Site Development. 4.1 Franchisee shall submit a proposed site for the Restaurant for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Franchisee under this Agreement or any other development, franchise or other agreement between Franchisor and Franchisee, evaluate the site proposed for which Franchisee has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Franchisee’s proposal, send to Franchisee written notice of acceptance or non- acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Franchisee shall: a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Franchisee: (i) owns the site; or (ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or (iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits. (iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 below. 4.2 After execution of this Agreement, Franchisee will be required to achieve certain milestones to assure the timely development of the Restaurant: a. Franchisee shall complete the acquisition of the Location, resulting in a fully executed lease or recorded grant deed (for real property which includes the Location) in the name of Franchisee within ninety (90) days following the date of Company’s execution of this Agreement; and b. Within six (6) months following the date of Company’s execution of this Agreement, Franchisee must have completed all of the site development work (including, but not limited to, engineering, architectural/design, entitlements, and permitting) and commence construction of the Restaurant. c. Within twelve (12) months following the date of Company’s execution of this Agreement, Franchisee must have completed construction of the Restaurant at the Location and the Restaurant shall be open to the public. The Company shall have no liability under any lease or purchase agreement for the Location and shall not guaranty Franchisee’s obligations under the same. In the event that Franchisee executes a lease for the Location site, Franchisee shall furnish to the Company a copy of the executed lease within fifteen (15) days of the date of execution of such lease. Company shall have no obligation to assist Franchisee to negotiate such lease. The lease may not contain a non-competition covenant which restricts the Company, or any franchisee of the Company, from operating an El Pollo Loco Restaurant or any other retail restaurant, unless such covenant is approved by the Company in writing prior to the execution of the lease. Any lease entered into by Franchisee shall include the following terms and conditions: i. The landlord consents to Franchisee’s use of the premises as an El Pollo Loco restaurant and such restaurant may be open for business during the required days and hours set forth in the Manual from time to time; ii. The landlord agrees to furnish the Company with copies of any and all notices of default, if any, pertaining to the lease and the premises, at the same time that such notices are sent to Franchisee; and iii. The landlord agrees that, subject to any other applicable provisions in this Agreement, the Company shall have the right, at its sole option and without any obligation whatsoever to do so, to assume Franchisee’s occupancy rights under the lease for the remainder of its term upon Franchisee’s default or termination under such lease, the termination of this Agreement, or the exercise by the Company of its right of first refusal or right to purchase as set forth at Sections 17 and 19 of this Agreement. iv. That upon expiration or termination of the lease for any reason, Franchisee shall, upon Company’s demand, remove all of the El Pollo Loco Marks from the Restaurant and the Location and modify the decor of the Restaurant and Location so that it no longer resembles, in whole or in part, a “El Pollo Loco” restaurant and that if Franchisee shall fail do so, Company will be given written notice and the right to enter the Location to make such alterations, in which event Franchisee shall reimburse Company for all direct and indirect costs and expense it may incur in connection therewith, including attorney’s fees. 4.3 Franchisee shall complete and open the Restaurant for business, in accordance with the provisions of this Agreement, no later than twelve (12) months from the date of Company’s execution hereof; provided, however, if Franchisee purchases a currently operating and Company- owned Restaurant from the Company (a “Turnkey Restaurant”), then Franchisee shall begin operation of the Restaurant on the date possession of the Restaurant is transferred to Franchisee pursuant to the agreement entered into between Franchisee and the Company for the purchase of such restaurant facility. Failure to reach each milestone described in Section 4.1 a.-c. above within the specified time frames shall constitute a material default hereunder. Prior to opening the Restaurant, Franchisee shall obtain and thereafter maintain throughout the term of this Agreement all necessary business licenses, permits and other documentation necessary for the operation of an El Pollo Loco restaurant. 4.4 Franchisee understands and acknowledges that in accepting Franchisee’s Location, or by granting a franchise for a Location (whether or not formerly operated as a Company-owned Restaurant), the Company does not in any way endorse, warrant or guarantee either directly or indirectly the suitability of such Location or the success of the franchise business to be operated by Franchisee at such Location. The suitability of the Location and the success of the franchise business depends upon a number of factors outside of the Company’s control including, but not limited to, the Franchisee’s operational abilities, site location, consumer trends and such other factors that are within the direct control of the Franchisee. Franchisor may require, as a condition to its approval of a site, a site description and analysis, traffic and other demographic information, all in such format as the Company may require, which information shall include, without limitation, a study prepared by a third party reasonably acceptable to the Company analyzing the impact of the proposed site on other franchised restaurants surrounding or within the vicinity of such proposed site. All such analyses, information and studies shall be prepared at the sole cost and expense of Franchisee.
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Sources: Franchise Agreement
Site Development. 4.1 Franchisee shall submit a proposed site for the Restaurant for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Franchisee under this Agreement or any other development, franchise or other agreement between Franchisor and Franchisee, evaluate the site proposed for which Franchisee has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Franchisee’s proposal, send to Franchisee written notice of acceptance or non- non-acceptance of the site. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer purchasing or leasing the proposed site. Within ninety (90) days after Franchisor’s site acceptance, Franchisee shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Franchisee:
(i) owns the site; or
(ii) has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or
(iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits.
(iv) If Developer has leased the site, the lease shall contain the provisions required in Section 4.2 below.
4.2 After execution of this Agreement, Franchisee will be required to achieve certain milestones to assure the timely development of the Restaurant:
a. Franchisee shall complete the acquisition of the Location, resulting in a fully executed lease or recorded grant deed (for real property which includes the Location) in the name of Franchisee within ninety (90) days following the date of Company’s execution of this Agreement; and
b. Within six (6) months following the date of Company’s execution of this Agreement, Franchisee must have completed all of the site development work (including, but not limited to, engineering, architectural/design, entitlements, and permitting) and commence construction of the Restaurant.
c. Within twelve (12) months following the date of Company’s execution of this Agreement, Franchisee must have completed construction of the Restaurant at the Location and the Restaurant shall be open to the public. The Company shall have no liability under any lease or purchase agreement for the Location and shall not guaranty Franchisee’s obligations under the same. In the event that Franchisee executes a lease for the Location site, Franchisee shall furnish to the Company a copy of the executed lease within fifteen (15) days of the date of execution of such lease. Company shall have no obligation to assist Franchisee to negotiate such lease. The lease may not contain a non-competition covenant which restricts the Company, or any franchisee of the Company, from operating an El Pollo Loco Restaurant or any other retail restaurant, unless such covenant is approved by the Company in writing prior to the execution of the lease. Any lease entered into by Franchisee shall include the following terms and conditions:
i. The landlord consents to Franchisee’s use of the premises as an El Pollo Loco restaurant and such restaurant may be open for business during the required days and hours set forth in the Manual from time to time;
ii. The landlord agrees to furnish the Company with copies of any and all notices of default, if any, pertaining to the lease and the premises, at the same time that such notices are sent to Franchisee; and
iii. The landlord agrees that, subject to any other applicable provisions in this Agreement, the Company shall have the right, at its sole option and without any obligation whatsoever to do so, to assume Franchisee’s occupancy rights under the lease for the remainder of its term upon Franchisee’s default or termination under such lease, the termination of this Agreement, or the exercise by the Company of its right of first refusal or right to purchase as set forth at Sections 17 and 19 of this Agreement.
iv. That upon expiration or termination of the lease for any reason, Franchisee shall, upon Company’s demand, remove all of the El Pollo Loco Marks from the Restaurant and the Location and modify the decor of the Restaurant and Location so that it no longer resembles, in whole or in part, a “El Pollo Loco” restaurant and that if Franchisee shall fail do so, Company will be given written notice and the right to enter the Location to make such alterations, in which event Franchisee shall reimburse Company for all direct and indirect costs and expense it may incur in connection therewith, including attorney’s fees.
4.3 Franchisee shall complete and open the Restaurant for business, in accordance with the provisions of this Agreement, no later than twelve (12) months from the date of Company’s execution hereof; provided, however, if Franchisee purchases a currently operating and Company- Company-owned Restaurant from the Company (a “Turnkey Restaurant”), then Franchisee shall begin operation of the Restaurant on the date possession of the Restaurant is transferred to Franchisee pursuant to the agreement entered into between Franchisee and the Company for the purchase of such restaurant facility. Failure to reach each milestone described in Section 4.1 a.-c. above within the specified time frames shall constitute a material default hereunder. Prior to opening the Restaurant, Franchisee shall obtain and thereafter maintain throughout the term of this Agreement all necessary business licenses, permits and other documentation necessary for the operation of an El Pollo Loco restaurant.
4.4 Franchisee understands and acknowledges that in accepting Franchisee’s Location, or by granting a franchise for a Location (whether or not formerly operated as a Company-owned Restaurant), the Company does not in any way endorse, warrant or guarantee either directly or indirectly the suitability of such Location or the success of the franchise business to be operated by Franchisee at such Location. The suitability of the Location and the success of the franchise business depends upon a number of factors outside of the Company’s control including, but not limited to, the Franchisee’s operational abilities, site location, consumer trends and such other factors that are within the direct control of the Franchisee. Franchisor may require, as a condition to its approval of a site, a site description and analysis, traffic and other demographic information, all in such format as the Company may require, which information shall include, without limitation, a study prepared by a third party reasonably acceptable to the Company analyzing the impact of the proposed site on other franchised restaurants surrounding or within the vicinity of such proposed site. All such analyses, information and studies shall be prepared at the sole cost and expense of Franchisee.
Appears in 1 contract
Site Development. 4.1 Franchisee shall employ only those qualified development professionals (including architectural firms, contractors and other real estate site development professionals or consultants) who have been approved in writing by Franchisor and who have executed the Preferred Development Professional Agreement.
4.2 Franchisee shall submit a proposed site for the Restaurant for acceptance by Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such site information as may be reasonably required by Franchisor to evaluate the proposed site. Franchisor shall, provided there exists no default by Franchisee under this Agreement or any other development, franchise or other agreement between Franchisor and Franchisee, evaluate the site proposed for which Franchisee has provided all necessary evaluation information, and shall promptly, but not more than sixty (60) days after receipt of Franchisee’s proposal, send to Franchisee written notice of acceptance or non- non-acceptance of the site. Franchisor shall send representatives to evaluate a proposed site for the Restaurant, and Franchisor will do so at its own expense for the first two (2) proposed sites for the Restaurant. If Franchisee proposes, and Franchisor evaluates, more than two (2) sites for the Restaurant, then Franchisee shall reimburse Franchisor for the reasonable costs and expenses incurred by Franchisor’s representatives in connection with the evaluation of such additional proposed site(s), including, without limitation, the costs of lodging, travel and meals. In addition, as a condition to reviewing a proposed site for the Restaurant, and to determine the impact a proposed site may have on other existing restaurants operating under the El Pollo Loco® System, Franchisor may require Franchisee to pay for a market study conducted by a third party of the proposed site and the surrounding geographic area. Site approval does not assure that a Franchise Agreement will be executed. Execution of the Franchise Agreement is contingent upon Developer Franchisee purchasing or leasing the proposed site. site and satisfying all other conditions imposed by Franchise Agreement upon the issuance of a franchise.
4.3 Within ninety (90) days after Franchisor’s Franchisor has approved a site acceptancefor the Restaurant, Franchisee shall:
a) Submit in writing to Franchisor, satisfactory proof to Franchisor that Franchisee:
(i) owns the sitesite or has entered into a written agreement to purchase the approved site on terms provided herein, subject, only to obtaining necessary governmental permits. Should Franchisee purchase the site using another entity other than the franchise entity, Franchisee must then enter into a lease with the Franchisee’s entity as the lessee and the purchasing entity as the lessor. Such lease needs to comply with Sections 4.3 (ii) and 4.4 below. This process needs to be completed within ninety (90) days after Franchisor has approved a site for the Restaurant; or
(ii) has entered into a written agreement to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits or franchisee has leased the site for a term which, with renewal options is not less than the initial term of the Franchise Agreement; or
(iii) has entered into a written agreement to purchase or to lease the approved site on terms provided herein, subject, only to obtaining necessary governmental permits.
(iv) . If Developer Franchisee has leased the site, the lease shall contain the provisions required in Section 4.2 4.4 below. The unexecuted form of the lease must be submitted to Franchisor to review for the required terms and conditions listed below in Section 4.4 prior to full execution of the lease. Upon approval of the inclusion of such required terms and conditions, Franchisor will notify Franchisee of such approval. Franchisee will then provide a final executed copy of the lease to Franchisor. This process needs to be completed within ninety (90) days after Franchisor has approved a site for the Restaurant.
4.2 4.4 After execution of this Agreement, Franchisee will be required to achieve certain milestones to assure the timely development of the Restaurant:
a. Franchisee shall complete the acquisition of the Location, resulting in a fully executed lease or recorded grant deed (for real property which includes the Location) in the name of Franchisee within ninety (90) days following the date of CompanyFranchisor’s execution of this Agreement; and
b. Within six (6) months following the date of CompanyFranchisor’s execution of this Agreement, Franchisee must have completed all of the site development work (including, but not limited to, engineering, architectural/design, entitlements, and permitting) and commence construction of the Restaurant.
c. Within twelve (12) months following the date of CompanyFranchisor’s execution of this Agreement, or the date specified in the Development Agreement, if earlier, Franchisee must have completed construction of the Restaurant at the Location and the Restaurant shall be open to the public. The Company Franchisor shall have no liability under any lease or purchase agreement for the Location Restaurant location and shall not guaranty Franchisee’s obligations under the same. In the event that Franchisee executes a lease for the Location site, Franchisee shall furnish to the Company Franchisor a copy of the executed lease within fifteen (15) days of the date of execution of such lease. Company Franchisor shall have no obligation to assist Franchisee to negotiate such lease. The lease may not contain a non-competition covenant which restricts the CompanyFranchisor, or any franchisee of the CompanyFranchisor, from operating an El Pollo Loco Loco® Restaurant or any other retail restaurant, unless such covenant is approved by the Company Franchisor in writing prior to the execution of the lease. Any lease entered into by Franchisee shall include the following terms and conditions:
i. The landlord consents to Franchisee’s 's use of the premises as an El Pollo Loco Loco® restaurant and such restaurant may be open for business during the required days and hours set forth in the Manual from time to time;
ii. The landlord agrees to furnish the Company Franchisor with copies of any and all notices of default, if any, pertaining to the lease and the premises, at the same time that such notices are sent to Franchisee; and
iii. The landlord agrees that, subject to any other applicable provisions in this Agreement, the Company Franchisor shall have the right, at its sole option and without any obligation whatsoever to do so, to assume Franchisee’s 's occupancy rights under the lease for the remainder of its term upon Franchisee’s 's default or termination under such lease, the termination of this Agreement, or the exercise by the Company Franchisor of its right of first refusal or right to purchase as set forth at Sections 17 and 19 of this Agreement.
iv. That upon expiration or termination of the lease for any reason, Franchisee shall, upon CompanyFranchisor’s demand, remove all of the El Pollo Loco Loco® Marks from the Restaurant and the Location and modify the decor of the Restaurant and Location so that it no longer resembles, in whole or in part, a “"El Pollo Loco” " restaurant and that if Franchisee shall fail do so, Company Franchisor will be given written notice and the right to enter the Location to make such alterations, in which event Franchisee shall reimburse Company Franchisor for all direct and indirect costs and expense it may incur in connection therewith, including attorney’s fees.
4.3 Franchisee shall complete and open the Restaurant for business, in accordance with the provisions of this Agreement, no later than twelve (12) months from the date of Company’s execution hereof; provided, however, if 4.5 If Franchisee purchases a currently operating and Company- owned Restaurant from the Company Franchisor (a “Turnkey Restaurant”), then Franchisee shall begin operation of the Restaurant on the date possession of the Restaurant is transferred to Franchisee pursuant to the agreement entered into between Franchisee and the Company Franchisor for the purchase of such restaurant facilityRestaurant. Failure to reach each milestone described in Section 4.1 a.-c. Sections 4.3 and 4.4 above within the specified time frames shall constitute a material default hereunder. Prior to opening the Restaurant, Franchisee shall obtain and thereafter maintain throughout the term of this Agreement all necessary business licenses, permits and other documentation necessary for the operation of an El Pollo Loco Loco® restaurant.
4.4 4.6 Franchisee understands and acknowledges that in accepting Franchisee’s Location, or by granting a franchise for a Location (whether or not formerly operated as a CompanyFranchisor or franchisee-owned Restaurant), the Company Franchisor does not in any way endorse, warrant or guarantee either directly or indirectly the suitability of such Location or the success of the franchise business to be operated by Franchisee at such Location. The suitability of the Location and the success of the franchise business depends upon a number of factors outside of the Company’s Franchisor's control including, but not limited to, the Franchisee’s operational abilities, site location, consumer trends and such other factors that are within the direct control of the Franchisee. Franchisor may require, as a condition to its approval of a site, a site description and analysis, traffic and other demographic information, all in such format as the Company Franchisor may require, which information shall include, without limitation, a study prepared by a third party reasonably acceptable to the Company Franchisor analyzing the impact of the proposed site on other franchised restaurants surrounding or within the vicinity of such proposed site. All such analyses, information and studies shall be prepared at the sole cost and expense of Franchisee.
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