EXHIBIT 10.32
NATIONAL AUTO/TRUCKSTOPS, INC.
FRANCHISE AGREEMENT
Franchise Agreement, made this day of ,
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19__, by and between NATIONAL AUTO/TRUCKSTOPS, INC., a Delaware corporation,
having its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Franchisor") and ("Franchisee").
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WITNESSETH:
WHEREAS, Franchisor owns a unique auto/truckstop network which
includes, among other things, the establishment, development and operation of
businesses for full-service truckstop facilities that provide motor fuel pumping
facilities, along with one or more of the following services: truck care and
repair services, a full-service restaurant, a convenience store, showers,
laundry facilities, telephones, recreation rooms, truck weighing scales and
other compatible business services ("A/TS Network");
WHEREAS, Franchisor has expended time, effort and money to
develop the A/TS Network;
WHEREAS, Union Oil Company of California, a California corporation
("Unocal"), is the owner of certain registered or unregistered trademarks,
service marks and/or trade names when used in the field of manufacturing,
marketing and selling various petroleum and related products and services;
WHEREAS, Unocal has granted Franchisor a license to use and
sublicense such registered or unregistered trademarks, service marks and/or
trade names in connection with the operation of the A/TS Network, pursuant to a
trademark license agreement ("Trademark License Agreement") by and between
Unocal and Franchisor;
WHEREAS, in addition to the trademarks, service marks and/or trade
names granted under the Trademark License Agreement, Franchisor may, from time
to time, develop, use and control other trademarks, service marks and/or trade
names for the benefit and use of Franchisor and the Franchised Businesses in
order to identify for the public the source of products and services and to
represent the A/TS Network's high standards of operations, quality, appearance
and service;
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WHEREAS, Franchisor grants to certain qualified persons a Franchised
Business providing products and services authorized and approved by Franchisor
and utilizing the Marks, and Franchisee desires to own and/or operate a
Franchised Business under the A/TS Network and wishes to enter into a franchise
relationship with Franchisor for that purpose, as well as to receive assistance
provided by Franchisor in connection therewith (collectively, a "Franchise
Relationship");
WHEREAS, Franchisee understands and acknowledges the importance of
and agrees to comply with Franchisor's high and uniform standards of quality and
service and the necessity of operating the Franchised Business in conformity
with Franchisor's standards and specifications; and
WHEREAS, Franchisor expressly disclaims the making of and Franchisee
acknowledges that it has not received nor relied upon any warranty or guaranty,
express or implied, as to the revenues, profits or success of the business
venture contemplated by this Agreement. Franchisee acknowledges that it has read
this Agreement and Franchisor's Uniform Franchise Offering Circular and all
exhibits thereto ("Offering Circular") upon which it has exclusively relied, and
that it has no knowledge of any representations by Franchisor, or its officers,
directors, stockholders, employees or agents that are contrary to the statements
made in the Offering Circular or to the terms herein.
NOW THEREFORE, in consideration of the premises, representations,
warranties, covenants and agreements set forth herein, the parties hereby agree
as follows:
I. DEFINITIONS
1.1 Except where the context otherwise requires, the following terms
used herein shall have the meanings set forth below.
A. "ACCESS 76 System" shall mean the on-line credit card and
information retrieval system pursuant to a Software License Agreement between
Franchisor and Unocal.
B. "Advertising Fund" shall mean the advertising, marketing
and promotional fund to be used for the development, placement and
implementation of Advertising Materials to promote the A/TS Network.
C. "Advertising Material" shall mean any advertising or
promotional material, including, but not limited to, newspapers, other print
media, radio and television advertising, other electronic media advertising,
specialty and novelty items, signs, boxes, containers, point-of-sale materials,
napkins, bags and wrapping papers.
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D. "Affiliates" shall mean, with respect to any person, any
person directly or indirectly controlling, controlled by or under direct or
indirect common control with such other person.
E. "Approved Supplies List" shall mean a list of approved
inventory, products, fixtures, furniture, equipment, signs, stationery,
supplies, and other items or services used to operate the Franchised Business.
F. "Approved Suppliers List" shall mean a list of approved
manufacturers, suppliers and distributors of items or services on the Approved
Supplies List.
G. "Average Monthly Base" shall mean the total of all Non-
Fuel Revenue derived from the operation of Franchisee's Franchised Business
during the Base Year divided by twelve (12).
H. "Base Year" shall mean the twelve (12) month period
beginning July 1, 1991 and ending June 30, 1992.
I. "Branded Fuel" shall mean such brands of fuel meeting
Franchisor's specifications and bearing the Unocal Marks or such other Marks as
Franchisor may designate from time to time.
J. "Branded Products" shall mean certain petroleum products,
truck care products, and other merchandise bearing the Marks.
K. "Buying Program" shall mean a program to capitalize on
group buying power through the purchase by Franchisor on behalf of truckstops in
the A/TS Network of products or services used in the Franchised Business,
including, but not limited to, communications services and devices; store
merchandise; restaurant food supplies and services; garage parts and services;
insurance policies; and business services that serve the trucking industry and
other business customers.
L. "Claim" shall mean an action, suit, claim, demand, cause of
action, legal or administrative or arbitral proceeding, inquiry or
investigation.
M. "Confidential Information" shall mean any and all
information, whether obtained before or after Franchisor acquired the A/TS
Network, relating to the A/TS Network, including, but not limited to, trade
secrets, technology, processes, business plans, business systems, knowledge,
knowhow, drawings, materials, equipment, techniques, procedures for display of
products, product formula and other data. For purposes of this Agreement,
Confidential Information shall exclude information that (i) was in the public
domain at the time of its disclosure to Franchisee or (ii) becomes part of the
public domain through no violation of this
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Agreement or any other obligation by Franchisee or any third party to keep such
information confidential.
N. "Confidential Operations Manual" shall mean the
confidential operations and procedures manual or series of manuals as developed
and maintained by Franchisor for the Franchised Businesses and as the same may
be modified or supplemented from time to time by Franchisor.
O. "Five Star" shall mean the program for operation and
appearance of the Franchised Premises prescribed by Franchisor in the
Confidential Operations Manual and the Lease Agreement.
P. "Fleet Accounts" shall mean trucking companies or other
purchasers of large quantities of diesel fuel.
Q. "Fleet Marketing Throughput Agreement" shall mean, if
executed by Franchisee, the Fleet Marketing Throughput Agreement, between
Franchisor and Franchisee, in substantially the form of Exhibit A attached
hereto, pursuant to which Franchisee agrees to sell diesel fuel owned by
Franchisor to Fleet Accounts in return for a service fee.
R. "Franchised Business" shall mean a franchised business that
is part of the A/TS Network and provides full-service truckstop facilities that
provide motor fuel pumping facilities, along with one or more of the following
services: truck care and repair services, a full-service restaurant, a
convenience store, showers, laundry facilities, telephones, recreation rooms,
truck weighing scales and other compatible business services approved by
Franchisor.
S. "Guides" shall mean Unocal's National Truck Credit Card
Guide, ACCESS 76 Guide, Unocal's Restaurants and TruckStop Stores Credit Card
Guide, Unocal's Service Station Credit Card Guide and such other guides as
Franchisor may, from time to time, introduce into the A/TS Network and require
Franchisee to comply with.
T. "Incapacity" shall mean, if Franchisee is an individual,
the death or continuing severe physical or mental disability of Franchisee of at
least three (3) months' duration, which renders Franchisee unable to provide for
the continued proper operation of its Franchised Business.
U. "Indemnified Parties" shall mean Franchisor and its
Affiliates, officers, employees, agents, stockholders, designees, successors,
assigns and representatives.
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V. "Lease Agreement" shall mean any lease for the Franchised
Premises between Franchisor and Franchisee.
W. "Losses" shall mean all demands, claims, actions or causes
of action, assessments, losses, damages, costs, expenses, labilities, judgments,
awards, find, sanctions, penalties, charges and amounts paid or payable in
settlement, including, all reasonable costs, fees and expenses of attorneys,
experts, accountants, appraisers, consultants, witnesses, investigators and
other agents.
X. "▇▇▇▇(s)" shall mean the Unocal Marks and such other trade
names, trademarks, service marks, logos and commercial symbols as Franchisor
determines in the future (and may hereinafter be designated by Franchisor) as an
integral part of the A/TS Network.
Y. "Motor Fuel" shall mean diesel fuel and gasoline and such
other fuel as Franchisor may sell, from time to time, for use in internal
combustion engines.
Z. "National Warranty Program" shall mean the national service
warranty program prescribed by Franchisor in the Confidential Operations Manual,
as amended by Franchisor from time to time.
AA. "Non-Fuel Revenue" shall mean the total gross monies and
other consideration received by Franchisee from all sales of parts, accessories,
merchandise, food, beverages, other products and services made in or on orders
placed at, or completed by delivery in, through or from any part of the
Franchised Premises, excluding sales of Motor Fuel. Non-Fuel Revenue shall
include sales and charges made for cash or upon credit whether or not collection
is made of the amounts for which credit is given, but shall exclude refunds for
merchandise returns, allowances, or adjustments permitted customers, sales
taxes, and Franchisor's "TLC" Truck Lube Center gross product receipts but shall
not exclude excise taxes, income taxes, or business taxes payable by Franchisee
which are measured by Franchisee's net operating income. Non-Fuel Revenue shall
also include any other monies or other consideration received from broker's
office rental, income or commissions from broker boards, telephones, permit
sales and motel rentals.
BB. "Person" shall mean an individual, corporation,
partnership, association, trust, estate or other entity or organization.
CC. "Promotional Programs" shall mean programs developed,
established and marketed by Franchisor from time to time and designed to induce
users of Franchisee's products or services to patronize its Franchised Business.
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DD. "Unocal Marks" shall mean trademarks, trade names, service
marks and associated logos and commercial symbols licensed to Franchisor
pursuant to a trademark license agreement.
1.2 Each of the following terms is defined in the paragraphs set
forth opposite such term:
"A/TS Network" Recitals
"Advertising Committee" 10.3
"Asserted Liability" 23.4
"Assign" 21.2.A
"Claims Notice" 23.4
"Continuing Services and Royalty Fee" 3.1
"Customer Complaint Form" 19.1.B.2
"Delivery Termination Date" 16.4.A
"Designated Terminal" 16.4.A
"Force Majeure" XXXV
"Franchised Premises" 2.1
"Franchise" Recitals
"Franchisor" Recitals
"Geographic Area" 16.4.A
"Gross Negligence" 23.4
"Initial Delivery Period" 16.4
"Initial Franchise Fee" 2.4
"Initial Term" 5.1
"Monthly Non-Fuel Revenue Amount" 3.2
"Offering Circular" Recitals
"Outside Elements" 12.13.E
"PMPA" 19.1.A.3
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"PMPA Summary" 19.1.E
"Principal Manager" 21.2.B
"Purchase Price" 16.6
"Qualified Immediate Family Member" 21.2.B
"Quarterly Maximum Gallons" 16.2
"Renewal Term" 5.2
"Tax" 16.7
"Trademark License Agreement" Recitals
"Transfer Fee" 21.2.D
"Unocal" Recitals
"Wilful Misconduct" 23.4
II. APPOINTMENT AND FRANCHISE FEE
2.1 Franchisor hereby grants to Franchisee, upon the terms and
conditions herein contained, the right, franchise and privilege to operate a
Franchised Business at, and only at, the following location:
("Franchised Premises"), and
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Franchisee undertakes to operate the Franchised Business at, and only at, the
Franchised Premises.
2.2 In connection with Franchisor's grant of the Franchised Business
to Franchisee, Franchisor will license Franchisee to use the Unocal Marks during
term of this Agreement solely in connection with the Franchised Business.
2.3 Franchisor does not grant Franchisee any territorial exclusivity
outside the Franchised Premises.
2.4 Upon execution of this Agreement, Franchisee shall pay to
Franchisor a non-refundable initial franchise fee of SEVENTY-FIVE THOUSAND
Dollars ($75,000.00) ("Initial Franchise Fee"). Franchisee acknowledges that the
Initial Franchise Fee is fully earned and non-refundable upon execution of this
Agreement as consideration for expenses incurred by Franchisor in furnishing
assistance and services to Franchisee and for Franchisor's lost or deferred
opportunity
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to franchise others. (STRIKE THIS PARAGRAPH IF NOT PAYING AN INITIAL FRANCHISE
FEE.)
III. CONTINUING SERVICES AND ROYALTY FEE
3.1 Commencing on January 1, 1994, Franchisee shall pay to
Franchisor, without offset, credit or deduction of any nature, so long as this
Agreement shall be in effect, an annual continuing services and royalty fee in
an amount equal to three percent (3%) of the excess of all Non-Fuel Revenue
derived from the Franchised Business during the calendar year over the Non-Fuel
Revenue derived from the Franchised Business during the Base Year ("Continuing
Services and Royalty Fee"). Such fee shall be paid monthly in arrears in the
manner set forth in the Confidential Operations Manual.
3.2 On or before the tenth (10th) day of each month commencing
February 1, 1994, Franchisee shall calculate the Non-Fuel Revenue derived from
the Franchised Business during the prior month just ended ("Monthly Non-Fuel
Revenue Amount"). If the Monthly Non-Fuel Revenue Amount exceeds the Average
Monthly Base, Franchisee shall pay to Franchisor on or before the tenth (10th)
day of each month, three percent (3%) of the excess of the Monthly Non-Fuel
Revenue Amount over the Average Monthly Base. If the Monthly Non-Fuel Revenue
Amount is less than the Average Monthly Base, Franchisor shall credit
Franchisee's account in the amount of three percent (3%) of the difference
between the Monthly Non-Fuel Revenue Amount and Average Monthly Base and shall
deduct such amount from the Continuing Services and Royalty Fee payments due in
subsequent months for the remainder of such calendar year. In January of each
year, Franchisor shall reconcile Franchisee's monthly payments of Continuing
Services and Royalty Fees for the preceding year just ended. In the event that
Franchisee has overpaid the amount due for Continuing Services and Royalty Fees
in any calendar year, Franchisor shall refund to Franchisee any Continuing
Services and Royalty Fees paid by Franchisee during such preceding calendar
year.
3.3 On or before the tenth (10th) day of each month Franchisee will
submit to Franchisor on a form approved by Franchisor, a correct statement,
signed by Franchisee, of Franchisee's Monthly Non-Fuel Revenue Amount for the
preceding month just ended. Each monthly statement shall be accompanied by
Franchisee's calculation of the Continuing Services and Royalty Fee payment
based on the Monthly Non-Fuel Revenue Amount reported in the statement so
submitted for the preceding month just ended. Franchisee shall make available to
Franchisor for reasonable inspections at reasonable times all original books and
records that Franchisor may deem necessary to ascertain Franchisee's Monthly
Non-Fuel Revenue Amount.
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IV. PAYMENT
4.1 All Continuing Services and Royalty Fees, advertising
contributions, amounts due for purchases by Franchisee from Franchisor, and
other amounts which Franchisee owes to Franchisor shall bear interest after due
date at eighteen percent (18%) per annum or the maximum rate permitted by law,
whichever is lower. Franchisee acknowledges that this Paragraph shall not
constitute agreement by Franchisor to accept such payments after same are due or
a commitment by Franchisor to extend credit to, or otherwise finance
Franchisee's operation of, the Franchised Business. Further, Franchisee
acknowledges that its failure to pay all amounts when due shall constitute
grounds for termination of this Agreement, as provided in Paragraph XIX hereof.
4.2 Notwithstanding any designation by Franchisee, Franchisor shall
have the sole discretion to apply any payments by Franchisee to any past due
indebtedness of Franchisee for Continuing Services and Royalty Fees, advertising
contributions, purchases from Franchisor, interest or any other indebtedness, in
such amounts and in such order as Franchisor shall determine.
V. TERM AND RENEWAL
5.1 This Agreement shall be effective and binding from the date of
its execution for an initial term commencing on the closing date of the
transaction and ending on ("Initial Term").
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5.2 Franchisee shall have the right to renew the Franchise Agreement
at the expiration of the Initial Term for five (5) additional successive terms
of three (3) years each ("Renewal Term"), provided that all of the following
conditions have been fulfilled:
A. Franchisee has during the Initial Term complied with all
the provisions of this Agreement and during any Renewal Term complied with the
provisions of the then-current franchise agreement;
B. Franchisee is not in default of the provisions of Paragraph
XIX of this Agreement;
C. Franchisee has given notice of renewal to Franchisor as
provided in Paragraph XIX herein;
D. Franchisee has satisfied all monetary obligations owed by
Franchisee to Franchisor and Franchisor's Affiliates and has timely met these
obligations throughout the term of this Agreement;
▇▇
▇. ▇▇▇▇▇▇▇▇▇▇ has executed upon renewal Franchisor's
then-current form of franchise agreement, Lease Agreement and/or any other
agreements required to be executed by the parties (with appropriate
modifications to reflect the fact that the agreement relates to the grant of a
renewal franchise), which agreements shall supersede in all respects this
Agreement, the Lease Agreement and other agreements between the parties, and the
terms of which may differ from the terms of this Agreement and other agreements
between the parties, including, without limitation, a different percentage
Continuing Services and Royalty Fee or advertising contribution, or adoption and
utilization of any new or different computer hardware and software prescribed by
Franchisor for current franchisees; provided, however, Franchisee shall not be
required to pay the then-current initial franchise fee;
F. Franchisee has complied with Franchisor's then-current
qualification and training requirements; and
G. Franchisee has executed a general release, in the
then-current form prescribed by Franchisor, of any and all claims against
Franchisor and its Affiliates, and their respective officers, directors, agents,
stockholders and employees.
5.3 Franchisor may terminate or not renew this Agreement by written
notice to Franchisee, as provided in Paragraph XIX herein.
VI. PROPRIETARY MARKS
6.1 Franchisee acknowledges that Franchisee's right to use the Marks
is derived solely from this Agreement and is limited to the conduct of the
Franchised Business by Franchisee pursuant to and in compliance with this
Agreement and all applicable standards, specifications, and operating procedures
prescribed by Franchisor from time to time during the term of this Agreement.
Any unauthorized use of the Marks by Franchisee is a breach of this Agreement
and an infringement of the rights of Franchisor in and to the Marks. Franchisee
acknowledges that all usage of the Marks by Franchisee and any goodwill
established by Franchisee's use of the Marks shall inure to the exclusive
benefit of Franchisor and that this Agreement does not confer any goodwill or
other interests in the Marks upon Franchisee. Franchisee shall not, at any time
during the term of this Agreement or after its termination or expiration,
contest the validity or ownership of any of the Marks or assist any other person
in contesting the validity or ownership of any of the Marks. All provisions of
this Agreement applicable to the Marks apply to any additional trademarks,
service marks, and commercial symbols authorized for use by and licensed to
Franchisee by Franchisor after the date of this Agreement.
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6.2 Franchisee shall not use any ▇▇▇▇ or portion of any ▇▇▇▇ as part
of any corporate or trade name, or with any prefix, suffix, or other modifying
words, terms, designs, or symbols, or in any modified form, nor may Franchisee
use any ▇▇▇▇ in connection with the sale of any unauthorized product or service
or in any other manner not expressly authorized in writing by Franchisor.
Franchisee shall give such notices of trademark and service ▇▇▇▇ registrations
as Franchisor specifies and obtain such fictitious or assumed name registrations
as may be required under applicable law, and at Franchisee's expense. Franchisee
shall not use any of the Marks in any manner which has not been specified or
approved by Franchisor.
6.3 Franchisee shall promptly notify Franchisor of any Claim based
upon or arising from any attempt by any other Person to use the Marks or any
colorable imitation thereof. Franchisee shall also notify Franchisor of any
Claim against Franchisee relating to the Marks, within ten (10) days after
Franchisee received notice of such Claim. Upon receipt of timely notice of a
Claim against Franchisee relating to the Marks, Franchisor shall have the sole
right to defend any such action. Franchisor shall have the exclusive right to
contest or bring action against any third party regarding the third party's use
of any of the Marks and shall exercise such right in its sole discretion. In any
defense or prosecution of any litigation relating to the Marks undertaken by
Franchisor, Franchisee shall cooperate with Franchisor and execute any and all
documents and take all actions as may be desirable or necessary in the opinion
of Franchisor and/or its counsel, to carry out such defense or prosecution. Both
parties will make every effort consistent with the foregoing to protect,
maintain, and promote the Marks and their distinguishing characteristics.
6.4 If it becomes advisable at any time, and from time to time, in
Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or
discontinue use of any ▇▇▇▇, including, but not limited to, the Unocal Marks,
and/or use one (1) or more additional or substitute trade names, trademarks,
service marks, or other commercial symbols, Franchisee shall comply with
Franchisor's directions within a reasonable time after notice to Franchisee by
Franchisor. Franchisee shall immediately, upon the request of Franchisor, and in
any event upon termination of this Agreement, at no expense to Franchisor,
discontinue and take such legal or other action as may be necessary to
discontinue the use of the Marks.
6.5 In order to preserve the validity and integrity of the Marks and
copyrighted material licensed herein and to ensure that Franchisee is properly
employing the same in the operation of its Franchised Business, Franchisor or
its agents shall have the right of entry and inspection of the Franchised
Premises at all reasonable times and, additionally, shall have the right to
observe the manner in which Franchisee is rendering its services and conducting
its operations, to confer with Franchisee's employees and customers, and at
Franchisee's expense to select fuel, products, inventory, equipment and other
items, materials and supplies for test
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of content and evaluation purposes to make certain that the services, fuel,
products, inventory, materials, supplies, equipment and operations are
satisfactory and meet the quality control provisions and performance standards
established by Franchisor.
6.6 Under no circumstances shall Franchisee use Franchisor's name or
Marks (i) on any forms, publication, material or item disapproved by Franchisor,
or (ii) in connection with any product or service not authorized by Franchisor,
or (iii) in connection with any service performed by Franchisee in any manner
not authorized by Franchisor.
6.7 Franchisee shall not use in any advertising or any other form of
promotion, the Marks (i) in any manner disapproved by Franchisor, and (ii)
without the appropriate (C) or (R) registration marks or the designations (TM)
or (sm) where applicable as specified by Franchisor in the Confidential
Operations Manual.
VII. CONFIDENTIAL OPERATIONS MANUAL
7.1 Franchisor will loan to Franchisee during the term of this
Agreement one (1) or more copies of a Confidential Operations Manual containing
mandatory and suggested specifications, standards, operating procedures and
rules prescribed from time to time by Franchisor for the A/TS Network and
information relative to other obligations of Franchisee hereunder and the
operation of its Franchised Business. Franchisor shall have the right to add to
and otherwise modify the Confidential Operations Manual from time to time to
reflect changes in the specifications, standards, operating procedures and rules
prescribed by Franchisor for the A/TS Network, provided that no such addition or
modification shall alter Franchisee's fundamental status and material rights
under this Agreement. Franchisee shall immediately upon notice adopt any and all
such changes.
7.2 The Confidential Operations Manual (and any copies thereof)
shall at all times remain the sole property of Franchisor and shall be returned
promptly by Franchisee to Franchisor, at Franchisee's expense, immediately upon
the expiration or other termination of this Agreement.
7.3 Franchisee acknowledges that the Confidential Operations Manual
contains proprietary information of Franchisor and agrees to keep such
information confidential both during the term of this Agreement and subsequent
to the expiration or termination of this Agreement. Franchisee shall at all
times insure that at least one (1) up-to-date and current copy of the
Confidential Operations Manual is available at the Franchised Premises. At all
times that the Confidential Operations Manual is not in use by authorized
personnel, Franchisee shall maintain the Confidential Operations Manual in a
locked receptacle at the Franchised Premises and
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shall grant only authorized personnel, as defined in the Confidential Operations
Manual, access to the key or lock combination of such receptacle.
7.4 In the event of any dispute as to the contents of the
Confidential Operations Manual, the terms of the master copy of the Confidential
Operations Manual maintained by Franchisor at Franchisor's principal place of
business shall control.
VIII. CONFIDENTIAL INFORMATION
8.1 Franchisee acknowledges that knowledge of the operation of the
Franchised Business is and will be derived from Confidential Information
disclosed to Franchisee by Franchisor and that such Confidential Information is
proprietary, confidential and a trade secret of Franchisor. Franchisee shall
maintain the absolute confidentiality of all such Confidential Information
during and after the term of this Agreement and shall not use any such
Confidential Information in any other business or in any manner not specifically
authorized or approved in writing by Franchisor.
8.2 Franchisee shall divulge Confidential Information only to its
employees that must have access to such information and only to the extent
necessary to operate the Franchised Business.
IX. MODIFICATION OF THE A/TS NETWORK
Franchisee acknowledges that at any time and from time to time
Franchisor may change or modify the A/TS Network, including, without limitation,
the adoption and use of new or modified trade names, trademarks, service marks
or copyrighted materials; new business centers; new computer systems; new
inventory items; new products or services; new merchandising techniques; new
equipment; or new techniques and that Franchisee will be required to accept, use
and display for the purpose of this Agreement any such changes in the A/TS
Network, as if they were part of this Agreement at the time of execution hereof.
Franchisee will make such expenditures as are reasonably required by such
modifications in the A/TS Network. Franchisee shall not change, modify or after
in any way the A/TS Network, except as directed by Franchisor.
X. ADVERTISING
10.1 Franchisor reserves the right to require Franchisee to
discontinue using any Advertising Material promoting the Franchised Business
that Franchisor deems unacceptable or detrimental to the A/TS Network.
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10.2 Beginning on January 1, 1994, or at such later time as
Franchisor's board of directors elects, and continuing throughout the term of
this Agreement, Franchisee shall contribute to the Advertising Fund an amount
equal to one percent (1%) of Non-Fuel Revenue. Franchisee's required payments to
the Advertising Fund shall be made monthly in arrears at the same time and in
the same manner as, and in addition to, the Continuing Services and Royalty Fee
provided in Paragraph III herein. The Advertising Fund shall be maintained and
administered by Franchisor or its designee, as follows:
A. Franchisor shall direct all advertising programs with sole
discretion over the creative concepts, materials and media used in such programs
and the placement and allocation thereof. Franchisor reserves the right in its
sole and exclusive discretion to use such media, create such programs and
allocate any money from the Advertising Fund to such regions or localities as
Franchisor shall deem appropriate. All Advertising Material shall be and remain
the sole property of Franchisor and may not be altered by Franchisee. Franchisee
acknowledges that the Advertising Fund need not be spent pro rata and is
intended to further the general recognition and acceptance of the Marks for the
benefit of the A/TS Network.
B. Franchisor shall, for each of its Franchisor-owned
Franchised Businesses, contribute to the Advertising Fund an amount equal to one
percent (1%) of the Non-Fuel Revenue of such Franchised Businesses.
C. The Advertising Fund may be used to meet any and all costs
of maintaining, administering, directing and preparing advertising material
(including, without limitation, the cost of (i) preparing and conducting
television, radio, magazine and newspaper advertising campaigns and other public
relations activities; (ii) employing advertising agencies to assist therein;
(iii) producing signage and point-of-sale materials; (iv) conducting marketing
activities; (v) compensating personnel employed by Franchisor to engage in
advertising, marketing and/or public relations activities on behalf of the
Advertising Fund if Franchisor in its sole and exclusive discretion, decides to
employ such personnel, but only to the extent such personnel actually devote
time to such activities; and (vi) providing promotional brochures and other
marketing materials to franchisees in the A/TS Network). All sums paid by
Franchisee to the Advertising Fund shall be maintained in a separate account
from the other funds of Franchisor and shall not be used to defray any of
Franchisor's general operating expenses, except for such reasonable
administrative costs and overhead, if any, as Franchisor may incur in activities
reasonably related to the administration or direction of the Advertising Fund
and advertising programs including, without limitation, conducting market
research, preparing marketing and advertising materials, and collecting and
accounting for assessments for the Advertising Fund; provided, however, that up
to ten percent (10%) of the Advertising Fund may be expended by Franchisor for
such reasonable administrative costs and overhead, if any, as Franchisor may
incur in activities reasonably related to the
15
administration or direction of the Advertising Fund and advertising programs for
Franchised Businesses including, without limitation, collecting and accounting
for assessments for the Advertising Fund.
D. Franchisor maintains the right to terminate the Advertising
Fund at any time. However, the Advertising Fund shall not be terminated until
all monies in the Advertising Fund have been expended for advertising and
promotional purposes, or returned to franchisees, as Franchisor deems fair and
reasonable in its sole discretion.
E. An accounting of the operation of the Advertising Fund
shall be prepared annually and shall be made available to Franchisee upon
request.
F. Once contributions to the Advertising Fund are made by
Franchisee, all such contributions shall be used as herein required and shall
not be returned to Franchisee, except pursuant to Subparagraph 10.2.D. hereof.
10.3 Franchisor shall form an Advertising and Promotion Committee
("Advertising Committee") comprised of no fewer than five (5) franchisee
representatives (each, a "Franchisee Representative"), the number of such
Franchisee representative being determined in Franchisor's sole discretion. Each
Franchisee Representative shall represent a geographic region specified by
Franchisor. Each Franchised Business shall have one (1) vote to elect annually
the Franchisee representative from its respective geographic area. Franchisor
may from time to time consult with the Advertising Committee to develop
Advertising Materials and Promotional Programs. The Advertising Committee may
recommend to Franchisor certain Advertising Materials and Promotional Programs
deemed beneficial for promotion of the A/TS Network. However, Franchisor
reserves the right, in its sole discretion, to make the final determination of
Advertising Materials and Promotional Programs to be implemented into the A/TS
Network and shall not be bound by the Advertising Committee's recommendations.
10.4 Franchisee shall participate in all Promotional Programs
conducted by Franchisor. Franchisor shall notify Franchisee of the creation of
all such Promotional Programs and shall advise Franchisee with respect to all of
the elements thereof. Franchisee shall adhere to all elements of such
Promotional Programs, provided that no such Promotional Program shall dictate or
control the price charged by Franchisee for any item. Franchisor may, however,
suggest prices to be charged in any Promotional Program. Franchisor may
establish no Promotional Programs, in its sole, subjective discretion, and need
not consult or confer with Franchisee or any other franchisee of Franchisor,
except to the extent provided in Subparagraph 10.3 above, with respect to the
nature, content or amount of any Promotional Programs.
16
XI. FRANCHISOR'S OPERATIONS ASSISTANCE
11.1 Franchisor may, from time to time, advise or offer guidance to
Franchisee relative to prices for the products and services offered for sale by
its Franchised Business that in Franchisor's judgment constitute good business
practice. Such guidance will be based on the experience of Franchisor and its
franchisees in operating Franchised Businesses and an analysis of the costs of
such products and prices charged for competitive products. Franchisee shall not
be obligated to accept any such advice or guidance and shall have the sole right
to determine the prices to be charged from time to time by its Franchised
Business, and no such advice or guidance shall be deemed or construed to impose
upon Franchisee any obligation to charge any fixed, minimum or maximum prices
for any product offered for sale by the Franchised Business.
11.2 During the term of this Agreement Franchisor shall:
A. Provide to Franchisee the Approved Supplies List and
Approved Suppliers List;
B. Provide site engineering assistance;
C. Maintain and administer a Fleet Marketing Throughput
Program, as provided in Exhibit A to this Agreement;
D. Provide centralized purchasing assistance for products and
services outside of the Buying Program;
E. Administer the Buying Program, as further described in
Paragraph XIII herein;
F. Provide ongoing training programs for Franchisee;
G. Coordinate system-wide advertising and administer the
Advertising Fund;
H. Regulate quality standards and products throughout the A/TS
Network; and
I. Provide Franchisee with key performance guidelines based on
information gathered from franchisees in the A/TS Network.
11.3 Franchisor may, from time to time, provide operations
assistance which may consist of advice and guidance with respect to the
following:
17
A. Proper procedures to be used by the Franchised Business,
with respect to the sale of the Branded Fuel, Branded Products and other
products and services as approved by Franchisor;
B. Additional products and services authorized for sale from
Franchised Businesses;
C. Ongoing research and development of products, services,
systems, procedures and techniques which may enhance the A/TS Network;
D. Central product purchasing services;
E. The institution of proper administrative, bookkeeping,
accounting, inventory control, supervisory and general operating procedures for
the effective operation of a Franchised Business;
F. Seminars and programs designed to increase knowledge of the
industry and/or ▇▇▇▇▇▇ and promote franchisee relations;
G. Advertising and promotional programs; and
H. Recommended software packages for conducting inventory
control, point-of-sale and/or other functions.
11.4 Franchisor, or its representative, shall make periodic visits
to the Franchised Business for the purposes of consultation, assistance, and
guidance to Franchisee in all aspects of the operation and management of the
Franchised Business.
XII. FRANCHISEE'S OBLIGATIONS
12.1 Franchisee shall comply with all requirements set forth in this
Agreement, the Confidential Operations Manual and other written policies
supplied to Franchisee by Franchisor. All references herein to this Agreement
shall include all such mandatory specifications, standards and operating
procedures and rules. Franchisee shall comply with the entire set of
specifications and standards for the A/TS Network including, but not limited to,
the provisions of this Paragraph XII.
12.2 Franchisee agrees to execute and deliver the Lease Agreement
simultaneously with the execution of this Agreement.
12.3 Franchisee shall follow such procedures or take such action as
Franchisor may from time to time require to maintain the appearance and
efficient operation of the Franchised Business and to meet or exceed
Franchisor's annually
18
published minimal acceptable Five Star score. If at any time in Franchisor's
judgment the general state of repair or appearance of the Franchised Premises or
its equipment, fixtures, signs or decor does not meet Franchisor's standards,
Franchisor shall so notify Franchisee, specifying the action to be taken by
Franchisee to correct such deficiency. If Franchisee fails to cure such
deficiency within the period of time specified in said notice and thereafter
fails to implement a bona fide program to complete any required maintenance,
Franchisor shall have the right, in addition to all other remedies, to enter
upon the Franchised Premises and effect such maintenance or repairs on behalf of
Franchisee, and Franchisee shall pay to Franchisor the entire cost thereof upon
demand. If Franchisee disputes the amounts owed Franchisor for such maintenance
or repairs, Franchisor shall be entitled to reimbursement of its costs
including, but not limited to, reasonable legal fees plus accrued interest.
Failure to correct such deficiency is a material default of this Agreement and
grounds for termination of this Agreement subject to the provisions of Paragraph
XIX herein.
12.4 Franchisee shall not make or permit anyone to make any
modifications in or to the Franchised Premises of a permanent nature, including
but not limited to, permanent improvements, alterations, decorations, or
additions, structural or otherwise, in or to the Franchised Premises without
first obtaining the written consent of Franchisor. All improvements,
alterations, decorations, or additions made by Franchisee shall be completed in
a good and workmanlike manner in accordance with all applicable laws and
requirements, and Franchisee shall defend, indemnify, and hold Franchisor
harmless from and against any and all costs, expenses, claims, liens, and
damages to person or property resulting from the making of any such
improvements, alterations, decorations, or additions in or to the Franchised
Premises.
Franchisee shall not do or suffer anything to be done whereby the
Franchised Premises may be encumbered by a mechanic's lien or liens. If,
however, any mechanic's lien is filed against the Franchised Premises,
Franchisee shall discharge the same of record within ten (10) days after the
date of filing. If Lessee fails to discharge any such lien as provided herein,
such failure shall be a default of this Agreement.
Franchisor shall not be liable for any labor or materials to be
furnished to Franchisee upon credit, and no mechanic's or other lien for any
such labor or materials shall attach to or affect the reversionary or other
estate or interest of Franchisor in and to the Franchised Premises.
12.5 Franchisee understands and acknowledges that uniformity of
standards, products and services is essential to the A/TS Network. To that end,
Franchisor reserves the right to reject any category of product or services
offered for sale at the Franchised Business. Should Franchisee elect to offer
and sell additional product or service categories to customers of the Franchised
Business, Franchisor
19
shall not unreasonably withhold its approval of any such category of product or
service.
A. Franchisee shall immediately cease offering for sale or
selling any product or service if Franchisor, in its sole discretion, deems such
product or service to be detrimental to the Marks or the image of the A/TS
Network.
B. Franchisee is prohibited from displaying, offering and
selling any alcoholic beverages, or otherwise, any condom vending machines
(unless required by law) and any sexual or pornographic materials (as determined
by Franchisor in its sole discretion), including, without limitation, books,
magazines, videotapes, cassettes, calendars, novelty and related items.
Franchisor reserves the right, in its sole discretion, to expand the categories
of products and services which Franchisee is prohibited from offering or selling
from the Franchised Business.
12.6 All inventory, products and materials, and other items and
supplies used in the operation of the Franchised Business which are not
purchased in accordance with Franchisor's Approved Supplies List and Approved
Suppliers List shall conform to the specifications and quality standards
established by Franchisor from time to time.
12.7 Franchisor has an ACCESS 76 System and credit card services
available for use by its Franchised Businesses. Franchisee shall use the ACCESS
76 System and credit card services from Franchisor or a source designated by
Franchisor at a cost established by Franchisor, and Franchisee agrees not to
obtain credit card services from any other source. Franchisee shall make sales
of Motor Fuel and other products and services at the Franchised Business to
persons presenting a valid credit card in accordance with the Guides.
Franchisee shall comply with the instructions, policies, equipment
requirements, and restrictions set forth in the Guides and agrees that
Franchisor may refuse to accept credit card invoices, or may charge back to
Franchisee any credit card invoices, where Franchisee has failed to comply with
any instruction, policy, or restriction set forth in the Guides. Franchisor
shall have the right, from time to time, to amend, add, or delete any
instruction, policy, or restriction in the Guides including the right to charge
a fee for Franchisor's acceptance of credit card invoices evidencing purchases
from Franchisee. If Franchisee is past due on any payment to Franchisor,
Franchisor may, without limiting any other lawful remedy, first apply credit
card invoices to the payment of the past due indebtedness.
12.8 Franchisee shall carry an adequate supply and maintain a
representative inventory of Branded Products and other items and merchandise
packaged under the Marks as required by the Confidential Operations Manual in
such quantities sufficient to meet public demand. Franchisor may, in the future,
develop
20
additional products bearing the Marks, and Franchisor may introduce such
products into the A/TS Network at Franchisor's discretion.
12.9 In order to maintain the common identity of the A/TS Network,
Branded Products shall be prominently displayed among the goods displayed for
resale at the Franchised Premises and Franchisee shall maintain at such premises
a stock of Branded Products sufficient to satisfy fully the demand of
Franchisee's customers for such products.
12.10 Franchisee, at its expense, shall secure and maintain in force
all required licenses, permits and certificates relating to the operation of the
Franchised Business and the property on which the Franchised Premises are
located and shall operate the Franchised Business and maintain the property on
which the Franchised Premises are located, in full compliance with all
applicable federal, state and local laws, ordinances and regulations, including,
without limitation, all such laws, ordinances and regulations relating to the
dispensing of food products, occupational hazards and health, general liability
and pollution liability insurance requirements, consumer protection,
environmental protection, underground storage facilities and dispensing of fuel,
trade regulation, workers' compensation, unemployment insurance and withholding
and payment of federal and state income taxes and social security taxes, and
sales, use and property taxes, as further described in Paragraph 23.6 herein and
in the Lease Agreement. Further, throughout the term of this Agreement,
Franchisee shall cause the Franchised Business to be in full and strict
compliance with the Americans with Disabilities Act, as amended, except as
otherwise provided in the Lease Agreement. Franchisee is responsible for daily
monitoring of the underground storage facilities and dispensing of fuel and for
reporting to and notifying Franchisor of any spills, leakage, losses and/or
other difficulties relating to such underground storage facilities.
12.11 Franchisee shall refrain from any merchandising, advertising
or promotional practice which is unethical or may be injurious to the business
of Franchisor, the A/TS Network and/or other Franchised Businesses or to the
goodwill associated with the Marks, as determined by Franchisor in its sole
discretion.
12.12 Franchisor may, from time to time, develop and market special
promotional items which will be made available to Franchisee at Franchisor's
cost plus a reasonable markup, and Franchisee shall maintain a representative
inventory of such promotional items to meet public demand. Franchisee shall have
the right to purchase alternative promotional items provided that such
alternative goods conform to the specifications and quality standards
established by Franchisor from time to time.
12.13 Franchisee shall operate the Franchised Business in a clean,
safe and healthful manner that will assure that customers receive quality
merchandise and
21
courteous and efficient service, which shall include the following minimum
obligations:
A. Sell merchandise and provide service with care, courtesy,
and regard for customer satisfaction.
B. Take prompt action to respond to or correct all complaints
received by Franchisor concerning Franchisee's operation of, or condition of,
the Franchised Business or conduct of any employee of Franchisee. A written
reply must be made to Franchisor within fourteen (14) days outlining
Franchisee's actions or plans to resolve.
C. Operate or cause a qualified manager to at all times
operate the Franchised Business in compliance with the standards prescribed in
this Agreement.
D. Operate the Franchised Business so as not to pose a threat
or danger to public health or safety or the environment.
E. Provide reasonable security at the parking lot of the
Franchised Business for vehicles and drivers, and exert reasonable effort to
maintain an absence of outside elements that negatively affect the image of the
Franchised Business as well as the Branded Fuel and Branded Products.
Specifically, "outside elements" refers to prostitutes, gamblers, drug dealers,
and stolen goods dealers, but is not limited to same ("Outside Elements").
F. Provide, or have made outside arrangements for providing
emergency service for passenger cars including tire service, road towing, belt
replacement, and light replacement, but not to be limited to same.
G. Keep the Franchised Business open for business twenty-four
(24) hours each day including, but not limited to, the diesel and gasoline
islands, garage, store and restaurant. Franchisee's closing the Franchised
Business or any part thereof shall constitute abandonment by Franchisee and
shall be a material breach of this Agreement.
H. Not engage in dishonest, fraudulent or scare selling
practices.
I. Perform all services in a good workmanlike manner.
J. Provide a sufficient number of trained, courteous, and neat
personnel who can communicate with customers by understanding and speaking
English to operate the Franchised Business in an efficient and organized manner.
22
K. Store and dispense Motor Fuel only from tanks, pumps, or
containers identified with only Franchisor-designated suppliers' trademarks or
trade names.
L. Comply with the requirements of any conditional use permit
or other approval covering the construction, maintenance, and/or operation of
the Franchised Business. If the Franchised Business is subject to a permit, a
copy shall be delivered to Franchisee and Franchisee shall acknowledge receipt
of the copy on a form provided by Franchisor.
12.14 Franchisee shall have on staff at all times during regular
business hours a qualified mechanic experienced in truck service to provide
prompt, courteous and workmanlike service, and to otherwise fulfill Franchisee's
responsibilities under this Agreement. Such mechanic shall meet the requirements
set forth in the Confidential Operations Manual.
12.15 Franchisee shall participate in the National Warranty Program
and shall abide by all provisions of the National Warranty Program as set forth
in the Confidential Operations Manual.
12.16 Franchisee shall notify Franchisor in writing within five (5)
days of the commencement of any action, suit, or proceeding, and of the issuance
of any order, writ, injunction, award, or decree of any court, agency, or other
governmental instrumentality, which may adversely affect the operation or
financial condition of the Franchised Business.
12.17 If Franchisee desires to utilize a software and hardware
system in the operation of the Franchised Business, Franchisee shall utilize
only such systems approved by Franchisor.
12.18 At any full service truckstop facility, Franchisee shall
maintain a minimum of fifty (50) paved truck parking spaces.
XIII. BUYING PROGRAM
13.1 Simultaneously with the execution of this Agreement, Franchisee
may, in its sole option, elect to participate in the Buying Program, and does so
elect unless this Paragraph is deleted from the Agreement. If Franchisee elects
to participate in the Buying Program, Franchisee shall, until the third
anniversary of this Agreement, purchase all products and services included in
and offered through the Buying Program only from participating suppliers, and
not from any other source. Franchisees who participate in the Buying Program
agree to maintain a representative inventory of all products covered in such
program. Franchisee's participation in the
23
Buying Program will automatically renew for the remainder of the term of the
Franchise Agreement, unless Franchisee gives Franchisor notice at least six (6)
months prior to the third anniversary of this Agreement. If at any time,
Franchisee fails to comply with the requirements of the Buying Program or drops
out of the Buying Program, Franchisee's participation in the Buying Program
shall be terminated upon written notice from Franchisor, and Franchisee cannot
later elect to participate in the Buying Program for the remainder of the
then-current term of this Agreement. Nothing herein shall obligate Franchisor to
initiate or continue the Buying Program, or to include any one (1) or more
products or services within the Buying Program. (STRIKE THIS PARAGRAPH IF NOT
PARTICIPATING IN THE BUYING PROGRAM).
13.2 On or before December 1 of any calendar year, any franchisee
who previously did not participate in the Buying Program may notify Franchisor
of its intent to participate in the Buying Program for the three (3) year period
starting January 1 of the subsequent calendar year. Franchisee shall pay a
one-time fee of TWELVE THOUSAND FIVE HUNDRED Dollars ($12,500.00) for the right
to join the Buying Program.
13.3 If Franchisee elects not to participate or to renew its
participation in the Buying Program, Franchisee agrees to maintain a
representative inventory of all products covered in the Buying Program. Such
products need not be purchased from suppliers participating in the Buying
Program, but Franchisee shall comply with Subparagraph 13.4 hereof with respect
to such products.
13.4 All products and services not included in the Buying Program or
listed on the Approved Supplies List, or purchased from suppliers not on the
Approved Suppliers List, shall meet specifications and quality standards
prescribed by Franchisor.
XIV. ACCOUNTING AND RECORDS
14.1 Franchisee shall maintain and preserve any and all records in
the manner and for such time as required by the Internal Revenue Service of the
United States.
14.2 Franchisee shall maintain a daily Motor Fuel meter reading and
shall provide such daily meter reading to Franchisor on a monthly report as
prescribed in the Confidential Operations Manual.
14.3 Franchisee shall, at its expense, submit to Franchisor, within
ninety (90) days of the end of each fiscal year during the term of this
Agreement,
24
annual financial statements, prepared by an independent certified public
accountant in accordance with generally accepted accounting principles.
14.4 Franchisee shall provide Franchisor on or before the tenth
(10th) day of each month a sales report specifying all Non-Fuel Revenue derived
from and actual fuel gallonage purchased through the Franchised Business in a
form approved by Franchisor. In order to assist Franchisor in monitoring the
A/TS Network, Franchisee shall submit to Franchisor such other information
requested by Franchisor from time to time in the format prescribed by Franchisor
in the Confidential Operations Manual or as Franchisor shall otherwise
reasonably require in writing, including, but not limited to, state and federal
fuel tax records by location and daily Motor Fuel meter readings by location.
14.5 Franchisor or its designated agents shall have the right at all
reasonable times to examine and copy, at its expense, the books, records, and
tax returns of Franchisee. Franchisor shall also have the right, at any time, to
have an independent audit made of the books and records of Franchisee at
Franchisor's expense. If an inspection or audit should reveal that any payments
due to Franchisor have been understated in any report to Franchisor, then
Franchisee shall immediately pay to Franchisor the amount understated upon
demand, in addition to interest from the date such amount was due until paid, at
the rate of eighteen percent (18%) per annum or the maximum rate permitted by
law, whichever is lower. If an inspection or audit discloses an understatement
in any report of two percent (2%) or more, Franchisee shall, in addition,
reimburse Franchisor for any and all costs and expenses connected with the
inspection or audit (including, without limitation, reasonable accounting and
attorneys' fees). The foregoing remedies shall be in addition to any other
remedies Franchisor may have, including, but not limited to, termination or
non-renewal pursuant to Paragraph XIX.
14.6 Franchisee acknowledges that nothing contained herein
constitutes Franchisor's agreement to accept any payments after same are due or
a commitment by Franchisor to extend credit to or otherwise finance Franchisee's
operation of the Franchised Business. Further, Franchisee acknowledges that its
failure to pay all amounts when due shall constitute a materially significant
default and grounds for termination of this Agreement.
XV. ACCESS
Franchisor has the right to enter and inspect the Franchised
Premises at any reasonable time with such employees, consultants, and equipment
as it considers necessary to determine if Franchisee's obligations under this
Agreement are being fulfilled.
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XVI. FUEL SUPPLY
16.1 Subject to Subparagraph 16.2 below, Franchisor agrees to sell
to Franchisee one hundred percent (100%) of Franchisee's requirements of Motor
Fuel for resale to the motoring public, and Franchisee agrees to buy from
Franchisor one hundred percent (100%) of Franchisee's requirements of such Motor
Fuel.
16.2 Franchisee's purchase of Motor Fuel shall be in fairly even
monthly amounts, within the quarterly maximum gallons listed below ("Quarterly
Maximum Gallons"). Franchisor shall not be obligated to sell to Franchisee
during any stated period more than one hundred twenty percent (120%) of the
Quarterly Maximum Gallons. Franchisee agrees to buy from Franchisor at least
eighty percent (80%) of the Quarterly Maximum Gallons. Franchisee acknowledges
and agrees that Franchisee's agreement to buy at least eighty percent (80%) of
the Quarterly Maximum Gallons is reasonable and of material significance to the
Franchise Relationship between Franchisor and Franchisee and that Franchisee's
failure to purchase at least such percentage is grounds for Franchisor's
termination or non renewal of this Agreement pursuant to Paragraph XIX.
Franchisor reserves the right to amend this amount in writing in the event
Franchisee experiences a reduction in Motor Fuel sales due to road closures,
Force Majeure, or any other reason approved by Franchisor in writing. The amount
of Quarterly Maximum Gallons will be adjusted annually as agreed upon by
Franchisee and Franchisor.
Quarterly Maximum Gallons
Jan-Feb-Mar Apr-May-June Jul-Aug-Sept Oct-Nov-Dec
----------- ------------ ------------ -----------
(in gallons)
Gasoline
------- ------- ------- -------
Diesel Fuel
------- ------- ------- -------
16.3 Franchisee shall not commingle Motor Fuel sold to Franchisee by
Franchisor pursuant to Paragraph XVI of this Agreement or consigned to
Franchisee pursuant to the Fleet Marketing Throughput Agreement with Motor Fuel
from any other suppliers or any other source.
16.4 For purposes of this Agreement, the term Initial Delivery
Period ("Initial Delivery Period") shall mean the period beginning on the date
first above written and ending on the last date on which Franchisor is required
to deliver Motor Fuel to Franchisee at the Franchised Premises pursuant to
Subparagraph 16.4.A. During the Initial Delivery Period, Franchisor shall be
responsible for arranging the delivery to the Franchised Premises of Motor Fuel
purchased by Franchisee. Such
26
deliveries shall be made on Franchisee's order in single deliveries of not less
than seven thousand five hundred (7,500) gallons. Franchisor shall not be
required to make such deliveries (i) within forty-eight (48) hours following
receipt of Franchisee's order, (ii) other than during Franchisor's normal
business hours, or (iii) on Sundays or holidays.
A. At any time during the period beginning on the date first
above written and ending no later than eighteen (18) months after such date,
Franchisor may notify Franchisee that Franchisor no longer intends to deliver
Motor Fuel to Franchisee at the Franchised Premises. Such notice shall specify
the last date on which Franchisor will deliver such Motor Fuel ("Delivery
Termination Date") and the first date on which Franchisor shall begin to provide
Franchisee with such Motor Fuel at a terminal designated by Franchisor within
the Geographic Area ("Designated Terminal"). The Geographic Area shall encompass
an area of not more than three hundred (300) miles from the Franchised Premises
("Geographic Area"). After the Delivery Termination Date (or after the eighteen
(18) month anniversary of this Agreement if Franchisor does not specify the
Delivery Termination Date), Franchisee shall arrange for the delivery of such
Motor Fuel from the Designated Terminal to the Franchised Premises.
B. After the Initial Delivery Period, Franchisee shall notify
Franchisor of its quantity requirements of Motor Fuel no less than forty-eight
(48) hours prior to Franchisee's pick-up of Motor Fuel. Franchisor shall not be
required to have Motor Fuel available to Franchisee (i) within forty-eight (48)
hours following receipt of Franchisee's order, (ii) other than during the
Designated Terminal's business hours, or (iii) on Sundays or holidays.
Immediately upon notice by Franchisor to Franchisee, Franchisor may change the
location of the Designated Terminal within the Geographic Area. Transportation
equipment shall be loaded on a first-come, first-served basis. All demurrage
shall be for the account of Franchisee.
16.5 At Franchisor's request, Franchisee will furnish to Franchisor,
on or before the tenth (10th) day subsequent to the end of each month, a written
statement (i) specifying the date of each delivery by Franchisor or pick-up by
Franchisee, as the case may be, during the preceding month, and (ii) showing the
quantity of Motor Fuel purchased by or consigned to Franchisee on each such
date.
16.6 The purchase price to be paid by Franchisee for Motor Fuel
("Purchase Price") shall be the price in effect for the Franchised Premises at
the time the transport truck receiving such Motor Fuel is completely loaded at
the Designated Terminal. Such price shall be posted by Franchisor at its
principal place of business and be available to Franchisee upon request. During
the Initial Delivery Period, any and all freight charges with respect to the
delivery of Motor Fuel by Franchisor to the Franchised Premises shall be
included in the Purchase Price. After the Initial Delivery Period and during the
remaining term of this Agreement, the Purchase Price
27
shall exclude any and all such freight charges and such charges shall be the
sole responsibility of and paid by Franchisee. Franchisor shall not be obligated
to compute the Purchase Price pursuant to any particular formula or to maintain
any particular differential between such price and other prices posted by
Franchisor. Franchisor's records of the Purchase Price with respect to a
particular transaction shall be conclusive and binding for all purposes of this
Agreement.
16.7 If any governmental authority now has, or later places, a tax,
excise, inspection fee or charge (collectively, a "Tax") on Franchisor because
of the manufacture, storage, withdrawal from storage, transportation,
distribution, sale or handling of any Motor Fuel sold by Franchisor to
Franchisee, such Tax shall be added to the Purchase Price and be the sole
responsibility of and paid by Franchisee. Franchisor shall remain liable for any
Tax applicable to Motor Fuel consigned by Franchisor to Franchisee pursuant to
the Fleet Marketing Throughput Agreement.
16.8 Franchisee shall pay for Motor Fuel purchased from Franchisor
according to the terms established from time to time by Franchisor's Credit
Department.
16.9 A. During the Initial Delivery Period, title to, and risk of
loss of, Motor Fuel purchased by Franchisee and delivered by Franchisor shall
pass to Franchisee at the time the Motor Fuel enters the Motor Fuel storage
tanks at the Franchised Premises. During the Initial Delivery Period, title to,
and risk of loss of, Motor Fuel consigned pursuant to the Fleet Marketing
Throughput Agreement to Franchisee by Franchisor and delivered by Franchisor
shall remain with Franchisor until the time such Motor Fuel is delivered by
Franchisee into the vehicles of the respective Fleet Accounts. Franchisee waives
any claim against Franchisor as to quantity and quality of Motor Fuel delivered
to the Franchised Premises unless Franchisee notifies Franchisor in writing
within ten (10) days after receipt of such Motor Fuel.
B. After the Initial Delivery Period, title to, and risk of
loss of, Motor Fuel purchased by Franchisee from Franchisor and delivered to the
Franchised Premises shall pass to Franchisee at the time such Motor Fuel enters
into the transportation equipment provided by Franchisee or for Franchisee's
account. After the Initial Delivery Period, title to, and risk of loss of, Motor
Fuel consigned pursuant to the Fleet Marketing Throughput Agreement to
Franchisee by Franchisor and delivered to the Franchised Premises shall remain
with Franchisor until the time such Motor Fuel is delivered by Franchisee into
the vehicles of the respective Fleet Accounts. Franchisee waives any claim
against Franchisor as to quantity or quality of Motor Fuel available to
Franchisee pursuant to Paragraph 16.4.B unless Franchisee notifies Franchisor in
writing within ten (10) days after receipt of such Motor Fuel.
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16.10 If at any time the volume of Motor Fuel that Franchisor has
available for sale to its Franchised Businesses is, for any reason, less than
the volume needed to supply its Franchised Businesses' demands, Franchisor shall
allocate the volume of available Motor Fuel to its Franchised Businesses under a
plan and formula that Franchisor determines is fair and reasonable.
XVII. CREDIT
In connection with evaluating Franchisee's financial status for
credit purposes, Franchisor's Credit Department may at any time, and from time
to time, request that Franchisee provide it with certain financial statements.
Franchisee's failure to respond to any such request may result in Franchisor's
denial of credit to Franchisee. If Franchisee fails to fulfill the terms of
payment or if Franchisee's financial responsibility shall deteriorate in
Franchisor's sole judgment, Franchisor may, without prejudice to any other
lawful remedy, withhold Motor Fuel until payment is made, demand cash payment,
demand advance payment or terminate or not renew this Agreement pursuant to
Paragraph XIX. Franchisor may apply any payment made by or on behalf of
Franchisee to any indebtedness owed Franchisor by Franchisee, notwithstanding
any direction to the contrary. No payment made to Franchisor by check or other
instrument shall contain a restrictive endorsement of any kind. A restrictive
endorsement shall have no legal effect, even if the instrument restrictively
endorsed is processed for payment and Franchisor retains the proceeds.
XVIII. INSURANCE
18.1 Franchisee shall procure at its expense, and maintain in full
force and effect during the term of this Agreement, an insurance policy or
policies protecting Franchisee and Franchisor and Franchisor's officers,
directors, partners and employees, against any loss, liability, personal injury,
death, or property damage or expense whatsoever arising or occurring upon or in
connection with the Franchised Business, as Franchisor may reasonably require
for its own and Franchisee's protection. Franchisor shall be named an additional
insured in such policy or policies.
18.2 Such policy or policies shall be written by a licensed
insurance company satisfactory to Franchisor in accordance with standards and
specifications set forth in the Confidential Operations Manual or otherwise in
writing, as either may be modified from time to time by Franchisor, following
written notice to Franchisee.
18.3 Franchisor reserves the right to review and amend the amounts
and types of the required insurance coverage annually.
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18.4 The insurance afforded by the policy or policies respecting
liability shall not be limited in any way by reason of any insurance which may
be maintained by Franchisor. Within thirty (30) days after execution of this
Agreement, a Certificate of Insurance showing compliance with the foregoing
requirements shall be furnished by Franchisee to Franchisor for approval. Such
certificate shall state that said policy or policies will not be canceled or
altered without at least ninety (90) days prior written notice to Franchisor and
shall reflect proof of payment of premiums. Maintenance of such insurance and
the performance by Franchisee of the obligations under this Paragraph shall not
relieve Franchisee of liability under the indemnity provision set forth in this
Agreement.
18.5 Should Franchisee, for any reason, not procure and maintain
insurance coverage as required by this Agreement, Franchisor shall have the
right and authority (without, however, any obligation to do so) immediately to
procure such insurance coverage and to charge same to Franchisee, which charges,
together with a reasonable fee for expenses incurred by Franchisor in connection
with such procurement, shall be payable by Franchisee immediately upon notice.
XIX. DEFAULT AND TERMINATION
19.1 Termination and Non-renewal by Franchisor.
A. Franchisor may terminate or not renew this Agreement
by written notice to Franchisee, upon the occurrence of any of the following:
1. Franchisee's failure to comply with any provision
of this Agreement, the Fleet Marketing Throughput Agreement, the Lease
Agreement, and any other agreement between the parties, which provision is
reasonable and of material significance to the Franchise Relationship between
Franchisor and Franchisee. Franchisor is not required to give Franchisee an
opportunity to remedy any such failure prior to terminating or not renewing this
Agreement; or
2. Franchisee's failure to exert good faith efforts to
carry out the terms and conditions of this Agreement, the Fleet Marketing
Throughput Agreement, or the Lease Agreement. Prior to terminating or not
renewing this Agreement under the provisions of this ▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇
shall advise Franchisee in writing of such failure and give Franchisee a
reasonable opportunity to remedy it; or
3. The happening of any one (1) or more of the
events, defined in the Petroleum Marketing Practices Act, as amended (including
any similar successor legislation, the "PMPA"), as an event relevant to the
Franchise Relationship or the happening of any other event which is relevant to
the Franchise
30
Relationship including, but not limited to, the following: Franchisor is not
required to give Franchisee an opportunity to remedy any such happening prior to
terminating or not renewing this Agreement.
a. Franchisee's fraud or criminal misconduct
in the operation of the Franchised Business.
b. Declaration of bankruptcy or judicial
determination of insolvency of Franchisee.
c. The death or continuing severe physical or
mental disability of Franchisee of at least three (3) months' duration which
renders Franchisee unable to provide for the continued proper operation of the
Franchised Business.
d. If Franchisee is occupying the Franchised
Premises under a lease from Franchisor, the loss of Franchisor's right to grant
possession under such lease through expiration of any underlying lease, if
Franchisee was notified in writing, prior to the commencement of the term of
this Agreement, of the duration of the underlying lease and of the fact that
such underlying lease might expire and not be renewed during the term of this
Agreement or at the end of this Agreement.
e. The condemnation or other taking, in
whole or in part, of the Franchised Premises under the power of eminent domain.
The condemnation award paid to Franchisor, or the payment received by Franchisor
in exchange for its voluntary conveyance in lieu of condemnation, shall belong
solely to Franchisor, and Franchisee shall not, by virtue of this Agreement, be
entitled to any part thereof; provided, however, that nothing in this Agreement
shall preclude Franchisee from prosecuting any claim directly against the
condemning authority for loss of business, or depreciation to, damage to, or
cost of, removal of, or for the value of stock, inventory and other personal
property of Franchisee; and further provided, however, that no such claim shall
diminish or otherwise adversely affect Franchisor's award or proceeds.
f. Franchisor's loss of the right to grant
Franchisee the use of any ▇▇▇▇, unless the loss is due to Franchisor's trademark
abuse, violation of federal or state law, or other fault or negligence of
Franchisor related to bad faith action by Franchisor.
g. The destruction, other than by Franchisor,
of all or substantially all of the Franchised Premises. If Franchisee is
occupying the Franchised Premises under a lease from Franchisor and Franchisor
rebuilds or replaces the Franchised Premises and elects to offer the operation
of the rebuilt or
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replaced Franchised Premises in accordance with the terms of the Lease
Agreement, Franchisee shall have the preferential right to again be the operator
of the Franchised Premises.
h. Franchisee's failure to pay Franchisor in a
timely manner when due, all sums to which Franchisor is legally entitled.
i. Franchisee's failure to operate the
Franchised Business for seven (7) consecutive days, or shorter period of time
which, under the facts and circumstances, is an unreasonable period of time.
j. Franchisee's wilful adulteration,
mislabeling or misbranding of Motor Fuel sold at the Franchised Premises, or
other trademark, trade name, service ▇▇▇▇, or other identifying symbol or name
violations.
k. Franchisee's knowing failure to comply
with federal, state or local laws or regulations that are relevant to the
operation of the Franchised Business.
l. Franchisee's conviction of any felony
involving moral turpitude; or
4. Franchisor's good faith determination, made in
the normal course of business, to withdraw from the marketing of Motor Fuel
through retail outlets in the state or geographic area in which the Franchised
Business is located if:
a. The term of this Agreement is three
(3) years or longer or Franchisee was offered a term of three (3) years or
longer and elected to accept a lesser term; and
b. Franchisor's determination to withdraw
was made after the effective date of this Agreement; and
c. Franchisor's determination to withdraw
was made as a result of a change of relevant facts and circumstances.
B. In addition to the rights of termination or non-renewal
by Franchisor, set forth above, Franchisor may decline to renew this Agreement:
1. If Franchisor and Franchisee fail to agree to
changes or additions to this Agreement made by Franchisor in good faith and in
the normal course of business, and Franchisor does not insist on such changes or
additions being made for the purpose of preventing the renewal of this
Agreement.
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2. If Franchisor receives numerous bona fide
complaints concerning Franchisee's operation of the Franchised Business and
Franchisor promptly notifies Franchisee of each complaint and the reason it was
communicated to Franchisor, and as to those complaints relating to the condition
of the Franchised Business or the conduct of any employee of Franchisee,
Franchisee does not take prompt action to cure or correct the basis for such
complaints. Franchisor will communicate these complaints to Franchisee in
writing using Franchisor's Customer Complaint Form ("Customer Complaint Form").
A written statement from Franchisee as to the outcome is required by Franchisor.
3. If Franchisee fails on at least three (3) occasions
during the term of this Agreement, to operate the Franchised Business in a
clean, safe and healthful condition and Franchisor notified Franchisee of each
such failure.
4. Franchisor makes a good faith determination in
the normal course of business not to renew this Agreement because such renewal
would be uneconomical to Franchisor, despite any changes or additions to the
provisions of this Agreement that may be acceptable to Franchisee; provided,
however, that such non-renewal is not made for the purpose of converting the
Franchised Business to operation by employees or agents of Franchisor for
Franchisor's own account.
C. If the Franchised Premises are leased by Franchisee from
Franchisor, Franchisor may also decline to renew this Agreement if Franchisor
makes a good faith determination, in the normal course of business, to:
1. Convert the Franchised Premises to a use other
than for the operation of an auto/truckstop; or
2. Materially alter, add to or replace the Franchised
Premises if such alteration, addition or replacement is not made for the purpose
of converting the Franchised Premises to operation by employees or agents of
Franchisor for Franchisor's own account; or
3. Sell the Franchised Premises.
D. Non-renewal under Subparagraph B.4 or Subparagraph C above
shall not be effective unless (i) the term of this Agreement is for three (3)
years or longer, or Franchisee was offered a term of three (3) years or longer
and elected to accept a shorter term, and (ii) within the ninety (90) day period
following notice of non-renewal, Franchisor makes a bona fide offer to sell,
transfer or assign its interest in the Franchised Business to Franchisee, or if
applicable, grants Franchisee a forty-five (45) day preferential right to meet
the bona fide offer of another Person to purchase Franchisor's interest in the
Franchised Business.
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E. Franchisor's written notice of termination or non-renewal
shall include a statement that this Agreement is being terminated or not renewed
and shall set forth the reason or reasons for termination or non-renewal. The
effective date of the termination or non-renewal shall be at least ninety (90)
days after the date of notice of termination or non-renewal, except as provided
by Subparagraph F below. Franchisor shall include with the notice a copy of the
Summary of Title I of the PMPA, prepared by the office of the Secretary of
Energy and published August 30, 1978, in Volume 43, No. 169 of the Federal
Register, as amended from time to time ("PMPA Summary").
F. Although at least ninety (90) days written notice of
termination or non-renewal is provided for in most circumstances, there may be
times when the giving of a ninety (90) day notice is not reasonable. If such a
circumstance occurs with regard to an event set forth in Subparagraph A, B, or C
above, Franchisor may terminate or not renew this Agreement by giving Franchisee
written notice of termination or non-renewal on the earliest date that is
reasonably practical. If the period between the date of notice of termination or
non-renewal and the effective date is thirty (30) days or less, Franchisor shall
not lease the Franchised Premises to another Person for at least thirty (30)
days from the date the notice of termination or non-renewal was posted by
certified mail or personally delivered to Franchisee. If, however, the period of
time between the date of notice of termination or non-renewal, and the effective
date is more than thirty (30) days, but less than ninety (90) days, Franchisor
shall not lease the Franchised Premises to another Person until the effective
date of such notice of termination or non-renewal.
G. Nothing in this Agreement shall prohibit or restrict
Franchisor from terminating or not renewing this Agreement in any lawful manner
or for any lawful reason under applicable federal, state and local laws or
regulations, including, but not limited to, the PMPA, as such laws or
regulations may be amended from time to time.
19.2 Mutual Termination. Franchisee and Franchisor may agree in
writing to terminate or not renew this Agreement. The effective date of such
termination or non-renewal shall be the date agreed to by Franchisee and
Franchisor but may not be a date that is more than one hundred eighty (180) days
after the date of such agreement. Franchisor shall send by certified mail, or
personally deliver to Franchisee, a copy of (i) the agreement promptly after it
is executed by Franchisor and Franchisee, and (ii) the PMPA Summary. Franchisee
may repudiate such agreement by written notice to Franchisor, sent by certified
mail, postmarked not more than seven (7) days following the date Franchisee
receives a copy of such agreement.
19.3 Termination by Franchisee. (a) If Franchisee is in
substantial compliance with this Agreement and Franchisor materially breaches
this Agreement
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and fails to cure such breach within a reasonable time after written notice
thereof is delivered to Franchisor, Franchisee may terminate this Agreement.
Such termination shall be effective thirty (30) days after delivery to
Franchisor of written notice that such breach has not been cured and Franchisee
elects to terminate this Agreement. A termination of this Agreement by
Franchisee for any reason other than breach of this Agreement by Franchisor and
Franchisor's failure to cure such breach within a reasonable time after receipt
of written notice thereof shall be deemed a termination by Franchisee without
cause.
(b) Franchisee may terminate this Agreement at any
time by one hundred eighty (180) days advance written notice to Franchisor,
posted by certified mail. Upon receipt of such notice by Franchisor, it may not
be withdrawn without Franchisor's written approval.
19.4 Termination of Lease Agreement. This Agreement shall
automatically terminate upon the occurrence of any default or termination of the
Lease Agreement.
XX. RIGHTS AND DUTIES OF PARTIES
UPON EXPIRATION OR TERMINATION
20.1 Upon termination or expiration, this Agreement and all rights
granted hereunder to Franchisee shall forthwith terminate, and:
A. Franchisee shall immediately cease to operate the
Franchised Business under this Agreement, and shall not thereafter, directly or
indirectly, represent to the public or hold itself out as a present or former
franchisee of Franchisor.
B. Franchisee shall immediately and permanently cease to use,
by advertising or in any manner whatsoever, any Confidential Information or any
other methods, procedures, and techniques associated with the A/TS Network or
any Marks and distinctive forms, slogans, signs, symbols, logos, or devices
associated with the A/TS Network. In particular, Franchisee shall cease to use,
without limitation, all signs, advertising materials, stationery, forms, and any
other articles which display the Marks associated with the A/TS Network.
C. Franchisee shall take such action as may be necessary to
cancel or assign to Franchisor, at Franchisor's option, any assumed name rights
or equivalent registration filed with state, city, or county authorities which
contains Marks associated with the A/TS Network, and Franchisee shall furnish
Franchisor with evidence of compliance with this obligation satisfactory to
Franchisor within thirty (30) days after termination or expiration of this
Agreement.
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D. In the event Franchisee continues to operate or
subsequently begins to operate any other business, Franchisee shall not use any
reproduction, counterfeit, copy or colorable imitation of the Marks either in
connection with such other business or the promotion thereof, which is likely to
cause confusion, mistake or deception, or which is likely to dilute Franchisor's
rights in and to the Marks and further, Franchisee shall not utilize any
designation of origin or description or representation which falsely suggests or
represents an association or connection with Franchisor so as to constitute
unfair competition or a deceptive trade practice.
E. Franchisee shall promptly pay all sums owing to Franchisor.
In the event of termination for any default of Franchisee, such sums shall
include all damages, costs, and expenses, including reasonable attorneys' fees,
incurred by Franchisor as a result of the default.
F. Franchisee shall pay to Franchisor all damages, costs and
expenses, including reasonable attorneys' fees, incurred by Franchisor
subsequent to the termination or expiration of the franchise herein granted in
obtaining injunctive or other relief for the enforcement of any provisions of
this Agreement.
G. Franchisee shall immediately turn over to Franchisor all
manuals and copies thereof, including the Confidential Operations Manual,
records, files, instructions, brochures, agreements, disclosure statements, and
any and all other materials provided by Franchisor to Franchisee relating to the
operation of the Franchised Business (all of which are acknowledged to be
Franchisor's property).
H. Franchisor shall acquire all right, title and interest to
any sign or sign faces bearing the Marks. Franchisee hereby acknowledges
Franchisor's right to access the Franchised Premises should Franchisor elect to
take possession of any signs or sign faces bearing the Marks. If this Agreement
has been terminated for cause as provided in Paragraph XIX herein, such sign
removal shall be at Franchisee's cost. In the event of non-renewal of this
Agreement, Franchisor shall not charge Franchisee for the cost of sign removal.
I. Franchisor shall have the right (but not the duty), to be
exercised by notice of intent to do so within thirty (30) days after termination
or expiration, to purchase for cash any or all signs (except those signs owned
by Franchisor), Advertising Materials, and all items bearing Franchisor's Marks,
at Franchisee's cost or fair market value, whichever is less. If the parties
cannot agree on fair market value within a reasonable time, the determination
shall be made by arbitration in accordance with Paragraph XXXIX of this
Agreement. If Franchisor elects to exercise any option to purchase herein
provided, it shall have the right to set off all amounts due from Franchisee
under this Agreement, and the cost of the arbitration, if any, against any
payment therefor.
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20.2 All obligations of Franchisor and Franchisee which expressly or
by their nature survive the expiration or termination of this Agreement shall
continue in full force and effect subsequent to and notwithstanding its
expiration or termination and until they are satisfied or by their nature
expire.
XXI. TRANSFERABILITY OF INTEREST
21.1 This Agreement and all rights hereunder can be assigned and
transferred by Franchisor and, if so, shall be binding upon and inure to the
benefit of Franchisor's successors and assigns.
21.2 This Agreement and all rights hereunder may be assigned and
transferred by Franchisee and, if so, shall be binding upon and inure to the
benefit of Franchisee's successors and assigns, subject to the following
conditions and requirements, and Franchisor's right of first refusal as set
forth herein:
A. Franchisee may not sell, assign (including, but not limited
to, assignments by operation of law) or transfer (collectively, "Assign") this
Agreement without Franchisor's prior written consent. Franchisor has an absolute
and unqualified right to withhold consent to such proposed Assignments. Any
attempt by Franchisee to Assign this Agreement without Franchisor's prior
written consent shall be void and of no force and effect. The sale, transfer,
transfer by operation of law, or other disposition of Franchisee's interest, or
any part thereof, in the Franchised Business, or any Person's ownership or other
interest in Franchisee, if Franchisee is a corporation, partnership or other
business entity, shall be an assignment requiring Franchisors prior written
consent. Franchisee's written request for Franchisor's approval of any
assignment must be received by Franchisor not less than ninety (90) days prior
to the effective date of such requested assignment.
B. Notwithstanding Subparagraph A above, Franchisee may Assign
this Agreement without Franchisor's consent to an immediate family member of (i)
Franchisee, if Franchisee is a natural person, or (ii) Franchisee's principal
manager (insert name) ("Principal Manager"); provided
-------------------------
that, in Franchisor's reasonable judgment, such family member is sufficiently
qualified and trained ("Qualified Immediate Family Member").
C. Franchisor shall have the preferential right to meet the
bona fide offer of any proposed assignee; such right to be exercised by
Franchisor within sixty (60) days following the date Franchisor receives a copy
of Franchisee's written request for Franchisor's approval of any assignment.
Franchisee shall include in such written request the name and address of the
proposed assignee and the price, terms, and conditions contained in the bona
fide offer. Franchisor's failure to
37
exercise this preferential right shall not terminate this Agreement or the
preferential right or release Franchisee from any of its obligations under this
Agreement.
D. In the event of sale, transfer, or assignment of this
Agreement by Franchisee during the term of this Agreement, or at the expiration
date of this Agreement, Franchisor will charge Franchisee a Transfer Fee of TEN
THOUSAND Dollars ($10,000.00) ("Transfer Fee"). If the transfer is an assignment
to a corporation in which Franchisee is the principal stockholder or the officer
responsible for the full-time personal operation and supervision of the
Franchised Business, or an assignment to a qualified immediate family member,
the fee will not be charged.
XXII. DEATH OR INCAPACITY OF FRANCHISEE
22.1 In the event of the death or incapacity of an individual
Franchisee, or any partner of a Franchisee which is a partnership or any
stockholder owning fifty percent (50%) or more of the capital stock of a
Franchisee which is a corporation, the heirs, beneficiaries, devisees, or legal
representatives of said individual, partner or stockholders shall notify
Franchisor within fifteen (15) days of death or incapacity, and, within one
hundred eighty (180) days of such event:
A. Apply to Franchisor for the right to continue to operate
the Franchised Business for the duration of the term of this Agreement, which
right shall be granted upon the fulfillment of all of the conditions set forth
in Subparagraph 21.2. of this Agreement (except that no transfer fee shall be
required); or
B. Sell, assign, transfer, or convey Franchisee's interest in
compliance with the provisions of Subparagraph 21.2 of this Agreement; provided,
however, in the event a proper and timely application for the right to continue
to operate has been made and rejected, the one hundred eighty (180) days to
sell, assign, transfer or convey shall be computed from the date of said
rejection. For purposes of this Paragraph, Franchisor's silence on an
application made pursuant to Subparagraph 21.2 through the one hundred and
eighty (180) days following the event of death or incapacity shall be deemed a
rejection made on the last day of such period.
22.2 In the event of the death or incapacity of an individual
Franchisee, or any partner or stockholder of a Franchisee which is a partnership
or corporation, where the aforesaid provisions of Paragraph XXI are applicable
and have not been fulfilled within the time provided, all rights licensed to
Franchisee under this Agreement shall, at the option of Franchisor, terminate
forthwith and Franchisor shall
38
have the option to purchase the Franchised Business in accordance with this
Agreement.
XXIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
23.1 This Agreement does not create a fiduciary relationship between
the parties nor does it constitute Franchisee as an agent, legal representative,
joint venturer, partner, employee, or servant of Franchisor for any purpose
whatsoever; and it is understood between the parties hereto that Franchisee
shall be an independent contractor and is not authorized to make any contract,
agreement, warranty or representation on behalf of Franchisor, or to create any
obligation, express or implied, on behalf of Franchisor. Franchisee shall not,
without the prior written approval of Franchisor, have any power to obligate
Franchisor for any expenses, liabilities or other obligations, other than as is
specifically provided for in this Agreement. Franchisor shall not have the power
to hire or fire Franchisee's employees and, except as herein expressly provided,
Franchisor may not control or have access to Franchisee's funds or the
expenditure thereof, or in any other way exercise dominion or control over
Franchisee's Franchised Business. It is expressly understood and agreed that
neither Franchisee nor any employee of Franchisee whose compensation for
services is paid by Franchisee may, in any way, directly or indirectly,
expressly or by implication, be construed to be an employee of Franchisor for
any purpose, most particularly with respect to any mandated or other insurance
coverage, tax or contributions, or requirements pertaining to withholdings
levied or fixed by any city, state or federal governmental agency.
23.2 FRANCHISEE SHALL CONSPICUOUSLY IDENTIFY ITSELF AND ITS
FRANCHISED BUSINESS IN ALL DEALINGS WITH ITS CLIENTS, CONTRACTORS, SUPPLIERS,
PUBLIC OFFICIALS AND OTHERS, AS AN INDEPENDENT FRANCHISEE OF FRANCHISOR, AND
SHALL PLACE SUCH NOTICE OF INDEPENDENT OWNERSHIP IN SUCH FASHION AS FRANCHISOR
MAY, IN ITS SOLE AND EXCLUSIVE DISCRETION, SPECIFY AND REQUIRE FROM TIME TO
TIME, IN ITS CONFIDENTIAL OPERATIONS MANUAL OR OTHERWISE.
23.3 EXCEPT AS OTHERWISE EXPRESSLY AUTHORIZED BY THIS AGREEMENT,
NEITHER PARTY HERETO SHALL MAKE ANY EXPRESS OR IMPLIED AGREEMENTS, WARRANTIES,
GUARANTEES OR REPRESENTATIONS OR INCUR ANY DEBT IN THE NAME OF OR ON BEHALF OF
THE OTHER PARTY, OR REPRESENT THAT THE RELATIONSHIP BETWEEN FRANCHISOR AND
FRANCHISEE IS OTHER THAN THAT OF FRANCHISOR AND FRANCHISEE. FRANCHISOR DOES NOT
ASSUME ANY LIABILITY, AND WILL NOT BE DEEMED LIABLE, FOR ANY AGREEMENTS,
REPRESENTATIONS, OR WARRANTIES MADE BY
39
FRANCHISEE WHICH ARE NOT EXPRESSLY AUTHORIZED UNDER THIS AGREEMENT, NOR WILL
FRANCHISOR BE OBLIGATED FOR ANY DAMAGES TO ANY PERSON OR PROPERTY WHICH DIRECTLY
OR INDIRECTLY ARISE FROM OR RELATE TO THE OPERATION OF THE FRANCHISED BUSINESS.
23.4 Franchisee agrees to indemnify, defend, protect and hold
harmless Franchisor (and its directors, officers, employees, agents, Affiliates,
designees, representatives, stockholders, successors and assigns (collectively,
"Indemnified Parties")) from and against all losses, liens, liabilities,
damages, deficiencies, demands, claims, actions, judgments or causes of action,
assessments, costs or expenses (including, without limitation, interest,
penalties and reasonable attorneys', consultants', and other experts' fees and
disbursements) ("Losses") based upon, arising out of or otherwise in respect of
Franchisee's Franchised Business; provided, however, Franchisee shall not be
required to indemnify, defend and hold harmless the Indemnified Parties from and
against any Losses, arising out of the gross negligence ("Gross Negligence") or
wilful misconduct ("Wilful Misconduct") of Franchisor and/or any other
Indemnified Party. For the purpose of this Paragraph 23.4, the term "Gross
Negligence" shall mean a conscious and voluntary act or omission which is in
reckless disregard of the rights or property of another and the term "Wilful
Misconduct" shall mean intentional, purposeful conduct of an Indemnified Party
but does not include instances where an Indemnified Party is strictly liable for
breach of any warranty. It is agreed that neither Franchisee nor its insurance
carrier shall have the power or authority under this Agreement to make a
determination as to whether an Indemnified Party caused liabilities, losses,
claims, liens or demands as the result of Gross Negligence or Wilful Misconduct.
If there is a disagreement between Franchisee, its insurance carrier and the
Indemnified Parties as to whether or not the actions of an Indemnified
Party(ies) meet the test of Gross Negligence or Wilful Misconduct, such a
dispute shall be submitted for resolution to a court having jurisdiction over
such disputes.
Promptly after receipt by any Indemnified Party of notice of any
demand, claim or circumstance which, with the lapse of time, would or might give
rise to a claim or the commencement (or threatened commencement) of any action,
proceeding or investigation ("Asserted Liability") that may result in a Loss,
the Indemnified Party shall give notice thereof ("Claims Notice") to Franchisee.
The Claims Notice shall describe the Asserted Liability in reasonable detail and
shall indicate the amount (estimated, if necessary and to the extent feasible)
of the Loss that has been or may be suffered by an Indemnified Party.
Franchisee may elect within thirty (30) days of receipt of the
Claims Notice to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability if Franchisee acknowledges to such Indemnified
Party Franchisee's obligation to fully indemnify such party with respect to such
Asserted Liability;
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provided, however, that a condition to any settlement by Franchisee shall be a
complete and unconditional release of the Indemnified Party with respect to such
claim. If Franchisee elects to compromise or defend such Asserted Liability as
provided in this Paragraph 23.4, the Indemnified Party shall cooperate, at the
expense of Franchisee, in the compromise or defense of such Asserted Liability.
The Indemnified Party may select its own legal counsel to participate in such
compromise or defense, at Franchisee's expense, to the extent such Indemnified
Party, or its counsel, reasonably believes that a conflict of interest exists
between Franchisee and such Indemnified Party.
Franchisor will reimburse reasonable attorneys' fees incurred by
Franchisee in a court-sought resolution if Franchisor or any other Indemnified
Party is found to be Grossly Negligent or guilty of Wilful Misconduct. If
Franchisee elects not to compromise or defend the Asserted Liability, fails to
notify the Indemnified Party of its election as herein provided or contests its
obligation to indemnify under this Agreement, the Indemnified Party may pay,
compromise or defend such Asserted Liability; provided, however, that such
payment, compromise or defense shall in no way relieve Franchisee of its
indemnification responsibilities pursuant to this Agreement.
23.5 Without limiting or detracting from the indemnity provision
above or elsewhere in this Agreement, Franchisee shall comply with the
applicable federal, state and local laws, rules, regulations, orders and
ordinances concerning pollution and protection of the environment, with special
attention to the regulations governing the storage, dispensing, and sale of
unleaded gasoline; shall procure and maintain all permits and licenses required
thereunder; and shall defend, indemnify, and hold harmless the Indemnified
Parties from and against any and all penalties, interest, costs, expenses,
claims, judgments, and orders with respect to such laws, ordinances, rules,
orders, and regulations, except those determined to have been caused by the
Gross Negligence or Willful Misconduct of an Indemnified Party.
23.6 Because Franchisee has the day-to-day occupation and control of
the business at the Franchised Premises, Franchisee shall:
A. Immediately clean up and properly dispose of all
contaminants, pollutants, toxic substances, and hazardous substances which are
dumped, spilled, or otherwise deposited, or which appear anywhere on, or which
originate from, the Franchised Premises from whatever cause or source. All such
cleanup and disposal actions shall be in compliance with all applicable laws,
regulations and ordinances, and the requirements of governmental agencies,
relating to pollution or protection of the environment. If the matter cleaned up
and disposed of is determined after non-appealable final judgment to have been
deposited through the Gross Negligence or Wilful Misconduct of an Indemnified
Party, Franchisor shall reimburse Franchisee the reasonable clean-up and
disposal costs.
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B. Comply with the Occupational Safety and Health Act and
rules, orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business. Franchisee shall also defend,
indemnify, and hold harmless the Indemnified Parties from and against any and
all penalties, interest, cost, expenses, claims, judgments, and orders arising
out of or incident to Franchisee's non-compliance with said Act and the rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business.
C. Comply with the Americans with Disabilities Act and rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business. Franchisee shall also defend,
indemnify, and hold harmless the Indemnified Parties from and against any and
all penalties, interest, cost, expenses, claims, judgments and orders arising
out of or incident to Franchisee's non-compliance with said Act and the rules,
orders, and regulations issued and promulgated thereunder applicable to
Franchisee's operation of the Franchised Business.
D. Immediately advise Franchisor in writing of defects in or
deterioration of storage tanks, submerged pumps, and/or piping as listed in the
Lease Agreement, for which Franchisor has replacement responsibility. In this
regard, storage tanks, submerged pumps, and/or piping at the Franchised Premises
may result in major environmental and property damage. One of the recommended
methods used to warn of a potential leak is the implementation and adherence to
a motor fuel inventory program that includes a daily stick measurement of the
volume of motor fuel in storage and recording of the volume of motor fuel
received and sold. Franchisee agrees to implement and adhere to a daily
inventory plan incorporating the above described elements. Franchisee shall
immediately notify Franchisor when a loss of motor fuel is equal to or greater
than one thousand (1,000) gallons reflected in its daily inventory system, but
not later than the next day, by the fastest means available. This loss may be
considered a paper shortage of motor fuel even though the motor fuel may be
reflecting an overage. Franchisee should use his best judgment and past
historical data in determining losses during periods of fuel expansion or
shrinkage during storage. If Franchisee's first notification to Franchisor of a
loss is verbal, Franchisee shall confirm such notice in writing immediately
after giving the verbal notice. Franchisor shall have the sole right to
determine what tests are required to confirm any leaks and what corrective
measures are to be taken. If Franchisee keeps a daily inventory system and
notifies Franchisor immediately upon detecting a motor fuel loss, Franchisee
shall be released from its obligation to defend, indemnify, and hold the
Indemnified Parties harmless from any claims, costs, fines, penalties, and
damages related to a leak in the underground tanks, submerged pumps, or piping,
except for any leak arising from the negligent or willful acts or omissions of
Franchisee, its contractors, agents, or employees. If Franchisee, its employees
or agents is negligent, or if Franchisee does not maintain a daily inventory
system and/or
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fails to immediately advise Franchisor of an indicated loss, Franchisee shall be
responsible for and shall indemnify, defend, and hold the Indemnified Parties
harmless from, any and all claims, costs, fines, penalties, or damages of every
nature related to any leak not detected and/or reported. Such failure to
maintain an inventory system or immediately notify Franchisor of an indicated
loss or water contamination shall be grounds for termination or non-renewal of
this Agreement.
23.7 Indemnified Parties do not assume any liability whatsoever for
acts, errors, or omissions of those with whom Franchisee may contract,
regardless of the purpose. Franchisee shall hold harmless and indemnify
Indemnified Parties for all losses and expenses which may arise out of any acts,
errors or omissions of these third parties.
23.8 Franchisor shall not, by virtue of any approvals, advice or
services provided to Franchisee, assume responsibility or liability to
Franchisee or any third parties to which Franchisor would not otherwise be
subject.
XXIV. APPROVALS
24.1 Whenever this Agreement requires the prior approval or consent
of Franchisor, Franchisee shall make a timely written request to Franchisor
therefor, and, except as otherwise provided herein, any approval or consent
granted must be in writing to be binding upon Franchisor.
24.2 Franchisor makes no warranties or guarantees upon which
Franchisee may rely and assumes no liability or obligation to Franchisee or any
third party to which it would not otherwise be subject, by providing any waiver,
approval, advice, consent or services to Franchisee in connection with this
Agreement, or by reason of any neglect, delay or denial of any request therefor.
XXV. AMENDMENTS; WAIVERS; REMEDIES
25.1 Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Franchisee and Franchisor, or in the case of a waiver, by the
party against whom the waiver is to be effective.
25.2 No waiver by either party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No single or partial exercise by
either party in
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exercising any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any right or remedies provided by law.
XXVI. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
XXVII. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of Illinois.
XXVIII. COUNTERPARTS; EFFECTIVENESS
This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
XXIX. ENTIRE AGREEMENT
This Agreement, together with the Lease Agreement, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings and negotiations, both
written and oral, between the parties with respect to the subject matter of this
Agreement. Neither this Agreement nor any provision hereof is intended to confer
upon any person or entity other than the parties hereto any rights or remedies
hereunder (except the rights given to the Indemnified Parties in Paragraph
XXIII).
XXX. JURISDICTION
Each of the parties hereto irrevocably submits to the jurisdiction
of any state or federal court sitting in the county and state in which the
Franchised Business is located, in any action or proceeding arising out of or
relating to this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and
44
determined in any such court, and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to contest
the jurisdiction (in rem or in personam) or power or decision of such court over
or pertaining to the party or with respect to the subject matter in any other
court within or outside of the United States other than appropriate appellate
courts. Each of the parties hereto irrevocably waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of the other
party hereto with respect thereto.
XXXI. CAPTIONS
The captions herein are included for convenience of reference only
and shall be ignored in the construction or interpretation hereof.
XXXII. SEVERABILITY
If any provisions of this Agreement, or the application thereof to
any Person, place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provisions as applied to other Persons, places and
circumstances shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.
XXXIII. CONSTRUCTION
Whenever required by the context, any gender shall include any other
gender, the singular shall include the plural and the plural shall include the
singular.
XXXIV. INCONSISTENCY
In the event of any conflict between the terms and provisions of
this Agreement and the terms and provisions of the Lease Agreement and other
agreements between the parties, the terms and provisions of the Franchise
Agreement shall govern and control.
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XXXV. FORCE MAJEURE
The period of time during which either party hereto is prevented or
delayed in the performance or fulfilling any obligation, or any other fees or
sums and charges due hereunder, due to unavoidable delays caused by force
majeure, earthquake, fire, flood, or the elements, malicious mischief, riots,
strikes, lockouts, boycotts, picketing, labor disputes or disturbance, war,
compliance with any directive, order or regulation of any governmental authority
or representative thereof acting under claim or color of authority, or for any
reason beyond such party's reasonable control, whether or not similar to the
foregoing, shall be added to such party's time for performance thereof, and such
party shall have no liability by reason thereof.
XXXVI. NOTICE
All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given (i) if personally delivered,
when so delivered, (ii) if mailed, two (2) business days after having been sent
by registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, (iii) if given by telex
or telecopier, once such notice or other communication is transmitted to the
telex or telecopier number specified below and the appropriate answer back or
telephonic confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (ii) above or (iv) if sent through a reputable overnight delivery service
in circumstances to which such service guarantees next day delivery, the day
following being so sent:
Notices to Franchisor: NATIONAL AUTO/TRUCKSTOPS, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telex:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Franchisee:
-------------------------
-------------------------
-------------------------
Attention:
Telex:
Telecopy:
Either party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
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electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it is
actually received by the individual for whom it is intended. Either party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.
XXXVII. COST OF ENFORCEMENT OR DEFENSE
If a claim for amounts owed by Franchisee to Franchisor is asserted
in any legal proceeding before a court of competent jurisdiction, or if
Franchisor or Franchisee is required to enforce this Agreement in a judicial
proceeding, the prevailing party shall be entitled to reimbursement of its
costs, including reasonable accounting and legal fees, in connection with such
proceeding.
XXXVIII. INJUNCTIVE RELIEF
Franchisor shall have the right to obtain injunctive relief against
threatened or actual conduct by Franchisee that will cause Franchisor loss or
damages, for Franchisee's material misuse or unauthorized use of the Marks, for
Franchisee's threatened or actual violation of the provisions of this Agreement
governing Confidential Information. Such injunctive relief shall be governed
under the usual equity rules, including the applicable rules for obtaining
restraining orders and preliminary injunctions.
XXXIX. ARBITRATION
39.1 Any monetary claim of less than ONE HUNDRED THOUSAND Dollars
($100,000.00) in dispute arising out of or relating to this Agreement, or any
breach thereof, shall be submitted to arbitration before a single arbitrator in
the county and state where Franchisor's principal place of business is located
at the time such action is brought forth in accordance with the rules of the
American Arbitration Association and judgment upon the award may be entered in
any court having jurisdiction thereof. The arbitrator is explicitly authorized
to award attorneys' fees as part of his or her award. Nothing contained herein
shall, however, be construed to limit or to preclude Franchisor from bringing
any action in any court of competent jurisdiction for injunctive or other
provisional relief as Franchisor deems to be necessary or appropriate to compel
Franchisee to comply with its obligations hereunder or to protect Franchisor's
Marks or other property rights of Franchisor. In addition, nothing contained
herein shall be construed to limit or to preclude Franchisor from joining with
any action for injunctive or provisional relief all monetary claims that
Franchisor may have against Franchisee which arise out of the
47
acts or omissions to act giving rise to the action for injunctive or provisional
relief. This arbitration provision shall be deemed to be self-executing and in
the event that Franchisee fails to appear at any properly noticed arbitration
proceeding, award may be entered against Franchisee notwithstanding its failure
to appear.
39.2 Nothing herein contained shall bar the right of either party to
seek and obtain temporary injunctive relief from a court of competent
jurisdiction in accordance with applicable law against threatened conduct that
will cause loss or damage, pending completion of the arbitration.
39.3 It is the intent of the parties that any arbitration between
Franchisor and Franchisee shall be of Franchisee's individual claim and that the
claim subject to arbitration shall not be arbitrated on a class-wide basis.
XL. LINE OF CREDIT
In order to guaranty Franchisee's performance of its monetary
obligations to Franchisor pursuant to this Agreement, Franchisee shall establish
a line of credit with Franchisor's Credit Department in an amount determined by
Franchisor's Credit Department. In the event that Franchisee fails to pay any
amounts due pursuant to this Agreement, Franchisor may refuse to extend credit
to Franchisee.
XLI. CAVEAT
The success of the business venture contemplated to be undertaken by
Franchisee by virtue of this Agreement is speculative and depends, to a large
extent, upon the ability of Franchisee as an independent business entity, and
its active participation in the daily affairs of the business as well as other
factors. Franchisor does not make any representation or warranty express or
implied as to the potential success of the business venture in this Agreement.
XLII. ACKNOWLEDGMENTS
42.1 Franchisee represents and acknowledges that it has received,
read and understood this Agreement and Franchisor's Uniform Franchise Offering
Circular; and that Franchisor has fully and adequately explained the provisions
of each to Franchisee's satisfaction; and that Franchisor has accorded
Franchisee ample time and opportunity to consult with advisors of its own
choosing about the potential benefits and risks of entering into this Agreement.
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42.2 Franchisee acknowledges that it has received a copy of this
Agreement and the attachments thereto, at least five (5) business days prior to
the date on which this Agreement was executed. Franchisee further acknowledges
that Franchisee has received the disclosure document required by the Trade
Regulation Rule of the Federal Trade Commission entitled Disclosure Requirements
and Prohibitions Concerning Franchising and Business Opportunity Ventures, at
least ten (10) business days prior to the date on which this Agreement was
executed.
42.3 Franchisee has been advised to consult with its own advisors
with respect to the legal, financial and other aspects of this Agreement, the
business franchised hereby, and the prospects for that business. Franchisee has
either consulted with such advisors or has deliberately declined to do so.
42.4 Franchisee affirms that all information set forth in any and
all applications, financial statements and submissions to Franchisor is true,
complete and accurate in all respects, with Franchisee expressly acknowledging
that Franchisor is relying upon the truthfulness, completeness and accuracy of
such information.
42.5 Franchisee has conducted an independent investigation of the
business contemplated by this Agreement and recognizes that, like any other
business, an investment in a Franchised Business involves business risks and
that the success of the venture is primarily dependent upon the business
abilities and efforts of Franchisee.
42.6 FRANCHISEE UNDERSTANDS AND ACKNOWLEDGES THAT ALL
REPRESENTATIONS OF FACT MADE BY FRANCHISOR HEREIN ARE MADE SOLELY BY FRANCHISOR.
ALL DOCUMENTS, INCLUDING FRANCHISOR'S FRANCHISE AGREEMENT AND UNIFORM FRANCHISE
OFFERING CIRCULAR AND ALL EXHIBITS THERETO, HAVE BEEN PREPARED SOLELY IN
RELIANCE UPON REPRESENTATIONS MADE AND INFORMATION PROVIDED BY FRANCHISOR, ITS
OFFICERS AND ITS DIRECTORS. FRANCHISEE FURTHER AGREES THAT IT HAS NO CLAIM
AGAINST, AND WILL INDEMNIFY AND HOLD HARMLESS, THE PREPARER OF ANY AND ALL SUCH
FRANCHISE AGREEMENTS, OFFERING CIRCULARS AND EXHIBITS THERETO, WITH RESPECT TO
ANY AND ALL LOSS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES), DAMAGES AND
LIABILITIES RESULTING FROM ANY REPRESENTATIONS AND/OR CLAIMS MADE BY FRANCHISOR
IN SUCH DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound hereby, have duly executed, sealed and delivered this Agreement in
multiple copies the day and year first above written.
NATIONAL AUTO/TRUCKSTOPS, INC.
ATTEST:
By:
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Witness
ATTEST:
Witness Franchisee
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Witness Franchisee
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