Area Development Agreement - BW-3 Franchise Systems Inc.
BW-3 FRANCHISE SYSTEMS, INC
AREA DEVELOPMENT AGREEMENT
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TABLE OF CONTENTS
ARTICLE PAGE
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I. GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
II. DEVELOPMENT FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
III. DEVELOPMENT SCHEDULE AND MANNER OF EXERCISING OPTIONS . . . . . . . . . . . .3
IV. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
V. YOUR DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
VI. PROPRIETARY MARKS/CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . .4
VII. DEFAULT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . .5
VIII. RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION . . . . . . . . .5
IX. YOUR ORGANIZATION, OPERATION AND OWNERSHIP. . . . . . . . . . . . . . . . . .6
X. TRANSFERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
XI. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
XII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
XIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION. . . . . . . . . . . . . . . . . .9
XIV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
XV. APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
XVI. ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXHIBITS
A. DESIGNATED TERRITORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. DEVELOPMENT SCHEDULE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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bw-3 FRANCHISE SYSTEMS, INC.
AREA DEVELOPMENT AGREEMENT
This Area Development Agreement (this "Agreement") is entered into this
______ day of ____________________, 19___ by and between bw-3 FRANCHISE SYSTEMS,
INC., an Ohio corporation which has its principal place of business at 1919
Interchange Tower, 600 South Highway 169, Minneapolis, Minnesota 55426 ("we" or
"us"), and _____________________________________________________________________
_________ which has its principal place of business at _________________________
________________________________________________________________________________
("you"). If you are a corporation, partnership or limited liability company,
certain provisions of the Agreement also apply to your owners and will be noted.
BACKGROUND:
A. Our parent company has developed a unique system ("System") for
establishing and operating restaurants which use the mark "BUFFALO WILD WINGS"
and which feature chicken wings, sandwiches, and other products and beverages,
which are all prepared according to specified recipes and procedures ("Menu
Items"), some of which use proprietary mixes ("Trade Secret Food Products"), and
has granted to us the right to sublicense the System to others.
B. The distinguishing characteristics of the System include, without
limitation, distinctive exterior and interior layout, design and color scheme,
signage, decorations, furnishings and materials, special recipes, formulae,
menus and food and beverage designations, Confidential Manuals, food and
beverage storage, preparation, service and delivery procedures and techniques,
operating procedures for sanitation and maintenance, and methods and techniques
for inventory and cost controls, record keeping and reporting, purchasing, sales
promotion and advertising, Trade Secret Food Products, if any, all of which may
be changed, improved and further developed from time to time.
C. Our parent company is the owner of the trade names, service marks
and trademarks "BUFFALO WILD WINGS", "bw-3" and such other trade names, service
marks, and trademarks as are now designated (and may later be designated by us
in writing) as part of the System ("Marks").
D. We grant to qualified persons options to obtain franchises to
develop and operate several Buffalo Wild Wings Restaurants offering food
products and services authorized and approved by us and utilizing the System and
Marks.
E. You have applied to obtain the right to develop Buffalo Wild Wings
Restaurants and your application has been approved by us in reliance upon all of
your representations.
F. You understand and acknowledge the importance of our high and
uniform standards of quality, operations, and service and the necessity of
operating your business in strict conformity with our standards and
specifications.
AGREEMENTS:
We and you agree as follows:
I. GRANT
A. We grant to you, under the terms and conditions of this Development
Agreement, options to obtain franchises to establish and operate _______________
___________________ (specify number) Buffalo Wild Wings Restaurants, (the
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"Franchised Restaurants") within the territory described on EXHIBIT A attached
hereto and incorporated herein by this reference ("Designated Territory").
B. You shall be bound by the development schedule ("Development
Schedule") set forth in Paragraph III.A. Time is of the essence. Each
Franchised Restaurant shall be established and operated pursuant to a separate
Franchise Agreement to be entered into by you and us pursuant to Paragraph
III.B. The Franchise Agreement (the "Franchise Agreement") shall be our
then-current form of Franchise Agreement which you acknowledge may be
substantially different from the form of Franchise Agreement currently used by
us.
C. If you are in compliance with the Development Schedule set forth on
EXHIBIT B ("Development Schedule"), we will not operate or grant anyone else a
franchise to operate a Buffalo Wild Wings or bw-3 Restaurant business in the
Designated Territory prior to the expiration of the Development Schedule, except
as otherwise provided in this Agreement.
D. You acknowledge and agree that we have the right, in our sole
discretion, to grant other franchises outside of the Designated Territory as we
deem appropriate. Although we will not operate a Buffalo Wild Wings or bw-3
business within the Designated Territory, we reserve the right, both within and
outside of the Designated Territory, to offer and sell at special events (at our
option, if you elect not to participate in such events) or at wholesale, through
channels of distribution distinct from those of a Franchised Restaurant,
products and services which comprise, or may in the future comprise a part of
the System, which products may be resold at retail to the general public by such
entities. Further, you acknowledge that certain locations within the Designated
Territory are by their nature unique and separate in character from sites
generally developed as Franchised Restaurants. As a result, you agree that the
following locations ("Special Sites") are excluded from the Designated Territory
and we shall have the right to develop (by direct ownership or franchising )
such locations: 1) public transportation facilities, including airports, train
stations and bus stations; 2) military bases; 3) sports facilities including
race tracks; and 4) amusement parks/theme parks. We also reserve the right to
market and sell Menu Items and Trade Secret Food Products on the Internet/World
Wide Web.
E. This Agreement is not a Franchise Agreement and you shall have no
right to use in any manner the Marks by virtue of this Agreement. You shall
have no right under this Agreement to subfranchise others to operate a business
or use the System or the Marks.
II. DEVELOPMENT FEE
A. As consideration for the rights and options granted herein, you pay
us a "Development Fee" of $___________, representing $12,500.00 times the number
of Franchised Restaurant for which you are granted options under this Agreement.
The Development Fee is consideration for this Agreement and not consideration
for any franchise agreement, is fully earned by us upon execution of this
Agreement and is non-refundable. In addition, you shall pay us an "Initial
Franchise Fee" of $12,500.00 for each of the Franchised Restaurants for which
you hold an option under this Agreement. The Initial Franchise Fee for the
first Franchised Restaurant shall be paid at the time of execution of this
Agreement, together with the execution by you of the Franchise Agreement for the
first Franchised Restaurant for which you hold an option. The total amount to
be paid by you at the time of execution of this Agreement pursuant to this
Paragraph, including both the Development Fee and the Initial Franchise Fee for
your first Franchised Restaurant is $_____________. The initial Franchise Fee
for each subsequent Franchised Restaurant for which you hold an option hereunder
shall be due as specified in Section II.B.
B. You shall submit a separate application for each Franchised
Restaurant to be established by you within the Designated Territory. Upon our
approval of the site of your Franchised Restaurant, a separate Franchise
Agreement shall be executed for each such Restaurant, at which time payment in
an amount equal to Twelve Thousand Five Hundred Dollars ($12,500) per Franchised
Restaurant is due and owing. Such payment represents the balance of the
appropriate individual franchise fee, as described above in Paragraph II.A.
Upon the execution of each Franchise Agreement, the terms and conditions of such
Franchise Agreement shall control the establishment and operation of such
Restaurant.
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III. DEVELOPMENT SCHEDULE AND MANNER OF EXERCISING OPTIONS
A. You will be bound by and strictly follow the Development Schedule.
Time is of the essence. By the dates set forth under the Development Schedule
("Option Period(s)"), you shall exercise options and enter into Franchise
Agreements with us pursuant to this Agreement for the number of Franchised
Restaurants described under the Development Schedule. You shall at all times
after the expiration of each of the Option Periods continuously maintain in
operation pursuant to each Franchise Agreement at least the number of Franchised
Restaurants set forth on the Development Schedule, provided however that such
obligation does not apply to facilities that are transferred in accordance with
the provisions of the Franchise Agreement, or are closed due to force majeure.
B. You will exercise each option for development of a Franchised
Restaurant granted under this Agreement by giving us written notice of your
intention to exercise such option at least thirty (30) days prior to the date
set forth in the Development Schedule by which you must execute a Franchise
Agreement for the particular Franchised Restaurant. After receipt of your
notice of intention to exercise, we have the right to review and approve you as
meeting our then-current standards for franchisees. You agree to cooperate with
us and furnish us with such information as we may request to make this
determination. Subject to our approval, you must execute the then-current form
of Franchise Agreement for the particular Franchised Restaurant and pay the
Initial Franchise Fee set forth in Paragraph II.B. by the deadline set forth in
the Development Schedule.
We will execute a Franchise Agreement with you only if (i) we approve you as
meeting our then-current standards for franchisees, (ii) you are in compliance
with all requirements and obligations of this Agreement and all other agreements
between us and you, and (iii) you are in compliance with all of your respective
obligations under individual franchise agreements.
IV. TERM
Unless sooner terminated in accordance with the terms of this Agreement,
the term of this Agreement and all rights granted hereunder shall expire on the
termination date of our acceptance and execution of a Franchise Agreement for
the last of the Buffalo Wild Wings Restaurants to be established pursuant to the
Development Schedule.
V. YOUR DUTIES
You shall perform the following obligations:
1. You shall comply with all terms and conditions set forth in
this Agreement.
2. You shall comply with all of the terms and conditions of each
Franchise Agreement. including without limitation the operating requirements
specified in each Franchise Agreement.
3. In accordance with the terms of Paragraph VI of this Agreement,
you shall at all times preserve in confidence any and all materials and
information furnished or disclosed to you by us and designated by us as
confidential, and you shall disclose such information or materials only to such
of your employees or agents who must have access to it in connection with their
employment. In accordance with the terms of Paragraph VI of this Agreement, you
shall not at any time, without our prior written consent, copy, duplicate,
record or otherwise reproduce such materials or information, in whole or in
part, nor otherwise make the same available to any unauthorized person.
4. You shall comply with all requirements of federal, state and
local laws, rules and regulations.
5. If you at some time in the future desire to make either a
public or a private offering of your securities, prior to such offering and
sale, and prior to the public release of any statements, data, or other
information of any kind relating to the proposed offering of your securities,
you shall secure our written approval, which approval shall not be unreasonably
withheld. You shall secure our prior written approval of any and all press
releases, news releases and any and all other publicity, the primary purpose of
which is in the public interest in its offering. Only after we have given our
written approval may you proceed to file, publish, issue, and release and make
public any said data, material
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and information regarding the securities offering. It is specifically
understood that any review by us is solely for our own information, and our
approval shall not constitute any kind of authorization, acceptance, agreement,
endorsement, approval, or ratification of the same, either expressly or implied.
You shall make no oral or written notice of any kind whatsoever indicating or
implying that we and/or our affiliates have any interest in the relationship
whatsoever to the proposed offering other than acting as Franchisor. You agree
to indemnify, defend, and hold us harmless, and our owners, directors, officers,
successors and assigns harmless from all claims, demands, costs, fees, charges,
liability or expense (including attorneys' fees) of any kind whatsoever arising
from your offering of information published or communicated in actions taken
with regard thereto.
VI. PROPRIETARY MARKS/CONFIDENTIALITY
A. Notwithstanding any provision to the contrary under this Agreement,
it is understood and agreed that this Agreement does not grant you any right to
use the Marks or to use any of our trade secret and/or Confidential Information,
as defined below. Further, it is understood and agreed that this Agreement does
not grant you any right to any copyright or patent which we now own or may later
own. Your license to use the Marks, trade secrets (and/or Confidential
Information), or copyrights is granted only under the individual Franchise
Agreements.
B. You and your owners, officers, directors, partners, members and
managers if any, acknowledge that your entire knowledge of the operation of a
Buffalo Wild Wings business including the knowledge or know-how regarding the
specifications, standards and operating procedures of the services and
activities, is derived from information disclosed to you by us and that certain
of such information is proprietary, confidential and constitute our trade
secrets. The term "trade secrets" refers to the whole or any portion of
know-how, knowledge, methods, specifications, processes, procedures and/or
improvements regarding the business that is valuable and secret in the sense
that it is not generally known to our competitors. You and your officers,
directors, shareholders, partners and members, if any, jointly and severally,
agree that at all times during and after the term of the franchise, you will
maintain the absolute confidentiality of all such proprietary information and
will not disclose, sell or use any such information in any other business or in
any manner not specifically authorized or approved in advance in writing by us.
C. You and your officers, directors, shareholders, partners, members
and, managers, if any, shall divulge such trade secret and confidential
information only to such of your employees as must have access to it in order to
perform obligations under this Agreement and the individual Franchise
Agreements. Any and all information, knowledge and know-how of ours, including,
without limitation, the Manuals, specifications and standards concerning the
operation of Franchised Restaurants and other materials and information provided
to us which we designate as confidential, shall be deemed confidential for
purposes of this Agreement, except information which you can demonstrate
lawfully came to your attention prior to disclosure by us, or which, at the time
of disclosure by us to you, had lawfully become a part of the public domain,
through publication or communication by others, or which, after disclosure to
you by us, lawfully becomes a part of the public domain, through publication or
communication by others. All references in this Agreement to the Manuals include
the entire series of Manuals we may designate as the Manuals, including, but not
limited to restaurant design criteria, restaurant operations, forms index,
approved vendors, and new products list.
D. Due to the special and unique nature of our trade secrets,
confidential information, proprietary marks and Manuals, you and your officers,
directors, shareholders, partners, members and managers, if any, hereby, jointly
and severally, agree and acknowledge that we shall be entitled to immediate
equitable remedies, including but not limited to, restraining orders and
injunctive relief in order to safeguard our proprietary, confidential, unique,
and special information and you acknowledge that money damages alone would be an
insufficient remedy with which to compensate us for any breach of the terms of
Paragraph VI of this Agreement. Furthermore, you agree that all of your
employees having access to our trade secrets, confidential and proprietary
information and any officers, directors, shareholders, partners, members,
managers and other employees designated by us shall be required to execute
confidentiality agreements acceptable to us.
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VII. DEFAULT AND TERMINATION
A. The options and territorial protection granted to you in this
Agreement have been granted in reliance on your representations and warranties,
and strictly on the conditions set forth in Paragraphs I and III of this
Agreement, including, without limitation, the condition that you comply strictly
with the Development Schedule.
B. You shall be deemed in default under this Agreement, and all rights
granted herein shall automatically terminate without notice if: (i) you become
insolvent, commit any affirmative action of insolvency or file any action or
petition of insolvency, (ii) a receiver (permanent or temporary) of your
property is appointed by a court of competent authority, (iii) you make a
general assignment for the benefit of your creditors, (iv) a final judgment
remains unsatisfied of record for thirty (30) days or longer (unless supersedeas
bond is filed), (v) execution is levied against your business or property, or
(vi) suit to foreclose any lien or mortgage against his premises or equipment is
instituted against you and not dismissed within thirty (30) days, or is not in
the process of being dismissed.
C. You shall further be deemed in default under this Agreement if you:
(i) fail to exercise options and enter into Franchise Agreements with us
pursuant to this Agreement for the Franchised Restaurants within any Option
Period as set forth on the Development Schedule, (ii) fail to comply with any
other terms and conditions of this Agreement, (iii) makes or attempts to make a
transfer or assignment in violation of Paragraph IX.C. hereof, or (iv) fails to
comply with the terms and conditions of any individual Franchise Agreement or of
any other agreement to which you and we are parties. Upon any such default, we,
in our discretion, may do any one or more of the following:
1. Terminate this Agreement and all rights granted hereunder
without affording you any opportunity to cure the default,
effective immediately upon receipt by you of written notice
from us;
2 Reduce the number of Franchised Restaurants, without any
reduction of the Development Fee, which are subject to options
granted to you pursuant to this Agreement;
3. Terminate or reduce in any manner, in our discretion, the
territorial protection granted to you in Paragraph I; and
4. Exercise any other rights and remedies which we may have.
D. Upon termination of the Agreement, all remaining options granted you
to establish Franchised Restaurants under this Agreement shall automatically be
revoked and shall be null and void. You shall not be entitled to any refund.
You shall have no right to establish or operate any business for which a
Franchise Agreement has not been executed by us. We shall be entitled to
establish, or to franchise others to establish, Franchised Restaurants in the
Designated Territory except as may be otherwise provided under any Franchise
Agreement which has been executed between us and you and which has not been
terminated. No default under this Agreement shall constitute a default under
any individual Franchise Agreement, except to the extent that any default under
this Agreement constitutes a default under the terms of any Franchise Agreement.
Notwithstanding the above, you must comply with the terms and conditions of each
Franchise Agreement.
E. No right or remedy herein conferred upon or reserved to us is
exclusive of any other right or remedy provided or permitted by law or equity.
VIII. RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION
Upon termination or expiration, this Agreement and all rights granted
hereunder to you shall forthwith terminate, and:
A. You shall immediately cease to operate your business under this
Agreement. and shall not thereafter, directly or indirectly, represent to the
public or hold yourself out as a present or former developer of ours.
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B. Except as permitted under the terms of any individual Franchise
Agreement in effect, you shall immediately and permanently cease to use, by
advertising or in any other manner whatsoever, any confidential methods,
procedures and techniques associated with the System, the Marks or any trade
name, trademark or service mark confusingly similar thereto, and any distinctive
form, slogans, signs, symbols, logos or devices associated with the Marks or
System. In particular, you shall cease to use, without limitation, all signs,
advertising materials, stationery, forms, and any other articles which display
the Marks associated with the System.
C. You shall take such action as may be necessary to cancel or assign
to us or our designee, at our option, any assumed name or equivalent
registration which contains the name or words "BUFFALO WILD WINGS ", "BW-3" or
any other Mark of ours, and you shall furnish us with evidence satisfactory to
us of compliance with this obligation within thirty (30) days after termination
or expiration of this Agreement.
D. You agree, in the event you continue to operate or subsequently
begin to operate any other business, not to use any reproduction, counterfeit,
copy or colorable imitation of the Marks either in connection with such other
business or the promotion thereof, which is likely to cause confusion, mistake
or deception, or which is likely to dilute our rights in and to the Marks and
further agrees not to utilize any designation of origin or description or
representation which falsely suggests or represents an association or connection
with us so as to constitute unfair competition. You shall make such
modifications or alterations to your operations (including, without limitation,
the changing of the telephone number) immediately upon termination or expiration
of this Agreement as may be necessary to prevent any association between us or
the System and any business thereon subsequently operated by you or others, and
shall make such specific additional changes thereto as we may request for that
purpose, including, without limitation, removal of all distinctive physical and
structural features identifying the System. In the event you fail or refuse to
comply with the requirements of this Paragraph, we shall have the right to enter
upon your premises, without being guilty of trespass or any other tort, for the
purpose of making or causing to be made such changes as may be required at your
expense, which expense you agree to pay upon demand.
E. You shall promptly pay all sums owing to us and our affiliates. In
the event of termination for any default by you, such sums shall include all
damages, costs, and expenses, including reasonable attorneys' fees, incurred by
us as a result of the default.
F. You shall pay to us all damages, costs and expenses, including
reasonable attorneys' fees, incurred by us subsequent to the termination or
expiration of the rights herein granted in obtaining injunctive or other relief
for the enforcement of any provisions of this Paragraph, Paragraph VI or
Paragraph X.
G. Upon termination or expiration of this Agreement, you shall assign
to us or our designee, all your right, title, and interest in and to your
telephone numbers and shall notify the telephone company and all listing
agencies of the termination or expiration of your right to use any telephone
number in any regular, classified or other telephone directory listing
associated with the Marks and to authorize transfer of same at our direction.
H. You shall comply with the covenants contained in Paragraphs VI and X
of this Agreement.
I. All of our and your obligations which expressly or by their nature
survive the expiration or termination of this Agreement shall continue in full
force and effect subsequent to and notwithstanding its expiration or termination
and until they are satisfied or by their nature expire.
The foregoing paragraphs in this Paragraph VIII are not intended and
shall not be interpreted to grant or entitle you to use any of the Marks or
other proprietary rights of ours or to obtain any of our trade secrets or
confidential information.
IX. YOUR ORGANIZATION, OPERATION AND OWNERSHIP
If you are a corporation, partnership, limited liability company or other
entity:
A. If we request from time to time, you shall furnish us with your
Articles of Incorporation, Articles of Organization, operating Agreement, By-
Laws and other governing documents (and any amendments or modifications
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thereof), minutes and resolutions and all agreements or other documents, records
and information pertaining to your existence and operation.
B. You shall confine your business activities exclusively to the
establishment, management and operation of Buffalo Wild Wings Restaurants
pursuant to agreements with us.
C. You shall, at the same time you execute this Agreement, and at such
other times as we may request, disclose the name and address of each person or
entity holding a beneficial interest in you, and you shall not issue any
additional securities, nor allow the "Transfer" (as defined in Paragraph X) of
any of your outstanding securities, except as provided in Paragraph X. You
shall cause all persons or entities owning any interest in you to sign the Owner
Agreement in the form we provide.
D. You shall at all times comply with all applicable laws, ordinances,
rules and regulations of governmental bodies.
X. TRANSFERABILITY
A. We have the right to transfer all or any part of our rights or
obligations under this Agreement to any person or legal entity.
B. This Agreement is entered into by us with specific reliance upon
your personal experience, skills and managerial and financial qualifications.
Consequently, this Agreement, and your rights and obligations under it, are and
shall remain personal to you. Any proposed Transfer by you or by any of your
investors (regardless of the form of Transfer) shall be subject to the same
terms and conditions contained in the first individual Franchise Agreement. As
used herein, the term "Transfer" shall mean any sale, assignment, gift, pledge,
mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial
order, merger, consolidation, share exchange, transfer by operation of law or
otherwise, whether direct or indirect, voluntary or involuntary, of this
Agreement or any interest in it, or any rights or obligations arising under it,
or of any material portion of your assets, or of any interest in you.
XI. COVENANTS
A. Unless otherwise specified, the term "you" as used in this Paragraph
XI shall include, collectively and individually, all subsidiary entities of
yours, all officers, directors, members, limited liability managers and holders
of a beneficial interest of the securities or other ownership interests in you,
and of any corporation or other entity directly or indirectly controlling you,
if you are a corporation, and the general partner and limited partners if you
are a partnership, and any member if you are a limited liability company.
B. You covenant that, during the term of this Agreement except as
otherwise approved in writing by us, you shall not, either directly or
indirectly, for yourself, or through, on behalf of, or in conjunction with any
person, persons, partnership, corporation or company:
1. Divert or attempt to divert any business or customers of the
Franchised Restaurants to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with the Marks or the System.
2. Employ or seek to employ any person who is at that time
employed by us or by any franchisee of ours, or otherwise directly or indirectly
induce or seek to induce such person to leave his or her employment.
3. Own, maintain, engage in, have any interest in, be employed in
any managerial capacity in or provide consulting services to any restaurant or
to any other business (including any business operated by you prior to entry
into this Agreement) which specializes, in whole or in part, in the wholesale or
retail sale or distribution of food and beverage products, catering or
restaurant delivery the same as or similar to the types of products or services
offered or provided in the System.
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C. You specifically acknowledge that you will receive valuable training
and trade secret and confidential information, including, without limitation,
information regarding the promotional, operational, sales, and marketing methods
and techniques of ours and the System. Accordingly, you covenant that, except
with our prior written approval, you shall not, for a period of two (2) years
after the expiration or termination of this Agreement, regardless of the cause
of termination, or within two (2) years of any Transfer own or operate, be
employed in any managerial capacity in or provide consulting services with
respect to the ownership and/or operation of, any restaurant or any other
business (excluding Franchised Restaurants developed pursuant to this Agreement)
which specialize, in whole or in part, in products or services the same as or
similar to the types of products and services offered or provided in the System.
D. Each of the foregoing covenants shall be construed as independent of
any other covenant or provision of this Agreement. If all or any portion of a
covenant in this Paragraph XI is held unreasonable or unenforceable by a court
or agency having valid jurisdiction in an unappealed final decision to which we
are a party, you shall be bound by any lesser covenant subsumed within the terms
of such covenant that imposes the maximum duty permitted by law, as if the
resulting covenant were separately stated in and made a part of this Paragraph
XI.
E. You understand and acknowledge that we have the right, in our sole
discretion, to reduce the scope of any covenant set forth in Paragraph XI in
this Agreement, or any portion thereof, without your consent, effective
immediately upon receipt by you of written notice thereof, and you agree that
you shall comply forthwith with any covenant as so modified, which shall be
fully enforceable notwithstanding the provisions of Paragraph XVII hereof.
F. We shall have the right to require all of your shareholders,
partners, members, managers and any personnel performing managerial or
supervisory functions and all personnel receiving special training from us to
execute similar covenants in a form satisfactory to us.
G. In addition to the foregoing covenants, you shall be bound by and
comply with the covenants contained in each individual Franchise Agreement
executed by you.
XII. NOTICES
Any and all notices required or permitted under this Agreement shall be
in writing and shall be personally delivered or mailed by certified mail, return
receipt requested, 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 us: bw-3 FRANCHISE SYSTEMS, INC.
1919 Interchange Tower
600 South Highway 169
Minneapolis, Minnesota 55426
Copy to: Mary Beth Brody, Esq.
Fredrikson & Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis, Minnesota 55402
Notices to you: At the address specified on Page 1 of this
Agreement.
Copy to:
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Any notice by certified mail shall be deemed to have been given at the
date and time of mailing.
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XIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
A. It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, 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. Each party to this Agreement is an independent
contractor, and neither shall be responsible for the debts or liabilities
incurred by the other.
B. You shall hold yourself out to the public as an independent
contractor operating pursuant to this Agreement. You agree to take such actions
as shall be necessary to that end.
C. You understand and agree that nothing in this Agreement authorizes
you to make any contract, agreement, warranty or representation on our behalf,
or to incur any debt or other obligation in our name, and that we assume no
liability for, and shall not be deemed liable by reason of, any act or omission
of yours in your conduct of the business under this Agreement, or any claim or
judgment arising therefrom. You agree to indemnify, defend, and hold us and our
affiliates harmless from and against any and all claims, losses, damages and
liabilities, however caused, arising directly or indirectly from, as a result
of, or in connection with, the development, use and operation of your Franchised
Restaurants, as well as the costs, including attorneys' fees, of defending
against them (hereinafter "Franchise Claims"). Franchise Claims include, but
are not limited to, those arising from any death, personal injury or property
damage (whether caused wholly or in part through our active or passive
negligence), latent or other defects in any Franchised Restaurant, or your
employment practices. In the event a Franchise Claim is made against us, we
reserve the right in our sole discretion to select our own legal counsel to
represent our interests, at your cost.
XIV. MISCELLANEOUS
A. Whenever this Agreement requires our prior approval or consent, you
shall make a timely written request to us, and, except as otherwise provided
herein, any approval or consent granted must be in writing to be binding upon
us.
B. We make no warranties or guarantees upon which you may rely and we
assume no liability or obligation to you or any third party to which we would
not otherwise be subject, by providing any waiver, approval, advice, consent or
services to you in connection with this Agreement, or by reason of any neglect,
delay or denial of any request therefor.
C. No failure of ours to exercise any power reserved to us in this
Agreement or to insist upon compliance by you 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 our rights to demand exact compliance
with the terms of this Agreement. Our waiver of any particular default shall
not affect or impair our right in respect to any subsequent default of the same
or of a different nature, nor shall any delay, forbearance, or omission of ours
to exercise any power or right arising out of any breach or default by you of
any of the terms, provisions, or covenants of this Agreement, affect or impair
our rights, nor shall such constitute a waiver by us of any rights hereunder or
rights to declare any subsequent breach or default.
D. Each term and provision of this Agreement shall be deemed severable.
Nothing in this Agreement shall confer upon any person or legal entity other
than us or you and such of their respective successors and assigns as may be
contemplated by Paragraph X hereof, any rights or remedies under or by reason of
this Agreement.
E. 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 any provision hereof. All references herein to gender and
number shall be construed to include such other gender and number as the context
may require, and all acknowledgements, promises, covenants, agreements and
obligations herein made or undertaken by or on behalf of you and by any of your
owners, directors, officers or employees shall be deemed jointly and severally
undertaken by all the parties hereto on your behalf.
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F. This Agreement constitutes the entire, full, and complete Agreement
between us and you concerning the subject matter hereof, and supersedes all
prior agreements. No amendment, change, or variance from this Agreement shall be
binding on either party unless mutually agreed to by the parties and executed by
the parties in writing.
G. For each business established pursuant to this Agreement, a separate
Franchise Agreement shall be executed and an Individual Franchise Fee as
prescribed by us shall be paid to us, subject only to the terms of Paragraph II
of this Agreement. You understand and agree that any and all Franchise
Agreements shall be construed and exist independently of this Agreement. The
continued existence of each such Franchise Agreement shall be determined by the
terms and conditions of such Franchise Agreement. Except as specifically set
forth in this Agreement, the establishment and operation of each business shall
be in accordance with the terms of the applicable Franchise Agreement.
XV. APPLICABLE LAW
A. THIS AGREEMENT TAKES EFFECT UPON ITS ACCEPTANCE AND EXECUTION BY
FRANCHISOR AND SHALL BE INTERPRETED AND CONSTRUED UNDER THE LAWS OF THE STATE IN
WHICH DEVELOPER'S FIRST FRANCHISED RESTAURANT IS TO BE LOCATED.
B. ANY ACTION SOUGHT TO BE BROUGHT BY EITHER PARTY SHALL BE BROUGHT IN
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA, OR THE DISTRICT
COURT FOR HENNEPIN COUNTY, STATE OF MINNESOTA, AND THE PARTIES DO HEREBY WAIVE
ALL QUESTIONS OF PERSONAL JURISDICTION OR VENUE FOR THE PURPOSES OF CARRYING OUT
THIS PROVISION.
C. NO RIGHT OR REMEDY CONFERRED UPON OR RESERVED TO FRANCHISOR OR
DEVELOPER BY THIS AGREEMENT IS INTENDED TO BE, NOR SHALL BE DEEMED, EXCLUSIVE OF
ANY OTHER RIGHT OR REMEDY HEREIN OR BY LAW OR EQUITY PROVIDED OR PERMITTED, BUT
EACH SHALL BE CUMULATIVE OF EVERY OTHER RIGHT OR REMEDY.
D. 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.
XVI. ACKNOWLEDGEMENTS
A. You acknowledge and agree that the success of the business venture
contemplated to be undertaken by you by virtue of this Agreement is speculative
and depends, to a large extent, upon your ability as an independent business
person, and your active participation in the daily affairs of the business as
well as other factors.
B. You represent and acknowledge that you have received, read and
understood this Agreement and our Uniform Franchise Offering Circular, that we
have fully and adequately explained the provisions of each to your satisfaction,
and that we have accorded you ample time and opportunity to consult with
advisors of your own choosing about the potential benefits and risks of entering
into this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and
delivered this Agreement in triplicate on the day and year first above written.
Your owners, directors and officers executing this Agreement below specifically
agree, jointly and severally, to be bound by their respective representations,
warranties and obligations hereunder.
ATTEST: bw-3 FRANCHISE SYSTEMS, INC.:
By:
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Witness
Its:
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ATTEST: DEVELOPER:
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By:
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Witness
Its:
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and
ATTEST: By:
--------------------------------
Its:
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Witness
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EXHIBIT A
DESCRIPTION OF DESIGNATED TERRITORY
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FRANCHISOR DEVELOPER
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EXHIBIT B
DEVELOPMENT SCHEDULE
You acknowledge and agree that a material provision of the Area
Development Agreement is that the following number of Buffalo Wild Wings
Restaurants must be opened and continuously operating in the Designated
Territory during the term of the Area Development Agreement in accordance with
the following Development Schedule:
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DATE BY WHICH THE CUMLATIVE NUMBER OF
DATE BY WHICH FRANCHISE RESTAURANT MUST BE FRANCHISED RESTAURANTS REQUIRED TO
AGREEMENT MUST BE SIGNED OPENED AND BE OPEN AND CONTINUOUSLY
RESTAURANT AND SITE APPROVAL REQUEST CONTINUOUSLY OPERATING OPERATING FOR BUSINESS IN THE
NUMBER MUST BE SUBMITTED TO US FOR BUSINESS IN THE DESIGNATED TERRITORY AS OF THE DATE
TERRITORY IN PRECEDING COLUMN
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1 Date of this Agreement 1
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2 2
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For purposes of determining compliance with the above Development Schedule, only
the Restaurants actually open and continuously operating for business in the
Designated Territory as of a given date will be counted toward the number of
Restaurants required to be open and continuously operating for business.
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