Area Development Agreement Sample Clauses

Area Development Agreement. In the Area Development Agreement (“ADA”) franchise model, a franchisor grants franchising rights for a specific geographic location to a single franchisee (“Area Developer”), and the Area Developer opens individual units in that area over a specified period of time. In a typical ADA, sub-franchising is not allowed, and the Area Developer is responsible for establishing the business units in that area, and to look after day-to-day management of the units. However, the franchisor may retain the right, by direct ownership or through franchising, to set up units in special locations such as airports, train and bus stations, sports facilities, and amusement parks. Another exclusion in terms of the ADA could be on account of sale of products on the internet. Area Developers are typically required to pay a development fee. Generally, separate franchise agreements are entered into with regard to every unit that is developed, and a royalty is charged in terms thereof. The obvious advantage of a true Area Development franchising model is that the franchisor is not saddled with the burden of multiple franchise partners. Also, the opportunity for quick expansion of the business is available - there being only a single franchisee. The need to negotiate with multiple franchisees is eliminated. In so far as the Area Developer is concerned, given its knowledge of local market and conditions, it will not only be able to negotiate preferred locations but also negotiate prices of supplies, so as to meet challenges from local competition. It will also have the ability to cut costs pertaining to local advertising and promotional programs. In its dealings with the franchisor, the Area Developer may be in a position to negotiate lower franchise and royalty fees. The franchisor has to watch out for the impact of lesser control over the franchised business with the Area Developer dictating growth and expansion plans for the business. In many cases, the Area Developer makes substantial contributions to the revenues of the franchisor, and the loss of a formidable Area Developer can have a big impact on the bottom line of the franchisor. When appointing an Area Developer, care should be taken to ensure that it is someone who has strong commitment to the business, with adequate financial resources and local clout to develop the business.

Area Development Agreement. Cosi and Holdings shall have entered into the Area Development Agreement for the development of additional franchised COSI restaurants, and Purchaser shall pay the development fees in accordance with the terms thereof.

Area Development Agreement. Pursuant to the Area Development Agreement, Panera is granting to the Company the right to develop, own and operate Panera Bread Bakery-Cafes in the Territory upon the terms and conditions described therein. Operating Member acknowledges and agrees that, notwithstanding the execution of the Area Development Agreement by Panera, Artisan has no obligations hereunder, as the Controlling Member or otherwise, to approve any Development Plan; to approve the development of any minimum number or specific number of Panera Bread Bakery-Cafes; to use consistent criteria for development decisions, it being acknowledged that the approval of a Development Plan shall not obligate Artisan to approve any other Development Plan; or to contribute capital or otherwise finance the development of Panera Bread Bakery Cafes (except to the extent that Artisan, as the Controlling Member, has approved the Development Plan for a Panera Bread Bakery-Cafe) and that if Controlling Member does not approve a Development Plan, Operating Member shall have the right to develop the Panera Bread Bakery-Cafe upon the terms set forth in the Area Development Agreement. Operating Member further acknowledges and agrees that the failure of Operating Member to timely make all Capital Contributions required under Sections 3.1A(i) and 3.2A(i) may result in the termination of the Company's right under the Area Development Agreement to continue developing Panera Bread Bakery-Cafes.