AREA DEVELOPMENT AGREEMENT Bagger Daves Franchising Corporation 27680 Franklin Road Southfield, Michigan48034 ###-###-#### www.baggerdaves.com AREA DEVELOPMENT AGREEMENT Between BAGGER DAVES FRANCHISING CORPORATION (FRANCHISOR) and BDS RESTAURANT GROUP, LLC (DEVELOPER) 2024 Watson Jackson, Missouri 63755 Telephone Number: (573 ###-###-#### Date: 11/17/11 Email ***@*** Effective Date

Bagger Dave’s Franchising Corporation

27680 Franklin Road

Southfield, Michigan  48034

(248) 223-9160

 

 

Between

and

(“DEVELOPER”)

2024 Watson

Jackson, Missouri 63755

Telephone Number: (573 ###-###-####

 

Email ***@***

Effective Date

 (to be completed by Us)

 

 

 

1.	DEFINITIONS	1
2.	DESIGNATED RIGHTS; TERM	6
3.	DEVELOPMENT SCHEDULE; LOCATION SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MATERIALS	7
4.	FEES AND PAYMENTS	10
5.	REPRESENTATIVE; OPERATOR; RESTAURANT MANAGERS; TRAINING	10
6.	CONFIDENTIAL INFORMATION	13
7.	DEVELOPER’S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS	14
8.	TRANSFER	18
9.	CONSENT AND WAIVER	20
10.	DEFAULT AND REMEDIES	20
11.	RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION	22
12.	INSURANCE	23
13.	INDEMNIFICATION	24
14.	NOTICES	26
15.	FORCE MAJEURE	26
16.	SEVERABILITY	27
17.	INDEPENDENT CONTRACTOR	27
18.	DUE DILIGENCE AND ASSUMPTION OF RISK	27
19.	ENFORCEMENT	28
20.	MISCELLANEOUS	31
21.	ENTIRE AGREEMENT	32

 

 

WHEREAS, our Parent has developed a unique System for operating a full-service, casual/fast-casual Restaurant with liquor license that offers on-premises dining and carry out with a wide variety of Menu Items, specializing in freshly-made hamburgers and French fries with superior customer service to its clients;

WHEREAS, our Parent owns the Trademarks used in connection with the System;

WHEREAS, our Parent has granted to us the right to sublicense the right to develop and operate Bagger Dave’s Legendary Burger Tavern™ Restaurants;

WHEREAS, Franchisor intends to identify the System in the Territory with the Trademarks;

WHEREAS, Developer wishes to obtain certain rights to develop Restaurants under the System in the Territory.

NOW, THEREFORE, the parties, in consideration of the undertakings and commitments set forth herein, agree as follows:

1.	DEFINITIONS

As used in this Agreement the following words and phrases shall have the meanings attributed to them in this Section:

Action - any cause of action, suit, proceeding, claim, demand, investigation or inquiry (whether a formal proceeding or otherwise) asserted or instituted by a third party with respect to which the indemnity described in Section 12 applies.

Agreement - this Area Development Agreement.

Business Days - Each day except Saturday, Sunday and United States Government legal holidays.

Commencement Date – as specified in Attachment 1.

 

Competing Business - a Restaurant business offering the same or similar products, including hamburgers, French fries, or other Menu Items, including any casual, fast-casual, quick-serve, full-service, take-out, or delivery Restaurant concept.

Confidential Information - all data or facts, not available to the public or which do not become available to the public, which data and facts shall include but not be limited to all memoranda, notes, disks, financial statements, Trademarks, trade dress, copyrights, logos, signage, blueprints, sketches, recipes, methods, processes, designs, plans, property, reports, documents, analytical tools, business plans, business contacts, information regarding operations, manufacturing, administration, merchandising, marketing, costing, and production information and all extracts and copies thereof prepared by either party or its officers, agents, employees, attorneys, Representatives, or consultants, which when used together as they relate to the System reasonably represent an entity employing the System, which is disclosed to or acquired by you directly or indirectly from us in the course of activities related to the development of a business relationship between you and us, or which is obtained by you through an inspection or tour of our offices, facilities, or Restaurants or the Restaurants of our Franchisees.

Development Fee - a fee equal to the sum of one hundred percent (100%) of the Initial Franchise Fee ($30,000) for the first Restaurant to be developed under the Development Schedule, plus twenty percent (20%) of the Initial Franchise Fee for each additional Restaurant ($20,000) required to be developed thereafter pursuant to the Development Schedule.

Development Materials - a description of the Location, a feasibility study (including, without limitation, demographic data, photographs, maps, artists' renderings, site plans, a copy of the Lease, and documentation indicating your prospects to acquire the Location) and such other information related to the development of the Location as we reasonably request.

Development Schedule - the schedule pursuant to which Developer must develop Restaurants in the Territory (see, Section 3.A).

Event of Default - as defined in Section 10.

Franchise Agreement – an agreement pursuant to which Developer constructs and operates a Restaurant during the Development Schedule.

Franchisee - as defined in the Franchise Agreement.

Franchise Fee - an initial per Restaurant fee (more fully defined in the Franchise Agreement) paid by Developer to us.  The Initial Franchise Fee for the first Restaurant to be developed under the Development Schedule shall be $30,000.  The Initial Franchise Fee for each subsequent Restaurant to be developed under the Development Schedule shall be $20,000.

Location - the proposed Location of the Restaurant.

 

Location Consent - written communication from us to Developer notifying Developer that a proposed Location has received our consent.

 

Losses and Expenses - all compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, reasonable fees of attorneys and other engaged professionals, court costs, settlement amounts, judgments, costs of or resulting from delays, financing, costs of advertising material and media time/space, and costs-of changing, substituting or replacing the same, and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described in Section 13.

Material Event of Default - an Event of Default which constitutes a substantial deviation from the performance required.

Menu Items - Any and all food and beverage products required to be provided to customers as provided by the Operations Manuals and prepared in accordance with specified recipes, cooking techniques and procedures pursuant to the System.

New Restaurant Team - a "New Restaurant Opening Team" consisting of our employees and certain of Franchisee's employees to whom we have consented which shall perform the functions described in Section 5.

Occupancy Contract - the proposed agreement or document (including, without limitation, any Lease, deed, contract for sale, contract for deed, land contract, management contract, license, or other agreement purporting to grant any right, title, or interest in or to the Location) pursuant to which Developer shall occupy or acquire rights in any Location.

Operator - an individual designated as described in Section 5.B. who shall devote his full time and best efforts to the management and supervision of (i) Developer's duties and obligations hereunder; and (ii) the operation of the Restaurants.

Operations Manuals – Our confidential operating manuals, as amended from time to time in our sole discretion, which contain the instructions, requirements, standards, specifications, methods and procedures for the operation of the Restaurant including without limitation, (i) those relating to the selection, purchase, service and sale of all products and services sold at the Restaurant; (ii) those relating to the maintenance and repair of the Restaurant, buildings, grounds, equipment, signs, interior and exterior décor items, fixtures and furnishings; (iii) those relating to employee apparel and dress, accounting, bookkeeping, record retention and other business Systems, procedures and operations; and (iv) the purchase, storage, and preparation of all Menu Items.

Our Indemnities – Us, our directors, officers, employees, agents, members, affiliates, successors and assigns, Parent, affiliates, subsidiaries, and the respective directors, officers, employees, agents, shareholders, members affiliates and successors and assigns of each.

Other Concepts - Retail, wholesale, Restaurant, bar, tavern, take-out or any other type of business involving the production, distribution or sale of food products, beverages, services, merchandise or other items that do not use one, some or all of the Trademarks or other names or markets but may utilize some part of or similar components of the System pursuant to which a Bagger Dave’s Legendary Burger Tavern™ Restaurant is operated.

 

Parent – AMC Burgers, Inc., the owner of the Trademarks and System.

Payments - all transfers of funds from you to us, including, without limitation, the Development Fee and reimbursement of expenses.

Permanent Disability - any physical, emotional or mental injury, illness or incapacity which would prevent the afflicted person from performing his obligations hereunder for more than ninety (90) consecutive days as determined by a licensed physician selected by us.

Principal Owner(s) - the persons listed on Attachment 2, who are (and such other persons or entities to whom we shall consent from time to time) the record and beneficial owners of, and have the right to vote their respective interests (collectively one hundred percent (100%)) of your equity interests or the securities or partnership interest of any person or entity designated by us which owns or controls a direct or indirect interest in your equity interests of the Developer.

Project Manager - an individual designated as described in Section 5.C who shall devote his full time and best efforts to the coordination and completion of Restaurant construction.

Publicly-Held Entity - a corporation or other entity whose equity securities are (i) registered pursuant to applicable law; (ii) widely held by the public; and (iii) traded on a public securities exchange or over the counter pursuant to applicable law.

Representative - an individual, designated as described in Attachment 1 who (i) owns an equity interest in the Developer and (ii) is authorized to act on behalf of, and bind, Developer with respect to this Agreement.

Restaurant - Restaurants operated in accordance with the System under the registered service marks “Bagger Dave’s Legendary Burger Tavern™” or “Bagger Dave’s®”.

Security - the capital stock of, partner’s interest in, or other equity or voting interest in Developer including such interests issued or created subsequent to the date hereof.

Standards and Specifications - our Standards and Specifications, as amended from time to time by us, in our sole discretion, contained in, and being a part of, the Confidential Information pursuant to which you shall develop and operate the Restaurant in the Designated Area.

System - a unique, proprietary System developed and owned by our Parent (which may be modified or further developed from time to time in our sole discretion) for the establishment and operation of full-service Restaurants under the Trademarks, which includes, without limitation, a distinctive image consisting of exterior and interior design, decor, color scheme and furnishings; special recipes, Menu Items and full-service bar; uniform standards, products, services and specifications; procedures with respect to operations, inventory and management control (including accounting procedures and policies); training and assistance; and advertising and promotional programs.

 

Term - the duration of this Agreement commencing on the Commencement Date and continuing until the date specified on the Development Schedule for the last Restaurant to be opened.

Territorial Expenses - such costs and expenses incurred by or assessed with respect to our (or other described party’s) employees, agents and/or Representatives in connection with activities in the Territory which Developer is obligated to pay pursuant to this Agreement including, without limitation, hotel/lodging, transportation and meals, and other related or incidental expenses.

Territory - the geographical area described in Attachment 1; provided, however, the Territory shall not include any enclosed malls, institutions (such as hospitals or schools), airports, airport properties, parks (including theme, entertainment or amusement parks), casinos, military bases and sports arenas otherwise located within the Territory, nor a specifically identified restricted area surrounding any Restaurant located within the Territory as of the date of this Agreement nor shall it be deemed to convey any exclusivity with respect to the use of the Trademarks.

Trademarks - certain Trademarks, trade names, trade dress, service marks, emblems and indicia of origin designated by us from time to time for use in connection with the operation of the Restaurant pursuant to the System in the Designated Area, including, without limitation, “Bagger Dave’s Legendary Burger Tavern™” or “Bagger Dave’s®”.

Training Center - the location(s) specified from time to time by us as the Training Center.

Transfer - the sale, assignment, conveyance, license, devise, bequest, pledge, mortgage or other encumbrance, whether direct or indirect, of (i) this Agreement; (ii) any or all of your rights or obligations herein; or (iii) any interest in any equity interest, including the issuance of any new equity interests.

Transferee Owner(s) - the owner of any and all record or beneficial interest in the capital stock of, partner’s interest in, or other equity or voting interest in any transferee of a Transfer occurring pursuant to the Terms of Section 8.

Wage Expenses - such wages and/or salaries (including a reasonable allocation of the cost of benefits) of, or with respect to, our (or other described party’s) employees, agents and/or Representatives to be reimbursed to us or such party as described herein.

2.	DESIGNATED RIGHTS; TERM

B.           We reserve the right to use some parts of or similar components of the System in connection with Other Concepts.

 

 

3.	DEVELOPMENT SCHEDULE; LOCATION SELECTION; OCCUPANCY CONTRACT; DEVELOPMENT MATERIALS

B.           Each Restaurant and the cumulative number of Restaurants indicated in the Development Schedule shall be OPEN AND OPERATING by the date(s) specified therein. Developer shall select a Location that we approve no later than six (6) months before the scheduled OPEN AND OPERATING date.  Our consent to any Location or execution of a Franchise Agreement shall not waive, extend or modify the Development Schedule.  Unless otherwise agreed and approved by us, the Restaurants shall refer to Bagger Dave’s Legendary Burger Tavern™ Restaurants operating pursuant to the System.

 

(1)           submission of all Development Materials to us; and

(2)           with respect to each Restaurant to be developed hereunder, completion of one (1) Location visit by us at our sole cost and expense, if we require.

E.           Neither our (i) consent to, nor (ii) assistance in the selection of, any Location shall constitute our representation or warranty that a Restaurant operated at such Site will be profitable or meet any financial projection.

 

 

 

I.           Developer shall abide by the Terms of the Franchise Agreement executed in connection with each Restaurant.

 

 

4.	FEES AND PAYMENTS

Restaurant No.	Amount of Credit
1	$30,000.00
2 or more	$4,000.00

D.           Developer shall not withhold or off-set any portion of any Payment due to our alleged non-performance under this Agreement or any other agreement by and between us and Developer or their respective Parent corporations, subsidiaries or affiliates.

5.	REPRESENTATIVE; OPERATOR; RESTAURANT MANAGERS; TRAINING

 

 

Restaurant No. Operated By Developer	No. of Our Employees on the New Restaurant Team	No. of Team Members Paid for by Us	Team Members Paid for by Developer
1 & 2	4	4	0
3	2	2	2
4	1	3	3
5 or more	0	4	4

In the event we determine that more than four (4) New Restaurant Team members are necessary for an opening, a Developer with five (5) or more Restaurants open (inclusive of the new Restaurant) shall be responsible for the costs associated with the team members in excess of four (4).  For Developers with less than five (5) Restaurants open, we will bear the costs of the additional team members.

If Franchisee fails or is unable to timely provide such employees, we may, but shall not be obligated to, staff the New Restaurant Team with our employees.  We and Franchisee shall each be responsible for: (a) making all travel, per diem food and lodging arrangements, and (b) the wage and other expenses of the New Restaurant Team members provided by each; provided, however, that Franchisee shall reimburse us for the Territorial Expenses and the Wage Expenses of our employees who are provided as a result of Franchisee’s failure or inability to provide Franchisee employees for participation on the New Restaurant Team.

6.	CONFIDENTIAL INFORMATION

 

7.	DEVELOPER’S REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

A.           In the event Developer is a corporation, limited liability company, or partnership, Developer represents and warrants to us as follows:

(1)           Developer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with all requisite power and authority to own, operate and lease its assets (real or personal), to carry on its business, to enter into this Agreement and perform its obligations hereunder.  Developer is duly qualified to do business and is in good standing in each jurisdiction in which its business or the ownership of its assets requires.

 

(6)           Developer's articles of incorporation or other governing documents, or partnership agreement limit Transfers as described in Sections 8.B.(2) and 8.C.

(7)           Each Security shall bear a legend (in a form to which we shall consent) indicating that any Transfer is subject to Sections 8.B and 8.C.

(8)           Developer represents, warrants and covenants to us that (1) neither Developer, nor any individual or entity owning directly or indirectly any interest of Developer (if Developer is a business entity) or their respective affiliates or the funding sources for any of the foregoing is an individual or entity whose property or interests are subject to being blocked under Executive Order 13224 issued by the President of the United States of America, the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), and the Cuban Assets Control Regulations (Title 31 Part 515 of the U.S. Code of Federal Regulations), and all other present and future federal, state and local laws, ordinances, regulations, policies, lists (including, without limitation, the Specially Designated Nationals and Blocked Persons List) and any other requirements of any Governmental Authority (including, without limitation, the United States Department of the Treasury Office of Foreign Assets Control) addressing, relating to, or attempting to eliminate, terrorist acts and acts of war, each as hereafter supplemented, amended or modified from time to time, and the present and future rules, regulations and guidance documents promulgated under any of the foregoing, or under similar laws, ordinances, regulations, policies or requirements of other states or localities (“OFAC Laws and Regulations”) or is otherwise in violation of any of the OFAC Laws and Regulations; (2) neither Developer nor any individual or entity owning directly or indirectly any interest of Developer or their respective affiliates or the funding sources for any of the foregoing, (a) is under investigation by any government authority form, or has been charged with, or convicted of, OFAC Laws and Regulations, (b) has been assessed any penalties under these laws, or (c) has had any of its funds seized or forfeited in any Action under these laws; (3) neither Developer nor any individual or entity owning directly or indirectly any interest of Developer or their respective affiliates or the funding sources for the foregoing is directly or indirectly owned or controlled by the government of a county that is subject to an embargo imposed by the United States Government, nor acting on behalf of a government; (4) has taken all reasonable measures to ensure compliance with all OFAC Laws and Regulations ; and (5) Developer shall take all reasonable measures to continue compliance with all OFAC Laws and Regulations during the Term of  this Agreement.

(9)           Developer and Principal Owners, and Developer’s officers, directors, shareholders, partners, members and managers, (if any) acknowledge that their respective entire knowledge of the operation of a Bagger Dave’s Legendary Burger Tavern™ Restaurant and the System, including without limitation the knowledge or know-how regarding the specifications, standards and operating procedures of the services and activities, is derived from information we disclose to you and that certain information is proprietary, confidential, and constitutes our trade secrets.  The Term “trade secrets” refers to the whole or any portion of know-how, knowledge, methods, specifications, processes, procedures and/or improvements regarding the business that is valuable and secret in the sense that it is not generally known to our competitors, any proprietary information contained in our Operations Manuals or otherwise communicated to you in writing, verbally or through the internet or other online or computer communications and any other knowledge or know-how concerning the methods of operation of the Restaurants.  You and your Principal Owners, officers, directors, shareholders, partners, members, and managers (if any), jointly and severally, agree that at all times during and after the Term of this Agreement, you will maintain the absolute confidentiality of all such proprietary information and will not disclose, copy, reproduce, sell or use any such information in any other business or in any manner not specifically authorized or approved in advance in writing by us.  We require that you obtain nondisclosure and confidentiality agreements and covenants not to compete in a form satisfactory to us from the individuals listed in the first sentence of this paragraph and other key employees.

 

(10)           You must comply with all requirements of all applicable federal, state and local laws, rules and regulations.

(1)           Developer shall perform its duties and obligations hereunder and under any Franchise Agreement and shall require each Operator, Franchisee Designate, Project Manager and Restaurant Manager to dedicate their respective full time and best efforts to the development, construction, management, operation, supervision and promotion of the Restaurants in accordance with the Terms and conditions hereof.

(2)           Developer shall promptly provide us with all information concerning any new process or improvements in the development, construction, management, operation, supervision or promotion of the Restaurants developed by Developer or any Principal without compensation. Developer and the Principals shall each execute such agreements and other documentation as shall be deemed necessary by us, granting us exclusive ownership thereof.

(3)           Developer shall comply with all requirements of applicable rules, regulations, statutes, laws and ordinances.

(4)           Developer shall maintain a current list of all Principals and deliver a certified copy thereof to us upon (i) any Transfer; or (ii) request.

(1)           Developer shall not amend its articles of incorporation, by-laws, partnership agreement or other governing documents in a manner which is inconsistent with Sections 7.A.(3), 8.B.(2) and 8.C.

(2)           Developer shall not, remove or permit removal from any Security or its partnership agreement, or issue any Security that does not have endorsed upon it, the legend described in Section 7.A.(7).

 

(3)           Developer and each Principal shall receive valuable, unique training, trade secrets and the Confidential Information which are beyond the present skills, experience and knowledge of Developer, any Principal and Developer's employees.  Developer and each Principal acknowledge that (i) such training, trade secrets and the Confidential Information (a) are essential to the development of the Restaurant and (b) provide a competitive advantage to Developer; and (ii) access to such training, trade secrets and the Confidential Information is a primary reason for their execution of this Agreement.  In consideration thereof, Developer and each Principal covenant that, during the Term and for a period of five (5) years after the expiration or termination hereof, neither Developer nor any Principal shall, directly or indirectly:

(a)           employ or seek to employ any person (or induce such person to leave his or her employment) who is, or has within one (1) year been, employed (i) by us, (ii) by any Developer or Franchisee of ours, or (iii) in any other concept or System owned, operated or franchised by an Affiliate, as a director, officer or in any managerial capacity;

(b)           own, maintain, operate or have any interest in any Competing Business;

(c)           own, maintain, operate or have any interest in any Competing Business which business is, or is intended to be, located in the Territory; or

(d)           own, maintain, operate or have any interest in any Competing Business which business is, or is intended to be, located within a ten (10) mile radius of any Restaurant which is a part of a concept or System owned, operated, or franchised by us or any Affiliate.

(4)           Sections 7.C.(3)(b), (c) and (d) shall not apply to an interest for investment only of five percent (5%) or less of the capital stock of a Publicly-Held Entity if such owner is not a director, officer or manager therefore or consultant thereto or to businesses operated pursuant to a Franchise Agreement with us.  You and Each Principal Owner shall be jointly and severally liable to us for a violation of Section 7.C(3)(a) the amount of two times the annual compensation of our employee or former employee whom you employ, which amount shall be deemed liquidated damages and not a penalty.  The parties agree that a precise calculation of the full extent of the damages that Franchisor will incur on a violation of this non-solicitation provision of this Agreement as a result of Franchisee’s default is difficult and the parties desire certainty in this matter and agree that the lump sum payment provided under this Section is reasonable in light of the damages for premature termination that Franchisor will incur.  This payment is not exclusive of any other remedies that Franchisor may have including attorneys’ fees and costs.

D.           Each of the foregoing covenants is independent of each other covenant or agreement contained in this Agreement or in any Franchise Agreement.

 

E.           We may, in our sole discretion, reduce the area, duration or scope of any covenant contained in Section 7.C. without Developer’s or any Principal’s consent, effective upon notice to Developer.  Developer and each Principal shall comply with any covenant as so modified.

F.           Developer’s representations, warranties, covenants and agreements herein are continuing representations, warranties, covenants and agreements each of which shall survive the expiration or termination hereof.

8.

TRANSFER

A.           We may assign this Agreement, or any of its rights or obligations herein, to any person or entity without Developer’s or any Principal’s consent; provided, however, that our obligations which are assigned shall be fully assumed by the party to whom we assign such obligations.

B.           (1)           Developer and each Principal acknowledge that Developer’s rights and obligations herein and in each Franchise Agreement are personal to Developer and that we have entered into this Agreement and will enter into each Franchise Agreement relying upon the business skill, experience and aptitude, financial resources and reputation of Developer and each Principal. Therefore, neither Developer nor any Principal, their respective successors or permitted assigns, shall complete, or allow to be completed, any Transfer without our consent.  Any purported Transfer, by operation of law or otherwise, without our consent shall be null and void and constitute an Event of Default.

(a)           no Event of Default shall have occurred and be continuing and no event shall have occurred which, with the giving of notice or lapse of time, or both, would constitute an Event of Default;

(b)           Developer and/or any affected Principal shall deliver a general release of any and all claims against Our Indemnitees including, without limitation, claims arising under this Agreement and any Franchise Agreement, in a form acceptable to us;

(c)           Developer and/or any affected Principal shall remain liable for the performance of its obligations, covenants and agreements herein through the date of Transfer and shall execute all instruments reasonably requested by us to evidence such liability;

(d)           the Transferee and all Transferee Owners, as applicable, shall (i) make each of Developer’s and Principal’s representations and warranties; (ii) assume full, unconditional, joint and several liability for, and agree to perform from the date of Transfer, each of Developer’s and Principal’s obligations, covenants and agreements herein; and (iii) execute all instruments (in a form acceptable to us) reasonably requested by us to evidence the foregoing;

 

 

F.           Our consent to any Transfer shall not constitute a waiver of (i) any claims it may have against the Transferor; or (ii) the Transferee's compliance with the Terms hereof.

9.	CONSENT AND WAIVER

A.           When required, Developer or any Principal shall make a written request for our consent in advance and such consent shall be obtained in writing.  Our consent shall not be unreasonably withheld.  The foregoing notwithstanding, where either party’s consent is expressly reserved to such party’s sole discretion, the exercise of such discretion shall not be subject to contest.

10.	DEFAULT AND REMEDIES

10.01      A.           The following shall constitute Events of Default by Developer or any Principal for which there shall be no opportunity to cure and for which notice of termination is not required: (i) failure to comply with the Development Schedule; (ii) the breach or falsity of any representation or warranty herein; (iii) failure to deliver executed covenants as required in Section 6.C; (iv) failure to comply with or perform its covenants, obligations and agreements herein; (v) any Transfer that (a) occurs other than as provided in Section 8 or (b) fails to occur within the time periods described in Section 8 (notwithstanding any lack of, or limits upon, the enforceability of any Term or provision of Sections 7 or 8); (vi) Developer (a) is adjudicated, or is, bankrupt or insolvent, (b) makes an assignment for the benefit of creditors, or (c) seeks protection from creditors by petition in bankruptcy or otherwise or there is filed against Developer a similar petition which is not dismissed within thirty (30) days; (vii) the appointment of a liquidator or receiver for (a) all or substantially all of Developer's assets or (b) any Restaurant is sought which is not dismissed within thirty (30) days; (viii) breach or failure to perform any other term or condition of this Agreement; (ix) an Event of Default shall arise under any Franchise Agreement under which Franchisee has no opportunity to cure; (x) Developer or any Principal pleads guilty or no contest to or is convicted of a felony or a crime involving moral turpitude or any other crime or offense that we reasonably believe is likely to adversely affect the Trademarks, the System or the goodwill associated therewith (whether in the Territory or elsewhere) or our interest therein; or (xi) any (a) two (2) or more Events of Default shall arise under any single subsection of Section 10.0l.B or (b) three (3) or more Events of Default shall arise under this Section 10.0l.B in any continuous twelve (12) month period notwithstanding the previous cure of such Events of Default.

 

10.02           Among the remedies we have for breach of this Agreement, upon the occurrences of any Event of Default under Section 10.01, we may: (a) terminate this Agreement and all rights granted hereunder without waiving, (i) any claim for damages suffered by us, or (ii) other rights, remedies or claims; (b) assert any and all other rights or remedies available to us.

10.03           Subject to the provisions of Section 10.06, all rights and remedies of either party shall be cumulative, and not exclusive, of any other right or remedy described herein or available at law or in equity. The expiration or termination of this Agreement shall not release any party from any liability or obligation then accrued or any liability or obligation continuing beyond, or arising from, such expiration or termination.  Nothing in this Agreement shall impair either party's right to obtain injunctive or other equitable relief.

10.04           The failure of any party to exercise any right or remedy or to enforce any obligation, covenant or agreement herein shall not constitute a waiver by, or estoppel of, that party’s right to any of the remedies described herein including, without limitation, to enforce strict compliance with any such obligation, covenant or agreement.  No custom or practice shall modify or amend this Agreement.  The waiver of, or failure or inability of any party to enforce, any right or remedy shall not impair that party’s rights or remedies with respect to subsequent Events of Default of the same, similar or different nature.  The delay, forbearance or failure of any party to exercise any right or remedy in connection with any Event of Default or default by any other developers shall not affect, impair or constitute a waiver of such party’s rights or remedies herein.  Acceptance of any Payment shall not waive any Event of Default.

10.05           Developer and each Principal shall, jointly and severally, pay all costs and expenses (including reasonable fees of attorneys and other engaged professionals) incurred by us in successfully enforcing, or obtaining any remedy arising from the breach of this Agreement.  The existence of any claims, demands or Actions which Developer or any Principal may have against us, whether arising from this Agreement or otherwise, shall not constitute a defense to our enforcement of Developer’s or any Principal’s representations, warranties, covenants, obligations or agreements herein.

 

10.07           Developer and each Principal agree that our exercise of the rights and remedies set forth herein are reasonable.  We may, in addition to pursuing any other remedies, specifically enforce such obligations, covenants and agreements or obtain injunctive or other equitable relief in connection with the violation or anticipated violation of such obligations, covenants and agreements.

11.	RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION

 

12.

INSURANCE

A.           Developer shall obtain within thirty (30) days from the date hereof and maintain throughout the Term, such insurance coverage (including, without limitation, auto liability coverage and workers compensation insurance) as may be (i) required by law; or (ii) prescribed by us from time to time as to types of coverage and amounts of coverage.  Such insurance shall:

(1)           name Our Indemnitees as additional insured parties and provide that coverage applies separately to each insured and additional insured party against whom a claim is brought as though a separate policy had been issued to each of Our Indemnitees;

(2)           contain no provision which limits or reduces coverage in the event of a claim by any one (1) or more of the insured or additional insured parties;

 

(3)           provide that policy limits shall not be reduced, coverage restricted, canceled, allowed to lapse or otherwise altered or such policy(ies) amended without our consent, but in no event upon less than thirty (30) days prior written notice to us; and

(4)           be obtained from reputable insurance companies with an A.M. Best Rating of “A” and an A.M. Best Class Rating of VIII or better (or comparable ratings from a reputable insurance rating service, in the event such A.M. Best ratings are discontinued or materially altered), authorized to do business in the jurisdiction in which the Restaurant is located.

C.           A certificate of insurance shall be submitted for our consent within ten (10) days following commencement of such coverage, and additional certificates of insurance shall be submitted to us thereafter, evidencing uninterrupted coverage.  Developer shall deliver a complete copy of such policy(ies) within ten (10) days of request.

D.           In the event of a claim of any one or more of Our Indemnitees against Developer, Developer shall, on our request, assign to us any and all rights which Developer then has or thereafter may have with respect to such claim against the insurer(s) providing the coverage described in this Section.

E.           Developer’s obligation to obtain and maintain insurance or to indemnify any of Our Indemnitees shall not be limited by reason of any insurance which may be maintained by Our Indemnitee, nor shall such insurance relieve Developer of any liability under this Agreement.  Developer’s insurance shall be primary to any policies maintained by any of Our Indemnitees.

13.	INDEMNIFICATION

A.           Developer and each Principal will, at all times, indemnify and hold harmless, to the fullest extent permitted by law, Our Indemnitees from all “Losses and Expenses” incurred in connection with any Action, suit, proceeding, claim, demand, investigation or inquiry (formal or informal), or any settlement thereof (whether or not a formal proceeding or Action has been instituted) which arises out of or is based upon any of the following:

(1)           The infringement, alleged infringement, or any other violation or alleged violation by Franchisee or any Principal of any patent, mark or copyright or other proprietary right owned or controlled by third parties.

 

(2)           The violation, breach or asserted violation or breach by Developer or any Principal of any contract, federal, state or local law, regulation, ruling, standard or directive or any industry standard.

(3)           Libel, slander or any other form of defamation of us or the System, by Developer or any Principal.

(4)           The violation or breach by Developer or any Principal of any warranty, representation, agreement or obligation in this Agreement.

(5)           Acts, errors or omissions of Developer or any of its agents, servants, employees, contractors, partners, affiliates or Representatives.

B.           Developer and each Principal agree to give us immediate notice of any such Action, suit, proceeding, claim, demand, inquiry or investigation.

C.           We shall at all times have the absolute right to retain counsel of our own choosing in connection with any Action, suit, proceeding, claim, demand, inquiry or investigation.  We shall at all times have the absolute right to investigate any Action, suit proceeding, claim or demand itself.

D.           Developer and each Principal shall indemnify Our Indemnitees for attorney fees, expenses, and costs incurred in connection with the enforcement of our rights under this Section 13. This provision shall not be construed so as to limit or in any way affect Developer’s indemnity obligations pursuant to the other provisions of this Section 13.

F.            In the event that our exercise of our rights under Section 13 actually results in the Insurer refusing to pay on a third-party claim, Developer shall be required to indemnify us for the our attorney fees, expenses and costs incurred in connection with that claim.

G.           In the event that Developer encourages, requests, or suggests that the Insurer deny a claim, Developer shall indemnify us for our attorney fees, expenses and costs in connection with that claim.

H.           In order to protect persons or property, or our reputation or goodwill, or the reputation or goodwill of others, we may, at any time and without notice, as in our judgment we deem appropriate, consent or agree to settlements or take such other remedial or corrective action as we deem expedient with respect to the Action, suit, proceeding, claim, demand, inquiry or investigation if, in our sole judgment, there are reasonable grounds to believe that:

 

(2)           any act, error, or omission of Developer or any Principal may result directly or indirectly in damage, injury or harm to any person or any property.

14.

NOTICES

All notices required or desired to be given hereunder shall be in writing and shall be sent by personal delivery, expedited delivery service, facsimile or certified mail, return receipt requested to the addresses identified in Attachment 1 to this Area Development Agreement (or such other addresses as designated pursuant to this Section 14)

Notices posted by personal delivery, next day or same day expedited service or given by facsimile shall be deemed given the next Business Day after transmission.  Notices posted by certified mail shall be deemed received three (3) Business Days after the date of posting.  Any change in the foregoing addresses shall be effected by giving fifteen (15) days written notice of such change to the other party.

15.	FORCE MAJEURE

No party shall be liable for any inability to perform resulting from acts of God or other causes (other than financial inability or insolvency) beyond their reasonable control; provided, however, that nothing herein shall excuse or permit any delay or failure (i) to remit any Payment on the date due; or (ii) for more than one hundred eighty (180) days.  The party whose performance is affected by an event of force majeure shall, within three (3) days of the occurrence of such event, give notice thereof to the other party setting forth the nature thereof and an estimate of its duration.

 

16.	SEVERABILITY

A.           Should any term, covenant or provision hereof, or the application thereof, be determined by a valid, final, non-appealable order to be invalid or unenforceable, the remaining terms, covenants or provisions hereof shall continue in full force and effect without regard to the invalid or unenforceable provision.  In such event, such term, covenant or provision shall be deemed modified to impose the maximum duty permitted by law and such term, covenant or provision shall be valid and enforceable in such modified form as if separately stated in and made a part of this Agreement.  Notwithstanding the foregoing, if any term hereof is so determined to be invalid or unenforceable and such determination adversely affects, in our reasonable judgment, (i) our ability to realize the principal purpose of the Agreement; (2) our, or our rights in, the goodwill associated with the System, the Trademarks, the System, or the Confidential Information, we may terminate this Agreement upon notice to Developer.

B.           Captions in this Agreement are for convenience only and shall not affect the meaning or construction of any provision hereof.

17.	INDEPENDENT CONTRACTOR

18.	DUE DILIGENCE AND ASSUMPTION OF RISK

 

19.	ENFORCEMENT

(1)           Except with respect to matters for which we believe it necessary to seek equitable relief or to collect royalties or other amounts owing to us, Developer or Principal and we shall be required to enter into mediation of all disputes involving this Agreement or any aspect of the relationship between them for a minimum of four (4) hours prior to the initiation of any arbitration or other Action or proceeding against the other party or any agent or affiliate of the other party.  Upon written notice by either party to the other of the initiating party’s desire to mediate, the party receiving the notice shall select an independent entity that regularly provides mediation services to franchisors and Franchisees to serve as mediator in the proceeding.  If the party receiving the notice of intent to mediate does not provide the name of such an organization within ten (10) Business Days from the date the notice of intention to mediate is received, then the other party, at its option, may (i) forego mediation of the issues(s) and commence legal Action, or (ii) select the organization to provide mediation services.  If one party selects an organization that is unwilling to serve as mediator, then the other party shall select an organization.  Once the organization is designated and agrees to accept the appointment as mediator, or if the designated organization is unwilling to serve as mediator or does not meet the requirements of this subparagraph, then the initiating party may designate such an organization.  Once the organization is designated, the organization shall be directed to schedule a mediation proceeding at a time mutually convenient to us and Developer or Principal.  The mediation shall be held within thirty (30) days following receipt by the mediation organization of notification that its services shall be retained.  If the parties cannot agree on a date for mediation, then the mediation organization shall select a date it believes is reasonable for the parties, given all of the alleged conflicts in dates.  The actual mediator shall either be a person who has had at least ten (10) years of experience as either Franchisee or franchisor (or as an officer of such an entity) or in franchise law.  The parties shall equally share the cost of the mediator.  The mediator shall select the Location for the mediation, giving due consideration to the Location that will minimize the total expenses of the mediation.  If Developer or Principal fails or refuses to abide by the provisions of this subparagraph and to engage in mediation as required herein, and litigation or arbitration ensues between the parties, Developer or Principal shall be liable for all attorney fees incurred by us in such proceeding, regardless of the outcome of the proceeding, and shall reimburse us on demand for such costs.

 

 

 

20.	MISCELLANEOUS

21.	ENTIRE AGREEMENT

This Agreement and the Exhibits, Addenda and Schedules hereto and the Franchise Disclosure Document constitute the entire agreement between us, Developer and the Principals concerning the subject matter hereof.  All prior agreements, discussions, representations, warranties and covenants are merged herein. THERE ARE NO WARRANTIES, REPRESENTATIONS, COVENANTS OR AGREEMENTS, EXPRESS OR IMPLIED, BETWEEN THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING, EXCEPT THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT.  EXCEPT THOSE PERMITTED TO BE MADE UNILATERALLY BY US HEREUNDER, NO AMENDMENT, CHANGE OR VARIANCE FROM THIS AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED TO BY US AND DEVELOPER AND EXECUTED IN WRITING.

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written.

 

DEVELOPER   BD’S RESTAURANT GROUP, LLC   By: /s/ Bill Zellmer   Name: Bill Zellmer   Title: Member   Date: 11/17/11

BAGGER DAVE’S FRANCHISING CORPORATION       By: /s/ T. Michael Ansley   Name: T. Michael Ansley   Title: President & CEO   Date: 11/17/11

 

 

By: /s/ Lonnie Griggs

 

Name: Lonnie Griggs

Title: Member

 

 

2.                Development Schedule:

Restaurant No.	Date of Location Consent	Date Franchise Agreement Signed & Franchise Fees Paid	Date Open & Operating
1	10/25/11	10/25/11	11/1/12
2	4/1/13	6/1/13	10/1/13
3	4/1/14	6/1/14	10/1/14
4	4/1/15	6/1/15	10/1/15
5	12/1/15	2/1/16	6/1/16
6	6/1/16	9/1/16	12/1/16

(1).           The Franchise Agreement for each Restaurant Location must be fully executed and all Franchise Fees paid within the time frames set forth in the foregoing Development Schedule.

(2).           Time is of the essence, with respect to each of the development obligations specified in this Attachment.

4.                Notice:                      Notices pursuant to Section 14 of the Area Development Agreement shall be sent to the following addresses:

 

if to Developer or any Principal:	Bill Zellmer
	2024 Watson
	Jackson, Missouri 63755
	Facsimile No.: 573 ###-###-####
if to us:	Bagger Dave’s Franchising Corporation
	27680 Franklin Road
	Southfield, Michigan  48034
	Facsimile No.: (866) 737-8689
with a copy to:	Mark J. Burzych
(does not constitute notice)	Fahey Schultz Burzych Rhodes PLC
	4151 Okemos Road
	Okemos, MI 48864
	Facsimile No.: (517) 381-5051

5.                Commencement Date.  The Commencement Date of the Area Development Agreement is 11/17/11, 2011.

6.                Representative.  Developer’s Representative and contact information for purposes of this Area Development Agreement is:

Name	Bill Zellmer
Address	2024 Watson
City, State, Zip code	Jackson, Missouri 63755
Phone Number	###-###-####
Email Address	***@***

 

7.                Operator.  Developer’s Operator and contact information for purposes of this Area Development Agreement is:

Name	Bill Zellmer
Address	2024 Watson
City, State, Zip code	Jackson, Missouri 63755
Phone Number	###-###-####
Email Address	***@***

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written.

DEVELOPER   BD’S  RESTAURANT GROUP, LLC   By: /s/ Bill Zellmer   Name: Bill Zellmer   Title: Member   Date: 11/17/11

BAGGER DAVE’S FRANCHISING CORPORATION       By: /s/ T. Michael Ansley   Name: T. Michael Ansley   Title: President & CEO   Date: 11/17/11

 

 

By: /s/ Lonnie Griggs

 

Name: Lonnie Griggs

Title: Member

DATED    11/17 , 2011

This form must be completed by you, if you have multiple owners or if Developer is owned by a business organization (like a corporation, partnership or limited liability company).  We are relying on its truth and accuracy in awarding the franchise to you.

    

1.	Form of Owner.  You are a (check one):
(a)	General Partnership	o
(b)	Corporation	o
(c)	Limited Partnership	o
(d)	Limited Liability Company	o
(e)	Other	x
Specify:		o
	___________________________________________________________________

 

You are formed under the laws of Missouri.

Name of Person	Position(s) Held
Bill Zellmer	Member
Lonnie Griggs	Member

Name	Address	Description and Quantity of Ownership Interest	Office Held
Bill Zellmer	2024 Watson, Jackson, MO 63755	50%	Member
Lonnie Griggs	110 Masterson, Jackson, MO 63755	50%	Member

4.                Governing Documents.  Attached are copies of the documents and contracts governing the ownership, management and other significant aspects of the business organization (e.g., articles of incorporation or organization, partnership or shareholder agreements, etc.) of BD’S RESTAURANT GROUP, LLC.

This Attachment 2 is current and complete as of 11/17/11, 2011.

Developer

BD’S RESTAURANT GROUP, LLC

By: /s/ Bill Zellmer

 

Bill Zellmer (print name)

Its: Member

By: /s/ Lonnie Griggs

 

Lonnie Griggs (print name)

Its: Memebr