FRANCHISE AGREEMENT Bagger Daves Franchising Corporation 27680 Franklin Road Southfield, Michigan48034 ###-###-#### www.baggerdaves.com FRANCHISE AGREEMENT Between BAGGER DAVES FRANCHISING CORPORATION ("FRANCHISOR") and BDS RESTAURANT GROUP, LLC ("FRANCHISEE") 2024 Watson Jackson, MO 63755 Telephone Number: (573 ###-###-#### Email Address: ***@*** Date: 11/17/11 (To be Completed by Us) For Restaurant Located at: (Business Location)

 

 

 

 

 

 

 

 

 

Bagger Dave’s Franchising Corporation

27680 Franklin Road

Southfield, Michigan  48034

(248) 223-9160

 

 

 

 

 

 

Between

and

("FRANCHISEE")

2024 Watson

Jackson, MO 63755

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

Email Address: ***@***

Date: 11/17/11

(To be Completed by Us)

For Restaurant Located at:

(Business Location)

in

Cape Girardeau, Missouri 63701

 

 

 

 

 

A.           Electronic Funds Transfer (EFT) Authorization

B.           Telephone Number Assignment

C.           Conditional Assignment of Lease

 

THIS FRANCHISE AGREEMENT (“Agreement”) is made and entered into this 17th day of November, 2011, by and between BAGGER DAVE’S FRANCHISING CORPORATION, a Michigan corporation, with its principal place of business at 27680 Franklin Road, Southfield, Michigan 48034 (referred to in this Agreement as “we,” “us,” or “Franchisor”) and BD’S  RESTAURANT GROUP, LLC, a Missouri limited liability company, a company formed or already existing whose principal place of business is Jackson, Missouri and its Principals, Bill Zellmer and Lonnie Griggs (individually referred to in this Agreement as “Principal Owner” or collectively as “Principal Owners”), residents of the state of Missouri (collectively referred to in this Agreement as “you,” “your,” or “Franchisee”).  The Principal Owners are personally responsible for the obligations of the Franchisee under this Agreement.

WHEREAS, we offer, to persons and entities that meet our qualifications to our satisfaction and demonstrate that they will be productive members of the Bagger Dave’s Legendary Burger Tavern™ System, the opportunity to be awarded a Bagger Dave’s Legendary Burger Tavern™ Franchise through which they will offer 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.  The restaurant specializes in freshly made hamburgers and fries with superior customer service to its clients (the “Restaurant”).

WHEREAS, each Restaurant will feature a distinctive format and method of doing business, including marketing and sales procedures, cooking and food presentation processes and systems (the “System”).

WHEREAS, you understand that the market for your services in operating a Restaurant consists of members of the general public seeking tasty and healthy meals in a casual or fast-casual atmosphere.  You understand that the market is very well developed and highly competitive.  You understand that you will compete with other casual and fast-casual restaurants, take-out and delivery hamburger concepts, quick-serve hamburger restaurants and full-service restaurants, as well as convenience, grocery and specialty stores that offer hamburgers, French fries and similar items.

WHEREAS, your Restaurant will be awarded a geographic territory (the “Designated Area”) that will not be awarded to any other franchise; and that you will identify that you are a Bagger Dave’s Legendary Burger Tavern™ Franchisee by exhibiting the Bagger Dave’s Legendary Burger Tavern™ trademarks and service mark on your marketing materials, vehicles, employee uniforms, signage, interior and exterior design, stationary, business cards, invoices, and other business supplies.

WHEREAS, you must comply with federal, state and local health regulations concerning food preparation, handling, storage, and sale, United States Department of Agriculture (USDA) standards; truth-in-menu and labeling laws; license, certificate and permit requirements for

 

 

restaurant operation and occupancy; and federal, state and local liquor laws and regulation concerning liquor license ownership, liquor storage, and the sale and consumption of alcoholic liquor.

WHEREAS, you have received and reviewed our Franchise Disclosure Document, have reviewed the Franchise Disclosure Document with counsel of your choice, you understand the terms of this Agreement and its consequences have been completely read and explained by your chosen counsel and you fully understand the terms of this Agreement and all Exhibits hereto.

WHEREAS, you have independently inspected the operations of other franchised businesses of other business concepts and independently inspected the operations of Restaurants operating the System and have satisfied yourself by the performance of your own due diligence that entering into this Agreement is your business decision.

WHEREAS, you have not relied upon any oral statements or other representations other than as are contained in our Franchise Disclosure Document.

NOW THEREFORE, the parties agree as follows:

1.	GRANT OF FRANCHISE; TERM

1.1           You have applied for a franchise to own and operate a Bagger Dave’s Legendary Burger Tavern™ Restaurant.  Subject to all of the terms and conditions of this Agreement and upon complete execution of this Agreement by all parties, we hereby grant to you a franchise (the “Franchise”) to operate a single Bagger Dave’s Legendary Burger Tavern™ Restaurant at a single Location utilizing the System and the Trademarks within a geographic area (the “Designated Area”) upon which you and we have agreed.  During the Initial Term and for so long as no Event of Default has occurred and is continuing and no event has occurred which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, we will not establish, nor authorize any other person to establish a Bagger Dave’s Legendary Burger Tavern™ Restaurant within your Designated Area.  The Designated Area and Location are described in Attachment 1 attached to this Agreement.

Except as expressly limited by the preceding paragraphs, we and our affiliates retain all rights with respect to Bagger Dave’s Legendary Burger Tavern™ Restaurants, the Trademarks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire, including, but not limited to:

A.

The right to establish and operate, and to grant to others the right to establish and operate a similar business or any other businesses offering similar or dissimilar products and services through similar or dissimilar channels of distribution, at any locations inside or outside your Designated Area under trademarks or service marks other than the Trademarks and on any terms and conditions we deem appropriate;

 

 

B.           The right to provide, offer and sell and to grant others the right to provide, offer and sell goods and services that are identical or similar to and/or competitive with those provided at Bagger Dave’s Legendary Burger Tavern™ Restaurants, whether identified by the Trademarks or other trademarks or service marks, through dissimilar channels of distribution (including without limitation, grocery stores, convenience stores, and the internet or similar electronic media) both inside and outside your Designated Area and on any terms and conditions we deem appropriate;

C.           The right to establish and operate, and to grant to others the right to establish and operate, businesses offering dissimilar products and services, both inside and outside your Designated Area under the Trademarks and on any terms and conditions we deem appropriate;

D.           The right to operate, and to grant others the right to operate Bagger Dave’s Legendary Burger Tavern™ Restaurants located anywhere outside your Designated Area under any terms and conditions we deem appropriate and regardless of the proximity to the Restaurant;

E.           The right to acquire the assets or ownership interests of one or more businesses providing products and services similar to those provided at Bagger Dave’s Legendary Burger Tavern™ Restaurants, and franchising, licensing or creating similar arrangements with respect to these businesses once acquired, wherever these businesses (or the Franchisees or licensees of these businesses) are located or operating (including in your Designated Area); and

F.           The right to be acquired (whether through acquisition of assets, ownership interests or otherwise, regardless of the form of transaction), by a business providing products and services similar to those provided at Bagger Dave’s Legendary Burger Tavern™ Restaurants, or by another business, even if such business operates, franchises and/or licenses competitive businesses in your Designated Area.

We are not required to pay you if we exercise any of the rights specified above inside your Designated Area.

1.2           Unless sooner terminated as provided herein, this Agreement shall be effective on the date hereof, but no sooner than the last date on which a party has executed this Agreement and shall continue for a term of fifteen (15) years (the “Initial Term”).

1.3           We expressly reserve the exclusive right and you acknowledge that we have the exclusive unrestricted right, to engage, directly and indirectly, through employees, developers, Franchisees, licensees, agents and others within the Designated Area, to sell or to distribute to others for resale, prepackaged food products or other trademarked items from other locations within the Designated Area, such as, without limitation, grocery stores, convenience stores, or through other media, such as the Internet, worldwide web, or any other publicly-accessible computer network, and we have no obligation to account for, or share, any profits with you related to these sales.  We reserve all rights, title and interest to any domain names that include any part of our names or Trademarks.  Nothing contained in this Agreement shall prevent us or our affiliates from establishing or operating, or granting the right to establish or operate,

 

 

businesses using the System or a similar system outside of the Designated Area, or marketing other products or services that are not a part of the System under dissimilar names and marks within the Designated Area.

2.	FEES AND PAYMENTS

2.01           Upon execution of this Agreement, in consideration of the franchise granted by us, you shall pay to us the non-refundable Initial Franchise Fee as disclosed in Attachment 1of the Franchise Agreement.

2.02           You shall pay to us a weekly royalty fee (“Royalty”) equal to five percent (5%) of the Restaurant’s Gross Sales without offset, credit or deduction of any nature.  You authorize us to collect the Royalty by means of electronic funds transfer (“EFT”) each Tuesday for the previous week’s Royalty.  On Monday of each week, you shall transmit to us a Gross Sales Report for the previous week’s Gross Sales.

2.03           Any Payment not received by us on the date they are due shall bear interest from the due date until received by us at eighteen percent (18%) per annum or the maximum rate permitted by law, whichever is less.

2.04           Any taxes or duties imposed upon or with respect to this Agreement or any materials, supplies or specifications acquired by or provided to you pursuant to or in connection with this Agreement shall be paid by you.  You shall pay to us an amount equal to any sales tax, gross receipts tax, excise tax or any license or tax similar thereto which is imposed, directly or indirectly, upon us with respect to any Payments from you to us that are required under this Agreement.  The preceding sentence shall not apply to any franchise tax or income, war profits, or excess profits tax (or any tax in lieu thereof) imposed on us with respect to these Payments.

2.05           You shall not withhold, off-set or discount any portion of any payment due to our alleged non-performance under this Agreement or any other agreement by and between us and you.

3.	CONTROL PERSON; FRANCHISEE DESIGNATE; RESTAURANT MANAGERS; TRAINING

3.01           You hereby designate the individual identified in Attachment 1 to this Franchise Agreement  as the Franchisee Designate.  The Franchisee Designate shall be the person responsible for the day-to-day operations of the Restaurant.  Your Franchisee Designate is required to be approved on an annual basis by us.  If your Franchisee Designate loses his/her approval, you are required to replace the Franchisee Designate consistent with this section, who shall successfully complete our training program and has been approved by us.  The Franchisee Designate shall attend and successfully complete to our satisfaction the training programs provided for Franchisees, management and staff.  Any replacement of the Franchisee Designate shall be appointed by you within ten (10) days of the prior Franchisee Designate’s resignation or termination.  If we conduct any training for the replacement Franchisee Designate, you shall pay to us all costs and expenses related to such training at the then-current rates for additional

 

 

training, as well as all expenses related to such Franchisee Designate, including without limitation, wages, meals, lodging and travel to attend the training.

3.02           You hereby designate the person identified in Attachment 1 of this Franchise Agreement as the Control Person.  The Control Person shall be the person with whom we will communicate and upon whom we will rely to bind the Franchisee.  You authorize the Control Person to perform any and all actions on your behalf related to this Agreement.

3.03           The requisite number of Managers, as we determine, shall be employed by you for the Restaurant.  All Managers shall attend and successfully complete, to our satisfaction, our management and staff training programs and be “certified” by us on an annual basis.  At any time during the term of this Agreement, you shall have at least three (3) certified Managers eligible to work in the Restaurant.  Your Franchisee Designate, if different from you, and at least three (3) Managers shall commence the management training program within approximately 180 days of the execution of this Agreement.  You shall be responsible for all wages, travel and living expenses of your Franchisee Designate and others during the training periods.  You and the Franchisee Designate shall attend the Franchisee Meetings we sponsor from time to time at times and locations determined by us in our sole discretion.  We may require that you stay at the hotel location of the scheduled meeting at your expense.  You shall be responsible for all expenses associated with attendance at such Franchisee Meetings.  We will provide the instructors and materials for the training programs.  You will be responsible for all of your expenses and your Managers and your employees’ expenses, including without limitation, wages, benefits, and travel and living expenses during training.  We will conduct the initial training of your initial management team prior to the opening of your Restaurant.  Management employees that are hired after the Restaurant opens must be trained at your sole cost and expense.

When you and/or your affiliates operate three (3) or more Restaurants, you shall have one of your or your affiliates’ Restaurants approved by us as a Certified Training Restaurant as provided in the Operations Manuals.

3.04           We will assist you in the opening of your Restaurant by (i) training to our satisfaction at least ninety percent (90%) of your staff employees at the site of your Restaurant, and (ii) assisting you in the opening of your Restaurant for approximately fourteen (14) days beginning approximately seven (7) calendar days before the opening of your Restaurant and concluding approximately seven (7) calendar days after the opening of your Restaurant.  We typically have approximately four (4) employees, consisting of ours and yours on the store opening training team (the actual number of members shall be determined in our sole discretion, depending upon the number of other Restaurants already being operated by you and your affiliates and such other criteria that we deem reasonable).  The members of the store opening training team shall be subject to our consent.  The number of our employees selected to serve on the store opening training team is determined in accordance with the following schedule, provided however, that we may elect to modify this schedule in the event the total number of people on the store opening training team is greater or less than four (4).

Restaurants Operated by you and/or your affiliates	Number of our employees on the store opening training team	Number of your employees on the store opening training team	Number of team members paid for by us	Number of team members paid for by you.
1 & 2	4	0	4	0
3	2	2	2	2
4	1	3	1	3
5 or more	0	4	0	4

In the event we determine that more than four (4) members of the store opening team are necessary for an opening, you will be responsible for the costs associated with the team members in excess of four (4).  If you fail to or are unable to provide such employees, we may, but are not obligated to, staff the store opening training team with our employees.  We and you shall each be responsible for (a) making all travel, food and lodging arrangements and (b) the wages and other expenses of the store opening training team provided by each; provided, however that you shall reimburse us for the wages, travel, food, lodging and other expenses of our employees who are provided as a result of your failure or inability to provide your employees for participation on the store opening training team.

If you or any member of your team fails to complete the management training program to our satisfaction, in our sole and unfettered judgment, we may terminate this Agreement.

We will conduct, consistent with this Agreement, the initial training of your staff prior to the opening of your Restaurant.  Staff employees that are hired after the Restaurant opens must be trained at your sole cost and expense.

We may in our discretion require you, your Control Person, your Franchisee Designate, your Managers, and/or employees to attend additional training programs and seminars during the term of this Agreement.  We may charge you for such additional training.  We may require you or your Control person, your Franchisee Designate, Managers and/or employees to attend such additional training programs and seminars.  You will be responsible for paying travel and living expenses for you, your Control Person, your Franchisee Designate, Manager, and/or employees to attend such additional training programs and seminars including employee wages, in addition to training expenses and our trainer expenses.  Our costs will range from $100 - $1,000 per day per trainer plus expenses.  If you request additional assistance from us, we reserve the right to provide such assistance or not, in our discretion, if, for example, the proper assistant is not available.  You shall pay to us a fee for this additional assistance that will range from $100 - $1,000 per day, per assistant plus expenses.  We have the right in our discretion to require our additional assistance and charge you for such assistance.  You shall also conduct such continuing training programs for your employees as we may reasonably require.

3.05           You shall maintain competent and conscientious personnel to operate the Restaurant in accordance with this Agreement, the System, and the Operations Manual.  You shall train or cause the training of all personnel as and when required by prudent business practices, System standards or this Agreement.  Franchisee must conduct criminal background checks and child

 

 

abuse registry checks on all of its employees or independent contractors who will provide services to customers.  At our request, you must provide us with copies of employment materials or independent contractor agreements relating to each of your employees, including, but not limited to, employment or other application materials and the results of criminal background checks and child abuse registry checks.  All costs associated with your performance of your obligations under this Section shall be your sole responsibility.

3.06           You shall comply with such employee training and testing procedures and requirements reasonably prescribed in the Operations Manuals or otherwise in writing.

3.06           We may create an audio and/or video recording of any training programs at our expense.  You will be responsible for any fee related to your participation in such training program including, without limitation, on-line training or examination programs we implement.

3.07           At the start of the employment, you promise to require, as consideration for employment each of your Managers to execute non-disclosure and confidentiality agreements and covenants not to compete that we have approved.  Such agreements will prohibit disclosure, by the employee to any other person or legal entity, of any trade secrets, customer lists, or other information, knowledge, or know-how regarding the System or the operation of the Restaurant, which is deemed confidential or propriety by us.  Such employee non-disclosure and confidentiality agreements and covenants not to compete will, to the fullest extent permitted by applicable law, prevent employees from servicing or soliciting any of the customers of your Restaurant, except in their capacities as employees of the Restaurant, and from engaging in a Competing Business, either as an owner, employee or any other capacity.  You must require, and provide copies to us, of criminal background checks for any Restaurant owner, employee or associated person.  You promise to ensure that terminated employees will not have access to the System, our software, intranet sites, our materials or any aspect of the Restaurant.  A fully-executed copy of each management employee agreement will be sent to us.

All individuals attending meetings of a confidential nature (i.e., Annual Convention, Regional Meetings) must sign the most current version of the confidentiality agreement.

You agree and acknowledge and will ensure that your employees agree and acknowledge that a violation of the covenants not to compete as listed in this Section will result in immediate and irreparable injury to us for which no adequate remedy at law will be available.  Accordingly, you consent to the entry of an injunction prohibiting any conduct by you in violation of the terms of the covenants not to compete.  Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement or otherwise, will not constitute a defense to the enforcement by us of these covenants not to compete.  If we prevail, you promise to pay all costs and expenses (including reasonable attorneys and experts’ fees) incurred by us in connection with the enforcement of these covenants not to compete, if you are found to be in violation of your confidentiality and/or your non-competition obligation(s) under this Agreement.  The protection awarded in this Paragraph will be in addition to, and not in lieu of, all other protections for such trade secrets and Confidential Information as may otherwise be afforded in law or in equity.

 

4.	RESTAURANT LOCATION; LEASE

4.01           You shall not relocate your Restaurant from the Location without our consent.

4.02           You must purchase or Lease a suitable site for the Restaurant subject to our approval using the site selection criteria in our Operations Manual with the assistance of a commercial real estate broker of your choosing who is approved by us.  You must submit to us a description of the proposed site together with evidence satisfactory to us that confirms your favorable prospects for obtaining the proposed site.  You must supply the required Development Materials that outline all of the information needed by us to review a proposed site.  You must use the real estate site analysis services of our approved supplier to evaluate your proposed site.  We will give you written notice of approval or disapproval of the proposed site within 25 business days after receiving your written proposal.  The factors we consider in approving the location for the proposed site may include, but are not limited to, the following:  (i) general location; (ii) traffic patterns; (iii) rent expense; (iv) demographics; (v) equipment and services located at the site; (vi) leasehold improvement costs; (vii) ability to reflect image to be portrayed by “Bagger Dave’s Legendary Burger Tavern™” Restaurants; and (viii) parking.  You must select a location we approve within six months after the execution of the Franchise Agreement, except in the event that you are developing under an Area Development Agreement, in which case, you are bound by the development dates provided in the Development Schedule.  We may cancel the Franchise Agreement in our sole discretion and option if you fail to select a location acceptable to us within this timeframe.  We have the right to review and consent to your Lease prior to the execution of the Lease.  You shall also provide to us prior to our consideration of your proposed Location the Development Materials for your proposed Location.  We will generally provide you a decision regarding our consent to the Location within twenty-five (25) business days after receipt of your Development Materials.  You represent that the Lease as consented to by us shall be executed by all necessary parties within ten (10) days following receipt of our consent.  You shall furnish us a complete copy of the fully-executed Lease with Conditional Assignment of Lease within ten (10) days after execution.  Unless you obtain fee simple title to the Location, you and the landlord must sign the Conditional Assignment of Lease attached as Exhibit H.  We recommend that you submit the Conditional Assignment of Lease to the landlord at the beginning of your Lease negotiations, although the terms of the Conditional Assignment of Lease may not be negotiated without our prior approval.  If the landlord requires us to negotiate the terms of the Conditional Assignment of Lease, we reserve the right to charge you a fee, which will not exceed our actual costs associated with the negotiation.  We have no responsibility for the Lease; it is your sole responsibility to evaluate, negotiate and enter into the Lease for the Restaurant Location.  If you obtain fee simple title to the Location, you must sign the Real Estate Option to Purchase attached as Exhibit I.

4.03           Notwithstanding the terms of Section 4.02, you shall:

 

B.           Permit us to enter the Restaurant Location to protect our Trademarks or the System or to cure any default under this Agreement or the Lease, all at your expense; and

C.           Not amend the Lease in any way that is inconsistent with this Agreement.

4.04           You must execute, and provide us an executed copy of the Lease (including an executed copy of the Conditional Assignment of Lease) or the purchase agreement for the selected and approved Location for your Restaurant within six (6) months from the date of execution of this Agreement.  If you fail to provide us with evidence that the Location is secured under your control within six (6) months of the date of execution of this Agreement, we have the right to terminate this Agreement.   If you are developing the System under an Area Development Agreement, you are bound by the development obligations provided in the Development Schedule.

5.	RESTAURANT CONSTRUCTION; APPROVED SUPPLIES AND APPROVED SUPPLIERS

5.01           You shall ensure that (a) materials satisfying our System and Approved Supplies are utilized in construction, and (b) such materials are purchased from Approved Suppliers.

5.02           We will provide to you a copy of sample and generic plans and specifications on the construction of a typical Restaurant.  These plans and specifications may be of an existing Restaurant or the current prototype that will need to be altered or modified to meet your space requirements, which modifications will be at your cost and expense.  To that end, you shall (a) employ a qualified architect and licensed general contractor to whom we have the right to consent, and (b) provide copies to us, upon request of architectural or construction contracts applicable to the Restaurant Location.  Upon request by you, we will make available to you, at your expense (a) architectural consultation or advice; (b) preparation of conceptual drawings; and (c) consultation and advice on the purchase, display and installation of Approved Supplies.

5.03           You shall (a) submit conceptual drawings, incorporating proposed adaptations to the local market for our consent; (b) modify the drawings as reasonably required by us; and (c) submit the modified drawings to us for our final consent.  Following our consent to the final drawings, you shall, pursuant to the Operations Manuals, (a) submit for our review, construction plans and specifications based upon the standard construction plans provided to you, adapted by you pursuant to the conceptual drawings listed above to which we have consented; (b) modify such construction plans and specifications as reasonably required by us; (c) submit the modified construction plans and specifications to us for final consent; and (d) construct the Restaurant pursuant to the plans and specifications to which we have consented.  Conceptual drawings and construction plans and specifications to which we have consented shall not be modified without our approval and consent.  Prior to the commencement of construction, you shall deliver a construction schedule and thereafter shall deliver monthly revisions to us indicating construction progress.

 

5.04           You shall obtain all zoning classifications, clearances, consents, permits, licenses, and variances, required in connection with the construction of the Restaurant.  Upon request, copies of such permits and licenses shall be provided to us.

5.05           You shall commence construction within two (2) months from the date of the date we provide you with preliminary Location consent and shall complete construction no later than three (3) months thereafter.  Construction shall be deemed to have been commenced upon the commencement the construction-related work at the Location.  You shall, within ten (10) days after commencement of construction, advise us of such Commencement Date.  We may inspect construction at the Location.  You shall make all necessary arrangements to ensure our access to the Location.  If you are developing pursuant to an Area Development Agreement, you are bound by the development obligations pursuant to the Development Schedule.

5.06           We may periodically provide you with an approved suppliers list (the “Approved Suppliers List”) and approved supplies list (the “Approved Supplies List”).  Such lists may specify, without limitation, the approved architects, contractors, manufacturers, suppliers and distributors and the inventory, Menu Items, products, fixtures, furniture, equipment, signs, stationery, supplies, uniforms, proprietary apparel, proprietary promotional items, small wares, paper products, grocery items (including without limitations, vegetables, fruits, meats, oils, spices, sauces, salad dressings, soups, desserts, coffee), non-alcoholic beverages, cash registers, computer hardware and software, and services that we have approved to be carried or used in the Restaurant.  We may revise the Approved Suppliers List and the Approved Supplies List from time to time in our sole discretion.  Such approved lists will be given to you as we deem advisable or at your request.  You shall acquire Approved Supplies from Approved Suppliers satisfying the requirements of this Agreement and the Operations Manuals.  ALTHOUGH APPROVED OR DESIGNATED BY US, WE AND OUR PARENT AND AFFILIATES MAKE NO REPRESENTATION OR WARRANTY AND EXPRESSLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO SERVICES, PRODUCTS AND EQUIPMENT (INCLUDING WITHOUT LIMITATION, ANY REQUIRED COMPUTER SYSTEMS), SUPPLIES, FIXTURES, FURNISHINGS OR OTHER APPROVED SUPPLIES.  IN ADDITION, WE DISCLAIM ANY LIABILITY ARISING OUT OF OR IN CONNECTION WITH THE SERVICES RENDERED OR PRODUCTS FURNISHED BY ANY SUPPLIER APPROVED OR DESIGNATED BY US.  OUR APPROVAL OR CONSENT TO ANY SERVICES, GOODS, SUPPPLIES, SUPPLIERS OR ANY OTHER INDIVIDUAL, ENTITY OR ITEM SHALL NOT CREATE ANY LIABILITY TO US.

If you want to (i) offer for sale at the Restaurant any brand of product, not then-approved by us, (ii) use any brand of food ingredient or other material or supply in the operation of the Restaurant that is not then-approved by us as meeting our minimum specifications and quality standards, or (iii) purchase any product from a supplier that is not then-designated by us as an Approved Supplier, you must first notify us in writing and, if requested by us, submit samples and such other information as we require for examination and/or testing or to otherwise determine whether such product, material or supply, or such proposed supplier meets our specifications and quality standards.  You must pay a charge not to exceed the reasonable

 

 

cost of the inspection and evaluation and the actual cost of the test and approval of the proposed supplier.  We reserve the right, at our option, to re-examine or re-test the facilities and products of any supplier of an approved item and to revoke such approval if such item fails to continue to meet any of our criteria.  We will send written notice of any revocation of an Approved Supplier.

All equipment, signs, fixtures, inventory, products and materials, and other items and supplies used in the construction and operation of the Restaurant that are not specifically required to be purchased in accordance with our Approved Supplies List and Approved Suppliers List must conform to the specifications and quality standards established by us from time to time.  The outdoor signage at your Restaurant must comply with our then-current specifications, which we may modify and change from time to time due to modifications in the System, including changes to the Trademarks.  You must make such changes to the outdoor signage as we require at your sole cost and expense.  Any upgrades to the type or size of your outdoor signage will be at your sole cost and expense.

We approve suppliers who can match the exact ingredients, blend, freshness standards, overall quality and appearance standards required by the System.  We apply the following general criteria in approving a proposed supplier: (i) ability to make products in conformity with our specifications and standards; (ii) willingness to protect the trade secrets of a product without dissemination to others; (iii) production and delivery capability; (iv) reputation and integrity of supplier; (v) financial condition and insurance coverage of the supplier; (vi) adherence to food safety standards; and (vii) Hazard Analysis and Critical Control Points (HACCP) approved.

We reserve the right to re-inspect any supplier and revoke our consent upon such supplier’s failure to continue to meet any of the foregoing criteria.

We have the right to retain rebates, markups and other benefits from suppliers or in connection with the furnishing of Approved Supplies by suppliers that are furnished to our Company-owned or affiliate-owned Restaurants.  You shall have no entitlement to or interest in any such benefits.  We reserve the right to negotiate rebates, markups and other benefits from suppliers in connection with the furnishing of Approved Supplies by suppliers that are furnished to you and paid for by you.  If we negotiate rebates from suppliers based upon purchases you make, we reserve the right to retain one-half of all rebates from suppliers based upon purchases by you for our benefit to use in our sole and absolute discretion.  The remaining portion of the rebates will be distributed to you and all other franchisees and allocated to each franchisee on a pro-rata basis based upon your annual Gross Sales for the rebate period.  Your pro-rata basis will be determined by dividing your annual Gross Sales for the rebate period by the annual Gross Sales of all of the participating franchisees for the rebate period.  On an annual basis, we will determine each franchisee’s pro-rata basis for purposes of rebate distribution and make distributions to each franchisee no later than March 31 or each year for the previous calendar year.  We reserve the right to amend, change, or discontinue the rebate distribution policy at any time and we reserve the right to retain all or any portion of the rebates, contribute the rebates to the National Advertising Fund or do anything else with these rebates that we may determine in our discretion.

 

5.07           You shall provide us with a current list of your suppliers prior to the commencement of construction of the Restaurant (current supplier lists shall thereafter be provided upon request).

5.08           We reserve the right to consent to, or require, limited variations from the Standards and Specifications with respect to the development of other Restaurants in the System.

6.	RESTAURANT OPERATIONS; MANUALS

6.01           You acknowledge that the reputation and goodwill of the System is based in large part on offering high quality products and services to its customers.  Accordingly, you shall provide or offer for sale or use at the Restaurant only those Menu Items, products, supplies, uniforms, proprietary apparel, proprietary promotional items, small wares, paper products, grocery items (including without limitations, vegetables, fruits, meats, oils, spices, sauces, salad dressings, soups, desserts, coffee), non-alcoholic beverages, supplies, and other items, products and services that we from time to time approve (and which are not thereafter disapproved) and that comply with our Specifications and Standards.  We will from time to time provide you with a list of these Approved Supplies and Approved Suppliers.  If required by us, any such items or services shall be purchased only from “Approved Suppliers” that we designate or approve (which might include, or be limited to, us or an Affiliate).  We will from time to time provide you with a list of the Approved Suppliers.  You shall not offer for sale, sell or provide through the Restaurant or from the Approved Location any products or services that we have not approved.  We have the right to designate certain products and services, not otherwise authorized for general use as part of the System, to be offered locally or regionally based upon such factors as we determine including, but not limited to, franchisee qualifications, test marketing and regional or local differences.  We have the right to give our consent to one (1) or more franchisees to provide certain products or services not authorized for general use as part of the System.  Such consent will be based upon the factors set forth in Section 5.06 and shall not create any rights to you to provide the same products or services.

6.02           The Restaurant shall open for business (a) only with our consent and (b) promptly after completion of appropriate training pursuant to the System, as we determine in our sole discretion.  You shall be open for business within six to twelve (6 – 12) months of executing this Agreement.

6.03           You acknowledge that (a) every component of the System is material to (i) us, (ii) other Franchisees in the System, and (iii) the operation of the Restaurant; and (b) compliance by all System Franchisees with the Operations Manuals is (i) fundamental to the value of the System and to this Agreement and (ii) the basis for the broad public acceptance of the System and the goodwill associated therewith.  Accordingly, you promise, during the term of this Agreement, to not:

 

A.           Engage as an owner, partner, shareholder, director, officer, employee, consultant, agent, or in any other capacity in any other restaurant concept or any other restaurant that is the same as, similar to, or competitive with, the services sold by the Restaurant (except for other Franchises under Franchise Agreements we enter into with you);

7.	CONFIDENTIAL INFORMATION

7.01           Neither you nor any Principal Owner shall communicate, disclose or use any Confidential Information except as (a) permitted herein, or (b) required by law, and shall use all reasonable efforts to maintain such information as secret and confidential.  Neither you nor any Principal Owner shall, without our prior consent, copy, duplicate, record or otherwise reproduce any Confidential Information.  Confidential Information may be provided to employees, agents, consultants, and contractors only to the extent necessary for such parties to provide services to you.  Prior to such disclosure of any Confidential Information each of such employees, agents, consultants and contractors shall (i) be advised by you of the confidential and proprietary nature of the Confidential Information and (ii) agree to be bound by the terms and conditions of Section 7 of this Agreement.  Notwithstanding such agreement, you shall indemnify us and Our Indemnities from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by your agents, employees, consultants, and contractors.

7.02           In the event that you or your employees, agents, consultants or contractors receive notice of any request, demand, or order to transfer or disclose all or any portion of the Confidential Information, you shall immediately notify us thereof, and shall fully cooperate with and assist us in prohibiting or denying any such transfer or disclosure.  Should such transfer or disclosure be required by a valid, final, non-appealable court order, you shall fully cooperate with and assist us in protecting the confidentiality of the Confidential Information to the maximum extent permitted by law.

7.03           You and each Principal Owner acknowledge our exclusive ownership of the Confidential Information and the System and our Parent’s exclusive ownership and our license with respect to the Trademarks.  Neither you nor any Principal Owner shall, directly or indirectly, contest or

 

 

impair our or our Parent’s exclusive ownership of, and/or license with respect to, the Confidential Information, the System or the Trademarks.

7.04           If you develop improvements (as determined by us) to the Confidential Information, you and the Principal Owners shall each, without additional consideration, execute such agreements and other documentation as shall be deemed necessary by us, granting exclusive ownership thereof to us as if you developed such improvements as work for hire for us.  All such improvements shall be Confidential Information.

7.05           Each Principal Owner shall execute and deliver to us a covenant in the form prescribed by us.  You shall cause your Control Person, your Franchisee Designate, each Manager and such other employees of yours whom we designate to execute and (if requested) deliver to us a covenant in the form prescribed by us.  Notwithstanding the execution of such covenants, you shall indemnify us and Our Indemnities from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by any Principal Owner, Control Person, Franchisee Designate, Manager, or employee.

7.06           Immediately upon any termination or expiration hereof, you and each Principal Owner, Control Person, Franchisee Designate, Manager or employee shall return the Confidential Information, including without limitation, that portion of the Confidential Information which consists of analyses, compilations, studies or other documents containing or referring to any part of the Confidential Information, prepared by you or such Principal Owner, Control Person, Franchisee Designate, Manager or employee, or their respective agents, representatives or employees, and all copies thereof.

7.07           For purposes of this Agreement, Confidential Information shall include, without limitation, the System, the Operations Manuals, other manuals, the Standards and Specifications, written directives and all other drawings, all equipment recipes, computer and point-of-sale programs (and output from such programs), and any other information, know-how, techniques, material and data imparted or made available by us which is (a) designated as confidential, (b) known by you to be considered confidential by us, or (c) by its nature inherently or reasonably considered confidential.  Notwithstanding the confidentiality of data we poll from your point-of-sale system, you authorize us to use the data for our purposes, including without limitation, use for any financial performance representation in our future franchise disclosure documents.

8.	TRADEMARKS

9.	ADVERTISING

9.01           You recognize the value of advertising and that standardized advertising programs enhance the goodwill and public image of the System.

We or our designate shall administer the funds in the national and/or regional advertising fund and direct all national and regional advertising programs.  We or our designate shall have the sole discretion to consent to or reject all creative concepts, materials and media and the placement and allocation thereof.  We shall not be a fiduciary to you with respect to the management of such funds.  We and our designate undertake no obligation to make expenditures in the area where your Restaurant Location is located which are equivalent or proportionate to your contribution or ensure that any particular Franchisee benefits directly or pro rata from the placement of such advertising.  Such funds may be applied to our costs of maintaining, administering, directing and preparing national or regional advertising (including without limitation, marketing research, public relations activities, marketing programs and initiatives including but not limited to guest membership programs, and employing advertising agencies to assist therein); provided however, that such funds shall not be used to defray our general operating expenses (except reasonable administrative costs and overhead related to the administration or direction of such funds and programs).  Such funds shall be maintained in a separate account and an annual statement of fund expenditures shall be delivered to you upon request.

9.03           In addition to the national advertising described in Section 9.02, we may from time to time develop and administer advertising, marketing and sales promotion programs in which you shall participate upon such terms and conditions as established by us.  Such programs may include, without limitation, guest membership programs, gift card programs, seasonal System-wide specials and the like.  All phases of such advertising and promotion, including without limitation, type, quantity, timing, placement, choice of media, market areas, promotional programs and advertising or public relations agencies, shall be determined by us in our sole discretion.

9.04           All of your advertising and promotion shall conform to the Standards and Specifications in the Operations Manuals.  You shall submit all advertising and promotional plans and materials to us for consent prior to use (unless prepared or provided by us).  We must consent to or reject such plans and materials within twenty one (21) days of receipt.  You shall not use such plans or materials until our consent is received.  You shall promptly discontinue any advertising or promotional plans or materials, whether or not previously consented to, upon notice from us.

9.05           We may designate any geographic area in which two (2) or more Restaurants are located and owned by different parties as a region for purposes of establishing an advertising Cooperative.  The members of the Cooperative for any area will consist of all Restaurants, whether operated by us, our affiliates or franchised.  We will determine in advance how each Cooperative will be organized and governed and when it must start operation.  Once established,

 

 

we do not have the right to dissolve, merge or change the structure of the Cooperatives.  Each Cooperative will be organized for the exclusive purposes of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in Local Advertising.  If a Cooperative has been established for a geographic area where your Restaurant is located when the Franchise Agreement is signed, or if any Cooperative is established during the Term on the Franchise Agreement, you must sign all documents we request and become a member of the Cooperative according to the terms of the documents.  We will provide to you a copy of the Cooperative documents applicable to the geographic area in which your Restaurant will be located if you request it.

You must contribute to the Cooperative the amounts required by the documents governing the Cooperative.  You may apply your Payments to the Cooperative toward satisfaction of your Local Advertising requirement.  We may allocate your contributions to a Cooperative to the Fund, as describes above.  All contributions to the Cooperative will be maintained and administered according to the Cooperative governing documents.  The Cooperative will be operated solely as a conduit for the collection and expenditure of the Cooperative fees for the Cooperative or services furnished to its members without first obtaining our approval.  Each Cooperative will be obligated to prepare an annual financial statement reporting its expenditures for the previous year to its members.

9.06           We also may maintain one or more social media sites (e.g., www.twitter.com; www.facebook.com, or such other social media sites).  You may not establish or maintain any social media sites utilizing any user names, or otherwise associating with the Marks, without our advance written consent.  We may periodically designate regional or territory-specific user names/handles to be maintained by you.  You must adhere to the social media policies established by us and you will require all of your employees to do so as well.

10.

INSURANCE

 

 

11.01           You shall prepare in accordance with the System and generally accepted accounting principles, and preserve for the periods specified in the Operations Manuals, complete and accurate books, records and accounts with respect to the Restaurant and all other reports or disclosures required or permitted herein and in the Operations Manuals including, without limitation, sales slips, coupons, purchase orders, invoices, payroll records, check stubs, bank statements, sales tax records and returns, cash receipts and disbursements, journals and ledgers, in a form and manner prescribed in the Operations Manuals or otherwise in writing.  You shall adopt such accounting periods as we prescribe.

11.02           Each Monday, you shall submit to us your weekly Gross Sales for the previous week, upon which we will base your Royalty, Advertising Fee, and other Payments due to us.  You shall submit to us a monthly accounting of Gross Sales within ten (10) days of the end of the

 

 

accounting month and an annual accounting of Gross Sales within thirty (30) days after the end of each accounting year.

11.03           You shall submit to us such additional reports, records, data, information, financial statements, (including, without limitation, periodic guest counts, weekly and monthly sales reports and quarterly and annual statements of profit and loss for the Restaurant and quarterly and annual financial statements and statements of your Gross Sales, showing itemized deductions and exclusions from Gross Sales for the Restaurant) as we may reasonably require or as specified from time to time in the Operations Manuals in a form reasonably required.  We may inspect, copy and audit all of the documents and information specified in this Section and your books, records and tax returns at any time during normal business hours upon five (5) days prior notice.

11.04           If any audit discloses an understatement of Gross Sales for the period subject to audit of one percent (1%) or more, or an underpayment of the Royalty for the period subject to the audit of three percent (3%) or more, you shall reimburse us (in addition to payment of such Royalty and Advertising Fee and interest as provided in this Agreement) any and all costs and expenses incurred in connection with such audit, including without limitation, reasonable attorney fees, auditor fees, and expenses related to our staff to conduct the audit, including without limitation, wages, benefits, lodging, travel and meal expenses related to the conduct of the audit.

11.05           The annual accounting of Gross Sales, and other financial statements required by this Section or as we request shall be accompanied by a certificate signed by your chief financial officer to the effect that such statements or reports fairly and accurately reflect the matters reported therein and are complete and correct.   You acknowledge that the financial information you supply to us may be used by us in the preparation of, and may be disclosed by us in, our future Franchise Disclosure Documents.

11.06           You shall use the professional services of an accountant or accounting firm.  You shall provide to us copies of your books, records, and tax returns as we may request from time to time.  You hereby waive any accountant-client privilege to allow your accountant to disclosure to us information required to be disclosed under this Agreement.  We reserve the right to make a financial performance representation in the future Franchise Disclosure Documents that may be based in part upon the actual performance of your Restaurant.  To that end, you agree and consent to our use of the financial information of your Restaurant and financial statements you provide to us in future franchise disclosure documents.

12.	YOUR REPRESENTATIONS AND WARRANTIES; AFFIRMATIVE AND NEGATIVE COVENANTS

12.01           If you are a corporation, partnership, limited partnership or limited liability company, you represent and warrant to us as follows:

 

A.           You are duly organized, validly existing and in good standing under the laws of the jurisdiction of your organization with all requisite power and authority to own, operate and Lease your assets (real and personal), to carry on your business, and to enter into this

 

 

12.04           Each of the covenants contained in this Section are independent of each other covenant or agreement contained in this Agreement.

12.05           Your representations, warranties, covenants and agreements herein are continuing, each of which shall survive the expiration or termination of this Agreement.

13.

TRANSFER

14.	CONSENT AND WAIVER

14.01           When required, you or any Principal Owner 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.

14.02           WE MAKE NO REPRESENTATIONS OR WARRANTIES UPON WHICH YOU OR ANY PRINCIPAL OWNER MAY RELY AND ASSUME NO LIABILITY OR OBLIGATION TO YOU, ANY PRINCIPAL OWNER OR ANY THIRD PARTY BY PROVIDING ANY WAIVER, ADVICE, CONSENT OR SERVICES TO YOU OR DUE TO ANY DELAY OR DENIAL THEREOF.

15.	DEFAULT AND REMEDIES

15.01           A.           The following shall constitute Events of Default by you or any Principal Owner for which there shall be no opportunity to cure and for which notice of termination is not required: (i) failure to commence construction of the Restaurant or open and thereafter continually operate the Restaurant as described herein; (ii) the breach or falsity of any representation, covenant or warranty herein; (iii) failure to deliver executed covenants as required in Section 7.05; (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 13 or (b) fails to occur within the time periods described in Section 13 (notwithstanding any lack of, or limits upon, the enforceability of any term or provision of Sections 12 or 13); (vi) you (a) are adjudicated, or are, bankrupt or insolvent, (b) make an assignment for the benefit of creditors, or (c) seek protection from creditors by petition in bankruptcy or otherwise or there is filed against you 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 your assets or (b) any Restaurant owned by you or an Affiliate 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 other agreement between you and us in which you have no opportunity to cure; (x) you or any Principal Owner 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 Designated Area 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 15.0l.B or (b) three (3) or more Events of Default shall arise under this Section 15.0l.B in any continuous twelve (12) month period notwithstanding the previous cure of such Events of Default.

B.           The following shall constitute Events of Default by you or any Principal Owner for which there shall be a cure period of fifteen (15) days after written notification from us: (i) failure to make any payment on or before the date payable; (ii) failure to meet and/or maintain the Standards and Specifications; (iii) failure to meet and/or maintain the requirements of the Operations Manuals; and (iv) an Event of Default shall arise under any other agreement you have with us in which you have an opportunity to cure, in which case, the cure period under this Agreement shall be extended to coincide with the cure period of the other agreement; (v) you understate your Royalty by five percent (5%) or more; (vi) you engage in any dishonest or unethical conduct which may adversely affect the reputation of the Restaurant, or the general goodwill associated with the Trademarks; (vii) you fail, for a period of ten (10) days after notification of non-compliance by appropriate authority, to comply with any law or regulation applicable to the operation of the Restaurant; (viii) you violate any covenant of confidentiality or non-disclosure provision contained in this Agreement or you otherwise disclose, use, or permit the use of copies, duplicates, records, transmits, or otherwise reproduce any Operations Manuals, business forms, videos, DVD/CD-ROMS, audiotapes, material or proprietary information, knowledge or know-how created or used by us and designated for confidential use within the System, without our prior written approval; (ix) you abandon or cease to operate all or any part of the Restaurant for more than ten (10) days; (x) you fail to comply with modifications to System Standards and Specifications within the required time period; (xi) you fail to carry the insurance we require; and do not correct within ten (10) days of receipt of written notice to you; (xii) you fail to receive our prior written approval and use products or materials that do not meet our Standards and Specifications and do not promptly discontinue use after written notice from us; or (xiii) you fail to timely provide us with any report, statement, or return required by this Agreement.  If you cannot reasonably cure the Event of Default within fifteen (15) days, you shall provide us notice thereof (together with your best estimate of the time period required to complete such cure) and immediately undertake efforts to cure such default within the fifteen (15) day cure period, and continue such efforts with diligence to completion.  In no event, however, shall such cure period be extended without our prior written consent.

15.02           Among the remedies we have for breach of this Agreement, upon the occurrences of any Event of Default under Section 15.01, 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) exercise our option to acquire the real estate associated with the Restaurant Location either through purchase pursuant to the Real Estate Option to Purchase or by assuming the occupancy contract pursuant to the Conditional Assignment of Lease.  Further, if we exercise our option to acquire the immediate right to occupy the premises and require you to vacate, you hereby grant to us an option to acquire all rights and assume all obligations remaining under any equipment Leases, and purchase any or all of the other equipment not covered by equipment Leases and any inventory or other property of yours at its then-current fair market value.  This option shall be exercised in the same manner that we are required to exercise our option as to the real estate, with possession to be transferred at the time possession

 

 

of the real estate is transferred.  In light of the poor market for used restaurant equipment, it is hereby agreed that equipment Leases assumed by us, if we exercise our option, have a fair market value of $0.00.

15.03           Subject to the provisions of Section 15.06, 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.

15.04           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 Franchisees 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.

15.05           You and each Principal Owner 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 you or any Principal Owner may have against us, whether arising from this Agreement or otherwise, shall not constitute a defense to our enforcement of your or any Principal Owner's representations, warranties, covenants, obligations or agreements herein.

15.06           IN THE EVENT OF A DISPUTE BETWEEN THEM WHICH IS NOT SUBJECT TO, NOR ARISES UNDER, SECTION 17, WE, YOU, AND EACH PRINCIPAL OWNER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, BUT SPECIFICALLY EXCLUDING, HOWEVER, DAMAGES TO THE REPUTATION AND GOODWILL ASSOCIATED WITH AND/OR SYMBOLIZED BY THE TRADEMARKS) AGAINST THE OTHER ARISING OUT OF ANY CAUSE WHATSOEVER (WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR OTHERWISE) AND AGREE THAT EACH SHALL BE LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY IT.  IF ANY OTHER TERM OF THIS AGREEMENT IS FOUND OR DETERMINED TO BE UNCONSCIONABLE OR UNENFORCEABLE FOR ANY REASON, THE FOREGOING PROVISION SHALL CONTINUE IN FULL FORCE AND EFFECT.

 

15.07           You and each Principal Owner 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.

15.08           You may terminate this Agreement as a result of a breach of a material provision of this Agreement provided that:  (i) you provide us with written notice of the breach that identifies the grounds for the breach; and (ii) we fail to cure the breach within thirty (30) days after our receipt of your written notice.  If we fail to cure the breach, the termination will be effective sixty (60) days after our receipt of your written notice of breach.  Your termination of this Agreement will not release or modify your post-term obligations upon termination as provided in this Agreement.

16.	OBLIGATIONS UPON TERMINATION OR EXPIRATION; RENEWAL OPTION

16.01           Upon any termination or expiration of this Agreement (or any renewal franchise agreement if the renewal option described in Section 16.09 has been exercised), and subject to the other terms of this Agreement, we may establish, or authorize others to establish Restaurants in the Designated Area.

17.	INDEMNIFICATION

 

18.

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 the Franchise Agreement (or such other addresses as designated pursuant to this Section 18).

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.

19.	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.  Notwithstanding the foregoing, if, through no fault of yours, the Restaurant is damaged or destroyed by an event such that it cannot, in our judgment, reasonably be restored within ninety (90) days thereafter, then you may, within sixty (60) days after such event, apply for our consent to relocate and/or reconstruct the Restaurant, which consent shall not be unreasonably withheld.  If you fail to make such application, this Agreement shall be deemed terminated for cause.

20.	SEVERABILITY

20.01           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, our ability to realize the principal purpose of the Agreement or preserve its or our rights in, or the goodwill underlying, the Trademarks, the System, or the Confidential Information, we may terminate this Agreement upon notice to you.

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

21.	INDEPENDENT CONTRACTOR

21.01           You are an independent contractor.  We do not operate your business.  Nothing herein shall create the relationship of principal and agent, legal representative, joint ventures, partners, employee and employer or master and servant between the parties.  No fiduciary duty is owed by, or exists between, the parties.

21.02           Nothing herein authorizes you or any Principal Owner to make any contract, agreement, warranty or representation or to incur any debt or obligation in our name.

22.	DUE DILIGENCE AND ASSUMPTION OF RISK

22.01           You and each Principal Owner (i) have conducted such due diligence and investigation as each desire; (ii) recognize that the business venture described herein involves risks; and (iii) acknowledge that the success of such business venture is dependent upon the abilities of you and Principal Owners.  WE EXPRESSLY DISCLAIM THE MAKING OF, AND YOU AND EACH PRINCIPAL OWNER ACKNOWLEDGE THAT THEY HAVE NOT RECEIVED OR RELIED UPON, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE POTENTIAL PERFORMANCE OR VIABILITY OF THE BUSINESS VENTURE CONTEMPLATED BY THIS AGREEMENT.

22.02           You and each Principal Owner have received, read and understand this Agreement, the documents referred to herein and the Exhibits and Schedules hereto.  You and each Principal Owner had ample time and opportunity to consult with their advisors concerning the potential benefits and risks of entering into this Agreement.

23.	ENFORCEMENT

23.01           We shall have the right to enforce by judicial process our right to terminate this Agreement for the causes enumerated in Section 15, to prevent or remedy a material breach of this Agreement by you or a Principal Owner if such breach could materially impair the goodwill associated with our Trademarks (including Actions with respect to the servicing of wholesale accounts), to enforce our rights under the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C. § 1050 et. seq), as amended, to enforce the confidentiality provisions of this Agreement, to collect unpaid Royalties, Advertising Fees and any other fees due and owing to us, and to enforce the Non-Competition provisions of this Agreement.  We shall be entitled without bond to the entry of temporary restraining orders and temporary and permanent injunctions enforcing the aforementioned provisions.  If a court determines a bond is necessary, you or Principal Owner agree that the bond shall be limited to not more than Five Thousand Dollars ($5,000).  If we are successful in obtaining an injunction or any other relief against you or Principal Owner, you or Principal Owner shall pay us an amount equal to the aggregate of our costs of commencing and prosecuting the Action, including, without limitation, reasonable attorney fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses.

 

23.02           Except insofar as we elect to enforce this Agreement by judicial process and injunction as provided above, all disputes and claims relating to any provision hereof, to any specification, standard, operating procedure or other obligation of us or our agents or the breach thereof (including, without limitation, any claim that this Agreement, any provision thereof, any specification, standard, operating procedure or any other obligation of you or Principal Owner or us is illegal, unenforceable or voidable under any law, ordinance or ruling) shall be settled by binding arbitration in the county of our principal office.  Arbitration will be held in accordance with the United States Arbitration Act (9 U.S.C. § 1 et. seq), if applicable, and the JAMS Comprehensive Arbitration Rules and Procedures (or such rules relating to the arbitration of disputes arising under Franchise Agreements).

23.03           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, you or Principal Owner and us 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 issue(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 you or Principal Owner.  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 you or Principal Owner 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, you or Principal Owner 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.

23.04           Any arbitrator appointed must have at least ten (10) years’ experience in franchise matters and shall have the right to award or include in any award the specific performance of this Agreement.  We and you or Principal Owner acknowledge that judgment upon an arbitration award may be entered in any court of competent jurisdiction and shall be binding,

 

 

final and non-appealable.  During the pendency of any arbitration proceeding, you or Principal Owner and we shall fully perform this Agreement.

23.05           If, after we or you or Principal Owner institute an arbitration proceeding, one (1) or the other asserts a claim, counterclaim or defense, the subject matter of which, under statute or current judicial decision is nonarbitrable for public policy reasons, the party against whom the claim, counterclaim or defense is asserted may elect to proceed with the arbitration of all arbitrable claims, counterclaims or defenses or to proceed to litigate all claims, counterclaims or defenses in a court having competent jurisdiction.

23.06           TO THE EXTENT EITHER PARTY IS PERMITTED TO ENFORCE THIS AGREEMENT BY JUDICIAL PROCESS AND ELECTS TO DO SO, EACH OF THE PARTIES WAIVES ITS RIGHT TO A TRIAL BY JURY.  THIS WAIVER SHALL APPLY TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION INCLUDING, BUT NOT LIMITED TO, CLAIMS RELATED WITH RESPECT TO THE ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT, ALLEGATIONS OF STATE OR FEDERAL STATUTORY VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND IN CONNECTION WITH ANY LEGAL ACTION INITIATED FOR THE RECOVERY OF DAMAGES BETWEEN US AND YOU OR PRINCIPAL OWNER (INCLUDING ANY PRINCIPAL OWNERS OR GUARANTORS, IF APPLICABLE, AND INCLUDING ACTIONS INVOLVING AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS OF OURS OR YOURS) FOR BREACH OF THE FRANCHISE AGREEMENT.

23.07           We and you or Principal Owner (and the respective owners, officers, affiliates and agents, if applicable) each agree to submit to the exclusive jurisdiction of the state and federal courts of the state of our principal place of business with respect to any litigation pertaining to this Agreement or to any aspect of the business relationship between the parties, even if additional persons are named as parties to such litigation.  No Action or proceeding involving this Agreement or any aspect of the relationship between the parties or their agents or affiliates shall be commenced by any party except in the county of our principal place of business at the time that the litigation is commenced, nor shall any such Action be transferred to any other venue.  Notwithstanding the foregoing, if we are permitted to seek injunctive relief under this Agreement, we may, at our option, bring such Action in the county in which the Restaurant is located.

23.08           The parties agree they should each be able to settle, mediate, litigate, arbitrate, or compromise disputes in which they are involved with third parties, without having the disposition of such disputes directly affect the contract or relationship between us and you or Principal Owner.  We and you or Principal Owner therefore each agree that a decision of an arbitrator or court of law in litigation to which one of them is not a party shall not in any manner prevent the person that was a party to such Action from making similar arguments, or taking similar positions, in any Action between us and you or Principal Owner.  The parties therefore waive the right to assert that principles of collateral estoppel prevent either of them from raising any claim or defense in an Action between them as a result of such party having lost a similar claim or defense in another Action.

 

23.09           Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C. § 1050 et. seq), as amended, this Agreement shall be governed by the laws of the state of Michigan.  The parties agree, however, that if the Restaurant is not located in Michigan, and if you are not a resident of Michigan, the provisions of the Michigan Franchise Investment Law and the regulations promulgated thereunder shall not apply to this transaction or this Agreement.  Notwithstanding the foregoing, the parties recognize that if you are a resident of a state that has a law specifically governing the sale and operation of franchises of the type granted hereby to you, or if the Restaurant is located in such a state, then while the foregoing paragraph shall still be applicable, the franchise law of such other states shall also apply to this transaction.  In that event, to the extent that the provisions of this Agreement provide for periods of notice less than those required by such applicable law, or provide for termination, cancellation, non-renewal or the like other than in accordance with such applicable law, such provisions shall, to the extent that such are not in accordance with such applicable law, be superseded by said law, and we shall comply with such applicable law in connection with each of these matters

23.10           All claims, except for monies due to us or your performance under this Agreement, arising under this Agreement or from the relationship between the parties are barred unless an Action is filed and timely served on the opposing party within one (1) year from the date the party knew or should have known of the facts creating the claim, except to the extent any applicable law or statute provides for a shorter period of time to bring a claim or as otherwise required by law.

24.	MISCELANEOUS

24.01           Time is of the essence to this Agreement.

24.02           There are no third-party beneficiaries to this Agreement except for the remedy provided for breach of your or any Principal Owner's covenant contained in Section 12.03C(1).

24.03           This Agreement may be executed in any number of counterparts each of which when so executed shall be an original, but all of which together shall constitute one (1) and the same instrument.

24.04           All references herein to the masculine, neuter or singular shall be construed to include the masculine, feminine, neuter or plural, unless otherwise suggested by the text.

24.05           This Agreement will become effective only upon execution hereof by an Officer of ours.

24.06           You shall not use the words “Bagger Dave’s®” or “Bagger Dave’s Legendary Burger Tavern™”, or any part thereof, as part of its corporate or other name.

24.07           You and each Principal Owner acknowledge that each has received a complete copy of this Agreement, the documents referred to herein and the Exhibits hereto at least five (5) Business Days prior to the date on which this Agreement was executed.  You and each Principal

 

 

Owner further acknowledge that each has received the Franchise Disclosure Document at least fourteen (14) days prior to the date on which this Agreement was executed.

24.08           You and each Principal Owner, jointly and severally, personally guarantee your performance of your obligations under this Agreement and must execute the form of Guaranty attached as Exhibit E to the Franchise Disclosure Document.  Any person or entity that at any time after the date of this Agreement becomes a Principal Owner pursuant to the provisions of this Agreement must execute the form Guaranty within ten (10) days from the date such person or entity becomes a Principal Owner, provided, however, that any person or entity who becomes a Principal Owner shall automatically acquire all of the obligations of a Principal Owner under this Agreement at the time that such person or entity becomes a Principal Owner.

24.09           Notwithstanding anything to the contrary contained in this Agreement, if you are developing pursuant to the terms of an Area Development Agreement, you are bound to the development obligations contained in the Development Schedule, which is incorporated herein by reference.

25.	ENTIRE AGREEMENT

This Agreement and the Exhibits, Addenda and Schedules hereto and the Franchise Disclosure Document constitute the entire agreement between us, you and the Principal Owners 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 MODIFICATION VARIANCE FROM THIS AGREEMENT SHALL BE BINDING ON EITHER PARTY UNLESS MUTUALLY AGREED TO BY US AND YOU AND EXECUTED IN WRITING.

26.	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 17 applies.

Agreement - this Franchise Agreement.

Appraiser(s) - one or more independent third parties selected by the parties to this Agreement in accordance with the terms and conditions hereof.

 

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

 

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

FRANCHISEE (For a business entity)   BD’S RESTAURANT GROUP, LLC   By: /s/ Bill Zellmer   Name: Bill Zellmer   Title: Member   Date: 11/17/11     By: /s/ Lonnie Griggs   Name: Lonnie Griggs   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

A.	Description of Franchisee's Designated Area. Franchisee’s Designated Area shall be defined as that area within the following borders or as depicted in the attached map:

Cape Girardeau County in MO; Jackson & Williamson Counties in IL; McCracken & Warren Counties in KY; Montgomery County in TN; Vanderburgh County in

B.           Location of Restaurant. We hereby approve the location of the Restaurant as:

2106 William St. #300 in Cape Girardeau, Missouri 63701

C.           Initial Franchise Fee.  The Initial Franchise Fee is $30,000.00.

D.	Franchisee Designate.  The Franchisee Designate and contact information for purposes of this Franchise Agreement is:

Name	Bill Zellmer
Address	2024 Watson
City, State, Zip code	Jackson, MO 63755
Phone Number	573 ###-###-####
Email Address	***@***

 

E.           Control Person.  The Control Person and contact information for purposes of this Franchises Agreement is:

Name	Bill Zellmer
Address	2024 Watson
City, State, Zip code	Jackson, Missouri 63755
Phone Number	573 ###-###-####
Email Address	***@***

F.           Notice.  Addresses for Notice pursuant to Section 18 of the Franchise Agreement shall be as follows:

 

if to You or any Principal Owner:	Bill Zellmer 2024 Watson Jackson, MO 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: (does not constitute notice)	Mark J. Burzych Fahey Schultz Burzych Rhodes PLC 4151 Okemos Road Okemos, MI 48864 Facsimile No.: (517) 381-5051

 

G.           Commencement Date.  The Commencement Date of the Franchise Agreement is

_________________________________________.

 

This Attachment 1 is current and complete as of 11/17/11, 2011.

FRANCHISEE (For a business entity)   BD’S RESTAUANT 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

This form must be completed by you, if you have multiple owners or if you or your Restaurant 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	x
(e)           Other	o

Specify:                      _________________________________________________________________

You are formed under the laws of Missouri.

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

3.           Owners.  The following list includes the full name and mailing address of each person who is one of your owners and fully describes the nature of each owner's interest.  Attach additional sheets if necessary.

 

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.

5.           Assumed Name Authorization.  You are authorized to operate the Restaurant and your Business Entity under the following assumed name and you are authorized to file the appropriate business forms with the state or local governmental body consistent with this authorization.

BD’S RESTAURANT GROUP, LLC

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

 

FRANCHISEE (For a business entity)   BD’S RESTAURANT GROUP, LLC   By: /s/ Bill Zellmer   Name: Bill Zellmer   Title: Member   Date: 11/17/11

By: /s/ Lonnie Griggs

Name: Lonnie Griggs

Title: Member

Franchisee understands and agrees that it is unlawful and a criminal offense to duplicate or reproduce any copyrighted materials.

BZ LG Initials

 

1.

Franchisee acknowledges that it has conducted an independent investigation of the business licensed by this Agreement, that it has had an adequate opportunity to be advised by advisors of its own choosing regarding all pertinent aspects of this Agreement and the franchise relation created by it, that the business venture contemplated by this Agreement involves business risks, and that the success of the business will be largely dependent upon the abilities and efforts of Franchisee as an independent businessperson or upon the abilities of the Principal Owners, if the Franchisee is a business entity.  Franchisee understands that Franchisor makes no express or implied warranties or representations, guarantees or assurances that Franchisee will achieve any degree of success in operation of the Restaurant and, while Franchisor will provide Franchisee with training, advice, and consultation as provided in this Agreement, success in the operation depends ultimately on Franchisee and on other factors including, but not limited to,  location, marketing, regional tastes and preferences, economic conditions, financial considerations and competition.

 

FRANCHISEE RECOGNIZES THAT FRANCHISOR HAS ENTERED INTO THIS AGREEMENT IN RELIANCE UPON AND IN RECOGNITION OF THE FACT THAT FRANCHISEE AND ITS CONTROL PERSON AND FRANCHISEE DESIGNATE SHALL HAVE FULL RESPONSIBILITY FOR THE MANAGEMENT AND OPERATION OF THE BUSINESS LICENSED BY THIS AGREEMENT, AND THAT THE AMOUNT OF PROFIT OR LOSS RESULTING FROM THE OPERATION OF THE BUSINESS WILL BE DIRECTLY ATTRIBUTABLE TO THE PERFORMANCE OF FRANCHISEE.

All information provided Franchisor in connection with the approval of Franchisee as a Franchisee and the Restaurant Location is truthful and accurate.

 

Franchisee acknowledges that it received Franchisor’s Franchise Disclosure Document and a standard form Franchise Agreement at least fourteen (14) days before the date of its execution by Franchisee and the payment of any fees to Franchisor.  Franchisee further acknowledges that it received this Agreement in the form actually executed at least seven (7) days before the date of its execution by Franchisee.

 

Franchisee acknowledges that this Agreement requires arbitration of disputes in the city in which Franchisor is headquartered at the time of initiation of the arbitration; that an exception to this requirement is Franchisor’s right to bring a court Action for injunctive relief for specified matters; that the exclusive venue and jurisdiction for any court Action is the city in which Franchisor is headquartered at the time litigation is initiated; and that Franchisor and Franchisee waive the right to a jury, to punitive damages, to collateral estoppel, and to bring multi-plaintiff, consolidated, collective or class-wide Actions; and that a one-year statute of limitations applies to claims between the parties subject to specified exceptions.

 

FRANCHISEE (For a business entity)   BD’S RESTAURANT GROUP, LLC   By: /s/ Bill Zellmer   Name: Bill Zellmer   Title: Member   Date: 11/17/11     By: /s/ Lonnie Griggs   Name: Lonnie Griggs   Title: Member   Date: 11/17/11

 

 

 

 

This Confidentiality and Nondisclosure Agreement and Covenant Not to Compete is entered into as of the date or dates set forth below by and between BD’S Restaurant Group, LLC located at 2024 Watson, Jackson, Missouri 63755 (“Franchisee”) and Bagger Dave’s Franchising Corporation, located at 27680 Franklin Road, Southfield, Michigan 48034 (“Bagger Dave’s”), and Bill Zellmer, located at 2024 Watson, Jackson, Missouri 63755, owner of Franchisee ("Owner").

WHEREAS, Bagger Dave’s is the Franchisor of “Bagger Dave’s Legendary Burger Tavern™” Restaurants and has the authority to disclose and discuss all information relating to the operations of a Restaurant (hereinafter referred to as “Bagger Dave’s Business,” “Business,” or “Franchised Business”);

WHEREAS, confidential information will be disclosed to Franchisee and Owner; and

WHEREAS, such confidential information gives Bagger Dave’s and Franchisee and Owner a competitive advantage over those who do not know it and who may compete with Bagger Dave’s, its affiliates or its Franchisees by 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.  The restaurant specializes in freshly made hamburgers and fries with superior customer service to its clients (the “Restaurant”).

NOW, THEREFORE, in order to induce Bagger Dave’s to transmit the aforesaid Information to it, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Franchisee and Owner hereby agrees as follows:

1.           The term “Information” shall mean, but shall not be limited to, any and all information concerning the Business, including but not limited to all information contained in Bagger Dave’s Operations Manual, Training Manuals or other Manuals provided to Owner by Bagger Dave’s, or Franchisee, all proprietary software, memoranda, notes, disks, cost analysis, trademarks, copyrights, logos, signage, blueprints, sketches, recipes, methods, processes, designs, plans, property, reports and documents, Bagger Dave’s operational, manufacturing, administrative, merchandising, marketing, costing, production and related information, information concerning the business, operations and markets of “Bagger Dave’s®” Restaurants, and all copies and extracts thereof, prepared by or on behalf of Bagger Dave’s or any of its officers, employees, attorneys, representatives, agents or consultants, which is disclosed to or acquired by Owner directly or indirectly from Bagger Dave’s in the course of activities related to the purchase and sale of a franchise of said Business, or which is obtained by Owner through an inspection of any facility employing Information.

2.           Owner agrees to retain all Information in strict confidence and not use it except as otherwise provided herein and Owner agrees not to claim any right or interest in or to disclose Information to others.