Franchise Agreement - Buffalo Wild Wings International Inc.
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
BETWEEN
BUFFALO WILD WINGS INTERNATIONAL, INC.
1600 UTICA AVENUE, SUITE 700
MINNEAPOLIS, MN 55416
AND
AUTHORIZED LOCATION:
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Street
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City State Zip Code
EFFECTIVE DATE:
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(To be completed by us)
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--TABLE OF CONTENTS--
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
SECTION PAGE
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1. DEFINITIONS..............................................................................................1
2. GRANT OF LICENSE.........................................................................................2
3. TRADEMARK STANDARDS AND REQUIREMENTS.....................................................................4
4. TERM AND RENEWAL.........................................................................................5
5. FACILITY STANDARDS AND MAINTENANCE.......................................................................6
6. PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS......................................................11
7. PERSONNEL AND SUPERVISION STANDARDS.....................................................................15
8. ADVERTISING.............................................................................................16
9. FEES, REPORTING AND AUDIT RIGHTS........................................................................18
10. YOUR OTHER OBLIGATIONS; NONCOMPETE COVENANTS............................................................20
11. TRANSFER OF FRANCHISE...................................................................................23
12. DISPUTE RESOLUTION......................................................................................26
13. DEFAULT AND TERMINATION.................................................................................27
14. POST-TERM OBLIGATIONS...................................................................................29
15. GENERAL PROVISIONS......................................................................................30
APPENDICES
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A. Trademarks
B. Designated Area
C. Addendum to Lease
D. Electronic Transfer of Funds Authorization
E. Gift Cards Participation Agreement
F. Enrollment Form and Portal Terms and Conditions
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BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
This Franchise Agreement is made this ____ day of , 2006 between BUFFALO WILD
WINGS INTERNATIONAL, INC., an Ohio corporation with its principal business
located at 1600 Utica Avenue South, Suite 700, Minneapolis, Minnesota 55416
("we" or "us"), and , a whose principal business address is
("franchisee" or "you"). If the franchisee is a corporation, partnership,
limited liability company or other legal entity, certain provisions to this
Agreement also apply to its owners.
RECITALS
A. Our parent company has developed a unique system for video
entertainment oriented, fast casual restaurants that feature chicken wings,
sandwiches, unique food service and other products, beverages and services using
certain standards and specifications;
B. Many of the food and beverage products are prepared according to
specified recipes and procedures, some of which include proprietary sauces and
mixes.
C. Our parent company owns the BUFFALO WILD WINGS(R) Trademark and
other trademarks used in connection with the operation of a BUFFALO WILD WINGS
restaurant;
D. Our parent company has granted to us the right to sublicense the
right to develop and operate BUFFALO WILD WINGS restaurants; and
E. You desire to develop and operate a BUFFALO WILD WINGS
restaurant and we, in reliance on your representations, have approved your
franchise application.
In consideration of the foregoing and the mutual covenants and
consideration below, you and we agree as follows:
DEFINITIONS
1. For purposes of this Agreement, the terms below have the
following definitions:
A. "Control Person" means the individual who has the authority to,
and does in fact, actively direct your business affairs in regard to
the Restaurant, is responsible for overseeing the general management
of the day-to-day operations of the Restaurant and has authority to
sign on your behalf on all contracts and commercial documents. The
Control Person is identified on the Ownership and Management
Addendum attached to this Agreement.
B. "Gross Sales" includes the total revenues and receipts from the
sale of all products, services and merchandise sold in your
Restaurant whether under any of the Trademarks or otherwise,
including any cover charges or fees, vending or similar activities
in your Restaurant or on its premises as well as all license and use
fees. Gross Sales excludes sales taxes.
C. "Menu Items" means the chicken wings, sandwiches and other
products and beverages prepared according to our specified recipes
and procedures, as we may modify and change them from time to time.
D. "Principal Owner" means any person or entity who, now or
hereafter, directly or indirectly owns a 10% or greater interest in
the franchisee when the franchisee is a corporation, limited
liability company, partnership, or a similar entity. However, if we
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are entering into this Agreement totally or partially based on the
financial qualifications, experience, skills or managerial
qualifications of any person or entity who directly or indirectly
owns less than a 10% interest in the franchisee, we have the right
to designate that person or entity as a Principal Owner for all
purposes under this Agreement. In addition, if the franchisee is a
partnership entity, then each person or entity who, now or hereafter
is or becomes a general partner is a Principal Owner, regardless of
the percentage ownership interest. If the franchisee is one or more
individuals, each individual is a Principal Owner of the franchisee.
Each franchisee must have at least one Principal Owner. Your
Principal Owner(s) are identified on the Ownership and Management
Addendum attached to this Agreement. Every time there is a change in
the persons who are your Principal Owners, you must, within 10 days
from the date of each such change, update the Ownership and
Management Addendum. As used in this Agreement, any reference to
Principal Owner includes all Principal Owners.
E. "Restaurant" means the BUFFALO WILD WINGS Restaurant you develop
and operate pursuant to this Agreement.
F. "System" means the BUFFALO WILD WINGS System, which consists of
distinctive food and beverage products prepared according to special
and confidential recipes and formulas with unique storage,
preparation, service and delivery procedures and techniques, offered
in a setting of distinctive exterior and interior layout, design and
color scheme, signage, furnishings and materials and using certain
distinctive types of facilities, equipment, supplies, ingredients,
business techniques, methods and procedures together with sales
promotion programs, all of which we may modify and change from time
to time.
G. "Trademarks" means the BUFFALO WILD WINGS Trademark and Service
Mark that have been registered in the United States and elsewhere
and the trademarks, service marks and trade names set forth on
Appendix A, as we may modify and change from time to time, and the
trade dress and other commercial symbols used in the Restaurant.
Trade dress includes the designs, color schemes and image we
authorize you to use in the operation of the Restaurant from time to
time.
H. "Unit General Manager" means the individual who (i) personally
invests his or her full time and attention and devotes his or her
best efforts to the on-premises general management of the day-to-day
operations of the Restaurant, (ii) meets our prior restaurant or
retail management experience requirements, and (iii) does not
participate in the active operation or management of any business
other than the Restaurant. The Unit General Manager must be
appointed at least 60 days prior to the Restaurant opening, fully
trained 20 days prior to the Restaurant opening and is or will be
identified on the Ownership and Management Addendum attached to this
Agreement.
GRANT OF LICENSE
2. The following provisions control with respect to the license
granted hereunder:
A. Authorized Location. We grant to you the right and license to
establish and operate a retail Restaurant identified by the BUFFALO
WILD WINGS Trademarks or such other marks as we may direct, to be
located at a location to be determined, in accordance with this
subparagraph or a location to be designated within 90 days from the
date of this Agreement (the "Authorized Location"). When a location
has been designated by you and approved by us, it will become part
of this subparagraph 2.A as if originally stated. If an Authorized
Location is not designated by you and approved by us within 90 days
from the date of this Agreement, we have the right to declare this
Agreement null and void without the return of any Initial Franchise
Fee or other amounts paid to us. You accept the license and
undertake the obligation to operate the Restaurant at the Authorized
Location using the Trademarks and the System in compliance with the
terms and conditions of this Agreement.
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B. Designated Area. You must locate and operate the Restaurant at an
Authorized Location within the area described in Appendix B (the
"Designated Area"). We and our affiliates will not locate and
operate or grant to anyone else a franchise to locate and operate a
BUFFALO WILD WINGS restaurant within the Designated Area so long as
this Agreement is in effect, except as provided in subparagraph 2.D.
You do not have any right to sublicense or subfranchise within or
outside of the Designated Area and do not have the right to operate
more than one Restaurant within the Designated Area.
C. Opening. You agree that the Restaurant will be open and operating
in accordance with the requirements of subparagraph 5.A within (i)
270 days from the date of this Agreement if the Restaurant is
located within an end cap, shopping mall, Special Site or other
similar location, or (ii) 365 days from the date of this Agreement
if the Restaurant is a free-standing building, unless in either case
we authorize in writing an extension of time. Notwithstanding the
foregoing, if you are entering this Agreement pursuant to an Area
Development Agreement executed between you and us, you agree to open
the Restaurant by the date stated in the Area Development Agreement.
If you fail to have your Restaurant open and in operation according
to the provisions of this subparagraph 2.C, we will have the right
to terminate this Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
D. Nonexclusivity; Our Reservation of Rights. The license is limited
to the right to develop and operate one Restaurant at the Authorized
Location located in the Designated Area, and does not include (i)
any right to sell products and Menu Items identified by the
Trademarks at any location other than the Authorized Location,
except for authorized catering and delivery services as noted in
subparagraph 2.E, or through any other channels or methods of
distribution, including the internet (or any other existing or
future form of electronic commerce), (ii) any right to sell products
and Menu Items identified by the Trademarks to any person or entity
for resale or further distribution, or (iii) any right to exclude,
control or impose conditions on our development of future
franchised, company or affiliate owned restaurants at any time or at
any location. You acknowledge that the consumer service area or
trade area of another BUFFALO WILD WINGS restaurant may overlap with
your Designated Area.
You also acknowledge and agree that we and our affiliates have the
right to operate and franchise others the right to operate restaurants or any
other business within and outside the Designated Area under trademarks other
than the BUFFALO WILD WINGS Trademarks, without compensation to any franchisee,
except that our operation of, or association or affiliation with, restaurants
(through franchising or otherwise) in the Designated Area that compete with
BUFFALO WILD WINGS restaurants in the video entertainment oriented, fast casual
restaurant segment will only occur through some form of merger or acquisition
with an existing restaurant chain (except as otherwise provided for in this
subparagraph). Outside of the Designated Area, we and our affiliates have the
right to grant other franchises or develop and operate company or affiliate
owned BUFFALO WILD WINGS restaurants and offer, sell or distribute any products
or services associated with the System (now or in the future) under the
Trademarks or any other trademarks, service marks or trade names or through any
distribution channel or method, all without compensation to any franchisee.
We and our affiliates have the right to offer, sell or distribute,
within and outside the Designated Area, any frozen, pre-packaged items or other
products or services associated with the System (now or in the future) or
identified by the Trademarks, or any other trademarks, service marks or trade
names, except for Prohibited Items (as defined below), through any distribution
channels or methods, without compensation to any franchisee. The distribution
channels or methods include, without limitation, grocery stores, club stores,
convenience stores, wholesale, hospitals, clinics, health care facilities,
business or industry locations (e.g. manufacturing site, office building),
military installations, military commissaries or the internet (or any other
existing or future form of electronic commerce). The Prohibited Items are the
following items that we will not sell in the Designated Area through other
distribution channels or methods: any retail food service Menu Items that are
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cooked or prepared to be served to the end user or customer for consumption at
the retail location (unless sold at the limited seating facilities referenced in
subparagraph (i) of the paragraph above). For example, chicken wings cooked and
served to customers at a grocery store or convenience store would be a
Prohibited Item, but the sale of frozen or pre-packaged chicken wings at a
grocery store or convenience store would be a permitted form of distribution in
the Designated Area.
You acknowledge and agree that certain locations within and outside
the Designated Area are by their nature unique and separate in character from
sites generally developed as BUFFALO WILD WINGS restaurants. As a result, you
agree that the following locations ("Special Sites") are excluded from the
Designated Area and we have the right, subject to our then-current Special Sites
Impact Policy, to develop or franchise such locations: (1) military bases; (2)
public transportation facilities; (3) sports facilities, including race tracks;
(4) student unions or other similar buildings on college or university campuses;
(5) amusement and theme parks; and (6) community and special events.
In addition, you acknowledge and agree that, subject to your right
of first refusal as set forth below, we and our affiliates have the right to
operate or franchise within and outside the Designated Area one or more
facilities selling, for dine in or take out, all or some of the Menu Items,
using the Trademarks or any other trademarks, service marks or trade names,
without compensation to any franchisee, provided, however, that such facilities
shall not have an interior area larger than 2,400 square feet and shall not have
seating capacity for more than 48 people ("Limited Seating Facilities"). If we
develop a model for a Limited Seating Facility and determine that your
Designated Territory is an appropriate market for such a facility, we will
provide to you a written offer ("Offer") specifying the terms and conditions for
your development of the Limited Seating Facility. You will have 90 days
following your receipt of the Offer to accept the Offer by delivering written
notice to us of your acceptance, provided that you are not in default under this
Agreement or any other Agreement with us or our affiliates. If you do not
provide written notice to us within the time period or if you are in default
under this Agreement or any other agreement with us or our affiliates, you will
lose the right to develop the Limited Seating Facility and we may develop or
franchise others to develop the Limited Seating Facility within your Designated
Area. You acknowledge and agree that if you accept the Offer, we may require you
to submit a full application, pay an initial fee and sign a new form of
franchise agreement.
E. Catering and Delivery. You may not engage in catering and
delivery services and activities within or outside of the Designated
Area, unless we authorize you in writing, as further described in
subparagraph 6.L. We and our affiliate companies will not engage in
catering and delivery services and activities in the Designated
Area; however, we have no obligation to enforce similar covenants
against any other franchisee.
TRADEMARK STANDARDS AND REQUIREMENTS
3. You acknowledge and agree that the Trademarks are our parent
company's property and it has licensed the use of the Trademarks to us with the
right to sublicense to others. You further acknowledge that your right to use
the Trademarks is specifically conditioned upon the following:
A. Trademark Ownership. The Trademarks are our parent company's
valuable property, and it is the owner of all right, title and
interest in and to the Trademarks and all past, present or future
goodwill of the Restaurant and of the business conducted at the
Authorized Location that is associated with or attributable to the
Trademarks. Your use of the Trademarks will inure to our parent
company's benefit. You may not, during or after the term of this
Agreement, engage in any conduct directly or indirectly that would
infringe upon, harm or contest our parent company's rights in any of
the Trademarks or the goodwill associated with the Trademarks,
including any use of the Trademarks in a derogatory, negative, or
other inappropriate manner in any media, including but not limited
to print or electronic media.
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B. Trademark Use. You may not use, or permit the use of, any
trademarks, trade names or service marks in connection with the
Restaurant except those set forth in Appendix A or except as we
otherwise direct in writing. You may use the Trademarks only in
connection with such products and services as we specify and only in
the form and manner we prescribe in writing. You must comply with
all trademark, trade name and service mark notice marking
requirements. You may use the Trademarks only in association with
products and services approved by us and that meet our standards or
requirements with respect to quality, mode and condition of storage,
production, preparation and sale, and portion and packaging.
C. Restaurant Identification. You must use the name BUFFALO WILD
WINGS GRILL & BAR as the trade name of the Restaurant and you may
not use any other mark or words to identify the Restaurant without
our prior written consent. You may not use any of the words BUFFALO,
WILD or WINGS or any of the other Trademarks as part of the name of
your corporation, partnership, limited liability company or other
similar entity. You may use the Trademarks on various materials,
such as business cards, stationery and checks, provided you (i)
accurately depict the Trademarks on the materials as we prescribe,
(ii) include a statement on the materials indicating that the
business is independently owned and operated by you, (iii) do not
use the Trademarks in connection with any other trademarks, trade
names or service marks unless we specifically approve in writing
prior to such use, and (iv) make available to us, upon our request,
a copy of any materials depicting the Trademarks. You must post a
prominent sign in the Restaurant identifying you as a BUFFALO WILD
WINGS franchisee in a format we deem reasonably acceptable,
including an acknowledgment that you independently own and operate
the Restaurant and that the BUFFALO WILD WINGS Trademark is owned by
our parent company and your use is under a license we have issued to
you. All your internal and external signs must comply at all times
with our outdoor/indoor guidelines and practices, as they are
modified from time to time.
D. Litigation. In the event any person or entity improperly uses or
infringes the Trademarks or challenges your use or our use or
ownership of the Trademarks, we will control all litigation and we
have the right to determine whether suit will be instituted,
prosecuted or settled, the terms of settlement and whether any other
action will be taken. You must promptly notify us of any such use or
infringement of which you are aware or any challenge or claim
arising out of your use of any Trademark. You must take reasonable
steps, without compensation, to assist us with any action we
undertake. We will be responsible for our fees and expenses with any
such action, unless the challenge or claim results from your misuse
of the Trademarks in violation of this Agreement, in which case you
must reimburse us for our fees and expenses.
E. Changes. You may not make any changes or substitutions to the
Trademarks unless we direct in writing. We reserve the right to
change the Trademarks at any time. Upon receipt of our notice to
change the Trademarks, you must cease using the former Trademarks
and commence using the changed Trademarks, at your expense. If the
changes to the Trademarks require substantial remodeling due to a
modernization in trade dress, the expenditure will be considered
toward the Maximum Modernization Amount described in subparagraph
5.E. If the changes to the Trademarks result in a required change to
outdoor signage, such changes will be subject to the provisions in
5.F.
TERM AND RENEWAL
4. The following provisions control with respect to the term and
renewal of this Agreement:
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A. Term. The initial term of this Agreement is 20 years, unless this
Agreement is sooner terminated in accordance with Paragraph 13. The
initial term commences upon the Effective Date (as defined in
subparagraph 15.S) of this Agreement. We may extend this initial
term in writing for a limited period of time not to exceed 6 months
to take into account the term of any applicable lease for the
Authorized Location.
B. Renewal Term and Conditions of Renewal. You may renew your
license for two renewal terms, (the first renewal term is 10 years;
the second renewal term is 5 years), provided that with respect to
each renewal: (i) you have given us written notice of your decision
to renew at least 6 months but not more than 12 months prior to the
end of the expiring term; (ii) you sign our then-current form of
franchise agreement (modified to reflect no additional renewal term
upon expiration and other modifications to reflect that the
agreement relates to the grant of a renewal), the terms of which may
differ from this Agreement, including higher fees and a modification
to the Designated Area (although in no event will the revised
Designated Area have a residential population of the lesser of
approximately 30,000 to 40,000 or the residential population that
existed as of the Effective Date); (iii) you have complied with the
provisions of subparagraph 5.E regarding modernization and, in
addition, 6 months prior to the end of the initial term, you perform
any further items of modernization and/or replacement of the
building, premises, trade dress, equipment and grounds as may be
necessary for your Restaurant to conform to the standards then
applicable to new BUFFALO WILD WINGS restaurants, regardless of the
cost of such modernizations and/or replacements, unless we determine
that you should relocate your Restaurant because your Authorized
Location no longer meets our then-current site criteria, in which
case you must comply with the 90 and 240 day relocation requirements
of subparagraph 5.D; (iv) you are not in default of this Agreement
or any other agreement pertaining to the franchise granted, have
satisfied all monetary and material obligations on a timely basis
during the term and are in good standing; (v) if leasing the
Restaurant premises (and not subject to relocation under (iii)
above), you have renewed the lease and have provided written proof
of your ability to remain in possession of the premises throughout
the renewal period; (vi) you comply with our then-current training
requirements; (vii) you pay us, at least 30 days prior to the end of
the expiring term, a renewal fee in the amount of $20,000; and
(viii) you and your Principal Owners and guarantors execute a
general release of claims in a form we prescribe.
C. Relocation Upon Renewal. If, as a condition of renewal, we
require you to relocate your Restaurant pursuant to subparagraph
4.B(iii) above, you may renew your license for two renewal terms
(the first renewal term for 15 years and the second renewal term for
5 years), provided that with respect to each renewal, you meet all
conditions stated in subparagraph 4.B.
FACILITY STANDARDS AND MAINTENANCE
5. You acknowledge and agree that we have the right to establish,
from time to time, quality standards regarding the business operations of
BUFFALO WILD WINGS restaurants and stores to protect the distinction, goodwill
and uniformity symbolized by the Trademarks and the System. Accordingly, you
agree to maintain and comply with our quality standards and agree to the
following terms and conditions:
A. Restaurant Facility; Site Under Control. You are responsible for
purchasing or leasing a site that meets our site selection criteria.
You must obtain our written consent to the site. Prior to granting
our consent to a site, you must have the site evaluated by the
proprietary site evaluator software that has been developed by
GeoVue, Inc. You must execute the Enrollment Form and Portal Terms
and Conditions attached as Appendix F and pay GeoVue, Inc. an
evaluation fee of $400 per site evaluated, but you must pay for the
rights to have at least 3 sites evaluated and these fees are non
refundable. If your authorized location is located in an area with a
lower population or smaller trade area, we may reduce the number of
required site evaluations. You may not use the Restaurant premises
or Authorized Location for any purpose other than the operation of a
BUFFALO WILD WINGS Restaurant during the term of this Agreement. We
make no guarantees concerning the success of the Restaurant located
on any site to which we consent.
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You may not open your Restaurant for business until we have notified
you in writing that you have satisfied your pre-opening obligations
as set forth in subparagraphs 5.A and 5.B and we have approved your
opening date. We are not responsible or liable for any of your
pre-opening obligations, losses or expenses you might incur for your
failure to comply with these obligations or your failure to open by
a particular date. We also are entitled to injunctive relief or
specific performance under subparagraph 12.C for your failure to
comply with your obligations.
In the event that you plan to enter into any type of lease for the
Restaurant premises, you must provide us a copy of the lease at
least 10 business days prior to the date you would execute the
lease; we reserve the right to, in such 10 days period, review and
approve or reject the lease. We have no responsibility for the
lease; it is your sole responsibility to evaluate, negotiate and
enter into the lease for the Restaurant premises. You and your
landlord are required to sign the Lease Addendum attached as
Appendix C. We require you submit the Lease Addendum to the landlord
at the beginning of your lease review and negotiation, although the
terms of the Lease Addendum may not be negotiated without our prior
approval. You must provide us a copy of the executed lease and Lease
Addendum within 5 days of their execution.
You must execute, and provide us an executed copy of your lease
(including an executed copy of the Lease Addendum) or the purchase
agreement for the selected and approved site for your Restaurant
within 120 days from the date of execution of this Agreement if the
Restaurant will be in a free standing location or within 90 days
from the execution of this Agreement if the selected and consented
to site for the Restaurant is in a non-free standing location. If
you fail to have your "site under control" (execute the lease or the
purchase agreement within the periods set forth in this
subparagraph), we will have the right to terminate this Agreement
without opportunity to cure pursuant to subparagraph 13.B.2.
B. Construction; Future Alteration. You must construct and equip the
Restaurant in strict accordance with our current approved
specifications and standards pertaining to equipment, inventory,
signage, fixtures, furnishings, accessory features (including sports
memorabilia) and design and layout of the building. You may not
commence construction of the Restaurant until you have received our
written consent to your building plans. If your Restaurant is not
constructed strictly according to the previously consented building
plans, we will not approve your Restaurant for opening. You will
have 30 days from the date we deny our approval for opening your
Restaurant to correct all the construction problems so that your
Restaurant is strictly constructed according to the consented
building plans. If you fail to correct the problems within the 30
day period we may immediately terminate this Agreement pursuant to
subparagraph 13.B.2. If the Restaurant opening is delayed for the
foregoing reasons, you will be responsible for any losses and costs
related to such delay.
Without limiting the generality of the prior paragraph, you must
promptly after obtaining possession of the site for the Restaurant:
(i) retain the services of one of our designated architects; and
(ii) retain the services a general contractors and audio/visual
equipment providers and installers, each of whom must have
successfully gone through our application process or otherwise been
approved by us in writing (although if this Agreement is for your
first BUFFALO WILD WINGS restaurant or if you or any of your
affiliates have failed to timely open any other BUFFALO WILD WINGS
restaurant in accordance with the terms of any franchise agreement
with us, you must use one of our designated general contractors and
audio/visual equipment provider and/or installers); (iii) have
prepared and submitted for our approval a site survey and basic
architectural plans and specifications (not for construction)
consistent with our general atmosphere, image, color scheme and
ambience requirements as set forth from time to time in the manuals
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for a BUFFALO WILD WINGS restaurant (including requirements for
dimensions, exterior design, materials, interior design and layout,
equipment, fixtures, furniture, signs and decorating); (iv) purchase
or lease and then, in the construction of the Restaurant, use only
the approved building materials, equipment, fixtures, audio visual
equipment, furniture and signs; (v) complete the construction and/or
remodeling, equipment, fixtures, furniture and sign installation and
decorating of the Restaurant in full and strict compliance with
plans and specifications we approve and all applicable ordinances,
building codes and permit requirements without any unauthorized
alterations; (vi) obtain all customary contractors' sworn statements
and partial and final waiver obtain all necessary permits, licenses
and architectural seals and comply with applicable legal
requirements relating to the building, signs, equipment and
premises, including, but not limited to, the Americans With
Disabilities Act; and (vii) obtain and maintain all required zoning
changes, building, utility, health, sanitation, liquor and sign
permits and licenses and any other required permits and licenses (if
this Agreement is for your first BUFFALO WILD WINGS restaurant or if
in any previous franchise agreement executed between you or any of
your affiliates and us, you or any of your affiliates have not met
your obligations regarding the build out of any previous BUFFALO
WILD WINGS restaurant, you must retain the services of a company
specialized in assisting restaurant operators during the
construction process to assist you in submitting, processing,
monitoring and obtaining in a timely manner all necessary
construction documents, licenses and permits and to advise you
throughout the construction of your Restaurant). It is your
responsibility to comply with the foregoing conditions.
If this is not your first BUFFALO WILD WINGS restaurant and you have
opened all others on a timely basis, you may request that we approve
a general contractor that is not on our current list of approved
suppliers. You must pay us a $5,000 processing fee to process your
request to qualify the general contractor. If you want to use an
audio/visual equipment provider/installer who is not on our list of
approved suppliers (whether it is for your first or any subsequent
restaurant), you must pay us $250 for any audio/visual equipment
provider/installer that you submit for our qualification. You also
must pay a bid review fee of $150 and a final inspection fee of $500
for audio/visual related services (in addition to travel expenses of
the inspector), regardless of whether you use a newly approved or
previously approved audio/visual provider and installer. Your
general contractor may not be your audio/visual equipment provider
and installer. You, your affiliates or your Principal Owners, or any
person related to, or any entity controlled by your Principal Owners
may not be your general contractor unless you have requested our
approval, you have paid the $5,000 qualification processing fee, and
we have approved your request. If you have signed an Area
Development Agreement for 8 or more restaurants, you also may
request approval an architect that is not on our list of approved
suppliers. The architect will be required to attend a two day
training session at our Minneapolis headquarters, at a cost of
$7,500.
Any change to the building plans or any replacement, reconstruction,
addition or modification in the building, interior or exterior decor
or image, equipment or signage of the Restaurant to be made after
our consent is granted for initial plans, whether at the request of
you or of us, must be made in accordance with specifications that
have received our prior written consent. You may not commence such
replacement, reconstruction, addition or modification until you have
received our written consent to your revised plans.
You must begin substantial construction (site work, utility
infrastructure and building erection) of the Restaurant at least 150
days before the deadline to open the Restaurant if the Restaurant
will be in a free standing location or at least 120 days before the
deadline to open the Restaurant if the Restaurant will be in a
non-free standing location. You must provide us weekly development
and construction reports in the form we designate from the date you
begin development until the date you open the Restaurant. For
instance, you must contact us weekly and provide checklists and
digital photos during construction. In addition, on or before the
deadlines to start construction you must submit to us executed
copies of any loan documents and any other document that proves that
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you have secured adequate financing to complete the construction of
the Restaurant by the date you are obligated to have the Restaurant
open and in operation. In the event that you fail to begin
construction or to secure financing pursuant to this paragraph, we
will have the right to terminate this Agreement without opportunity
to cure pursuant to subparagraph 13.B.2.
C. Maintenance. The building, equipment, fixtures, furnishings,
signage and trade dress (including the interior and exterior
appearance) employed in the operation of your Restaurant must be
maintained and refreshed in accordance with our requirements
established periodically and any of our reasonable schedules
prepared based upon periodic evaluations of the premises by our
representatives. Within a period of 30-45 days (as we determine
depending on the work needed) after the receipt of any particular
report prepared following such an evaluation, you must effect the
items of maintenance we designate, including the repair of defective
items and/or the replacement of irreparable or obsolete items of
equipment and interior signage. If, however, any condition presents
a threat to customers or public health or safety, you must effect
the items of maintenance immediately, as further described in
subparagraph 6.G. The items of maintenance generally result from
common wear and tear over a period of time, accidents or lack of
care. Examples include, but are not limited to, repairing or
replacing HVAC equipment, plumbing and electrical systems that are
not functioning properly; repairing a leaking roof; repairing or
replacing broken operational and audio-visual equipment; refreshing
general appearance items such as paint (interior and exterior) and
landscaping; replacing worn carpet, furniture and other furnishings;
and conducting routine maintenance of areas that affect the
appearance of the Restaurant and goodwill of the Trademarks such as
the appearance of the outdoor signage, the parking lot and dumpster
area. Items of maintenance will not be considered items of
modernization or replacement under subparagraph 5.E and, therefore,
any expenses for maintenance will not be counted towards the Maximum
Modernization Amount that you are required to spend pursuant to
subparagraph 5.E.
D. Relocation. If you need to relocate because of condemnation,
destruction, or expiration or cancellation of your lease for reasons
other than your breach, we will grant you authority to do so at a
site acceptable to us that is within your Designated Area; provided
that (i) the new site has been evaluated by the proprietary site
evaluator software that has been developed by GeoVue, Inc. (or by
the proprietary site evaluation system then being used by us) and
you have paid the $400 evaluation fee, provided, that you must
purchase the rights to have at least 3 sites evaluated unless we
determine your trade area does not require 3 evaluations; (ii) we
have consented in writing to the new site; (iii) the new Restaurant
is under construction within 90 days after you discontinue operation
of the Restaurant at the Authorized Location; and (iv) the new
Restaurant is open and operating within 240 days after construction
commences, all in accordance with our then-current standards. If you
voluntarily decide to relocate the Restaurant, your right to
relocate the Restaurant will be void and your interest in this
Agreement will be voluntarily abandoned, unless you have given us
notice of your intent to relocate not less than 60 days prior to
closing the Restaurant, have procured a site that has been evaluated
by the proprietary site evaluator software that has been developed
by GeoVue, Inc. (or by the proprietary site evaluation system then
being used by us) and accepted by us within 60 days after closing
the prior Restaurant, have opened the new Restaurant for business
within 180 days of such closure and complied with any other
conditions that we reasonably require. You must pay the costs of any
relocation, and we reserve the right to charge you for any
reasonable costs that we incur.
In the event your Restaurant is destroyed or damaged and you repair
the Restaurant at the Authorized Location (rather than relocate the
Restaurant), you must repair and reopen the Restaurant at the
Authorized Location in accordance with our then-current standards
for the destroyed or damaged area within 240 days of the date of
occurrence of the destruction or damage.
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You do not have the right to relocate in the event you lose the
right to occupy the Restaurant premises because of the cancellation
of your lease due to your breach. The termination or cancellation of
your lease due to your breach is grounds for immediate termination
under subparagraph 13.B.2.
E. Modernization or Replacement. From time to time as we require,
you must effect items of modernization and/or replacement of the
building, premises, trade dress, equipment and grounds as may be
necessary for your Restaurant to conform to the standards for
similarly situated new BUFFALO WILD WINGS restaurants. The maximum
cumulative amount (the "Maximum Modernization Amount") that you will
be required to spend during the initial term of this Agreement
depends on whether your Restaurant is a free standing location and
is established as follows:
(i) Free Standing Locations (a single use, single
tenant, unattached building or pad site). You will be
required to spend no more than $185,000 during the
initial 10 years of this Agreement and $50,000 during
years 11-15. If we do not require you to spend $185,000
during the first 10 years of the Agreement, we may
require you to spend the remaining amount, in addition
to the $50,000, during years 11-15. If we do not require
you to spend $235,000 during the first 15 years of this
Agreement, we may require you to spend the remaining
amount up to $235,000 during years 16-20.
(ii) Non-Free Standing Locations. You will be required
to spend no more than $155,000 during the initial 10
years of this Agreement and $25,000 during years 11-15.
If we do not require you to spend $155,000 during the
first 10 years of the Agreement, we may require you to
spend the remaining amount, in addition to the $25,000,
during years 11-15. If we do not require you to spend
$180,000 during the first 15 years of this Agreement, we
may require you to spend the remaining amount up to
$180,000 during years 16-20.
Notwithstanding the prior paragraphs, we will not require you to
make any modernization expenditures during the first three years of
this Agreement. Thereafter, however, you must complete to our
satisfaction any changes we require within 24 months from the date
you are notified of any required changes, except for outdoor signage
as set forth in subparagraph 5.F.
Each and every transfer of any interest in this Agreement or your
business governed by Paragraph 11 or renewal covered by Paragraph 4
is expressly conditioned upon your compliance with these
requirements at the time of transfer or renewal without regard to
the Maximum Modernization Amount.
The Maximum Modernization Amount will be adjusted every 5-year
period in accordance with any change in the National Consumer Price
Index - All Urban Consumers for the recently completed 5-year
period, as described in subparagraph 16.Q. The Maximum Modernization
Amount does not include any required expenditures for equipment or
leasehold improvements necessary to prepare new product offerings.
Furthermore, you must perform general, continued maintenance and
refreshing of the Restaurant premises whenever necessary as set
forth in subparagraph 5.C and at a cost not included in the Maximum
Modernization Amount.
You acknowledge and agree that the requirements of this subparagraph
5.E are both reasonable and necessary to insure continued public
acceptance and patronage of BUFFALO WILD WINGS restaurants and to
avoid deterioration or obsolescence in connection with the operation
of the Restaurant. If you fail to make any improvement as required
by this subparagraph or perform the maintenance described in
subparagraph 5.C, we may, in addition to our other rights in this
Agreement, effect such improvement or maintenance and you must
reimburse us for the costs we incur.
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F. Signage. The outdoor signage at your Restaurant must comply with
our then current specifications, which we may modify and change from
time to time due to modifications to the System, including changes
to the Trademarks. You must make such changes to the outdoor signage
as we require. We will pay for 1/3 of the cost to replace your
outdoor signage if: (i) your Restaurant's sign is less than 2 years
old and (ii) we require that you replace the sign within one year
from the date of notification. In any case, your failure to replace
the signage within 15 months from the date of notification will
constitute a default of this Agreement under Paragraph 13. Any
upgrades to the type or size of your outdoor signage will be at your
expense. Your costs for the signage will be included in the Maximum
Modernization Amount under subparagraph 5.E.
PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS
6. You must implement and abide by our requirements and
recommendations directed to enhancing substantial System uniformity. The
following provisions control with respect to products and operations:
A. Authorized Menu. Your business must be confined to the
preparation and sale of only such Menu Items and other food and
beverage products as we designate and approve in writing from time
to time for sale by your Restaurant. You must offer for sale from
the Restaurant all items and only those items listed as Menu Items
and other approved food and beverage products. We have the right to
make modifications to these items from time to time, and you agree
to comply with any modifications. You may not offer or sell any
other product or service at the Authorized Location without our
prior written consent.
B. Authorized Products and Ingredients. You must use in the
operation of the Restaurant and in the preparation of Menu Items and
other food and beverage products only the proprietary sauces and
mixes and other proprietary and non-proprietary ingredients,
recipes, formulas, cooking techniques and processes and supplies,
and must prepare and serve Menu Items and products in such portions,
sizes, appearance, taste and packaging, all as we specify in our
most current product preparation materials or otherwise in writing.
We will supply to you a copy of the current product preparation
materials prior to opening the Restaurant. You acknowledge and agree
that we may change these periodically and that you are obligated to
conform to the requirements. All supplies, including containers,
cups, plates, wrapping, eating utensils, and napkins, and all other
customer service materials of all descriptions and types must meet
our standards of uniformity and quality. You acknowledge that the
Restaurant must at all times maintain an inventory of ingredients,
food and beverage products and other products, material and supplies
that will permit operation of the Restaurant at maximum capacity.
C. Approved Supplies and Suppliers. We will furnish to you from time
to time lists of approved supplies or approved suppliers. You must
only use approved products, services, inventory, equipment,
fixtures, furnishings, signs, advertising materials, trademarked
items and novelties, and other items or services (collectively,
"approved supplies") in connection with the design, construction and
operation of the Restaurant as set forth in the approved supplies
and approved suppliers lists, as we may amend from time to time.
Although we do not do so for every item, we have the right to
approve the manufacturer, distributor and/or supplier of approved
supplies and in some instances, require that you use designated
sources or suppliers. Along with a number of other approval
criteria, to be an approved supplier, the supplier must have the
ability to provide the product and/or service, on a national basis,
to at least 80% of the then existing Restaurants. You acknowledge
and agree that certain approved supplies may only be available from
one source, and we or our affiliates may be that source. All
inventory, products, materials and other items and supplies used in
the operation of the Restaurant that are not included in the
approved supplies or approved suppliers lists must conform to the
specifications and standards we establish from time to time.
ALTHOUGH APPROVED OR DESIGNATED BY US, WE AND OUR AFFILIATES MAKE NO
WARRANTY AND EXPRESSLY DISCLAIM ALL WARRANTIES, INCLUDING WARRANTIES
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OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WITH
RESPECT TO SERVICES, PRODUCTS, EQUIPMENT (INCLUDING, WITHOUT
LIMITATION, ANY REQUIRED COMPUTER SYSTEMS), SUPPLIES, FIXTURES,
FURNISHINGS OR OTHER APPROVED ITEMS. IN ADDITION, WE DISCLAIM ANY
LIABILITY ARISING OUT OF OR IN CONNECTION WITH THE SERVICES RENDERED
OR PRODUCTS FURNISHED BY ANY SUPPLIER APPROVED OR DESIGNATED BY US.
OUR APPROVAL OR CONSENT TO ANY SERVICES, GOODS, SUPPLIERS, OR ANY
OTHER INDIVIDUAL, ENTITY OR ANY ITEM SHALL NOT CREATE ANY LIABILITY
TO US.
D. Computer System. You must purchase and use any computer system
that we develop or select for the Restaurant, including all future
updates, supplements and modifications (the "Computer System"). Any
updates, supplements or modifications are not subject to or part of
the Maximum Modernization Amount defined in subparagraph 5.E. The
Computer System may include all hardware and software used in the
operation of the Restaurant, including electronic point-of-sale cash
registers and back office programs used to record, analyze and
report sales, labor, inventory and tax information. The computer
software package developed for use in the Restaurant may include
proprietary software. You may be required to license the proprietary
software from us, an affiliate or a third party and you also may be
required to pay a software licensing or user fee in connection with
your use of the proprietary software. All right, title and interest
in the software will remain with the licensor of the software. The
computer hardware component of the Computer System must conform to
specifications we develop. We reserve the right to designate a
single source from whom you must purchase the Computer System. You
acknowledge and agree that we will have full and complete access to
information and data entered and produced by the Computer System.
You must, at all times, have at the Authorized Location internet
access with a form of high speed connection as we require and you
must maintain: (i) an email account for our direct correspondence
with the Control Person; and (ii) a separate email account for the
Restaurant.
E. Serving and Promotional Items. All sales promotion material,
customer goodwill items, cartons, containers, wrappers and paper
goods, eating and serving utensils and other items, and customer
convenience items used in the sales promotion, sale and distribution
of products covered by this Agreement are subject to our approval
and must, where practicable, contain one or more of the Trademarks.
We may require you to carry and offer for sale in the Restaurant a
representative supply of approved trademarked clothing and other
novelty items, including special promotional items that we develop
and market from time to time.
F. Health and Sanitation. Your Restaurant must be operated and
maintained at all times in compliance with any and all applicable
health and sanitary standards prescribed by governmental authority.
You also must comply with any standards that we prescribe. In
addition to complying with such standards, if the Restaurant is
subject to any sanitary or health inspection by any governmental
authorities under which it may be rated in one or more than one
classification, it must be maintained and operated so as to be rated
in the highest available health and sanitary classification with
respect to each governmental agency inspecting the same. In the
event you fail to be rated in the highest classification or receive
any notice that you are not in compliance with all applicable health
and sanitary standards, you must immediately notify us of such
failure or noncompliance.
G. Evaluations. We or our authorized representative have the right
to enter your Restaurant at all reasonable times during the business
day for the purpose of making periodic evaluations and to ascertain
if the provisions of this Agreement are being observed by you, to
inspect and evaluate your building, land and equipment, and to test,
sample, inspect and evaluate your supplies, ingredients and
products, as well as the storage, preparation and formulation and
the conditions of sanitation and cleanliness in the storage,
production, handling and serving. If we determine that any condition
in the Restaurant presents a threat to customers or public health or
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safety, we may take whatever measures we deem necessary, including
requiring you to immediately close the Restaurant until the
situation is remedied to our satisfaction. Our inspections and
evaluations may include a "mystery shopper" program from time to
time throughout the term of this Agreement. We hire various vendors
who send the "mystery shoppers" into the BUFFALO WILD WINGS
restaurants. You will be obligated to pay for 3 "mystery shopper"
visits during the first 3 months after you open your Restaurant. In
addition, any time you fail an evaluation, by us or by a mystery
shopper, you must pay the next three mystery shoppers we send to
your Restaurant. The current fee charged by the vendors is
approximately $100 fee per visit, which you must pay directly to the
vendor. The fee per visit includes the reimbursement of the tab paid
by the mystery shopper for the items consumed at your Restaurant
and, therefore, the actual fee for each visit will vary.
H. Period of Operation. Subject to any contrary requirements of
local law, your Restaurant must be opened to the public and operated
at least 12 hours each day of the year, although you have the option
to close your Restaurant on Thanksgiving, Christmas Eve, Christmas
Day and Easter. Any variance from this provision must be authorized
by us in writing. You acknowledge and agree that if your Restaurant
is closed for a period of 2 consecutive days or 5 or more days in
any 12-month period without our prior written consent, such closure
constitutes your voluntary abandonment of the franchise and business
and we have the right, in addition to other remedies provided for
herein, to terminate this Agreement. Acts of God, war, strikes,
riots or other force majeure cause preventing you temporarily from
complying with the foregoing will suspend compliance for the
duration of such interference.
I. Operating Procedures. You must adopt and use as your continuing
operational routine the required standards, service style,
procedures, techniques and management systems described in our
manuals or other written materials relating to product preparation,
menu, storage, uniforms, financial management, equipment, facility
and sanitation. We will revise the manuals and these standards,
procedures, techniques and management systems periodically to meet
changing conditions of retail operation in the best interest of
restaurants operating under the Trademarks. Any required standards
exist to protect our interests in the System and the Trademarks and
not for the purpose of establishing any control or duty to take
control over those matters that are reserved to you. You must use
your best efforts to promote and increase the sales and service of
Menu Items and to effect the widest and best possible distribution
throughout the Designated Area.
You acknowledge having received one copy of the manuals on loan from
us for the term of this Agreement. You acknowledge and agree that
the manuals and other system communications may only be available on
the internet or other online or computer communications. The manuals
at all times are our sole property. You must at all times treat the
manuals, and the information they contain, as secret and
confidential, and must use all reasonable efforts to maintain such
information as secret and confidential. We may from time to time
revise the contents of the manuals and you expressly agree to comply
with each new or changed requirement. You must at all times insure
that your copy of the manuals are kept current and up to date, and
in the event of any dispute as to the contents of said manuals, the
terms of the master copy of the manuals that we maintain are
controlling.
J. Confidential Information. You, the Principal Owners, the Unit
General Manager, your guarantors, officers, directors, members,
managers, partners, employees or agents, or any other individual or
entity related to, or controlled by, you may not, during the term of
this Agreement or thereafter, disclose, copy, reproduce, sell or use
any such information in any other business or in any manner not
specifically authorized or approved in advance in writing by us any
Confidential Information. For purposes of this Agreement,
"Confidential Information" means 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 and any proprietary information contained in the manuals
or otherwise communicated to you in writing, verbally or through the
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internet or other online or computer communications, and any other
knowledge or know-how concerning the methods of operation of the
Restaurant, as well as the content of this Agreement and any other
document executed in connection with this Agreement. Any and all
Confidential Information, including, without limitation, proprietary
ingredients, sauces and mixes, secret formulas and recipes, methods,
procedures, suggested pricing, specifications, processes, materials,
techniques and other data, may not be used for any purpose other
than operating the Restaurant. We may require that you obtain
nondisclosure and confidentiality agreements in a form satisfactory
to us from any persons owning a minority interest in the franchisee,
the Principal Owners, the Unit General Manager and other key
employees. You must provide executed copies of these agreements to
us upon our request. Notwithstanding the foregoing, you are
authorized to disclose the terms of this Agreement to any lender
providing you financing for the Restaurant as well as to your
landlord.
K. Vending Services. You may not install or maintain on the premises
of the Restaurant any newspaper racks, video games, jukeboxes, gum
machines, games, rides, vending machines, or other similar devices
without our prior written approval. If you install any such devices
without our prior written approval, you must remove them within 3
days from receiving written notice from us. Pool tables, cigarette
vending machines, gambling and gaming machines or games of chance
are not allowed. Any income from vending services in the Restaurant
or on its premises, regardless of which person or entity collects
the money, and regardless of whether we authorized you to install
them, must be included in Gross Sales for purposes of your Royalty
Fee and Advertising Fee. Upon our written approval, the money
derived from services provided by charitable organizations or
services that are for customer convenience, such as pay phones or
cash machines, will not be included in Gross Sales.
L. Catering and Delivery Services. If you want to offer catering or
delivery service to customers, you must obtain our prior written
approval, which we will not withhold unreasonably, although we
reserve the right to require you to offer catering service to
customers located within the Designated Area. Any catering or
delivery services must meet our written standards. You also must
charge the same price for products offered by the Restaurant whether
delivered or catered by or sold in the Restaurant. Any income from
catering or delivery services must be included in Gross Sales for
purposes of your Royalty Fee and Advertising Fee.
M. Compliance with Law; Licenses and Permits. You must at all times
maintain your premises and conduct your Restaurant operations in
compliance with all applicable laws, regulations, codes and
ordinances. You must secure and maintain in force all required
licenses, including a liquor license, permits and certificates
relating to your Restaurant. In the event your liquor license is
suspended or revoked, in addition to our right to terminate this
Agreement pursuant to subparagraph 13.B, we reserve the right to
charge you the Royalty Fee on the Gross Sales you would have
received on the lost liquor sales during the license suspension. We
will estimate the Gross Sales based on the prior year's Gross Sales
for the suspension period.
You acknowledge that you are an independent business and responsible
for control and management of your Restaurant, including, but not
limited to, the hiring and discharging of your employees and setting
and paying wages and benefits of your employees. You acknowledge
that we have no power, responsibility or liability in respect to the
hiring, discharging, setting and paying of wages or related matters.
You must immediately notify us in writing of any claim, litigation
or proceeding that arises from or affects the operation or financial
condition of your BUFFALO WILD WINGS business or Restaurant,
including any notices of health code violations or liquor license
violations.
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N. Participation in Internet Web Sites or Other Online
Communications. You must, at your expense, participate in our
BUFFALO WILD WINGS web site on the internet, our intranet system or
other online communications as we may require. For instance, you
must submit to us daily reports via our intranet system, as further
described in subparagraph 9.H. We have the right to determine the
content and use of our web site and intranet system and will
establish the rules under which franchisees may or must participate.
You may not separately register any domain name containing any of
the Trademarks nor participate in any web site that markets goods
and services similar to a BUFFALO WILD WINGS restaurant. We retain
all rights relating to our web site and intranet system and may
alter or terminate our web site or intranet system. Your general
conduct on our web site and intranet system or other online
communications and specifically your use of the Trademarks or any
advertising is subject to the provisions of this Agreement. You
acknowledge that certain information related to your participation
in our web site or intranet system may be considered Confidential
Information, including access codes and identification codes. Your
right to participate in our web site and intranet system, or
otherwise use the Trademarks or System on the internet or other
online communications, will terminate when this Agreement expires or
terminates.
O. System Modifications. You acknowledge and agree that we have the
right to modify, add to or rescind any requirement, standard or
specification that we prescribe under this Agreement to adapt the
System to changing conditions competitive circumstances, business
strategies, business practices and technological innovations and
other changes as we deem appropriate. You must comply with these
modifications, additions or rescissions at your expense, subject to
the requirements of subparagraph 5.E and any other express
limitations set forth in this Agreement.
P. Suggested Pricing Policies. We may, from time to time, make
suggestions to you with regard to your pricing policies.
Notwithstanding any suggestions, you have the sole and exclusive
right as to the minimum prices you charge for the services offered
at the Restaurant. We retain the right to establish maximum prices
to be charged by you for sales promotions or otherwise. Any list or
schedule of prices we furnish to you may, unless otherwise
specifically stated as to the maximum price, be treated as a
recommendation only and failure to accept or implement any such
suggestion will not in any way affect the relationship between you
and us.
PERSONNEL AND SUPERVISION STANDARDS
7. The following provisions and conditions control with respect to
personnel, training and supervision:
A. Supervision. You must have a Control Person and a Unit General
Manager that meet our standards and qualifications at all times
during the term of this Agreement. Your Control Person and Unit
General Manager must attend and successfully complete all required
training, as set forth in subparagraphs 7.B - E. Should any actions
(or inactions) of your Control Person or Unit General Manager cause
the individual to fail to meet our standards and qualifications or
should the action (or inaction) bring or tend to bring any of the
Trademarks into disrepute or impair or tend to impair your or your
Restaurant's reputation or the goodwill of the Trademarks, your
Restaurant or the BUFFALO WILD WINGS system, we have the right to
require that you replace the Control Person or Unit General Manager
with an individual who meets our standards and qualifications within
30 days. Any new Control Person or Unit General Manager must attend
and successfully complete our training requirements immediately
after being appointed by you. The Control Person and Unit General
Manager must insure that the Restaurant is operated in accordance
with the terms and conditions of this Agreement, although this in no
way relieves you of your responsibilities to do so. Your Control
Person also must be readily and continuously available to us. In
addition to the Control Person and your Unit General Manager, you
must have at least two assistant managers at all times during the
term of this Agreement.
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B. Training. You must, at your expense, comply with all of the
training requirements we prescribe for the Restaurant to be
developed under this Agreement. The Control Person, the Unit General
Manager and at least one of your assistant managers must attend
training and complete training to our satisfaction. The training
requirements may vary depending on our assessment of the experience
of the Control Person, the Unit General Manager and the assistant
managers or other factors specific to the Restaurant. In the event
you are given notice of default as set forth in subparagraphs 13.A
and B and the default relates, in whole or in part, to your failure
to meet any operational standards, we have the right to require as a
condition of curing the default that you, the Control Person, the
Unit General Manager and the assistant managers, at your expense,
comply with the additional training requirements we prescribe. Any
new Control Person or Unit General Manager must comply with our
training requirements immediately after being appointed by you.
Under no circumstances may you permit management of the Restaurant's
operations by a person who has not successfully completed to our
reasonable satisfaction all applicable training we require.
C. Ongoing Training. We may require the Control Person, the Unit
General Manager, the assistant managers and other key employees of
the Restaurant to attend, at your expense, ongoing training at our
training facility, the Authorized Location or other location we
designate. In addition, we may develop and require you to purchase
an in-restaurant training program.
D. Staffing. You will employ a sufficient number of competent and
trained employees to insure efficient service to your customers. You
must require all your employees to work in clean uniforms approved
by us, but furnished at your cost or the employees' cost as you may
determine. No employee of yours will be deemed to be an employee of
ours for any purpose whatsoever.
E. Attendance at Meetings. You and the Control Person must attend,
at your expense, all annual franchise conventions we may hold or
sponsor and all meetings relating to new products or product
preparation procedures, new operational procedures or programs,
training, restaurant management, sales or sales promotion, or
similar topics. If you or the Control Person are not able to attend
a meeting or convention, you must notify us prior to the meeting and
must have a substitute person acceptable to us attend the meeting.
In addition, your Unit General Manager(s) must attend the annual
training meeting for Unit General Managers that we may hold or
sponsor, at your own expense. We reserve the right to require that
you and/or your Control Person attend any additional meetings that
we deem appropriate under special circumstances, provided however,
that we will not require more than one additional meeting every year
and we will give you written notice of any such meeting at least 10
days prior to the meeting.
ADVERTISING
8. You agree to actively promote your Restaurant, to abide by all
of our advertising requirements and to comply with the following provisions:
A. Advertising Fund. You must pay to us an Advertising Fee as set
forth in subparagraph 9.C. All Advertising Fees will be placed in an
Advertising Fund that we own and manage. On behalf of our company
and affiliate owned restaurants (except for "Special Sites"), we
will pay the same Advertising Fee as similarly situated franchised
restaurants (based on age and type of location) in the same local
marketing area. The Advertising Fund is not a trust or escrow
account, and we have no fiduciary obligation to franchisees with
respect to the Advertising Fund; provided, however, we will make a
good faith effort to expend such fees in a manner that we determine
is in the general best interests of the System. We have the right to
determine the expenditures of the amounts collected and the methods
of marketing, advertising, media employed and contents, terms and
conditions of marketing campaigns and promotional programs. Because
of the methods used, we are not required to spend a prorated amount
on each restaurant or in each advertising market. We have the right
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to make disbursements from the Advertising Fund for expenses
incurred in connection with the cost of formulating, developing and
implementing marketing, advertising and promotional campaigns. The
disbursements may include payments to us for the expense of
administering the Advertising Fund, including accounting expenses
and salaries and benefits paid to our employees engaged in the
advertising functions. If requested, we will provide you an annual
unaudited statement of the financial condition of the Advertising
Fund.
B. Required Local Expenditures, Approved Materials. You must use
your best efforts to promote and advertise the Restaurant and
participate in any local marketing and promotional programs we
establish from time to time. In addition to the Advertising Fee, you
are required to spend 1/2% of your Gross Sales on approved local
marketing and promotion. Upon our request, you must provide us with
itemization and proof of marketing and an accounting of the monies
that you have spent for approved local marketing. If you fail to
make the required expenditure, we have the right to collect and
contribute the deficiency to the Advertising Fund. You must use only
such advertising materials as we furnish, approve or make available,
and the materials must be used only in a manner that we prescribe.
Furthermore, any promotional activities you conduct in the
Restaurant or on its premises are subject to our approval.
We will not unreasonably withhold approval of any sales promotion
materials and activities; provided that they are current, in good
condition, in good taste and accurately depict the Trademarks. You
must use point-of-sale posters or other promotional materials that
depict any of the Trademarks only in connection with your sale of
approved Menu Items at the Restaurant. Any point-of-sale posters or
other promotional materials used by you must be current and in good
condition. To that end, we may make available at a reasonable cost
to you annually or at other reasonable intervals, and when made
available you must purchase, a sales promotion kit containing new
point-of-sale and other promotional materials; however, the cost of
the sales promotion kit may be included from time to time as
determined by us in the Advertising Fee described in subparagraph
9.C.
C. Advertising Cooperatives. We have the right to designate local
advertising markets and if designated, you must participate in and
contribute to the cooperative advertising and marketing programs in
your designated local advertising market. If established, you must
contribute the 1/2% of Gross Sales you are required to spend on
local marketing and promotion to the local cooperative. If, however,
the cooperative votes to spend a percentage greater than 1/2% per
location, you must contribute such amount. Each BUFFALO WILD WINGS
restaurant, including those operated by us, our parent company or
our affiliates (except Special Sites) within a designated local
advertising area is a member of the local advertising cooperative
and each restaurant has one vote on all matters requiring a vote.
Each advertising cooperative will be required to adopt governing
bylaws that meet our approval. We will provide each advertising
cooperative with a sample form of bylaws, containing certain terms
and conditions that we require, although the bylaws can not modify
the voting structure set forth in this paragraph. You will be
required to contribute to the cooperative the percentage as
designated by a majority vote of the cooperative members. We reserve
the right to administer the advertising cooperatives' funds and
require payment from its members via electronic funds transfer. The
contribution amount designated by the cooperative must be on a
percentage of Gross Sales basis and per Restaurant, and must be at
least 1/2%. The members of each cooperative and their elected
officers will be responsible for the administration of the
advertising cooperative. Each advertising cooperative must engage
the services of a professional advertising agency or media buyer
that meets with our approval and has expertise in the industry and
in the particular market. Further, you must obtain our written
approval of all promotional and advertising materials, creative
execution and media schedules prior to their implementation. Each
advertising cooperative will be required to prepare annual financial
statements, which must be made available to all franchisee members
of the cooperative and to us upon request. Also, each advertising
cooperative must submit to us its meeting minutes upon our request.
We have the right to require advertising cooperatives to be formed,
changed, dissolved or merged.
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D. Yellow Pages. You must place a separate listing, or participate
in a joint listing, in the Yellow Pages of your local telephone
directory. The listing must contain such copy and proper use of the
Trademarks as we specify. The cost of the listing must be paid by
you or, in the case of a joint listing, by you and other
participating BUFFALO WILD WINGS restaurants. Your cost to advertise
in the yellow pages as we direct will be included as part of your
local advertising requirements under subparagraph 8.B. We will not
specify an unreasonably expensive listing; we may, however, require
you to advertise in more than one local telephone directory.
E. Gift Cards, Certificates and Checks. You must use and honor only
system-wide gift cards, certificates and checks that we designate
and you must obtain all certificates, cards or checks from an
approved supplier. We have developed a gift card program and require
that you sign the Participation Agreement attached as Appendix E. At
the time of termination or expiration, or the transfer of your
rights under this Agreement, you must pay all amounts owed by you
under the Participation Agreement, including those amounts from
purchased, but unredeemed, gift cards.
F. Grand Opening Promotion. You must conduct certain advertising and
public relations activities in connection with the opening of your
Restaurant, as we specify in writing. We require you to spend, in
addition to the required local advertising contribution described
above, $12,500 for such grand opening activities. In addition, you
must perform a grand opening as mandated by this paragraph every
time that you (i) relocate the Restaurant or (ii) reopen the
Restaurant after having it closed for 30 days or more. Upon our
request, you must provide to us proof of these expenditures. We have
the right, but not the obligation, to collect and administer these
funds on your behalf.
FEES, REPORTING AND AUDIT RIGHTS
9. You must pay the fees described below and comply with the
following provisions:
A. Initial Franchise Fee. You must pay to us a nonrefundable Initial
Franchise Fee of $___________. The Initial Franchise Fee, payable in
full on the date you sign this Agreement, is earned upon receipt and
is in consideration for our expenses incurred and services rendered
in granting you the franchise rights.
B. Royalty Fee. In addition to the Initial Franchise Fee, during the
full term of this Agreement and in consideration of the rights
granted to you, you must pay to us as a weekly Royalty Fee. The
Royalty Fee for the first half of the initial term of this Agreement
shall be an amount equal to 5% of Gross Sales. The Royalty Fee for
the second half of the initial term of this Agreement shall be an
amount equal to the greater of (i) 5% of Gross Sales or (ii) the
Royalty Fee being charged by us under our form of franchise
agreement being used by us at any time during the second half of the
initial term of the Agreement (or, if no form of franchise agreement
is being used by us on such date, the Royalty Fee being charged by
us under our latest form of franchise agreement), provided that the
Royalty Fee may not be increased by more than 1/2% at any time
during the initial term of the Agreement. The amount of the Royalty
Fee for any renewal term shall be that provided in the franchise
agreement executed for such renewal term.
C. Advertising Fee. You must pay to us a weekly Advertising Fee in
an amount equal to 3% of Gross Sales. We reserve the right to
increase this percentage upon 60 days written notice to you,
provided, however, that we may not increase the Advertising Fee by
more than 1/2% per year and that the Advertising Fee will not exceed
4% for the initial term of this Agreement. These fees are not held
by us in trust and become our property to be spent in accordance
with Paragraph 8 of this Agreement.
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D. Computations and Remittances. Except for the Initial Franchise
Fee, you must compute all amounts due and owing at the end of each
week's operation and remittance for the amounts must be made to us
on or before Friday of the following week, accompanied by the
reports required by subparagraph 9.H of this Agreement. We reserve
the right to change the reporting day of the week for any or all
amounts. You must certify the computation of the amounts in the
manner and form we specify, and you must supply to us any supporting
or supplementary materials as we reasonably require to verify the
accuracy of remittances. You waive any and all existing and future
claims and offsets against any amounts due under this Agreement,
which amounts you must pay when due. We have the right to apply or
cause to be applied against amounts due to us or any of our
affiliates any amounts that we or our affiliates may hold from time
to time on your behalf or that we or our affiliates owe to you.
Further, if you are delinquent in the payment of any amounts owed to
us, we have the right to require you to prepay estimated Royalty
Fees and Advertising Fees.
E. Electronic Transfer of Funds. You must sign an electronic
transfer of funds authorization, attached as Appendix D, to
authorize and direct your bank or financial institution to transfer
electronically, on a weekly basis, directly to our account or our
affiliates' and to charge to your account all amounts due to us or
our affiliates. You must maintain a balance in your account
sufficient to allow us and our affiliates to collect the amounts
owed when due. You are responsible for any penalties, fines or other
similar expenses associated with the transfer of funds described in
this subparagraph.
F. Interest Charges; Late Fees. Any and all amounts that you owe to
us or to our affiliates will bear interest at the rate of 18% per
annum or the maximum contract rate of interest permitted by
governing law, whichever is less, from and after the date of
accrual. In addition to interest charges on late Royalty Fee and
Advertising Fee payments, you must pay to us a service charge of
$150 for each delinquent report or payment that you owe to us under
this Agreement. A payment is delinquent for any of the following
reasons: (i) we do not receive the payment on or before the date
due; or (ii) there are insufficient funds in your bank account to
collect the total payment by a transfer of funds on or after the
date due. The service charge is not interest or a penalty, it is
only to compensate us for increased administrative and management
costs due to late payment.
G. Financial Planning and Management. You must record daily all
sales on a cash register tape or similar device. You must keep books
and records and submit reports as we periodically require, including
but not limited to a monthly profit plan, monthly balance sheet and
monthly statement of profit and loss, records of prices and special
sales, check registers, purchase records, invoices, sales summaries
and inventories, sales tax records and returns, payroll records,
cash disbursement journals and general ledger, all of which
accurately reflect the operations and condition of your Restaurant
operations. You must compile, keep and submit to us the books,
records and reports on the forms and using the methods of
bookkeeping and accounting as we periodically may prescribe. The
records that you are required to keep for your Restaurant must
include detailed daily sales, cost of sales, and other relevant
records or information maintained in an electronic media format and
methodology we approve. You must provide this information to us
according to reporting formats, methodologies and time schedules
that we establish from time to time. You also must preserve and
retain the books, records and reports for not less than 36 months.
You must allow us electronic and manual access to any and all
records relating to your Restaurant.
H. Reports and Audit. You must submit your Gross Sales daily via our
intranet system. You must verify the accuracy of the Gross Sales
figure on Friday of each week for the preceding week. Within 10 days
after the end of each month, you must submit to us a report with
respect to the preceding calendar month in the form and content as
we periodically prescribe. The report must include, but not be
limited to, the following information for the preceding month: (i)
amount of Gross Sales and gross receipts of the Restaurant, amount
of sales tax and the computation of the Royalty Fee and the
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Advertising Fee; (ii) quantities of products purchased and the
sources from which each were obtained; (iii) if we request, copies
of your most recent sales tax return, monthly sales summary and
monthly balance sheet and statement of profit and loss, including a
summary of your costs for utilities, labor, rent and other material
cost items (iv) if requested by us to verify your Gross Sales, all
such books and records as we may require under our audit policies
published from time to time. You also must, at your expense, submit
to us within 90 days after the end of each fiscal year a detailed
balance sheet, profit and loss statement and statement of cash flows
for such fiscal year, prepared on an accrual basis including all
adjustments necessary for fair presentation of the financial
statements. We may require that the annual financial statements be
reviewed by a certified public accountant. You must certify all
reports to be true and correct. You acknowledge and agree that we
have the right to impose these requirements on you regardless of
whether we impose the same requirement on our other franchisees.
We or our authorized representative have the right at all times
during the business day to enter the premises where your books and
records relative to the Restaurant are kept and to evaluate, copy
and audit such books and records. We also have the right to request
information from your suppliers and vendors. In the event that any
such evaluation or audit reveals any understatement of your Gross
Sales, Royalty Fees or Advertising Fees or a variance of 1.25% or
more from data reported to us in respect to any other item that is
material to the computation of fees or to the analysis of the
operation, you must pay for the audit, and in addition to any other
rights we may have, we have the right to conduct further periodic
audits and evaluations of your books and records as we reasonably
deem necessary for up to 3 years thereafter and any further audits
and evaluations will be at your sole expense, including, without
limitation, professional fees, travel, and room and board expenses
directly related thereto. Furthermore, if you intentionally
understate or underreport Gross Sales, Royalty Fees or Advertising
Fees at any time, or if a subsequent audit or evaluation conducted
within the 3-year period reveals any understatement of your Gross
Sales, Royalty Fees or Advertising Fees or a variance of 1.25% or
more from data reported to us in respect to any other item that is
material to the computation of fees or to the analysis of the
operation, in addition to any other remedies provided for in this
Agreement, at law or in equity, we have the right to terminate this
Agreement immediately. In order to verify the information that you
supply, we have the right to reconstruct your sales through the
inventory extension method or any other reasonable method of
analyzing and reconstructing sales. You agree to accept any such
reconstruction of sales unless you provide evidence in a form
satisfactory to us of your sales within a period of 14 days from the
date of notice of understatement or variance. You must fully
cooperate with us or our representative in performing these
activities and any expenses incurred by us from your lack of
cooperation shall be reimbursed by you.
We will keep your financial books, records and reports confidential,
unless the information is requested by tax authorities or used as
part of a legal proceeding or in a manner as set forth in
subparagraph 11.D.8 or where your information is grouped with
similar information from other restaurants to produce shared results
like high-low ranges or average gross sales or expenses on a
system-wide or regional basis.
YOUR OTHER OBLIGATIONS; NONCOMPETE COVENANTS
10. You agree to comply with the following terms and conditions:
A. Payment of Debts. You agree to pay promptly when due: (i) all
payments, obligations, assessments and taxes due and payable to us
and our affiliates, vendors, suppliers, lessors, federal, state or
local governments, or creditors in connection with your business;
(ii) all liens and encumbrances of every kind and character created
or placed upon or against any of the property used in connection
with the Restaurant or business; and (iii) all accounts and other
indebtedness of every kind incurred by you in the conduct of the
Restaurant or business. In the event you default in making any such
payment, we are authorized, but not required, to pay the same on
your behalf and you agree promptly to reimburse us on demand for any
such payment.
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B. Indemnification. You hereby waive all claims against us for
damages to property or injuries to persons arising out of the
operation of your Restaurant. You must fully protect, indemnify and
hold us and our owners, directors, officers, insurers, successors
and assigns and our affiliates harmless from and against any and all
claims, demands, damages and liabilities of any nature whatsoever
arising in any manner, directly or indirectly, out of or in
connection with or incidental to the operation of your Restaurant
(regardless of cause or any concurrent or contributing fault or
negligence of us or our affiliates) or any breach by you or your
failure to comply with the terms and conditions of this Agreement.
We also reserve the right to select our own legal counsel to
represent our interests, and you must reimburse us for all our costs
and all attorneys' fees immediately upon our request as they are
incurred.
We hereby waive all claims against you for damages to property or
injuries to persons arising out of the operation of our company or
affiliate owned restaurants. We must fully protect, indemnify and
defend you and your affiliates and hold you and them harmless from
and against any and all claims, demands, damages and liabilities of
any nature whatsoever arising in any manner, directly or indirectly,
out of or in connection with or incidental to the operation of our
company or affiliate owned restaurants (regardless of cause or any
concurrent or contributing fault or negligence of you) or any breach
by us or our failure to comply with the terms and conditions of this
Agreement.
C. Insurance. You must purchase and maintain in full force and
effect, at your expense and from a company we accept, insurance that
insures both you and us, our affiliates and any other persons we
designate by name. The insurance policies must include, at a
minimum: (i) special/causes of loss coverage forms (sometimes called
"All Risk coverage") on the Restaurant and all fixtures, equipment,
supplies and other property used in the operation of the Restaurant,
for full repair and replacement value of the machinery, equipment
and improvements, including full coverage for loss of income
resulting from damage to the Restaurant without any co-insurance
clause, except that an appropriate deductible clause is permitted;
(ii) business interruption insurance covering a minimum 12 months
loss of income, including coverage for our Royalty Fees; (iii)
comprehensive general liability insurance, including product
liability insurance and contractual liability insurance, with
minimum limits of $1,000,000 per occurrence and $2,000,000
aggregate; (iv) liquor liability coverage with minimum limits of
$1,000,000 per occurrence; (v) "Per Location" aggregate limits when
multiple restaurant locations are insured under one comprehensive
general liability policy and/or liquor liability policy(ies); (vi)
automobile liability insurance, including owned, hired and non-owned
vehicle coverage with a minimum combined single limit of $1,000,000
per claim (vii) workers' compensation and employer's liability
insurance covering all of your employees (viii) umbrella liability
insurance which also includes liquor liability, employers liability
and automobile liability, with minimum limits of $2,000,000 per
occurrence; (ix) Buffalo Wild Wings, Inc., Buffalo Wild Wings
International, Inc. and affiliates as named additional insureds on
all liability policies required by this subparagraph; (x) any other
such insurance coverages or amounts as required by law or other
agreement related to the Restaurant. The insurance coverages
referenced in (iii), (v), (vi), (vii), (viii), (ix) and (x) of this
subparagraph must commence as of the date of this Agreement. The
insurance coverages referenced in (i) and (ii) of this subparagraph
must commence as of the date construction begins at the Restaurant.
The liquor liability insurance referenced in (iv) of this
subparagraph must commence no later than the date that liquor begins
to arrive at the Restaurant site.
You must deliver to us at commencement and thereafter annually or at
our request a proper certificate evidencing the existence of such
insurance coverage and your compliance with the provisions of this
subparagraph. The insurance certificate must show our status as an
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additional insured (as noted in (ix) above) and provide that we will
be given 30 days' prior written notice of material change in or
termination or cancellation of the policy. We also may request
copies of all policies. We may from time to time modify the required
minimum limits (including a significant increase to the umbrella
policy referenced in (viii) above) and require additional insurance
coverages, by providing written notice to you, as conditions
require, to reflect changes in relevant circumstances, industry
standards, experiences in the BUFFALO WILD WINGS system, standards
of liability and higher damage awards. If you do not procure and
maintain the insurance coverage required by this Agreement
(including any modifications referenced in the preceding sentence),
we have the right, but not the obligation, to procure insurance
coverage and to charge same to you, together with a reasonable fee
for the expenses we incur in doing so, payable by you immediately
upon notice.
D. Noncompete Covenants. You agree that you will receive valuable
training and Confidential Information that you otherwise would not
receive or have access to but for the rights licensed to you under
this Agreement. You therefore agree to the following noncompetition
covenants:
1. Unless otherwise specified, the term "you" as used in
this subparagraph 10.D includes, collectively and
individually, your Control Person, all Principal Owners,
guarantors, officers, directors, members, managers,
partners, as the case may be, and holders of any
ownership interest in you. We may require you to obtain
from your Control Person and other individuals
identified in the preceding sentence a signed
non-compete agreement in a form satisfactory to us that
contains the non-compete provisions of this subparagraph
10.D.
2. You covenant that during the term of this Agreement
you will not, either directly or indirectly, for
yourself, or through, on behalf of, or in conjunction
with any person or entity, own, manage, operate,
maintain, engage in, consult with or have any interest
in any restaurant or food business other than one
authorized by this Agreement or any other agreement
between us and you, except if, at the Effective Date of
this Agreement, you operate or hold an interest in a
restaurant or food business other than a casual or fast
casual restaurant. Under no circumstances may you be a
member of a franchisee advisory council, committee,
board or other similar group for a restaurant or food
business, unless you receive our prior written approval.
3. You covenant that you will not, for a period of 2
years after the expiration or termination of this
Agreement, regardless of the cause of termination, or
within 2 years of the sale of the Restaurant or any
interest in you, either directly or indirectly, for
yourself, or through, on behalf of, or in conjunction
with any person or entity, own, manage, operate,
maintain, engage in, consult with or have any interest
in (i) a casual or fast casual restaurant that sells or
offers to dispense prepared food products the same as or
similar to the type sold in BUFFALO WILD WINGS
restaurants; (ii) a video entertainment oriented, casual
or fast casual restaurant or bar business; or (iii) any
business establishment that sells or offers to dispense
prepared chicken wings or legs:
a. At the premises of the former Restaurant;
b. Within a 5-mile radius of the former
Restaurant; or
c. Within a 5-mile radius of the location of
any other business or restaurant using the
BUFFALO WILD WINGS System, whether
franchised or owned by us or our affiliates.
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For purposes of this subparagraph, a video
entertainment oriented, casual or fast
casual restaurant or bar is one with more
than two screens, or any screen larger than
21 inches, available for the viewing of
different events.
4. You agree that the length of time in subpart (3) will
be tolled for any period during which you are in breach
of the covenants or any other period during which we
seek to enforce this Agreement. The parties agree that
each of the foregoing covenants will be construed as
independent of any other covenant or provision of this
Agreement.
TRANSFER OF FRANCHISE
11. You agree that the following provisions govern any transfer or
proposed transfer:
A. Transfers. We have entered into this Agreement with specific
reliance upon your financial qualifications, experience, skills and
managerial qualifications as being essential to the satisfactory
operation of the Restaurant. Consequently, neither your interest in
this Agreement nor in the Restaurant may be transferred or assigned
to or assumed by any other person or entity (the "assignee"), in
whole or in part, unless you have first tendered to us the right of
first refusal to acquire this Agreement in accordance with
subparagraph 11.F, and, if we do not exercise such right, unless our
prior written consent is obtained, the transfer fee provided for in
subparagraph 11.C is paid, and the transfer conditions described in
subparagraph 11.D are satisfied. Any sale (including installment
sale), lease, pledge, management agreement, contract for deed,
option agreement, assignment, bequest, gift or otherwise, or any
arrangement pursuant to which you turn over all or part of the daily
operation of the business to a person or entity who shares in the
losses or profits of the business in a manner other than as an
employee will be considered a transfer for purposes of this
Agreement. Specifically, but without limiting the generality of the
foregoing, the following events constitute a transfer and you must
comply with the right of first refusal, consent, transfer fee, and
other transfer conditions in this Paragraph 11:
1. Any change or any series of changes in the percentage
of the franchisee entity owned, directly or indirectly,
by any Principal Owner which results in any addition or
deletion of any person or entity who qualifies as a
Principal Owner;
2. Any change in the general partner of a franchisee
that is a general, limited or other partnership entity;
or
3. For purposes of this subparagraph 11.A, a pledge or
seizure of any ownership interests in you or in any
Principal Owner that affects the ownership of 25% or
more of you or any Principal Owner, which we have not
approved in advance in writing.
In the event of your insolvency or the filing of any petition by or
against you under any provisions of any bankruptcy or insolvency
law, if your legal representative, successor, receiver or trustee
desires to succeed to your interest in this Agreement or the
business conducted hereunder, such person first must notify us,
tender the right of first refusal provided for in subparagraph 11.F,
and if we do not exercise such right, must apply for and obtain our
consent to the transfer, pay the transfer fee provided for in
subparagraph 11.C, and satisfy the transfer conditions described in
subparagraph 11.D. In addition, you or the assignee must pay the
attorneys' fees and costs that we incur in any bankruptcy or
insolvency proceeding pertaining to you.
You may not place in, on or upon the location of the Restaurant, or
in any communication media or any form of advertising, any
information relating to the sale of the Restaurant or the rights
under this Agreement, without our prior written consent.
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B. Consent to Transfer. We will not unreasonably withhold our
consent to transfer, provided that all of the conditions described
in this Paragraph 11 have been satisfied. Application for our
consent to a transfer and tender of the right of first refusal
provided for in subparagraph 11.F must be made by submission of our
form of application for consent to transfer, which must be
accompanied by the documents (including a copy of the proposed
purchase or other transfer agreement) or other required information.
The application must indicate whether you or a Principal Owner
proposes to retain a security interest in the property to be
transferred. No security interest may be retained or created,
however, without our prior written consent and except upon
conditions acceptable to us. Any agreement used in connection with a
transfer shall be subject to our prior written approval, which
approval will not be withheld unreasonably. You immediately must
notify us of any proposed transfer and must submit promptly to us
the application for consent to transfer. Any attempted transfer by
you without our prior written consent or otherwise not in compliance
with the terms of this Agreement will be void, your interest in this
Agreement will be voluntarily abandoned, and it will provide us with
the right to elect either to deem you in default and terminate this
Agreement or to collect from you and the guarantors a transfer fee
equal to two times the transfer fee provided for in subparagraph
11.C.
C. Transfer Fee. You must pay to us a $12,500 transfer fee every
time you submit an application for consent to transfer. The transfer
fee must be submitted at the time you submit the application for
consent to transfer. If the transfer is part of a simultaneous,
multiple restaurant transfer, the transfer fee will be modified as
follows: the transfer fee for the first restaurant is $12,500, the
transfer fee for the second through tenth restaurants is $2,500 per
restaurant, with no additional transfer fee beyond the tenth
restaurant. If, however, our costs and expenses in reviewing and
processing the transfer, including attorneys' fees, exceed the
applicable transfer fee, then in addition to the transfer fee you
agree to cover those additional costs and expenses up to $10,000.
The transfer fee is nonrefundable even if, for any reason, the
proposed transfer does not occur, in which case the transfer fee you
paid us for the failed transfer will not be applied to any future
attempted transfer.
D. Conditions of Transfer. We condition our consent to any proposed
transfer, whether to an individual, a corporation, a partnership or
any other entity upon the following:
1. Assignee Requirements. The assignee must meet all of
our then-current requirements for any potential new
franchisee at the time of the proposed transfer.
2. Payment of Amounts Owed. All amounts owed by you to
us or any of our affiliates, your suppliers or any
landlord for the Restaurant premises and Authorized
Location, or upon which we or any of our affiliates have
any contingent liability must be paid in full.
3. Reports. You must have provided all required reports
to us in accordance with subparagraphs 9.G and H.
4. Modernization. You must have complied with the
provisions of subparagraph 5.E.
5. Guarantee. In the case of an installment sale for
which we have consented to you or any Principal Owner
retaining a security interest or other financial
interest in this Agreement or the business operated
thereunder, you or such Principal Owner, and the
guarantors, are obligated to guarantee the performance
under this Agreement until the final close of the
installment sale or the termination of such interest, as
the case may be.
6. General Release. You, each Principal Owner and each
guarantor must sign a general release of all claims
arising out of or relating to this Agreement, your
Restaurant or the parties' business relationship, in the
form we designate, releasing us and our affiliates.
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7. Execution of Then Current Franchise Agreement. The
assignee executes our then-current form of franchise
agreement (modified to reflect that the term is only the
remainder of the term under this Agreement and other
modifications to reflect that the agreement relates to a
transfer), the terms of which may differ from this
Agreement, including higher fees and modifications to
the Designated Area (although in no event will the
revised Designated Area have a residential population of
the lesser of approximately 30,000 to 40,000 or the
residential population that existed as of the Effective
Date).
8. Training. The assignee must, at your or assignee's
expense, comply with the training requirements of
subparagraph 7.B.
9. Financial Reports and Data. We have the right to
require you to prepare and furnish to assignee and/or us
such financial reports and other data relating to the
Restaurant and its operations reasonably necessary or
appropriate for assignee and/or us to evaluate the
Restaurant and the proposed transfer. You agree that we
have the right to confer with proposed assignees and
furnish them with information concerning the Restaurant
and proposed transfer without being held liable to you,
except for intentional misstatements made to an
assignee. Any information furnished by us to proposed
assignees is for the sole purpose of permitting the
assignees to evaluate the Restaurant and proposed
transfer and must not be construed in any manner or form
whatsoever as earnings claims or claims of success or
failure.
10. Other Franchise Agreements. You must be in full
compliance with all your obligations under any and all
Franchise Agreements and Area Development Agreements
executed between you and us.
11. Other Conditions. You must have complied with any
other conditions that we reasonably require from time to
time as part of our transfer policies, provided that
such conditions will not be more stringent than any
conditions otherwise imposed on new franchisees signing
the then current franchise agreement.
E. Death, Disability or Incapacity. If any individual who is a
Principal Owner dies or becomes disabled or incapacitated and the
decedent's or disabled or incapacitated person's heir or
successor-in-interest wishes to continue as a Principal Owner, such
person or entity must apply for our consent under subparagraph 11.B,
comply with the training requirements of subparagraph 7.B if the
Principal Owner also was the Control Person (unless the heir or
successor-in-interest finds another Principal Owner to qualify as
the Control Person), pay the applicable transfer fee under
subparagraph 11.C, and satisfy the transfer conditions under
subparagraph 11.D, as in any other case of a proposed transfer, all
within 180 days of the death or event of disability or incapacity.
During any transition period to an heir or successor-in-interest,
the Restaurant still must be operated in accordance with the terms
and conditions of this Agreement. If the assignee of the decedent or
disabled or incapacitated person is the spouse or child of such
person, no transfer fee will be payable to us and we will not have a
right of first refusal as set forth in subparagraph 11.F.
F. Right of First Refusal. If you propose to transfer or assign this
Agreement or your interest herein or in the business, in whole or in
part, to any third party, including, without limitation, any
transfer contemplated by subparagraph 11.E or any transfer described
in subparagraph 11.A, you first must offer to sell to us your
interest under the same terms. In the event of a bona fide offer
from such third party, you must obtain from the third-party offeror
and deliver to us a statement in writing, signed by the offeror and
by you, of the terms of the offer. In the event the proposed
transfer results from a change in control of the franchisee or a
Principal Owner under subparagraphs 11.A.1 through 11.A.3, or your
insolvency or the filing of any petition by or against you under any
provisions of any bankruptcy or insolvency law, you first must offer
to sell to us your interest in this Agreement and the land,
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building, equipment, furniture and fixtures, and any leasehold
interest used in the operation of your Restaurant. Unless otherwise
agreed to in writing by us and you, the purchase price for our
purchase of assets in the event of a transfer that occurs by a
change in control or insolvency or bankruptcy filing will be
established by a qualified appraiser selected by the parties and in
accordance with the price determination formula established in
subparagraph 14.B in connection with an asset purchase upon
expiration. In addition, unless otherwise agreed to in writing by us
and you, the transaction documents, which we will prepare, will be
those customary for this type of transaction and will include
representations and warranties then customary for this type of
transaction. If the parties cannot agree upon the selection of such
an appraiser, a Judge of the United States District Court for the
District in which the Authorized Location is located will appoint
one upon petition of either party.
You or your legal representative must deliver to us a statement in
writing incorporating the appraiser's report and all other
information we have requested. We then have 45 days from our receipt
of the statement setting forth the third-party offer or the
appraiser's report and other requested information to accept the
offer by delivering written notice of acceptance to you. Our
acceptance of any right of first refusal will be on the same price
and terms set forth in the statement delivered to us; provided,
however, we have the right to substitute equivalent cash for any
noncash consideration included in the offer. If we fail to accept
the offer within the 45-day period, you will be free for 60 days
after such period to effect the disposition described in the
statement delivered to us provided such transfer is in accordance
with this Paragraph 11. You may effect no other sale or assignment
of you, this Agreement or the business without first offering the
same to us in accordance with this subparagraph 11.F.
G. Transfer to Immediate Family Members. If the assignee is your
spouse or child, no transfer fee will be payable to us, although you
must reimburse us for our reasonable expenses, in an amount not to
exceed $3,500. Further, if the transfer is to a spouse or child, we
will waive our right of first refusal described in subparagraph 11.F
and will not require that the individual execute the then-current
franchise agreement, as required by subparagraph 11.D.E. All other
provisions of this Paragraph 11 apply in full force and effect to
the type of transfer described in this subparagraph.
H. Transfer by Us. We have the right to sell or assign, in whole or
in part, our interest in this Agreement.
DISPUTE RESOLUTION
12. The following provisions apply with respect to dispute
resolution:
A. Arbitration; Mediation. Except as qualified below, any dispute
between you and us or any of our or your affiliates arising under,
out of, in connection with or in relation to this Agreement, any
lease or sublease for the Restaurant or Authorized Location, the
parties' relationship, or the business must be submitted to binding
arbitration under the authority of the Federal Arbitration Act and
must be arbitrated in accordance with the then-current rules and
procedures and under the auspices of the American Arbitration
Association. The arbitration must take place in Minneapolis,
Minnesota, or at such other place as may be mutually agreeable to
the parties. Any arbitration must be resolved on an individual basis
and not joined as part of a class action or the claims of other
parties. The arbitrators must follow the law and not disregard the
terms of this Agreement. The decision of the arbitrators will be
final and binding on all parties to the dispute; however, the
arbitrators may not under any circumstances: (i) stay the
effectiveness of any pending termination of this Agreement; (ii)
assess punitive or exemplary damages; or (iii) make any award which
extends, modifies or suspends any lawful term of this Agreement or
any reasonable standard of business performance that we set. A
judgment may be entered upon the arbitration award by any state or
federal court in Minnesota or the state of the Authorized Location.
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Before the filing of any arbitration, the parties agree to mediate
any dispute that does not include injunctive relief or specific
performance actions covered under subparagraph 12.B, provided that
the party seeking mediation must notify the other party of its
intent to mediate prior to the termination of this Agreement.
Mediation will be conducted by a mediator or mediation program
agreed to by the parties. Persons authorized to settle the dispute
must attend any mediation session. The parties agree to participate
in the mediation proceedings in good faith with the intention of
resolving the dispute if at all possible within 30 days of the
notice from the party seeking to initiate the mediation procedures.
If not resolved within 30 days, the parties are free to pursue
arbitration. Mediation is a compromise negotiation for purposes of
the federal and state rules of evidence, and the entire process is
confidential.
B. Injunctive Relief. Notwithstanding subparagraph 12.A above, you
recognize that the Restaurant is one of a large number of
restaurants and stores identified by the Trademarks and similarly
situated and selling to the public similar products, and the failure
on the part of a single franchisee to comply with the terms of its
agreement could cause irreparable damage to us and/or to some or all
of our other franchisees. Therefore, it is mutually agreed that in
the event of a breach or threatened breach of any of the terms of
this Agreement by you, we will forthwith be entitled to an
injunction restraining such breach or to a decree of specific
performance, without showing or proving any actual damage, together
with recovery of reasonable attorneys' fees and other costs incurred
in obtaining said equitable relief, until such time as a final and
binding determination is made by the arbitrators. The foregoing
equitable remedies are in addition to, and not in lieu of, all other
remedies or rights that the parties might otherwise have by virtue
of any breach of this Agreement by the other party. Finally, we and
our affiliates have the right to commence a civil action against you
or take other appropriate action for the following reasons: to
collect sums of money due to us; to compel your compliance with
trademark standards and requirements to protect the goodwill of the
Trademarks; to compel you to compile and submit required reports to
us; or to permit evaluations or audits authorized by this Agreement.
C. Attorneys' Fees. The prevailing party in any action or proceeding
arising under, out of, in connection with, or in relation to this
Agreement, any lease or sublease for the Restaurant or Authorized
Location, or the business will be entitled to recover its reasonable
attorneys' fees and costs.
DEFAULT AND TERMINATION
13. The following provisions apply with respect to default and
termination:
A. Defaults. You are in default if we determine that you or any
Principal Owner or guarantor has breached any of the terms of this
Agreement or any other agreement between you and us or our
affiliates, which without limiting the generality of the foregoing
includes making any false report to us, intentionally understating
or underreporting or failure to pay when due any amounts required to
be paid to us or any of our affiliates, conviction of you, a
Principal Owner, or a guarantor of (or pleading no contest to) any
misdemeanor that brings or tends to bring any of the Trademarks into
disrepute or impairs or tends to impair your reputation or the
goodwill of any of the Trademarks or the Restaurant, any felony,
filing of tax or other liens that may affect this Agreement,
voluntary or involuntary bankruptcy by or against you or any
Principal Owner or guarantor, insolvency, making an assignment for
the benefit of creditors or any similar voluntary or involuntary
arrangement for the disposition of assets for the benefit of
creditors.
B. Termination by Us. We have the right to terminate this Agreement
in accordance with the following provisions:
1. Termination After Opportunity to Cure. Except as
otherwise expressly provided in this subparagraph 13.B
or elsewhere in the Agreement: (i) you will have 30 days
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from the date of our issuance of a written notice of
default to cure any default under this Agreement, other
than a failure to pay amounts due or submit required
reports, in which case you will have 10 days to cure
those defaults; (ii) your failure to cure a default
within the 30-day or 10-day period will provide us with
good cause to terminate this Agreement; (iii) the
termination will be accomplished by mailing or
delivering to you written notice of termination that
will identify the grounds for the termination; and (iv)
the termination will be effective immediately upon our
issuance of the written notice of termination.
2. Immediate Termination With No Opportunity to Cure. In
the event any of the following defaults occurs, you will
have no right or opportunity to cure the default and
this Agreement will terminate effective immediately on
our issuance of written notice of termination: any
material misrepresentation or omission in your franchise
application, your voluntary abandonment of this
Agreement or the Authorized Location, the loss or
revocation of your liquor license or suspensions
totaling 90 days over any 5 year period, the loss of
your lease, the failure to timely cure a default under
the lease, the loss of your right of possession or
failure to reopen or relocate under subparagraph 5.D,
the closing of the Restaurant by any state or local
authorities for health or public safety reasons, any
unauthorized use of the Confidential Information,
insolvency of you, a Principal Owner, the Control Person
or guarantor, you, a Principal Owner, the Control Person
or guarantor making an assignment or entering into any
similar arrangement for the benefit of creditors, any
default under this Agreement that materially impairs the
goodwill associated with any of the Trademarks,
conviction of you, any Principal Owners, the Control
Person, or guarantors of (or pleading no contest to) any
felony regardless of the nature of the charges, or any
misdemeanor that brings or tends to bring any of the
Trademarks into disrepute or impairs or tends to impair
your reputation or the goodwill of the Trademarks or the
Restaurant, intentionally understating or underreporting
Gross Sales, Royalty Fees or Advertising Fees or any
understatement or 1.25% variance on a subsequent audit
within a 3 year period under subparagraph 9.H, failure
to open the Restaurant by the date set forth in
subparagraph 2.C, failure to execute the lease
(including the Lease Addendum) or the Purchase Agreement
for the Restaurant by the date stated subparagraph 5.A,
failure to start substantial construction of the
Restaurant by the date established in subparagraph 5.B,
failure to secure financing for the construction of the
Restaurant by the date set forth in subparagraph 5.B,
violation by you of the provisions of subparagraph 15.P,
any unauthorized transfer or assignment in violation of
Paragraph 11 or any default by you that is the second
same or similar default within any 12-month consecutive
period or the fourth default of any type within any
24-month consecutive period.
3. Immediate Termination After No More than 24 Hours to
Cure. In the event that a default under this Agreement
occurs that violates any health safety or sanitation law
or regulation, violates any system standard as to food
handling, cleanliness, health and sanitation, or if the
operation of the Restaurant presents a health or safety
hazard to your customers or to the public (for example,
improper cooking or storage procedures used for chicken
wings): (i) you will have no more than 24 hours after we
provide written notice of the default to cure the
default; and (ii) if you fail to cure the default within
the 24 hour period, this Agreement will terminate
effective immediately on our issuance of written notice
of termination.
4. Effect of Other Laws. The provisions of any valid,
applicable law or regulation prescribing permissible
grounds, cure rights or minimum periods of notice for
termination of this franchise supersede any provision of
this Agreement that is less favorable to you.
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C. Termination by You. You may terminate this Agreement as a result
of a breach by us of a material provision of this Agreement provided
that: (i) you provide us with written notice of the breach that
identifies the grounds for the breach; and (ii) we fail to cure the
breach within 30 days after our receipt of the written notice. If we
fail to cure the breach, the termination will be effective 60 days
after our receipt of your written notice of breach. Your termination
of this Agreement under this Paragraph will not release or modify
your Post-Term obligations under Paragraph 14 of this Agreement.
POST-TERM OBLIGATIONS
14. Upon the expiration or termination of this Agreement:
A. Reversion of Rights; Discontinuation of Trademark Use. All of
your rights to the use of the Trademarks and all other rights and
licenses granted herein and the right and license to conduct
business under the Trademarks at the Authorized Location will revert
to us without further act or deed of any party. All of your right,
title and interest in, to and under this Agreement will become our
property. Upon our demand, you must assign to us or our assignee
your remaining interest in any lease then in effect for the
Restaurant (although we will not assume any past due obligations).
You must immediately comply with the post-term noncompete
obligations under subparagraph 10.D, cease all use and display of
the Trademarks and of any proprietary material (including the manual
and the product preparation materials) and of all or any portion of
point-of-sale materials furnished or approved by us, assign all
right, title and interest in the telephone numbers for the
Restaurant and cancel or assign, at our option, any assumed name
rights or equivalent registrations filed with authorities. You must
pay all sums due to us, our affiliates or designees and all sums you
owe to third parties that have been guaranteed by us or any of our
affiliates. You must immediately return to us, at your expense, all
copies of the manuals and product preparation materials then in your
possession or control or previously disseminated to your employees
and continue to comply with the confidentiality provisions of
subparagraph 6.J. You must promptly at your expense and subject to
subparagraph 14.B, remove or obliterate all Restaurant signage,
displays or other materials (electronic or tangible) in your
possession at the Authorized Location or elsewhere that bear any of
the Trademarks or names or material confusingly similar to the
Trademarks and so alter the appearance of the Restaurant as to
differentiate the Restaurant unmistakably from duly licensed
restaurants identified by the Trademarks. If, however, you refuse to
comply with the provisions of the preceding sentence within 30 days,
we have the right to enter the Authorized Location and remove all
Restaurant signage, displays or other materials in your possession
at the Authorized Location or elsewhere that bear any of the
Trademarks or names or material confusingly similar to the
Trademarks, and you must reimburse us for our costs incurred.
Notwithstanding the foregoing, in the event of expiration or
termination of this Agreement, you will remain liable for your
obligations pursuant to this Agreement or any other agreement
between you and us or our affiliates that expressly or by their
nature survive the expiration or termination of this Agreement.
B. Purchase Option. We have the right to purchase or designate a
third party that will purchase all or any portion of the assets of
your Restaurant that are owned by you or any of your affiliates
including, without limitation, the land, building, equipment,
fixtures, signage, furnishings, supplies, leasehold improvements,
liquor license and inventory of the Restaurant at a price determined
by a qualified appraiser (or qualified appraisers if one party
believes it is better to have a real estate appraiser appraise the
value of the land and building and a business appraiser appraise the
Restaurant's other assets) selected with the consent of both
parties, provided we give you written notice of our preliminary
intent to exercise our purchase rights under this Paragraph within
30 days after the date of the expiration or termination of this
Agreement. If the parties cannot agree upon the selection of an
appraiser(s), one or both will be appointed by a Judge of the United
States District Court for the District in which the Authorized
Location is located upon petition of either party.
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In the event the Agreement is terminated (rather than if it
expires), the price determined by the appraiser(s) will be the
reasonable fair market value of the assets based on their continuing
use in, as, and for the operation of a BUFFALO WILD WINGS Restaurant
and the appraiser will designate a price for each category of asset
(e.g., land, building, equipment, fixtures, etc.), but shall not
include the value of any goodwill of the business, as the goodwill
of the business is attributable to the Trademarks and the System. In
the event that the Agreement expires (rather than if it is
terminated), the price determined by the appraiser(s) will be the
reasonable fair market value of the assets, as stated in the prior
sentence, plus the value of any goodwill of the business,
attributable to your operation of the Restaurant. In the event of
expiration, however, the parties agree that you may elect not to
include the land in the appraisal and option to purchase process. In
this instance, you may elect to lease the land to us or our designee
for a lease term of at least 10 years with two 5-year options to
renew and for a primary rate equal to fair market value according to
the applicable Building Office Management Association Guidelines,
unless otherwise agreed to by the parties.
Within 45 days after our receipt of the appraisal report, we or our
designated purchaser will identify the assets, if any, that we
intend to purchase at the price designated for those assets in the
appraisal report. We or our designated purchaser and you will then
proceed to complete and close the purchase of the identified assets,
and to prepare and execute purchase and sale documents customary for
the assets being purchased, in a commercially reasonable time and
manner. We and you will each pay one-half of the appraiser's fees
and expenses. Our interest in the assets of the Restaurant that are
owned by you or your affiliates will constitute a lien thereon and
may not be impaired or terminated by the sale or other transfer of
any of those assets to a third party. Upon our or our designated
purchaser's exercise of the purchase option and tender of payment,
you agree to sell and deliver, and cause your affiliates to sell and
deliver, the purchased assets to us or our designated purchaser,
free and clear of all encumbrances, and to execute and deliver, and
cause your affiliates to execute and deliver, to us or our
designated purchaser a bill of sale therefor and such other
documents as may be commercially reasonable and customary to
effectuate the sale and transfer of the assets being purchased.
If we do not exercise our option to purchase under this
subparagraph, you may sell or lease the Restaurant premises to a
third party purchaser, provided that your agreement with the
purchaser includes a covenant by the purchaser, which is expressly
enforceable by us as a third party beneficiary, pursuant to which
the purchaser agrees, for a period of 2 years after the expiration
or termination of this Agreement, not to use the premises for the
operation of a restaurant business that has a menu or method of
operation similar to that employed by our company-owned or
franchised restaurants.
C. Claims. You and your Principal Owners and guarantors may not
assert any claim or cause of action against us or our affiliates
relating to this Agreement or the BUFFALO WILD WINGS business after
the shorter period of the applicable statute of limitations or one
year following the effective date of termination of this Agreement;
provided that where the one-year limitation of time is prohibited or
invalid by or under any applicable law, then and in that event no
suit or action may be commenced or maintained unless commenced
within the applicable statute of limitations.
GENERAL PROVISIONS
15. The parties agree to the following provisions:
A. Severability. Should one or more clauses of this Agreement be
held void or unenforceable for any reason by any court of competent
jurisdiction, such clause or clauses will be deemed to be separable
in such jurisdiction and the remainder of this Agreement is valid
and in full force and effect and the terms of this Agreement must be
equitably adjusted so as to compensate the appropriate party for any
consideration lost because of the elimination of such clause or
clauses. It is the intent and expectation of each of the parties
that each provision of this Agreement will be honored, carried out
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and enforced as written. Consequently, each of the parties agrees
that any provision of this Agreement sought to be enforced in any
proceeding must, at the election of the party seeking enforcement
and notwithstanding the availability of an adequate remedy at law,
be enforced by specific performance or any other equitable remedy.
B. Waiver/Integration. No waiver by us of any breach by you, nor any
delay or failure by us to enforce any provision of this Agreement,
may be deemed to be a waiver of any other or subsequent breach or be
deemed an estoppel to enforce our rights with respect to that or any
other or subsequent breach. Subject to our rights to modify
Appendices and/or standards and as otherwise provided herein, this
Agreement may not be waived, altered or rescinded, in whole or in
part, except by a writing signed by you and us. This Agreement
together with the addenda and appendices hereto and the application
form executed by you requesting us to enter into this Agreement
constitute the sole agreement between the parties with respect to
the entire subject matter of this Agreement and embody all prior
agreements and negotiations with respect to the business. You
acknowledge and agree that you have not received any warranty or
guarantee, express or implied, as to the potential volume, profits
or success of your business. There are no representations or
warranties of any kind, express or implied, except as contained
herein and in the aforesaid application.
C. Notices. Except as otherwise provided in this Agreement, any
notice, demand or communication provided for herein must be in
writing and signed by the party serving the same and either
delivered personally or by a reputable overnight service or
deposited in the United States mail, service or postage prepaid and
addressed as follows:
1. If intended for us, addressed to General Counsel,
Buffalo Wild Wings International, Inc., 1600 Utica
Avenue South, Suite 700, Minneapolis, Minnesota 55416;
2. If intended for you, addressed to you at ____________
________________________________________ or at the
Authorized Location; or,
in either case, as the intended party may change such address by
written notice to the other party. Notices for purposes of this
Agreement will be deemed to have been received if mailed or
delivered as provided in this subparagraph.
D. Authority. Any modification, consent, approval, authorization or
waiver granted hereunder required to be effective by signature will
be valid only if in writing executed by the Control Person or, if on
behalf of us, in writing executed by our President or one of our
authorized Vice Presidents.
E. References. If the franchisee is 2 or more individuals, the
individuals are jointly and severally liable, and references to you
in this Agreement includes all of the individuals. Headings and
captions contained herein are for convenience of reference and may
not be taken into account in construing or interpreting this
Agreement.
F. Guarantee. All Principal Owners of a franchisee that is a
corporation, limited liability company, partnership or other legal
entity must execute the form of undertaking and guarantee at the end
of this Agreement. Any person or entity that at any time after the
date of this Agreement becomes a Principal Owner pursuant to the
provisions of Paragraph 11 or otherwise must execute the form of
undertaking and guarantee at the end of this Agreement within 10
days from the date such person or entity becomes a Principal Owner;
provided, however, that any person or entity who becomes a Principal
Owner shall automatically acquire all the obligations of a Principal
Owner under this Agreement at the time such person or entity becomes
a Principal Owner. Before approving and entering into any
transaction that would make any person or entity a Principal Owner,
you must notify such person about the content of this subparagraph.
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G. Successors/Assigns. Subject to the terms of Paragraph 11 hereof,
this Agreement is binding upon and inures to the benefit of the
administrators, executors, heirs, successors and assigns of the
parties.
H. Interpretation of Rights and Obligations. The following
provisions apply to and govern the interpretation of this Agreement,
the parties' rights under this Agreement, and the relationship
between the parties:
1. Applicable Law and Waiver. Subject to our rights
under federal trademark laws and the parties' rights
under the Federal Arbitration Act in accordance with
Paragraph 12 of this Agreement, the parties' rights
under this Agreement, and the relationship between the
parties is governed by, and will be interpreted in
accordance with, the laws (statutory and otherwise) of
the state in which the Authorized Location is located.
You waive, to the fullest extent permitted by law, the
rights and protections that might be provided through
the laws of any state relating to franchises or business
opportunities, other than those of the state in which
the Authorized Location is located.
2. Our Rights. Whenever this Agreement provides that we
have a certain right, that right is absolute and the
parties intend that our exercise of that right will not
be subject to any limitation or review. We have the
right to operate, administrate, develop, and change the
System in any manner that is not specifically precluded
by the provisions of this Agreement, although this right
does not modify the requirements of subparagraph 5.E and
other express limitations set forth in this Agreement.
3. Our Reasonable Business Judgment. Whenever we reserve
discretion in a particular area or where we agree to
exercise our rights reasonably or in good faith, we will
satisfy our obligations whenever we exercise Reasonable
Business Judgment in making our decision or exercising
our rights. Our decisions or actions will be deemed to
be the result of Reasonable Business Judgment, even if
other reasonable or even arguably preferable
alternatives are available, if our decision or action is
intended, in whole or significant part, to promote or
benefit the System generally even if the decision or
action also promotes our financial or other individual
interest. Examples of items that will promote or benefit
the System include, without limitation, enhancing the
value of the Trademarks, improving customer service and
satisfaction, improving product quality, improving
uniformity, enhancing or encouraging modernization and
improving the competitive position of the System.
I. Venue. Any cause of action, claim, suit or demand allegedly
arising from or related to the terms of this Agreement or the
relationship of the parties that is not subject to arbitration under
Paragraph 12, must be brought in the Federal District Court for the
District of Minnesota or in Hennepin County District Court, Fourth
Judicial District, Minneapolis, Minnesota. Both parties hereto
irrevocably submit themselves to, and consent to, the jurisdiction
of said courts. The provisions of this subparagraph will survive the
termination of this Agreement. You are aware of the business
purposes and needs underlying the language of this subparagraph, and
with a complete understanding thereof, agree to be bound in the
manner set forth.
J. Jury Waiver. All parties hereby waive any and all rights to a
trial by jury in connection with the enforcement or interpretation
by judicial process of any provision of this Agreement, and in
connection with allegations of state or federal statutory
violations, fraud, misrepresentation or similar causes of action or
any legal action initiated for the recovery of damages for breach of
this Agreement.
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K. Waiver of Punitive Damages. You and your affiliates and us and
our affiliates agree to waive, to the fullest extent permitted by
law, the right to or claim for any punitive or exemplary damages
against the other and agree that in the event of any dispute between
them, each will be limited to the recovery of actual damages
sustained.
L. Relationship of the Parties. You and we are independent
contractors. Neither party is the agent, legal representative,
partner, subsidiary, joint venturer or employee of the other.
Neither party may obligate the other or represent any right to do
so. This Agreement does not reflect or create a fiduciary
relationship or a relationship of special trust or confidence.
Without limiting the generality of the foregoing, we shall have no
liability in connection with or related to the products or services
rendered to you by any third party, even if we required, approved or
consented to the product or service or designated or approved the
supplier.
M. Force Majeure. In the event of any failure of performance of this
Agreement according to its terms by any party due to force majeure
will not be deemed a breach of this Agreement. For purposes of this
Agreement, "force majeure" shall mean acts of God, State or
governmental action, riots, disturbance, war, strikes, lockouts,
slowdowns, prolonged shortage of energy supplies or any raw
material, epidemics, fire, flood, hurricane, typhoon, earthquake,
lightning and explosion or other similar event or condition, not
existing as of the date of signature of this Agreement, not
reasonably foreseeable as of such date and not reasonably within the
control of any party hereto, which prevents in whole or in material
part the performance by one of the parties hereto of its obligations
hereunder.
N. Adaptations and Variances. Complete and detailed uniformity under
many varying conditions may not always be possible, practical, or in
the best interest of the System. Accordingly, we have the right to
vary the Menu Items and other standards, specifications, and
requirements for any franchised restaurant or franchisee based upon
the customs or circumstances of a particular franchise or operating
agreement, site or location, population density, business potential,
trade area population, existing business practice, competitive
circumstance or any other condition that we deem to be of importance
to the operation of such restaurant or store, franchisee's business
or the System. We are not required to grant to you a like or other
variation as a result of any variation from standard menus,
specifications or requirements granted to any other franchisee. You
acknowledge that you are aware that our other franchisees operate
under a number of different forms of agreement that were entered
into at different times and that, consequently, the obligations and
rights of the parties to other agreements may differ materially in
certain instances from your rights and obligations under this
Agreement.
O. Notice of Potential Profit. We and/or our affiliates may from
time to time make available to you or require you to purchase goods,
products and/or services for use in your Restaurant on the sale of
which we and/or our affiliates may make a profit. Further, we and/or
our affiliates may from time to time receive consideration from
suppliers and/or manufacturers in respect to sales of goods,
products or services to you or in consideration of services rendered
or rights licensed to such persons. You agree that we and/or our
affiliates are entitled to said profits and/or consideration.
P. Interference with Employment Relations. During the term of this
Agreement, neither we nor you may employ or seek to employ, directly
or indirectly, any person who is at the time or was at any time
during the prior 6 months employed in any type of managerial
position by the other party or any of its affiliates, or by any
franchisee in the system. In the event that you violate this
provision, we will have the right to terminate this Agreement
without opportunity to cure pursuant to subparagraph 13.B.2. In
addition, any party who violates this provision agrees to pay as
fair and reasonable liquidated damages (but not as a penalty) an
amount equal to 2 times the annual compensation that the person
33
<PAGE>
being hired away was receiving at the time the violating party
offers her/him employment. You agree that this amount is for the
damages that the non-violating party will suffer for the loss of the
person hired away by the other party, including the costs of
finding, hiring and training a new employee and for the loss of the
services and experience of the employee hired away, and that it
would be difficult to calculate with certainty the amount of damage
that the non-violating party will incur. Notwithstanding the
foregoing, if a court determines that this liquidated damages
payment is unenforceable, then the non-violating party may pursue
all other available remedies, including consequential damages. This
subparagraph will not be violated if (i) at the time we or you
employ or seek to employ the person, the former employer has given
its written consent or (ii) we employ or seek to employ the person
in connection with the transfer of the Restaurant to us or any of
our affiliates. The parties acknowledge and agree that any
franchisee from whom an employee was hired by you in violation of
this subparagraph shall be a third-party beneficiary of this
provision, but only to the extent they may seek compensation from
you.
Q. National Consumer Price Index. We may adjust the maximum
modernization amount (subparagraph 5.E) every five year period, as
noted in subparagraph 5.E, in proportion to the five-year change in
the National Consumer Price Index - All Urban Consumers as reported
for each calendar year by the U.S. Department of Labor (or the
successor index or agency thereto) using 2003 as the base year, and
as so adjusted will apply to the maximum modernization expenditure
amount, subsequent to the adjustment date but prior to the next
adjustment date.
R. Updating Your Franchise Agreement. If at any time during the term
of this Agreement you and us enter into a subsequent franchise
agreement (the "Subsequent Agreement") granting you the right to
operate another BUFFALO WILD WINGS restaurant and the terms of the
Subsequent Agreement are different from the terms of this Agreement,
you will have the right to request that this Agreement be replaced
by a franchise agreement containing terms and conditions similar to
the Subsequent Agreement (the "New Agreement"), but such right shall
be conditioned upon you meeting all the conditions stipulated in
subparagraph 4.B of this Agreement, except that you shall pay a fee
of only $2,500; provided, however, that the term under the New
Agreement shall be equal to the term left under this Agreement at
the time of the execution of the New Agreement. You must exercise
the rights granted under this subparagraph within 30 days after the
date you execute the Subsequent Agreement.
S. Effective Date. We will designate the "Effective Date" of this
Agreement in the space provided on the cover page. If no Effective
Date is designated on the cover page, the Effective Date is the date
when we sign this Agreement. However, as described in subparagraph
5.A, you do not have the right to, and may not, open and commence
operation of a Restaurant at the Authorized Location until we notify
you that you have satisfied all of the pre-opening conditions set
forth in this Agreement.
T. Acknowledgment of Prohibition on Insider Trading. Federal law and
our parent company's policy prohibit purchasing or selling stock in
Buffalo Wild Wings, Inc. ("BWW") by anyone in possession of
material, non-public information concerning BWW. While it is not
possible to define "material information" to cover every set of
circumstances that might arise, a general guide is that information
is considered "material" if there is a substantial likelihood that a
reasonable investor would consider it important in determining
whether to buy, sell or hold stock. Violations of insider trading
laws may be punishable by fines and/or imprisonment. During the
terms of this Agreement, you may be provided with material,
non-public information regarding BWW. You hereby acknowledge that
you are familiar with insider trading laws and will not purchase or
sell BWW stock while in possession of material, non-public
information.
34
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Franchise Agreement
on the dates written below.
FRANCHISEE: US:
BUFFALO WILD WINGS
INTERNATIONAL, INC.
Date:________________ Date:__________________
_____________________ _______________________
By:__________________ By: Sally J. Smith
--------------------
Its:______________ Its: President & CEO
----------------
By:__________________
Its:______________
35
<PAGE>
PERSONAL GUARANTY AND AGREEMENT TO BE BOUND
PERSONALLY BY THE TERMS AND CONDITIONS
OF THE FRANCHISE AGREEMENT
In consideration of the execution of the Franchise Agreement (the
"Agreement") between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and
(the "Franchisee"), dated , 2006 and for other good and valuable consideration,
the undersigned, for themselves, their heirs, successors, and assigns, do
jointly, individually and severally hereby become surety and guarantor for the
payment of all amounts and the performance of the covenants, terms and
conditions in the Agreement, to be paid, kept and performed by the Franchisee,
including without limitation the arbitration and other dispute resolution
provisions of the Agreement.
Further, the undersigned, individually and jointly, hereby agree to
be personally bound by each and every condition and term contained in the
Agreement, including but not limited to the non-compete provisions in
subparagraph 10.D, and agree that this Personal Guaranty will be construed as
though the undersigned and each of them executed an agreement containing the
identical terms and conditions of the Agreement.
The undersigned waive (1) notice of demand for payment of any
indebtedness or nonperformance of any obligations hereby guaranteed; (2) protest
and notice of default to any party respecting the indebtedness or nonperformance
of any obligations hereby guaranteed; (3) any right he/she may have to require
that an action be brought against the Franchisee or any other person as a
condition of liability; and (4) notice of any changes permitted by the terms of
the Agreement or agreed to by the Franchisee.
In addition, the undersigned consents and agrees that: (1) the
undersigned's liability will not be contingent or conditioned upon our pursuit
of any remedies against the Franchisee or any other person; (2) such liability
will not be diminished, relieved or otherwise affected by the Franchisee's
insolvency, bankruptcy or reorganization, the invalidity, illegality or
unenforceability of all or any part of the Agreement, or the amendment or
extension of the Agreement with or without notice to the undersigned; and (3)
this Personal Guaranty shall apply in all modifications to the Agreement of any
nature agreed to by Franchisee with or without the undersigned receiving notice
thereof.
It is further understood and agreed by the undersigned that the
provisions, covenants and conditions of this Personal Guaranty will inure to the
benefit of our successors and assigns.
FRANCHISEE:_____________________________
PERSONAL GUARANTORS:
____________________ ____________________
Individually Individually
____________________ ____________________
Print Name Print Name
____________________ ____________________
Address Address
____________________ ____________________
City State Zip Code City State Zip Code
____________________ ____________________
Telephone Telephone
2
<PAGE>
____________________ ____________________
Individually Individually
____________________ ____________________
Print Name Print Name
____________________ ____________________
Address Address
____________________ ____________________
City State Zip Code City State Zip Code
____________________ ____________________
Telephone Telephone
3
<PAGE>
OWNERSHIP AND MANAGEMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
1. Control Person. You represent and warrant to us that the
following person, and only the following person is the Control Person:
NAME TITLE ADDRESS
2. Principal Owner(s). You represent and warrant to us that the
following person(s) and entities, and only the following person(s) and entities,
will be your Principal Owner(s):
PERCENTAGE
NAME HOME ADDRESS OF INTEREST
3. Unit General Manager. You represent and warrant to us that the
following person, and only the following person, is your Unit General Manager:
NAME TITLE ADDRESS
4. Change. You must immediately notify us in writing of any change
in the information contained in this Addendum and, at our request, prepare and
sign a new Addendum containing the correct information.
5. Effective Date. This Addendum is effective as of this ______ day
of__________, 2006.
___________________________ ___________________________
Your Initials Our Initials
<PAGE>
Appendix A to the Franchise Agreement
TRADEMARKS
You have the right to use the following Trademarks in accordance
with the terms of the Franchise Agreement:
Service Mark: BUFFALO WILD WINGS
Registration No.: 2,239,550
Registration Date: April 13, 1999
Service Mark: BUFFALO WILD WINGS GRILL & BAR (Design Mark)
Registration No.: 2,187,765
Registration Date: September 8, 1998
Service Mark: BETTER-BE-READY BLAZIN'
Registration No.: 2,433,893
Registration Date: March 6, 2001
Service Mark: HOME OF THE REAL WING
Registration No.: 2,247,812
Registration Date: May 25, 1999
Service Mark: SOMETHING WILD HAS COME TO TOWN
Registration No.: 2,234,404
Registration Date: March 23, 1999
Service Mark: GOTTA WING IT
Registration No.: 2,556,785
Registration Date: April 2, 2002
Service Mark: WINGS. BEER. SPORTS. ALL THE ESSENTIALS
Registration No.: 2,905,689
Registration Date: November 30, 2004
We may amend this Appendix A from time to time in order to make
available additional Trademarks or to delete those Trademarks that become
unavailable. You agree to use only those Trademarks that are then currently
authorized.
The Trademarks must be used only in the manner that we specify. No
deviations will be permitted.
<PAGE>
Appendix B to the Franchise Agreement
THE DESIGNATED AREA
As stated in Subparagraph 2.B. of the Franchise Agreement, subject to the terms
and conditions of the Franchise Agreement, the Designated Area in which you will
locate and operate the Restaurant is defined as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Designated Area is considered fixed as of the date of the Franchise
Agreement.
FRANCHISEE: FRANCHISOR:
BUFFALO WILD WINGS
INTERNATIONAL, INC.
_____________________________ _____________________________
By:__________________________ By: Sally J. Smith
--------------------
Its:______________________ Its: President & CEO
---------------
_____________________________
By:__________________________
Its:______________________
<PAGE>
Appendix C to the Franchise Agreement
ADDENDUM TO LEASE
This Addendum to Lease, dated ______________, 200__, is entered into
between __________________("Landlord"), and _______________________("Tenant").
RECITALS
A. The parties have entered into a Lease Agreement, dated _________,
200__, (the "Lease") pertaining to the premises located at
_______________________________________ (the "Premises").
B. Landlord acknowledges that Tenant has agreed to operate a Restaurant
at the Premises pursuant to Tenant's Franchise Agreement (the
"Franchise Agreement") with Buffalo Wild Wings International, Inc.
("BWW") under the name "Buffalo Wild Wings Grill & Bar" or other
name designated by BWW (the "Restaurant").
C. The parties desire to amend the Lease in accordance with the terms
and conditions contained in this Addendum to provide BWW the
opportunity to preserve the Premises as a BWW branded restaurant as
provided herein.
AGREEMENT
Landlord and Tenant agree as follows:
1. Remodeling and Decor. Landlord agrees that Tenant has the right to
remodel, equip, paint and decorate the interior of the Premises and
to display such proprietary marks and signs on the interior and
exterior of the Premises as Tenant is reasonably required to do
pursuant to the Franchise Agreement and any successor Franchise
Agreement under which Tenant may operate a Restaurant on the
Premises. Any remodel of the building and/or its signs shall be
subject to Landlord's prior and reasonable approval.
2. Assignment. Tenant does not have the right to sublease or assign the
Lease to any third party without BWW's and Landlord's written
approval. Tenant has the right to assign all of its right, title and
interest in the Lease to BWW, its affiliates or its parent company,
at any time during the term of the Lease, including any extensions
or renewals, without first obtaining Landlord's consent. No
assignment will be effective, however, until BWW or its designated
affiliate gives Landlord written notice of its acceptance of the
assignment. BWW or its parent company will be responsible for the
lease obligations incurred after the effective date of the
assignment. If BWW elects to assume the Lease under this
subparagraph or unilaterally assumes the lease as provided for in
subparagraph 3(a) or 4(a), Landlord and Tenant agree that (i) Lessee
will remain liable for the responsibilities and obligations,
including amounts owed to Landlord, prior to the date of assignment
and assumption, and (ii) BEWW will have the right to sublease the
Premises to another franchisee with Landlord's prior reasonable
approval - reasonableness to be based on proposed new franchisee's
related business experience and credit history, provided the
franchisee meets BWW's then-current standards and requirements for
franchisees and agrees to operate the Restaurant as a Buffalo Wild
Wings restaurant pursuant to a Franchise Agreement with BWW. Upon
receipt by Landlord of an assumption agreement pursuant to which the
assignee agrees to assume the Lease and to observe the terms,
conditions and agreements on the part of Tenant to be performed
under the Lease, the BWW Entity shall thereupon be released from all
liability as tenant under the Lease from and after the date of
assignment, without any need of a written acknowledgment of such
release by Landlord.
-1-
3. Default and Notice.
(a) Landlord shall send BWW copies of all notices of default
it gives to Tenant concurrently with giving such notices
to Tenant. If Tenant fails to cure any defaults within
the period specified in the Lease, Landlord shall
promptly give BWW written notice thereof, specifying the
defaults Tenant has failed to cure. BWW has the right to
unilaterally assume the Lease if Tenant fails to cure.
BWW shall have 15 days from the date BWW receives such
notice to exercise, by written notice to Landlord and
Tenant, its right for BWW or its designee (the "BWW
Entity") to assume the Lease. BWW shall have an
additional 15 days from the expiration of Tenant's cure
period in which to cure the default or violation.
(b) If the BWW Entity elects to assume the Lease, the BWW
Entity shall not be required to cure defaults and/or to
begin paying rent until Landlord delivers possession of
the Premises to the BWW Entity. The BWW Entity shall
have the right, at any time until Landlord delivers
possession of the Premises, to rescind the option
exercise, by written notice to Landlord.
(c) All notices to BWW must be sent by registered or
certified mail, postage prepaid, to the following
address:
Buffalo Wild Wings International, Inc.
1600 Utica Avenue South
Suite 700
Minneapolis, MN 55416
Attention: General Counsel
BWW may change its address for receiving notices by giving Landlord
written notice of the new address. Landlord agrees that it will notify both
Tenant and BWW of any change in Landlord's mailing address to which notices
should be sent.
4. Termination, Non-Renewal, Expiration.
(a) If the Franchise Agreement is terminated for any reason
during the term of the Lease or any extension thereof,
BWW has the right, but not the obligation, to
unilaterally assume the Lease by giving Landlord written
notice. Within 30 days after receipt of such notice,
Landlord shall give a BWW Entity written notice
specifying any defaults of Tenant under the Lease.
(b) If the Lease contains term renewal or extension right(s)
and if Tenant allows the term to expire without
exercising said right(s), Landlord shall give BWW
written notice thereof, and a BWW Entity shall have the
option, for thirty (30) days after receipt of said
notice, to exercise the Tenant's renewal or extension
right(s) on the same terms and conditions as are
contained in the Lease. If a BWW Entity elects to
exercise such right(s), it shall so notify Landlord in
writing, whereupon Landlord and the BWW Entity shall
promptly execute and deliver an agreement whereby the
BWW Entity assumes the Lease, effective at the
commencement of the extension or renewal term.
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<PAGE>
(c) Upon the expiration or termination of the Lease,
Landlord will cooperate with and assist BWW in gaining
possession of the Premises and if a BWW Entity does not
elect to enter into a new lease for the Premises with
Landlord on terms reasonably acceptable to the BWW
Entity, Landlord will allow BWW to enter the Premises,
without being guilty of trespass and without incurring
any liability to Landlord, except for any damages caused
by BWW's willful misconduct or gross negligence, to
remove all signs, awnings, and all other items
identifying the Premises as a Buffalo Wild Wings(R)
Restaurant and to make such other modifications (such as
repainting) as are reasonably necessary to protect the
Buffalo Wild Wings(R) marks and system. In the event BWW
exercises its option to purchase assets of Tenant,
Landlord must permit BWW to remove all such assets being
purchased by BWW.
5. Additional Provisions.
(a) Landlord hereby acknowledges that the provisions of this
Addendum to Lease are required pursuant to the Franchise
Agreement under which Tenant plans to operate its
business and the Tenant would not lease the Premises
without this Addendum.
(b) Landlord further acknowledges that Tenant is not an
agent or employee of BWW and the Tenant has no authority
or power to act for, or to create any liability on
behalf of, or to in any way bind BWW or any affiliate of
BWW, and that Landlord has entered into this Addendum to
Lease with full understanding that it creates no duties,
obligations or liabilities of or against BWW or any
affiliate of BWW, unless and until the Lease is assigned
to, and accepted in writing by, BWW or its parent
company.
(c) BWW Entity may elect not to assume or be bound by the
terms of any amendment to the Lease executed by Tenant
without obtaining BWW's prior written approval, which
shall not be unreasonably withheld or delayed.
6. Sales Reports. If requested by BWW, Landlord will provide BWW with
whatever information Landlord has regarding Tenant's sales from the
Restaurant.
7. Modification. No amendment or variation of the terms of this
Addendum is valid unless made in writing and signed by the parties
and the parties have obtained the written consent of BWW.
8. Reaffirmation of Lease. Except as amended or modified in this
Addendum, all of the terms, conditions and covenants of the Lease
remain in full force and effect and are incorporated by reference
and made a part of this Addendum as though copied herein in full. In
the event of any conflict between the terms of this Addendum and
those in the Lease, the terms of this Addendum shall control.
9. Beneficiary. Landlord and Tenant expressly agree that BWW is a third
party beneficiary of this Addendum.
IN WITNESS WHEREOF, the parties have executed this Addendum as of
the dates written below.
TENANT: LANDLORD:
_________________________________ _________________________________
By_______________________________ By_______________________________
Its____________________________ Its____________________________
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<PAGE>
Appendix D to the Franchise Agreement
ELECTRONIC TRANSFER OF FUNDS AUTHORIZATION
Franchisee:
Location:
Date:
-------------- -------------
NEW CHANGE
-------------- -------------
-------------- -------------
Attention: Bookkeeping Department
The undersigned hereby authorizes Buffalo Wild Wings International, Inc., its
parent company or any affiliated entity (collectively, "BWW"), to initiate
weekly ACH debit entries against the account of the undersigned with you in
payment of amounts for Royalty Fees, Advertising Fees or other amounts that
become payable by the undersigned to BWW. The dollar amount to be debited per
payment will vary.
Subject to the provisions of this letter of authorization, you are hereby
directed to honor any such ACH debit entry initiated by BWW.
This authorization is binding and will remain in full force and effect until 90
days prior written notice has been given to you by the undersigned. The
undersigned is responsible for, and must pay on demand, all costs or charges
relating to the handling of ACH debit entries pursuant to this letter of
authorization.
Please honor ACH debit entries initiated in accordance with the terms of this
letter of authorization, subject to there being sufficient funds in the
undersigned's account to cover such ACH debit entries.
Sincerely yours,
*** We also need a VOIDED Check ***
_______________________
Account Name
_______________________ _______________________
Bank Name Street Address
_______________________ _______________________
Branch City State Zip Code
_______________________ _______________________
Street Address Telephone Number
_______________________ By:_______________________
City State Zip Code
_______________________ Its:______________________
Bank Telephone Number
_______________________ Date:______________________
Bank's Account Number
_______________________
Customer's Account Number
<PAGE>
Appendix E to the Franchise Agreement
BUFFALO WILD WINGS(R)
AUTHORIZATION AND GIFT CARD PARTICIPATION AGREEMENT
The franchisee identified below ("Franchisee") hereby agrees to
participate in the gift card marketing program to be provided by SASH Management
L.L.C. d.b.a. Gift Card Solutions, a Utah limited liability company ("GCS") to
owners of franchises operated under an agreement with Buffalo Wild Wings, Inc.,
a Minnesota corporation, Blazin Wings, Inc., a Minnesota corporation, Buffalo
Wild Wings International, Inc., an Ohio corporation, and Real Wing, Inc., a
Kansas corporation (the aforementioned entities are collectively and
individually referred to as "Franchisor"). This Agreement will continue until
the expiration of the Gift Card Agreement between GCS and Buffalo Wild Wings,
Blazin Wings, Buffalo Wild Wings International, and Real Wing, Inc. dated August
16, 2002. GCS may otherwise terminate this Agreement if Franchisee ceases to
operate outlets pursuant to a franchise agreement with any of the above
referenced entities or, with the consent of the respective franchisor,
franchisee has defaulted under the terms of this Agreement.
GCS' program is made available to Franchisee in return for
Franchisee's agreement to participate in a TurnKey Gift Card program (the
"Program") that will allow Franchisee's customers to prepay in specific amounts
for product purchases at participating stores and to then purchase product at
any participating store using the gift card (the "Gift Card") provided by GCS
for purchase. To effectuate this, GCS agrees to provide the following:
1. A complete TurnKey Gift Card processing program, defined to include
a system for real-time card authorization and accounting and funds
settlement procedures.
2. Provide reports that will be available via a secure web site for
next day viewing of daily transaction detail.
3. Maintain adequate communication lines for both the issuing and
verification terminals within the Franchisee's stores.
4. Inventory management, including ordering and disbursement of cards
to Franchisee.
5. Accept and fulfill Gift Card requests from consumers and Franchisee.
6. Maintain adequate inventory of card stock and other fulfillment
materials.
7. With the assistance of Franchisee, prepare individual terminals at
each Store to accept Gift Cards by programming terminals, gaining
required permissions from a Store merchant acquirer or through other
measures that are required for participation in the program.
8. Maintain an automated balance inquiry system that is available 24
hours a day 365 days a year which may be accessed by Franchisee by a
toll free telephone number.
To effectuate the Program, the Franchisee will have an account which
is credited and debited with certain amounts. Those credits and debits are as
follows:
1. If a Verifone Terminal/Printer package is to be supplied by GCS to
Franchisee, as described below, GCS shall bill the Franchisee
$225.00 for each such package. Said amount shall be due with the
first monthly payment, as set forth below.
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<PAGE>
2. There will be a transaction fee for each transaction which is
performed with respect to a Gift Card issued as part of the program.
The transaction fee shall be $.16 per transaction, and shall be
charged for each transaction performed by the Franchisee. The
cumulative amount of the transaction fees for a particular month
shall be paid as part of the payment to be made pursuant to the
terms of this Agreement. A "transaction" shall be defined as the
initial activation of a Gift Card and each respective use of a Gift
Card for the purchase of product from a participating store. In
addition, a transaction shall include the payment of any inactivity
fee which is debited against a Gift Card.
3. In addition to the transaction fee, a fee of $.04 per transaction
will be charged, and this amount will be added to an insurance
account established for the payment of delinquent franchise
payments. The insurance account which these fees are added to shall
be owned by Franchisor, and all amounts paid to this account shall
be under the control of Franchisor. The cumulative amount of the
insurance account fees for a particular month shall be paid as part
of the payment to be made pursuant to the terms of the Agreement.
4. Each Gift Card which is purchased as part of this program and which
is not completely used on the date which is the later of one (1)
year from the initial purchase of the Gift Card or one (1) year from
the last time the customer added cash to the value of the Gift card
shall be assessed a fee of $2.00 on such date which shall be debited
against the remaining value of the Gift Card. This fee shall be
applied thereafter for each additional month until the earlier of
the customer adding additional cash to the Gift Card or until the
remaining balance of the Gift Card is $0.00. The $2.00 inactivity
fee shall be credited to the Franchisee if the Gift Card was
purchased at a Franchisee's store.
5. GCS may modify any of the aforementioned fees, except the insurance
account fee, to cover any cost increases incurred by GCS when
material cost increases are sustained from non-related third party
vendors that provide support services to GCS. These price changes
can only take place once in each contract year upon sixty (60) days'
prior written notice to the Franchisee. GCS will not have the power
to modify the insurance account fee, but this fee may be modified by
Franchisor, provided the fee may not be greater than $.04 per
transaction.
6. GCS will maintain and provide monthly reports of the amounts due
from the Franchisee. The Franchisee's account shall be debited with
an amount equal to the value of all Gift Cards sold at the
Franchisee's stores and all fees which are due from a Franchisee as
set forth in this Agreement. The Franchisee's account will be
credited with an amount equal to the value of all product purchased
from the Franchisee's store using a Gift Card and all inactivity
fees which are attributed to the Franchisee. The resulting
difference as of the last day of each month will be the monthly
amount which is due to or from the Franchisee. This amount will be
collected from or paid to a participant as set forth below.
7. GCS shall be solely responsible for the accuracy of all account
management with regard to the Gift Cards. Any error in the account
management shall be the sole liability of GCS and GCS shall bear the
cost of any such error. By way of example and not limitation, if a
$10.00 Gift Card is sold and entered into the terminal for $10.00
and GCS accounts for the Gift Card at $100.00, GCS shall be solely
responsible for the $90.00 discrepancy.
Franchisee is responsible for providing an electronic card issuing
terminal that is compatible with and can interface with the GCS system to be
used for this Program. GCS will assist Franchisee by programming Franchisee's
individual terminal for a fee of $150.00. GCS will maintain adequate
communication lines for both Franchisee's issuing terminal and verification
terminal. A Verifone Terminal package may be purchased from GCS for Two Hundred
Twenty Five Dollars ($225.00). This amount shall be due with the first monthly
payment, as described above.
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<PAGE>
CS has contracted with Stored Value Systems, Inc. to provide account services
for the Program. Franchisee agrees to have a bank account which will be used to
either withdraw funds that are due from the Franchisee for the Program or into
which funds will be deposited if they are due to Franchisee under the Program.
The Franchisee agrees to execute the attached ACH Authorization Form to allow
Stored Value Systems to electronically debit and credit Franchisee's account. In
the event Franchisee has insufficient funds to pay any amount due hereunder and
such amount is collected from the insurance account referred to above or from
Buffalo Wild Wings, Inc., the paying party shall have the right to recover the
amount paid from Franchisee and Franchisee shall pay said amount to the party
paying the amount due from Franchisee.
Agreed to this_______day of ____________, 2006.
FRANCHISEE:
__________________________
By:_______________________
Its:___________________
__________________________
By:_______________________
Its:___________________
Franchisee Legal Business Name: __________________________________
Franchisee's Address: __________________________________
__________________________________
SASH Management, LLC, a Utah Limited Liability Company
By:__________________________________
Its:_________________________________
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<PAGE>
Appendix F to the Franchise Agreement
BUFFALO WILD WINGS(R)
ENROLLMENT FORM AND PORTAL TERMS AND CONDITIONS
WHAT IS THE PORTAL?
The portal has been designed to provide franchisees with a preliminary real
estate analysis of a proposed location. Franchisees are able to gather the
required data from one central source by leveraging the power of this portal.
The following maps and reports are created as part of the site evaluation
package:
a. Site Overview Map
b. Competition and Co-Tenants Map
c. Daytime Employment Map
d. Traffic Volumes Map
e. Medium Household Income Map
f. Mosaic Index Map
g. Owner Occupied Units Map
h. Population & Daytime Employment Map
i. 3-5-7 Minute Drive Time Map
j. Demographic Report
k. Traffic Location Report
l. Trade Area Rating Report
HOW DO I GET STARTED?
Once you have enrolled, you will receive a Welcome Kit from geoVue in the mail.
This kit will contain: a User Guide, Frequently Asked Questions, your user name
and password and other information. Your account will be set up with credits
that are redeemed for site packages. Each time you process a request for a
package, your account will be decremented. You must purchase site packages in
blocks of three.
The maps and reports will be available to you in PDF form via email and through
the portal itself. You will have one year to use the credits you have purchased.
<PAGE>
ENROLLMENT FORM
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Name City
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Company Name State
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Company Address Zip
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Email Address Telephone
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SITE PACKAGES
Each site package includes the maps and reports in proper form for submission to
corporate. Each site is measured against a pre-determined set of benchmarks.
PAYMENT METHOD
Each package is $400, available in blocks of three (3) for a total of $1,200.
|_| Enclosed is a check for $1,200 made payable to geoVue, Inc.
|_| Please bill my credit card (Visa, MC or Amex)
Card Number ____________________
Expirations Date ____________________
Full Name on Card ____________________
By signing below and using the geoVue Portal products, you agree, for yourself
and any applicable entities that all services and products are provided subject
to the Portal Terms and Conditions, printed on the following page.
Non-refundable payment is due upon placement of order. In certain states, this
order will be subject to state tax.
Print Name: ________________________
Title: ________________________
Signature: ________________________ Date:____________________
Upon completing this form, please either fax back to (617) 482-3066 or mail to
geoVue, Inc., Attn: Sales, 200 Lincoln Street, Boston, MA 02111. If you require
any additional information, please feel free to call us at 1-800-554-5150.
<PAGE>
PORTAL TERMS AND CONDITIONS
1. ACCEPTANCE OF TERMS
These terms and conditions apply to and govern your use of the geoVue software
and online products, including the Portal available through web sites owned or
controlled by geoVue (collectively, the "Products"). Your use of the Products
signifies your agreement to be bound by these terms and conditions in their
entirety. If you do not agree to be bound by these terms and conditions, you may
not access or otherwise use the Products. You are responsible for obtaining and
paying for the hardware, software, and Internet access required for you to use
the Products. The Products are only to be used within the United States of
America. You acknowledge that transmissions to and from geoVue are not
confidential and your Communications may be read or intercepted by others. At
geoVue's sole discretion, anyone determined to have violated these Terms and
Conditions may be barred, without notice, from using the Products.
2. LIMITED LICENSE
geoVue grants you a non-exclusive, non-transferable, limited right to access,
use and display the Products and content and the materials thereon only for your
business use as described herein, provided that you comply fully with these
terms and conditions. You shall not interfere or attempt to interfere with the
operation of the Products in any way through any means or device including, but
not limited to, spamming, hacking, uploading computer viruses or time bombs, or
the means expressly prohibited by any provision of these terms and conditions.
The license, unless otherwise specified, is for utilization by a single user or
a single-user workstation at any one time. You shall not use or permit the use
of Products for the benefit of any other entities.
3. CHANGES TO TERMS AND
CONDITIONS geoVue reserves the right, at its sole discretion, to change, modify,
add or remove any portion of these terms and conditions, in whole or in part, at
any time upon written notice. Your continued use of the Products after any
changes to these terms and conditions will be considered acceptance of those
changes.
4. OWNERSHIP; RESTRICTIONS
geoVue owns, controls, licenses or has the right to use and provide the Products
and all material in the Products, including, without limitation, text, images,
articles, photographs, illustrations, audio and video clips, (collectively the
"Content"). All Products and Content are Copyright (C) 2004 geoVue, Inc.,
protected pursuant to U.S. copyright laws, international conventions, and other
copyright laws. You agree to abide by any and all copyright notices, information
or restrictions displayed on the Products. Except as expressly provided herein,
you may not use the Products and Content, and geoVue reserves all copyrights
therein. All Business logos are the registered trademarks of their respective
owners. All rights reserved. You are responsible for complying with all
applicable laws, rules and regulations regarding your use of the Products and
Content. In the event of any permitted publication of material from the
Products, no changes in or deletion of author attribution, trademark, legend or
copyright notice shall be made.
5. INDEMNIFICATION
You agree that you shall indemnify, defend and hold harmless geoVue, and its
officers, directors, owners, agents, employees, Content providers, affiliates,
and licensors (collectively, the "Indemnified Parties") from and against any and
all losses, damages, liabilities, and claims and all fees, costs, expenses, of
any kind related thereto (including, without limitation, reasonable attorneys'
fees) incurred by the Indemnified Parties in connection with any claim arising
out of, based upon or resulting from your use of the Products or Content geoVue
reserves the right, at its own expense, to assume the exclusive defense and
control of any matter otherwise subject to indemnification by you and you shall
not in any event settle any matter without the written consent of geoVue.
6. LINKS TO OTHER WEB PAGES
The Products may
contain links and pointers to the other related World Wide Web Internet pages,
resources, and sponsors of the Products. Links to or from any Products and
third-party sites, maintained by third parties, do not constitute an endorsement
by geoVue or any of its subsidiaries and affiliates of any third-party resources
or their contents. Links do not imply that geoVue is affiliated or associated
with or/is legally authorized to use any trademark, trade name, logo or
copyright symbol displayed in or accessible through the links, or that any
linked web sites are authorized to use any trademark, trade name, logo or
copyright symbol of geoVue, any of their affiliates or licensors.
7. DISCLAIMER OF WARRANTIES AND DAMAGES; LIMITATION OF LIABILITY
The site selection package is a preliminary report and assessment based upon
data available on geoVue's databases. It is provided without representation or
warranty. Not all retailers, competitors, employers, or streets were reviewed.
Acceptable sites may not be available on favorable terms within the indicated
areas. The assessment may be (or become) inaccurate due to changing demographic
and economic conditions; opening and closing of retailers, employers and
competitors; modifications to roads and other transportation systems; and other
causes. It is your responsibility to fully analyze the indicated area to remain
aware of the changes in it, and to seek locations that are the most
advantageous. Upon delivery of the purchased site selection reports, you will no
longer have access to any data or information you had previously created,
maintained, managed, or stored in Products. geoVue is under no obligation to
maintain any such data or information. Your obligations pursuant to Section 1
(ACCEPTANCE OF THE TERMS), Section 2 (LIMITED LICENSE), Section 4 (OWNERSHIP;
RESTRICTIONS), Section 5 (INDEMNIFICATION), Section 7 (DISCLAIMER OF WARRANTIES
AND DAMAGES; LIMITATION OF LIABILITY), and Section 8 (GENERAL PROVISIONS) shall
survive the termination of your use of the Products. THE PRODUCTS, INCLUDING ALL
CONTENT, SOFTWARE, FUNCTIONS, MATERIALS AND INFORMATION MADE AVAILABLE ON OR
ACCESSED THROUGH THE PRODUCTS, ARE PROVIDED ON AN "AS IS," "AS AVAILABLE" BASIS,
WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE. NEITHER geoVue NOR ITS CONTENT PROVIDERS WARRANT THAT THE
FUNCTIONS, FEATURES OR CONTENT CONTAINED IN THE PRODUCTS WILL BE UNINTERRUPTED
OR ERROR FREE, THAT DEFECTS WILL BE CORRECTED, OR THAT ANY OTHER PRODUCTS OR THE
SERVERS) THAT MAKE THEM AVAILABLE ARE FREE OF VIRUSES OR OTHER HARMFUL
COMPONENTS; NOR DO THEY MAKE ANY WARRANTY OR REPRESENTATION AS TO THE ACCURACY
OR RELIABILITY OF THE PRODUCTS, THE CONTENT THEREOF, THE MATERIALS, INFORMATION
AND FUNCTIONS MADE ACCESSIBLE BY THE SOFTWARE USED ON OR ACCESSED THROUGH THE
PRODUCTS, ANY PRODUCTS OR SERVICES OR HYPERTEXT LINKS TO THIRD PARTIES OR FOR
ANY BREACH OF SECURITY ASSOCIATED WITH THE TRANSMISSION OF SENSITIVE INFORMATION
THROUGH THE PRODUCTS OR ANY LINKED PRODUCTS. geoVue AND ITS SUBSIDIARIES AND
AFFILIATES MAKE NO WARRANTIES AND SHALL NOT BE LIABLE FOR THE USE OF THE
PRODUCTS, INCLUDING WITHOUT LIMITATION. THE CONTENT AND ANY ERRORS CONTAINED
THEREIN UNDER ANY DIRECT OR INDIRECT CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO
geoVue's NEGLIGENCE. IF YOU ARE DISSATISFIED WITH THE PRODUCTS OR ANY MATERIALS
ON THE PRODUCTS, YOUR SOLE REMEDY FOR ALL OF THE FOREGOING SHALL BE LIMITED TO
THE GREATER OF THE AMOUNT ACTUALLY PAID FOR BY YOU FOR THE PRODUCTS OR FIVE
DOLLARS (USD $5.00). UNDER NO CIRCUMSTANCES SHALL geoVue, ITS SUBSIDIARIES,
AFFILIATES OR CONTENT PROVIDERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES THAT ARE DIRECTLY OR INDIRECTLY RELATED TO THE USE OF, OR
THE INABILITY TO USE, THE CONTENT, MATERIALS AND FUNCTIONS IN THE PRODUCTS,
INCLUDING WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS, EVEN IF SUCH ENTITIES OR AN AUTHORIZED REPRESENTATIVE THEREOF HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE
LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. IN NO EVENT SHALL THE TOTAL
LIABILITY OF geoVue, ITS SUBSIDIARIES AND AFFILIATES TO YOU FOR ALL DAMAGES,
LOSSES, AND CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT, INCLUDING, BUT NOT
LIMITED T0, NEGLIGENCE OR OTHERWISE) ARISING FROM THESE TERMS AND CONDITIONS OR
YOUR USE OF THE PRODUCTS EXCEED, IN THE AGGREGATE, ONE HUNDRED DOLLARS (USD
$100.00).
8. GENERAL PROVISIONS
These terms and conditions shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to conflicts of
laws provisions. The sole and exclusive jurisdiction for any action or
proceeding arising out of or related to these terms and conditions shall be an
appropriate State or Federal court located in the Commonwealth of Massachusetts
and you hereby irrevocably consent to the jurisdiction of such courts. If for
any reason a court of competent jurisdiction finds any provision of these terms
and conditions, or portion thereof, to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of these
terms and conditions, and the remainder of these terms and conditions shall
continue in full force and effect. These terms and conditions constitute the
entire agreement between you and geoVue with respect to the subject matter
hereof, and supersede all previous written or oral agreements between the
parties with respect to such subject matter. No waiver by either you or geoVue
of any breach or default hereunder shall be deemed to be a waiver of any
preceding or subsequent breach or default. The section headings used herein are
for convenience only and shall not be given any legal import.
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF ILLINOIS
This Addendum pertains to franchises sold in the State of Illinois and is for
the purpose of complying with Illinois statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended to include the following:
1. The fourth and fifth sentences of Section 15.B of the Agreement are
hereby deleted in their entirety.
2. Section 15.B of the Agreement is hereby amended to include the
following:
Nothing in this Section 15.B, however, may be construed to mean that
you may not rely on the BUFFALO WILD WINGS Offering Circular that we
provided to you in connection with the offer and purchase of your
BUFFALO WILD WINGS Business. Although the statements in the Offering
Circular do not become part of the Franchise Agreement, nothing in
the Offering Circular may contradict or be inconsistent with the
contract terms.
3. The first sentence of Section 15.I is hereby deleted in its
entirety, and the following substituted in lieu thereof:
Subject to Section 12.A, any cause of action, claim, suit or demand
allegedly arising from or related to the terms of this Agreement or
the relationship of the parties must be brought in the Illinois
federal or state court for the Designated Area in which you are
located.
4. The Acknowledgment Addendum attached to the Franchise Agreement
(and specifically stating that it is not for use in the State of Illinois) is
unenforceable under Illinois law because it may have the effect of forcing a
franchisee to waive or release certain rights that you as a franchisee have
under the Illinois Franchise Disclosure Act, 815 IL ss. 705.
5. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-1-
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF MARYLAND
This Addendum pertains to franchises sold in the State of Maryland and is for
the purpose of complying with Maryland statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended as follows:
1. The following sentence is added to the end of Section 14.C:
Notwithstanding the preceding sentence, any claims arising under the
Maryland Franchise Registration and Disclosure Law must be brought
within three years after the date of this Agreement.
2. The following sentence is hereby added to the end of Section 11.D.6:
Nothing in this Section 11.D.6, however, will act as a release,
estoppel or waiver of any liability incurred under the Maryland
Franchise Registration and Disclosure Law.
3. The following sentence is hereby added to the end of Section 15.B:
Nothing in this Section 15.B, however, will act as a release,
estoppel or waiver of any liability incurred under the Maryland
Franchise Registration and Disclosure Law.
4. Section 15.I is amended to provide that you may bring a lawsuit in
Maryland for claims arising under the Maryland Franchise Registration and
Disclosure Law. Section 15.I is further amended to provide that any claims
arising under the Maryland Franchise Registration and Disclosure Law must be
brought within three (3) years after the date of the Franchise Agreement.
5. Any provision in the Agreement that requires you to disclaim the
occurrence and/or acknowledge the non occurrence of acts that would constitute a
violation of the Maryland Franchise Registration and Disclosure Law is not
intended to nor will it act as a release, estoppel or waiver of any liability
incurred under the Maryland Franchise Registration and Disclosure Law.
6. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-2-
<PAGE>
RELEASE OF CLAIMS
For and in consideration of the agreements and covenants described
below, Buffalo Wild Wings International, Inc. ("BWW") and ("Franchisee") enter
into this Release of Claims ("Agreement").
RECITALS
A. BWW and Franchisee entered into a BUFFALO WILD WINGS(R) Franchise
Agreement dated __________, ____________.
B. [NOTE: Describe the circumstances relating to the release.]
C. Subject to and as addressed with greater specificity in the terms
and conditions set forth below, BWW and Franchisee now desire to
settle any and all disputes that may exist between them relating to
the Franchise Agreement.
AGREEMENTS
1. CONSIDERATION. [NOTE: Describe the consideration paid.]
2-3. [NOTE: Detail other terms and conditions of the release.]
4. RELEASE OF CLAIMS BY BWW. In consideration of, and only upon full
payment of $________ to BWW, and the other terms and conditions of
this Agreement, the receipt and sufficiency of which is hereby
acknowledged, BWW, for itself, its parent company and for each of
its affiliated corporations, subsidiaries, divisions, insurers,
indemnitors, attorneys, successors, and assigns, together with all
of its past and present directors, officers, employees, attorneys,
agents, assigns and representatives does hereby release and forever
discharge Franchisee and each of his heirs, executors, successors,
and assigns of and from any and all actions, suits, proceedings,
claims (including, but not limited to, claims for attorney's fees),
complaints, judgments, executions, whether liquidated or
unliquidated, known or unknown, asserted or unassorted, absolute or
contingent, accrued or not accrued, disclosed or undisclosed,
related to the Franchise Agreement. This release does not release
Franchisee from any obligations he may have under this Agreement.
5. RELEASE OF CLAIMS BY FRANCHISEE. In consideration of the other
terms and conditions of this Agreement, the receipt and sufficiency
of which is hereby acknowledged, Franchisee, for himself and for
each of his heirs, executors, administrators, insurers, attorneys,
agents, representatives, successors, and assigns, does hereby
release and forever discharge Buffalo Wild Wings International,
Inc., its parent company and each of its respective affiliated
corporations, subsidiaries, divisions, insurers, indemnitors,
attorneys, successors, and assigns, together with all of their past
and present directors, officers, employees, attorneys, agents,
assigns and representatives in their capacities as such, of and from
any and all actions, suits, proceedings, claims (including, but not
limited to, claims for attorney's fees), complaints, charges,
judgments, executions, whether liquidated or unliquidated, known or
unknown, asserted or unasserted, absolute or contingent, accrued or
not accrued, related to the Franchise Agreement.
6. RESERVATION OF CLAIMS AGAINST NON-SETTLING PARTIES. Buffalo Wild
Wings International, Inc. and Franchisee expressly reserve their
right and claims against any non-settling persons, firms,
corporations, or other entities for whatever portion or percentage
their damages are found to be attributable to the wrongful conduct
of said non-settling parties.
-2-
<PAGE>
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relative to the subject matter contained herein,
and all prior understandings, representations and agreements made by
and between the parties relative to the contents contained in this
Agreement are merged into this Agreement.
8. VOLUNTARY NATURE OF AGREEMENT. The parties acknowledge and agree
that they have entered into this Agreement voluntarily and without
any coercion. The parties further represent that they have had the
opportunity to consult with an attorney of their own choice, that
they have read the terms of this Agreement, and that they fully
understand and voluntarily accept the terms.
9. GOVERNING LAW AND JURISDICTION. This Agreement will be construed
and enforced in accordance with the law of the state of
____________.
10. ATTORNEYS' FEES. All rights and remedies under this Agreement
shall be cumulative and none shall exclude any other right or remedy
allowed by law. In the event of a breach of this Agreement that
requires one of the parties to enforce the terms and conditions of
this Agreement, the non-prevailing party shall pay the prevailing
party's attorneys' fees and costs incurred by reason of the breach.
Dated: ______________,2006 BUFFALO WILD WINGS INTERNATIONAL, INC.
________________________________________
By:_____________________________________
Its:____________________________________
Dated: ______________,2006 FRANCHISEE:
________________________________________
By:_____________________________________
Its:____________________________________
-3-
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF MINNESOTA
This Addendum pertains to franchises sold in the State of Minnesota and is for
the purpose of complying with Minnesota statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended as follows:
1. We will undertake the defense of any claim of infringement by third
parties involving the BUFFALO WILD WINGS mark, and you will cooperate with the
defense in any reasonable manner prescribed by us with any direct cost of such
cooperation to be borne by us.
2. Minnesota law provides franchisees with certain termination and
nonrenewal rights. As of the date of this Franchise Agreement, Minn. Stat. Sec.
80C.14, Subd. 3, 4 and 5 require, except in certain specified cases, that a
franchisee be given 90 days notice of termination (with 60 days to cure) and 180
days notice for nonrenewal of the franchise agreement.
3. The second sentence of Section 12.B of the Agreement is deleted in
its entirety and will have no further force and effect and the following is
substituted in lieu thereof:
Therefore, it is mutually agreed that in the event of a breach or
threatened breach of any of the terms of this Agreement by you, we
will forthwith be entitled to seek an injunction restraining such
breach or to a decree of specific performance, without showing or
proving any actual damage, together with recovery of reasonable
attorneys' fees and other costs incurred in obtaining said equitable
relief, until such time as a final and binding determination is made
by the arbitrators.
4. Section 15.J is hereby deleted in its entirety.
5. No release language set forth in the Franchise Agreement shall
relieve Franchisor or any other person, directly or indirectly, from liability
imposed by the laws concerning franchising in the State of Minnesota, provided,
that this part will not bar the voluntary settlement of disputes.
6. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-4-
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF NORTH DAKOTA
This Addendum pertains to franchises sold in the State of North Dakota and is
for the purpose of complying with North Dakota statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended to include the following:
1. Notwithstanding anything contained in Section 12.A of the Franchise
Agreement, any arbitration proceeding must take place in the city nearest to the
your Business in which the American Arbitration Association maintains an office
and facility for arbitration, or at such other location as may be mutually
agreed upon by the parties.
2. Covenants not to compete such as those mentioned in Sections 10.D
of the Franchise Agreement may be subject to Section 9-08-06 of the North Dakota
Century Code and unenforceable in the State of North Dakota if contrary to
Section 9-08-06.
3. The North Dakota Securities Commissioner has held that requiring
franchisees to consent to the jurisdiction of courts outside of North Dakota is
unfair, unjust or inequitable within the intent of Section 51-19-09 of the North
Dakota Franchise Investment Law. The first sentence of Section 15.I is therefore
deleted in its entirety, and the following substituted in lieu thereof:
Any cause of action, claim, suit or demand allegedly arising from or
related to the terms of this Agreement or the relationship of the
parties that is not subject to arbitration under Paragraph 12 must
be brought in the Federal District Court for the District of
Minnesota or in Hennepin County District Court, Fourth Judicial
District, Minneapolis, Minnesota or the federal or state court of
the Designated Area in which the you are located.
4. Section 15.J is hereby deleted from the Franchise Agreement, as a
waiver of punitive damages is considered unenforceable in the State of North
Dakota.
5. Pursuant to Section 51-19-09 of the North Dakota Franchise
Investment Law, a franchisee may not be required to sign a general release as a
condition of renewal under Section 4.B of the Franchise Agreement.
6. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-2-
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF WASHINGTON
This Addendum pertains to franchises sold in the State of Washington
and is for the purpose of complying with Washington statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended to include the following:
1. Section 15.B of the Franchise Agreement is amended by the addition
of the following language:
If any of the provisions in the Franchise Offering Circular or
Franchise Agreement are inconsistent with the relationship
provisions of R.C.W. 19.100.180 or other requirements of the
Washington Franchise Investment Protection Act, the provisions of
the Act will prevail over the inconsistent provisions of the
Franchise Offering Circular and Franchise Agreement with regard to
any franchise sold in Washington.
2. The second sentence of Section 12.A is hereby deleted in its
entirety and the following substituted in lieu thereof
The arbitration must take place either in the state of Washington,
or in a place mutually agreed upon at the time of the arbitration,
or as determined by the arbitrator.
3. Paragraph 16 of the Franchise Agreement is amended by the addition
of the following language:
A release or waiver of rights executed by you will not include
rights under the Washington Franchise Investment Protection Act
except when executed pursuant to a negotiated settlement after the
agreement is in effect and where the parties are represented by
independent counsel. Provisions such as those which unreasonably
restrict or limit the statute of limitations period for claims under
the Act, rights or remedies under the Act such as a right to a jury
trial may not be enforceable.
4. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-1-
<PAGE>
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF WISCONSIN
This Addendum pertains to franchisees in the State of Wisconsin and is for the
purpose of complying with Wisconsin statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended to include the following:
1. Notwithstanding anything which may be contained in the body of the
Franchise Agreement to the contrary, Section 13.B of the Agreement pertaining to
"Termination by Us" is extended as follows:
We will provide you at least 90 days' prior written notice of
termination, cancellation, or substantial change in competitive
circumstances. The notice will state all the reasons for
termination, cancellation, or substantial change in competitive
circumstances and will provide that you have 60 days in which to
rectify any claimed deficiency. If the deficiency is rectified
within 60 days, the notice will be void. If the reason for
termination, cancellation, or substantial change in competitive
circumstances is nonpayment of sums due under the franchise, you
will be entitled to written notice of such default, and will have
not less than 10 days in which to remedy such default from the date
of delivery or posting of such notice.
2. Ch. 135, Stats., the Wisconsin Fair Dealership Law, supersedes any
provisions of this Agreement or a related document between you and us
inconsistent with the Law.
3. Except as amended herein, the Franchise Agreement will be construed
and enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-2-
<PAGE>
BUFFALO WILD WINGS(R)
DEVELOPER INCENTIVE PACKAGE
ADDENDUM TO FRANCHISE AGREEMENT
This Addendum is appended to, and made a part of, the BUFFALO WILD WINGS
Franchise Agreement, dated __________ (the "Agreement"), between BUFFALO WILD
WINGS INTERNATIONAL, INC. ("we" or "us") and ____________________("you").
Capitalized terms not defined in this Addendum have the meanings given to them
in the Agreement. In the event of any conflict between the terms of this
Addendum and those in the Agreement, the terms of this Addendum shall control.
The Agreement is hereby amended as follows:
1. The Agreement was entered into pursuant to an Area Development
Agreement between you and us dated ________________ (the
"Development Agreement"). Subject to the following conditions, if
you open your Restaurant by the date required for the Restaurant
under the Development Agreement, Royalty Fees will be abated for the
first 52 weeks of operation of your Restaurant. If you default under
your Agreement during the first 52 weeks of operation, the abatement
of Royalty Fees will be forfeited from the date a written notice of
default is issued to you.
2. You acknowledge and agree that the Restaurant and the Agreement are
subject to certain provisions of the Development Agreement,
including, but not limited to, Section 8.F thereunder.
3. All provisions of the Agreement that are not expressly modified
herein shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed the foregoing Addendum
as of the date first written above.
YOU: WE: BUFFALO WILD WINGS
INTERNATIONAL, INC.
_______________________________ ________________________
By:____________________________ By: Sally J. Smith
---------------------
Its:________________________ Its: President & CEO
-----------------
By:____________________________
Its:________________________
-2-
<PAGE>
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits
and attachments) at least 10 business days prior to signing the
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing
the Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5
business days prior to the date on which the Franchise Agreement was
executed? Check one: ( ) Yes ( ) No. If no, please comment:
________________________________________________________________
________________________________________________________________
4. Did you understand all the information contained in both the
Offering Circular and Franchise Agreement? Check one: ( ) Yes ( )
No. If no, please comment:
________________________________________________________________
________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check
one: ( ) Yes ( ) No. If yes, please state in detail the oral,
written or visual claim or representation:
________________________________________________________________
________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income
or profit levels at any BUFFALO WILD WINGS location or business, or
the likelihood of success at your franchised business? Check one: (
) Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
________________________________________________________________
________________________________________________________________
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding
the costs involved in operating a franchise that is not contained in
the Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes
(__) No. If yes, please comment:
________________________________________________________________
________________________________________________________________
-2-
<PAGE>
8. Do you understand that that the franchise granted is for the right
to develop and operate the Restaurants in the Designated Territory,
as stated in Subparagraph 2.B, and that, according to Subparagraph
2.D, we and our affiliates have the right to distribute products
through alternative methods of distribution and to issue franchises
or operate competing businesses for or at locations, as we
determine, (i) outside of your Designated Area using any trademarks;
(ii) inside your Designated Territory using any trademarks other
than the BUFFALO WILD WINGS Trademark; and (iii) inside the
Designated Territory using the BUFFALO WILD WINGS Trademark, for
facilities at Special Sites and facilities with interior areas less
than 2,400 square feet (subject to your right of first refusal as
detailed in the Franchise Agreement)? Check one: (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not
set out in the Franchise Agreement will not be binding? Check one:
(__) Yes (__) No. If no, please comment:
________________________________________________________________
________________________________________________________________
10. Do you understand that the success or failure of your Restaurant
will depend in large part upon your skills and experience, your
business acumen, your location, the local market for products under
the BUFFALO WILD WINGS trademarks, interest rates, the economy,
inflation, the number of employees you hire and their compensation,
competition and other economic and business factors? Further, do you
understand that the economic and business factors that exist at the
time you open your Business may change? Check one (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
APPROVED ON BEHALF OF
BUFFALO WILD WINGS
INTERNATIONAL, INC.
Signed:_____________________ Signed:_____________________
Print Name:_________________ Print Name: Sally J. Smith,
President & CEO
Date:_______________________ Date:_______________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.
-3-
<PAGE>
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits
and attachments) at least 10 business days prior to signing the
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing
the Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5
business days prior to the date on which the Franchise Agreement was
executed? Check one: ( ) Yes ( ) No. If no, please comment:
________________________________________________________________
________________________________________________________________
4. Did you understand all the information contained in both the
Offering Circular and Franchise Agreement? Check one: ( ) Yes ( )
No. If no, please comment:
________________________________________________________________
________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check
one: ( ) Yes ( ) No. If yes, please state in detail the oral,
written or visual claim or representation:
________________________________________________________________
________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income
or profit levels at any BUFFALO WILD WINGS location or business, or
the likelihood of success at your franchised business? Check one:( )
Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
________________________________________________________________
________________________________________________________________
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding
the costs involved in operating a franchise that is not contained in
the Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes
(__) No. If yes, please comment:
________________________________________________________________
________________________________________________________________
-2-
<PAGE>
8. Do you understand that that the franchise granted is for the right
to develop and operate the Restaurants in the Designated Territory,
as stated in Subparagraph 2.B, and that, according to Subparagraph
2.D, we and our affiliates have the right to distribute products
through alternative methods of distribution and to issue franchises
or operate competing businesses for or at locations, as we
determine, (i) outside of your Designated Area using any trademarks;
(ii) inside your Designated Territory using any trademarks other
than the BUFFALO WILD WINGS Trademark; and (iii) inside the
Designated Territory using the BUFFALO WILD WINGS Trademark, for
facilities at Special Sites and facilities with interior areas less
than 2,400 square feet (subject to your right of first refusal as
detailed in the Franchise Agreement)? Check one: (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not
set out in the Franchise Agreement will not be binding? Check one:
(__) Yes (__) No. If no, please comment:
________________________________________________________________
________________________________________________________________
10. Do you understand that the success or failure of your Restaurant
will depend in large part upon your skills and experience, your
business acumen, your location, the local market for products under
the BUFFALO WILD WINGS trademarks, interest rates, the economy,
inflation, the number of employees you hire and their compensation,
competition and other economic and business factors? Further, do you
understand that the economic and business factors that exist at the
time you open your Business may change? Check one (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
APPROVED ON BEHALF OF
BUFFALO WILD WINGS
INTERNATIONAL, INC.
Signed:_____________________ Signed:_____________________
Print Name:_________________ Print Name: Sally J. Smith,
President & CEO
Date:_______________________ Date:_______________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.
-3-
<PAGE>
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits
and attachments) at least 10 business days prior to signing the
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing
the Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
________________________________________________________________
________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5
business days prior to the date on which the Franchise Agreement was
executed? Check one: ( ) Yes ( ) No. If no, please comment:
________________________________________________________________
________________________________________________________________
4. Did you understand all the information contained in both the
Offering Circular and Franchise Agreement? Check one: ( ) Yes ( )
No. If no, please comment:
________________________________________________________________
________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check
one: ( ) Yes ( ) No. If yes, please state in detail the oral,
written or visual claim or representation:
________________________________________________________________
________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income
or profit levels at any BUFFALO WILD WINGS location or business, or
the likelihood of success at your franchised business? Check one: (
) Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
________________________________________________________________
________________________________________________________________
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding
the costs involved in operating a franchise that is not contained in
the Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes
(__) No. If yes, please comment:
________________________________________________________________
________________________________________________________________
-2-
<PAGE>
8. Do you understand that that the franchise granted is for the right
to develop and operate the Restaurants in the Designated Territory,
as stated in Subparagraph 2.B, and that, according to Subparagraph
2.D, we and our affiliates have the right to distribute products
through alternative methods of distribution and to issue franchises
or operate competing businesses for or at locations, as we
determine, (i) outside of your Designated Area using any trademarks;
(ii) inside your Designated Territory using any trademarks other
than the BUFFALO WILD WINGS Trademark; and (iii) inside the
Designated Territory using the BUFFALO WILD WINGS Trademark, for
facilities at Special Sites and facilities with interior areas less
than 2,400 square feet (subject to your right of first refusal as
detailed in the Franchise Agreement)? Check one: (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not
set out in the Franchise Agreement will not be binding? Check one:
(__) Yes (__) No. If no, please comment:
________________________________________________________________
________________________________________________________________
10. Do you understand that the success or failure of your Restaurant
will depend in large part upon your skills and experience, your
business acumen, your location, the local market for products under
the BUFFALO WILD WINGS trademarks, interest rates, the economy,
inflation, the number of employees you hire and their compensation,
competition and other economic and business factors? Further, do you
understand that the economic and business factors that exist at the
time you open your Business may change? Check one (__) Yes (__) No.
If no, please comment:
________________________________________________________________
________________________________________________________________
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
APPROVED ON BEHALF OF
BUFFALO WILD WINGS
INTERNATIONAL, INC.
Signed:_____________________ Signed:_____________________
Print Name:_________________ Print Name: Sally J. Smith,
President & CEO
Date:_______________________ Date:_______________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.
-3-