Exhibit 10.29
TA FRANCHISE SYSTEMS, INC.
FRANCHISE AGREEMENT
THIS CONTRACT IS SUBJECT TO ARBITRATION
TABLE OF CONTENTS
SECTION PAGE
I. DEFINITIONS.....................................................2
II. APPOINTMENT AND FRANCHISE FEE...................................7
III. CONTINUING SERVICES AND ROYALTY FEE.............................8
IV. PAYMENT........................................................10
V. TERM AND RENEWAL...............................................11
VI. PROPRIETARY MARKS..............................................12
VII. CONFIDENTIAL OPERATIONS MANUAL.................................14
VIII. CONFIDENTIAL INFORMATION.......................................15
IX. MODIFICATION OF THE NETWORK....................................15
X. ADVERTISING....................................................16
XI. FRANCHISOR'S OPERATIONS ASSISTANCE.............................18
XII. FRANCHISEE'S OBLIGATIONS.......................................20
XIII. BUYING PROGRAM.................................................27
XIV. ACCOUNTING AND RECORDS.........................................28
XV ACCESS.........................................................29
XVI. FUEL SUPPLY....................................................29
XVII CREDIT.........................................................31
XVIII INSURANCE......................................................31
XIX. DEFAULT AND TERMINATION........................................32
XX. RIGHTS AND DUTIES OF PARTIES UPON
EXPIRATION OR TERMINATION......................................37
XXI. TRANSFERABILITY OF INTEREST....................................39
XXII. DEATH OR INCAPACITY OF FRANCHISEE..............................41
XXIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION.....................42
XXIV. RESTRICTIVE COVENANTS..........................................46
XXV. APPROVALS......................................................47
XXVI. AMENDMENTS; WAIVERS; REMEDIES..................................47
XXVII. SUCCESSORS AND ASSIGNS.........................................48
XXVIII. GOVERNING LAW; JURY TRAIL WAIVER...............................48
XXIX. COUNTERPARTS; EFFECTIVENESS....................................48
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XXX. ENTIRE AGREEMENT...............................................49
XXXI. JURISDICTION...................................................49
XXXII. CAPTIONS.......................................................49
XXXIII. SEVERABILITY...................................................50
XXXIV, CONSTRUCTION...................................................50
XXXV. INCONSISTENCY..................................................50
XXXVI. FORCE MAJEURE..................................................50
XXXVII. NOTICE.........................................................50
XXXVIII. COST OF ENFORCEMENT OR DEFENSE.................................51
XXXIX. INJUNCTIVE RELIEF..............................................52
XL. ARBITRATION....................................................52
XLI. LINE OF CREDIT.................................................53
XLII. CAVEAT.........................................................53
XLIII. ACKNOWLEDGEMENTS...............................................53
EXHIBITS
A. EXCLUSIONS FROM THE PROTECTED TERRITORY
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TA FRANCHISE SYSTEMS, INC.
FRANCHISE AGREEMENT
Franchise Agreement, made this day of , 19 , by
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and between TA FRANCHISE SYSTEMS, INC., a Delaware corporation, having its
principal place of business at 00000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxx
00000-0000 ("TAFSI") and ("Franchisee").
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WITNESSETH:
WHEREAS, TAFSI, together with its Affiliates (collectively,
"Franchisor") owns a unique auto/truckstop network which includes, among other
things, the establishment, development and operation of businesses for
full-service truckstop facilities that provide motor fuel pumping facilities,
along with one or more of the following services: truck care and repair
services, a full-service restaurant, a convenience store, showers, laundry
facilities, telephones, recreation rooms, truck weighing scales and other
compatible business services (the "Network"); and
WHEREAS, TAFSI has expended time, effort and money to develop the
Network; and
WHEREAS, TA Operating Corporation ("TA Operating") has granted TAFSI a
license to use and sublicense such registered or unregistered trademarks,
service marks and/or trade names in connection with the operation of the
Network; and
WHEREAS, in addition to the trademarks, service marks and/or trade
names granted by the trademark license referenced above, Franchisor may, from
time to time, develop, use and control other trademarks, service marks and/or
trade names for the benefit and use of Franchisor and the Franchised Businesses
in order to identify for the public the source of products and services and to
represent the Network's high standards of operations, quality, appearance and
service; and
WHEREAS, Franchisor grants to certain qualified persons a Franchised
Business providing products and services authorized and approved by Franchisor
and utilizing the Marks, and Franchisee desires to own and/or operate a
Franchised Business under the Network and wishes to enter into a franchise
relationship with Franchisor for that purpose, as well as to receive assistance
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provided by Franchisor in connection therewith (collectively, a "Franchise
Relationship"); and
WHEREAS, Franchisee understands and acknowledges the importance of and
agrees to comply with Franchisor's high and uniform standards of quality and
service and the necessity of operating the Franchised Business in conformity
with Franchisor's standards and specifications; and
WHEREAS, Franchisor expressly disclaims the making of and Franchisee
acknowledges that it has not received nor relied upon any warranty or guaranty,
express or implied, as to the revenues, profits or success of the business
venture contemplated by this Agreement. Franchisee acknowledges that it has read
this Agreement and Franchisor's Uniform Franchise Offering Circular and all
exhibits thereto ("Offering Circular") upon which it has exclusively relied, and
that it has no knowledge of any representations by Franchisor, or its officers,
directors, stockholders, employees or agents that are contrary to the statements
made in the Offering Circular or to the terms herein.
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants and agreements set forth herein, the parties hereby agree
as follows:
I. DEFINITIONS
1.01. Except where the context otherwise requires, the following terms
used herein shall have the meanings set forth below.
A. "Advertising Fund" shall mean the advertising, marketing
and promotional fund to be used for the development, placement and
implementation of Advertising Materials to promote the Network.
B. "Advertising Material" shall mean any advertising or
promotional material, including, but not limited to, billboards, newspapers,
other print media, radio and television advertising, other electronic media
advertising, specialty and novelty items, signs, boxes, containers,
point-of-sale materials, napkins, bags and wrapping papers.
C. "Affiliates" shall mean, with respect to any Person, any
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person.
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D. "Approved Supplies List" shall mean a list of approved
inventory, products, fixtures, furniture, equipment, signs, stationery,
supplies, and other items or services used to operate the Franchised Business.
E. "Approved Suppliers List" shall mean a list of approved
manufacturers, suppliers and distributors of items or services on the Approved
Supplies List.
F. "Branded Motor Fuel" shall mean such brands of Motor Fuel
meeting Franchisor's specifications and bearing such Marks as Franchisor may
approve in writing from time to time.
G. "Branded Products" shall mean certain petroleum products,
truck care products, and other merchandise bearing the Marks.
H. "Buying Program" shall mean a program to capitalize on
group buying power through the purchase by Franchisor on behalf of truckstops in
the Network of products or services used in the Franchised Business, including,
but not limited to, communications services and devices; store merchandise;
restaurant food supplies and services; garage parts and services; insurance
policies; and business services that serve the trucking industry and other
business customers.
I. "Claim" shall mean any action, suit, claim, demand, cause
of action, legal or administrative or arbitral proceeding, inquiry or
investigation.
J. "Commingle" shall mean any unauthorized purchase of
gasoline or diesel fuel delivered to or stored or sold at the Franchised
Premises.
K. "Confidential Information" shall mean any and all
information, whether obtained before or after Franchisor acquired the Network,
relating to the Network, including, but not limited to, trade secrets,
technology, processes, business plans, business systems, knowledge, knowhow,
drawings, blueprints, plans, materials, equipment, techniques, procedures for
display of products, product formula, training materials and other data,
including the Confidential Operations Manual. For purposes of this Agreement,
Confidential Information shall exclude information that (i) was in the public
domain at the time of its disclosure to Franchisee or (ii) becomes part of the
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public domain through no violation of this Agreement or any other obligation by
Franchisee or any third party to keep such information confidential.
L. "Confidential Operations Manual" shall mean the
confidential operations and procedures manual or series of manuals as developed
and maintained by Franchisor for the Franchised Businesses and as the same may
be modified or supplemented from time to time by Franchisor.
M. "Franchisee Party" shall mean the following persons:
-----------------------------------.
N. "Franchised Business" shall mean a franchised business that
is part of the Network and provides full-service truckstop facilities that
provide motor fuel pumping facilities, along with one or more of the following
services: truck care and repair services, a full-service restaurant, a
convenience store, showers, laundry facilities, telephones, recreation rooms,
truck weighing scales and other compatible business services approved by
Franchisor.
O. "Incapacity" shall mean the death or continuing severe
physical or mental disability of Franchisee (if Franchisee is an individual), or
a Franchisee Party, of at least three (3) months' duration, which renders
Franchisee or such Franchisee Party, as the case may be, unable to provide for
the continued proper operation of the Franchised Business.
P. "Indemnified Parties" shall mean Franchisor and the
officers, employees, agents, stockholders, designees, successors, assigns and
representatives of each Franchisor entity, including but not limited to TA
Operating Corporation, TA Holdings Corporation, National Auto/Truckstops
Holdings Corporation and National Auto/Truckstops, Inc.
Q. "Lease Agreement" shall mean any lease for the Franchised
Premises between any Franchisor entity and Franchisee.
R. "Losses" shall mean all demands, claims, actions or causes
of action, assessments, losses, damages, costs, expenses, liabilities,
judgments, awards, finds, sanctions, penalties, charges and amounts paid or
payable in settlement, including, all reasonable costs, fees and expenses of
attorneys, experts, accountants, appraisers, consultants, witnesses,
investigators and other agents.
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S. "Xxxx(s)" shall mean the name "Truckstops of America,"
"TA," "Country Pride" and such other trade names, trademarks, service marks,
logos and commercial symbols as Franchisor determines in the future (and may
hereinafter be designated by Franchisor) as an integral part of the Network.
T. "Motor Fuel" shall mean diesel fuel and gasoline and such
other alternative fuel as Franchisor may sell to Franchisee or approve for
purchase by Franchisee from other Persons, from time to time.
U. "Person" shall mean any individual, corporation,
partnership, association, trust, estate or other entity or organization.
V. "Promotional Programs" shall mean programs developed,
established and marketed by Franchisor from time to time and designed to induce
users of Franchisee's products or services to patronize its Franchised Business.
W. "State Logo Signs" shall mean state-sponsored highway logo
signs containing space for advertising fuel, food and lodging brands available
at the Franchised Premises.
X. "TA Quality Inspection" shall mean the program for
operation and appearance of the Franchised Premises prescribed by Franchisor in
the Confidential Operations Manual.
1.02. Each of the following terms is defined in the paragraphs set
forth opposite such term:
"Asserted Liability" 23.04
"Assign" 21.02.A
"Claims Notice" 23.04
"Continuing Services and Royalty Fee" 3.03(c)
"Core Programs" 12.07
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"Customer Complaint Form" 19.01.D.2
"Designated Terminal" 16.03
"Force Majeure" XXXVI
"Franchise Relationship" Recitals
"Franchised Premises" 2.01
"Franchisee" First Paragraph
"Franchisor" Recitals
"Gross Negligence" 23.04
"Initial Term" 5.01
"Leased Premises" 2.01
"Network" Recitals
"Non-Fuel Revenue" 3.03(a)
"Offering Circular" Recitals
"Outside Elements" 12.14.E.
"Protected Territory" 2.03
"Renewal Term" 5.02
"TA Operating" Recitals
"TAFSI" First Paragraph
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"Tax" 16.03
"Transfer and Training Fee" 21.02.C
"Willful Misconduct" 23.04
II. APPOINTMENT AND FRANCHISE FEE.
2.01. Franchisor hereby grants to Franchisee, upon the terms and
conditions herein contained, the right, franchise and privilege to operate a
Franchised Business at, and only at, the following location:
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The property and buildings to be used by Franchisee hereunder is defined in the
Lease Agreement as the "Leased Premises," is more particularly depicted and
described in Exhibit A to the Lease Agreement, and is referred to herein,
collectively, as the "Franchised Premises." Franchisee agrees to operate the
Franchised Business at, and only at, the Franchised Premises.
2.02. In connection with Franchisor's grant of the Franchised Business
to Franchisee, Franchisor will license Franchisee to use the Marks during term
of this Agreement solely in connection with the Franchised Business.
2.03. Franchisor agrees that so long as this Agreement is in force and
effect, and Franchisee is not in default of any term hereunder, Franchisor will
not operate, or allow another Person to operate, a truckstop or travelcenter
business which uses the "TA" brand, within seventy-five (75) miles in either
direction along the interstate(s) at which the Franchised Premises is located
(the "Protected Territory"). Notwithstanding anything to the contrary herein:
(a) Franchisor may operate, or may allow another Person to operate, a truckstop
or travelcenter business at or within any of the locations or areas described on
Exhibit A to this Agreement; and (b) nothing herein shall restrict, prevent or
prohibit any Person who purchases or assumes the operation of more than one TA
facility from rebranding such Person's existing facilities with a "TA" brand,
even if such facilities are located within the Protected Territory.
2.04. Upon execution of this Agreement, Franchisee agrees to pay to
Franchisor a franchise fee in the aggregate sum of One Hundred Thousand dollars
($100,000.00), which fee shall be due and payable as follows: (a) Fifty-Thousand
Dollars ($50,000.00), less credit for any application fee already paid to
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Franchisor, shall be due and payable upon execution of this Agreement, and (b)
the balance shall be due and payable upon the earlier to occur of the
commencement of any training of Franchisee (or any employee of Franchisee), or
six (6) months from the date of this Agreement. Notwithstanding the foregoing,
the franchise fee described above shall be reduced to Five Thousand Dollars
($5,000.00), which shall be due and payable upon execution of this Agreement, if
(i) Franchisee has been continuously operating during the past year pursuant to
a franchise agreement, license agreement or prescribed marketing plan or system
of another truckstop company, (ii) Franchisee meets or satisfies certain
conditions and requirements established by Franchisor for its franchise
applicants, and (iii) Franchisee executes this Agreement within six (6) months
of its or his receipt of the same. Upon the earlier of payment or the due date
for payment, such sums shall be deemed fully earned and non-refundable in whole
or in part, notwithstanding any termination of this Agreement, whereupon such
sums shall be kept by Franchisor as consideration for expenses incurred by
Franchisor in furnishing assistance and services to Franchisee and for
Franchisor's lost or deferred opportunity to franchise others for which,
although the exact amount of damages sustained by Franchisor could not be
ascertained, Franchisee acknowledges the sums are reasonable.
2.05. Franchisee may request in writing approval to operate
motel/lodging facilities, branded fast food, deli operations or other business
facilities on the Franchised Premises. Such request shall be made in advance of
any proposed operation and in advance of any proposed alterations or
modifications in connection therewith. If Franchisor approves such request in
writing, Franchisee agrees to operate such businesses in accordance with
Franchisor's standards and specifications and such businesses shall be included
in the definition of "Franchised Business." Franchisee and each Franchisee Party
agree not to operate any business or facility on the Franchised Premises other
than as stated in Section 2.01 or otherwise approved by Franchisor in writing in
Franchisor's sole discretion.
2.06. Simultaneously with the execution of this Agreement, Franchisee
shall execute the Lease Agreement.
III. CONTINUING SERVICES AND ROYALTY FEE.
3.01. Franchisee shall pay to Franchisor, without offset, credit or
deduction of any nature, so long as this Agreement shall be in effect, a monthly
Continuing Services and Royalty Fee in an amount equal to (a) three and three
quarters percent (3.75%) of all Non-Fuel Revenue (as defined in Section 3.03(a)
below); (b) three cents ($.03) per gallon on all sales at or from the Franchised
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Premises of gasoline which was purchased from a supplier other than Franchisor;
and (c) three percent (3%) of all revenues earned directly or indirectly by
Franchisee from or pertaining to all branded fast food sales approved for sale
by Franchisor, after deducting from such amount the amount of royalties and
advertising fees actually paid by Franchisee to any licensor or franchisor with
respect thereto.
3.02. In addition to the payments described in 3.01 above, Franchisee
agrees that it shall pay to Franchisor Improvement Rent (as defined in Exhibit B
of the Lease Agreement), in the event Franchisor (either upon request of
Franchisee or at Franchisor's sole discretion) performs or makes capital
expenditures to improve the Franchised Premises, including but not limited to
improvements to allow for the sale of branded fast food which has been approved
in writing by Franchisor. The amount of such Improvement Rent shall be
determined in accordance with Exhibit B of the Lease Agreement.
3.03. As used in this Agreement, the following terms shall
have the meanings set forth below:
(a) The term "Non-Fuel Revenue" shall mean all revenues earned
directly or indirectly by Franchisee (or any Affiliates of Franchisee or any
Franchisee Party), from the Franchised Business and all businesses conducted at
or from the Franchised Premises, excluding fuel sales. Each charge or sale upon
credit shall be treated as a sale for the full price in the calendar month
during which such charge or sale was made, irrespective of the time when
Franchisee receives payment (whether full or partial) therefor. Non-Fuel Revenue
shall not include (i) the amount of any sales tax, excise tax or inspection fees
imposed by any federal, state, municipal or other governmental authority
directly on sales and collected from customers; provided, that the amount
thereof is included in the selling price and is actually paid by Franchisee to
such governmental authority; (ii) refunds to customers for merchandise;
provided, that the amount received for such merchandise shall have previously
been included in Non-Fuel Revenues; (iii) trade discounts; and (iv) revenues
from the sale of branded fast food approved by Franchisor. In cases in which the
Franchisee receives only a commission from a business activity rather than the
gross revenues from such activity (e.g., game revenues, legalized gambling that
has been approved in writing by Franchisor, permit sales, lottery ticket sales,
CAT branded scale sales, telephone commissions and the like), only the
commission received by Franchisee shall be included in Non-Fuel Revenue;
provided, that such commissions are reasonable and customary.
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(b) For purposes of Section 3.01(b) above, in determining the
gallons of gasoline sales, each charge or sale, whether for cash or on credit,
shall be treated as a sale in the month during which such charge or sale was
made, irrespective of whether, or of the month when, Franchisee receives payment
therefor.
(c) The term "Continuing Services and Royalty Fee" shall mean
all amounts due or payable pursuant to this Section III.
IV. PAYMENT.
4.01. The Continuing Services and Royalty Fee shall be paid in the
manner prescribed in the Confidential Operations Manual and shall be due on the
tenth (10th) day of each month for the preceding month. Notwithstanding the
foregoing, payment terms for all amounts due Franchisor from Franchisee shall be
in accordance with terms established by Franchisor which may be changed at any
time at Franchisor's discretion. Among other things, Franchisor shall have the
right to require payment by certified check or by electronic funds transfer. All
Continuing Services and Royalty Fees, and amounts due for purchases by
Franchisee from Franchisor, and other amounts which Franchisee may owe to
Franchisor, shall bear interest after due date at the highest applicable legal
rate for open account business credit, not to exceed one and one-half percent
(1-1/2%) per month. Franchisee agrees to make all payments according to terms,
whether or not disputed, and waives any claim or right of offset, set-off, or
deduction for amounts disputed or otherwise. Franchisee's sole remedy, to the
exclusion of all others, for disputed amounts which are not resolved by
agreement of the parties (including amounts withheld for thirty (30) days
pursuant to the provision above) shall be to pay the disputed amount to
Franchisor and then to invoke arbitration under the procedures provided in
Section XL. If Franchisee obtains an award pursuant to the foregoing, recovering
the disputed amount from Franchisor, the award shall include interest at the
rate specified above for the period from the date of payment by Franchisee to
Franchisor, to the date of repayment by Franchisor. Notwithstanding anything to
the contrary herein, Franchisor may seek judgment in any court for any amount
due from Franchisee or with respect to any disputes hereunder and may exercise
termination rights under Section XIX.
4.02. Notwithstanding any designation by Franchisee, Franchisor shall
have the sole discretion to apply any payments by Franchisee to any past due
indebtedness of Franchisee for Continuing Services and Royalty Fees, advertising
contributions, purchases from Franchisor, interest or any other indebtedness
under this Agreement or any agreement related hereto, in such amounts and in
such order as Franchisor shall determine.
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V. TERM AND RENEWAL.
5.01. This Agreement shall be effective and binding for an initial term
commencing on the date hereof (the "Initial Term") and ending on
("Initial Term").
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5.02. Subject to Franchisor's rights under Section XIX to terminate or
not renew this Agreement, Franchisee shall have the right to renew the Franchise
Agreement at the expiration of the Initial Term for five (5) additional
successive terms of three (3) years each ("Renewal Term"); provided, that all of
the following conditions have been fulfilled:
A. Franchisee has during the Initial Term complied with all
the provisions of this Agreement and during any Renewal Term complied with the
provisions of the then-current franchise agreement;
B. Franchisee is not in default of the provisions of Paragraph
XIX. of this Agreement;
C. Franchisee has given written notice of a request for
renewal at least three (3) but not more than (6) months prior to the expiration
of the then-current term;
D. Franchisee has satisfied all monetary obligations owed by
Franchisee to any Franchisor entity and has timely met these obligations
throughout the term of this Agreement;
E. Franchisee has executed upon renewal Franchisor's
then-current form of Franchise Agreement, Lease Agreement and any other
agreements required to be executed by the parties (with appropriate
modifications to reflect the fact that the agreement relates to the grant of a
renewal franchise), which agreements shall supersede in all respects this
Agreement, the Lease Agreement and other agreements between the parties, and the
terms of which may differ from the terms of this Agreement and other agreements
between the parties, including, without limitation, a different percentage
Continuing Services and Royalty Fee or advertising contribution, or adoption and
utilization of any new or different computer hardware and software prescribed by
Franchisor for current franchisees; provided, however, that Franchisee shall not
be required to pay the then-current initial franchise fee;
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F. Franchisee has complied with Franchisor's then-current
qualification and training requirements; and
G. Franchisee has executed a general release, in the
then-current form prescribed by Franchisor, of any and all Claims against
Franchisor, and the officers, directors, agents, stockholders and employees of
each Franchisor entity.
5.03. Franchisor may terminate or not renew this Agreement by
written notice to Franchisee, as provided in Paragraph XIX. herein.
VI. PROPRIETARY MARKS.
6.01. Franchisee acknowledges that Franchisee's right to use the Marks
is derived solely from this Agreement and is limited to the conduct of the
Franchised Business by Franchisee pursuant to and in compliance with this
Agreement and all applicable standards, specifications, and operating procedures
prescribed by Franchisor from time to time during the term of this Agreement.
Any unauthorized use of the Marks by Franchisee is a breach of this Agreement
and an infringement of the rights of Franchisor in and to the Marks. Franchisee
acknowledges that all usage of the Marks by Franchisee and any goodwill
established by Franchisee's use of the Marks shall inure to the exclusive
benefit of Franchisor and that this Agreement does not confer any goodwill or
other interests in the Marks upon Franchisee. Franchisee shall not, at any time
during the term of this Agreement or after its termination or expiration,
contest the validity or ownership of any of the Marks or assist any other person
in contesting the validity or ownership of any of the Marks. All provisions of
this Agreement applicable to the Marks apply to any additional trademarks,
service marks, and commercial symbols authorized for use by and licensed to
Franchisee by Franchisor after the date of this Agreement.
6.02. Franchisee shall not use any Xxxx or portion of any Xxxx as part
of any corporate or trade name, or with any prefix, suffix, or other modifying
words, terms, designs, or symbols, or in any modified form, nor may Franchisee
use any Xxxx in connection with the sale of any unauthorized product or service
or in any other manner not expressly authorized in writing by Franchisor.
Franchisee shall give such notices of trademark and service xxxx registrations
as Franchisor specifies and obtain such fictitious or assumed name registrations
as may be required under applicable law, and at Franchisee's expense. Franchisee
shall not use any of the Marks in any manner which has not been specified or
approved by Franchisor.
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6.03. Franchisee shall promptly notify Franchisor of any Claim based
upon or arising from any attempt by any other Person to use the Marks or any
colorable imitation thereof. Franchisee shall also notify Franchisor of any
Claim against Franchisee relating to the Marks, within ten (10) days after
Franchisee received notice of such Claim. Upon receipt of timely notice of a
Claim against Franchisee relating to the Marks, Franchisor shall have the sole
right to defend any such action. Franchisor shall have the exclusive right to
contest or bring action against any third party regarding the third party's use
of any of the Marks and shall exercise such right in its sole discretion. In any
defense or prosecution of any litigation relating to the Marks undertaken by
Franchisor, Franchisee shall cooperate with Franchisor and execute any and all
documents and take all actions as may be desirable or necessary in the opinion
of Franchisor and/or its counsel, to carry out such defense or prosecution. Both
parties will make every effort consistent with the foregoing to protect,
maintain, and promote the Marks and their distinguishing characteristics.
6.04. If it becomes advisable at any time, and from time to time, in
Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or
discontinue use of any Xxxx, including, but not limited to, the "TA" Xxxx,
and/or use one (1) or more additional or substitute trade names, trademarks,
service marks, or other commercial symbols, Franchisee shall comply with
Franchisor's directions within a reasonable time after notice to Franchisee by
Franchisor. Franchisee shall immediately, upon the request of Franchisor, and in
any event upon termination of this Agreement, at no expense to Franchisor,
discontinue and take such legal or other action as may be necessary to
discontinue the use of the Marks.
6.05 In order to preserve the validity and integrity of the Marks and
copyrighted material licensed herein and to ensure that Franchisee is properly
employing the same in the operation of its Franchised Business, Franchisor or
its agents shall have the right of entry and inspection of the Franchised
Premises at all reasonable times and, additionally, shall have the right to
observe the manner in which Franchisee is rendering its services and conducting
its operations, to confer with Franchisee's employees and customers, and at
Franchisee's expense to select fuel, products, inventory, equipment and other
items, materials and supplies for test of content and evaluation purposes to
make certain that the services, fuel, products, inventory, materials, supplies,
equipment and operations are satisfactory and meet the quality control
provisions and performance standards established by Franchisor.
6.06. Under no circumstances shall Franchisee use Franchisor's name or
Marks (i) on any forms, publication, material or item disapproved by Franchisor,
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or (ii) in connection with any product or service not authorized by Franchisor,
or iii) in connection with any service performed by Franchisee in any manner not
authorized by Franchisor.
6.07. Franchisee shall not use the Marks in any advertising or any
other form of promotion (i) in any manner disapproved by Franchisor, or (ii)
without the appropriate (R) or registration marks or the designations TM or SM
where applicable as specified by Franchisor in the Confidential Operations
Manual.
VII. CONFIDENTIAL OPERATIONS MANUAL.
7.01. Franchisor will loan to Franchisee during the term of this
Agreement one (1) copy of a Confidential Operations Manual containing mandatory
and suggested specifications, standards, operating procedures and rules
prescribed from time to time by Franchisor for the Network and information
relative to other obligations of Franchisee hereunder and the operation of its
Franchised Business. Franchisor shall have the right to add to and otherwise
modify the Confidential Operations Manual from time to time to reflect changes
in the specifications, standards, operating procedures and rules prescribed by
Franchisor for the Network; provided, that no such addition or modification
shall alter Franchisee's fundamental status and material rights under this
Agreement. Franchisee shall immediately upon notice adopt any and all such
changes.
7.02. The Confidential Operations Manual (and any copies thereof) shall
at all times remain the sole property of Franchisor and shall be returned
promptly by Franchisee to Franchisor, at Franchisee's expense, immediately upon
the expiration or other termination of this Agreement.
7.03. Franchisee acknowledges that the Confidential Operations Manual
contains proprietary information of Franchisor and agrees to keep such
information confidential both during the term of this Agreement and subsequent
to the expiration or termination of this Agreement. Franchisee shall at all
times ensure that one (1) up-to-date and current copy of the Confidential
Operations Manual is available at the Franchised Premises. At all times that the
Confidential Operations Manual is not in use by authorized personnel, Franchisee
shall maintain the Confidential Operations Manual in a locked receptacle at the
Franchised Premises and shall grant only authorized personnel, as defined in the
Confidential Operations Manual, access to the key or lock combination of such
receptacle.
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7.04. In the event of any dispute as to the contents of the
Confidential Operations Manual, the terms of the master copy of the Confidential
Operations Manual maintained by Franchisor at Franchisor's principal place of
business shall control.
VIII. CONFIDENTIAL INFORMATION.
8.01. Franchisee acknowledges that knowledge of the operation of the
Franchised Business is and will be derived from Confidential Information
disclosed to Franchisee by Franchisor and that such Confidential Information is
proprietary, confidential and a trade secret of Franchisor. Franchisee shall
maintain the absolute confidentiality of all such Confidential information
during and after the term of this Agreement and shall not use any such
Confidential Information in any other business or in any manner not specifically
authorized or approved in writing by Franchisor.
8.02. Franchisee shall divulge Confidential Information only to its
employees that must have access to such information and only to the extent
necessary to operate the Franchised Business. Franchisee agrees that all
employees of Franchisee having access to Confidential Information of Franchisor
shall be required to execute confidentiality agreements in a form acceptable to
Franchisor.
IX. MODIFICATION OF THE NETWORK.
Franchisee acknowledges that at any time and from time to time
Franchisor may change or modify the Network, including, without limitation, the
adoption and use of new or modified trade names, trademarks, service marks or
copyrighted materials; new business centers; new computer systems; new inventory
items; new products or services; new merchandising techniques; new equipment; or
new techniques and that Franchisee will be required to accept, use and display
for the purpose of this Agreement any such changes in the Network, as if they
were part of this Agreement at the time of execution hereof. Franchisee will
make such expenditures as are reasonably required by such modifications in the
Network. Franchisee shall not change, modify or alter in any way the Network,
except as directed by Franchisor.
X. ADVERTISING.
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10.01. Franchisor reserves the right to require Franchisee to
discontinue using any Advertising Material promoting the Franchised Business or
products and services sold at the Franchised Premises that Franchisor deems
unacceptable or detrimental to the Network.
10.02. Franchisee agrees to contribute to the Advertising Fund an
amount equal to six-tenths of one percent (0.6%) of the Non-Fuel Revenue derived
from the Franchised Business or any other business conducted at or from the
Franchised Premises, including all revenues from fast food sales (branded or
unbranded) after deducting from such fast food sales revenues the amount of
royalties and advertising fees actually paid by Franchisee to any licensor or
franchisor with respect thereto. The amount due hereunder shall be payable
monthly as provided in Section 4.01. The Advertising Fund shall be maintained
and administered by Franchisor or its designee, as follows.
A. Franchisor shall direct all advertising programs with sole
discretion over the creative concepts, materials and media used in such programs
and the placement and allocation thereof. Franchisor reserves the right in its
sole and exclusive discretion to use such media, create such programs and
allocate any money from the Advertising Fund to such regions or localities as
Franchisor shall deem appropriate. All Advertising Material shall be and remain
the sole property of Franchisor and may not be altered by Franchisee. Franchisee
acknowledges that the Advertising Fund need not be spent pro rata and is
intended to further the general recognition and acceptance of the Marks for the
benefit of the Network.
B. Franchisor shall match the total contribution made to the
Advertising Fund by each Franchisee and all other Franchised Businesses.
C. The Advertising Fund may be used to meet any and all costs
of maintaining, administering, directing and preparing Advertising Material
(including, without limitation, the cost of (i) preparing and conducting
television, radio, magazine and newspaper advertising campaigns and other public
relations activities; (ii) employing advertising agencies to assist therein;
(iii) producing billboards, signage and point-of-sale materials; (iv) conducting
marketing activities; (v) compensating personnel employed by Franchisor to
engage in advertising, marketing and/or public relations activities on behalf of
the Advertising Fund if Franchisor, in its sole and exclusive discretion,
decides to employ such personnel, but only to the extent such personnel actually
devote time to such activities, and (vi) providing promotional brochures and
other marketing materials to franchisees in the Network). All sums paid by
Franchisee to the Advertising Fund shall be accounted for separately from the
other funds of Franchisor and shall not be used to defray any of Franchisor's
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general operating expenses, except for such reasonable administrative costs and
overhead, if any, as Franchisor may incur in activities reasonably related to
the administration or direction of the Advertising Fund and advertising programs
including, without limitation, conducting market research, preparing marketing
and advertising materials, and collecting and accounting for assessments for the
Advertising Fund; provided, however, that up to ten percent (10%) of the
Advertising Fund may be expended by Franchisor for such reasonable
administrative costs and overhead, if any, as Franchisor may incur in activities
reasonably related to the administration or direction of the Advertising Fund
and advertising programs for Franchised Businesses including, without
limitation, collecting and accounting for assessments for the Advertising Fund.
D. Franchisor maintains the right to terminate the Advertising
Fund at any time. However, the Advertising Fund shall not be terminated until
all monies in the Advertising Fund have been expended for advertising and
promotional purposes, or returned to franchisees, as Franchisor deems fair and
reasonable in its sole discretion.
E. An accounting of the operation of the Advertising Fund
shall be prepared annually and shall be made available to Franchisee upon
request.
F. Once contributions to the Advertising Fund are made by
Franchisee, all such contributions shall be used as herein required and shall
not be returned to Franchisee, except pursuant to Subparagraph 10.02.D hereof.
10.03. Franchisee shall be required to maintain State Logo Signs (with
one State Logo Sign located in each direction on the primary interstate
approaching the Franchised Premises). Franchisor shall share equally with
Franchisee the cost of maintaining such State Logo Signs; provided, however,
that in no event shall Franchisor be required to spend more than Fourteen
Thousand Dollars ($14,000.00) per year pursuant hereto. If the state in which
the Franchised Premises is located allows State Logo Signs, and Franchisee
maintains State Logo Signs in accordance herewith, Franchisee may, but is not
required to, maintain (at its sole expense) billboards advertising the
Franchised Business, in a form and layout approved by Franchisor. If the state
in which the Franchised Premises is located does not allow State Logo Signs,
Franchisee shall be required to maintain at least two (2) billboards (with one
billboard located in each direction on the primary interstate approaching the
Franchised Premises) advertising the Franchised Business, in a form and layout
approved by Franchisor. Franchisor shall share equally with Franchisee the cost
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of maintaining billboards which are required hereunder; provided, however, that
in no event shall Franchisor be required to spend more than $14,000 per year
pursuant hereto. The locations for any billboards hereunder must be sites
approved in writing by Franchisor.
10.04. Franchisee shall spend a minimum of Five Thousand Dollars
($5,000.00) for newspaper, direct mail or advertising through other media during
Franchisee's initial thirty (30) days of operation of the Franchised Business in
accordance with Franchisor's policy for "Business Opening" advertising.
10.05. Franchisee shall participate in all Promotional Programs
conducted by Franchisor, except as excluded by law. Franchisor shall notify
Franchisee of the creation of all such Promotional Programs and shall advise
Franchisee with respect to all of the elements thereof. Franchisee shall adhere
to all elements of such Promotional Programs; provided, that no such Promotional
Program shall dictate or control the price charged by Franchisee for any item.
Franchisor may, however, suggest prices to be charged in any Promotional
Program. Franchisor may establish Promotional Programs, in its sole, subjective
discretion, and need not consult or confer with Franchisee or any other
franchisee of Franchisor, except to the extent provided in Subparagraph 10.02
above, with respect to the nature, content or amount of any Promotional
Programs.
XI. FRANCHISOR'S OPERATIONS ASSISTANCE.
11.01. Franchisor may, from time to time, advise or offer guidance to
Franchisee relative to prices for the products and services offered for sale by
its Franchised Business that in Franchisor's judgment constitute good business
practice. Such guidance will be based on the experience of Franchisor and its
franchisees in operating Franchised Businesses and an analysis of the costs of
such products and prices charged for competitive products. Franchisee shall not
be obligated to accept any such advice or guidance and shall have the sole right
to determine the prices to be charged from time to time by its Franchised
Business, and no such advice or guidance shall be deemed or construed to impose
upon Franchisee any obligation to charge any fixed, minimum or maximum prices
for any product offered for sale by the Franchised Business.
11.02. During the term of this Agreement Franchisor shall:
A. Provide to Franchisee the Approved Supplies List and
Approved Suppliers List;
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B. Provide site engineering assistance;
C. Provide centralized purchasing assistance for products and
services outside of the Buying Program;
D. Administer the Buying Program, as further described in
Paragraph XIII. herein;
E. Provide ongoing training programs for Franchisee;
F. Coordinate system-wide advertising and administer the
Advertising Fund; and
G. Regulate quality standards and products throughout the
Network.
11.03. Franchisor may, from time to time, provide operations assistance
which may consist of advice and guidance with respect to the following:
A. Proper procedures to be used by the Franchised Business
with respect to the sale of the Branded Motor Fuel, Branded Products and other
products and services as approved by Franchisor;
B. Additional products and services authorized for sale from
Franchised Businesses;
C. Ongoing research and development of products, services,
systems, procedures and techniques which may enhance the Network;
D. Central product purchasing services;
E. The institution of proper administrative, bookkeeping,
accounting, inventory control, supervisory and general operating procedures for
the effective operation of a Franchised Business;
F. Seminars and programs designed to increase knowledge of the
industry and/or xxxxxx and promote franchisee relations;
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G. Advertising and promotional programs; and
H. Required software and hardware packages for conducting
inventory control, point-of-sale and/or other functions.
11.04. Franchisor, or its representative, shall make periodic visits to
the Franchised Business for the purposes of consultation, assistance, and
guidance to Franchisee in all aspects of the operation and management of the
Franchised Business.
XII. FRANCHISEE'S OBLIGATIONS.
12.01. Franchisee shall comply with all requirements set forth in this
Agreement, the Confidential Operations Manual and other written policies
supplied to Franchisee by Franchisor. All references herein to this Agreement
shall include all such mandatory specifications, standards and operating
procedures and rules. Franchisee shall comply with the entire set of
specifications and standards for the Network including, but not limited to, the
provisions of this Section XII.
12.02. Franchisee shall promptly remove all inventory, fixtures,
furniture, furnishings, marketing materials, supplies and equipment which do not
conform with System, are not approved by Franchisor in writing, or which do not
meet the standards or specifications prescribed in the Confidential Operations
Manual (as amended from time to time). Franchisee shall refurbish and convert
the operation of the Franchised Premises in accordance with a Conversion
Obligation Schedule to be delivered by Franchisor in connection herewith, or as
otherwise agreed in writing.
12.03. Franchisee agrees to maintain the condition and appearance of
the Franchised Premises consistent with Franchisor's standards for the image of
a "TA" branded facility as an attractive, pleasant and comfortable facility
conducive to buying by its customers. Among other things, Franchisee agrees to
maintain the Franchised Premises in accordance with Exhibit C to the Lease
Agreement.
12.04. Franchisee shall follow such procedures or take such action as
Franchisor may from time to time require to maintain the appearance and
efficient operation of the Franchised Business and to meet or exceed
Franchisor's annually published minimal acceptable TA Quality Inspection. If at
any time in Franchisor's judgment the general state of repair or appearance of
the Franchised Premises or its equipment, fixtures, signs or decor does not meet
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Franchisor's standards, Franchisor shall so notify Franchisee, specifying the
action to be taken by Franchisee to correct such deficiency. If Franchisee fails
to cure such deficiency within the period of time specified in said notice and
thereafter fails to implement a bona fide program to complete any required
maintenance, Franchisor shall have the right, in addition to all other remedies,
to enter upon the Franchised Premises and effect such maintenance or repairs on
behalf of Franchisee, and Franchisee shall pay to Franchisor the entire cost
thereof upon demand. If Franchisee disputes the amounts owed Franchisor for such
maintenance or repairs, Franchisor shall be entitled to reimbursement of its
costs including, but not limited to, reasonable legal fees plus accrued
interest. Failure to correct such deficiency is a material default of this
Agreement and grounds for termination of this Agreement subject to the
provisions of Paragraph XIX. herein.
12.05. Franchisee shall not make or permit anyone to make any modifications
in or to the Franchised Premises of a permanent nature, including but not
limited to, permanent improvements, alterations, decorations, or additions,
structural or otherwise, in or to the Franchised Premises without first
obtaining the written consent of Franchisor. All improvements, alterations,
decorations, or additions made by Franchisee shall be completed in a good and
workmanlike manner in accordance with all applicable laws and requirements, and
Franchisee shall defend, indemnify, and hold Franchisor harmless from and
against any and all costs, expenses, claims, liens, and damages to person or
property resulting from the making of any such improvements, alterations,
decorations, or additions in or to the Franchised Premises.
Franchisee shall not do or suffer anything to be done whereby the
Franchised Premises may be encumbered by a mechanic's lien or liens. If,
however, any mechanic's lien is filed against the Franchised Premises,
Franchisee shall discharge the same of record within ten (10) days after the
date of filing. If Lessee fails to discharge any such lien as provided herein,
such failure shall be a default of this Agreement.
Franchisor shall not be liable for any labor or materials to be furnished
to Franchisee upon credit, and no mechanic's or other lien for any such labor or
materials shall attach to or affect the reversionary or other estate or interest
of Franchisor in and to the Franchised Premises.
12.06. Franchisee understands and acknowledges that uniformity of
standards, products and services is essential to the Network. To that end,
Franchisor reserves the right to reject any category of product or services
offered for sale at the Franchised Business. Should Franchisee elect to offer
and sell additional product or service categories to customers of the Franchised
21
Business, Franchisor shall not unreasonably withhold its approval of any such
category of product or service.
A. Franchisee shall immediately cease offering for sale or
selling any product or service if Franchisor, in its sole discretion, deems such
product or service to be detrimental to the Marks or the image of the Network.
B. Franchisee is prohibited from displaying, offering and
selling any alcoholic beverages, packaged or otherwise, and any sexual or
pornographic materials (as determined by Franchisor in its sole discretion),
including, without limitation, books, magazines, videotapes, cassettes,
calendars, novelty and related items. Franchisor reserves the right, in its sole
discretion, to expand the categories of products and services which Franchisee
is prohibited from offering or selling from the Franchised Business.
C. Franchisee shall not offer fast food for sale at the
Franchised Premises and shall not permit any form of gambling or gaming at the
Franchised Premises without the prior written consent of Franchisor.
12.07. FRANCHISEE FURTHER AGREES TO COMPLY FULLY WITH ALL PROGRAMS
WHICH ARE PRESCRIBED FROM TIME TO TIME BY FRANCHISOR IN THE CONFIDENTIAL
OPERATIONS MANUAL (OR OTHER OPERATIONS MANUAL), OR ARE OTHERWISE COMMUNICATED BY
FRANCHISOR IN WRITING AND DESIGNATED BY FRANCHISOR AS CONSTITUTING A CORE
PROGRAM ("CORE PROGRAM"), INCLUDING BUT NOT LIMITED TO THE FOLLOWING: 1. Mystery
shop program; 2. Lowest price guarantee; 3. Frequent fueler or any other named
redemption program; 4. Nationwide guaranty - refund, exchange, replacement; 5.
Nationwide programs for national non-fuel accounts; 6. Check cashing program; 7.
Showers program; 8. ProntoPay; 9. Mandatory diesel fuel purchase; 10. Fleet
marketing programs; 11. Tire programs; 12. Preventative maintenance programs;
13. Lubricant programs; 14. Restaurant programs; 15. Fast food programs; and 16.
Billing programs. Franchisee shall also participate in the Franchise Advisory
Council and Franchisee training programs, as described in the Confidential
Operations Manual. FAILURE TO COMPLY WITH ANY CORE PROGRAM SHALL BE A MATERIAL
DEFAULT OF THIS AGREEMENT AND GROUNDS FOR TERMINATION OF THE AGREEMENT SUBJECT
TO THE PROVISIONS OF PARAGRAPH XIX HEREOF.
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12.08. All inventory, products and materials, and other items and
supplies used in the operation of the Franchised Business which are not
purchased in accordance with Franchisor's Approved Supplies List and Approved
Suppliers List shall conform to the specifications and quality standards
established by Franchisor from time to time. Franchisee recognizes and
acknowledges that Franchisor may receive fees, commissions and other
considerations of value from Persons on the Approved Suppliers List, that
Franchisee has no objection or right thereto, and that Franchisee shall receive
only such part thereof, if any, as Franchisor may in its sole discretion
allocate.
12.09. Franchisee shall carry an adequate supply and maintain a
representative inventory of Branded Products and other items and merchandise
packaged under the Marks as required by the Confidential Operations Manual in
such quantities sufficient to meet public demand. Franchisor may, in the future,
develop additional products bearing the Marks, and Franchisor may introduce such
products into the Network at Franchisor's discretion.
12.10. In order to maintain the common identity of the Network, Branded
Products shall be prominently displayed among the goods displayed for resale at
the Franchised Premises and Franchisee shall maintain at such premises a stock
of Branded Products sufficient to satisfy fully the demand of Franchisee's
customers for such products.
12.11. Franchisee, at its expense, shall secure and maintain in force
all required licenses, permits and certificates relating to the operation of the
Franchised Business and the property on which the Franchised Premises are
located and shall operate the Franchised Business and maintain the property on
which the Franchised Premises are located, in full compliance with all
applicable federal, state and local laws, ordinances and regulations, including,
without limitation, all such laws, ordinances and regulations relating to the
dispensing of food products, occupational hazards and health, general liability
and pollution liability insurance requirements, consumer protection,
environmental protection, underground storage facilities and dispensing of fuel,
trade regulation, workers' compensation, unemployment insurance and withholding
and payment of federal and state income taxes and social security taxes, and
sales, use and property taxes, as further described in Paragraph 23.06 herein
and in the Lease Agreement. Further, throughout the term of this Agreement,
Franchisee shall cause the Franchised Business to be in full and strict
compliance with the Americans with Disabilities Act, as amended, except as
otherwise provided in the Lease Agreement. Franchisee is responsible for daily
monitoring of the underground storage facilities and dispensing of fuel and for
reporting to and notifying Franchisor of any spills, leakage, losses and/or
other difficulties relating to such underground storage facilities.
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12.12. Franchisee shall refrain from any merchandising, advertising or
promotional practice which is unethical or may be injurious to the business of
Franchisor, the Network and/or other Franchised Businesses or to the goodwill
associated with the Marks, as determined by Franchisor in its sole discretion.
12.13. Franchisor may, from time to time, develop and market special
promotional items which will be made available to Franchisee at Franchisor's
cost plus a reasonable markup, and Franchisee shall maintain a representative
inventory of such promotional items to meet public demand. Franchisee shall have
the right to purchase alternative promotional items; provided, that such
alternative goods conform to the specifications and quality standards
established by Franchisor from time to time.
12.14. Franchisee shall operate the Franchised Business in a clean,
safe and healthful manner that will assure that customers receive quality
merchandise and courteous and efficient service, which shall include the
following minimum obligations:
A. Sell merchandise and provide service with care, courtesy,
and regard for customer satisfaction.
B. Take prompt action to respond to or correct all complaints
received by Franchisor concerning Franchisee's operation of, or condition of,
the Franchised Business or conduct of any employee of Franchisee. A written
reply must be made to Franchisor within fourteen (14) days outlining
Franchisee's actions or plans to resolve any such complaints.
C. The Franchised Business and Franchised Premises shall at
all times be under the direct supervision of Franchisee (or a trained and
competent employee approved by Franchisor acting as full-time general manager or
assistant general manager). Franchisee shall notify Franchisor in writing,
within seven (7) days, of the identity of any employees who become managers or
assistant managers of the Franchised Business or Franchised Premises.
D. Operate the Franchised Business so as not to pose a threat
or danger to public health or safety or the environment.
E. Provide reasonable security at the parking lot of the
Franchised Business for vehicles and drivers, and exert reasonable effort to
24
maintain an absence of outside elements that negatively affect the image of the
Franchised Business as well as the Branded Motor Fuel and Branded Products.
Specifically, "outside elements" refers to prostitutes, gamblers, drug dealers,
and stolen goods dealers, but is not limited to same ("Outside Elements").
F. Provide, or have made outside arrangements for providing
emergency service for passenger cars including tire service, road towing, belt
replacement, and lens replacement, but not to be limited to same.
G. Keep the Franchised Business open for business twenty-four
(24) hours each day including, but not limited to, the diesel and gasoline
islands, garage, store and restaurant. Franchisee's closing the Franchised
Business or any part thereof shall constitute abandonment by Franchisee and
shall be a material breach of this Agreement.
H. Not engage in dishonest, fraudulent or scare selling
practices.
I. Perform all services in a good workmanlike manner.
J. Provide a sufficient number of trained, courteous, and neat
personnel who can communicate with customers by understanding and speaking
English to operate the Franchised Business in an efficient and organized manner.
K. Store and dispense Motor Fuel only from tanks, pumps, or
containers identified with only Franchisor-designated suppliers' trademarks or
trade names.
L. Comply with the requirements of any conditional use permit
or other approval covering the construction, maintenance, and/or operation of
the Franchised Business. If the Franchised Business is subject to a permit, a
copy shall be delivered to Franchisee and Franchisee shall acknowledge receipt
of the copy on a form provided by Franchisor.
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12.15. Franchisee shall have on staff at all times during regular
business hours a qualified mechanic experienced in truck service to provide
prompt, courteous and workmanlike service, and to otherwise fulfill Franchisee's
responsibilities under this Agreement. Such mechanic shall meet the requirements
set forth in the Confidential Operations Manual.
12.16. Franchisor shall provide Franchisee with specifications for
dispensing, storage and display equipment, cash registers, other equipment, fuel
facilities and equipment, fixtures, furniture, exterior and interior signs and
decorating required for the Franchised Premises. Specifications may include
minimum standards for performance, warranties, design and appearance and local
zoning, sign and other restrictions. Franchisee may purchase or lease original
and replacement equipment, fixtures, furniture, signs and decorating materials
and services meeting such specifications from any source. If Franchisee proposes
to purchase or lease any item of equipment or furniture or any fixture, sign or
decorating materials not theretofore approved by Franchisor as meeting its
specifications, Franchisee shall first notify Franchisor and Franchisor may
require, at Franchisee's expense, submission of sufficient specifications,
photographs, drawings or other information and samples to determine whether such
item of equipment or furniture or such fixture, sign or decorating materials
meets its specifications. Franchisor shall advise Franchisee within a reasonable
time whether such item of equipment or furniture or such fixture, sign or
decorating materials meets its specifications.
12.17. Franchisee shall notify Franchisor in writing within five (5)
days of the commencement of any action, suit, or proceeding, and of the issuance
of any order, writ, injunction, award, or decree of any court, agency, or other
governmental instrumentality, which may adversely affect the operation or
financial condition of the Franchised Business.
12.18. Franchisee must use a software, hardware, or point-of-sale and
reporting system in the operation of the Franchised Business and, if necessary,
change or convert to only such systems (hardware or software) that Franchisor,
in its sole discretion, determines are compatible with Franchisor's computer
systems and that permit Franchisor full remote access to any and all information
stored therein. Franchisee shall utilize only such systems approved by
Franchisor.
12.19. At any full service truckstop facility, Franchisee shall
maintain a minimum of fifty (50) paved truck parking spaces.
12.20. Franchisor shall provide initial and on-going training to
Franchisee throughout the term of this Agreement as described in the
Confidential Operations Manual.
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XIII. BUYING PROGRAM.
13.01. Franchisor shall offer Franchisee the right to participate in
the Buying Program, including the right to purchase products from its
distribution center(s), as long as Franchisor has a distribution center, upon
terms and conditions identified in the Confidential Operations Manual, as
modified from time to time. Nothing contained herein shall require Franchisor to
have a distribution center in operation.
13.02. Materials, supplies and products used in the operation of the
Franchised Business or otherwise held for resale (including but not limited to
menu items, beverages, ingredients and other food and beverage products and
materials, containers, packaging materials, other paper and plastic products,
plates, cups, utensils, menus, uniforms, forms, cleaning and sanitation
materials) shall conform to the specifications and quality standards established
by Franchisor from time to time and shall be procured from Franchisor or
suppliers approved by Franchisor. If Franchisee proposes to offer for sale at
the Franchised Premises any brand of product, or to use in the operation of the
Franchised Business, any brand of food ingredient or other material or supply
which is not then approved by Franchisor as meeting its minimum specifications
and quality standards, or to purchase any product, material or supply from a
supplier that is not then designated by Franchisor as an approved supplier, then
Franchisee shall first notify Franchisor in writing and shall submit samples and
such other information as Franchisor requests for examination or testing or to
otherwise determine whether such product, material or supply, or such proposed
supplier, meets Franchisor's specifications and quality standards or should
otherwise be approved. If Franchisor fails to disapprove the product, material,
supply or supplier, or request more samples or more information, within fourteen
(14) days of Franchisee's initial submission to Franchisor, then Franchisee is
free to commence the procurement. A charge not to exceed the reasonable cost of
the inspection and evaluation and the actual cost of the test shall be paid by
Franchisee promptly upon Franchisor's request. Franchisor reserves the right to
re-inspect the facilities and products of any supplier and to revoke approval of
any item or any supplier which fails to continue to meet any of Franchisor's
criteria.
13.03. Notwithstanding anything to the contrary herein, Franchisee
agrees to maintain a representative inventory of all products covered in the
Buying Program.
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13.04. All products and services not included in the Buying Program or
listed on the Approved Supplies List, or purchased from suppliers not on the
Approved Suppliers List, shall meet specifications and quality standards
prescribed by Franchisor.
XIV. ACCOUNTING AND RECORDS.
14.01. Franchisee shall maintain, preserve and submit to Franchisor, as
the case may be, any and all records in the manner and for such time as may be
required by the Internal Revenue Service of the United States or the
Confidential Operations Manual.
14.02. Franchisee shall maintain a daily Motor Fuel meter reading and
shall provide such daily meter reading to Franchisor on a monthly report or as
otherwise prescribed in the Confidential Operations Manual.
14.03. Franchisee shall, at its expense, submit to Franchisor, within
ninety (90) days of the end of each fiscal year during the term of this
Agreement, annual financial statements, prepared by an independent certified
public accountant in accordance with generally accepted accounting principles.
14.04. Franchisee shall provide Franchisor on or before the tenth
(1Oth) day of each month a sales report specifying all Non-Fuel Revenue derived
from and actual fuel gallonage purchased through and sold at the Franchised
Business in a form approved by Franchisor, as described in the Confidential
Operations Manual. In order to assist Franchisor in monitoring the Network,
Franchisee shall submit to Franchisor such other information requested by
Franchisor from time to time in the format prescribed by Franchisor in the
Confidential Operations Manual or as Franchisor shall otherwise reasonably
require in writing, including, but not limited to, state and federal fuel tax
records by location and daily Motor Fuel meter readings by location.
14.05. Franchisor or its designated agents shall have the right at all
reasonable times, at the Franchised Premises, to audit, inspect, examine and
copy, at its expense, the books, records, and tax returns of Franchisee.
Franchisor shall also have the right, at any time, to have an independent audit
made of the books and records of Franchisee at Franchisor's expense. If an
inspection or audit should reveal that any payments due to Franchisor have been
understated in any report to Franchisor, then Franchisee shall immediately pay
to Franchisor the amount understated upon demand, in addition to interest from
the date such amount was due until paid, at the rate of eighteen percent (18%)
per annum or the maximum rate permitted by law, whichever is lower. If an
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inspection or audit discloses an understatement in any report of two percent
(2%) or more, Franchisee shall, in addition, reimburse Franchisor for any and
all costs and expenses connected with the inspection or audit (including,
without limitation, reasonable accounting and attorneys' fees). The foregoing
remedies shall be in addition to any other remedies Franchisor may have,
including, but not limited to, termination or nonrenewal pursuant to Paragraph
XIX.
14.06. Franchisee acknowledges that nothing contained herein
constitutes Franchisor's agreement to accept any payments after same are due or
a commitment by Franchisor to extend credit to or otherwise finance Franchisee's
operation of the Franchised Business. Further, Franchisee acknowledges that its
failure to pay all amounts when due shall constitute a materially significant
default and grounds for termination of this Agreement.
XV. ACCESS.
15.01. In order to preserve the goodwill, validity and integrity of the
Marks and the Network, and to ensure that Franchisee is properly employing both
the Marks and the Network in the operation of the Network, Franchisor or its
agents shall have the right of entry and inspection of Franchisee's premises and
operating procedures at all reasonable times. Franchisor or its agents shall
have the right at any time to observe the manner in which Franchisee is
rendering its services and conducting its operations, to confer with
Franchisee's employees and customers, and to select motor fuel and other
petroleum products, ingredients, food and non-food products, beverages and other
items, products, equipment, merchandise, sundries, materials and supplies for
test of content and evaluation purposes to make certain that they are
satisfactory and meet the standards and specifications set by Franchisor. In the
event any products do not conform to Franchisor's standards and specifications,
Franchisee shall upon learning of the non-conformance immediately cease offering
and selling such products.
XVI. FUEL SUPPLY.
16.01. Franchisor agrees to sell to Franchisee one hundred percent
(100%) of Franchisee's requirements of diesel fuel for resale to the motoring
public, and Franchisee agrees to buy from Franchisor one hundred percent (100%)
of Franchisee's requirements of such diesel fuel. Notwithstanding anything to
the contrary herein, Franchisor shall not be in breach of its obligations
hereunder and shall have no liability to Franchisee if it is unable to sell or
provide 100% of Franchisee's diesel fuel requirements as a result of any event
or circumstance caused by Force Majeure.
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16.02. Franchisee agrees that it shall only purchase gasoline from
suppliers which have been approved by Franchisor in writing. Notwithstanding
anything to the contrary herein, Franchisee shall not Commingle any Motor Fuel
sold to Franchisee by Franchisor (or by gasoline suppliers approved in writing
by Franchisor) pursuant hereto with any fuel from any other suppliers or any
other source. Any violation of the preceding sentence shall be grounds for
termination of this Agreement.
16.03. The method and manner of purchase and payment for diesel fuel,
including but not limited to designation of the terminals for pick-up of such
diesel fuel (the "Designated Terminals") and determination of the purchase
price, taxes and freight shall be subject to and governed by the terms and
provisions set forth in the Confidential Operations Manual, or as otherwise
specified by Franchisor in writing, as the same may be amended from time to
time. Franchisor's records with respect to any particular transaction shall be
conclusive and binding for all purposes of this Agreement. If any governmental
authority now has, or later places, a tax, excise, inspection fee or charge
(each, a "Tax") on Franchisor because of the manufacture, storage, withdrawal
from storage, transportation, distribution, sale or handling of any diesel fuel
sold by Franchisor to Franchisee, such Taxes shall be added to the purchase
price and be the sole responsibility of and paid by Franchisee. At such time, if
ever, that both Franchisor and Franchisee shall be exempt from any Tax with
respect to the transfer or sale of diesel fuel, Franchisor shall sell such
diesel fuel to Franchisee without adding such Tax to the purchase price.
16.04. Title to, and risk of loss of, diesel fuel purchased by
Franchisee from Franchisor and delivered to the Franchised Premises shall pass
to Franchisee at the time such diesel fuel enters into the transportation
equipment provided by Franchisee or for Franchisee's account. Franchisee waives
any claim against Franchisor as to quantity or quality of diesel fuel available
to Franchisee unless Franchisee notifies Franchisor in writing within ten (10)
days after receipt thereof.
16.05. If at any time the volume of Motor Fuel that Franchisor has
available for sale to its Franchised Businesses is, for any reason, less than
the volume needed to supply its Franchised Businesses' demands, Franchisor shall
allocate the volume of available Motor Fuel to its Franchised Businesses under a
plan and formula that Franchisor determines is fair and reasonable.
XVII. CREDIT.
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In connection with evaluating Franchisee's financial status for credit
purposes, Franchisor's Credit Department may at any time, and from time to time,
request that Franchisee provide it with certain financial statements.
Franchisee's failure to respond to any such request may result in Franchisor's
denial of credit to Franchisee. If Franchisee fails to fulfill the terms of
payment or if Franchisee's financial responsibility shall deteriorate in
Franchisor's sole judgment, Franchisor may, without prejudice to any other
lawful remedy, withhold Motor Fuel until payment is made, demand cash payment,
demand advance payment or terminate or not renew this Agreement pursuant to
Paragraph XIX. Franchisor may apply any payment made by or on behalf of
Franchisee to any indebtedness owed Franchisor by Franchisee, notwithstanding
any direction to the contrary. No payment made to Franchisor by check or other
instrument shall contain a restrictive endorsement of any kind. A restrictive
endorsement shall have no legal effect, even if the instrument restrictively
endorsed is processed for payment and Franchisor retains the proceeds.
XVIII. INSURANCE.
18.01. Franchisee shall procure at its expense, and maintain in full
force and effect during the term of this Agreement, an insurance policy or
policies protecting Franchisee and Franchisor and the officers, directors,
partners and employees of each Franchisor entity, against any loss, liability,
personal injury, death, or property damage or expense whatsoever arising or
occurring upon or in connection with the Franchised Business, as Franchisor may
require under or pursuant to the Confidential Operations Manual, or otherwise in
writing, for its own and Franchisee's protection. Franchisor shall be named an
additional insured in such policy or policies.
18.02. Such policy or policies shall be written by a licensed insurance
company satisfactory to Franchisor in accordance with standards and
specifications set forth in the Confidential Operations Manual or otherwise in
writing, as either may be modified from time to time by Franchisor, following
written notice to Franchisee.
18.03. Franchisor reserves the right to review and amend the amounts
and types of the required insurance coverage annually.
18.04. The insurance afforded by the policy or policies respecting
liability shall not be limited in any way by reason of any insurance which may
be maintained by Franchisor. Within thirty (30) days after execution of this
Agreement, a Certificate of Insurance showing compliance with the foregoing
requirements shall be furnished by Franchisee to Franchisor for approval. Such
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certificate shall state that said policy or policies will not be canceled or
altered without at least ninety (90) days prior written notice to Franchisor and
shall reflect proof of payment of premiums. Maintenance of such insurance and
the performance by Franchisee of the obligations under this Paragraph shall not
relieve Franchisee of liability under the indemnity provision set forth in this
Agreement.
18.05. Should Franchisee, for any reason, not procure and maintain
insurance coverage as required by this Agreement, Franchisor shall have the
right and authority (without, however, any obligation to do so) immediately to
procure such insurance coverage and to charge same to Franchisee, which charges,
together with a reasonable fee for expenses incurred by Franchisor in connection
with such procurement, shall be payable by Franchisee immediately upon notice.
18.06. Although Franchisee is not required to maintain any business
interruption insurance, in the event a payment under or pursuant to any type of
business interruption insurance is made to Franchisee or any Affiliate thereof
in connection with a business interruption at the Franchised Premises, then
Franchisee will immediately thereafter pay to Franchisor a sum equal to the
average daily Continuing Services and Royalty Fees for the year preceding the
interruption multiplied by the number of days of the business interruption.
Franchisor shall be included in any such insurance policy as a loss payee as its
interest may appear.
XIX. DEFAULT AND TERMINATION.
19.01. Termination and Nonrenewal by Franchisor.
A. Franchisor may terminate or not renew this Agreement by
written notice to Franchisee, upon the occurrence of any of the following:
1. Franchisee's failure to comply with any provision
of this Agreement, the Lease Agreement, and any other agreement between the
parties, which provision is reasonable and of material significance to the
Franchise Relationship between Franchisor and Franchisee. Franchisor is not
required to give Franchisee an opportunity to remedy any such failure prior to
terminating or not renewing this Agreement; or
2. Franchisee's failure to exert good faith efforts
to carry out the terms and conditions of this Agreement or the Lease Agreement,
or any other agreement between the parties. Prior to terminating or not renewing
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this Agreement under the provisions of this Subparagraph 2., Franchisor shall
advise Franchisee in writing of such failure and give Franchisee a reasonable
opportunity to remedy it; or
3. The happening of any one (1) or more events which
is relevant to the Franchise Relationship including, but not limited to, the
following: (Franchisor is not required to give Franchisee an opportunity to
remedy any such happening prior to terminating or not renewing this Agreement).
a. Franchisee's fraud or criminal misconduct
in the operation of the Franchised Business.
b. Declaration of bankruptcy or judicial
determination of insolvency of Franchisee.
c. If Franchisee is an individual, the death
or continuing severe physical or mental disability of Franchisee of at least
three (3) months' duration which renders Franchisee unable to provide for the
continued proper operation of the Franchised Business.
d. If Franchisee is occupying the Franchised
Premises under a lease from a Franchisor entity, the loss of Franchisor's right
to grant possession under such lease through expiration of any underlying lease,
if Franchisee was notified in writing, prior to the commencement of the term of
this Agreement, of the duration of the underlying lease and of the fact that
such underlying lease might expire and not be renewed during the term of this
Agreement or at the end of this Agreement.
e. The condemnation or other taking, in
whole or in part, of the Franchised Premises under the power of eminent domain.
The condemnation award paid to Franchisor, or the payment received by Franchisor
in exchange for its voluntary conveyance in lieu of condemnation, shall belong
solely to Franchisor, and Franchisee shall not, by virtue of this Agreement, be
entitled to any part thereof; provided, however. that nothing in this Agreement
shall preclude Franchisee from prosecuting any claim directly against the
condemning authority for loss of business, or depreciation to, damage to, or
cost of, removal of, or for the value of stock, inventory and other personal
property of Franchisee; and further provided, however, that no such claim shall
diminish or otherwise adversely affect Franchisor's award or proceeds.
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f. Franchisor's loss of the right to grant
Franchisee the use of any Xxxx, unless the loss is due to Franchisor's trademark
abuse, violation of federal or state law, or other fault or negligence of
Franchisor related to bad faith action by Franchisor.
g. The destruction, other than by
Franchisor, of all or substantially all of the Franchised Premises. If
Franchisee is occupying the Franchised Premises under a lease from Franchisor
and Franchisor rebuilds or replaces the Franchised Premises and elects to offer
the operation of the rebuilt or replaced Franchised Premises in accordance with
the terms of the Lease Agreement, Franchisee shall have the preferential right
to again be the operator of the Franchised Premises.
h. Franchisee's failure to pay Franchisor in
a timely manner when due, all sums to which Franchisor is legally entitled.
i. Franchisee's failure to operate the
Franchised Business for seven (7) consecutive days, or shorter period of time
which, under the facts and circumstances, is an unreasonable period of time.
j. Franchisee's willful adulteration,
mislabeling or misbranding of Motor Fuel sold at the Franchised Premises, or
other trademark, trade name, service xxxx, or other identifying symbol or name
violations.
k. Franchisee's knowing failure to comply
with federal, state or local laws or regulations that are relevant to the
operation of the Franchised Business.
l. Franchisee commingles any fuel.
m. Franchisee's conviction of any felony
involving moral turpitude; or
4. Franchisor's good faith determination, made in the
normal course of business, to withdraw from the marketing of Motor Fuel through
retail outlets in the state or county or parish in which the Franchised Business
is located.
B. In addition to the rights of termination or nonrenewal by
Franchisor, set forth above, Franchisor may decline to renew this Agreement:
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1. If Franchisor and Franchisee fail to agree to
changes or additions to this Agreement made by Franchisor in good faith and in
the normal course of business, and Franchisor does not insist on such changes or
additions being made for the purpose of preventing the renewal of this
Agreement.
2. If Franchisor receives numerous bona fide
complaints concerning Franchisee's operation of the Franchised Business and
Franchisor promptly notifies Franchisee of each complaint and the reason it was
communicated to Franchisor, and as to those complaints relating to the condition
of the Franchised Business or the conduct of any employee of Franchisee,
Franchisee does not take prompt action to cure or correct the basis for such
complaints. Franchisor will communicate these complaints to Franchisee in
writing using Franchisor's Customer Complaint Form ("Customer Complaint Form").
A written statement from Franchisee as to the outcome is required by Franchisor.
3. If Franchisee fails on at least three (3)
occasions during the term of this Agreement, to operate the Franchised Business
in a clean, safe and healthful condition and Franchisor notified Franchisee of
each such failure.
4. If Franchisor makes a good faith determination in
the normal course of business not to renew this Agreement because such renewal
would be uneconomical to Franchisor, despite any changes or additions to the
provisions of this Agreement that may be acceptable to Franchisee; provided,
however, that such nonrenewal is not made for the purpose of converting the
Franchised Business to operation by employees or agents of Franchisor for
Franchisor's own account.
C. If the Franchised Premises are leased by Franchisee from a
Franchisor entity, Franchisor may also decline to renew this Agreement if
Franchisor makes a good faith determination, in the normal course of business,
to:
1. Convert the Franchised Premises to a use other
than for the operation of an auto/truckstop; or
2. Materially alter, add to or replace the Franchised
Premises if such alteration, addition or replacement is not made for the purpose
of converting the Franchised Premises to operation by employees or agents of
Franchisor for Franchisor's own account; or
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3. Sell the Franchised Premises.
D. Franchisor agrees that in the event of a nonrenewal
pursuant to Subparagraph B.4 above, Franchisor will not sell the Franchised
Premises or Franchised Business for at least ninety (90) days following the
expiration of this Agreement, during which time Franchisee shall be free to
tender to Franchisor a purchase offer pertaining to the Franchised Premises;
provided, however, that nothing herein shall be deemed to (i) prevent or
restrict Franchisor from negotiating with third parties for the sale of the
Franchised Premises during such 90-day period, or (ii) grant to Franchisee any
rights of first refusal with respect to any such offer to purchase which
Franchisor may receive from any third party.
E. Franchisor's written notice of termination or nonrenewal
shall include a statement that this Agreement is being terminated or not renewed
and shall set forth the reason or reasons for termination or nonrenewal. Except
as otherwise provided in this Section 19.01, the effective date of the
termination or nonrenewal shall be at least thirty (30) days after the date of
notice of termination or nonrenewal.
F. Although at least thirty (30) days written notice of
termination or nonrenewal is provided for in most circumstances, there may be
times when the giving of a thirty (30) day notice is not reasonable. If such a
circumstance occurs, Franchisor may terminate or not renew this Agreement by
giving Franchisee written notice of termination or nonrenewal on the earliest
date that is reasonably practical.
G. Nothing in this Agreement shall prohibit or restrict
Franchisor from terminating or not renewing this Agreement in any lawful manner
or for any lawful reason under applicable federal, state and local laws or
regulations, as such laws or regulations may be amended from time to time.
19.02. Mutual Termination. Franchisee and Franchisor may agree in
writing to terminate or not renew this Agreement. The effective date of such
termination or nonrenewal shall be the date agreed to by Franchisee and
Franchisor but may not be a date that is more than one hundred eighty (180) days
after the date of such agreement. Franchisor shall send by certified mail, or
personally deliver to Franchisee, a copy of the agreement promptly after it is
executed by Franchisor and Franchisee. Franchisee may repudiate such agreement
36
by written notice to Franchisor, sent by certified mail, postmarked not more
than seven (7) days following the date Franchisee receives a copy of such
agreement.
19.03. Termination by Franchisee. (a) If Franchisee is in substantial
compliance with this Agreement and Franchisor materially breaches this Agreement
and fails to cure such breach within a reasonable time after written notice
thereof is delivered to Franchisor, Franchisee may terminate this Agreement.
Such termination shall be effective thirty (30) days after delivery to
Franchisor of written notice that such breach has not been cured and Franchisee
elects to terminate this Agreement. A termination of this Agreement by
Franchisee for any reason other than breach of this Agreement by Franchisor and
Franchisor's failure to cure such breach within a reasonable time after receipt
of written notice thereof shall be deemed a termination by Franchisee without
cause.
(b) Franchisee may terminate this Agreement at any time by one
hundred eighty (180) days advance written notice to Franchisor, posted by
certified mail. Upon receipt of such notice by Franchisor, it may not be
withdrawn without Franchisor's written approval.
19.04. Termination of Lease Agreement. This Agreement shall
automatically terminate upon the occurrence of any default or termination of the
Lease Agreement.
XX. RIGHTS AND DUTIES OF PARTIES UPON EXPIRATION OR TERMINATION.
20.01. Upon termination or expiration, this Agreement and all rights
granted hereunder to Franchisee shall forthwith terminate, and:
A. Franchisee shall immediately cease to operate the
Franchised Business under this Agreement, and shall not thereafter, directly or
indirectly, represent to the public or hold itself out as a present or former
franchisee of Franchisor.
B. Franchisee and each Franchisee Party shall immediately and
permanently cease to use, by advertising or in any manner whatsoever, any
Confidential Information or any other methods, procedures, and techniques
associated with the Network or any Marks and distinctive forms, slogans, signs,
symbols, logos, or devices associated with the Network. In particular,
Franchisee shall cease to use, without limitation, all signs, advertising
materials, stationery, forms, and any other articles which display the Marks
associated with the Network.
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C. Franchisee shall take such action as may be necessary to
cancel or assign to Franchisor, at Franchisor's option, any assumed name rights
or equivalent registration filed with state, city, or county authorities which
contains Marks associated with the Network, and Franchisee shall furnish
Franchisor with evidence of compliance with this obligation satisfactory to
Franchisor within thirty (30) days after termination or expiration of this
Agreement.
D. In the event Franchisee or any Franchisee Party continues
to operate or subsequently begins to operate any other business, Franchisee or
such Franchisee Party shall not use any reproduction, counterfeit, copy or
colorable imitation of the Marks either in connection with such other business
or the promotion thereof, which is likely to cause confusion, mistake or
deception, or which is likely to dilute Franchisor's rights in and to the Marks
and further, Franchisee shall not utilize any designation of origin or
description or representation which falsely suggests or represents an
association or connection with Franchisor so as to constitute unfair competition
or a deceptive trade practice.
E. Franchisee shall promptly pay all sums owing to Franchisor.
In the event of termination for any default of Franchisee, such sums shall
include all damages, costs, and expenses, including reasonable attorneys' fees,
incurred by Franchisor as a result of the default.
F. Franchisee shall pay to Franchisor all damages, costs and
expenses, including reasonable attorneys' fees, incurred by Franchisor
subsequent to the termination or expiration of the franchise herein granted in
obtaining injunctive or other relief for the enforcement of any provisions of
this Agreement.
G. Franchisee shall immediately turn over to Franchisor all
manuals and copies thereof, including the Confidential Operations Manual,
records, customer lists, files, instructions, brochures, agreements, disclosure
statements, and any and all other Confidential Information or other materials
provided by Franchisor to Franchisee relating to the operation of the Franchised
Business (all of which are acknowledged to be Franchisor's property), including
but not limited to any such Confidential Information or materials which have
been or are stored or maintained electronically.
H. Franchisor shall acquire all right, title and interest to
any sign or sign faces bearing the Marks. Franchisee hereby acknowledges
Franchisor's right to access the Franchised Premises should Franchisor elect to
take possession of any signs or sign faces bearing the Marks. If this Agreement
38
has been terminated for cause as provided in Paragraph XIX. herein, such sign
removal shall be at Franchisee's cost. In the event of nonrenewal of this
Agreement, Franchisor shall not charge Franchisee for the cost of sign removal.
I. Franchisor shall have the right (but not the duty), to be exercised
by notice of intent to do so within thirty (30) days after termination or
expiration, to purchase for cash any or all signs (except those signs owned by
Franchisor), Advertising Materials, and all items bearing Franchisor's Marks, at
Franchisee's cost or fair market value, whichever is less. If the parties cannot
agree on fair market value within a reasonable time, the determination shall be
made by arbitration in accordance with Paragraph XL. of this Agreement. If
Franchisor elects to exercise any option to purchase herein provided, it shall
have the right to set off all amounts due from Franchisee under this Agreement,
and the cost of the arbitration, if any, against any payment therefor.
20.02. All obligations of Franchisor and Franchisee which expressly or by
their nature survive the expiration or termination of this Agreement shall
continue in full force and effect subsequent to and notwithstanding its
expiration or termination and until they are satisfied or by their nature
expire.
XXI. TRANSFERABILITY OF INTEREST.
21.01. This Agreement and all rights hereunder can be assigned and
transferred by Franchisor and, if so, shall be binding upon and inure to the
benefit of Franchisor's successors and assigns.
21.02. This Agreement and all rights hereunder may be assigned and
transferred by Franchisee and, if so, shall be binding upon and inure to the
benefit of Franchisee's successors and assigns, subject to the following
conditions and requirements, and Franchisor's right of first refusal as set
forth herein:
A. Neither Franchisee nor any Franchisee Party may sell,
assign (including, but not limited to, assignments by operation of law) or
transfer (collectively, "Assign") this Agreement without Franchisor's prior
written consent. Franchisor may condition such consent on, among other things,
transferee's completion of Franchisor's then-current training program to
Franchisor's satisfaction. Franchisor has an absolute and unqualified right to
withhold consent to such proposed Assignments. Any attempt by Franchisee to
Assign this Agreement without Franchisor's prior written consent shall be void
39
and of no force and effect. The sale, transfer, transfer by operation of law, or
other disposition of Franchisee's interest, or any part thereof, in the
Franchised Business, or any Franchisee Party's or other Person's ownership or
other interest in Franchisee, if Franchisee is a corporation, partnership or
other business entity, shall be an assignment requiring Franchisor's prior
written consent. Franchisee's written request for Franchisor's approval of any
assignment must be received by Franchisor not less than ninety (90) days prior
to the effective date of such requested assignment.
B. Franchisor shall have the preferential right to meet the
bona fide offer of any proposed assignee; such right to be exercised by
Franchisor within sixty (60) days following the date Franchisor receives a copy
of Franchisee's written request for Franchisor's approval of any assignment.
Franchisee shall include in such written request the name and address of the
proposed assignee and the price, terms, and conditions contained in the bona
fide offer. Franchisor's failure to exercise this preferential right shall not
terminate this Agreement or the preferential right or release Franchisee from
any of its obligations under this Agreement.
C. In the event of sale, transfer, or assignment of this
Agreement by Franchisee during the term of this Agreement, or at the expiration
date of this Agreement, Franchisor will charge Franchisee a Transfer and
Training Fee of Twenty-Five Thousand Dollars ($25,000.00) ("Transfer and
Training Fee"). Notwithstanding the foregoing, if the transfer or assignment is
approved in writing by Franchisor pursuant to Subparagraph A above, and such
transfer or assignment is to (i) an immediate family member of Franchisee (if
Franchisee is an individual), or (ii) an immediate family member of a Franchisee
Party, or (iii) a principal operator of the Franchised Business, the Transfer
and Training Fee will not be charged.
21.03. During the term of this Agreement, neither Franchisee nor any
Franchisee Party shall encumber all or any part of its interest in or rights
under this Agreement (or the franchise granted hereby) without the prior written
consent of Franchisor.
XXII. DEATH OR INCAPACITY OF FRANCHISEE.
22.01. In order to prevent any interruption of the Franchised Business,
in the event of (a) the death or Incapacity of an individual Franchisee or any
Franchisee Party; or (b) Franchisee's inability to operate the Franchise (due to
absence, illness or death of one or more key personnel, or for any other
reason), or (c) Franchisee's failure to cure a default timely under this
Agreement, Franchisor may, at its option (and for such period(s) of time as it
determines in its sole discretion), enter upon the Franchised Premises and
exercise complete authority with respect to the operation of the business for
40
such period of time as Franchisor determines is necessary or practical.
Franchisee specifically agrees that Franchisor may take over, control, and
operate the Franchised Business under such circumstances, and that Franchisee
shall pay to Franchisor a service fee of not less than Five Hundred Fifty
Dollars ($550.00) per day plus all travel and living expenses, room and board
and other expenses reasonably incurred by Franchisor in connection with such
services. All revenues and expenses (including Franchisor's service fee) from
the operation of the Franchised Business during such period of operation by
Franchisor shall be accounted for separately. Franchisee further agrees that if
Franchisor exercises such right of operation, Franchisee will indemnify and hold
harmless Franchisor and its agents, employees, and contractors who may act
hereunder against all claims or losses which may be asserted against Franchisor
in connection therewith, except to the extent the claims or losses are
attributable to the Gross Negligence or Willful Misconduct of Franchisor. During
any period of temporary management by Franchisor all personnel working at the
Franchised Premises, except those provided by Franchisor, shall be deemed
employees, agents or contractors of Franchisee. Franchisor's exercise of its
rights hereunder shall not constitute a waiver of any other rights or remedies
Franchisor may have under this Agreement.
22.02. Notwithstanding anything to the contrary herein, in the event of
the death or Incapacity of an individual Franchisee, or any Franchisee Party,
the heirs, beneficiaries, devisees, or legal representatives of such person may,
within one hundred eighty (180) days of such death or Incapacity, apply to TA,
in writing, for the right to continue to operate the Franchised Business for the
duration of the term of this Agreement. Such application shall be treated by
Franchisor as a request for an assignment, and shall be subject to the terms and
provisions of Section XXI above. If no such application is made within such one
hundred eighty (180) day period, this Agreement shall automatically terminate.
XXIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION.
23.01. This Agreement does not create a fiduciary relationship between
the parties nor does it constitute Franchisee as an agent, legal representative,
joint venturer, partner, employee, or servant of Franchisor for any purpose
whatsoever; and it is understood between the parties hereto that Franchisee
shall be an independent contractor and is not authorized to make any contract,
agreement, warranty or representation on behalf of Franchisor, or to create any
obligation, express or implied, on behalf of Franchisor. Franchisee shall not,
without the prior written approval of Franchisor, have any power to obligate
Franchisor for any expenses, liabilities or other obligations, other than as is
specifically provided for in this Agreement. Franchisor shall not have the power
41
to hire or fire Franchisee's employees and, except as herein expressly provided,
Franchisor may not control or have access to Franchisee's funds or the
expenditure thereof, or in any other way exercise dominion or control over
Franchisee's Franchised Business. It is expressly understood and agreed that
neither Franchisee nor any employee of Franchisee whose compensation for
services is paid by Franchisee may, in any way, directly or indirectly,
expressly or by implication, be construed to be an employee of Franchisor for
any purpose, most particularly with respect to any mandated or other insurance
coverage, tax or contributions, or requirements pertaining to
withholdings-levied or fixed by any city, state or federal governmental agency.
23.02. FRANCHISEE SHALL CONSPICUOUSLY IDENTIFY ITSELF AND ITS
FRANCHISED BUSINESS IN ALL DEALINGS WITH ITS CLIENTS, CONTRACTORS, SUPPLIERS,
PUBLIC OFFICIALS AND OTHERS, AS AN INDEPENDENT FRANCHISEE OF FRANCHISOR, AND
SHALL PLACE SUCH NOTICE OF INDEPENDENT OWNERSHIP IN SUCH FASHION AS FRANCHISOR
MAY, IN ITS SOLE AND EXCLUSIVE DISCRETION, SPECIFY AND REQUIRE FROM TIME TO
TIME, IN ITS CONFIDENTIAL OPERATIONS MANUAL OR OTHERWISE.
23.03. EXCEPT AS OTHERWISE EXPRESSLY AUTHORIZED BY THIS AGREEMENT,
NEITHER PARTY HERETO SHALL MAKE ANY EXPRESS OR IMPLIED AGREEMENTS, WARRANTIES,
GUARANTEES OR REPRESENTATIONS OR INCUR ANY DEBT IN THE NAME OF OR ON BEHALF OF
THE OTHER PARTY, OR REPRESENT THAT THE RELATIONSHIP BETWEEN FRANCHISOR AND
FRANCHISEE IS OTHER THAN THAT OF Franchisor AND FRANCHISEE. FRANCHISOR DOES NOT
ASSUME ANY LIABILITY, AND WILL NOT BE DEEMED LIABLE, FOR ANY AGREEMENTS,
REPRESENTATIONS, OR WARRANTIES MADE BY FRANCHISEE WHICH ARE NOT EXPRESSLY
AUTHORIZED UNDER THIS AGREEMENT, NOR WILL FRANCHISOR BE OBLIGATED FOR ANY
DAMAGES TO ANY PERSON OR PROPERTY WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR
RELATE TO THE OPERATION OF THE FRANCHISED BUSINESS.
23.04. Franchisee agrees to indemnify, defend, protect and hold
harmless Franchisor (and the directors, officers, employees, agents, Affiliates,
designees, representatives, stockholders, successors and assigns of each
Franchisor entity) (collectively, "Indemnified Parties") from and against all
losses, liens, liabilities, damages, deficiencies, demands, claims, actions,
judgments or causes of action, assessments, costs or expenses (including,
without limitation, interest, penalties and reasonable attorneys', consultants',
42
and other experts' fees and disbursements) ("Losses") based upon, arising out of
or otherwise in respect of Franchisee's Franchised Business; provided, however,
Franchisee shall not be required to indemnify, defend and hold harmless the
Indemnified Parties from and against any Losses, arising out of the gross
negligence ("Gross Negligence") or willful misconduct ("Willful Misconduct") of
Franchisor and/or any other Indemnified Party. For the purpose of this Paragraph
23.04., the term "Gross Negligence" shall mean a conscious and voluntary act or
omission which is in reckless disregard of the rights or property of another and
the term "Willful Misconduct" shall mean intentional, purposeful conduct of an
Indemnified Party but does not include instances where an Indemnified Party is
strictly liable for breach of any warranty. It is agreed that neither Franchisee
nor its insurance carrier shall have the power or authority under this Agreement
to make a determination as to whether an Indemnified Party caused liabilities,
losses, claims, liens or demands as the result of Gross Negligence or Willful
Misconduct. If there is a disagreement between Franchisee, its insurance carrier
and the Indemnified Parties as to whether or not the actions of an Indemnified
Party(ies) meet the test of Gross Negligence or Willful Misconduct, such a
dispute shall be submitted for resolution to a court having jurisdiction over
such disputes.
Promptly after receipt by any Indemnified Party of notice of any
demand, claim or circumstance which, with the lapse of time, would or might give
rise to a claim or the commencement (or threatened commencement) of any action,
proceeding or investigation ("Asserted Liability") that may result in a Loss,
the Indemnified Party shall give notice thereof ("Claims Notice") to Franchisee.
The Claims Notice shall describe the Asserted Liability in reasonable detail and
shall indicate the amount (estimated, if necessary and to the extent feasible)
of the Loss that has been or may be suffered by an Indemnified Party.
Franchisee may elect within thirty (30) days of receipt of the Claims
Notice to compromise or defend, at its own expense and by its own counsel, any
Asserted Liability if Franchisee acknowledges to such Indemnified Party
Franchisee's obligation to fully indemnify such party with respect to such
Asserted Liability; provided, however, that a condition to any settlement by
Franchisee shall be a complete and unconditional release of the Indemnified
Party with respect to such claim. If Franchisee elects to compromise or defend
such Asserted Liability as provided in this Paragraph 23.04., the Indemnified
Party shall cooperate, at the expense of Franchisee, in the compromise or
defense of such Asserted Liability. The Indemnified Party may select its own
legal counsel to participate in such compromise or defense, at Franchisee's
expense, to the extent such Indemnified Party, or its counsel, reasonably
believes that a conflict of interest exists between Franchisee and such
Indemnified Party.
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Franchisor will reimburse reasonable attorneys' fees incurred by
Franchisee in a court-sought resolution if Franchisor or any other Indemnified
Party is found to be Grossly Negligent or guilty of Willful Misconduct. If
Franchisee elects not to compromise or defend the Asserted Liability, fails to
notify the Indemnified Party of its election as herein provided or contests its
obligation to indemnify under this Agreement, the Indemnified Party may pay,
compromise or defend such Asserted Liability; provided, however, that such
payment, compromise or defense shall in no way relieve Franchisee of its
indemnification responsibilities pursuant to this Agreement.
23.05. Without limiting or detracting from the indemnity provision
above or elsewhere in this Agreement, Franchisee shall comply with the
applicable federal, state and local laws, rules, regulations, orders and
ordinances concerning pollution and protection of the environment, with special
attention to the regulations governing the storage, dispensing, and sale of
unleaded gasoline; shall procure and maintain all permits and licenses required
thereunder; and shall defend, indemnify, and hold harmless the Indemnified
Parties from and against any and all penalties, interest, costs, expenses,
claims, judgments, and orders with respect to such laws, ordinances, rules,
orders, and regulations, except those determined to have been caused by the
Gross Negligence or Willful Misconduct of an Indemnified Party.
23.06. Because Franchisee has the day-to-day occupation and control of
the business at the Franchised Premises, Franchisee shall:
A. Immediately clean up and properly dispose of all
contaminants, pollutants, toxic substances, and hazardous substances which are
dumped, spilled, or otherwise deposited, or which appear anywhere on, or which
originate from, the Franchised Premises from whatever cause or source. All such
cleanup and disposal actions shall be in compliance with all applicable laws,
regulations and ordinances, and the requirements of governmental agencies,
relating to pollution or protection of the environment. If the matter cleaned up
and disposed of is determined after non-appealable final judgment to have been
deposited through the Gross Negligence or Willful Misconduct of an Indemnified
Party, Franchisor shall reimburse Franchisee the reasonable clean-up and
disposal costs.
B. Comply with the Occupational Safety and Health Act and
rules, orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business. Franchisee shall also defend,
indemnify, and hold harmless the Indemnified Parties from and against any and
44
all penalties, interest, cost, expenses, claims, judgments, and orders arising
out of or incident to Franchisee's non-compliance with said Act and the rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business.
C. Comply with the Americans with Disabilities Act and rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business. Franchisee shall also defend,
indemnify, and hold harmless the Indemnified Parties from and against any and
all penalties, interest, cost, expenses, claims, judgments and orders arising
out of or incident to Franchisee's non-compliance with said Act and the rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business.
D. Immediately advise Franchisor verbally and in writing of
defects in or deterioration of storage tanks, submerged pumps, and/or piping as
listed in the Lease Agreement, for which Franchisor has replacement
responsibility. In this regard, storage tanks, submerged pumps, and/or piping at
the Franchised Premises may result in major environmental and property damage.
One of the recommended methods used to warn of a potential leak is the
implementation and adherence to a motor fuel inventory program that includes a
daily stick measurement of the volume of motor fuel in storage and recording of
the volume of motor fuel received and sold. Franchisee agrees to implement and
adhere to a daily inventory plan incorporating the above described elements.
Franchisee shall immediately notify Franchisor when a loss of motor fuel is
equal to or greater than one thousand (1,000) gallons reflected in its daily
inventory system, but not later than the next day, by the fastest means
available. This loss may be considered a paper shortage of motor fuel even
though the motor fuel may be reflecting an overage. Franchisee should use his
best judgment and past historical data in determining losses during periods of
fuel expansion or shrinkage during storage. If Franchisee's first notification
to Franchisor of a loss is verbal, Franchisee shall confirm such notice in
writing immediately after giving the verbal notice. Franchisor shall have the
sole right to determine what tests are required to confirm any leaks and what
corrective measures are to be taken. If Franchisee keeps a daily inventory
system and notifies Franchisor immediately upon detecting a motor fuel loss,
Franchisee shall be released from its obligation to defend, indemnify, and hold
the Indemnified Parties harmless from any claims, costs, fines, penalties, and
damages related to a leak in the underground tanks, submerged pumps, or piping,
except for any leak arising from the negligent or willful acts or omissions of
Franchisee, its contractors, agents, or employees. If Franchisee, its employees
or agents is negligent, or if Franchisee does not maintain a daily inventory
system and/or fails to immediately advise Franchisor of an indicated loss,
45
Franchisee shall be responsible for and shall indemnify, defend, and hold the
Indemnified Parties harmless from, any and all claims, costs, fines, penalties,
or damages of every nature related to any leak not detected and/or reported.
Such failure to maintain an inventory system or immediately notify Franchisor of
an indicated loss or water contamination shall be grounds for termination or
nonrenewal of this Agreement.
23.07. Indemnified Parties do not assume any liability whatsoever for
acts, errors, or omissions of those with whom Franchisee may contract,
regardless of the purpose. Franchisee shall hold harmless and indemnify
Indemnified Parties for all losses and expenses which may arise out of any acts,
errors or omissions of these third parties.
23.08. Franchisor shall not, by virtue of any approvals, advice or
services provided to Franchisee, assume responsibility or liability to
Franchisee or any third parties to which Franchisor would not otherwise be
subject.
XXIV. RESTRICTIVE COVENANTS.
24.01. During the term of this Agreement, neither Franchisee nor any
Franchisee Party shall, without the prior written consent of TAFSI, at the
Franchised Premises, be affiliated with, participate in or have any interest in
any franchise agreement, licensing agreement, marketing plan or other system of
any Person other than TA Operating.
24.02. Except for the continued operation of those businesses or
facilities described on EXHIBIT B attached hereto (under the brand or name
identified thereon), during the term of this Agreement, Franchisee and each
Franchisee Party covenants and agrees that it or he, as the case may be, shall
not, without the prior written consent of Franchisor, either directly or
indirectly (for itself or himself or on behalf of or in conjunction with any
person, persons, partnership, corporation or other entity) own, maintain, engage
in, participate in or have any interest in the operation, within the United
States, of the whole or any part of any truckstop, travel center business,
fueling business, vehicle repair facility, truckstop or travel center restaurant
or other business offering or selling any services or products similar to that
sold in the Network, pursuant to a franchise agreement, licensing agreement or a
prescribed marketing plan or system of another truckstop company or other
Person, the primary purpose of which is the marketing of fuel and services to
the traveling public, (including but not limited to Petro, Flying J, Pilot,
Speedway, Xxxx Bros., Travelport, Mobil or Tosco, or their successors or
assigns). Notwithstanding the foregoing, these restrictions shall not apply to
ownership by Franchisee or any Franchisee Party of outstanding securities of any
corporation whose securities are publicly held and traded; provided, that the
46
securities are held for investment purposes only and that the combined total of
Franchisee and any Franchisee Parties holdings do not constitute more than five
percent (5%) of the outstanding securities of the corporation.
XXV. APPROVALS.
25.01. Whenever this Agreement requires the prior approval or consent
of Franchisor, Franchisee shall make a timely written request to Franchisor
therefor, and, except as otherwise provided herein, any approval or consent
granted must be in writing to be binding upon Franchisor.
25.02. Franchisor makes no warranties or guarantees upon which
Franchisee may rely and assumes no liability or obligation to Franchisee or any
third party to which it would not otherwise be subject, by providing any waiver,
approval, advice, consent or services to Franchisee in connection with this
Agreement, or by reason of any neglect, delay or denial of any request therefor.
XXVI. AMENDMENTS; WAIVERS; REMEDIES.
26.01. Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Franchisee and Franchisor, or in the case of a waiver, by the
party against whom the waiver is to be effective.
26.02. No waiver by either party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No single or partial exercise by
either party in exercising any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any right or remedies provided by law.
XXVII. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
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XXVIII. GOVERNING LAW; JURY TRAIL WAIVER.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Ohio, without regard to conflict of laws principles
thereof. Each of Franchisor, Franchisee and any Franchisee Party hereby
irrevocably waives trial by jury in any action, proceeding or counterclaim,
whether at law or in equity, brought by Franchisor against Franchisee or any
Franchisee Party on the one hand, or by Franchisee or any Franchisee Party
against any Franchisor entity on the other hand, whether or not there are other
parties in such action or proceeding.
XXIX. COUNTERPARTS; EFFECTIVENESS.
This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
XXX. ENTIRE AGREEMENT.
This Agreement, together with the Lease Agreement and any other
documents referred to herein or therein, or executed or delivered in connection
herewith or therewith, including but not limited to the Confidential Operations
Manual, constitute the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. Neither this Agreement nor any provision
hereof is intended to confer upon any person or entity other than the parties
hereto any rights or remedies hereunder (except the rights given generally to
Affiliates of TAFSI, by virtue of the fact that the definition of "Franchisor"
includes such Affiliates, and the rights given to the Indemnified Parties in
Paragraph XXIII.).
XXXI. JURISDICTION.
Each of the parties hereto irrevocably submits to the jurisdiction of
any state or federal court sitting in Cuyahoga County, Ohio, and further agrees
that any action or proceeding arising out of or relating to this Agreement (or
any agreement referred to herein or executed or delivered in connection
herewith) shall be heard and determined in such court, and agrees not to bring
48
any action or proceeding arising out of or relating to this Agreement (or any
agreement referred to herein or executed or delivered in connection herewith) in
any other court or to contest the jurisdiction (in rem or in personam) or power
or decision of such court over or pertaining to the party or with respect to the
subject matter in any other court within or outside of the United States other
than appropriate appellate courts. Each of the parties hereto irrevocably waives
any defense of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety or other security that might be required
of the other party hereto with respect thereto.
XXXII. CAPTIONS.
The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
XXXIII. SEVERABILITY.
If any provisions of this Agreement, or the application thereof to any
Person, place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provisions as applied to other Persons, places and
circumstances shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.
XXXIV. CONSTRUCTION.
Whenever required by the context, any gender shall include any other
gender, the singular shall include the plural and the plural shall include the
singular.
XXXV. INCONSISTENCY.
In the event of any conflict between the terms and provisions of this
Agreement and the terms and provisions of the Lease Agreement and other
agreements between the parties, the terms and provisions of the Franchise
Agreement shall govern and control.
XXXVI. FORCE MAJEURE.
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The period of time during which either party hereto is prevented or
delayed in the performance or fulfilling any obligation, or any other fees or
sums and charges due hereunder, due to unavoidable delays caused by force
majeure, including but not limited to earthquake, fire, flood, or the elements,
malicious mischief, riots, strikes, lockouts, boycotts, picketing, labor
disputes or disturbance, war, refinery disruption, fuel rationing or allocation,
compliance with any directive, order or regulation of any governmental authority
or representative thereof acting under claim or color of authority, or any other
reason beyond such party's reasonable control, whether or not similar to the
foregoing (collectively, "Force Majeure"), shall be added to such party's time
for performance thereof, and such party shall have no liability by reason
thereof.
XXXVII. NOTICE.
All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) if personally delivered,
when so delivered, (ii) if mailed, two (2) business days after having been sent
by registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, (iii) if given by telex
or telecopier, once such notice or other communication is transmitted to the
telex or telecopier number specified below and the appropriate answer back or
telephonic confirmation is received; provided, that such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (ii) above or (iv) if sent through a reputable overnight delivery service
in circumstances to which such service guarantees next day delivery, the day
following being so sent:
Notices to Franchisor: TA FRANCHISE SYSTEMS, INC.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000-0000
Attention: Manager of Franchising
Telecopy: (000) 000-0000
Notices to Franchisee:
--------------------------
--------------------------
--------------------------
Attention:
--------------
Telecopy:
---------------
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Either party may serve any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it is
actually received by the individual for whom it is intended. Either party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
XXXVIII. COST OF ENFORCEMENT OR DEFENSE.
If a claim for amounts owed by Franchisee to Franchisor is asserted in
any legal proceeding before a court of competent jurisdiction, or if Franchisor
or Franchisee is required to enforce this Agreement in a judicial proceeding,
the prevailing party shall be entitled to reimbursement of its costs, including
reasonable accounting and legal fees, in connection with such proceeding.
XXXIX. INJUNCTIVE RELIEF.
Franchisor shall have the right to obtain injunctive relief against any
threatened or actual conduct by Franchisee that could cause Franchisor loss or
damages, including but not limited to Franchisee's or any Franchisee Party's
material misuse or unauthorized use of the Marks or Franchisee's or any
Franchisee Party's threatened or actual violation of the provisions of Sections
VII, VIII or XXIV. Such injunctive relief shall be governed under the usual
equity rules, including the applicable rules for obtaining restraining orders
and preliminary injunctions.
XL. ARBITRATION.
40.01. Any monetary claim of less than ONE HUNDRED THOUSAND Dollars
($100,000.00) in dispute arising out of or relating to this Agreement, or any
breach thereof, shall be submitted to arbitration before a single arbitrator in
Cuyahoga County, Ohio in accordance with the rules of the American Arbitration
Association and judgment upon the award may be entered in any court having
jurisdiction thereof. The arbitrator is explicitly authorized to award
attorney's fees as part of his or her award. Nothing contained herein shall,
however, be construed to limit or to preclude Franchisor from bringing any
action in any court of competent jurisdiction for injunctive or other
provisional relief as Franchisor deems to be necessary or appropriate to compel
Franchisee to comply with its obligations hereunder or to protect Franchisor's
Marks or other property rights of Franchisor. In addition, nothing contained
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herein shall be construed to limit or to preclude Franchisor from joining with
any action for injunctive or provisional relief all monetary claims that
Franchisor may have against Franchisee which arise out of the acts or omissions
to act giving rise to the action for injunctive or provisional relief. This
arbitration provision shall be deemed to be self-executing and in the event that
Franchisee fails to appear at any properly noticed arbitration proceeding, award
may be entered against Franchisee notwithstanding its failure to appear.
40.02. Nothing herein contained shall bar the right of either party to
seek and obtain temporary injunctive relief from a court of competent
jurisdiction (subject to Section XXXI) in accordance with applicable law against
threatened conduct that will cause loss or damage, pending completion of the
arbitration.
40.03. It is the intent of the parties that any arbitration between
Franchisor and Franchisee shall be of Franchisee's individual claim and that the
claim subject to arbitration shall not be arbitrated on a classwide basis.
XLI. LINE OF CREDIT.
In order to guaranty Franchisee's performance of its monetary
obligations to Franchisor pursuant to this Agreement, Franchisee shall establish
a line of credit with Franchisor's Credit Department in an amount determined by
Franchisor's Credit Department. In the event that Franchisee fails to pay any
amounts due pursuant to this Agreement, Franchisor may refuse to extend credit
to Franchisee.
XLII. CAVEAT.
The success of the business venture contemplated to be undertaken by
Franchisee by virtue of this Agreement is speculative and depends, to a large
extent, upon the ability of Franchisee as an independent business entity, and
its active participation in the daily affairs of the business as well as other
factors. Franchisor does not make any representation or warranty express or
implied as to the potential success of the business venture in this Agreement.
XLIII. ACKNOWLEDGMENTS
43.01. Franchisee and each Franchisee Party represents and acknowledges
that it or he, as the case may be, has received, read and understood this
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Agreement and Franchisor's Uniform Franchise Offering Circular; and that
Franchisor has fully and adequately explained the provisions of each to
Franchisee's satisfaction; and that Franchisor has accorded Franchisee and each
Franchisee Party ample time and opportunity to consult with advisors of its own
choosing about the potential benefits and risks of entering into this Agreement.
43.02. Franchisee and each Franchisee Party acknowledges that it or he,
as the case may be, has received a copy of this Agreement and the attachments
thereto, at least five (5) business days prior to the date on which this
Agreement was executed. Franchisee further acknowledges that Franchisee has
received the disclosure document required by the Trade Regulation Rule of the
Federal Trade Commission entitled Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures, at least ten (10)
business days prior to the date on which this Agreement was executed. Franchisee
and each Franchisee party acknowledges that Franchisor has made no
representation or warranty in connection with this Agreement other than those
expressly set forth herein or in the Lease Agreement, and that Franchisee and
the Franchisee Parties have not relied on any such representations or warranties
in entering into this Agreement.
43.03. Franchisee has been advised to consult with its own advisors
with respect to the legal, financial and other aspects of this Agreement, the
business franchised hereby, and the prospects for that business. Franchisee has
either consulted with such advisors or has deliberately declined to do so.
43.04. Franchisee affirms that all information set forth in any and all
applications, financial statements and submissions to Franchisor is true,
complete and accurate in all respects, with Franchisee expressly acknowledging
that Franchisor is relying upon the truthfulness, completeness and accuracy of
such information.
43.05. Franchisee has conducted an independent investigation of the
business contemplated by this Agreement and recognizes that, like any other
business, an investment in a Franchised Business involves business risks and
that the success of the venture is primarily dependent upon the business
abilities and efforts of Franchisee.
43.06. Franchisee and each Franchisee Party represents and acknowledges
that, except as may be disclosed on EXHIBIT B hereto, it or he, as the case may
be, does not (i) operate under a franchise agreement, licensing agreement, or a
prescribed marketing plan or system of another company or organization or (ii)
own, maintain, engage in, participate in or have any interest in the operation,
within the United States, of any truckstop, travel center business, fueling
business, vehicle repair facility or other business offering or selling any
53
services or products similar to that sold in the Network, pursuant to a
franchise agreement, licensing agreement or a prescribed marketing plan or
system of another truckstop company or other Person, the primary purpose of
which is the marketing of fuel and services to the traveling public (including
but not limited to Petro, Flying J., Pilot, Speedway, Xxxx Bros., Travelport,
Mobil or Tosco, or their successors or assigns), and that Franchisee and its
officers, directors and shareholders are not subject to any agreements limiting
or restricting Franchisee's ability to conduct said business as a Franchisee
hereunder. Operation of a business similar to the Franchised Business without
Franchisor's prior written approval is a material default and grounds for
termination of this Agreement.
43.07. Franchisee understands and acknowledges that all representations
of fact made by Franchisor herein are made solely by Franchisor. All documents,
circular and all exhibits thereto, have been prepared solely in reliance upon
representations made and information provided by Franchisor, its officers and
its directors. Franchisee further agrees that it has no claim against, and will
indemnify and hold harmless, the preparer of any and all such franchise
agreements, offering circulars and exhibits thereto, with respect to any and all
loss, costs, expenses (including attorneys' fees), damages and liabilities
resulting from any representations and/or claims made by Franchisor in such
documents.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed and delivered this Agreement in multiple
copies the day and year first above written.
WITNESS: TA FRANCHISE SYSTEMS, INC.
By:
--------------------------------- ------------------------------
ITS:
--------------------------------- ------------------------------
WITNESS/ATTEST: FRANCHISEE:
By:
--------------------------------- ------------------------------
ITS:
-----------------------------
ACKNOWLEDGEMENT
The undersigned hereby acknowledges and agrees that he or she is a
Franchisee Party under this Agreement, and covenants and agrees to be bound by
and subject to all of the terms or provisions herein that are applicable to
Franchisee Parties.
-----------------------------------
55
TRUCKSTOPS OF AMERICA
EXCLUSIONS FROM THE PROTECTED TERRITORY
EXHIBIT A TO THE FRANCHISE AGREEMENT
TA FRANCHISE SYSTEMS INC.
ADDENDUM TO FRANCHISE AGREEMENT
This Addendum to the Franchise Agreement (the "Addendum") is
executed this day of , 1997, by and between TA Franchise
----- --------------
Systems, Inc., a Delaware corporation, having its principal place of business at
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxx 00000-0000 (hereinafter
referred to as "TAFSI"), and
---------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(hereinafter referred to as "Franchisee").
------------------------
WITNESSETH:
WHEREAS, TAFSI and Franchisee have executed a Franchise
Agreement, of even date herewith (the "Franchise Agreement"), pertaining to the
operation of the Franchised Business at the Franchised Premises (as such terms
are defined in the Franchise Agreement); and
WHEREAS, the parties desire to amend and modify certain terms
and provisions of the Franchise Agreement in accordance with the terms of this
Addendum;
NOW, THEREFORE, in consideration of the premises above and in
the Franchise Agreement, and in consideration of the mutual covenants,
agreements and obligations set forth herein, the parties hereto agree as
follows:
1. Unless otherwise defined herein, capitalized terms which
are used herein shall have the meanings ascribed thereto in the Franchise
Agreement.
2. Section 5.01 of the Franchise Agreement shall be and hereby
is deleted in its entirety, and the following shall be and hereby is added in
lieu thereof:
"5.01 This Agreement shall be effective and binding for an
initial term of five (5) years, commencing on
, 19 (the "Initial Term")."
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3. Section 19.01(D) of the Franchise Agreement shall be and
hereby is deleted in its entirety, and the following shall be and hereby is
added in lieu thereof:
"D. Franchisor agrees that in the event of: (a) a nonrenewal
of this Agreement pursuant to Subparagraph 19.01.A.4 above; or
(b) a nonrenewal of this Agreement pursuant to Subparagraph
19.01.B.1 or 19.01.B.4 above; Franchisor will not, during the
one hundred eighty (180) day period following the expiration
of the then-current Initial Term or Renewal Term, as the case
may be, contract with another Person for the operation of the
Franchised Business at the Franchised Premises upon terms that
are materially different from those that Franchisor offered to
Franchisee, without first giving Franchisee a 30-day
preferential right to accept a renewal of this Agreement upon
such modified or different terms. Notwithstanding anything to
the contrary herein, Franchisor shall not be subject to the
restrictions above, and Franchisee shall not be entitled to
any such preferential right if Franchisee has not otherwise
complied with the terms and provisions of Section 5.02 of this
Agreement."
4. The first three (3) sentences of Section 21.02(A) of the
Franchise Agreement shall be and hereby are deleted, and the following shall be
and hereby is added in lieu thereof:
"A. Neither Franchisee nor any Franchisee Party may sell,
assign (including, but not limited to, assignments by
operation of law) or transfer (collectively, "Assign") this
Agreement without Franchisor's prior written consent, which
consent shall not be unreasonably withheld. Franchisor may
condition such consent on, among other things, transferee's
completion of Franchisor's then-current training program to
Franchisor's satisfaction."
5. If Franchisee has executed, or is required to execute, an
Amendment to Franchise Agreement, attached as Exhibit C to Franchisor's offering
circular (the "Amendment"), Section XLV of the Franchise Agreement (which is
added to the Franchise Agreement by Item 13 of the Amendment) shall be and
hereby is amended by changing the words "two (2) years" to "one hundred eighty
(180) days."
6. Exhibit A to the Franchise Agreement, entitled "Exclusions
from the Protected Territory," shall be and hereby is amended by adding the
following to Exhibit A as new item 4:
"4. Specifically excluded from the Protected Territory (as
defined in the Franchise Agreement) are the geographic areas
within a five (5) mile radius of each of the truckstops or
travel centers which, as of January 1, 1997, were being
operated by National Auto/Truckstops, Inc., either as a
company operated or a franchisee operated facility."
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IN WITNESS WHEREOF, the parties hereto intending to be legally
bound hereby, have duly executed and delivered this Addendum to Franchise
Agreement on the day and year first above written.
TAFSI:
TA FRANCHISE SYSTEMS INC.
By:
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(sign)
-----------------------------------
(print)
-----------------------------------
(title)
FRANCHISEE:
By:
--------------------------------
(sign)
-----------------------------------
(print)
-----------------------------------
(title)
FRANCHISEE PARTIES:
By:
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(sign)
-----------------------------------
(print)
-----------------------------------
(sign)
-----------------------------------
(print)
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