Popeyes Chicken & Biscuits Development Agreement - AFC Enterprises Inc.
POPEYES CHICKEN & BISCUITS
DEVELOPMENT AGREEMENT
(Exclusive)
BETWEEN
AFC ENTERPRISES, INC.
AND
_________________________________
Dev. Agr. No.:________
No. Options:________
Date:______________
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AFC ENTERPRISES, INC.
POPEYES CHICKEN & BISCUITS
DEVELOPMENT AGREEMENT
(Exclusive)
TABLE OF CONTENTS
I. GRANT............................................................ 2
II. DEVELOPMENT FEE.................................................. 3
III. DEVELOPMENT SCHEDULE............................................. 3
IV. FRANCHISED UNIT OPENINGS......................................... 4
V. DEFAULT AND TERMINATION.......................................... 6
VI. TRANSFERABILITY OF INTEREST...................................... 7
VII. CONFIDENTIAL INFORMATION......................................... 10
VIII. COVENANTS........................................................ 11
IX. NOTICES.......................................................... 12
X. NON-WAIVER....................................................... 13
XI. INDEPENDENT CONTRACTOR AND INDEMNIFICATION....................... 13
XII. APPROVALS........................................................ 14
XIII. ACKNOWLEDGMENT................................................... 14
XIV. SEVERABILITY AND CONSTRUCTION.................................... 15
XV. ENTIRE AGREEMENT AND APPLICABLE LAW.............................. 16
EXHIBIT A - DEVELOPMENT SCHEDULE.......................................... 18
EXHIBIT B - TERRITORY..................................................... 19
EXHIBIT C - FRANCHISE AGREEMENT........................................... 20
<PAGE>
AFC ENTERPRISES, INC.
POPEYES CHICKEN & BISCUITS
DEVELOPMENT AGREEMENT
(Exclusive)
THIS AGREEMENT (the "Agreement"), made this ______ day of
__________________________, 20___, by and between AFC ENTERPRISES, INC. (f/k/a
AMERICA'S FAVORITE CHICKEN COMPANY), a Minnesota corporation, with its principal
place of business at Six Concourse Parkway, Suite 1700, Atlanta, Georgia 30328-
5352, U.S.A. ("Franchisor") and _________________________________ ("Developer").
WITNESSETH:
WHEREAS, Franchisor owns a unique system for opening and operating
restaurants ("Popeyes Restaurant(s)") specializing in the preparation,
merchandising, advertising and sale of Popeyes uniquely seasoned fried chicken
and other quick-service menu items developed and owned by Franchisor (the
"Popeyes System" or the "System");
WHEREAS, the distinguishing characteristics of the Popeyes System
include, without limitation, the names "Popeyes" and "Popeyes Chicken &
Biscuits"; the distinguishing characteristics of which include, without
limitation, uniform and distinctive building designs, interior and exterior
layouts, trade dress, equipment layout standards and specifications, development
and maintenance of sources of supply, operating procedures for sanitation and
maintenance, food and beverage storage procedures, service procedures, and
secret food preparation recipes and batter mixes, standards and specifications
for equipment, equipment layouts, products, operating procedures and management
programs, all of which may be changed, improved and further developed by
Franchisor from time to time;
WHEREAS, Franchisor identifies the Popeyes System by means of certain
trade names, service marks, trademarks, logos, emblems, and indicia of origin,
including, but not limited to, the marks "Popeyes" and "Popeyes Chicken &
Biscuits" and such other trade names, service marks, and trademarks as are now,
or may hereafter, be designated by Franchisor for use in connection with the
System ("Proprietary Marks");
WHEREAS, Franchisor continues to develop, use, and control the use of
such Proprietary Marks in order to identify for the public the source of
services and products marketed thereunder in the Popeyes System and to represent
the Popeyes System's high standards of quality, appearance, and service;
WHEREAS, Developer wishes to be assisted, trained and licensed by
Franchisor as a Popeyes developer and franchisee and licensed to use, in
connection therewith, the Popeyes System;
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WHEREAS, Developer understands the importance of the Popeyes System
and Popeyes high and uniform standards of quality, cleanliness, appearance, and
service, and the necessity of opening and operating Developer's Popeyes
Restaurants in conformity with the Popeyes System; and
WHEREAS, Developer wishes to obtain the right to develop Popeyes
Restaurants ("Franchised Units") in the area described in this Agreement and to
use the Popeyes System in connection with those Franchised Units;
NOW, THEREFORE, the parties hereto agree as follows:
I. GRANT
1.01. Franchisor hereby grants the Developer, subject to the terms and
conditions of this Development Agreement and as long as Developer shall not be
in default of this Agreement or any other development, franchise or other
agreement between Developer and Franchisor, development rights to obtain
franchises to establish and operate ___ Franchised Units, and to use the Popeyes
System solely in connection therewith, at specific locations to be designated in
separate franchise agreements ("Franchise Agreements"), executed as provided in
Section 3.01. hereof, and pursuant to the schedule set forth in Exhibit A to
this Agreement ("Development Schedule"). Each Franchised Unit developed
pursuant hereto shall be located in the area described in Exhibit B hereto
"(Development Area").
1.02. Subject to the terms and conditions herein, Franchisor shall neither
establish nor license anyone other than Developer to establish a Franchised Unit
in the Development Area until sixty (60) days after the commencement of
operations of the final Franchised Unit under this Agreement, without
Developer's prior written consent.
1.03. Each Franchised Unit for which a development right is granted
hereunder shall be established and operated pursuant to a Franchise Agreement to
be entered into between Developer and Franchisor in accordance with Section
3.01. hereof.
1.04. This Agreement is not a franchise agreement, and does not grant the
Developer any right to use Franchisor's Proprietary Marks or the Popeyes System,
but merely sets forth the terms and conditions under which Developer will be
entitled to obtain a franchise agreement.
1.05. Developer shall have no right under this Agreement to license others
under the Proprietary Marks or to use the Popeyes System.
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II. DEVELOPMENT FEE
In consideration of the development rights granted herein, Developer has
paid to the Franchisor upon execution of this Agreement a non-refundable
development fee of _____________ Dollars ($__________) which development fee has
been fully earned by Franchisor for administrative and other expenses incurred
by Franchisor and for the development opportunities lost or deferred as a result
of the rights granted Developer herein.
III. DEVELOPMENT SCHEDULE
3.01. Developer shall exercise each development right granted herein only
by executing a Franchise Agreement for each Franchised Unit for a site accepted
by the Franchisor in the Development Area as hereinafter provided. Developer's
right to execute such a Franchise Agreement shall be contingent upon Developer's
continuous performance of all of the terms and conditions of this Agreement and
any other development, franchise or other agreements between Developer and
Franchisor. The Franchise Agreement for each Franchised Unit developed pursuant
to this Agreement shall be in the form of the Franchise Agreement attached
hereto as Exhibit C.
3.02. Recognizing that time is of the essence in this Agreement, Developer
agrees to exercise the development rights granted hereunder in the manner
specified in Section IV hereof and to satisfy the Development Schedule. Failure
by Developer to adhere to the Development Schedule shall constitute a default
under this Agreement, as provided in Section 5.03. hereof.
3.03. In addition to the development fee required by Section II hereof,
Developer shall pay (i) an initial franchise fee for each Restaurant developed
hereunder in the amount of Twenty Thousand Dollars ($20,000) upon execution of a
Franchise Agreement for each such Franchised Unit, all of which amount shall be
non-refundable and fully earned by Franchisor upon execution of the Franchise
Agreement for a Franchised Unit.
3.04 Franchisor reserves the right, in its sole discretion, to grant
Developer one or more extensions to the Development Schedule (a "Development
Schedule Extension") provided, however, Franchisee shall be required to pay
Franchisor a fee (the "Development Schedule Extension Fee") in an amount not to
exceed Five Thousand Dollars and No/Cents ($5,000.00) for each Development
Schedule Extension of three (3) months duration or less. Notwithstanding the
foregoing, Franchisor reserves the right to waive the applicable Development
Schedule Extension Fee, in its sole discretion, upon a showing, by Franchisee,
to Franchisor's satisfaction, that (1) Developer has used its best efforts to
comply with the Development Schedule and (b) Franchisee has been unable to
comply with the Development Schedule as a result of conditions or events beyond
Franchisees control. Nothing herein shall be deemed to require Franchisor to
grant Franchisee a Development Schedule Extension at any time. Furthermore, the
grant of one Development Schedule Extension to Franchisee shall not be deemed
approval of any further Development
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IV. FRANCHISED UNIT OPENINGS
4.01. Developer shall submit a proposed site for each Franchised Unit for
acceptance by Franchisor, together with such site information as required by
Franchisor to evaluate the proposed site. Franchisor shall, provided there
exists no default by Developer under this Agreement or any other development,
franchise or other agreement between developer and Franchisor, evaluate each
site proposed for which Developer has provided all necessary evaluation
information, and shall promptly, but not more than 30 days after receipt of
Developer's proposal, send to Developer written notice of acceptance or non-
acceptance of the site. Site approval does not assure that a Franchise
Agreement will be executed. Execution of the Franchise Agreement is contingent
upon Developer purchasing or leasing the proposed site and securing acceptance
of the final plans and specifications as provided below.
4.02. With respect to each Franchised Unit to be developed hereunder,
Franchisor shall conduct one site visit for up to two (2) proposed sites, at no
cost to Developer. If Developer has not received a site acceptance after the
second site visit, Developer shall pay Franchisor the amount of One Thousand
Five Hundred Dollars ($1,500.00) for each additional site visit until such time
as a site is approved by Franchisor.
Within ninety (90) days after notice of Franchisor's site acceptance,
Developer shall:
A. Submit, in writing to Franchisor, satisfactory proof to
Franchisor that Developer:
(i) owns the accepted site;
(ii) has leased the accepted site for a term which, with
renewal options, is not less than the initial term of the Franchise
Agreement; or
(iii) has entered into a written agreement to purchase or to
lease the accepted site on terms provided herein, subject only to
obtaining necessary governmental permits. If Developer leases the
accepted site, the lease must provide: (a) that, in the event
Developer defaults under or otherwise ceases operating the Franchised
Unit at the accepted site during the term of the lease, Franchisor
shall have the right, at its option, to assume Developer's position
under the lease; (b) that, in the event Developer defaults under the
lease, notice of the default shall immediately be forwarded to
Franchisor; and (c) that Franchisor shall have the right, upon default
under the lease or other cessation of operation at the accepted site,
to make the modifications and alterations to the Franchised Unit set
forth in Section 16.01.D. of the Franchise Agreement. The proof
required by this Section includes, but is not limited to, submission
of executed copies of all leases and deeds, as well as all
governmental approvals if effectiveness of the leases or deeds is
conditioned thereon.
B. Submit to Franchisor, and obtain Franchisor's written approval of,
the final and complete plans and specifications for the construction (or
renovation) and decoration
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of the Franchised Unit, which must be in conformity with Franchisor's
standards and specifications for Franchised Units, as set out in the
current Confidential Operating Standards Manual (as defined in the
Franchise Agreement) or otherwise in writing (hereinafter, the
"Construction Plans"). The final Construction Plans shall include, but are
not limited to, floor plans, equipment layouts, decor, and interior and
exterior elevations. For each Franchised Unit to be developed hereunder,
Franchisor shall provide Developer up to two (2) equipment layout drawings
for an accepted site at no cost to Developer. Developer shall pay
Franchisor the amount of One Thousand Dollars ($1,000.00) per revision
("Plan Revision Fee") thereafter. Franchisor may, in its discretion, reduce
or waive the Plan Revision Fee in the case of minor revisions.
C. Execute the Franchise Agreement and pay all fees required
thereunder. If Developer is a partnership, each general partner shall, and
if Developer is a corporation, each stockholder holding a beneficial
interest of five percent (5%) or more of the securities with voting rights
of Developer or any corporation directly or indirectly controlling
Developer shall, guarantee the performance of the Franchise Agreement by
executing the Franchisor's Franchise Agreement Guarantee form. Franchisor
shall not approve the final construction plans until the Franchise
Agreement is executed and all fees are paid by Franchisee.
4.04. Developer shall procure the insurance coverage provided for in
Section XI of the Franchise Agreement, prior to commencement of construction of
a Franchised Unit, and shall maintain such insurance coverage throughout the
term of the Franchise Agreement.
4.05. Developer shall commence construction or renovation of the
Franchised Unit on the earlier to occur of (i) ninety (90) days after the
Franchisor approves Developer's Construction Plans, or (ii) fifteen (15) days
after issuance of all requisite construction permits. Developer shall at all
times, use its best efforts to obtain all necessary construction permits in
order to avoid delays in commencement of construction of the Franchised Units.
In the construction of the Franchised Unit, Developer shall only use general
contractors and architects duly licensed by the jurisdiction in which the
Franchised Unit is to be constructed. If commencement of construction or
renovation is delayed by a cause beyond the reasonable control of Developer, the
date upon which commencement of construction or renovation is to begin may be
extended by obtaining written approval of Franchisor.
4.06. Upon commencement of construction or renovation of the Franchised
Unit, Developer shall notify Franchisor on such form as Franchisor may
prescribe.
4.07. Developer shall have completed construction or renovation and
commenced operation of the Franchised Unit within one-hundred eighty (180) days
from execution of the Franchise Agreement as provided in Section 4.02.C. hereof.
Franchisor may, in its sole discretion, extend this period to address unforeseen
construction delays, not within the control of Developer. Nothing herein shall
be deemed to relieve Developer of the obligation of complying with the
Development Schedule.
4.08. At least ten (10) days prior to the proposed commencement of
operation of each
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Franchised Unit, Developer shall notify Franchisor in writing of such proposed
opening. If the Franchised Unit is Developer's first Franchised Unit opened
hereunder, Developer shall give Franchisor at least thirty (30) days prior
written notice. Upon receipt of such notice, Franchisor shall provide a
representative to be present at the opening of the first Franchised Unit. The
first Franchised Unit shall not be opened unless such representative is present.
Thereafter, each Franchised Unit shall not open until Developer has received
Franchisor's prior written approval to open. Should commencement of operation of
the First Franchised Unit be delayed by the failure of Franchisor to provide
such a representative, the date upon which commencement of operation of such
Franchised Unit is required pursuant to Exhibit A of this Agreement, shall be
extended until such time as such assistance is provided by Franchisor. Should
Developer reschedule the opening date of Developer's first Franchised Unit less
than thirty (30) days prior to the date scheduled with Franchisor, the Developer
shall reimburse Franchisor for any out-of-pocket expenses incurred by Franchisor
in connection with the reschedule, unless such delay was caused solely by
Franchisor or as otherwise agreed to by Franchisor in writing.
V. DEFAULT AND TERMINATION
5.01. The rights granted to Developer in this Agreement have been granted
based upon Developer's representations and assurances, among others, that the
conditions set forth in Sections III and IV of this Development Agreement will
be met by Developer in a timely manner.
5.02. Developer shall be deemed to be in default under this Agreement, and
all rights granted herein shall automatically terminate without notice to
Developer, if Developer shall become insolvent or make a general assignment for
the benefit of creditors; if a petition in bankruptcy is filed by Developer or
such a petition is filed against Developer and not opposed by Developer; or if
Developer is adjudicated bankrupt or insolvent; or if a receiver or other
custodian (permanent or temporary) of Developer's assets or property, or any
part thereof, is appointed by any court of competent jurisdiction; or if
proceedings for a composition with creditors under the applicable law of any
jurisdiction should be instituted by or against Developer; or if a final
judgment remains unsatisfied or of record for thirty (30) days or longer (unless
a supersede as bond is filed); or if Developer is dissolved; or if execution is
levied against Developer's property or business; or if suit to foreclose any
lien or mortgage against the premises or equipment of any Franchised Unit
developed hereunder is instituted against the Developer and not dismissed within
thirty (30) days; or if the real or personal property of any Franchised Unit
developed hereunder shall be sold after levy thereupon by any sheriff, marshall,
or constable.
5.03. If Developer fails to comply with the Development Schedule or any
other material term of this Agreement, or fails to obtain Franchisor's approval
of a site or construction plans and specifications prior to commencement of
construction, or fails to comply with any material term or condition of any
franchise agreement covering a Franchised Unit established hereunder, or any
other agreement between Developer or any affiliate of Developer and Franchisor
or any affiliate of Franchisor, such action shall constitute a default under
this Development Agreement. Upon such default, Franchisor, in its discretion,
may, effective immediately upon the mailing of
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written notice by Franchisor to Developer, do any one or more of the following:
A. Terminate this Agreement and all rights granted hereunder
without affording the Developer any opportunity to cure the default;
B. Reduce the number of Franchised Units which Developer may
establish pursuant to Section 1.01. of this Agreement;
C. Terminate the territorial exclusivity granted Developer in
Section 1.01. hereof or reduce the area of territorial exclusivity granted
Developer hereunder;
D. Withhold evaluation or approval of site proposal packages and
refuse to permit the opening of any Franchised Unit then under construction
or otherwise not ready to commence operations; or
E. Accelerate the Development Schedule set forth in Exhibit A
hereto.
In addition to the foregoing, Franchisor shall be entitled to pursue any
other remedies available hereunder or at law or in equity.
5.04. Upon termination of this Agreement, Developer shall have no right to
establish or operate any Franchised Unit for which a Franchise Agreement has not
been executed by Franchisor and delivered to Developer at the time of
termination; and Franchisor shall be entitled to establish, and to license
others to establish, Franchised Units in the Development Area, except as may be
provided under any other agreement which is then in effect between Franchisor
and Developer.
5.05. A default in the Development Schedule under this Development
Agreement shall not constitute a default under any existing Franchise Agreement
between the parties hereto.
VI. TRANSFERABILITY OF INTEREST
6.01. Transfer by Franchisor. This Agreement shall inure to the benefit
of the successors and assigns of Franchisor. Franchisor shall have the right to
transfer or assign its interest in this Agreement to any person, persons,
partnership, association, or corporation. If Franchisor's assignee assumes all
the obligations of Franchisor hereunder and sends written notice of the
assignment so attesting, Developer agrees promptly to execute a general release
of Franchisor, and any affiliates of Franchisor, from claims or liabilities of
Franchisor under this Agreement.
6.02. Transfer by Developer. Developer understands and acknowledges that
the rights and duties set forth in this Agreement are personal to Developer, and
that Franchisor has granted this Agreement in reliance on Developer's business
skill and financial capacity. Accordingly, neither (i) Developer, nor (ii) any
immediate or remote successor to Developer, nor (iii) any individual,
partnership, corporation or other legal entity which directly or indirectly owns
any
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interest in the Developer or in this Development Agreement, shall sell, assign,
transfer, convey, donate, pledge, mortgage, or otherwise encumber any direct or
indirect interest in this Agreement or in Developer without the prior written
consent of Franchisor. Any purported assignment or transfer, by operation of law
or otherwise, not having the written consent of Franchisor, shall be null and
void, and shall constitute a material breach of this Agreement, for which
Franchisor may then terminate without opportunity to cure pursuant to Section
5.03. of this Agreement. Notwithstanding anything in this Agreement to the
contrary, Developer understands and acknowledges that individual development
rights to obtain franchises to establish and operate Franchised Units may not be
transferred except in connection with a transfer of this Development Agreement,
together with all remaining development options due to be developed under this
Agreement, in accordance with the conditions set forth herein.
6.03. Conditions for Consent. Franchisor shall not unreasonably withhold
its consent to any transfer referred to in this Section hereof for the remainder
of the term hereof, when requested; provided, however, that prior to the time of
transfer:
A. Developer shall not be in default of the Development Schedule;
B. The transfer must be in conjunction with a simultaneous transfer
to the same transferee of all Franchised Units operated by Developer under
the Popeyes System within the same DMA('s) as the remaining development
options;
C. All of Developer's accrued monetary obligations to Franchisor
and its subsidiaries and affiliates shall have been satisfied;
D. Developer shall have agreed to remain obligated under the
covenants contained in Sections VII and VIII hereof as if this Agreement
had been terminated on the date of the transfer;
E. The transferee must be of good moral character and reputation,
in the reasonable judgment of the Franchisor;
F. The transferee shall have demonstrated to the Franchisor's
satisfaction, by meeting with the Franchisor or otherwise at Franchisor's
option, that the transferee's qualifications meet the Franchisor's then
current criteria for new developers;
G. The parties must execute a written assignment, in a form
satisfactory to Franchisor, pursuant to which the transferee shall assume
all of the obligations of the individual or entity which is the transferor
under this Agreement and pursuant to which Developer shall generally
release any and all claims it might have against Franchisor as of the date
of the assignment;
H. The transferee must, at Franchisor's option, execute the then-
current form of Development Agreement and such other then-current ancillary
agreements as Franchisor may reasonably require. The then-current form of
Development Agreement may have significantly different provisions,
provided, however, that Exhibits A and B
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hereto shall be Exhibits A and B to such development agreement;
I. If the transferee is a partnership, the partnership agreement
shall provide that further assignments or transfers of any interest in the
partnership are subject to all restrictions imposed upon assignments and
transfers in this Agreement;
J. Developer shall, at Franchisor's option and request, execute a
written guarantee of the transferee's obligations under the Agreement,
which such guarantee shall not exceed a period of three (3) years from the
date of transfer; and
K. The Developer or the transferee shall have paid to Franchisor a
transfer fee of Five Thousand Dollars ($5,000), to cover Franchisor's
administrative expenses in connection with the transfer, but no development
fees shall be charged by Franchisor for a transfer. If the transferee is a
corporation formed by Developer for the convenience of ownership and in
which the Developer is the sole shareholder, no transfer fee shall be
required.
6.04. Grant of Security Interest. Developer shall grant no security
interest in this Agreement unless the secured party agrees that, in the event of
any default by Developer under any documents related to the security interest,
(i) Franchisor shall be provided with notice of default and be given a
reasonable time within which to cure said default, (ii) Franchisor shall have
the right and option to be substituted as obligor to the secured party and to
cure any default of Developer or to purchase the rights of the secured party
upon payment of all sums then due to such secured party, except such amounts
which may have become due as a result of any acceleration of the payment dates
based upon the Developer's default, and (iii) such other requirements as
Franchisor, in its sole discretion, deems reasonable and necessary to protect
the integrity of the Proprietary Marks and the Popeyes System.
6.05. Death or Mental Incapacity. Upon the death or mental incapacity of
any person with an interest in this Agreement or in Developer, the executor,
administrator, or personal representative of such person shall transfer his
interest to a third party approved by Franchisor within twelve (12) months after
such death or mental incapacity. Such transfer, including, without limitation,
transfer by devise or inheritance, shall be subject to the same conditions as
any inter vivos transfer. However, in the case of transfer by devise or
inheritance, if the heirs or beneficiaries of any such person are unable to meet
the conditions in this Section VI, the personal representative of the deceased
Developer shall have a reasonable time, but no more than eighteen (18) months
after the death of the Developer, to dispose of the deceased's interest in this
Agreement and the business conducted pursuant hereto, which disposition shall be
subject to all the terms and conditions for assignments and transfers contained
in this Agreement. If the interest is not disposed of within twelve (12) or
eighteen (18) months, whichever is applicable, Franchisor may terminate this
Agreement pursuant to Section 5.03. hereof.
6.06. Right of First Refusal. Any party holding any interest in this
Agreement or in Developer, and who desires to accept any bona fide offer from a
third party to purchase such interest, shall notify Franchisor in writing of
such offer within ten (10) days of receipt of such offer, and shall provide such
information and documentation relating to the offer as Franchisor
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may require. Franchisor shall have the right and option, exercisable within
thirty (30) days after receipt of such written notification, to send written
notice to the seller that Franchisor intends to purchase the seller's interest
on the same terms and conditions offered by the third party. In the event that
Franchisor elects to purchase the seller's interest, closing on such purchase
must occur within sixty (60) days from the date of notice to the seller of the
election to purchase by Franchisor. Any material change in the terms of any
offer prior to closing shall constitute a new offer subject to the same rights
of first refusal by Franchisor as in the case of an initial offer. Failure of
Franchisor to exercise the option afforded by this Section 6.06. shall not
constitute a waiver of any other provisions of this Agreement, including all of
the requirements of this Section VI, with respect to a proposed transfer.
In the event the consideration, terms, and/or conditions offered by a third
party are such that Franchisor may not reasonably be required to furnish the
same consideration, terms, and/or conditions, then Franchisor may purchase the
interest in this Agreement, Developer, or Developer's business proposed to be
sold for the reasonable equivalent in cash. If the parties cannot agree within
a reasonable time as to the reasonable equivalent in cash of the consideration,
terms, and/or conditions offered by the third party, an independent appraiser
shall be designated by Franchisor, and his determination shall be binding upon
the parties.
6.07. Offerings by Developer. Securities or partnership interests in
Developer may be offered to the public, by private offering or otherwise, only
with the prior written consent of Franchisor, which consent shall not be
unreasonably withheld. All materials required for such offering by federal or
state law shall be submitted to Franchisor for review prior to their being filed
with any governmental agency; and any materials to be used in any exempt
offering shall be submitted to Franchisor for review prior to their use. No
offering of such securities shall imply (by use of the Proprietary Marks or
otherwise) that Franchisor is participating in the underwriting, issuance, or
offering of securities by Developer or Franchisor; and Franchisor's review of
any offering shall be limited solely to the subject of the relationship between
Developer and Franchisor. Developer and the other participants in the offering
must fully indemnify Franchisor in connection with the offering. For each
proposed offering, Developer shall pay to Franchisor a non-refundable fee of
Five Thousand Dollars ($5,000), or such greater amount as is necessary to
reimburse Franchisor for its reasonable costs and expenses associated with
reviewing the proposed offering, including, without limitation, legal and
accounting fees. Developer shall give Franchisor written notice at least thirty
(30) days prior to the date of commencement any offering or other transaction
covered by this Section 6.07.
VII. CONFIDENTIAL INFORMATION
7.01. Developer shall not, during the term of this Agreement or
thereafter, communicate, divulge, or use for the benefit of any other person,
persons, partnership, association, or corporation, any confidential information,
knowledge, or know-how concerning the construction and methods of operation of
any Franchised Unit which may be communicated to Developer, or of which
Developer may be apprised, by virtue of Developer's operation under the terms of
this Agreement. Developer shall divulge such confidential information only to
such employees of Developer as must have access to it in order to exercise the
development rights
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granted hereunder and to establish and operate the Franchised Units pursuant to
the Franchise Agreement and as Developer may be required by law, provided,
Developer shall give Franchisor prior written notice of any such required
disclosure immediately upon receipt of notice by Developer in order for
Franchisor to have the opportunity to seek a protective order or take such other
actions as it deems appropriate under the circumstances.
7.02. Any and all information, knowledge, and know-how, including, without
limitation, drawings, materials, equipment, recipes, prepared mixtures or blends
of spices or other food products, and other data, which Franchisor designates as
confidential, and any information, knowledge, or know-how which may be derived
by analysis thereof, shall be deemed confidential for purposes of this
Development Agreement, except information which Developer can demonstrate came
to Developer's attention prior to disclosure thereof by Franchisor or which, at
the time of disclosure thereof by Franchisor to Developer, had become a part of
the public domain, through publication or communication by others or which,
after disclosure to Developer by Franchisor, becomes a part of the public
domain, through publication or communication by others.
7.03. Developer shall require all of Developer's employees, as a condition
of their employment, to execute a confidentiality agreement, as provided in
writing by Franchisor, prohibiting them during the term of their employment, or
thereafter, from communicating, divulging, or using for the benefit of any
person, persons, partnership, association, or corporation any confidential
information, knowledge, or know-how concerning the methods of operation of the
franchised business which may be acquired during the term of their employment
with Developer. A duplicate original of each such agreement shall be provided
to Franchisor upon execution.
VIII. COVENANTS
8.01. Developer specifically acknowledges that, pursuant to this
Agreement, Developer will receive valuable specialized training and confidential
information, including, without limitation, information regarding the
operational, sales, promotional, and marketing methods and techniques of
Franchisor and the System. Developer covenants that, during the term of this
Agreement, except as otherwise approved in writing by Franchisor, Developer
(who, unless otherwise specified, shall include for purposes of this Section
VIII, collectively and individually, all officers, directors and holders of a
beneficial interest of five percent (5%) or more of the securities with voting
rights of Developer, and of any corporation directly or indirectly controlling
Developer, if Developer is a corporation, and the general partners and any
limited partners, including any corporation and the officers, directors and
holders of beneficial interests of five percent (5%) or more of the securities
with voting rights, of a corporation which controls, directly or indirectly, any
general or limited partner, if Developer is a partnership) shall not, either
directly or indirectly, for Developer or through or on behalf of, or in
conjunction with, any person, persons, partnership, or corporation:
A. Divert or attempt to divert any business or customer of the
Franchised Units to be developed hereunder to any competitor by direct or
indirect inducements or
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otherwise, or to do or perform, directly or indirectly, any other act
injurious or prejudicial to the goodwill associated with Franchisor's
Proprietary Marks and the System;
B. Employ or seek to employ any person who is at the time employed
by Franchisor or by any other Popeyes franchisees or otherwise, or directly
or indirectly induce such person to leave his or her employment; or
C. Own, maintain, operate, engage in, or have an interest in any
fast food (either takeout, on premises consumption, or a combination
thereof) restaurant that specializes in the sale of chicken ("Chicken
Restaurant"); provided, however, that the term "Chicken Restaurant" shall
not apply to any business operated by Developer under a franchise agreement
with Franchisor or an affiliate of Franchisor.
8.02. Developer covenants that, except as otherwise approved in writing
by the Franchisor, Developer shall not, either directly or indirectly, for
itself or through or on behalf of, or in conjunction with, any person, persons,
partnership or corporation, during the term hereof or for two (2) years
following expiration or termination of this Agreement, regardless of the cause
for termination, own, maintain, engage in, or have an interest in any Chicken
Restaurant which is located within a radius of ten (10) miles of the location of
any restaurant under the Popeyes System which is in existence as of the date of
expiration or termination of this Agreement.
8.03. At Franchisor's request, Developer shall require and obtain
execution of covenants similar to those set forth in this Section VIII
(including covenants applicable upon the termination of a person's relationship
with Developer) from all officers, directors, and holders of a direct or
indirect beneficial ownership interest of five percent (5%) or more in
Developer. Every covenant required by this Section 8.03. shall be in a form
satisfactory to Franchisor, including, without limitation, specific
identification of Franchisor as a third party beneficiary of such covenants with
the independent right to enforce them. Failure by Developer to obtain execution
of a covenant required by this Section 8.03. shall constitute a material breach
of this Agreement.
IX. NOTICES
Any and all notices required or permitted under this Agreement shall be in
writing and shall be delivered by any means which will provide evidence of the
date received to the respective parties at the following addresses unless and
until a different address has been designated by written notice to the other
party:
Notices to Franchisor: Franchise Department
AFC Enterprises, Inc.
Six Concourse Parkway, Suite 1700
Atlanta, Georgia 30328-5352
cc: Legal Department
Notices to Developer: ________________________
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________________________
________________________
Attention:______________
All written notices and reports permitted or required to be delivered by
the provisions of this Agreement shall be addressed to the party to be notified
at its most current principal business address of which the notifying party has
been notified and shall be deemed so delivered (i) at the time delivered by
hand; (ii) one (1) business day after sending by telegraph, facsimile or
comparable electronic system; or (iii) if sent by registered or certified mail
or by other means which affords the sender evidence of delivery, on the date and
time of receipt or attempted delivery if delivery has been refused or rendered
impossible by the party being notified.
X. NON-WAIVER
No failure of Franchisor to exercise any power reserved to it in this
Agreement, or to insist upon compliance by Developer with any obligation or
condition in this Agreement, and no custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of Franchisor's right
to demand exact compliance with the terms of this Agreement. Waiver by
Franchisor of any particular default shall not affect or impair Franchisor's
right with respect to any subsequent default of the same or of a different
nature, nor shall any delay, forbearance, or omission of Franchisor to exercise
any power or rights arising out of any breach or default by Developer of any of
the terms, provisions, or covenants of this Agreement, affect or impair
Franchisor's rights, nor shall such constitute a waiver by Franchisor of any
rights hereunder or right to declare any subsequent breach or default.
Subsequent acceptance by Franchisor of any payments due to it shall not be
deemed to be a waiver by Franchisor of any preceding breach by Developer of any
terms, covenants, or conditions of this Agreement.
XI. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
11.01. It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, that Developer
is an independent contractor, and that nothing in this Agreement is intended to
constitute either party an agent, legal representative, subsidiary, joint
venturer, partner, employee, or servant of the other for any purpose whatsoever.
11.02. Developer shall hold itself out to the public to be an independent
contractor operating pursuant to this Agreement. Developer agrees to take such
actions as shall be necessary to that end.
11.03. Developer understands and agrees that nothing in this Agreement
authorizes the Developer to make any contract, agreement, warranty, or
representation on Franchisor's behalf, or to incur any debt or any other
obligation in Franchisor's name, and that Franchisor shall in no event assume
liability for, or be deemed liable hereunder as a result of, any such action or
by reason of any act or omission of Developer, or any claim or judgement arising
therefrom. Developer shall indemnify and hold Franchisor and Franchisor's
officers, directors, shareholders,
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and employees, harmless against any and all such claims arising directly or
indirectly from, as a result of, or in connection with Developer's activities,
as well as the cost, including attorney's fees, of defending against such
claims.
11.04. Developer shall indemnify and hold Franchisor harmless for all
costs, expenses, or losses incurred by Franchisor in enforcing the provisions
hereof or in upholding the propriety of any action or determination by
Franchisor pursuant to this Agreement, or arising in any manner from Developer's
breach of or failure to perform any covenant or obligation hereunder, including,
without limitation, reasonable attorney's fees incurred by Franchisor in
connection with any litigation relating to any aspect of this Agreement, unless
Developer shall be found, after due legal proceedings, to have complied with all
of the terms, provisions, conditions and covenants hereof.
XII. APPROVALS
12.01. Whenever this Agreement requires the prior approval of
Franchisor, Developer shall make a timely written request to Franchisor
therefor, and, except as may otherwise be expressly provided herein, any
approval or consent granted shall be in writing.
12.02. Franchisor makes no warranties or guaranties upon which Developer
may rely, and assumes no liability or obligation to Developer or any third party
to which Franchisor would not otherwise be subject, by providing any waiver,
approval, advice, consent, or services to Developer in connection with this
Agreement, or by reason of any neglect, delay, or denial of any request
therefor.
XIII. ACKNOWLEDGMENT
13.01. Developer acknowledges that the success of the business venture
contemplated by this Agreement involves substantial business risks and will be
largely dependent upon the ability of Developer as an independent businessman.
Franchisor expressly disclaims the making of, and Developer acknowledges not
having received, any warranty or guaranty, expressed or implied, as to the
potential volume, profits, or success of the business venture contemplated by
this Agreement.
13.02. Developer acknowledges that Developer has received, read, and
understands this Agreement, the exhibits hereto, and agreements relating hereto,
if any; and the Franchisor has accorded Developer ample time and opportunity to
consult with advisors of Developer's own choosing about the potential benefits
and risks of entering into this Agreement.
13.03. Developer acknowledges that Developer has received a complete
copy of this Agreement, the exhibits hereto, and agreements relating hereto, if
any, at least five (5) business days prior to the date upon which this Agreement
was executed. Developer further acknowledges that Developer has received the
Uniform Franchise Offering Circular required by the Trade Regulation Rule of the
Federal Trade Commission entitled "Disclosure Requirements
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and Prohibitions concerning Franchising and Business Opportunity Ventures" at
least ten (10) business days prior to the date on which this Agreement was
executed.
XIV. SEVERABILITY AND CONSTRUCTION
14.01. Except as expressly provided to the contrary herein, each portion,
section, part, term, and/or provision of this Agreement shall be considered
severable; and if, for any reason, any section, part, term, and/or provision
herein is determined to be invalid and contrary to, or in conflict with, any
existing or future law or regulation by a court or agency having valid
jurisdiction, such shall not impair the operation, or have any other effect
upon, such other portions, sections, parts, terms, and/or provisions of this
Agreement as may remain otherwise intelligible, and the latter shall continue to
be given full force and effect to bind the parties; and said invalid portions,
sections, parts, terms, and/or provisions shall be deemed not to be part of this
Agreement.
14.02. Except as has been expressly provided to the contrary herein,
nothing in this Agreement is intended, nor shall be deemed, to confer upon any
person or legal entity other than Developer, Franchisor, Franchisor's officers,
directors, and employees, and Developer's and Franchisor's respective successors
and assigns as may be contemplated (and, as to Developer, permitted) by Section
VI hereof, any rights or remedies under or by reason of this Agreement.
14.03. Developer expressly agrees to be bound by any covenant or promise
imposing the maximum duty permitted by law which is subsumed within the terms of
any provision hereof, as though it were separately articulated in and made a
part of this Agreement, that may result from striking from any of the provisions
hereof any portion or portions which a court will hold to be unreasonable and
unenforceable in a final decision to which Franchisor is a party, or from
reducing the scope of any promise or covenant to the extent required to comply
with such court order.
14.04. All captions in this Agreement are intended solely for the
convenience of the parties, and none shall be deemed to affect the meaning or
construction of the provisions hereof.
14.05. All provisions of this Agreement which, by their terms or intent,
are designed to survive the expiration or termination of this Agreement, shall
so survive the expiration and/or termination of this Agreement.
14.06. This Agreement may be executed in multiple originals and each copy
so executed deemed an original.
XV. ENTIRE AGREEMENT AND APPLICABLE LAW
15.01. This Agreement, the documents referred to herein, and the exhibits
hereto, constitute the entire, full, and complete agreement between Franchisor
and Developer concerning the subject matter hereof and supersede any and all
prior agreements. Except for those permitted
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to be made unilaterally by Franchisor hereunder, no amendment, change, or
variance from this Agreement shall be binding on either party unless mutually
agreed to by the parties and executed by their authorized officers or agents in
writing.
15.02. Applicable Law. This Agreement takes effect upon its acceptance
--------------
and execution by Franchisor and shall be interpreted and construed under the
laws of the State of Georgia which laws shall prevail in the event of any
conflict of law (without regard to, and without giving effect to, the
application of Georgia choice of law or conflict of law rules) provided,
however, that if the covenants in Article VIII of this Agreement would not be
enforceable under the laws of Georgia, then such covenants shall be interpreted
and construed under the laws of the State in which the Developer operates the
Franchised Units developed hereunder, or in the State where Developer is
domiciled if Developer, at such time, is not operating any Franchised Units.
Nothing in this Section XV is intended by the parties to subject this Agreement
to any franchise or similar law, rule, or regulation of the State of Georgia to
which this Agreement would not otherwise be subject.
15.03. The parties agree that any action brought by Developer against
Franchisor in any court, whether federal or state, shall be brought within such
state and in the judicial district in which Franchisor has its principal place
of business. Any action brought by Franchisor against Developer in any court,
whether federal or state, may be brought within the state and in the judicial
district in which Franchisor has its principal place of business. Developer
hereby consents to personal jurisdiction and venue in the state and judicial
district in which the Franchisor has its principal place of business.
15.04. No right or remedy herein conferred upon or reserved to Franchisor
is exclusive of any other right or remedy herein, or by law or equity provided
or permitted; but each shall be cumulative of any other right or remedy provided
in this Agreement.
15.05. Nothing herein contained shall bar Franchisor's right to obtain
injunctive relief against threatened conduct that will cause it loss or damages,
under the usual equity rules, including the applicable rules for obtaining
restraining orders and preliminary injunctions.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed, and delivered this Agreement in multiple
originals as of the day and year first above-written.
AFC ENTERPRISES, INC.: DEVELOPER:
By: ________________________________ By: _______________________________
Title: _____________________________ Title: ____________________________
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EXHIBIT "A"
DEVELOPMENT SCHEDULE
CUMULATIVE
NUMBER OF NUMBER OF
FRANCHISED FRANCHISED
RESTAURANTS RESTAURANTS
TO BE OPENED AND TO BE OPEN AND IN
IN OPERATION DATE OPENED OPERATION
------------ ----------- ---------
TO BE INITIALED BY BOTH PARTIES:
FRANCHISOR: ________ DEVELOPER: _______
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EXHIBIT "B"
DESCRIPTION OF DEVELOPMENT AREA
(The following are specifically excluded from the Development Area: military
bases, public transportation facilities, toll road plazas, universities,
recreational theme parks and the interior-structural confines of shopping
malls).
TO BE INITIALED BY BOTH PARTIES
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EXHIBIT "C"
FRANCHISE AGREEMENT
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EXHIBIT 10.3
AMENDMENT TO POPEYES DEVELOPMENT AGREEMENT
(Non-Exclusive Development Agreement)
THIS AMENDMENT TO DEVELOPMENT AGREEMENT (this "Amendment") is made and
entered into this day of ___________________, 2000 by and between AFC
ENTERPRISES, INC., a Minnesota corporation, with its principal offices at Six
Concourse Parkway, Suite 1700, Atlanta, Georgia 30328-5352 (hereinafter referred
to as "Franchisor") and _______________________, with a mailing address at
__________________________(hereinafter referred to as "Developer").
W I T N E S S E T H:
-------------------
WHEREAS, Developer and Franchisor entered into a POPEYES Development
Agreement dated ___________ (hereinafter the "Development Agreement"); and
WHEREAS, Developer and Franchisor desire to amend the terms and conditions
of the Development Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree to
amend the Development Agreement as follows:
1. This Amendment shall be attached to, incorporated in, and become a
part of, the Development Agreement. The terms and conditions stated in this
Amendment, to the extent they are inconsistent with the terms and conditions
stated in the Development Agreement, shall prevail over the terms of the
Development Agreement.
2. Section 1.01 of the Development Agreement is hereby deleted in its
entirety and the following new provision is inserted in lieu thereof:
"1.01 Franchisor hereby grants the Developer, subject to the
terms and conditions of this Development Agreement and as long as
Developer shall not be in default of this Agreement or any other
development, franchise or other agreement between Developer and
Franchisor (or any parent, subsidiary or affiliate of Franchisor),
non-exclusive development rights to obtain franchises to establish
and operate _________ Franchised Units, and to use the POPEYES
System solely in connection therewith, at specific locations to be
designated in separate franchise agreements ("Franchise
Agreements"), executed as provided in Section 3.01 hereof, and
pursuant to the schedule set forth in Exhibit A to this Agreement
---------
("Development Schedule"). Each Franchised Unit developed pursuant
hereto shall be located in the area described in Exhibit B hereto
---------
("Development Area")."
3. Section 1.02 of the Development Agreement is hereby deleted in its
entirety and the following new provision is inserted in lieu thereof:
<PAGE>
1.02 This Agreement is non-exclusive. Franchisor retains the
right at all times to establish and/or to license others to
establish Franchised Units anywhere in the Development Area during
or after the term of this Development Agreement.
4. This Amendment and the documents referred to herein, constitute the
entire, full and complete agreement between Franchisor and Developer concerning
the subject matter hereof and supersede any and all prior agreements. No other
representations have induced Developer to execute this Amendment, and there are
no representations, inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein which are of any force or effect with
reference to this Amendment or otherwise. No amendment, change, or variance
from this Amendment shall be binding on either party unless executed in writing.
5. The Development Agreement and this Amendment shall be governed by the
laws of the State of Georgia, without regard to application of Georgia choice of
law rules.
6. The Development Agreement shall remain in full force and effect except
as specifically amended herein.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby
have executed this Amendment in triplicate on the day and year first written.
WITNESS: FRANCHISOR:
AFC ENTERPRISES, INC.
__________________________
By:_______________________
WITNESS: DEVELOPER:
__________________________
By:________________________