Restaurant Closing Procedure Sample Clauses

Restaurant Closing Procedure. A. Developer may discontinue operations at any Friendly's Restaurant opened or maintained pursuant to this Development Agreement (other than through condemnation or casualty loss) only in accordance with the procedure set forth in this Section 6. Developer shall notify Friendly's that the restaurant to be discontinued does not produce a profit at a restaurant operating level, and shall afford Friendly's not less than thirty (30) days to audit the operations of such restaurant, should Friendly's choose to do so. Evidence of a restaurant's failure to produce a profit shall be established through six (6) quarters of consecutive losses totaling Seventy-Five Thousand Dollars ($75,000.00) or if an aggregate loss of Seventy-Five Thousand Dollars ($75,000.00) is achieved in such shorter period when measured on the basis of restaurant operating income. Thereafter, Developer may proceed to discontinue operations at the restaurant so long as de-identification of the restaurant occurs within fifteen (15) days of the cessation of restaurant operations. B. Developer shall replace any closed restaurant with (and shall transfer the Franchise Agreement for such closed restaurant) to a newly constructed or remodeled restaurant within eighteen (18) months of the cessation of restaurant operations, if the replacement restaurant does not have a drive-thru window, or within twenty-four (24) months if the replacement restaurant does have a drive-thru window (collectively, such period shall be considered the "Replacement Period"). C. Developer shall be entitled to a moratorium on royalties and marketing fees for the Replacement Period for a total of four (4) closed restaurants; however, for each additional closed restaurant, Developer shall continue to pay the average monthly royalty and marketing fee for such restaurant as was paid during the last twelve (12) months of operation until each such additional restaurant is replaced pursuant to the terms of this Paragraph 6, and the Franchise Agreement for such closed restaurant is transferred to the replacement restaurant. D. For each closed Restaurant to be replaced, Developer shall pay a Site Replacement Fee to Friendly's to cover Friendly's costs of reviewing and approving the proposed replacement site, such Fee to be in the amount of the lesser of Friendly's actual costs or Two Thousand Five Hundred Dollars ($2,500.00).