouse Outlet for any immoral or illegal
purpose, or for any other purpose, business activity, use of
function which is not expressly authorized hereunder or in the
Operations Manual.
3. Franchisee hereby acknowledges receipt and loan of a copy of the
Operations Manual, and agrees to faithfully, completely and continuously
perform, fulfill, observe and follow all instructions, requirements, standards,
specifications, systems and procedures contained therein, including (a) those
relating to the selection, purchase, storage, preparation, packaging, service
and sale of all products being sold at ▇▇▇▇▇'▇ Roadhouse Outlet, (b) those
relating to the maintenance and repair of ▇▇▇▇▇'▇ Roadhouse Outlet buildings,
grounds, equipment, signs, interior and exterior decor items, fixtures and
furnishings, and (c) those relating to employee uniforms and dress, accounting,
bookkeeping, record retention and other business systems, procedures and
operations. The Operations Manual is incorporated herein by reference and
hereby made part of this Agreement. Franchisee acknowledges that the materials
contained in the Operations Manual are integral, necessary and material
elements of the System. Franchisee acknowledges receipt herewith of a copy of
Franchisor's Operations Manual, which must be returned on expiration or
termination of this Agreement.
4. Franchisee understands, acknowledges and agrees that strict conformity
with the System, including the standards, specifications, systems, procedures,
requirements and instructions contained in this Agreement and in the Operations
Manual, is vitally important not only to the success of Franchisor, but to the
collective success of all of Franchisor's other franchisees, by reason of the
benefits which Franchisor and all of its franchisees will derive from
uniformity in products sold, identity, quality, appearance, facilities and
service among all restaurant units which are part of the System.
5. Franchisor shall have the right at any time and from time to time, in
the good faith exercise of its reasonable business judgment, consistent with
the overall best interests of the System generally, to revise, amend, delete
from and add to the System and the material contained in the Operations Manual.
Franchisee expressly agrees to comply with all such revisions, amendments,
deletions and additions.
6. Franchisee shall offer for sale from ▇▇▇▇▇'▇ Roadhouse Outlet, at all
times when ▇▇▇▇▇'▇ Roadhouse Outlet is open for business, only the products
which are expressly designated in the Operations Manual, except to the extent
that Franchisee has obtained Franchisor's prior written consent to a
modification of that requirement. No product shall be offered or sold at or
from ▇▇▇▇▇'▇ Roadhouse Outlet under, or in connection with, any trademark or
service ▇▇▇▇ other than Franchisor's designated
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trademarks and service marks without Franchisor's prior written consent.
7. No food or beverage product, interior or exterior decor item, sign,
item of equipment, fixtures, furnishings or supplies, or other product or
material required for the operation of ▇▇▇▇▇'▇ Roadhouse Outlet, which bears
any of Franchisor's trade names, service marks or trademarks, shall be used or
sold in or upon ▇▇▇▇▇'▇ Roadhouse Outlet premises unless the same shall have
been first submitted to and approved in writing by Franchisor.
8. Franchisee acknowledges that every component of the System is
important to Franchisor, to all franchisees and to the operation of each
▇▇▇▇▇'▇ Roadhouse Outlet, including the requirements (a) that only those
products designated and approved by the Franchisor are sold at the Outlet, and
(b) that there is uniformity of food and beverage specifications, preparation
methods, quality, appearance, facilities and service among all Outlets in the
System. Accordingly, Franchisee agrees to and shall comply with all aspects of
the System (as it now exists and as it may be modified from time to time).
C. RELATIONSHIP OF PARTIES: Franchisee is not, and shall not represent or
hold itself out as, an agent, legal representative, joint venturer, partner,
employee or servant of Franchisor for any purpose whatsoever and, where
permitted by law to do so, shall file a business certificate to such effect
with the proper recording authorities. Franchisee is an independent contractor
and is not authorized to make any contract, agreement, warranty or
representation on behalf of Franchisor. Franchisee agrees that Franchisor does
not have any fiduciary obligation to Franchisee. Franchisee shall not use the
name Logan's or ▇▇▇▇▇'▇ Roadhouse or any similar words as part of or in
association with any trade name of any business entity which is directly or
indirectly associated with Franchisee, except for the Outlet.
D. USE OF INTELLECTUAL PROPERTY:
1. Trademark License. Franchisee shall use the trademarks, trade names,
and other commercial symbols ("the Marks") that are part of the ▇▇▇▇▇'▇
Roadhouse System only in connection with the operation of a ▇▇▇▇▇'▇ Roadhouse
Outlet under this Agreement and Franchisor agrees to license such uses.
Franchisee shall not use or permit to be used any other name or names alone or
in connection with a ▇▇▇▇▇'▇ Roadhouse Outlet during the term of this
Agreement without the prior consent of Franchisor. All trademarks, tradenames,
and other identifying marks of the ▇▇▇▇▇'▇ Roadhouse System shall be used by
Franchisee only in such fashion as shall not adversely affect the validity or
value thereof. Franchisee agrees that it will cause to appear on or within
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materials created or used under this trademark license and on or within all
advertising, promotional or display material bearing the Marks, the designation
(TM) or (R) as directed by Franchisor.
2. Copyright License. Franchisor hereby provides a license for Franchisee
to use certain copyrighted materials belonging to Franchisor. Franchisee
agrees to use the copyrighted materials provided under this license solely for
the operation of a ▇▇▇▇▇'▇ Roadhouse Outlet under this Agreement. Franchisee
shall not use or permit to be used the copyrighted materials outside the
operation of the ▇▇▇▇▇'▇ Roadhouse Outlet under this Agreement. Franchisee
agrees that it will cause to appear on or within materials created or used
under this copyright license and on or within all advertising, promotional or
display materials containing the copyrighted materials, designations showing
copyright ownership as directed by Franchisor.
E. ENGAGEMENT IN BUSINESS: Franchisee shall commence the operation of its
▇▇▇▇▇'▇ Roadhouse Outlet promptly after a certificate of occupancy (temporary
or permanent) or the local equivalent thereof, is issued for the ▇▇▇▇▇'▇
Roadhouse Outlet, and shall continue to operate same at all times during the
term of this Agreement. Franchisee agrees to keep its ▇▇▇▇▇'▇ Roadhouse Outlet
open during such hours as are specified by Franchisor in its Operations Manual,
to include both lunch and dinner every day except for Thanksgiving and
Christmas, unless Franchisor agrees otherwise in writing or unless operation is
made impossible because of Acts of God or similar circumstances wholly beyond
Franchisee's control as more fully set forth in Section VIII (H).
F. NO OTHER BUSINESS OPERATED ON PREMISES: No business other than the
operation of a ▇▇▇▇▇'▇ Roadhouse Outlet shall be conducted upon the premises
approved for such operation.
G. LOCAL LAWS AND ORDINANCES: Franchisee shall comply with all laws,
regulations, ordinances, or similar governmental restrictions, applicable to
the ▇▇▇▇▇'▇ Roadhouse Outlet. It is the duty and obligation to ascertain the
terms and provisions of all such laws, regulations, ordinances and restrictions
and inform its employees thereof so as to avoid any violation thereof. Should
any provisions of this Agreement or any aspect of the ▇▇▇▇▇'▇ Roadhouse System
be in conflict with the provisions of any laws, regulations, ordinances, or
similar governmental restrictions, Franchisee is absolved from compliance with
said provisions to the extent necessary to avoid such conflict.
H. TAXES: Franchisee shall pay or cause to be paid promptly when due all
obligations incurred directly or indirectly in connection with the ▇▇▇▇▇'▇
Roadhouse Outlet and its operation, including without limitation, all taxes and
assessments that may be assessed and all liens and encumbrances of every kind
and character
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created or placed upon or against any of the equipment, fixtures,
signs, furnishings and other property, and all accounts and other indebtedness
of every kind and character incurred by or on behalf of Franchisee in the
conduct of the business.
I. SUBMISSION OF OPERATING REPORTS: Franchisee shall submit to Franchisor
a year end operating statement, sales tax reports, income tax returns, and
other operational reports and supporting data, including any information
necessary for Franchisor to verify the amount of fees properly due to
Franchisor under Part III paragraph A of this Agreement.
J. INSURANCE AND INDEMNIFICATION:
1. Franchisee shall indemnify and hold harmless Franchisor and its
officers, directors, employees, agents, affiliates, successors and assigns from
and against: (a) any and all claims based upon, arising out of, or in any way
related to the operation or condition of any part of the ▇▇▇▇▇'▇ Roadhouse
Outlet or its premises, the conduct of business thereat, the ownership or
possession of real or personal property, and any negligent act, misfeasance or
nonfeasance by Franchisee or any of its agents, contractors, servants,
employees or licensees (including without limitation, the performance by
Franchisee of any act required by, or performed pursuant to, any provision of
this Agreement); (b) any and all fees (including reasonable attorneys' fees),
costs and other expenses incurred by or on behalf of Franchisor in the
investigation of or defense against any and all such claims; and (c) any
accident, incident or occurrence of any kind whatsoever which happens on, in or
about the premises of the ▇▇▇▇▇'▇ Roadhouse Outlet.
2. Without limiting the generality of the foregoing Subsection (J)(1),
Franchisee shall procure before the commencement of operations of the ▇▇▇▇▇'▇
Roadhouse Outlet, and shall maintain in full force and effect during the entire
term of this Agreement, at its sole cost and expense, an insurance policy or
policies protecting Franchisee and Franchisor and their respective officers,
directors and employees against any and all claims, loss, liability, or expense
whatsoever, arising out of or in connection with the condition, operation, use
or occupancy of the Outlet or Outlet premises. Franchisee shall insure the
Outlet building and other improvements, equipment, signs, interior and exterior
decor items, furnishings, fixtures, and any additions thereto, against fire and
other casualties insured against in an "all risk" of physical loss insurance
policy. Franchisor shall be named as an additional insured in all such
policies, workers' compensation excepted, and the certificate or certificates
of insurance shall state that the policy or policies shall not be subject to
cancellation or alteration without at least thirty (30) days' prior written
notice to Franchisor.
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Such policy or policies shall be written by a responsible insurance company or
companies satisfactory to Franchisor, and shall be in such form and contain
such limits of liability as shall be satisfactory to Franchisor from time to
time. In any event, such policy or policies shall include at least the
following:
KIND OF INSURANCE MINIMUM LIMITS OF LIABILITY
Workers' Compensation Statutory
Comprehensive General Public
Liability including Product $1,000,000 each person,
Liability, Injury and Host $1,000,000 each
Liquor Liability occurrence
Fire and Extended Coverage Full replacement value/
All risk coverage including
flood and earthquake
Umbrella Liability Insurance $3,000,000
Franchisee shall deliver certificates of such insurance to Franchisor. The
insurance afforded by the policy or policies respecting public liability shall
be primary and shall not be limited in any way by reason of any insurance which
may be maintained by Franchisor.
3. Within sixty (60) days after the execution of this Agreement, but in no
event later than the day before the Outlet opens for business, Franchisee shall
submit to Franchisor for approval certificates of insurance showing compliance
with the requirements of Subsection J(2) above. Maintenance of such insurance
and the performance by Franchisee of its obligations under this Section J shall
not relieve Franchisee of liability under the indemnity provisions of this
Agreement, and shall not limit such liability.
4. Should Franchisee, for any reason, fail to procure or maintain the
insurance coverage required by this Section, then Franchisor shall have the
right and authority to immediately procure such insurance coverage and to
charge the cost thereof to Franchisee, which amounts shall be paid immediately
upon notice and shall be subject to charges for late payments as provided in
Paragraph III(A).
5. No later than thirty (30) days following Franchisee's receipt of same,
Franchisee shall submit to Franchisor a copy of any written report relating to
the condition of the Outlet premises, or any aspect thereof, prepared by an
insurer or prospective insurer or by a representative of a federal, state or
local government agency, provided that if any such report contains
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comments or information which could materially and detrimentally affect the
Outlet, such report shall be submitted to Franchisor within three (3) days
following Franchisee's receipt thereof.
K. STATEMENT OF LEGAL COMPOSITION:
Franchisee and Principal represent and warrant that: (a) Franchisee is a
corporation validly existing; (b) Franchisee is duly qualified and is
authorized to do business in the jurisdiction in which its business activities
or the nature of the properties owned by it requires such qualification; (c)
the execution and delivery of this Agreement and the transactions contemplated
hereby are within Franchisee's power; (d) the execution and delivery of this
Agreement has been duly authorized by the Franchisee; (e) the balance sheet for
the most recent date for which such statement is available, heretofore
delivered to Franchisor, is complete and correct, has been prepared in
accordance with sound accounting principles and fairly presents the financial
position of Franchisee, as of the date thereof; and (f) there have been no
materially adverse changes in the condition, assets of liabilities of
Franchisee or Principal since the date of the most recent balance sheet
heretofore delivered to Franchisor. In addition to the financial information
which Franchisee is required to provide to Franchisor under this Section,
Franchisee and Principal shall provide Franchisor with such other financial
information as Franchisor may reasonably request from time to time, including,
but not limited to, an audited balance sheet and income statement of Franchisee
when such statements become available.
L. OUTLET SPECIFICATIONS: It is understood and agreed that the aesthetic
appeal and efficiency of each ▇▇▇▇▇'▇ Roadhouse Outlet plays a vital and
integral role in the combined marketing efforts of Franchisor and Franchisee.
Franchisee shall update the signs, furnishings, fixtures and all other aspects
of its Outlet's external and internal design and decor so as to stay current
with the decor of other prudently-operated Outlets. Specifically, Franchisee
shall, at a minimum, comply with all standards set forth in the Operations
Manual.
M. RENOVATION: Franchisee shall periodically renovate and maintain the
furnishings, fixtures and any other aspect of the ▇▇▇▇▇'▇ Roadhouse Outlet that
would otherwise materially adversely affect the public image of ▇▇▇▇▇'▇
Roadhouse Outlets generally or of Franchisor. In the event that Franchisee
shall fail to do so, Franchisor may by written notice require Franchisee to
make any alterations that the management of Franchisor reasonably deems
necessary to maintain such image.
N. QUALITY: The quality of products sold through the ▇▇▇▇▇'▇ Roadhouse
Outlet of Franchisee shall be maintained at all times consistent with the
standards in the Operations Manual. In
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the event of a substantial erosion in quality at the Franchisee's ▇▇▇▇▇'▇
Roadhouse Outlet, Franchisor may by written notice require Franchisee to make
any changes that the management of Franchisor reasonably deems necessary to
restore acceptable product quality.
O. MODERNIZATION OF PREMISES: In order to assure the continued success of
the Outlet, Franchisee shall at any time and from time to time after ten (10)
years after the date of this Agreement as reasonably required by Franchisor
(taking into consideration the cost and then-remaining term of this Agreement),
modernize the Outlet premises to Franchisor's then-current standards and
specifications, provided that at the time Franchisor requires Franchisee to so
modernize the Outlet premises at least twenty-five percent (25%) of
Franchisor-owned Outlets meet such standards and specifications.
P. EMPLOYEES: The employees of a ▇▇▇▇▇'▇ Roadhouse Outlet are to be
adequately trained in personal appearance, neat, polite and in general keeping
with the employees of other ▇▇▇▇▇'▇ Roadhouse Outlets. Should substantial
complaint or rebuke be brought to the Franchisor's attention with regard to
Franchisee's employees, Franchisor may file a written request for disciplinary
action against the employee involved, and Franchisee shall take reasonable
steps to remedy, correct, remove or in any other fashion eliminate such
detrimental conduct on the part of the employee.
Q. ADVERTISING:
1. ADVERTISING FUND: Franchisee, as its contribution towards an
advertising fund, shall pay Franchisor up to one (1%) percent of Franchisee's
gross sales per month, calculated as set forth in this Agreement at Part III
(A). Such funds shall become the property of Franchisor, to be maintained in a
separate "advertising account" established by Franchisor. Franchisor shall use
such funds for marketing studies or services, the payroll expenses related to
any employee of Franchisor responsible for coordination of Franchisee's
advertising and for the purchase of advertising time, space, or materials in
national, regional or other advertising media, in a manner determined by
Franchisor in its sole discretion.
2. LOCAL ADVERTISING: Franchisor may require, at its sole discretion,
Franchisee to expend on an annual basis an amount up to three percent (3%) of
Franchisee's total gross sales, calculated as set forth in this Agreement at
Part III (A), for local promotional activities. All of the Franchisee's local
promotional activities shall utilize approved advertising media. "Approved
advertising media" are limited to the following:
(a) Newspapers, magazines and other such periodicals;
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(b) Radio and television;
(c) Outdoor advertising by signs displayed on billboards or buildings;
and
(d) Handbills, flyers and direct mail.
3. ADVERTISING CAMPAIGN PLAN: Franchisee shall submit to Franchisor for
Franchisor's approval an advertising campaign plan relating to the promotion of
the opening of the Outlet.
R. LEASE PROVISIONS REGARDING TERMINATION: If the premises are leased by
Franchisee from a third party, the lease (the "Lease") must allow Franchisee to
assign the Lease to Franchisor without the consent or approval of the lessor
under the Lease. Upon termination of this Agreement for any reason, Franchisor
has the right, exercisable upon written notice to Franchisee within 30 days
after termination is effective, to require Franchisee to assign all
Franchisee's rights under the Lease to Franchisor and to immediately surrender
possession of the premises, including all fixtures and leasehold improvements,
to Franchisor under the terms of the Lease. The lessor may not impose any
assignment fee or other similar charge on Franchisor in connection with such
assignment. If Franchisor exercises that right, (i) it will, within 30 days
after taking possession of the premises, purchase the leasehold improvements
thereon at their depreciated book value as determined in accordance with
generally accepted accounting principles, and (ii) it has an additional right,
to be exercised within 30 days after taking possession of the premises, to
purchase all of Franchisee's equipment, signs, decor items, furnishings,
supplies and other products and materials at their then fair market value. If
Franchisor elects not to purchase the items mentioned above (except for capital
leasehold improvements), Franchisee shall, at Franchisee's own expense and
under Franchisor's supervision remove those items (except for capital leasehold
improvements) from the premises within 10 days after such final election or 10
days after expiration of the option period, whichever is earlier. If
Franchisee fails to remove all such property (except for capital leasehold
improvements) from the premises within such period, Franchisor shall be
entitled to do so, or to authorize a third part to do so, all at Franchisee's
expense. If Franchisee is or becomes a lessee of the premises, Franchisee
shall have included in the Lease a provision expressly permitting both
Franchisee and Franchisor to take all actions and make all alterations referred
to in this Part, requiring the lessor thereunder to give Franchisor reasonable
notice of any contemplated termination and providing that any assignment of the
lease to Franchisor shall occur without the lessor having any right to impose
conditions on such assignment or to obtain any payment in connection
therewith. Franchisee shall not, without the prior
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written consent of Franchisor, execute any lease or other agreement
which imposes, or purports to impose, any limitations on the ability of
Franchisee and/or Franchisor to operate additional restaurants at any
particular location or any lease the term of which is shorter than the term of
this Agreement (including any renewal and extension option periods).
S. COLLATERALIZATION OF PREMISES: Franchisee shall seek prior approval
from Franchisor of any and all plans or attempts to use any tangible or
intangible asset of the premises as collateral, including but not limited to
the premises, fixtures, furnishings, merchandise or income stream.
T. PERSONAL GUARANTY OF PRINCIPAL: Principal personally and
unconditionally guarantees Franchisee's financial obligations to Franchisor as
set forth in Part III, Section A hereof. Principal agrees that Franchisor may
resort to such Principal for payment of such financial obligation, whether or
not Franchisor shall have proceeded against Franchisee, any other Principal or
any other obligor primarily or secondarily obligated to Franchisor with respect
to such financial obligation. Principal hereby expressly waives presentment,
demand, notice of dishonor, protest and all other notices whatsoever with
respect to Franchisor's enforcement of this guaranty.
PART III
TERMS
A. CONSIDERATION: Franchisee shall pay Franchisor the initial sum of
$30,000 upon signing this Agreement and, after Franchisee opens its Outlet,
shall also pay no later than ten (10) days from the end of each calendar month
a sum equal to three percent (3%) of "Gross Sales" as hereinafter defined as
royalties from the ▇▇▇▇▇'▇ Roadhouse Outlet operated under the franchise
granted by or under this Agreement. For the purposes of this Agreement, the
term "Gross Sales" shall be defined as all receipts (cash, cash equivalents or
credit) or revenues from sales from all business conducted upon or from the
▇▇▇▇▇'▇ Roadhouse premises, whether evidenced by check, cash, credit, charge
account, exchange, or otherwise, including, but not limited to, amounts
received from the sale of goods, wares and merchandise (including sales of
food, beverages and tangible property of every kind and nature, promotional or
otherwise), from all services performed from or at the ▇▇▇▇▇'▇ Roadhouse
Outlet, regardless of where such orders are filled. Gross sales shall not be
reduced by any deductions for cash shortages incurred in connection with the
transaction of business with customers. Each charge or sale upon installment
or credit shall be treated as a sale for the full price in the month during
which such charge or sale shall first be made, irrespective
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of the time when Franchisee shall receive payment (whether full or partial)
therefor. Gross Sales shall not include the amount of any sales tax imposed by
any federal, state, municipal or other governmental authority directly on sales
and intended to be collected from customers, provided that the amount thereof
is added to the selling price and actually paid by the Franchisee to such
governmental authority. Income, property, and other like taxes paid by
Franchisee shall not be excluded from Gross Sales. In addition Franchisor
shall have the right to assess Franchisee an automatic penalty of one and
one-half percent (1 1/2%) per month or the highest amount permitted by law,
whichever is less, for any unpaid balance of fees or any other sums which have
become known to Franchisor are due and payable under the terms of this
Agreement.
B. DEFAULT: Franchisee shall be deemed to be in default of this
provision when royalties remain unpaid for a period of thirty (30) days past
the due date specified in Section A above, or if Franchisee is found to have
understated its gross sales by an amount equal to or greater than two percent
(2%) of the gross sales set forth in its monthly report to Franchisor. In the
event of default, Franchisor will have, without limitation, the rights and
remedies set out in Part V of this Agreement and any other rights and remedies
available to it in law or equity.
C. METHOD OF PAYMENT: Franchisee shall make all payments required under
the terms of this Agreement to ▇▇▇▇▇'▇ Roadhouse, Inc. located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, by check or by wire transfer in
United States dollars from a U.S. bank to such account(s) as may be designated
by Franchisor from time to time or on other terms as specifically requested in
writing by Franchisor. Such other terms shall include, but are not limited to
checks, certified bank drafts or any other reasonable form of payment so
designated by Franchisor.
D. TERM: The term of the franchise shall commence on the date hereof, and
shall end twenty (20) years thereafter unless this Agreement is terminated
prior to that date in accordance with its provisions or unless renewed as
provided in the following paragraph (E).
E. RENEWAL: At the expiration of the term hereof, Franchisee shall have
an option to operate the ▇▇▇▇▇'▇ Roadhouse Outlet for up to two additional
terms of five (5) years each (unless this Agreement is sooner terminated in
accordance with its provisions), provided that (a) Franchisee satisfies the
requirements which Franchisor then imposes on its new franchisees, (b) all
other units within the System which Franchisee then operates comply with
Franchisor's then current standards, specifications, requirements and
instructions, and (c) Franchisee
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executes the form of franchise agreement which Franchisor is then using with
respect to new franchises, with the specified franchise, royalty, and
advertising fees payable up to, but not to exceed, the rates then prevailing
under the franchise agreements which Franchisor is then using for new ▇▇▇▇▇'▇
Roadhouse outlets. Franchisee shall give Franchisor written notice of its
desire to exercise its option no earlier than twelve (12) months, and no later
than seven (7) months, prior to expiration of the initial term. If Franchisee
gives that notice, Logan's in its sole discretion shall determine whether
Franchisee has satisfied the foregoing requirements. Within thirty (30) days
of receiving the notice described above, Logan's shall notify Franchisee in
writing whether or not Franchisee is eligible to exercise the option described
in this section.
PART IV
CONTROLS
A. RIGHT OF INSPECTION: Franchisor or its authorized representatives
shall have the right to inspect Franchisee's ▇▇▇▇▇'▇ Roadhouse Outlet,
equipment and operations, and have access to the premises whereon the ▇▇▇▇▇'▇
Roadhouse Outlet are operated to insure the adherence to the high quality
standards of a ▇▇▇▇▇'▇ Roadhouse Outlet and to further insure the compliance
with the terms of this Agreement. Such inspections shall be made during normal
business hours, and Franchisor may conduct the inspections with or without
notice. In no event shall the Franchisor conduct any inspection in a manner
that would impede or unduly hamper the operation of the Franchisee's ▇▇▇▇▇'▇
Roadhouse Outlet or the activities of the Franchisee or its agents.
B. AUDIT: Franchisor shall have the right to request Franchisee to
present at the corporate offices of Franchisee a complete copy of all
bookkeeping material, journals and other methods or ledgers employed for such
purposes, and Franchisor or his authorized agent shall have the right to an
on-premises inspection during normal business hours of the foregoing material.
In no event shall the Franchisor conduct any audit in a manner that would
impede or unduly hamper the operation of the Franchisee's ▇▇▇▇▇'▇ Roadhouse
Outlet or the activities of the Franchisee or its agents. Franchisor may
conduct audits with or without notice to Franchisee.
C. RULES OF OPERATION: To enable Franchisee and Franchisor to develop,
maintain and exchange cost and expense information to assure the maintenance of
economical and efficient and profitable operations, Franchisee shall adopt
prudent accounting and record keeping procedures, and shall keep complete and
accurate financial books and records of the operation of its
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▇▇▇▇▇'▇ Roadhouse Outlet, adjusted, if necessary, to correspond in accounting
policy with Logan's financial books and records.
PART V
TERMINATION
A. BY MUTUAL AGREEMENT: The parties to this Agreement may agree in
writing at any time to terminate the franchise prior to the stated expiration
date.
B. OTHERWISE: Franchisor shall have the right to terminate this Agreement
immediately upon written notice to Franchisee stating the reason for such
termination if any of the following events ("Events of Default") occur:
(1) Franchisee's default in the performance or observance of any of its
other obligations hereunder, with such default continuing for a period of
thirty (30) days after written notice to Franchisee specifying such default or
if Franchisee is notified of more than two Events of Default in one year;
(2) Franchisee's filing of a petition in bankruptcy, an arrangement for
the benefit of creditors, or a petition for reorganization, or the filing by
any third party of such petition or arrangement, if not dismissed within sixty
(60) days from the filing thereof, or Franchisee's making of any assignment for
the benefit of creditors, or the appointment of a receiver or trustee for
Franchisee and the non-dismissal of such receiver or trustee within sixty (60)
days of such appointment;
(3) Franchisee's voluntary cessation of operation of the Outlet without
the prior written consent of Franchisor or Franchisee's loss of right to
possess the Outlet premises for any reason;
(4) Franchisor's discovery that Franchisee has made any material
misrepresentation or omitted any material fact in the information supplied to
Franchisor in connection with this Agreement;
(5) the declaration by any court of competent jurisdiction that any part
of this Agreement relating to the payment of fees to Franchisor or the
preservation of any of Franchisor's trade names, service marks, trademarks,
trade secrets or secret formulae licensed or disclosed hereunder is invalid or
unenforceable;
(6) Franchisee's default in the payment to Franchisor of any sums due
Franchisor, whether characterized as
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consideration/Franchise fee, advertising fund contribution, or otherwise, with
such default continuing for a period of thirty (30) days after written notice
to Franchisee specifying such default; or
(7) any person or group (as such term is defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) other than Principal becomes
holder of 50% or more of all of the outstanding shares of Franchisee's Stock.
C. TERMINATION SUBJECT TO LOCAL LAW: The foregoing provisions of Part V,
section B are subject to the provisions of any local statutes or regulations
which limit the grounds upon which Franchisor may terminate this Agreement or
which require that Franchisor give Franchisee additional prior written notice
of termination and opportunity to cure any default.
D. STATUS OF PROPERTY: Upon the termination of this Agreement by
Franchisor, Franchisee may not remove any property from the Outlet premises for
thirty (30) days after the termination. Upon expiration or termination of this
Agreement for any reason, and if Franchisor chooses not to exercise its options
to purchase the Outlet as contained herein, Franchisee shall immediately
discontinue its use of the System and its use of Franchisor tradenames, service
marks, trademarks, logos, insignia, slogans, emblems, symbols, designs and
other identifying characteristics (including but not limited to, the immediate
removal of all signs) and paint all premises and other improvements maintained
pursuant to this Agreement a design and color which is basically different from
Franchisor authorized designs and colors. If Franchisee shall fail to make or
cause to be made any such removal or repainting within thirty (30) days after
written notice, then Franchisor shall have the right to enter upon the
premises, without being deemed guilty of trespass or any tort, and make or
cause to be made such removal, alterations and repainting at the reasonable
expense of Franchisee, which expense Franchisee shall pay to Franchisor
immediately on demand. Franchisee shall not thereafter use any of the items
referred to in this paragraph or in any way associated with Franchisor to
operate or do business under any name or in any manner that might tend to give
the public the impression that Franchisee is or was a licensee or franchisee
of Franchisor.
E. TERMINATION OF FRANCHISE: Should an event of Default occur, then in
addition to its other rights and remedies hereunder, the Franchisor may,
without further demand or notice, immediately declare this Agreement and the
license included herein, and all rights and privileges of this Agreement, to be
terminated with respect to the affected ▇▇▇▇▇'▇ Roadhouse Outlet in accordance
with this Part. In the event of any termination, Franchisee shall be liable
for damages to Franchisor for any and all amounts due to Franchisor on the
effective date of such termination.
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F. NONCOMPETITION FOLLOWING TERMINATION OF FRANCHISE: For a period of
two (2) years following the date of termination or expiration of this
Agreement, each of Franchisee and Principal agree not to compete, either as an
individual, employee, officer or in any other capacity, in any entity engaged
in the business of preparing and serving or preparing for service of steaks,
ribs, chicken and seafood dishes in a distinctive atmosphere reminiscent of an
American roadhouse anywhere within a fifty (50) mile radius of any existing or
planned Company or franchised Outlet. Franchisee further agrees that for a
period of one (1) year following termination, it will not solicit any
previously serviced accounts, groups or other commercial customers (not
including retail customers) for or on behalf of any competitive casual dining
restaurant whether such food is served on the premises or delivered off
premises to the ultimate consumer.
G. RIGHTS OF FRANCHISOR POST-TERMINATION:
1. RIGHT TO TERMINATE FRANCHISEE'S USE OF TRADENAMES, SIGNS, AND THE
LIKE: In the event of termination of this Agreement, Franchisor shall have the
right as set forth above in Part V(B), and shall require Franchisee to
immediately thereafter cease to use, by advertising or otherwise, directly or
indirectly, the name "▇▇▇▇▇'▇ Roadhouse" or any combination of words similar
thereto, or suggestive thereof, the trade names, copyrighted materials,
trademarks, service marks, certification marks, color schemes and patterns,
slogans, designs, signs, emblems provided by Franchisor or in any way similar
thereto or suggestive thereof, and Franchisee agrees upon any such termination
to cease and refrain from holding Franchisee out to the public in any way as a
Franchisee or licensee or operator of a ▇▇▇▇▇'▇ Roadhouse Outlet.
Notwithstanding the foregoing, upon termination of this Agreement, Franchisee
shall retain the right to continue in the business of developing, owning,
operating, and franchising restaurant businesses, including restaurant
businesses specializing in meat products; provided, that in such endeavors
Franchisee shall differentiate its retail food establishments so clearly from
those of the Franchisor as to avoid all reasonable possibility of any
confusion by the public.
2. FRANCHISOR'S REMEDIES: Franchisee agrees that Franchisor has no
adequate remedy at law and shall be entitled to injunctive and equitable relief
for any violation of paragraph 1 above and any and all other or further relief
that a court of competent jurisdiction shall see fit to render for the
violation of this paragraph, and Franchisee agrees to pay all Franchisor's
costs and expenses, including a reasonable attorney's fee in enforcing the
terms of paragraph 1 or any other part of this Agreement as a result of
Franchisee's violation of or default in performing the terms of paragraph 1.
Franchisor shall have the right, in addition to any and all other rights
guaranteed by law or this Agreement, to
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enter Franchisee's property, forcibly if necessary without being guilty of
trespass or any other tort, to make or cause changes required by this paragraph
to be made at Franchisee's expense and to remove items belonging to Franchisor
or containing Franchisor's trademarks, copyrighted materials or other
proprietary items.
3. PURCHASE OF PREMISES:
a. With respect to premises owned by Franchisee, in the event of
termination or expiration of this Agreement, Franchisor shall have, for 30 days
after the termination or expiration is effective, an option, exercisable upon
written notice, to Franchisee within such 30 day period, to elect to purchase
the premises from Franchisee for the appraised market value of the land and
buildings, furnishings and equipment located therein. If the parties cannot
agree on the purchase price or other terms of purchase within 30 days following
Franchisor's exercise of its option pursuant to this section, the price or
disputed terms of purchase shall be determined by two appraisers, with each
party selecting one appraiser. The purchase price shall be the average of the
appraised market value of the land and building if the two appraisals do not
differ by more than ten percent (10%). If the two appraisals differ by more
than ten percent (10%), then the two appraisers so chosen shall select a third
appraiser, and the purchase price shall be the average of the appraisals of all
three appraisers. In the event of such an appraisal, each party shall bear its
own legal and other costs and shall split the appraisal fees. The appraisers'
determination of the price and other disputed terms of purchase shall be final
and binding.
b. If Franchisor elects to exercise its option to purchase upon
expiration of this Agreement, the purchase price shall be determined within
ninety (90) days and paid within thirty (30) days of such determination of the
purchase price and other terms of purchase. If the Franchisor does not elect to
exercise its option to purchase the premises, the Franchisee may sell such
premises to a third party, provided that Franchisee's agreement with the
purchase includes a covenant by the purchaser which is expressly enforceable by
Franchisor as a third party beneficiary thereof, pursuant to which the
purchaser agrees that it will not use such premises for the operation of a
restaurant business which, in the reasonable determination of the Franchisor,
utilizes a menu or method of operation which is similar to that employed by
restaurant units within the System for a period of twelve (12) months after the
termination or expiration of this Agreement.
H. FRANCHISOR PRE-TERMINATION OPTIONS: At any time prior to the
termination of this Agreement, an Event of Default shall occur and be
continuing, then during the continuance of such Event of Default, Franchisor
may at its option, cause the
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electrical power service to any external sign containing the words
▇▇▇▇▇'▇ Roadhouse or any other facsimile thereof to be disconnected at the
▇▇▇▇▇'▇ Roadhouse Outlet in respect of which such Event of Default then exists,
and further, Franchisor may take any other such similar action until such time
as Franchisee has cured such Event of Default.
I. NOTICE: Should under the terms of this agreement, notice be required,
the same shall be given in writing and delivered personally, by certified mail
(postage pre-paid and return receipt requested), or by nationally recognized
overnight courier service, in each case addressed to the party for whom
intended. All such notices intended for Franchisee shall be addressed to
Franchisee at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., or such other address or addresses as
may hereafter be designated in writing by the Franchisee. All such notices
intended for Franchisor shall be addressed to ▇▇▇▇▇'▇ Roadhouse, Inc., ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Chief Executive
Officer, or such other address or addresses as hereafter may be designated in
writing by the Franchisor. Any notice so mailed shall for all purposes, be
deemed to have been given when delivered. Any refusal to accept delivery or to
acknowledge an attempted delivery shall be deemed to be a delivery.
PART VI
ASSIGNMENT, SALE, AND TRANSFER
A. ASSIGNMENT OR SALE BY FRANCHISEE:
1. Franchisor agrees to permit the transfer and assignment of the
Franchise to a purchaser or transferee of Franchisee's choosing for the
remaining term of this Agreement, only with the prior written consent of
Franchisor, not to be unreasonably withheld, provided that:
(a) The assignee executes a current ▇▇▇▇▇'▇ Roadhouse, Inc. franchise
agreement prior to taking possession or control of Franchisee's business;
(b) Franchisor reserves the right of first refusal for thirty (30) days
to match any offer of any bona fide purchaser under the same terms, conditions
and financing as those offered by and intended for potential transferee or
assignee; and
(c) Franchisee reimburses Franchisor for all costs and attorney's fees
incurred in connection with such transfer and assignment, in an amount not to
exceed $10,000.
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2. Notwithstanding any of the foregoing provisions of this paragraph,
▇▇▇▇▇'▇ Roadhouse, Inc. retains the right to veto any proposed assignment if
▇▇▇▇▇'▇ Roadhouse, Inc., in its sole discretion, deems the proposed assignee
financially or otherwise unfit, and even if ▇▇▇▇▇'▇ Roadhouse, Inc. does not
choose to exercise its right of first refusal to purchase the Outlet.
B. RESTRICTIONS ON TRANSFER OF STOCK: Any shares of stock, partnership
interest or beneficial interest of Franchisee may be transferred to members of
Franchisee's immediate family or to Franchisee's controlled
enterprises/affiliates at any time without Franchisor's consent upon written
notice to Franchisor.
C. ASSIGNMENT BY FRANCHISOR: Subject to the Franchisee's rights under the
Area Development Agreement, it is expressly understood and agreed that
Franchisor maintains full and exclusive right of assignment of this Agreement
to any party it designates, including the right to sell, convey, assign, grant
and in any other fashion delegate its duties and/or assign its obligations
under this Agreement.
PART VII
GENERAL PROVISIONS
A. FRANCHISEE'S STATUS: Franchisee is an independent contractor and
neither Franchisee nor any of Franchisee's employees, agents, or
representatives shall be deemed expressly or by implication to be an employee,
agent or representative of Franchisor.
B. RESTRICTIVE COVENANT: During the period from the date of this
Agreement to the expiration or earlier termination of this Agreement,
Franchisor shall not establish an Outlet utilizing the System, or license
another franchisee to establish an Outlet utilizing the System, at any location
within the Franchisee's exclusive territory as designated in the Area
Development Agreement.
C. UNFAIR EMPLOYMENT COMPETITION PROHIBITED: Upon execution of this
Agreement and for a period of three (3) years after the end of Franchisee's
relationship with ▇▇▇▇▇'▇ Roadhouse, Inc., the Franchisee shall not directly or
indirectly solicit, induce, or attempt to induce any employee of ▇▇▇▇▇'▇
Roadhouse, Inc. or any other Outlet to leave their employment, nor shall the
Franchisee in any way interfere with the relationship between ▇▇▇▇▇'▇
Roadhouse, Inc. or any other Outlet and any employee thereof; or hire or
attempt to hire any individual who was an employee of the ▇▇▇▇▇'▇ Roadhouse,
Inc. or any other Outlet at any
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time during the six-month period preceding the termination of any such
employee's relations with ▇▇▇▇▇'▇ Roadhouse, Inc. or any other Outlet.
D. AMENDMENT AND RIGHT TO REVISE RETAIL SYSTEM: Franchisee shall timely
incorporate into its operations at the Outlet any and all modifications and
refinements which Franchisor may elect to make in the ▇▇▇▇▇'▇ Roadhouse System.
In furtherance of the foregoing, Franchisee and Franchisor shall share without
compensation all recipes, methods of operation, trademarks, tradenames,
copyrighted materials, patents, and other improvements or additions to the
▇▇▇▇▇'▇ Roadhouse System, and shall allow the same to be used without
additional compensation by their respective franchisees.
E. CONFIDENTIALITY:
1. The parties acknowledge that the System includes trade secrets and
confidential information which ▇▇▇▇▇'▇ Roadhouse, Inc. has revealed to
Franchisee in confidence, and that protection of said trade secrets and
confidential information and protection of ▇▇▇▇▇'▇ Roadhouse, Inc. against
unfair competition from others who enjoy or who have had access to said trade
secrets and confidential information are essential for the maintenance of
goodwill and special value of the System.
2. Supervisory and managerial employees have access to information and
materials which constitute trade secrets and confidential and proprietary
information. Any actual or potential direct or indirect competitor of ▇▇▇▇▇'▇
Roadhouse or of any of its franchisees shall not have access to such trade
secrets and confidential information.
3. Franchisee agrees that neither it nor its employees shall (a)
appropriate, use, or duplicate the System, or any portion thereof, for use in
any business which is not within the System; (b) disclose or reveal any
portion of the System to any person other than to Franchisee's employees as an
incident of their training; (c) acquire any right to use, or to license or
franchise the use of any name, ▇▇▇▇ or other intellectual property right which
is or may be granted by any Franchise Agreement between ▇▇▇▇▇'▇ Roadhouse, Inc.
and Franchisee; or (d) communicate, divulge, or use for the benefit of any
other person, partnership, association, or corporation any confidential
information, knowledge, or know-how concerning the methods of development or
operation of an Outlet. Any and all information, knowledge, and know-how,
including, without limitation, drawings, materials, equipment, specifications,
techniques, and other data, which ▇▇▇▇▇'▇ Roadhouse, Inc. designates as
confidential shall be deemed confidential for purposes of this Agreement.
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4. Franchisee shall require its Director of Operations (as defined in
Section 12.2 of the Area Development Agreement) and each of its area
supervisors to execute a confidentiality agreement in the form attached hereto
as Appendix A ("Confidentiality Agreement"). Franchisee shall use its best
efforts to obtain from each other employee of Franchisee, including but not
limited to, each General Manager, who will have supervisory authority over the
development or operations of more than one Outlet, execute a Confidentiality
Agreement to the extent required by Franchisor of its own employees at similar
levels. Franchisee shall be responsible for compliance of its employees with
the agreements identified in this paragraph.
PART VIII
MISCELLANEOUS
A. WAIVER: The failure of Franchisor to insist upon strict performance of
any provision of this agreement, or failure of the Franchisor to exercise any
right, remedy or option hereby reserved shall not be construed as a waiver from
any such provision, right, option or remedy in the future or as a waiver of a
subsequent breach thereof. The agreement or consent and approval by the
Franchisor of any act by the Franchisee requiring Franchisor's consent or
approval shall not be construed to waive or render unnecessary the requirements
for Franchisor's consent or approval of any subsequent similar act by
Franchisee. Any delay, omission, waiver or forbearance on the part of the
Franchisor to exercise any right, option, duty or power arising out of any
breach or default by any other licensee of the terms, provisions and covenants
contained herein or to enforce any such right, option or power against any
other Franchisee or any subsequent breach or default by any other Franchisee
shall not constitute a waiver by Franchisor thereof.
B. ENTIRE CONTRACT: This Franchise Agreement contains the entire
agreement of the parties with respect to the subject matter hereof, and there
are no representations, warranties, covenants, inducements, promises,
agreements, arrangements or undertakings, oral or written, expressed, or
implied between the parties hereto other than those expressly set forth herein,
with the exception of the Operations Manual and the Area Development Agreement,
which shall control in the event of conflict between this Agreement and the
Area Development Agreement. Further, no agreement or any kind of modification
or waiver of any of the terms, covenants or conditions of this Agreement shall
be binding upon either party unless and until the same has been made in writing
and duly executed by both parties.
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C. SEVERABILITY: If any term or condition hereof would otherwise be
deemed to violate any provision of law limiting the terms of a contractual
obligation of a party, such term or condition or provision hereof respecting
same shall not be void or voidable, but rather shall be deemed to mean, and
shall be construed so as to mean that its duration or term may not extend
beyond the maximum period allowed by law. Should any other provision of this
Agreement be prohibited by law or by any court decree, in any locality or
state, it shall be ineffective to the extent of such prohibition without in any
way invalidating or affecting the remaining provisions of this Agreement, or
without invalidating or affecting the provisions of this Agreement within the
state and localities where not prohibited by law or any decree of the court.
D. GOVERNING LAW; CONSTRUCTION: This Agreement has been negotiated in and
fully executed within the State of Tennessee and shall be construed according
to the laws of that state and the United States. The language in all parts of
this Agreement shall in all cases be construed as a whole according to its fair
meaning, and neither strictly for nor against either Franchisor or Franchisee.
All terms and words used in said Agreement regardless of the gender and number
in which they are used shall be construed and deemed to include any other
number, singular or plural, and any other gender, masculine, feminine or,
neuter, as the context or sense of this Agreement or any paragraph or clause
herein may require as if such words had been fully and properly written in the
appropriate gender.
E. HEADINGS; APPROVALS: Headings provided herein are for convenience
only, and are not to be construed as a part of this Agreement or in any way
defining, amplifying or limiting the provisions hereof. The Franchisor agrees
not to unreasonably withhold its approval of or consent to any act of the
Franchisee where such approval or consent is required by the terms of this
agreement.
F. ASSIGNMENTS: This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective heirs, transferees,
successors, and assigns; provided that this Agreement may only be assigned in
accordance with the provisions for assignment set forth herein at Part VI.
G. FORCE MAJEURE: As used in this Agreement, the term "Force Majeure" or
"Act of God" shall mean any act of God, strike, lockout or other labor
disturbance, war, riot, epidemic, fire or other catastrophe, act of any
government, material defaults by unaffiliated third parties under agreements
with either party hereto relating to the development of franchised Outlets or
other similar cause not within the control of the party affected thereby.
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H. ATTORNEY'S FEES: In the event that any party to this Agreement
initiates any legal proceeding to construe or enforce any of the terms,
conditions and/or provisions of this Agreement, including but not limited to
its termination provisions, or to obtain damages or other relief to which any
party may be entitled by virtue of this Agreement, the prevailing party or
parties shall be paid its reasonable attorneys' fees and expenses by the other
party or parties.
G. RULE AGAINST PERPETUITIES: It is the intention of the parties to this
Agreement that this Agreement shall not violate the Rule Against Perpetuities
or any statute, rule or regulation similar thereto (the "Rule"); and in the
event anything in this Agreement violates the Rule, this Agreement shall be
construed, to the extent permitted by law, in a manner that will not cause the
violation of the Rule.
IN WITNESS WHEREOF, the parties hereto, having duly executed this
Agreement as of the ____ day of __________, 1997.
▇▇▇▇▇'▇ ROADHOUSE, INC.
By:____________________________
Its:___________________________
CMAC INCORPORATED
By:____________________________
Its:___________________________
PRINCIPAL
_______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
(Individually)
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