Exhibit 10.7 FLORIDINO'S STANDARD FRANCHISE AGREEMENT
THIS AGREEMENT is made and entered into this ________ day of
______________,19 ____, by and between FLORIDINO'S INTERNATIONAL,
INC., a Florida corporation, with its principal office at 0000
Xxxxxxx Xxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxx 00000 ("COMPANY"),
and _________________________________ with his principal address
at ___________________________________________
__________________________________________("FRANCHISEE").
1. PREAMBLES AND ACKNOWLEDGMENTS
A. PREAMBLES
The COMPANY has developed specialty restaurants, known as
"Floridino's Restaurants", that sell and serve calzones, pizzas,
pastas, salads, Italian sandwiches, beers, wines, sodas, and
other Italian, Italian-American, and American foods and
beverages. The Floridino's Restaurants are identified by certain
service marks, trade names, logos, trade dress, and other
commercial symbols, including, without limitation, the
"Floridino's" service xxxx and trade name and the "Home of the
World's Largest Calzone" service xxxx ("Marks"). The Floridino's
Restaurants are operated pursuant to formats, specifications,
standards, methods, and procedures required or approved by the
COMPANY ("System"), all of which may be improved, further
developed, or otherwise modified from time to time by the
COMPANY. The COMPANY grants to persons who meet the COMPANY's
qualifications, who have selected a location approved by the
COMPANY, and who are willing to undertake the investment and
effort, a franchise to operate a Floridino's Restaurant at such
location, offering the products and services required or approved
by the COMPANY and using the Marks and the System.
B. ACKNOWLEDGMENTS
FRANCHISEE acknowledges that he has read this Agreement and the
COMPANY's franchise offering circular and that he understands and
accepts the terms, conditions, and covenants contained in this
Agreement as being reasonably necessary to maintain the COMPANY's
high standards of quality and service at all Floridino's
Restaurants in order to protect and preserve the goodwill
associated with the Marks and the System. FRANCHISEE further
acknowledges that he has conducted an independent investigation
of the franchise contemplated by this Agreement and recognizes
that, like any other business, the business of operating a
Floridino's Restaurant may evolve and change over time, that an
investment in the franchise contemplated by this Agreement
involves risks, and that the success of the franchise
contemplated by this Agreement will be largely dependent upon the
abilities and efforts of FRANCHISEE. The COMPANY expressly
disclaims the making of, and FRANCHISEE acknowledges that he has
not received or relied upon, any-warranty or guarantee, express
or implied, as to the revenues, profits, or financial success of
the franchise contemplated by this Agreement. FRANCHISEE further
acknowledges that he has not received or relied on any
representation about the franchise contemplated by this Agreement
by the COMPANY, or its directors, officers, employees, or agents,
that are contrary to the disclosures made in the COMPANY's
franchise offering circular. FRANCHISEE represents to the
COMPANY, as an inducement to its entry into this Agreement, that
FRANCHISEE has made no misrepresentations in obtaining the
franchise contemplated by this Agreement.
2. FRANCHISE
A. FRANCHISE GRANT
Subject to the provisions of this Agreement, the COMPANY grants
to FRANCHISEE a franchise ("Franchise") to operate one (1)
Floridino's Restaurant ("Restaurant"), offering the products and
services required and approved by the COMPANY and using the Marks
and the System, at the following location:
The COMPANY's approval of the foregoing location does not
constitute a representation, warranty, or guarantee by the
COMPANY that the Restaurant can be successfully operated at such
location.
B. FRANCHISE TERM
The term of the Franchise shall commence upon the date of
execution of this Agreement by the COMPANY and shall expire on
the last day of the month that includes the tenth (10th)
anniversary of such date, unless otherwise terminated prior
thereto by operation of law or in accordance with any provision
of this Agreement.
C. FRANCHISE RENEWAL
Provided FRANCHISEE is in full compliance with all provisions of
this Agreement, any and all other agreements between the COMPANY
and FRANCHISEE, and any and all applicable laws and regulations,
and upon not less than six (6) not more than twelve (12) months
written notice to the COMPANY of his intention to do so,
FRANCHISEE shall have the right to renew the Franchise for
successive periods of ten (10) years each upon the payment to the
COMPANY of a renewal fee in an amount equal to twenty-five
percent (25%) of the franchise fee then most recently received by
the COMPANY for a comparable new franchise and the execution of
the then current form of standard franchise agreement used by the
COMPANY prior to the expiration of each such-successive term.
D. TERRITORIAL RIGHTS
Provided FRANCHISEE is in full compliance with all of the
provisions of this Agreement, any and all other agreements
between the COMPANY and FRANCHISEE, and any and all applicable
laws and regulations, the COMPANY agrees that it will not
operate, or permit any person other than FRANCHISEE to operate,
any Floridino's Restaurant at any location within two and
one-half (2.5) miles of the Restaurant during the term of the
Franchise. The COMPANY (on behalf of itself and its affiliates)
retains the right, in its sole discretion and without granting
any rights to FRANCHISEE, (i) to itself operate, and permit
persons other than FRANCHISEE to operate, Floridino's Restaurants
at such locations greater than two and one-half (2.5) miles from
the Restaurant as the COMPANY deems appropriate and (ii) to
distribute anywhere the products and services required and
approved by the COMPANY for Floridino's Restaurants under the
Marks and other marks through dissimilar channels of trade (such
as, food store, supermarket, factory, hospital, nursing home,
school, arena, and stadium sales).
3. CONSTRUCTION AND OPENING OF THE RESTAURANT
A. ACQUISITION OF PREMISES OF THE RESTAURANT
FRANCHISEE has purchased or leased, or will, within thirty (30)
days after the date of the execution of this Agreement, purchase
or lease the premises at which the Restaurant is to be operated.
Any lease or sublease of such premises shall contain such terms
and provisions as are reasonably acceptable to the COMPANY and,
at the COMPANY'S option, shall (i) be collaterally assigned to
the COMPANY (with the consent of the lessor, if required) by a
collateral assignment agreement in form and substance reasonably
acceptable to the COMPANY to secure performance of any and all of
FRANCHISEE's liabilities and obligations to the COMPANY; or (ii)
contain substantially the following provisions:
(a) Anything contained in this Lease to the contrary
notwithstanding, Lessor agrees that without its consent, this
Lease and the right, title, and interest of Lessee hereunder may
be assigned by Lessee to Floridino's International, Inc., a
Florida corporation, or its designee, provided that Floridino's
International, Inc. shall execute documents evidencing that it
will be bound by all of the obligations of Lessee arising under
this Lease from and after the time of such assignment.
(b) Lessee hereby agrees that Lessor may, upon the written
request of Floridino's International, Inc., disclose to
Floridino's International, Inc. all reports, information, or data
in Lessor's possession respecting, sales made in, upon, or from
the leased premises.
(c) Lessor shall give written notice to Floridino's
International, Inc. (concurrently with the giving of such notice
to Lessee) of any defaults by Lessee under this Lease and
Floridino's International, Inc. shall have, after the expiration
of the period during which Lessee may cure such default, an
additional fifteen (15) days to cure, at its sole option, any
such default and, upon the curing of such default, the right to
enter upon the leased premises and assume Lessee's rights under
this Lease as if this Lease had been assigned by Lessee to
Floridino's International, Inc.
B. CONSTRUCTION OF THE RESTAURANT
The COMPANY shall provide to FRANCHISEE prototype plans and
specifications for a Floridino's Restaurant reflecting the
COMPANY's requirements and suggestions for dimensions, exterior
design, interior design and layout, decor, building materials,
equipment, fixtures, furniture, and signs.
Promptly after purchasing or leasing the premises at which the
Restaurant is to be operated and having been provided with the
above-described plans and specifications, FRANCHISEE shall do or
cause to be done the following:
(i) prepare and submit to the COMPANY for approval, which shall
not be unreasonably withheld, final plans and specifications for
the Restaurant, specifically noting any proposed modifications to
the COMPANY's prototype plans and specifications, all such
modifications being subject to prior written approval by the
COMPANY;
(ii) obtain all licenses, permits, and certificates required for
construction and operation of the Restaurant;
(iii) construct all required improvements to the premises,
purchase and install all required equipment, fixtures,
furniture, and signs, and decorate the premises in compliance
with the plans and specifications approved by the COMPANY and all
applicable ordinances, building codes, permit requirements, and
lease or deed requirements and restrictions;
(iv) establish filing, accounting, and inventory control systems
conforming to requirements of the COMPANY;
(v) obtain a certificate of occupancy for the Restaurant; and
(vi) purchase, in accordance with the COMPANY's specifications,
an opening inventory of ingredients, foods, beverages, plates,
glasses, cups, utensils, menus, napkins, and other supplies
required f or operation of the Restaurant.
The COMPANY shall make reasonable efforts to provide consultation
services in connection with the construction of the Restaurant
upon written request therefor from FRANCHISEE, but the ultimate
responsibility for such construction remains with FRANCHISEE.
C. OPENING OF THE RESTAURANT
FRANCHISEE agrees that he will not open the Restaurant for
business without a certificate of occupancy and the COMPANY's
prior written approval. FRANCHISEE agrees to complete the
construction of and open the Restaurant for business within one
hundred twenty (120) days after he purchases or leases the
premises of the Restaurant, subject to such extensions of time as
the COMPANY may grant, in its sole discretion.
D. RELOCATION OF THE RESTAURANT
If FRANCHISEE's lease for the premises of the Restaurant
terminates, with or without the fault of FRANCHISEE, or if in the
judgment of the COMPANY and FRANCHISEE there is a change in the
character of the location of the Restaurant sufficiently
detrimental to its business potential to warrant its relocation,
the COMPANY may, in its sole discretion, grant permission for
relocation of the Restaurant to a new location approved in
writing by the COMPANY. In the absence of such permission to
relocate, this Agreement and the Franchise shall automatically
terminate upon the loss of the right to continue to occupy the
premises of the Restaurant. Any approved relocation shall be at
FRANCHISEE's sole expense and FRANCHISEE shall reimburse the
COMPANY for any and all costs and expenses incurred by the
COMPANY in connection with such relocation. FRANCHISEE agrees
that the premises at any such new location shall be acquired and
the Restaurant shall be constructed and opened at such premises
in accordance with the then current standards and specifications
for a Floridino's Restaurant and in accordance with the
provisions of Paragraphs A, B, and C of this Section 3.
4. TRAINING AND ASSISTANCE
A. TRAINING BY THE COMPANY
The COMPANY shall provide, and FRANCHISEE (or if FRANCHISEE is a
partnership or corporation, a managing partner or officer who
shall have been approved by the COMPANY) and any proposed
managers of the Restaurant shall complete, an initial training
program on the operation of a Floridino's Restaurant at such
places and times as the COMPANY may designate. The initial
training program shall consist of at least twenty (20) days of
training covering such topics and using such instructional
methods as the COMPANY, in its sole discretion, shall determine
to be appropriate.
If, during the initial training program, the COMPANY determines,
in its sole discretion, that any proposed manager of the
Restaurant is not qualified to manage the Restaurant, the COMPANY
shall notify FRANCHISEE thereof and FRANCHISEE may select a
substitute manager for attendance at such training program. If,
during the initial training program, the COMPANY determines, in
its sole discretion, that FRANCHISEE (or if FRANCHISEE is a
partnership or corporation, its managing partner or officer) is
not qualified to operate the Restaurant, the COMPANY shall have
the right to terminate the Franchise, effective upon delivery of
written notice thereof to FRANCHISEE. Upon such termination, the
COMPANY shall promptly refund (without interest) the franchise
fee paid pursuant to Paragraph A of Section 8 hereof, and
FRANCHISEE shall accept such refund as its only remedy with
respect thereto.
The COMPANY shall have the right to require that FRANCHISEE (or
if FRANCHISEE is a partnership or corporation, its managing
partner or officer) and all managers of the Restaurant complete
supplemental and refresher training programs during the term of
the Franchise, to be provided at such places and times as the
COMPANY may designate. The COMPANY shall have the right to
assess FRANCHISEE reasonable charges for such training programs.
FRANCHISEE shall be solely responsible for all travel, lodging,
and living expenses incurred in connection with the attendance by
FRANCHISEE (or if FRANCHISEE is a partnership or corporation, its
managing partner or officer) and all managers of the Restaurant
at the initial training program and any supplemental or refresher
training programs.
B. START-UP ASSISTANCE
The COMPANY shall provide FRANCHISEE the services of one (1) or
more of its employees for twenty-one (21) days commencing one (1)
day prior to the scheduled date of opening of the Restaurant to
assist FRANCHISEE with the start-up and initial operation of the
Restaurant.
C. OPERATING ASSISTANCE
The COMPANY may advise FRANCHISEE of operating problems of the
Restaurant disclosed by reports submitted to or inspections made
by the COMPANY. Further, the COMPANY may provide to FRANCHISEE
such guidance and assistance in connection with the operation of
the Restaurant as is deemed appropriate by the COMPANY. Such
guidance and assistance as the COMPANY does provide may be
provided, in the sole discretion of the COMPANY, in the form of
bulletins and other written materials, telephone consultations,
and consultations at the offices of the COMPANY or at the
Restaurant in conjunction with inspections of the Restaurant.
Additional guidance and assistance may be made available to
FRANCHISEE, at the written request of FRANCHISEE and in the sole
discretion of the COMPANY, at per then fees and charges
established by the COMPANY.
D. OPERATING MANUAL
The COMPANY shall loan to FRANCHISEE during the term of the
Franchise one (1) copy of an operating manual, which may consist
of one (1) or more manuals and other written materials
("Operating Manual"), pertaining to the operation of Floridino's
Restaurants, containing a description of the foods, beverages,
and other products and services required and approved by the
COMPANY, formats, specifications, standards, methods, and
procedures required and approved by the COMPANY, and information
relative to other obligations of FRANCHISEE hereunder. The
COMPANY shall have the right to add to, and otherwise modify, the
Operating Manual to reflect changes in required and approved
foods, beverages, and other products and services and required
and approved formats, specifications, standards, methods, and
procedures for Floridino's Restaurants. FRANCHISEE shall keep
his copy of the Operating Manual current. The master copy
maintained by the COMPANY at its principal office shall be
controlling in the event of a dispute relative to the contents of
the Operating Manual. FRANCHISEE shall not at any time copy any
part of the Operating Manual, or disclose its contents to any
third party, without the written approval of the COMPANY.
5. MARKS
A. OWNERSHIP AND GOODWILL OF THE MARKS
FRANCHISEE acknowledges that the COMPANY is the owner of the
Marks, that FRANCHISEE has no interest whatsoever in the Marks,
and that FRANCHISEE's right to use the Marks is derived solely
from this Agreement and is limited to the operation of the
Restaurant pursuant to and in compliance with this Agreement and
the formats, specifications, standards, methods, and procedures
required and approved by the COMPANY. Any other use of the Marks
by FRANCHISEE shall constitute an infringement of the rights of
the COMPANY in the Marks. FRANCHISEE agrees that all use of the
Marks by FRANCHISEE, and any goodwill established thereby, shall
inure to the exclusive benefit of the COMPANY, and FRANCHISEE
acknowledges that this Agreement does not confer any such
goodwill or other interest in the Marks upon FRANCHISEE. All
provisions of this Agreement applicable to the Marks shall apply
to any additional or substitute service marks, trade names,
logos, trade dress, commercial symbols, and other identifying
characteristics of Floridino's Restaurants hereafter authorized
for use by FRANCHISEE pursuant to this Agreement.
B. LIMITATIONS ON FRANCHISEE'S USE OF THE MARKS
FRANCHISEE agrees to use the Marks as the sole identification of
the Restaurant, provided that FRANCHISEE shall identify himself
as the independent owner thereof in the manner required by the
COMPANY. FRANCHISEE shall not use any Xxxx as part of any
corporate, partnership, or organizational 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 food, beverage, or other
product or service that is not required or approved by the
COMPANY or in any other manner not expressly authorized in
writing by the COMPANY. FRANCHISEE agrees to display the Marks
prominently and in the manner required by the COMPANY at the
Restaurant, on stationery, business forms, signs, and uniforms
required or approved by the COMPANY, and in connection with
advertising and promotional materials required or approved by the
COMPANY. Further, FRANCHISEE agrees to give such notices of xxxx
registrations as the COMPANY specifies and to obtain such
fictitious or assumed name registrations as may be required under
applicable law.
C. NOTIFICATION OF INFRINGEMENT AND CLAIMS
FRANCHISEE shall notify the COMPANY immediately in writing of any
apparent infringement of, or challenge to FRANCHISEE's use of,
any Xxxx, or any claim by any person of any rights in any Xxxx,
or any similar trademark, service xxxx, trade name, logo, trade
dress, commercial symbol, or other identifying characteristic of
which FRANCHISEE becomes aware. FRANCHISEE shall not communicate
with any person other than the COMPANY and its counsel in
connection with any such infringement, challenge, or claim. The
COMPANY shall have sole discretion to take such action as it
deems appropriate and have the right to exclusively control any
litigation, U.S. Patent and Trademark Office proceeding, or other
administrative proceeding arising out of any such infringement,
challenge, or claim or otherwise relating to any Xxxx, including
any claim of unfair competition relating thereto.
FRANCHISEE may not, without the written approval of the COMPANY,
in its sole discretion, commence or prosecute, or seek leave to
intervene in, any litigation or other proceeding, including any
arbitration proceeding, in which FRANCHISEE purports to enforce
any right to recover any element of damage arising from the use
or infringement of any of the Marks or from any unfair
competition relating thereto. FRANCHISEE agrees to execute all
instruments and documents, render such assistance, and do such
acts and things as, in the opinion of the COMPANY's counsel, may
be necessary or advisable to protect and maintain the interests
of the COMPANY in any such litigation, U.S. Paten and Trademark
Office proceeding, or other administrative or arbitration
proceeding or to otherwise protect and maintain the interests of
the COMPANY in the Marks.
D. DISCONTINUANCE OF USE OF THE MARKS
If it becomes advisable at any time, in the COMPANY's sole
discretion, for the COMPANY and/or FRANCHISEE to modify or
discontinue use of any Xxxx, and/or use one (1) or more
additional or substitute service marks, trade names, logos, trade
dress, commercial symbols, or other identifying characteristics
of Floridino's Restaurants, FRANCHISEE agrees to comply with the
COMPANY's directions with respect thereto within a reasonable
time after notice thereof by the COMPANY. FRANCHISEE shall be
solely responsible for all expenses associated with his
compliance with the COMPANY's directions.
6. CONFIDENTIAL INFORMATION
A. THE COMPANY'S CONFIDENTIAL INFORMATION
The COMPANY possesses certain trade secrets and other
confidential information relating to the System, including,
without limitation, formats, specifications, standards, methods,
procedures, information, and knowledge of and experience in
operating Floridino's Restaurants ("Confidential Information").
The COMPANY will disclose the Confidential Information to
FRANCHISEE in providing FRANCHISEE training, in the Operating
Manual, and in guidance and assistance provided to FRANCHISEE
during the term of the Franchise. FRANCHISEE acknowledges and
agrees he will not acquire any interest in the Confidential
Information other than the right to use it in the operation of
the Restaurant during the term of the Franchise, and that the use
or duplication of the Confidential Information in any other
business would constitute unfair competition. FRANCHISEE
acknowledges and agrees that the Confidential Information is
proprietary to the COMPANY and is disclosed to FRANCHISEE solely
on the condition that FRANCHISEE agrees, and FRANCHISEE does
hereby agree, that he will (i) not use the Confidential
Information in any other business or capacity; (ii) maintain the
absolute confidentiality of the Confidential Information during
and after the term of the Franchise; (iii) not make unauthorized
copies of any portion of the Confidential Information disclosed
in written form; and (iv) adopt and implement all reasonable
procedures required from time to time by the COMPANY to prevent
unauthorized use or disclosure of the Confidential Information,
including, without limitation, restrictions on disclosure thereof
to FRANCHISEE's employees and the use of nondisclosure and
noncompetition clauses in employment agreements with such
employees if the COMPANY so directs.
B. FRANCHISEE'S OTHER BUSINESS INTERESTS
FRANCHISEE acknowledges and agrees that the COMPANY would be
unable to protect the Confidential Information against
unauthorized use or disclosure and encourage a free exchange of
ideas and information among the COMPANY and all owners of
franchised Floridino s Restaurants if any owner or manager of a
franchised Floridino s Restaurant is permitted to have any
interest in or involvement with any Italian or Italian-American
restaurant, other than a Floridino's Restaurant. Therefore,
during the term of the Franchise, neither FRANCHISEE (or any
partner, shareholder, director, or officer of FRANCHISEE if
FRANCHISEE is a partnership or corporation), any manager of the
Restaurant, nor any member of his (or their) immediate families,
shall have any interest in or involvement with, as an owner,
investor, partner, director, officer, employee, consultant,
representative, or agent, or in any other capacity, any Italian
or Italian-American restaurant, other than a Floridino's
Restaurant. This prohibition shall not preclude any such person
from owning less than five percent (5%) of the outstanding shares
of stock of any publicly held corporation owning or operating any
such restaurant so long as such person is not involved in the
operation of such restaurant.
C. FRANCHISEE'S INVENTIONS AND IMPROVEMENTS
FRANCHISEE agrees that the COMPANY shall have the perpetual right
to use and authorize other persons to use, and FRANCHISEE shall
fully and promptly disclose to the COMPANY, all inventions,
improvements, ideas, concepts, methods, and procedures relating
to the operation of Italian or Italian-American restaurants
conceived or developed by FRANCHISEE and/or his employees during
the term of the Franchise.
7. RELATIONSHIP OF THE PARTIES - INDEMNIFICATION
A. RELATIONSHIP OF THE PARTIES
It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them,
that the COMPANY and FRANCHISEE shall be independent contractors,
and that nothing in this Agreement is intended to make either
party a general or special agent, legal representative,
subsidiary, joint venturer, partner, employee, or servant of the
other for any purpose. FRANCHISEE shall identify himself in all
dealings with customers, lessors, contractors, suppliers, public
officials, and others as the owner and operator of the Restaurant
under a franchise from the COMPANY, and shall place such notices
of independent ownership and operation on forms, signs
stationery, advertising, and other materials, as the COMPANY may
require.
The COMPANY has not authorized or empowered FRANCHISEE to use the
Marks other than as provided by this Agreement. FRANCHISEE shall
not employ any Xxxx in signing any contract, lease, mortgage,
check, purchase agreement, negotiable instrument, or other legal
obligation without the prior written approval of the COMPANY or
employ any Xxxx in a manner that is likely to result in liability
of the COMPANY for any indebtedness or obligation of FRANCHISEE.
Except as may otherwise be specifically provided in this
Agreement, neither the COMPANY nor FRANCHISEE shall make any
express or implied agreements, guarantees, or representations, or
incur any debt, in the name of or on behalf of the other, or
represent that their relationship is other than franchiser and
franchisee. Neither the COMPANY nor FRANCHISEE shall be
obligated by or have any liability under any agreements or
representations made by the other that are not expressly
authorized hereunder, nor shall the COMPANY be obligated for any
damages to any person or property directly or indirectly arising
out of FRANCHISEE's ownership, construction, or operation of the
Restaurant. The COMPANY shall have no liability for any sales,
service, use, value added, excise, gross receipts, property, or
other taxes, whether levied upon FRANCHISEE, the Restaurant, or
the COMPANY, in connection with FRANCHISEE's ownership,
construction, or operation of the Restaurant.
B. INDEMNIFICATION
FRANCHISEE agrees to indemnify and hold the COMPANY, and its
subsidiaries, affiliates, stockholders, directors, officers,
employees, agents, and assignees, harmless from and against, and
to reimburse them for, any loss, liability, taxes, or damages
(actual, consequential, and incidental) and all reasonable costs
and expenses of defending any claim brought against any of them
or any action in which any of them is named as a party
(including, without limitation, reasonable accountant, attorney,
and expert witness fees, costs of investigation and proof of
acts, court costs , other litigation expenses, and travel and
living expenses) that any of them may suffer, sustain, or incur
by reason of, arising from, or in connection with FRANCHISEE's
ownership, construction, or operation of the Restaurant. The
indemnities and assumptions of liabilities and obligations herein
shall continue in full force and effect subsequent to and
notwithstanding the expiration or termination of the Franchise.
8. FRANCHISE FEES
A. FRANCHISE FEE
FRANCHISEE shall pay to the COMPANY a franchise fee in the amount
of ________________ ($______) payable upon the execution of this
Agreement. If FRANCHISEE has paid to the COMPANY a development
fee for the Restaurant prior to the execution of this Agreement,
such development fee shall be fully credited to the franchise
fee. The franchise fee shall be fully earned by the COMPANY upon
the execution of this Agreement and shall be nonrefundable,
except as expressly provided in Paragraph A of Section 4 hereof.
B. ROYALTY AND SERVICE FEE
FRANCHISEE agrees to pay to the COMPANY a monthly royalty and
service fee based on the following percentages of the Gross
Revenues, as defined in Paragraph C of this Section 8, payable by
the tenth (10th) day of each month in respect of the Gross
Revenues for the preceding month:
Four percent (4.0%) of the Gross Revenues for each month during
the period commencing on the date of execution of this Agreement
by the COMPANY and expiring on the last day of the month that
includes the first (1st) anniversary of such date;
The COMPANY may, in its sole discretion, institute an electronic
funds transfer system for payment of the royalty and service fee
each month during the term of the Franchise. If the COMPANY
institutes such a system, FRANCHISEE agrees to execute all
documents required to authorize his bank to electronically
transfer funds from his account to the COMPANY's account at its
bank as payment of the royalty and service fee each month upon
presentation by the COMPANY of a statement of the Gross Revenues
and the royalty and service fee due and owing in respect of the
Gross Revenues for the preceding month.
C. DEFINITION OF "GROSS REVENUES"
The term "Gross Revenues" shall mean the total amount of all
sales of foods, beverages, and other products and services sold
at, from, and otherwise in connection with the operation of the
Restaurant, including delivery, special event, and other off
premises sales, whether for cash, on credit, or otherwise, but
shall not include any sales, service, value added, or excise
taxes paid or accrued by FRANCHISEE.
D. INTEREST ON LATE PAYMENTS
All royalty and service fees, advertising contributions, amounts
due for purchases by FRANCHISEE from the COMPANY or its
affiliates, and other amounts that FRANCHISEE owes to the COMPANY
or its affiliates shall bear interest after the due date at the
applicable maximum legal rate for open account business credit,
but not to exceed one and one-half percent (1.5%) per month.
FRANCHISEE acknowledges that this Paragraph D shall not
constitute the COMPANY's agreement to accept such payments after
they are due or a commitment by the COMPANY to extend credit to,
or otherwise finance FRANCHISEE's operation of, the Restaurant.
Further, FRANCHISEE acknowledges that his failure to pay all
amounts when due shall constitute grounds for termination of the
Franchise, as provided in Paragraph B of Section 14 hereof,
notwithstanding the provisions of this paragraph.
E. APPLICATION OF PAYMENTS
The COMPANY shall have sole discretion to apply any and all
payments received from FRANCHISEE and any and all indebtedness
of the COMPANY to FRANCHISEE to any and all past due indebtedness
of FRANCHISEE for royalty and service fees, advertising
contributions, and purchases from the COMPANY and its affiliates
in such amounts and in such order as the COMPANY deems
appropriate.
9. IMAGE AND OPERATING STANDARDS
A. BUILDING MATERIALS, EQUIPMENT, FIXTURES, FURNITURE, AND
SIGNS
FRANCHISEE acknowledges and agrees that the COMPANY would be
unable to maintain its high standards of quality and service at
all Floridino's Restaurants and protect and preserve the goodwill
associated with the Marks and the System if any franchisee is
permitted to use any building materials, equipment, fixtures,
furniture, or signs other than those required or approved by the
COMPANY in the construction or operation of his Floridino's
Restaurant. The COMPANY shall provide FRANCHISEE with a list of
required or approved building materials, equipment, fixtures,
furniture, and signs and may issue revisions thereto. The
COMPANY's requirement or approval of building materials,
equipment, fixtures, furniture, and signs may be given in the
form of specifications and in the requirement or approval of
specific types and brands. FRANCHISEE agrees that he will not,
without the prior written approval of the COMPANY, use or
authorize his employees or contractors to use, any building
materials, equipment, fixtures, furniture, or signs that are not
on such list in the construction or operation of the Restaurant.
FRANCHISEE may purchase required and approved building materials,
equipment, fixtures, furniture, and signs from the COMPANY or any
other supplier that can provide the same.
B. CONDITION OF THE RESTAURANT, EQUIPMENT, FIXTURES, FURNITURE,
AND SIGNS
FRANCHISEE agrees that he will maintain the condition and
appearance of the Restaurant and all equipment, fixtures,
furniture, and signs used in the operation of the Restaurant in
accordance with the specifications of the COMPANY. FRANCHISEE
shall not alter the Restaurant and/or any equipment, fixture,
furniture, or sign used in the operation of the Restaurant
without the prior written approval of the COMPANY. If the
Restaurant and/or any equipment, fixture, furniture, or sign used
in the operation of the Restaurant is damaged by fire or any
other casualty, FRANCHISEE shall, within thirty (30) days
thereafter, repair the Restaurant and/or such equipment, fixture,
furniture, or sign in accordance with the specifications of the
COMPANY if such repair is commercially practical or commence
reconstruction of the Restaurant and/or replace such equipment,
fixture, furniture, or sign if such repair is not commercially
practical. If the Restaurant and/or any equipment used in the
operation of the Restaurant is destroyed by fire or any other
casualty, FRANCHISEE shall, within thirty (30) days
thereafter, commence reconstruction of the Restaurant and/or
replace such equipment, fixture, furniture, or sign. Upon
commencement of reconstruction of the Restaurant, FRANCHISEE
shall thereafter proceed with such reconstruction with reasonable
diligence until such reconstruction has been completed and the
Restaurant reopened in accordance with the provisions of
Paragraphs B and C of Section 3 hereof. As an alternative to
reconstruction of the Restaurant if the Restaurant has been
damaged to the extent that repair is commercially impractical or
destroyed, FRANCHISEE may terminate the Franchise by written
notice to the COMPANY.
C. FOODS AND BEVERAGES
FRANCHISEE acknowledges and agrees that the COMPANY would be
unable to maintain its high standards of quality and service at
all Floridino's Restaurants and protect and preserve the goodwill
associated with the Marks and the System if any franchisee is
permitted to offer any foods, beverages, and other products and
services other than those required and approved by the COMPANY in
connection with the operation of his Floridino's Restaurant.
FRANCHISEE agrees that he will offer all foods, beverages, and
other products and services required by the COMPANY in the
Operating Manual and will not, without the prior written approval
of the COMPANY, offer any food, beverage, or other product or
service that is not approved by the COMPANY in the Operating
Manual in connection with the operation of the Restaurant.
FRANCHISEE further agrees that he will not offer any food,
beverage, or other product or service that is required or
approved by the COMPANY in the Operating Manual at any location
other than the premises of the Restaurant without the prior
written approval of the COMPANY.
D. INGREDIENTS AND OTHER SUPPLIES
FRANCHISEE acknowledges and agrees that the COMPANY would be
unable to maintain its high standards of quality and service at
all Floridino's Restaurants and protect and preserve the goodwill
associated with the Marks and the System if any franchisee is
permitted to use any ingredients, foods, beverages, plates,
glasses, cups, utensils, menus, napkins, or other supplies other
than those required or approved by the COMPANY in the operation
of his Floridino's Restaurant. The COMPANY shall provide
FRANCHISEE a list of required or approved ingredients, foods,
beverages, plates, glasses, cups, utensils, menus, napkins, and
other supplies and shall from time to time issue revisions
thereto. The COMPANY's requirement or approval of ingredients,
foods, beverages, plates, glasses, cups, utensils, menus,
napkins, and other supplies may be given in the form of
specifications and in the requirement or approval of specific
types and brands. FRANCHISEE agrees that he will not, without
the prior written approval of the COMPANY, use or authorize his
employees to use, any ingredients, foods, beverages, plates,
glasses, cups, utensils, menus, napkins, and other supplies that
are not on such list in the operation of the Restaurant.
FRANCHISEE must purchase required and approved ingredients,
foods, beverages, plates, glasses, cups, utensils, menus,
napkins, and other supplies from suppliers as are required or
approved by the COMPANY.
E. FORMATS, SPECIFICATIONS, STANDARDS, METHODS, AND PROCEDURES
FRANCHISEE acknowledges and agrees that each and every detail of
the operation of the Restaurant is important to the COMPANY and
the franchised owners of other Floridino's Restaurants.
FRANCHISEE agrees to cooperate with the COMPANY in maintaining
high standards in his operation of the Restaurant and,
accordingly, agrees to comply with all formats, specifications,
standards, methods, and procedures (whether contained in the
Operating Manual or any other written or oral communication to
FRANCHISEE) that the COMPANY may, in its sole discretion, require
for Floridino's Restaurants. Required formats, specifications,
standards, methods, and procedures required in the Operating
Manual or otherwise communicated to FRANCHISEE in writing shall
constitute provisions of this Agreement as if fully set forth
herein. All references herein to this Agreement shall include
all such required formats, specifications, standards, methods,
and procedures.
F. RECOMMENDED RETAIL PRICES
The COMPANY may recommend or suggest retail prices for the foods,
beverages, and other products and services sold at, from, and
otherwise in connection with the operation of the Restaurant.
All such recommendations or suggestions are based on the
COMPANY's experience relating to the various factors that
determine appropriate prices, but such recommendations or
suggestions are not binding upon FRANCHISEE. FRANCHISEE shall
have the right to charge whatever retail prices for such foods,
beverages, and other products and services he determines to be
appropriate.
G. STATIONERY AND BUSINESS FORMS
FRANCHISEE shall use only such stationery and business forms as
are required or approved by the COMPANY. FRANCHISEE may purchase
such stationery and business forms from any supplier that can
produce such stationery and business forms using the Marks in
accordance with the COMPANY's specifications.
H. UNIFORMS
When serving customers at the Restaurant or promoting the
Restaurant, FRANCHISEE and his employees shall wear such uniforms
or other items of clothing as may be required or approved by the
COMPANY. All such uniforms or other items of clothing shall be
maintained by FRANCHISEE and his employees in a clean and
attractive manner. FRANCHISEE may purchase such uniforms or
other items of clothing from any supplier that can provide such
uniforms or other items of clothing in accordance with the
COMPANY's specifications.
I. COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES
FRANCHISEE shall obtain and maintain in force all licenses,
permits, and certificates required for the operation of the
Restaurant and shall operate the Restaurant in full compliance
with all applicable laws, ordinances, and regulations.
FRANCHISEE agrees that he will not take any action, or fail to
take any action, that may cause any license, permit, or
certificate required to operate the Restaurant to be revoked,
suspended, or restricted, and FRANCHISEE shall be solely
responsible for compliance with all applicable laws, ordinances,
and regulations pertaining thereto. FRANCHISEE shall immediately
notify the COMPANY of steps taken or threatened to be taken by
the issuing authority to revoke, suspend, or restrict any such
license, permit, or certificate. FRANCHISEE shall notify the
COMPANY in writing within five (5) days of the commencement of
any action, suit, proceeding, or investigation, or of the
issuance of any order, writ, injunction, award, or decree, by any
court, agency, or other governmental authority that may adversely
affect the operation of the Restaurant.
All advertising and promotion by FRANCHISEE shall be completely
factual and shall conform to the highest standards of ethical
advertising. FRANCHISEE agrees to refrain from any business or
advertising practice that may be injurious to the COMPANY or the
goodwill associated with the Marks, the System, and Floridino's
Restaurants. FRANCHISEE shall at all times give prompt,
courteous, and efficient service to the customers of the
Restaurant. Franchisee shall, in all dealings with the customers
and suppliers of the Restaurant and the public, adhere to the
highest standards of honesty, integrity, fair dealing, and
ethical conduct.
J. MANAGEMENT OF THE RESTAURANT
The Restaurant shall at all times be under the direct,
day-to-day, full-time supervision of FRANCHISEE (or if FRANCHISEE
is a partnership or corporation, a managing partner or officer
who shall have completed the initial training program), subject
to the requirements of the Operating Manual. FRANCHISEE shall at
all times faithfully, honestly, and diligently perform his
obligations hereunder and exert his best efforts to promote and
enhance the business of the Restaurant. FRANCHISEE (and the
partners, directors, shareholders, and officers of FRANCHISEE if
FRANCHISEE is a partnership or corporation) and the managers of
the Restaurant shall not engage in any other business or other
activity, directly or indirectly, that substantially conflicts
with FRANCHISEE's obligations hereunder.
K. HIRING, TRAINING, AND SUPERVISION OF EMPLOYEES
FRANCHISEE shall hire all employees of the Restaurant and shall
be exclusively responsible for the terms of their employment and
compensation. FRANCHISEE shall implement a training program for
his employees in compliance with the COMPANY's requirements.
FRANCHISEE agrees to maintain at all times a staff of trained
employees sufficient to operate the Restaurant in compliance with
the COMPANY's standards. FRANCHISEE (or if FRANCHISEE is a
partnership or corporation, its managing partner or officer) or a
manager of the Restaurant who shall have completed the initial
training program or other training satisfactory to the COMPANY
shall be on the premises of the Restaurant at all times during
the hours of its operation to supervise all other employees on
duty.
L. INSURANCE
FRANCHISEE shall at all times during the term of the Franchise
maintain in force, at his sole expense, fire and casualty
insurance for the Restaurant and commercial general liability
insurance against claims for bodily and personal injury, death,
and property damage caused by or occurring in connection with the
operation of the Restaurant. Such insurance coverage shall be
maintained under policies of insurance containing minimum
protection in such amounts as may be specified by the COMPANY in
the Operating Manual. FRANCHISEE shall carry workers'
compensation insurance covering all of his employees as required
by the laws of the applicable state. All insurance policies
shall be issued by one or more insurance carriers acceptable to
the COMPANY. All liability insurance policies shall name the
COMPANY as an additional insured, shall contain a waiver of the
insurance carrier's right of subrogation against the COMPANY, and
shall provide that the COMPANY will receive thirty (30) days
prior written notice of termination, expiration, or cancellation
of any such policy.
FRANCHISEE shall provide to the COMPANY annually a copy of the
certificate or other evidence of the renewal or extension of each
insurance policy. If FRANCHISEE at any time fails or refuses to
maintain in effect any insurance coverage required by the
COMPANY, or to provide satisfactory evidence thereof, the
COMPANY, at its option and in addition to its other rights and
remedies hereunder, may obtain such insurance coverage on behalf
of FRANCHISEE, and FRANCHISEE shall promptly execute any
application or other form or instrument required to obtain any
such insurance and pay to the COMPANY, on demand, any costs and
premiums paid or incurred by the COMPANY. FRANCHISEE's
obligation to maintain the insurance described herein shall not
be limited in any way by reason of any insurance maintained by
the COMPANY, nor shall FRANCHISEE's performance of such
obligations relieve FRANCHISEE of any obligations under Section 7
hereof.
M. CREDIT CARDS
FRANCHISEE shall at all times have arrangements in existence with
VISA, MasterCard, American Express, and such other credit card
issuers or sponsors, check verification services, and electronic
funds transfer systems as the COMPANY designates from time to
time in order that the Restaurant may accept customers' credit
cards, personal checks, and other forms of non-currency payment.
If the COMPANY designates a processor for all credit card
transactions at Floridino's Restaurants during the term of the
Franchise, FRANCHISEE agrees to use that processor for all credit
card transactions at, from, or in connection with the operation
of the Restaurant.
10. ADVERTISING
A. BY THE COMPANY
Recognizing the value of uniform advertising to the goodwill and
public image of Floridino's Restaurants, the COMPANY may
institute, maintain, and administer a central advertising fund
("Fund") for such advertising or public relations programs as the
COMPANY, in its sole discretion, may deem necessary or
appropriate to advertise or promote Floridino's Restaurants. The
COMPANY shall direct all such programs, with sole discretion over
the creative concepts, materials, endorsements, and media used,
and the placement and allocation of advertisements in such media.
The COMPANY shall have the right to determine, in its sole
discretion, the composition of all geographic areas for the
development and implementation of such programs. FRANCHISEE
shall contribute to the Fund an amount designated by the COMPANY,
in its sole discretion, not to exceed one and two percent (2.0%)
of the Gross Revenues, payable monthly together with the royalty
and service fee due hereunder.
FRANCHISEE agrees that the Fund may be used to meet all costs of
maintaining, administering, directing, and preparing national,
regional, or local advertising and public relations materials and
programs, including, without limitation, costs for preparing and
conducting television, radio, magazine, billboard, newspaper, and
other media programs and activities, costs associated with
conducting market research, and costs for providing promotional
brochures and advertising materials to Floridino's Restaurants.
The COMPANY may spend in any fiscal year an amount greater or
less than the aggregate contributions of Floridino's Restaurants
to the Fund in that year and the COMPANY may make loans to the
Fund bearing reasonable interest to cover any deficits of the
Fund and cause the Fund to invest any surplus for future use by
the Fund.
The Fund shall be accounted for separately from the other funds
of the COMPANY and shall not be used to defray any of the
COMPANY's general operating expenses, except for such reasonable
salaries, administrative costs, and overhead as the COMPANY may
incur in activities reasonably related to the administration or
direction of the Fund and its programs (including, without
limitation, conducting market research, preparing advertising
materials, and collecting and accounting for contributions to the
Fund). A report of the operations of the Fund shall be prepared
annually by the COMPANY and shall be made available to FRANCHISEE
upon request.
FRANCHISEE understands and acknowledges that the Fund is intended
to maximize general recognition of the Marks and the goodwill and
public image of Floridino's Restaurants for the benefit of all
Floridino's Restaurants and that the COMPANY undertakes no
obligation in developing, implementing, or administering
advertising or public relations programs to ensure that
expenditures that are proportionate or equivalent to FRANCHISEE's
contributions are made for the Restaurant or that any Floridino's
Restaurant benefits directly or pro rata from the placement of
advertising through the Fund.
B. BY FRANCHISEE
In addition to making the advertising contributions required
under Paragraph A of this Section 10, FRANCHISEE agrees to list
and advertise the Restaurant in the principal (as determined by
the COMPANY) regular (white pages) and classified (Yellow pages)
telephone directories for the market area within which the
Restaurant is located in such directory categories as are
specified by the COMPANY using the COMPANY's standard forms of
listing and classified directory advertisements. If such
classified directory advertisements include other Floridino's
Restaurants operating within such market area, the cost of such
advertisements shall be reasonably apportioned among all
Floridino's Restaurants included therein in proportion to the
annualized total Gross Revenues of each such Floridino's
Restaurant for the preceding year.
In addition to making the advertising contributions required
under Paragraph A of this Section 10, FRANCHISEE shall be
obligated to expend not less than an additional two percent
(2.0%) of the Gross Revenues in connection with local advertising
and promotional activities in such media (including any secondary
regular and classified telephone directories) and by such methods
as FRANCHISEE may determine to be appropriate, subject to the
approval of the COMPANY, which shall not be unreasonably
withheld. Prior to their use by FRANCHISEE, samples of all local
advertising and promotional materials not prepared or previously
approved by the COMPANY shall be submitted to the COMPANY for
approval, which shall not be unreasonably withheld. If written
disapproval is not received by FRANCHISEE within fifteen (15)
days from the date of receipt by the COMPANY of such materials,
the COMPANY shall be deemed to have given the required approval.
FRANCHISEE shall not use any advertising or promotional materials
that the COMPANY has disapproved.
C. FRANCHISEE'S PARTICIPATION IN LOCAL ADVERTISING COOPERATIVE
The COMPANY may, in its sole discretion, designate geographical
areas for which it has determined, on the basis of television
coverage, newspaper coverage, or other criteria that it may
establish, in its sole discretion, that the establishment of a
local advertising cooperative may be appropriate for all
Floridino's Restaurants located within each such area. If the
owners of seventy-five percent (75%) of the franchised
Floridino's Restaurants located within any such area that
includes the Restaurant concur with the COMPANY's judgment that a
local advertising cooperative would be appropriate, FRANCHISEE
shall be obligated to participate in the cooperative for such
area ("Local Advertising Cooperative"). The Local Advertising
Cooperative shall be formed by all of the owners of the
Floridino's Restaurants within such area and shall operate
pursuant to such by-laws and in such form as the members thereof
may determine, on the basis of one (1) vote for each Floridino's
Restaurant within such area. Pursuant to the by-laws adopted by
the Local Advertising Cooperative, FRANCHISEE shall contribute to
the Local Advertising Cooperative an amount of the Gross Revenues
designated thereby, not to exceed one and one-half percent (1.
5%) of the Gross Revenues. FRANCHISEE's obligation to expend
funds directly on local advertising and promotional activities
pursuant to Paragraph B of this Section 10 shall be reduced as
necessary such that the total amount of the Gross Revenues that
FRANCHISEE is required to expend for local advertising and
promotional activities, including direct local advertising and
promotional activities by FRANCHISEE and contributions to the
Local Advertising Cooperative by FRANCHISEE (but excluding any
expenditures made for advertising in telephone directories as
required by Paragraph B of this Section 10), shall not exceed two
percent (2%).
11. RECORDS AND REPORTS
A. ACCOUNTING AND RECORDS
During the term of the Franchise, FRANCHISEE shall, at his
expense, (i) implement record keeping and accounting systems
conforming to the requirements required by the COMPANY and (ii)
maintain at a location required or approved by the COMPANY and
preserve for no less than three (3) years from the date of their
preparation, or for such longer period as may be required by any
applicable law, ordinance, or regulation, full, complete, and
accurate books, records, and accounts for the Restaurant and all
supporting documents pertaining thereto. FRANCHISEE shall use
only cash registers with "non-resettable totals" in the operation
of the Restaurant. If requested by the COMPANY, FRANCHISEE shall
use in the operation of the Restaurant cash registers and
associated computer hardware and software that permits the
COMPANY to electronically poll and capture all transaction data
entered into such cash registers.
B. REPORTS AND TAX RETURNS
FRANCHISEE shall provide to the COMPANY the following:
(i) within ten (10) days after the end of each month,
(a)a statement relating to the Gross Revenues for such month and
(b) a year-to-date profit and loss statement, a year-to-date
source and use of funds statement, and a balance sheet as of the
end of the month preceding such month; and
(ii) within sixty (60) days after the end of each year, an annual
profit and loss statement, an annual source and use of funds
statement, and a balance sheet as of the end of such year, which
shall be reviewed by an independent certified public accountant
if requested by the COMPANY.
FRANCHISEE shall provide to the COMPANY upon its request such
other written and electronic reports and such other information
as the COMPANY shall designate. All such financial statements,
written reports, and information shall be on forms approved by
the COMPANY and signed and verified by FRANCHISEE. FRANCHISEE
shall provide to the COMPANY upon its request exact copies of all
state sales tax returns and such portions of FRANCHISEE's federal
and state income tax returns as reflect the operation of the
Restaurant.
12. INSPECTION AND AUDITS
A. THE COMPANY'S RIGHT TO INSPECT THE RESTAURANT
To determine whether FRANCHISEE is complying with this Agreement,
the COMPANY shall have the right at any time during business
hours, and without prior notice to FRANCHISEE, to view and
inspect the operation of the Restaurant. FRANCHISEE shall fully
cooperate with representatives of the COMPANY making any such
inspection and shall permit representatives of the COMPANY to
take photographs, movies, and videotapes of FRANCHISEE and/or his
employees during their service of customers and to interview his
employees and customers.
B. THE COMPANY'S RIGHT TO EXAMINE BOOKS AND RECORDS
The COMPANY shall have the right at any time during business
hours, and without prior notice to FRANCHISEE, to examine or
audit, or cause to be examined or audited, the books, records,
and accounts of the Restaurant and all supporting documents
pertaining thereto. FRANCHISEE shall fully cooperate with
representatives of the COMPANY and independent accountants hired
by the COMPANY to conduct any such examination or audit. If any
such examination or audit shall disclose an understatement of the
Gross Revenues, FRANCHISEE shall pay to the COMPANY, within
fifteen (15) days after receipt of the examination or audit
report, the royalty and service fees and any advertising
contributions due on the amount of such understatement, plus
interest (at the rate and on the terms provided in Paragraph D of
Section 8 hereof) from the date originally due until the date of
payment. Any contention that the COMPANY or its independent
accountants have miscalculated any sum then due shall not excuse
FRANCHISEE from making full payment of all sums then determined
to be due, with all disputed sums to be paid as provided herein
and a refund to be made by the COMPANY within ten (10) days of
any final determination that a lesser sum than FRANCHISEE has
paid pursuant hereto was properly due to the COMPANY. Further,
if any such examination or audit is made necessary by the failure
of FRANCHISEE to provide reports, records, financial statements,
or other documents or information as herein required, or failure
to provide such reports, records, financial statements,
documents, or information on a timely basis, or if an
understatement of the Gross Revenues for any month is determined
by any such examination or audit to be greater than two percent
(2%), FRANCHISEE shall reimburse the COMPANY for the cost of such
examination or audit, including, without limitation, the charges
of any independent accountants and the travel expenses, room and
board, and compensation of employees of the COMPANY. The
foregoing remedies shall be in addition to all other remedies and
rights of the COMPANY hereunder or under applicable law.
13. ASSIGNMENT
A. BY THE COMPANY
This Agreement and the Franchise are fully assignable by the
COMPANY and shall inure to the benefit of any assignee or other
legal successor to the interest of the COMPANY herein.
B. FRANCHISEE MAY NOT ASSIGN WITHOUT APPROVAL OF THE COMPANY
FRANCHISEE understands and acknowledges that the rights and
duties created by this Agreement are personal to FRANCHISEE and
that the COMPANY has granted the Franchise in reliance upon the
individual or collective character, skill, aptitude, attitude,
business ability, and financial resources of FRANCHISEE or its
owners. Therefore, except as otherwise provided in Paragraphs D
and E of this Section 13, neither the Franchise, nor the
Restaurant, nor any interest in the Restaurant, nor any part or
all of the ownership of FRANCHISEE may be voluntarily,
involuntarily, directly or indirectly, assigned, sold,
subdivided, subfranchised, or otherwise transferred by FRANCHISEE
or its owners (including, without limitation, by merger or
consolidation, by issuance of additional securities representing
an ownership interest in FRANCHISEE, by operation of law, or, in
the event of the death of FRANCHISEE or an owner of FRANCHISEE,
by will, declaration of or transfer in trust, or the laws of
interstate succession) without the prior written approval of the
COMPANY, and any such assignment or transfer without such
approval shall constitute a breach hereof and shall convey no
rights to or interests in the Franchise or the Restaurant.
C. CONDITIONS FOR APPROVAL OF ASSIGNMENT
If FRANCHISEE and its owners are in full compliance with this
Agreement, the COMPANY shall not unreasonably withhold its
approval of an assignment, provided that the proposed assignee
is, in the opinion of the COMPANY, of good moral character and
has sufficient business experience, aptitude, and financial
resources to own and operate the Restaurant and otherwise meets
the COMPANY's then applicable standards for new franchisees, and
further provided that the following conditions are met prior to,
or concurrent with, the effective date of the assignment:
(i) all obligations of FRANCHISEE and its owners incurred in
connection with this Agreement have been assumed by the assignee;
(ii) FRANCHISEE shall have paid such royalty and service fees,
advertising contributions, amounts owed for purchases by
FRANCHISEE from the COMPANY and its affiliates, and any other
amounts owed to the COMPANY and its affiliates that are then due;
(iii) the assignee agrees to complete the initial training
program then required of new franchisees;
(iv) if required, the lessor of the premises of the Restaurant
has consented to FRANCHISEE's assignment or sublease of the
premises to the assignee;
(v) the assignee (and, if the assignee is a partnership or
corporation, its partners or shareholders) shall, at the
COMPANY's option, have executed and agreed to be bound by (a) an
assignment and assumption agreement satisfactory to the COMPANY
whereby the assignee assumes the obligations of FRANCHISEE under
this Agreement, or (b) the form of franchise agreement and any
ancillary agreement as are then customarily used by the COMPANY
in the grant of new franchises for Floridino's Restaurants, which
shall provide for the same royalty and service fees and
advertising contributions required hereunder and a term equal to
the remaining term of the Franchise;
(vi) FRANCHISEE or the assignee shall have paid to the COMPANY
an assignment fee in an amount equal to twenty-five percent (25%)
of the franchise fee then most recently received by the COMPANY
for a comparable new franchise to defray expenses incurred by the
COMPANY in connection with the assignment, including, without
limitation, training of the assignee, legal and accounting fees,
credit and other investigation charges, and evaluation of the
assignee and the terms of the assignment;
(vii) except to the extent limited or prohibited by applicable
law, FRANCHISEE (and each of its partners or shareholders if
FRANCHISEE is a partnership or corporation) shall have executed a
general release, in a form satisfactory to the COMPANY, of any
and all claims against the COMPANY and its affiliates, officers,
directors, employees, and agents;
(viii) the COMPANY shall have approved the material terms and
conditions of such assignment and shall have determined that the
price and terms of payment are not so burdensome as to adversely
affect the operation of the Restaurant by the assignee;
(ix) FRANCHISEE (and each of its partners or shareholders if
FRANCHISEE is a partnership or corporation) shall have executed a
noncompetition covenant in favor of the COMPANY and the assignee
agreeing that, for a period of two (2) years commencing on the
effective date of the assignment or from the effective date of
any injunction required to enforce the provisions of the
covenant, whichever is later, he will not have any direct or
indirect interest as an owner, investor, partner, director,
officer, employee, consultant, representative, or agent, or in
any other capacity, in any Italian or Italian-American restaurant
within five (5) miles of the Restaurant or any Floridino's
Restaurant in operation or under development as of the effective
date of the assignment; and
(x) FRANCHISEE (and each of its partners or shareholders if
FRANCHISEE is a partnership or corporation) shall have entered
into an agreement with the COMPANY agreeing that any and all
obligations of the assignee to make installment payments of the
purchase price to FRANCHISEE (and each of its partners or
shareholders if FRANCHISEE is a partnership or corporation) shall
be subordinated to the assignee's obligations to the COMPANY and
its affiliates, including, without limitation, any royalty and
service fees and advertising contributions.
The COMPANY's approval of an assignment shall not constitute a
waiver of any claims it may have against the assignor, nor shall
it be deemed a waiver of the COMPANY's right to demand exact
compliance with any of the terms or conditions of this Agreement
by the assignee.
D. DEATH OR DISABILITY OF FRANCHISEE
Upon the death or permanent disability of FRANCHISEE (or the
managing partner or officer of FRANCHISE if FRANCHISEE is a
partnership or corporation), the executor, administrator,
conservator, or other personal representative of such person, or
the remaining partners or directors, shall appoint a competent
manager within a reasonable time, not to exceed thirty (30) days
from the date of death or permanent disability. The appointment
of such manager shall be subject to the COMPANY's prior written
approval, and such manager shall, if requested by the COMPANY,
attend and satisfactorily complete the COMPANY's then required
initial training program at FRANCHISEE's expense. If the
Restaurant is not being managed by a COMPANY approved manager
within such thirty (30) day period, the COMPANY is authorized,
but shall not be required, to immediately appoint a manager to
maintain the operation of the Restaurant for and on behalf of
FRANCHISEE until an approved assignee or manager shall be able to
assume the management and operation of the Restaurant. The
COMPANY's appointment of a manager of the Restaurant shall not
relieve FRANCHISEE of his obligations hereunder, and the COMPANY
shall not be liable for any debts, losses, costs, or expenses
incurred in the operation of the Restaurant or to any creditor of
FRANCHISEE for any products, materials, supplies, or services
purchased by the Restaurant during any period that it is managed
by the COMPANY appointed manager. The COMPANY shall have the
right to charge a reasonable fee for such management services and
to cease to provide such management services at any time.
Upon the death or permanent disability of FRANCHISEE (or the
managing partner of officer of FRANCHISEE, if FRANCHISEE is a
partnership or corporation), executor, administrator,
conservator, or other personal representative of such person
shall transfer his interest within a reasonable time, not to
exceed twelve (12) months from the date of death or permanent
disability, to a person approved by the COMPANY unless FRANCHISEE
is a partnership or corporation and a new managing partner or
officer approved by the COMPANY, subject to the satisfactory
completion of all then required training for such managing
partners or officers, has been appointed within such period, and
subject to the transfer or assignment of such interest within
thirty (30) days of the completion of any applicable probate or
administration proceedings with respect to the estate of such
person. Such transfers, including, without limitation, transfers
by devise or inheritance, shall be subject to all the terms and
conditions for assignments and transfers contained in Paragraph B
and C of this Section 13. Failure to comply with the
requirements of this paragraph shall constitute grounds for
termination under Paragraph B of Section 14 hereof.
E. ASSIGNMENT TO A CORPORATION
Upon thirty (30) days prior written notice to the COMPANY, the
Franchise may be assigned, by an agreement in form and substance
approved by the COMPANY, to a corporation that conducts no
business other than operating the Restaurant, that is actively
managed by FRANCHISEE and for which FRANCHISEE owns and controls
all of the equity and voting power of all issued and outstanding
capital stock. Such an assignment shall not relieve FRANCHISEE
of his obligations hereunder, and FRANCHISEE shall remain jointly
and severally liable for all obligations hereunder. The articles
of incorporation, by-laws, and other organizational documents of
such corporation shall recite that the issuance and assignment of
any interest therein is restricted by the terms of Paragraphs B,
C, D, and E of this Section 13 and all issued and outstanding
stock certificates of such corporation shall bear a legend
reflecting or referring to such restrictions.
Any person who becomes a shareholder of FRANCHISEE during
the term of the Franchise shall execute an agreement in a form
provided or approved by the COMPANY undertaking to be bound
jointly and severally by all provisions of this Agreement and any
shareholder owning more than five percent (5%) of the beneficial
interest in such corporation shall execute a personal guarantee,
in the form attached hereto as Exhibit A or any form then
required by the COMPANY, of all obligations of FRANCHISEE to the
COMPANY and any affiliated corporation, partnership, or other
business entity. FRANCHISEE shall provide to the COMPANY at any
time upon a request a certified copy of the articles of
incorporation and a list, in such form as the COMPANY may
require, of all shareholders (of record and beneficially)
reflecting their respective interests in FRANCHISEE.
F. THE COMPANY'S RIGHT OF FIRST REFUSAL
If FRANCHISEE (or its partners or shareholders if FRANCHISEE
is a partnership or corporation) shall at any time determine to
sell or to transfer for consideration the Franchise, the
Restaurant, any interest in the Restaurant, or any ownership
interest in FRANCHISEE, other than to any individual or entity
already owning an interest therein, FRANCHISEE (or its partners
or shareholders if FRANCHISEE is a partnership or corporation)
shall obtain a bona fide, signed written offer from a responsible
and fully disclosed purchaser and shall submit an exact copy of
such offer to the COMPANY. The COMPANY shall have the right,
exercisable by written notice delivered to FRANCHISEE, (or its
partners or shareholders if FRANCHISEE is a partnership or
corporation) within thirty (30) days from the date of delivery of
an exact copy of such offer to the COMPANY, to purchase the
Franchise, the Restaurant, such interest in the Restaurant, or
such ownership interest in FRANCHISEE for the price and on the
terms and conditions contained in such offer, provided that the
COMPANY may substitute cash for any form of payment proposed in
such offer and shall have not less than thirty (30) days within
which to close any such transaction, or such longer period as may
have been provided by the terms and conditions of such offer. If
the COMPANY does not exercise its right of first refusal,
FRANCHISEE (or its partners or shareholders if FRANCHISEE is a
partnership or corporation) may complete the sale to such
purchaser pursuant to and on the terms of such offer, subject to
the COMPANY's approval of the purchaser as provided in Paragraphs
B and C of this Section 13, provided that if the sale to such
purchaser is not completed within one hundred twenty (120) days
after delivery of such offer to the COMPANY, or if there is a
material change in the terms and conditions of such offer, the
COMPANY shall again have the right of first refusal provided
herein.
14. TERMINATION OF THE FRANCHISE
A. BY FRANCHISEE
If FRANCHISEE is in substantial compliance with this Agreement
and the COMPANY materially breaches this Agreement and fails to
cure such breach within thirty (30) days after written notice
thereof is delivered to the COMPANY, FRANCHISEE may terminate the
Franchise. Such termination shall be effective ten (10) days
after delivery to the COMPANY of written notice that such breach
has not been cured and FRANCHISEE elects to terminate the
Franchise. A termination (or purported or attempted termination)
of the Franchise by FRANCHISEE, other than in strict compliance
with the foregoing provisions or the provisions in Paragraph B of
Section 9 hereof shall be deemed a termination by FRANCHISEE
without cause and a material breach of this Agreement by
FRANCHISEE.
B. BY THE COMPANY
The COMPANY shall have the right to terminate the Franchise by
delivery of a written notice to FRANCHISEE stating that the
COMPANY elects to terminate the Franchise as a result of any of
the breaches set forth below. Such termination shall be
effective upon delivery of such notice of termination or, if
applicable, upon the failure to cure (to the COMPANY's
satisfaction) any such breach, by the expiration of any period of
time within which such breach may be cured in accordance with the
provision set forth below, without the necessity of any further
notice from the COMPANY to FRANCHISEE. It shall be a material
breach of this Agreement if FRANCHISEE (and/or, when applicable,
any of its partners, shareholders, directors, or officers if
FRANCHISEE is a partnership or corporation):
(i) fails to acquire the premises for the Restaurant as provided
in Paragraph A of Section 3 hereof, construct the Restaurant as
provided in Paragraph B of Section 3 hereof, open the Restaurant
for business as provided in Paragraph C of Section 3 hereof, or
satisfactorily complete the initial training program as provided
in Paragraph A of Section 4 hereof;
(ii) abandons, surrenders, or loses the right to occupy the
premises of the Restaurant (except as otherwise permitted in
Paragraph D of Section 3 hereof) or fails to actively operate the
Restaurant;
(iii) has made any material misrepresentation or omission in his
application for the Franchise, or is convicted of or pleads no
contest to a felony, or is convicted of or pleads no contest to
any crime or offense that may adversely affect the reputation of
Floridino's Restaurants or the goodwill associated with the Marks
and the System;
(iv) surrenders or transfers control of the operation of the
Restaurant (including entering into a management arrangement with
any person not a party to this Agreement), makes an unauthorized
direct or indirect assignment or transfer of this Agreement, the
Franchise, the Restaurant, any interest in the Restaurant, or
any ownership interest in FRANCHISEE or fails or refuses to
effect an assignment, transfer, or appointment of an approved
manager in accordance with Paragraph D of Section 13 hereof;
(v) makes any unauthorized use of the Marks or unauthorized use
or disclosure of any of the Confidential Information;
(vi) terminates (or purports or attempts to terminate) the
Franchise, other than in strict compliance with Paragraph B of
Section 9 hereof or Paragraph A of this Section 14,
(vii) fails to timely pay royalty and service fees, advertising
contributions, amounts due for purchases from the COMPANY or its
affiliates, or other payments due the COMPANY;
(viii) fails to maintain insurance in strict compliance with
Paragraph L of Section 9 hereof;
(ix) fails to comply with any other provision of this Agreement
or any mandatory format, specification, standard, method, or
procedure required by the COMPANY, or to timely pay amounts due
to persons other than the COMPANY or its affiliates; or
(x) fails on three (3) or more separate occasions within any
twelve (12) consecutive month period to submit when due financial
statements, reports or other data, information, or supporting
records, to pay when due the royalty and service fees,
advertising contributions, amounts due for purchases from the
COMPANY or its affiliates, or other payments due to the COMPANY,
or to pay amounts due to other persons, or otherwise fails to
comply with this Agreement, whether or not such failures to
comply are cured after notice thereof is delivered to FRANCHISEE.
FRANCHISEE shall have the right to cure a breach under
subparagraph (vii) or subparagraph (viii) within ten (10) days
after delivery of the COMPANY's notice of termination pursuant
thereto and shall have the right to cure a breach under
subparagraph (ix) within thirty (30) days after delivery of the
COMPANY's notice of termination pursuant thereto.
15. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION
A. PAYMENT OF AMOUNTS OWED TO THE COMPANY
FRANCHISEE agrees to pay to the COMPANY, within fifteen (15) days
after the effective date of the expiration or termination of the
Franchise, such royalty and service fees, advertising
contributions, any and all amounts owed for products purchased by
FRANCHISEE from the COMPANY and its affiliates, interest due the
COMPANY on any of the foregoing, and any and all other amounts
owed to the COMPANY and its affiliates that are then unpaid.
FRANCHISEE shall contemporaneously with such payment provide a
complete accounting of all such amounts owed to the COMPANY and
its affiliates.
B. THE MARKS
FRANCHISEE shall, upon the expiration or termination of the
Franchise:
(i) not directly or indirectly at any time or in any manner
identify himself as a current or former franchisee or licensee of
or as otherwise associated with the COMPANY, identify any
restaurant as a current or former Floridino's Restaurant, use the
Marks, any colorable imitation thereof, or other indicia of
Floridino's Restaurants in any manner or for any purpose, or use
for any purpose any trademark, service xxxx, trade name, logo,
trade dress, or other commercial symbol that suggests or
indicates a connection or association with the COMPANY;
(ii) promptly remove or paint over all signs, decals, and
lettering displaying the Marks at the Restaurant and take such
other actions as required or approved by the COMPANY to
distinguish the Restaurant from Floridino's Restaurants; promptly
destroy or deliver to the COMPANY (at the COMPANY's option,
exercisable within ten (10) days after the termination) all
menus, advertising materials, stationery, business forms, and
other materials displaying the Marks or otherwise identifying or
relating to Floridino's Restaurants
(iv) promptly take such action as may be required to cancel all
fictitious or assumed name registrations relating to his use of
the Marks;
(v) promptly notify the telephone company and all listing
agencies of the expiration or termination of FRANCHISEE's right
to use any telephone number and any regular, classified, or
other telephone directory listings associated with the Marks and
authorize transfer of the same to or at the direction of the
COMPANY; and
(vi) provide to the COMPANY within thirty (30) days after the
effective date of the expiration or termination evidence
satisfactory to the COMPANY of FRANCHISEE's compliance with the
foregoing obligations.
If requested by the COMPANY during the term of the Franchise,
FRANCHISEE shall execute dated letters to telephone companies and
telephone directory listing agencies directing termination and/or
transfer of FRANCHISEE's right to use telephone numbers
associated with the Marks that the COMPANY may utilize upon
the expiration or termination of the Franchise. FRANCHISEE
acknowledges that as between the COMPANY and FRANCHISEE, the
COMPANY has the sole right to and interest in all telephone
numbers and directory listings associated with the Marks, and
FRANCHISEE authorizes the COMPANY, and hereby appoints the
COMPANY and any officer of the COMPANY as his attorney in fact to
direct the telephone company and all listing agencies to transfer
the same to the COMPANY or at its direction should FRANCHISEE
fail or refuse to do so, and the telephone company and all
listing agencies may accept such direction or this Agreement as
conclusive of the exclusive right of the COMPANY in such
telephone numbers and directory listings and its authority to
direct their transfer.
C. CONFIDENTIAL INFORMATION
FRANCHISEE shall, upon the expiration or termination of the
Franchise, immediately cease to use in any business or otherwise
the Confidential Information disclosed to FRANCHISEE pursuant to
this Agreement and return to the COMPANY all copies of the
Operating Manual and other written forms of the Confidential
Information that have been loaned or provided to him by the
COMPANY.
D. COVENANT NOT TO COMPETE
If the Franchise expires or is terminated by the COMPANY in
accordance with the provisions of this Agreement or by FRANCHISEE
without cause, FRANCHISEE agrees that, for a period of two (2)
years commencing on the effective date of the expiration or
termination, the date on which FRANCHISEE ceases to operate the
Restaurant, or the effective date of any injunction required to
enforce the provisions of this paragraph, whichever is later,
FRANCHISEE (and its partners or shareholders if FRANCHISEE is a
partnership or corporation) will not have any interest as an
owner, partner, director, officer, employee, consultant,
representative, or agent, or in any other capacity, in any
Italian or Italian American restaurant (i) on the premises of the
Restaurant or (ii) within five (5) miles of the Restaurant or any
other Floridino's Restaurant in operation or under development as
of the effective date of such expiration or termination.
E. THE COMPANY'S RIGHT TO PURCHASE FRANCHISEE'S ASSETS
Upon the expiration or termination of the Franchise by the
COMPANY in accordance with the provisions of this Agreement or by
FRANCHISEE without cause, the COMPANY shall have the option,
exercisable by giving written notice thereof within thirty (30)
days from the date of such expiration or termination, to purchase
from FRANCHISEE all of the tangible assets of FRANCHISEE used in
the operation of the Restaurant (including, without limitation,
all equipment, fixtures, furniture, signs, and inventory of
ingredients, foods, beverages, plates, glasses, cups, utensils,
menus, napkins, and other supplies, but excluding any unamortized
portion of the franchise fee, cash, short term investments, and
accounts receivable) and, if assignable, an assignment of all
leases, subleases, agreements, licenses, permits, and
certificates required for operation of the Restaurant. The
COMPANY shall have the unrestricted right to assign this option
to purchase.
The purchase price for the tangible assets of FRANCHISEE used in
the operation of the Restaurant shall be the lesser of the (i)
total purchase price paid by FRANCHISEE for such tangible assets,
less depreciation for federal income tax purposes through the
date of the expiration or termination of the Franchise as
previously elected by FRANCHISEE, or (ii) fair market value of
such assets on the date of the expiration or termination of the
Franchise. Should the COMPANY and FRANCHISEE disagree as to the
purchase price of such tangible assets, such disagreement shall
be resolved pursuant to the arbitration provisions of Section 18
hereof, with the COMPANY and FRANCHISEE responsible for their
respective costs and attorney fees incurred in connection
therewith. No amount shall be paid by the COMPANY to FRANCHISEE
for the assignment of all leases, subleases, agreements,
licenses, permits, and certificates that may be assigned.
The purchase price for the tangible assets of FRANCHISEE used in
the operation of the Restaurant shall be paid in cash at the
closing of the purchase, which shall take place not later than
thirty (30) days after the determination of the purchase price,
at which time FRANCHISEE shall: (i) deliver instruments
transferring good and marketable title to the tangible assets
purchased, free and clear of all liens and encumbrances, to the
COMPANY or its nominee, with all sales and other transfer taxes
paid by FRANCHISEE and (ii) assign to the COMPANY or its nominee
all leases, subleases, agreements, licenses, permits, and
certificates that may be assigned. If FRANCHISEE cannot deliver
clear title to all of the tangible assets purchased or there are
other unresolved issues, the closing of the sale shall be
accomplished through an escrow. The COMPANY and FRANCHISEE
shall, prior to closing, comply with any applicable bulk sales
provisions of the Uniform Commercial Code as enacted in the
applicable state. The COMPANY shall have the right to set off
against and reduce the purchase price by any sums then due to the
COMPANY or any of its affiliates.
If the COMPANY exercises the foregoing option to purchase the
tangible assets of FRANCHISEE used in the operation of the
Restaurant, the COMPANY shall have the right (but shall not be
required) pending determination of the purchase price and the
closing of such purchase to operate the Restaurant for its
exclusive benefit at its expense, subject to its having assumed
all liabilities associated with its operation of the Restaurant
and having executed a written indemnification agreement by which
FRANCHISEE is held harmless for events occurring after the
COMPANY commences operation of the Restaurant.
F. CONTINUING RIGHTS AND OBLIGATIONS
All rights and obligations of the COMPANY and FRANCHISEE that
expressly or by their nature survive the expiration or
termination of the Franchise 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.
16. ENFORCEMENT
A. SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS
Except as expressly provided to the contrary herein, each
section, paragraph, term, and provision of this Agreement, and
any portion thereof, shall be considered severable and if, for
any reason, any such portion of this Agreement is held to be
invalid, contrary to, or in conflict with any applicable present
or future law or regulation in a final, unappealable ruling
issued by any court, agency, or other tribunal of competent
jurisdiction in a proceeding to which the COMPANY is a party,
that ruling shall not impair the operation of, or have any other
effect upon, such other portions of this Agreement as may remain
otherwise intelligible, which shall continue to be given full
force and effect and bind the parties hereto, although any
portion held to be invalid shall be deemed not to be a part of
this Agreement from the date the time for appeal expires, if
FRANCHISEE is a party thereto, otherwise upon FRANCHISEE's
receipt of a notice of non-enforcement thereof from the COMPANY.
If any applicable and binding law or rule of any jurisdiction
requires a greater period of notice of any proposed termination
of the Franchise than is required hereunder, or the taking of
some other action not required hereunder, or if under any
applicable and binding law or regulation of any applicable
jurisdiction, any provision of this Agreement or any format,
specification, standard, method, or procedure required by the
COMPANY is invalid or unenforceable, the period of notice and/or
other action required by such law or rule shall be substituted
for the comparable provisions hereof, and the COMPANY shall have
the right, in its sole discretion, to modify such invalid or
unenforceable provision, format, specification, standard, method,
or procedure to the extent required to be valid and enforceable.
FRANCHISEE agrees to be bound by any promise or covenant imposing
the maximum duty permitted by law that is subsumed within the
terms of any provision hereof, as though it were separately
articulated in and made a part of this Agreement, that may result
from striking from such provision, or any format, specification,
standard, method, or procedure required by the COMPANY, any
portion or portions that a court or other tribunal of competent
jurisdiction may hold to be unenforceable in a final decision to
which the COMPANY is a party, or from reducing the scope of any
promise or covenant to the extent required to comply with such an
order. Any modification to this Agreement contemplated by this
paragraph shall be effective only in such jurisdiction or
jurisdictions as are specifically included within the authority
of the court or other tribunal rendering the decision giving rise
to such modification, unless the COMPANY elects to give such
modification greater applicability, and this Agreement shall be
enforced in all other jurisdictions without regard to any such
modification.
B. WAIVER OF OBLIGATIONS
The COMPANY may by written instrument unilaterally waive or
reduce any obligation of or restriction upon FRANCHISEE under
this Agreement, and FRANCHISEE may by written instrument
unilaterally waive or reduce any obligation of or restriction
upon the COMPANY under this Agreement, effective upon delivery of
written notice thereof to the other or such other effective date
stated in the notice of waiver. Whenever this Agreement requires
the COMPANY's prior approval or consent, FRANCHISEE shall make a
timely written request therefor, and such approval shall be
obtained in writing.
The COMPANY makes no warranties or guarantees upon which
FRANCHISEE may rely, and assumes no liability or obligation to
FRANCHISEE, by granting any waiver, approval, or consent to
FRANCHISEE, or by reason of any neglect, delay, or denial of any
request therefor. Any waiver granted by the COMPANY shall be
without prejudice to any other rights the COMPANY may have, will
be subject to continuing review by the COMPANY, and may be
revoked, in the COMPANY's sole discretion, at any time and for
any reason, effective upon delivery to FRANCHISEE of ten (10)
days prior written notice.
The COMPANY shall not be deemed to have waived or impaired any
right, power, or option reserved by this Agreement (including,
without limitation, the right to demand exact compliance with
every term, condition, and covenant herein, or to declare any
breach thereof to be a default and to terminate the Franchise) by
virtue of any custom or practice of the parties at variance with
the terms hereof; any failure, refusal, or neglect of the COMPANY
to exercise any right under this Agreement or to insist upon
exact compliance with FRANCHISEE's obligations hereunder
(including, without limitation, any format, specification,
standard, method, or procedure required by the COMPANY) ; any
waiver, forbearance, delay, failure, or omission by the COMPANY
to exercise any right, power, or option, whether of the same,
similar, or different nature, with respect to other Floridino's
Restaurants; or the acceptance by the COMPANY of any payments due
from FRANCHISEE after any breach of this Agreement.
Neither the COMPANY nor FRANCHISEE shall be liable for loss or
damage or deemed to be in breach of this Agreement if its failure
to perform its obligations results from: (i) transportation
shortages, material or energy shortages, or the voluntary
foregoing of the right to acquire or use any of the foregoing in
order to accommodate or comply with the orders, requests,
regulations, recommendations, or instructions of any federal,
state, or municipal government or any department or agency
thereof; (ii) compliance with any law, ruling, order, regulation,
requirement, or instruction of any federal, state, or municipal
government or any department or agency thereof; (iii) acts of
God; (iv) acts or omissions of the other party; (v) fires,
strikes, embargoes, war, or riot; or (vi) any other similar event
or cause. Any delay resulting from any of the said causes shall
extend performance accordingly or excuse performance, in whole or
in part, as may be reasonable.
C. SPECIFIC PERFORMANCE/INJUNCTIVE RELIEF
Nothing herein contained shall bar the COMPANY's right to obtain
specific performance of the provisions of this Agreement and
injunctive relief against threatened conduct that will cause it
loss or damage under customary equity rules, including applicable
rules for obtaining restraining orders and preliminary
injunctions. FRANCHISEE agrees that the COMPANY may have such
injunctive relief, in addition to such further and other relief
as may be available at equity or law, and the sole remedy of
FRANCHISEE, in the event of the entry of such injunction, shall
be the dissolution of such injunction, if warranted, upon hearing
duly had (all claims for damages by reason of the wrongful
issuance of any such injunction being expressly waived hereby).
D. RIGHTS AND REMEDIES ARE CUMULATIVE
The rights and remedies of the COMPANY hereunder are cumulative
and no exercise or enforcement by the COMPANY of any right or
remedy hereunder shall preclude the exercise or enforcement by
the COMPANY of any other right or remedy hereunder or that the
COMPANY is entitled by law to exercise or enforce.
E. COSTS AND ATTORNEY FEES
If a claim for amounts owed by FRANCHISEE to the COMPANY or any
affiliate is asserted in any legal proceeding before a court of
competent jurisdiction or arbitrators, or if the COMPANY is
required to enforce this Agreement in a judicial or arbitration
proceeding, the COMPANY shall be entitled to reimbursement of its
costs and expenses, including reasonable accounting and legal
fees.
F. GOVERNING LAW/CONSENT TO JURISDICTION
Except to the extent governed by the United States Trademark Act
(Xxxxxx Act, 15 U.S. C. Sections 1051, et. seq.), any other
applicable federal law, or any applicable state franchise law,
this Agreement and the Franchise shall be governed by the laws of
the State of Florida, the state in which the COMPANY is
headquartered, all financial obligations of FRANCHISEE are
required to be paid, and this Agreement is deemed to have been
executed.
G. BINDING EFFECT
This Agreement is binding upon the parties hereto and their
respective heirs, personal representatives, assigns, and
successors in interest, and shall not be modified except by
written agreement signed by both the COMPANY and FRANCHISEE. If
FRANCHISEE is a corporation, each shareholder or other owner of
more than five percent (5%) of the beneficial interest in
FRANCHISEE shall execute a personal guarantee in the form of that
which appears in Exhibit A attached hereto.
H. CONSTRUCTION
The preambles to this Agreement are a part of this Agreement,
which constitutes the entire agreement of the parties, and there
are no other oral or written understandings or agreements between
the COMPANY and FRANCHISEE relating to the subject matter of this
Agreement as of the date of this Agreement other than as may be
specifically referenced herein.
Except as otherwise expressly provided herein, nothing in this
Agreement is intended, nor shall be deemed, to confer any rights
or remedies upon any person or legal entity not a party hereto.
The headings of the several sections and paragraphs hereof are
for convenience only and do not define, limit, or construe the
contents of such sections or paragraphs.
The term "FRANCHISEE" as used herein is applicable to one or more
persons, a partnership, or a corporation, as the case may be, and
the singular usage includes the plural and the masculine and
neuter usages include the other and the feminine. If two or more
persons are at any time FRANCHISEE hereunder, their obligations
and liabilities to the COMPANY shall be joint and several.
References to "FRANCHISEE" and "assignee" which are applicable to
an individual or individuals shall mean the owner or owners of
the equity or operating control of FRANCHISEE or the assignee if
FRANCHISEE or the assignee is a partnership or corporation.
This Agreement may be executed in multiple copies, each of which
shall be deemed an original.
Time is of the essence in this Agreement.
17. EFFECTIVENESS OF AGREEMENT
The delivery of an unexecuted copy of this Agreement and any
accompanying franchise offering circular to FRANCHISEE shall not
be deemed to be an offer to grant a franchise or enter into an
agreement that FRANCHISEE may accept by the execution of such
copy. No franchise shall be deemed to have been granted by the
COMPANY to FRANCHISEE and no agreement shall be deemed to have
been reached between the COMPANY and FRANCHISEE until the COMPANY
has delivered a fully executed copy of this Agreement to
FRANCHISEE and the franchise fee required to be paid by Paragraph
A of Section 8 hereof has been received by the COMPANY.
18. ARBITRATION
All disputes between the COMPANY and FRANCHISEE arising from
or in any way related to this Agreement or to business dealings
between the COMPANY and any affiliated corporation, partnership,
or other business entity and FRANCHISEE shall be submitted to
binding arbitration pursuant to the Commercial Arbitration Rules
of the American Arbitration Association, with such arbitration to
take place in Winter Haven, Polk County, Florida, unless the
COMPANY shall specifically agree in writing to the conduct of
such arbitration proceeding in some other location.
Nothing in this section shall be deemed to preclude the COMPANY
from filing litigation in any court of competent jurisdiction for
injunctive relief to enforce the provisions of this Agreement
either during the term or upon the expiration hereof, nor shall
the commencement of any such litigation be deemed to constitute a
waiver of the COMPANY's right to arbitrate any dispute otherwise
subject to this section. In any such action seeking injunctive
relief, the remedies available to the COMPANY shall be limited to
such injunction as the court deems appropriate and neither the
COMPANY nor FRANCHISEE may assert any monetary claims or other
causes of action or affirmative defenses in such litigation,
without regard to any otherwise applicable rule of civil
procedure requiring the assertion of any such claim as a
compulsory counterclaim or affirmative defense. Upon the
completion of any arbitration contemplated by this Section 18,
either the COMPANY or FRANCHISEE may apply to any court of
competent jurisdiction for such order as may be deemed
appropriate to modify, vacate, or confirm any award of the
arbitration panel entered pursuant to this Section 18.
19. NOTICES AND PAYMENTS
All written notices permitted or required to be delivered by
the provisions of this Agreement or of the Operating Manual shall
be deemed so delivered at the time delivered by hand, one (1)
business day after sending by telegraph, telefax, or a comparable
electronic system, or three (3) business days after being placed
in the U.S. mail by Registered or Certified Mail, Return Receipt
Requested, postage prepaid, addressed to the party to be notified
at its most current principal business address of which the
notifying party has been notified.
All payments and reports required by this Agreement shall be
directed to the COMPANY at the address listed in the first
paragraph of this Agreement or to such other persons and places
as the COMPANY may direct from time to time. Any required
payment or report not actually received by the COMPANY during
regular business hours on the date due or properly placed in the
U. S. mail and postmarked by postal authorities at least three
(3) business days prior thereto shall be deemed delinquent.
IN WITNESS WHEREOF, the parties hereto have executed sealed, and
delivered this Agreement in counterparts on the day and year
first above written.
FLORIDINO'S INTERNATIONAL, INC. FRANCHISEE:
Sign: _________________________ Sign: _______________________
Print: ________________________ Print: ______________________
Title: ________________________ Title: ______________________
Date: _________________________ Date: _______________________
ACKNOWLEDGEMENTS
STATE OF _____________________
COUNTY OF ___________________
The foregoing franchise agreement was acknowledged before me this
day of _____________, 19____, by _______________________ as
____________________________________________, of Floridino's
International, Inc., a Florida corporation, on behalf of the
corporation. He or she is personally known to me or has produced
______________as identification and did take an oath.
NOTARY PUBLIC:
Signed: _______________________
Print: _________________________
(Seal) My Commission Expires:
STATE OF _______________________
COUNTY OF ______________________
The foregoing franchise agreement was acknowledged before me this
_______day of _______, 19 ____________, by _________________.
He or she is personally known to me or who has produced as
identification and did take an oath.
NOTARY PUBLIC:
Signed: _______________________
Print: _________________________
(Seal) My Commission Expires:
0000-000-000000
EXHIBIT A
PERSONAL GUARANTEE
In consideration of the granting of a franchise to construct,
own, and operate a Floridino's Restaurant to [name of
corporation] or of the approval by Floridino's International,
Inc., a Florida corporation, of the assignment of a previously
granted franchise to operate a Floridino's Restaurant to (name of
corporation], the undersigned, as the owner of more than five
percent (5%) of the beneficial interest in (name of corporation],
hereby guarantees all obligations, financial and otherwise, of
[name of corporation] to Floridino's International, Inc.
(including its successors and assigns) and any affiliated
corporation, partnership, or other business entity (including its
successors and assigns), and agrees to pay any such financial
obligation immediately upon demand therefor irrespective of
whether any demand has yet been made upon [name of corporation]
and irrespective of the ability of [name of corporation] to
satisfy any then existing financial obligation to Floridino's
International, Inc. (including its successors and assigns) or any
affiliated corporation, partnership, or other business entity
(including its successors and assigns).
The obligations of the undersigned are to be joint and several
with any other guarantor of the obligations of [name of
corporation] to Floridino's International, Inc. (including its
successors and assigns) and any affiliated corporation,
partnership, or other business entity (including its successors
and assigns) and it is specifically understood that the failure
of Floridino's International, Inc. (including its successors and
assigns) or any such affiliated corporation, partnership, or
other business entity (including its successors and assigns) to
attempt to recover on the guarantee of any other individual with
respect to the obligations of (name of corporation] shall not
constitute a defense to any claims against the undersigned
arising from this guarantee.
Sign: ___________________________
Print: ___________________________
Date: ____________________________
