PIZZA PLACE AREA REPRESENTATIVE AGREEMENT
Between
AMERICAN KIOSK CORPORATION
a Delaware corporation
(Franchisor)
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and/or Assigns
(Representative)
Dated: November 10, 1998
Service Area:
Louisiana, Mississippi, Arkansas, Tennessee,
Alabama, Florida,(except Dade, Broward, and Palm Beach Counties)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PIZZA PLACE AREA REPRESENTATIVE AGREEMENT
TABLE OF CONTENTS
PAGE
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BACKGROUND................................................................................................1
ARTICLE 1
Section 1.1 Grant.....................................................................................
Section 1.2 Area of Responsibility....................................................................
Section 1.3 Territorial Protection....................................................................
ARTICLE 2
Section 2.1 Training..................................................................................
Section 2.2 Loan of the Pizza Place Manuals...........................................................
Section 2.3 Continued Assistance and Support..........................................................
Section 2.4 License of the Proprietary Marks..........................................................
Section 2.5 Duties Solely to the Representative.......................................................
Section 2.6 The Franchisor's Right to Delegate Duties.................................................
ARTICLE 3
Section 3.1 Franchise Brokerage Services..............................................................
Section 3.2 Pre-Opening Assistance to Franchisees.....................................................
Section 3.3 Continued Assistance and Support of Franchisees...........................................
Section 3.4 Other Obligations and Requirements........................................................
Section 3.5 Insurance.................................................................................
Section 3.6 Confidentiality...........................................................................
ARTICLE 4
Section 4.1 Representative Fee........................................................................
Section 4.2 Compensation of the Representative........................................................
ARTICLE 5
Section 5.1 The Franchisor's Representations As to the Proprietary Marks..............................
Section 5.2 Restrictions on the Representative's Use of the Proprietary Marks.........................
Section 5.3 The Representative's Lack of Ownership....................................................
Section 5.4 Infringement by the Representative........................................................
Section 5.5 Indemnification of the Representative.....................................................
Section 5.6 Claims Against the Proprietary Marks......................................................
ARTICLE 6
Section 6.1 Confidential Use..........................................................................
Section 6.2 Sole Property of the Franchisor...........................................................
Section 6.3 Periodic Revisions........................................................................
Section 6.4 Prior Information.........................................................................
PAGE
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ARTICLE 7
Section 7.1 Transfer by the Franchisor...............................................................
Section 7.2 Transfer by the Representative...........................................................
ARTICLE 8
Section 8.1 Termination by the Representative........................................................
Section 8.2 Termination by the Franchisor - Without Notice...........................................
Section 8.3 Termination by the Franchisor - After Notice.............................................
Section 8.4 Termination by the Franchisor - After Notice and Right to Cure...........................
ARTICLE 9
Section 9.1 Payment of Outstanding Amounts...........................................................
Section 9.2 Discontinue Legal Use of Name............................................................
Section 9.3 Return of Materials......................................................................
Section 9.4 Loss of Exclusivity; Cessation of Sales; Cessation of Services...........................
ARTICLE 10
Section 10.1 Devotion to the Sale and Servicing of Franchises.........................................
Section 10.2 Diversion of Business; Competition With the Franchisor; and Interference.................
(i)....................................................................................24
(ii) ..................................................................................24
(iii) .................................................................................24
Section 10.4 Independent Covenants....................................................................
ARTICLE 11
Section 11.1 Independent Status.......................................................................
Section 11.2 Indemnification..........................................................................
ARTICLE 12
Section 12.1 No Reliance..............................................................................
Section 12.2 Representations of the Franchisor........................................................
Section 12.3 Representations of the Representative....................................................
ARTICLE 13
Section 13.1 Mediation and Arbitration................................................................
Section 13.2 Injunctive Relief; Specific Performance..................................................
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PAGE
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ARTICLE 14
Section 14.1 Term.....................................................................................
Section 14.2 Option to Obtain Successor Pizza Place Area..............................................
ARTICLE 15
Section 15.1 Definitions..............................................................................
Section 15.2 Other Definitional Provisions............................................................
ARTICLE 16
Section 16.1 SUCCESS OF THE REPRESENTATIVE'S BUSINESS.................................................
Section 16.2 Amendments...............................................................................
Section 16.3 Binding Effect...........................................................................
Section 16.4 Notices..................................................................................
Section 16.5 Headings.................................................................................
Section 16.6 Severability.............................................................................
Section 16.7 Waivers..................................................................................
Section 16.8 Enforcement Costs........................................................................
Section 16.9 Jurisdiction and Venue...................................................................
Section 16.10 Remedies Cumulative......................................................................38
Section 16.11 Effectiveness; Counterparts..............................................................39
Section 16.12 Consents, Approvals and Satisfaction.....................................................39
Section 16.13 Governing Law............................................................................39
Section 16.14 Interpretation...........................................................................39
Section 16.15 Entire Agreement.........................................................................40
Section 16.16 Survival.................................................................................40
Section 16.17 Force Majeure............................................................................40
Section 16.18 Third Parties............................................................................40
Exhibit A to Pizza Place Area Representative Agreement...................................................44
Exhibit B to Pizza Place Area Representative Agreement...................................................45
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PIZZA PLACE AREA REPRESENTATIVE AGREEMENT
THIS PIZZA PLACE AREA REPRESENTATIVE AGREEMENT is signed on _____________,
199___, between American Kiosk Corporation, a Delaware corporation (the
"Franchisor") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and/or Assigns (the
"Representative").
BACKGROUND
A. The Franchisor intends to develop a national brand franchise system of
kiosk and kiosk-style retail outlets called Retail-Style Kiosks, to deliver
popular food products to consumers initially focusing on brick oven pizza under
the Proprietary Marks (the "Franchise").
A. The Franchisor designates selected area representatives who meet special
criteria to solicit prospective franchisees ("Franchisees") to purchase
Franchises to be operated in a designated area, under a Franchise Agreement
between the Franchisor and the Franchisee, and to perform certain duties for
these Franchises, many of which are duties of the Franchisor under the Franchise
Agreement and are delegated under this Agreement to the Representative.
B. As compensation for the Representative's services under this Agreement,
the Franchisor desires to pay the Representative a portion of the Turnkey
Package Fees, and Royalties paid by Franchisees, also the Representative shall
be issued shares of American Kiosk Corporation
C. The Franchisor desires to provide the Representative with special
training to assist the Representative in soliciting and servicing Franchisees
under this Agreement.
D. The Representative desires to receive this special training and be
engaged by the Franchisor on the terms in this Agreement.
E. The Representative has had sufficient opportunity to be advised
thoroughly of the terms of this Agreement by advisors of the Representative's
own choosing and by receipt and review of a current FOC (Single-Unit) and has
made an independent investigation of the Franchisor's operations, and the
Representative and the Franchisor have concluded an agreement that they reduce
to this written document, which is intended to fully state all of the parties'
understandings and agreements, representations and warranties pertaining to
their relationship and which terms are acknowledged by the parties to be
material and reasonable.
The parties agree as follows:
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ARTICLE 1
APPOINTMENT
Section 1.1 Grant.
The Franchisor grants to the Representative, subject to the terms in this
Agreement, the right to act as the Franchisor's exclusive sales agent of, and
service provider to, Franchises within the Area described in Section 1.2 and the
Representative agrees to accept this engagement. This Agreement is not a
franchise. This Agreement does not grant to the Representative any right to own
or operate a Pizza Place Franchise. However, nothing in this Agreement will
prohibit the Representative from proposing any entity in which the
Representative has an interest, or the Representative himself or herself, as a
prospective Franchisee for a System franchise to be located in the Area. If the
Franchise is granted under the approval procedures in this Agreement and
compliance with the FTC Franchise Rule and applicable state franchise laws, the
Representative will be entitled to compensation as provided in Section 4.2. The
Representative must also purchase two (2) Pizza Place Franchises (Turn Key
Packages) at Sixty-Five Thousand dollars($65,000.00) each. These two units will
be paid for through a secured 36 month note for $130,000 bearing 8% interest,
with a balloon payment of $65,000 due at the end of the loan term. The first
payment will be due on April 1, 1999. These units will also be used as the
Representative's showcase unit, sales office and training facility. The
Representative will receive a separate FOC (Single-Unit) in accordance with
federal and state franchise law requirements.
Section 1.2 Area of Responsibility.
The Representative's area of responsibility (the "Area") is: The States of
:Florida, except Dade, Broward, and Palm Beach Counties, Alabama, Mississippi
Louisiana Arkansas and Tennessee. The Franchisor agrees to provide the
Representative, the additional states of Georgia, South Carolina , and North
Carolina if the current potential Representative does not come to terms with
American Kiosk Corporation. If these additional states are provided the Area
Representative Performance Schedule will be adjusted accordingly. This Area can
reasonably absorb at least Three Hundred Sixty(360) Franchises. The
Representative will only deal with prospective Franchisees who are residents
within the Area and whose Franchise is to be located within the Area without the
written approval of the Franchisor to avoid an inadvertent offer to sell a
franchise to a resident of a state where the Franchisor is not currently
registered. The Representative will not have a first personal meeting with any
prospective Franchisee until notified in writing by the Franchisor that the
Franchisor has complied with any applicable state franchise registration
requirements and the Franchisor has delivered to the Representative its current
form of FOC for delivery to prospective Franchisees. Franchisor agrees to
immediately file the necessary documents to do business in the above mentioned
area.
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Section 1.3 Territorial Protection.
During the Term, if the Representative is not in default under this
Agreement, the Franchisor will not grant any other person the right to offer
Franchises to be operated in the Area, nor grant any Franchise or a
Company-Owned Unit to be operated in the Area without the Franchise being
subject to the terms of this Agreement and the written consent of the
Representative.
ARTICLE 2
DUTIES OF THE FRANCHISOR
The Franchisor will provide the Representative with the following
assistance and services if the Representative is not in default under this
Agreement:
Section 2.1 Training.
(a) Initial Training
(b) Failure to Complete Initial Training.
(c) Content.
(d) Attend Franchisee's Basic Management Training.
THE FRANCHISOR HEREBY AGREES THAT BECAUSE OF THE REPRESENTATIVES PREVIOUS
INVOLVEMENT WITH THE FRANCHISOR THE ABOVE SECTIONS a,b,c, and d ARE WAIVED AND
ARE NOT PART OF THIS AGREEMENT.
(e) Refresher or Additional Training. The Franchisor may provide refresher
training programs, seminars or advanced management training for the
Representative at the principal training facility of the Franchisor, which may
be required, at the option of the Franchisor. Training will not be required more
often than once a year. The Representative is solely responsible for all
expenses associated with these programs, including the then prevailing standard
rates charged by the Franchisor for these programs and all travel, meals and
lodging costs for the Representative's attendees.
(f) Approval of Prospective Franchisees. The Franchisor will promptly
process all applications by prospective Franchisees forwarded by the
Representative and will not unreasonably withhold its approval of any
prospective Franchisee, provided the prospect meets the educational,
professional, managerial, business, financial, and other qualifications as the
Franchisor may require for new franchisees.
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Section 2.2 Loan of the Pizza Place Manuals.
The Franchisor will loan to the Representative one registered copy of the
Pizza Place Manuals (with peraodic revisions as required). The Franchisor's
practice is to deliver to the Representative Pizza Place Manuals at or shortly
before the time of Initial Training.
Section 2.3 Continued Assistance and Support.
(a) Collection of Fees and Royalties. The Franchisor will provide for the
collection of fees and royalties from the Franchisees and payment to the
Representative as provided in Section 4.2.
(b) Telephone Hotline. The Franchisor will maintain a telephone "hotline"
for informational assistance for the Representative and the Franchisees.
(c) Advertising and Public Relations Campaigns. The Franchisor will
generally promote the Franchised Business through advertising and public
relation campaigns.
(d) Periodic Assistance. The Franchisor may provide to the Representative
continuing advisory assistance in the operation and promotion of the Franchises
as the Franchisor deems advisable, which may include communication of new
developments, improvements in equipment and supplies, and new techniques in
advertising, service and management that are relevant to the operation of the
Franchised Business.
(e) Research and Development. The Franchisor will continue to research and
develop new products and services, introductions and techniques as deemed
appropriate by the Franchisor in its sole and absolute discretion.
(f) Referral of Leads. The Franchisor will refer all leads to the
Representative for possible Franchises in the Area.
Section 2.4 License of the Proprietary Marks.
Subject to the terms of this Agreement, the Franchisor licenses the right
to use the "Pizza Place" trade name.
Section 2.5 Duties Solely to the Representative.
All of the obligations of the Franchisor under this Agreement are solely to
the Representative. No other party is entitled to rely on, enforce, or obtain
relief for breach of these obligations either directly or by subrogation.
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Section 2.6 The Franchisor's Right to Delegate Duties.
The Representative agrees to the Franchisor's right to delegate any of the
duties of the Franchisor under this Agreement to a Designee. The Representative
must discharge his or her duties in all respects with the Designee to the extent
requested by the Franchisor in the same manner with which the Representative is
otherwise required to do so with the Franchisor.
ARTICLE 3
DUTIES OF THE REPRESENTATIVE
The Representative will perform the following duties on an exclusive,
full-time, best efforts basis for the Franchisor:
Section 3.1 Franchise Brokerage Services.
(a) The Representative will develop and implement a franchise marketing
plan, to attract qualified franchisee candidates within the Area. The
Representative must diligently check to ensure that the Pizza Place System is
feasible within the Area. The Representative will solicit and screen prospective
Franchisees for the Franchisor to purchase Pizza Place Franchises to be located
in the Area under separate Franchise Agreements with the Franchisor that the
Franchisor may specify. The Representative agrees that the Franchisor has sole
discretion to accept or reject a prospective Franchisee. The final terms of the
Franchise Agreement entered into with each Franchisee including all fees and
royalties is also determined in the sole discretion of the Franchisor. The
Franchisor reserves the right to increase the fees and royalties charged to
franchisees upon 60 days' written notice to the Representative. The
Representative is without authority to sign any agreement for the Franchisor
including any Franchise Agreement.
(b) The Representative's responsibilities in this regard include
advertising for prospective Franchisees, screening of prospective Franchisees
pursuant to standards required by the Franchisor, obtaining completed franchisee
applications that are submitted to the Franchisor's home office for processing
and review, and delivering timely the Franchisor's FOC. The Representative will
make no representations inconsistent with any Authorized Materials delivered by
the Representative to prospective Franchisees, including the FOC (including all
exhibits), that the Representative warrants he or she has read, and with which
he or she is familiar.
(c) The Representative will comply with all applicable federal and state
laws and regulations in the sale of Franchises. The Representative must provide
each prospective Franchisee with the then current form of Pizza Place FOC
required to be delivered to the prospective Franchisee. The FOC must be
delivered by the Representative, at the earlier of: (i) at least 10 Business
Days before signing the Franchise Agreement and payment of any
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consideration in the sale or proposed sale of a Franchise to the prospective
Franchisee; or (ii) on or before the first personal meeting between the
prospective Franchisee and the Representative for the purpose of discussing the
sale or possible sale of a Franchise. In addition, the Representative must
provide each prospective Franchisee with the Franchise Agreement, and all other
agreements to be signed by the prospective Franchisee, with all blanks and terms
completed, at least 5 Business Days before signing the Franchise Agreement and
payment of any consideration in the sale or proposed sale of a Franchise to the
prospective Franchisee.
(d) The Representative will number each FOC and maintain a detailed log as
to each prospective Franchisee including all letters, telephone contacts,
personal meetings, obtaining the signed Acknowledgement of Receipt of the FOC
and other information required by the Franchisor. The Representative will make
no oral or written statement, promise, guarantee, representation, understanding
or other agreement that is outside of, or inconsistent with, the terms of the
FOC. The Representative will not use any marketing or advertising materials that
have not been previously supplied by the Franchisor or previously approved, in
writing, by the Franchisor.
(e) The Representative will spend a reasonable sum per calendar year on
advertising the solicitation of Franchisees and agrees to provide the Franchisor
with satisfactory proof of these expenditures, upon the Franchisor's request.
The Representative will refrain from using any false or misleading advertising
in the solicitation of prospective Franchisees. All advertising must receive the
written approval of the Franchisor before its use and the Representative will
comply with all laws regulating the content and use of advertising including
registration with, and approval by, applicable state franchise regulators.
(f) The Representative will actively participate in franchise and business
opportunity shows, within the Area. The Representative will purchase an
appropriate franchise display booth.
(g) The Representative will establish and maintain sources of supplies and
services for the Franchisees within the Area, including sources for leasing and
financing assistance to the Franchisees approved by the Franchisor.
Section 3.2 Pre-Opening Assistance to Franchisees.
(a) In a Franchisee's selection of a site for the establishment and
operation of a Franchised Business, the Representative must:
(i) develop and provide standards and criteria for the threshold
consideration of possible sites;
(ii) develop meaningful information concerning possible site selection
and present this information to a Franchisee;
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(iii) upon request of a Franchisee, consult with the Franchisee
regarding site selection and the negotiation of real estate leases; and
(iv) consider and evaluate applications presented by the Franchisees
for site approval and forward all materials to the Franchisor along with
the Representative's analysis and recommendation for the Franchisee's final
approval or disapproval for the purpose of approving or disapproving sites
so presented.
(b) The Representative will provide the Franchisee with Basic Management
Training as stated in Section 2.8 of the Franchise Agreement at its training
facility, pre-opening inspections as stated in Section 2.10 of the Franchise
Agreement, pre-opening on-site training and an opening supervisor as stated in
Section 2.11 of the Franchise Agreement and grand opening assistance stated
Section 2.12 of the Franchise Agreement. The Representative will assist the
franchisee to help ensure that the Franchisee's Franchised Business opens within
120 days from the signing of the Franchise Agreement.
Section 3.3 Continued Assistance and Support of Franchisees.
(a) Refresher Training. The Representative may be required to provide
refresher training programs or seminars for the Franchisees at his or her
training facility and for the time and content as may be required by the
Franchisor.100% of the training fees referred to in the Franchise Agreement
shall be paid to the Representative.
(b) Field Visits. The Representative must provide assistance to the
Franchisees in the development and operation of their respective Franchises by
means of periodic visits by the Representative no less frequently than once per
month. The Representative will make himself or herself available to the
Franchisees and sales agents for consultation on matters such as operations,
advertising and promotion, installation and business methods.
(c) Advice on Local Advertising. The Representative must provide
suggestions and comments to Franchisees regarding regional and local
advertising, and direction regarding the proper usage of the Franchisor's
Proprietary Marks.
(d) Reports to Franchisor. The Representative must report promptly to the
Franchisor regarding any complaints or suggestions made by the Franchisees.
(e) Periodic Franchisee Meetings. The Representative will conduct periodic
meetings of all Franchisees in the Area including meetings of any Regional
Advertising Cooperative for purposes as, and no less frequently than, the
Franchisor may require in writing. If requested by the Franchisor, the
Representative will develop specific marketing programs for the Area using
material provided or approved by the Franchisor.
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(f) Other Responsibilities. The Representative will undertake other
responsibilities as requested by the Franchisor, provided these responsibilities
are deemed reasonably necessary by the Franchisor as a result of being required
to be performed by the Franchisor or its Designee under the then current form of
Franchise Agreement.
Section 3.4 Other Obligations and Requirements.
(a) Informational Requests; Monthly Forecasts. The Representative will
promptly comply with all informational requests of the Franchisor and cooperate
fully with the Franchisor to administer the franchise program contemplated under
this Agreement. The Representative will provide monthly forecasts of sales of
Franchises.
(b) Licenses. The Representative is responsible for complying with all
licensing requirements and other applicable laws concerning the performance of
the Representative's duties, for which the Franchisor makes no representations
and warranties.
(c) Telephones. The Representative will at all times: (i) maintain
continuously the number of operating telephone lines and telephone numbers to be
used exclusively by the Representative for the operation of his or her business
required by the Franchisor, with sufficient staff to handle telephone calls in
an efficient and courteous manner at all times during business hours; and (ii)
maintain an answering service after normal business hours.
(d) Compliance with Laws. The Representative will comply with all federal,
state, and local laws, rules and regulations, and will timely obtain, maintain
and renew when required all permits, certificates or franchises necessary for
the full and proper conduct of his or her business under this Agreement,
including qualification to do business, fictitious, trade or assumed name
registration, occupational licenses and franchise salesmen regulations. Copies
of all inspection reports, warnings, certificates and ratings, issued by any
governmental entity during the Term in the conduct of his or her business that
indicate material non-compliance by the Representative with any applicable law,
rule or regulation, will be forwarded to the Franchisor by the Representative
within 2 days of the Representative's receipt of these items.
(e) Tax Payments; Contested Assessments. The Representative will promptly
pay when due all taxes levied or assessed by any federal, state or local tax
authority, including unemployment taxes, withholding taxes, sales taxes, income
taxes, tangible commercial personal property taxes, real estate taxes,
intangible taxes and all other indebtedness incurred by the Representative in
the conduct of his or her business. The Representative will pay to the
Franchisor or the Franchisor will withhold an amount equal to any sales tax,
goods and services taxes, gross receipts tax, or similar tax imposed on the
Franchisor for any payments to the Representative required under this Agreement,
unless the tax is measured by or related to the net income of the Franchisor or
to its corporate status in a state. If any tax is paid by the Franchisor,
8
the Representative will promptly reimburse the Franchisor the amount paid. Upon
any bona fide dispute as to liability for taxes assessed or other indebtedness,
the Representative may contest the validity or the amount of the tax or
indebtedness in accordance with procedures of the taxing authority or applicable
law; however, the Representative will not permit a tax sale or seizure by levy
of execution or similar writ or warrant, or attachment by a creditor, to occur
against any assets used in his or her business.
(f) Inspections. The Representative will permit the Franchisor and/or its
representatives to enter the office of the Representative and his or her
training facility at any time during normal business hours, for purposes of
conducting inspections including a review of the Representative's books and
records. The Representative will cooperate fully with the Franchisor and/or its
agents in the inspections by rendering assistance as they may reasonably request
and by permitting them, at their option, to observe the methods used by the
Representative in selling franchises and rendering his or her services for the
Franchisor. The inspections may be conducted without notice at any time when the
Representative or one of his or her employees is at his or her business. The
inspections will be performed in a manner that minimizes interference with the
operation of the Representative's business.
(g) Minimum Annual Performance Requirement. The Representative agrees that
his or her performance under this Agreement will be measured, in part, by the
number of Franchisees who enter into Franchise Agreements during the Term as a
result of the Representative's efforts in accordance with the Performance
Schedule stated in Exhibit A. To the extent the Representative exceeds the
Minimum Annual Performance Requirement in any Annual Period, the number of
Franchisees by which the Representative exceeds the Minimum Annual Performance
Requirement will be credited in later Annual Periods to meet the Minimum Annual
Performance Requirement for the Annual Periods. If the Term expires before the
expiration of the then current Annual Period, the Minimum Annual Performance
Requirement is prorated for that Annual Period.
(h) Notices to the Franchisor. The Representative will notify the
Franchisor in writing within 5 days of each of the following events:
(i) The actual filing of any action, suit or proceeding against the
Representative or any of his or her employees;
(ii) The issuance of any order, writ, injunction, award or decree of
any court, agency or other governmental instrumentality, that may adversely
affect the operation, financial condition or good will of the
Representative or the Franchisor; or
(iii) Notice to the Representative of a violation of any law,
ordinance or regulation by his or her business.
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If any action or proceeding is brought against the Representative regarding his
or her business, the Representative will immediately provide the Franchisor with
copies of all pleadings, papers and material correspondence regarding the action
or proceeding. The Representative will keep the Franchisor informed about the
progress and outcome of the action or proceeding.
(i) Assist in Enforcement Efforts; Temporary Management. Upon request, the
Representative will assist the Franchisor in its enforcement efforts including
the collection of delinquent accounts of Franchisees in the Area. At the request
of the Franchisor, the Representative will assume managerial control over any
abandoned or terminated Franchise in the Area until the Representative or the
Franchisor can find a successor Franchisee. The Representative will receive a
reasonable management fee equal to 5% of gross sales for these management
services.
(j) Operational Suggestions. The Representative is encouraged to submit
suggestions in writing to the Franchisor for improving elements of the System,
such as products, services, equipment, service format, advertising and any other
relevant matters, that will be considered by the Franchisor when adopting or
modifying standards, specifications and procedures for the System. The
Representative agrees that any suggestions made by the Representative under this
Agreement are the exclusive property of the Franchisor. The Franchisor has no
obligation to use these suggestions and no obligation to provide compensation
for any suggestion. The Representative may not use any suggestions inconsistent
with his or her obligations under this Agreement without the written consent of
the Franchisor.
Section 3.5 Insurance.
(a) The Representative will procure and maintain in full force and effect
during the Term, at his or her sole expense, an insurance policy or policies, as
the Franchisor may reasonably require, protecting the Representative and the
Franchisor, and their officers, directors, partners and employees, against any
loss, liability, personal injury, death, or property damage or expense arising
from the Representative's obligations under this Agreement. All liability
policies will name the Franchisor as the additional named insured and will
provide that the Franchisor will receive notice of the Representative's default
in payment of any premium and 30 days' prior written notice of termination,
cancellation, expiration or alteration to provide less coverage. The insurance
afforded by any liability policy will not be limited in any way by reason of any
insurance maintained by the Franchisor.
(b) The policy or policies procured by the Representative will be written
by a licensed insurance company and will include, at a minimum, commercial
general casualty insurance and general liability insurance, including products
liability, property damage, owned and non-owned motor vehicle coverage, and
personal injury coverage with a combined single limit of at least $1,000,000,
unless otherwise agreed in writing by the Franchisor, an "Errors and Omissions"
policy with at least $1,000,000 coverage, as well as all other insurance as may
be required by
10
statute or rule of the state in which the Area is located including workers'
compensation insurance. The Franchisor may require that additional coverages be
procured or that minimum limits be increased as necessary for the
Representative's and the Franchisor's protection.
(c) Before beginning operation of the Representative's obligations under
this Agreement, the Representative will submit to the Franchisor one or more
certificates showing that the Representative has procured the required
insurance. The Representative will submit evidence annually of the renewal or
extension of these policies.
(d) If the Representative fails to procure and maintain any required
insurance coverage or furnish satisfactory evidence of insurance, the
Franchisor, in addition to its other remedies, may, but need not, procure
insurance coverage for the Representative, who will pay the Franchisor on demand
the amount of any premiums and expenses incurred by the Franchisor in obtaining
the insurance.
Section 3.6 Confidentiality.
During the Term and at all later times, the Representative will not in any
manner, either directly or indirectly, divulge, disclose or communicate to any
person or firm, except to or for the Franchisor's benefit, any information of
any kind concerning any matters affecting the business of the Franchisor or its
affiliates, that he or she may have acquired in the course of or incident to his
or her engagement by the Franchisor, including the terms of this Agreement, the
terms of any other agreement between the Franchisor and its employees or its
Franchisees, or any Franchisee lists, compilations or profiles or the name of
any Franchisee, without regard to whether the information would be deemed
confidential or material, the Representative agreeing that the information
affects the successful and effective conduct of the Franchisor's business and
its good will, and that any breach of the terms of this Section is a material
breach of this Agreement. All of the records, files and materials created or
used by the Representative in performing his or her duties under this Agreement
are the Franchisor's sole and exclusive property and any items in the
Representative's possession will be returned immediately to the Franchisor upon
its request, and upon termination of this Agreement.
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ARTICLE 4
REPRESENTATIVE FEE AND COMPENSATION
Section 4.1 Representative Fee.
The Representative will pay to the Franchisor an initial fee of $0.00 (the
"Representative Fee") payable simultaneously with the signing of this Agreement.
The Representative Fee is fully earned by the Franchisor and is non-refundable
upon signing this Agreement in consideration for the administrative and other
costs incurred by the Franchisor and opportunities lost or deferred as a result
of the rights granted to the Representative in this Agreement.
Section 4.2 Compensation of the Representative.
(a) During the Term, the Representative is entitled to receive, as his or
her sole and exclusive compensation under this Agreement: (i) Sixteen (16)% of
the Turnkey Package Fee paid to the Franchisor by a Franchisee under a Franchise
Agreement; (ii) Fifty-five (55)% of the Royalty Fee paid to the Franchisor by a
Franchisee under a Franchise Agreement (the "Royalty Payment") and (iii) Three
thousand two hundred dollars ($3,200.00) for every deposit received under a
Development Agreement , all as and when received and earned by the Franchisor
from each Franchisee who the Representative has solicited to enter into a Pizza
Place Franchise Agreement and/or Development Agreement with the Franchisor
during the Term to operate a Franchise in the Area and who the Representative
has serviced and is servicing as provided in this Agreement.
(b) The Franchisor will pay the Turnkey Package Fee Payment to the
Representative within 15 days after the actual receipt by the Franchisor of the
Turnkey Package Fee; The Franchisor will pay the Royalty Payment to the
Representative within 30 days of actual receipt of Royalty Fees paid by
Franchisees.
(c) The Representative's right under this Agreement to receive compensation
after the expiration of the Term is limited exclusively to receiving 50% of the
Renewal Fee, if any, paid by any Franchisee who signed a Franchise Agreement
during the Term and 55% of the Royalty Fee received by the Franchisor for 2
years after expiration of the Term from any Franchisee who signed a Franchise
Agreement during the Term (the "Continuing Payments").
(d) Unless otherwise expressly provided to the contrary in this Agreement,
all expenses incurred by the Representative in soliciting prospective
Franchisees and servicing the Franchisees as required pursuant to ARTICLE 3 are
the sole expense and obligation of the Representative.
(e) The Representative agrees that he or she is not an employee of the
Franchisor and that the compensation expressly required to be paid to the
Representative under this Agreement is
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the sole and exclusive compensation of the Representative for the performance of
his or her duties under this Agreement. The Representative has no rights to
receive any employee benefits provided at any time by the Franchisor or its
affiliates including pension, life insurance, hospital and medical, disability,
profit sharing, vacation or retirement benefits to any of his or her employees.
The Representative agrees that the Franchisor is not obligated to make, and that
it is the sole responsibility of the Representative to make, on the income
earned by the Representative from the Franchisor, all periodic filings and
payments required to be made for withholding taxes, FICA taxes, SECA payments,
federal Unemployment Taxes (FUTA) and all other federal or state taxes, payments
or filings required to be paid, made or maintained other than federal or state
tax forms that under applicable laws are the responsibility of the payor.
ARTICLE 5
PROPRIETARY MARKS
Section 5.1 The Franchisor's Representations As to the Proprietary Marks.
The Franchisor represents to the Representative that:
(a) The Franchisor is the owner of all right, title, and interest in and to
the Proprietary Marks subject to the rights of senior users, if any; and
(b) The Franchisor will take all steps reasonably necessary to preserve and
protect the ownership and validity of the Proprietary Marks.
Section 5.2 Restrictions on the Representative's Use of the Proprietary
Marks.
The Franchisor will use and permit the Representative to use the
Proprietary Marks only in accordance with this Agreement. The Representative
agrees that:
(a) The Representative will use only the Proprietary Marks as designated by
the Franchisor and will use them only in the manner required or authorized and
permitted by the Franchisor;
(b) The Representative's right to use the Proprietary Marks is limited to
the uses expressly authorized under this Agreement, and any unauthorized use of
the Proprietary Marks is an infringement of the Franchisor's rights;
(c) The Representative will not use the Proprietary Marks as security for
any obligation or indebtedness;
(d) The Representative will not use the Proprietary Marks as part of his or
her
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corporate, partnership or other legal name but may use the Pizza Place trade
name as a fictitious, trade or assumed name that is properly registered, if
required by law; and
(e) The Representative will exercise precaution when utilizing the
Franchisor's Proprietary Marks to ensure that the Proprietary Marks are not
jeopardized in any manner and the Representative indemnifies and holds the
Franchisor harmless for any damage or expense occasioned by the Representative's
improper use of the Proprietary Marks.
Section 5.3 The Representative's Lack of Ownership.
The Representative agrees to the Franchisor's rights in and to the
Proprietary Marks, and agrees not to represent in any manner that the
Representative has any ownership in the Franchisor's Proprietary Marks. The
Representative agrees that his or her use of the Proprietary Marks will not
create in his or her favor any right, title or interest in or to the
Franchisor's Proprietary Marks except as the right to use same is expressly
stated in this Agreement, but that all of this use will benefit the Franchisor.
Section 5.4 Infringement by the Representative.
The Representative agrees that the use of the Proprietary Marks outside the
scope of this Agreement, without the Franchisor's written consent, is an
infringement of the Franchisor's rights in and to the Proprietary Marks, and
expressly agrees that during the Term, and after the expiration or termination
of this Agreement, the Representative will not, directly or indirectly, commit
an act of infringement or contest or aid in contesting the validity or right of
the Franchisor to the Proprietary Marks, or take any other action in derogation
of these rights.
Section 5.5 Indemnification of the Representative.
The Franchisor indemnifies the Representative against and will reimburse
the Representative for all damages for which he or she is held liable in any
proceeding involving his or her use of any Proprietary ▇▇▇▇, but only pursuant
to and in compliance with this Agreement, and for all costs reasonably incurred
by the Representative in the defense of any claim brought against him or her or
in any proceeding in which he or she is named as a party, if the Representative:
(i) has timely notified the Franchisor of the claim or proceeding in accordance
with Subsection 5.6(a); (ii) has otherwise complied with this Agreement; and
(iii) allows the Franchisor sole control of the defense and settlement of the
action in accordance with Subsection 5.6(b).
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Section 5.6 Claims Against the Proprietary Marks.
(a) Upon any claim of infringement, unfair competition or other challenge
to the Representative's right to use any Proprietary ▇▇▇▇, or if the
Representative becomes aware of any use of or claims to, any ▇▇▇▇, name, logo or
any other commercial symbol identical to or confusingly similar to any
Proprietary ▇▇▇▇, the Representative will promptly notify the Franchisor in
writing within 10 days;
(b) The Representative will not communicate with anyone except the
Franchisor and its counsel about any infringement, challenge or claim except
under judicial process. The Franchisor has sole discretion to take action as it
deems appropriate in any infringement, challenge or claim, and the sole right to
control exclusively any litigation or other proceeding involving any
infringement, challenge or claim involving any Proprietary ▇▇▇▇. The
Representative must sign all instruments and documents, render all assistance,
and do all acts that the Franchisor's attorneys deem necessary or advisable in
order to protect and maintain the Franchisor's interest in any litigation or
proceeding involving the Proprietary Marks or otherwise to protect and maintain
the Franchisor's interests in the Proprietary Marks; provided the Franchisor
will reimburse the Representative for the reasonable out-of-pocket expenses
incurred and paid by the Representative in complying with these requirements;
and
(c) If the Franchisor deems it advisable in the sole and absolute
discretion of the Franchisor, to modify or discontinue the use of any
Proprietary ▇▇▇▇ and/or use one or more additional or substitute names or marks,
including due to the rejection of any pending registration or revocation of any
existing registration of any of the Franchisor's Proprietary Marks, the
Representative is obligated to do so at his or her sole cost and expense within
30 days of the Franchisor's request.
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ARTICLE 6
PIZZA PLACE MANUALS AND OTHER
CONFIDENTIAL INFORMATION
Section 6.1 Confidential Use.
The Representative will at all times treat the Pizza Place Manuals and any
other Confidential Information as confidential, and will use his or her best
efforts to maintain the Confidential Information as confidential. The Pizza
Place Manuals will, at all times, be kept in a secure area at the
Representative's offices. The Representative will report the theft, loss or
destruction of the Pizza Place Manuals, or any portion of the Manuals,
immediately to the Franchisor. Upon the theft, loss or destruction of the Pizza
Place Manuals, a replacement set must be purchased by the Representative from
the Franchisor at a cost of $200. Moreover, the Representative agrees that
designated portions of the Pizza Place Manuals are "trade secrets" held and
treated as "trade secrets" by the Franchisor. The Representative will strictly
limit access to the Pizza Place Manuals to his or her employees, to the extent
they have a "need to know" in order to perform their jobs. The Representative
will not at any time, without the Franchisor's written consent, copy, record or
otherwise reproduce any part of the Pizza Place Manuals, nor otherwise make the
Pizza Place Manuals available to any unauthorized person except as may be
required by law, regulation or court order. All current and future principals,
employees and agents of the Representative involved in any manner with his or
her Business and having access to the Pizza Place Manuals or any other
Confidential Information, are required to sign before Initial Representative
Training or upon employment, a nondisclosure and noninterference agreement.
Section 6.2 Sole Property of the Franchisor.
The Pizza Place Manuals and other Confidential Information at all times is
and remains the sole property of the Franchisor. The Representative acquires no
right, title or interest to this property under this Agreement except to possess
and use the Pizza Place Manuals or other Confidential Information during the
Term of, and subject to the restrictions contained in, this Agreement.
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Section 6.3 Periodic Revisions.
The Franchisor may revise and change the contents of the Pizza Place
Manuals and the Representative expressly agrees to comply with each new or
changed provision. A new or changed provision is effective on the 30th day (or
any longer time as specified by the Franchisor) after written notice from the
Franchisor. Revisions to the Pizza Place Manuals are based on what the
Franchisor, in its sole discretion, deems is in the best interests of the
System, including to promote quality, enhance good will, increase efficiency,
decrease administrative burdens, or improve profitability of the Franchisor or
its franchisees. The Representative will at all times ensure his or her or its
copy of the Pizza Place Manuals contains all updates received by the
Representative from the Franchisor. Upon any dispute as to the contents of the
Pizza Place Manuals, the terms contained in the Master Copy of each of the Pizza
Place Manuals maintained by the Franchisor at the Franchisor's home office is
controlling.
Section 6.4 Prior Information.
The Representative acknowledges that all Confidential Information received
before the Agreement Date was unknown to him or her before the negotiation and
signing of this Agreement and that the marketing practices and operating
procedures developed by the Franchisor and loaned to the Representative by the
Franchisor are unique to the Franchisor. To the extent the Representative
receives any Confidential Information after the Agreement Date, and the
Representative does not object in writing to the Franchisor within 30 days after
receipt that any of the information comprising the Confidential Information
should not be considered Confidential Information, then the Representative
agrees that he or she is deemed to have irrevocably waived his or her right to
make any objection. The Representative agrees that this provision is a material
inducement for the Franchisor to enter into this Agreement, and any breach of
this provision is a material breach of this Agreement. The Representative will
take all other steps necessary, at his or her own expense, to protect the
Confidential Information and will not divulge Confidential Information either
during, or upon the expiration or termination of, this Agreement without the
written consent of the Franchisor.
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ARTICLE 7
TRANSFER OF INTEREST
Section 7.1 Transfer by the Franchisor.
The Franchisor has the absolute right to transfer, assign or delegate all
or any part of its rights or obligations under this Agreement to any person
without the consent or approval of the Representative. If the Franchisor's
transferee assumes the Franchisor's obligations under this Agreement and sends
to the Representative written notice of the assignment and assumption, the
Representative agrees within 7 days of a request to sign a release of the
Franchisor except for known claims against the Franchisor by the Representative
and except for any liabilities from which the Franchisor may not be released
under any applicable state law. The Franchisor can also transfer its stock,
engage in public and private securities offerings, merge, consolidate, acquire
other businesses including Competitive Businesses, sell all or substantially all
of its assets, borrow money (secured or unsecured), deal in its assets or
otherwise operate its business without the consent or approval of the
Representative.
Section 7.2 Transfer by the Representative.
Personal Rights. The rights and duties in this Agreement are personal to
the Representative. The Franchisor has granted this Agreement in reliance on the
Representative's business and personal skills, reputation, aptitudes and
financial capacity. Accordingly, the Representative agrees that neither the
Representative, nor any person with greater than a 10% interest (direct or
indirect) in the Representative, may sell, assign, transfer, convey or give
(collectively "transfer") any direct or indirect interest in the Representative
or in this Agreement without the written consent of the Franchisor (which shall
not be unreasonably with held); provided, however, that the Franchisor's written
consent is not required for: (i) a transfer of this Agreement by an individual
Representative to a corporation, the majority interest of which is and remains
owned by the individual Representative; (ii) a transfer of less than a 5%
interest in a publicly-held corporation; or (iii) a transfer of any part of any
interest in the Representative to another of the original shareholders or
partners of the Representative. Any purported transfer by the Representative, by
operation of law or otherwise in violation of this Agreement, is null and void
and is a material breach of this Agreement, for which the Franchisor may then
terminate without opportunity to cure.
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ARTICLE 8
DEFAULT AND TERMINATION
Section 8.1 Termination by the Representative.
If the Representative has substantially complied with this Agreement and
the Franchisor materially breaches this Agreement, the Representative has the
right to terminate this Agreement effective 10 days after delivery of written
notice of termination, if the Franchisor does not cure the breach in 30 days
after the Franchisor receives a written notice of default from the
Representative, unless the breach cannot reasonably be cured in 30 days, in
which case the Representative has the right to terminate this Agreement if,
after the Franchisor's receipt of a written notice of default from the
Representative, the Franchisor does not in 10 days undertake and continue
efforts to cure the breach and continue until completion. Any termination of
this Agreement by the Representative other than as provided above, is a wrongful
termination by the Representative.
Section 8.2 Termination by the Franchisor - Without Notice.
Subject to applicable law, this Agreement automatically terminates without
notice or opportunity to cure on the date of the occurrence of any of the
following events, which are defaults under this Agreement by the Representative.
In addition, the Representative will notify the Franchisor in writing within 3
days of each of the following events: the Representative becomes insolvent or
makes a general assignment for the benefit of creditors; a petition in
bankruptcy is filed by the Representative or a petition is filed against or
consented to by the Representative and the petition is not dismissed within 45
days; the Representative is adjudicated as bankrupt; a ▇▇▇▇ in equity or other
proceeding for the appointment of a receiver of the Representative or other
custodian for the Representative's business or assets is filed and consented to
by the Representative; a receiver or other custodian (permanent or temporary) of
the Representative's business or assets is appointed by any court of competent
jurisdiction; proceedings for a composition with creditors under federal or any
state law is instituted by or against the Representative; a final judgment in
excess of $5,000 remains unsatisfied or of record for 30 days or longer (unless
a supersedeas bond is filed); execution is levied against the Representative's
operation or property, or suit to foreclose any lien or mortgage against the
Premises or assets of the Representative is instituted against the
Representative and not dismissed within 45 days; or a substantial portion of
real or personal property of the Representative used in the Representative's
business, is sold after levy by any sheriff, marshal or constable.
Section 8.3 Termination by the Franchisor - After Notice.
The Representative is in default and the Franchisor may, at its option,
terminate this Agreement and all rights granted to the Representative under this
Agreement, without affording
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the Representative any opportunity to cure the default, effective immediately
upon notice to the Representative, upon the occurrence of any of the following
events:
(a) If the Representative commits any act involving personal dishonesty,
bad faith, misfeasance, malfeasance, willful misconduct, or willful violation of
any law, rule or regulation (other than a law, rule or regulation involving a
traffic violation or similar offense);
(b) If the Representative, or any of his or her officers, directors, owners
or employees is convicted of a felony, a crime of moral turpitude or any other
crime or offense that the Franchisor reasonably believes is likely to have an
adverse effect on the System, the Proprietary Marks, the good will associated
with the System or Proprietary Marks, or the Franchisor's interest in the System
or Proprietary Marks unless the Representative immediately and legally
terminates that individual as an officer, director, owner or employee of the
Representative;
(c) If the Representative denies the Franchisor the right to inspect his or
her business or to audit the sales and accounting records of his or her
business;
(d) If the Representative engages in conduct that is deleterious to or
reflects unfavorably on the Representative or the System in that the conduct
exhibits reckless disregard for the physical and mental well being of employees,
customers, the Franchisor's representatives or the public at large, including
battery, assault, sexual discrimination or harassment, racial discrimination or
harassment, alcohol or drug abuse or other forms of threatening, outrageous or
unacceptable behavior;
(e) If the Representative, contrary to this Agreement, purports to transfer
any rights or obligations under this Agreement, or any interest in a corporate
or partnership Representative, to any third party without the Franchisor's
written consent as required under this Agreement;
(f) If the Representative, or any of his or her directors, officers or
owners, discloses or divulges in any material respect the contents of the Pizza
Place Manuals or other trade secret or Confidential Information provided to the
Representative by the Franchisor or its affiliates, in violation of this
Agreement;
(g) If the Representative knowingly maintains false books or records, or
knowingly submits any false reports to the Franchisor;
(h) The Franchisor has received repeated complaints from Franchisees under
the Representative's responsibility that in the sole discretion of the
Franchisor are justified and are adversely affecting the System;
(i) The Representative has failed to meet the Minimum Annual Performance
Requirement in Subsection 3.4(g) and Exhibit A; or
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(j) If the Representative has received from the Franchisor 3 or more
Notices of Default for the same, similar or different defaults during any 12
consecutive-month period, even if the defaults were cured.
Section 8.4 Termination by the Franchisor - After Notice and Right to Cure.
Except as otherwise provided in Sections 8.2 and 8.3, the Representative
has 30 days after delivery from the Franchisor of a written Notice of Default
specifying the nature of the default within which to remedy any default other
than as stated in Sections 8.2 and 8.3 and provide evidence of cure satisfactory
to the Franchisor. If any default is not cured within that time, or any longer
period as applicable law may require, all the rights of the Representative under
this Agreement terminate without additional notice to the Representative
effective immediately upon the expiration of the 30-day period or any longer
period as applicable law may require. In addition to the events specified in
Sections 8.2 and 8.3, the Representative is in default under this Section for
any failure to comply with any of the requirements imposed by this Agreement, as
it may reasonably be revised or supplemented by the Pizza Place Manuals, or to
carry out the terms of this Agreement in good faith. The Representative has the
burden of proving he or she properly and timely cured any default, to the extent
a cure is permitted under this Agreement.
ARTICLE 9
OBLIGATIONS UPON TERMINATION BY THE FRANCHISOR
Upon termination by the Franchisor or expiration of this Agreement, this
Agreement and all rights granted under this Agreement to the Representative
terminate, and the Sections of this ARTICLE will apply to the rights and
obligations of the parties.
Section 9.1 Payment of Outstanding Amounts.
The Franchisor may retain all fees paid under this Agreement. In addition,
within 10 days after the effective date of the termination or expiration of this
Agreement, or any later dates as it is determined that amounts are due to the
Franchisor, the Representative will pay to the Franchisor all amounts owed to
the Franchisor or its affiliates that are then unpaid. Any fees due and owing
the Representative are paid by the Franchisor after offset of any amounts due
the Franchisor by the Representative.
21
Section 9.2 Discontinue Legal Use of Name.
The Representative will take all action as may be necessary to cancel any
fictitious, trade or assumed name registration, or equivalent registration that
contains the name "Pizza Place" or any other trademark, trade name or service
▇▇▇▇ of the Franchisor or colorable imitation of any trademark, trade name or
service ▇▇▇▇ of the Franchisor. The Representative will furnish the Franchisor
with evidence of compliance with this obligation to cancel the registration
within 30 days after termination or expiration of this Agreement. If the
Representative fails to do so, the Representative appoints the Franchisor as the
Representative's attorney-in-fact to do so for the Representative.
Section 9.3 Return of Materials.
The Representative will immediately turn over to the Franchisor in an
organized manner all materials, including the Pizza Place Manuals, records,
files, instructions, correspondence, all materials related to operating a Pizza
Place Franchise, including all Authorized Materials and other materials on the
solicitation of prospective Franchisees, and all other materials about the
operation of a Franchised Business in the Representative's possession or
control, and all copies and any other forms of reproductions of any of these
materials (all of which are acknowledged to be the sole and exclusive property
of the Franchisor), and will retain no copy or record of any of these materials,
excepting only the Representative's copy of this Agreement and related
agreements and of correspondence between the parties, copies of all Franchise
Agreements with the Franchisees in the Area entered into during the Term, and
copies of any other documents that the Representative reasonably needs for
compliance with any law. The Franchisor will reimburse the Representative for
the reasonable cost of shipping the materials to the Franchisor promptly after
receipt of invoices or other reasonable evidence of these costs.
Section 9.4 Loss of Exclusivity; Cessation of Sales; Cessation of Services.
(a) Upon the expiration of this Agreement, the Representative will: (i)
cease selling Franchises for the Franchisor; (ii) cease using all advertising
materials, forms and other materials bearing the Franchisor's Proprietary Marks;
(iii) cease holding himself or herself out as a representative of the
Franchisor; and (iv) take all steps necessary to disassociate himself or herself
from the Franchisor. As to all existing Franchises under Franchise Agreements,
the Representative will continue to service the Franchises as required in this
Agreement for 2 years after termination and will receive the Continuing Payments
as stated in Subsection 4.2(c). The Franchisor is free to sell new Franchises,
enter into new area representative agreements or other arrangements in the Area
without additional obligation to the Representative.
(b) Upon the early termination of this Agreement due to the
Representative's default, the Representative will: (i) cease selling Franchises
for the Franchisor; (ii) cease using all advertising materials, forms and other
materials bearing the Franchisor's Proprietary Marks;
22
(iii) cease holding himself or herself out as a representative of the
Franchisor; and (iv) take all steps necessary to disassociate himself or herself
from the Franchisor. At the option of the Franchisor, the Representative will
cease providing services to Franchises. In this event the Representative is not
entitled to any Continuing Payments. The Franchisor is free to sell new
Franchises, renew existing Franchises, enter into area representative agreements
or other arrangements within the Area without additional obligation to the
Representative.
ARTICLE 10
INDEPENDENT COVENANTS OF THE REPRESENTATIVE
Section 10.1 Devotion to the Sale and Servicing of Franchises.
The Representative agrees that during the Term, except as otherwise
approved in writing by the Franchisor, the Representative will faithfully,
honestly and diligently devote all necessary time, energy and best efforts to
the sale and servicing of Franchises and the business of the Franchisor and
refrain from engaging in any business or other activity that will conflict with
his or her obligations under this Agreement, whether or not the activity is
pursued for gain, profit, or other pecuniary advantage; provided, however, that
this will not be construed as preventing the Representative from investing his
or her personal assets in businesses that do not compete with the Franchisor
where the form or manner of the investment will or will not require services on
the part of the Representative in the operation of the business in which the
investments are made.
Section 10.2 Diversion of Business; Competition With the Franchisor; and
Interference.
The Representative agrees that the Franchisor would be unable to protect
the Confidential Information against unauthorized use or disclosure and would be
unable to encourage a free exchange of ideas and information among the
representatives and Franchisees within the System if representatives were
permitted to hold interests in any Competitive Business.
(a) In-Term. The Representative agrees that during the Term except as
otherwise approved in writing by the Franchisor, the Representative will not:
(i) directly or indirectly, solicit or otherwise attempt to induce, by
combining or conspiring with, or attempting to do so, or in any other
manner influence any Business Affiliate of the Franchisor to terminate or
modify his, her or its position as an employee, officer, director, agent,
consultant, representative, contractor, supplier, distributor, franchisee
or business contact with the Franchisor or to compete against the
Franchisor;
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(ii) directly, as owner, officer, director, employee, agent, lender,
franchisee or in any other capacity be connected in any manner with the
ownership, management, operation or control of or conduct a Competitive
Business (this restriction does not apply to a 5% or less beneficial
interest in a publicly-held corporation); and
(iii) in addition to, and not in limitation of the other provisions of
this Section, the Representative will not in any manner interfere with,
disturb, disrupt, decrease or otherwise jeopardize the business of the
Franchisor or any of its representatives or franchisees.
(b) Post-Term. The Representative also agrees that for a 24-month period
after the termination or expiration of this Agreement, except as otherwise
approved in writing by the Franchisor, that the Representative will not:
(i) directly, solicit or otherwise attempt to induce, by combining or
conspiring with, or attempting to do so, or in any other manner influence
any Business Affiliate of the Franchisor to terminate or modify his, her or
its business relationship with the Franchisor or to compete against the
Franchisor;
(ii) directly, as owner, officer, director, employee, agent, lender,
franchisee or in any other similar capacity be connected in any manner with
the ownership, management, operation or control, or conduct of a
Competitive Business within 5 miles of any Franchised Business then in
operation or under construction (this restriction does not apply to a 5% or
less beneficial interest in a publicly-held corporation); and
(iii) in any manner interfere with, disturb, disrupt, decrease or
otherwise jeopardize the business of the Franchisor or any of its other
franchisees.
(c) The Representative agrees that the length of the term and geographical
restrictions contained in this Agreement are fair and reasonable and not the
result of overreaching, duress or coercion of any kind. The Representative
agrees that his or her full, uninhibited and faithful observance of each of the
covenants in this Section will not cause any undue hardship, financial or
otherwise, and that enforcement of each of the covenants contained in this
Section will not impair his or her ability to obtain employment commensurate
with his or her abilities and on terms fully acceptable to him or her or
otherwise to obtain income required for the comfortable support of him or her
and his or her family, and the satisfaction of the needs of his or her
creditors.
(d) The Representative agrees that to disregard the provisions of this
ARTICLE 10 would effectively foreclose the Franchisor from selling another
franchise in the Area and other areas and the Representative could ride freely
and unfairly on the laurels of good will of and training from the Franchisor.
Moreover, the franchisees and Company-Owned Units within the
24
System could be severely disadvantaged if the Representative competes, without
authorization, against them using the Proprietary Marks and other Confidential
Information of the System. Therefore, it is the manifest intent of the
Representative and the Franchisor that, if any court finally holds that the time
or territory or any other provision in this Section is an unreasonable
restriction upon the Representative, the Representative agrees that the
provisions of this Agreement will not be rendered void, but will apply as to
time and territory or to any other extent as the court may judicially determine
or indicate is a reasonable restriction under the circumstances involved.
(e) The Representative agrees that the restrictions on activities in this
Agreement are required for the Franchisor's reasonable protection. The
Representative agrees that upon the violation by him or her of any of the
provisions of this Agreement, the Franchisor is entitled, if it so elects, to
institute and prosecute proceedings at law or in equity to obtain damages for
the violation or to enforce the specific performance of this Agreement by the
Representative or to enjoin the Representative from engaging in any activity in
violation of this Agreement.
Section 10.3 Independent Covenants.
The parties agree that the covenants in this ARTICLE will be construed as
independent of any other covenant or provision of this Agreement. The
Representative agrees that the existence of any claim he or she may have against
the Franchisor, whether or not under this Agreement, is not a defense to the
enforcement of the these covenants by the Franchisor.
ARTICLE 11
INDEPENDENT CONTRACTOR AND INDEMNIFICATION
Section 11.1 Independent Status.
The parties agree that this Agreement does not create a fiduciary
relationship between them. The Representative is an independent contractor, and
nothing in this Agreement is intended to constitute either party a legal
representative, subsidiary, joint venturer, partner, employee, affiliate or
servant of the other party for any purpose. The parties agree that nothing in
this Agreement authorizes either party to make any contract, agreement, warranty
or representation on the other party's behalf, or to incur any debt or other
obligation in the other party's name. Neither party will assume liability for,
or be liable under this Agreement as a result of, any action, or by reason of
any act or omission of the other party or any claim or judgment from any act or
omission of the other party. The Franchisor has no control over the terms of
employment of the Representative's employees or of their activities or control
over the
25
day-to-day operations of his or her business. Neither the Representative nor his
or her employees are bound by any rules, regulation or policies applicable to
the Franchisor's employees. The Representative is free to exercise his or her
own independent business judgment in determining the methods to be used in
performing his or her duties under this Agreement, including those related to
the hours of operation, the location of the Representative's office, and the
type of advertising to be used in soliciting prospective Franchisees.
Section 11.2 Indemnification.
(f) The Franchisor will defend fully, protect, indemnify and hold harmless
the Representative from every claim, demand or cause of action and all
liability, cost or expense (including reasonable attorneys' fees, costs and
expenses incurred in the defense of the Representative, even if incident to
appellate, post-judgment and bankruptcy proceedings), that may be asserted by a
Franchisee or a prospective Franchisee from a violation of federal and state
franchise laws due to the alleged failure of the Franchisor to comply with the
requirements of franchise registration and disclosure, where failure is not due
to the Representative's sales activities such as failure to deliver timely the
FOC or alleged representations or misrepresentations by the Representative.
(g) The Representative will defend fully, protect, indemnify and hold
harmless the Franchisor from every claim, demand or cause of action and all
liability, cost or expense (including reasonable attorneys' fees, costs and
expenses incurred in defense of the Franchisor, even if incident to appellate,
post-judgment or bankruptcy proceedings) that may be made or asserted by a
Franchisee, a prospective Franchisee or any third party and the performance by
the Representative under this Agreement. Also, the Representative will indemnify
and hold harmless the Franchisor from all fines, suits, proceedings, claims,
demands or actions of any nature, or from anyone whomsoever involving the
Representative's operation of a Pizza Place business. At the election of the
Franchisor, the Representative will contest and defend the Franchisor against
any claims of liability against the Franchisor. The Franchisor will have the
right, through counsel of its choice, to control the defense or response to any
claim to the extent it could affect the Franchisor financially. The Franchisor
has the right to defend any claim against it in any manner as the Franchisor
deems appropriate or desirable in its sole discretion. This indemnity obligation
continues in effect after the expiration or termination of this Agreement.
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ARTICLE 12
REPRESENTATIONS AND WARRANTIES
Section 12.1 No Reliance.
Except as expressly provided to the contrary in this Agreement, the
Franchisor makes no representations, warranties or guarantees upon which the
Representative may rely, and assumes no liability or obligation to the
Representative, by providing any waiver, approval, consent or suggestion to the
Representative in this Agreement, or by reason of any neglect, delay or denial
of any request therefor unless the conduct would otherwise be a breach of an
express obligation of the Franchisor under this Agreement.
Section 12.2 Representations of the Franchisor.
The Franchisor makes the following representations and warrants to the
Representative, which will be true and correct upon the Agreement Date and
throughout the Term:
(a) Organization. The Franchisor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
qualified to do business in the State of Florida.
(b) Authorization. The Franchisor has the corporate power to sign, deliver,
and carry out the terms of this Agreement. The Franchisor has taken all
necessary action to obtain the power to sign, deliver and carry out the terms of
this Agreement. This Agreement has been duly authorized, signed and delivered by
the Franchisor and is a valid, legal and binding agreement and obligation under
the terms of this Agreement, except as may be limited by applicable bankruptcy,
insolvency, reorganization and other laws and equitable principles affecting
creditors' rights.
(c) No Violation. Performance by the Franchisor of its obligations under
the Agreement will not result in: (i) the breach of any term of, or be a default
under any contract or agreement to which the Franchisor is a party or by which
it is bound, or be an event that, with notice, lapse of time or both, would
result in a breach or event of default; nor (ii) result in the violation by the
Franchisor of any statute, rule, regulation, ordinance, code, judgment, order,
injunction or decree.
Section 12.3 Representations of the Representative.
The Representative makes the following representations and warranties to
the Franchisor, which will be true and correct upon the Agreement Date and
throughout the Term:
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(a) Authorization. The Representative has the power to sign, deliver, and
carry out the terms of this Agreement. The Representative has taken all
necessary action to obtain the power to sign, deliver and carry out the terms of
this Agreement. This Agreement has been duly authorized, signed and delivered by
the Representative and is a valid, legal and binding agreement and obligation
under the terms of this Agreement, except as may be limited by applicable
bankruptcy, insolvency, reorganization and other laws and equitable principles
affecting creditors' rights.
(b) No Violation. Performance by the Representative of his or her
obligations under this Agreement will not result in: (i) the breach of, or be a
default under, any contract, agreement or other commitment to which the
Representative is a party or by which he or she is bound, or be an event that,
with notice, lapse of time or both, would result in a breach or event of
default; nor (ii) result in the violation by the Representative of any statute,
rule, regulation, ordinance, code, judgment, order, injunction or decree.
(c) True Copies. Copies of all documents required to be furnished by the
Representative to the Franchisor will be true and correct copies of the
documents, including all amendments or modifications to the documents and all
written representations made by the Representative, in any application,
financial statement or other document submitted to the Franchisor to obtain this
Agreement or otherwise contain no misleading or incorrect statement or material
omissions.
(d) Affidavit. The Affidavit attached as Exhibit B is true and correct in
all respects. The Representative agrees that this affidavit will be relied upon
by the Franchisor and its franchise counsel to complete its FOC and for state
franchise registration purposes.
ARTICLE 13
MEDIATION AND ARBITRATION; INJUNCTIVE RELIEF
Section 13.1 Mediation and Arbitration.
(a) In any dispute under this Agreement, before any arbitration proceeding
taking place, either party may, at its option, submit the controversy or claim
to non-binding mediation before Franchise Arbitration and Mediation, Inc.
("FAM"), or other mutually agreeable mediator and both parties will sign a
suitable confidentiality agreement. Upon submission, the obligation to attend
mediation in accordance with FAM is binding on both parties.
(b) Except as specifically modified by this Section and excepting matters
involving provisional remedies in Section 13.2, any controversy or claim arising
out of this Agreement, or any breach of this Agreement, including any claim that
this Agreement, or any part of this
28
Agreement, is invalid, illegal or otherwise voidable or void, will be submitted
to arbitration: (i) before and in accordance with the arbitration rules of FAM;
or (ii) if FAM is unable to conduct the arbitration for any reason or if both
parties agree, the claim will be submitted before the American Arbitration
Association in accordance with its commercial arbitration rules, or any other
mutually agreeable arbitration association.
(c) The provisions of this Section are construed as independent of any
other provision of this Agreement; however, if a court of competent jurisdiction
determines that any provisions are unlawful in any way, the court will modify or
interpret the provisions to the minimum extent necessary to have them comply
with the law. All issues of arbitrability or the enforcement of the agreement to
arbitrate contained in this Agreement are governed by the United States
Arbitration Act (9 U.S.C. ss. 1 et seq.) and the federal common law of
arbitration, rather than under any other governing law.
(d) Judgment upon an arbitration award may be entered in any court having
competent jurisdiction and is binding, final and non-appealable. The Franchisor
and the Representative (and their respective owners) waive to the fullest extent
permitted by law, any right to or claim for any punitive or exemplary damages
against the other and agree that upon a dispute between them each is limited to
the recovery of any actual damages sustained by him, her or it.
(e) Before any arbitration proceeding taking place, the Franchisor or the
Representative may, at its, his or her respective option, elect to have the
arbitrator conduct, in a separate proceeding before the actual arbitration, a
preliminary hearing, at which hearing testimony and other evidence may be
presented and briefs may be submitted, including a brief stating the then
applicable statutory or common law methods of measuring damages for the
controversy or claim being arbitrated.
(f) This arbitration provision is self-executing and remains in full force
and effect after the expiration or termination of this Agreement. If either
party fails to appear at any properly noticed arbitration proceeding, an award
may be entered against that party by default or otherwise.
(g) Mediation and/or arbitration will take place in the county and state
where the Franchisor's principal place of business is then located.
(h) The Franchisor and the Representative agree that no action (whether for
arbitration, damages, injunctive, equitable or other relief, including
rescission) will be maintained by any party to enforce any liability or
obligation of the other party, whether from this Agreement or otherwise, unless
brought before the expiration of the earlier of one year from the occurrence of
the facts creating the claims or within 90 days from either the actual discovery
of the facts creating the claims or from the date on which the party should
have, in the exercise of
29
reasonable diligence, discovered the facts.
(i) The obligation to mediate or arbitrate is not binding upon either party
for claims on the Franchisor's trademarks, service marks, other Proprietary
Marks, patents, or copyrights; claims related to any lease or sublease of real
property between the parties or their related entities; requests for temporary
restraining orders, preliminary injunctions or other procedures in a court of
competent jurisdiction to obtain interim relief when deemed necessary to
preserve the status quo or prevent irreparable injury pending resolution by
arbitration of the actual dispute between the parties.
(j) The prevailing party is entitled to receive from the non-prevailing
party its, his or her costs for the arbitration proceeding, including
arbitrator's fees, attorneys' fees and costs, witness fees, transcription fees,
etc. and sales and use taxes on the above, if any.
(k) The Representative agrees that arbitration between the Franchisor and
the Representative will be of the Franchisor's and the Representative's
individual claims, and that none of the Representative's claims will be
arbitrated on a class-wide basis.
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; Specific Performance.
(a) The Representative agrees that upon a breach or threatened breach of
any of the terms of this Agreement by the Representative, the Franchisor is
entitled to an injunction restraining the breach and/or to a decree of specific
performance, without showing or proving any actual damage, together with
recovery of reasonable attorneys' fees and costs incurred in obtaining equitable
relief until a final and binding determination is made by the court. This
equitable remedy is in addition to, and not in lieu of, all remedies or rights
that the Franchisor may otherwise have by virtue of any breach of this Agreement
by the Representative.
(b) The Franchisor is entitled to seek injunctive relief without the
posting of any bond or security to obtain the entry of temporary and permanent
injunctions and orders of specific performance enforcing the provisions of this
Agreement on the Representative's use of the Proprietary Marks, the obligations
of the Representative upon termination or expiration of this Agreement, any
transfers restricted under this Agreement concerning interests in the
Representative, its business and this Agreement, the assignment or proposed
assignment of its business, this Agreement or any ownership interest in the
Representative (and if a bond is nevertheless required by a court of competent
jurisdiction, the parties agree that the sum of $100 is a sufficient bond).
(c) The Representative agrees that the Franchisor may, in addition to any
other available remedies, obtain an injunction to terminate or prevent the
continuance of any existing default or violation, and/or to prevent the
occurrence of any threatened default by the Representative of this Agreement.
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ARTICLE 14
TERM
Section 14.1 Term.
The Term of this Agreement runs for 10 years from the Agreement Date,
unless sooner terminated under ARTICLE 10. The conditions under which the
Representative will have the opportunity of obtaining a Successor Pizza Place
Area Representative Agreement at the expiration of this Agreement are stated in
Section 14.2.
Section 14.2 Option to Obtain Successor Pizza Place Area Representative
Agreement.
(a) The Representative is granted options to obtain Successor Pizza Place
Area Representative Agreements in 10-year term increments on the following
conditions which must be met at the time the option is exercised and immediately
before the beginning of the Succeeding Term, unless another time is specified,
in order to obtain a Successor Pizza Place Area Representative Agreement:
(i) The Representative gives the Franchisor written notice of his or
her intention to exercise his or her option to obtain a Successor Pizza
Place Area Representative Agreement by submitting his or her application
for a Successor Pizza Place Area Representative Agreement between 9 months
and 12 months before the end of the Term;
(ii) The Representative is not in default of any provision of this
Agreement, or any other agreement between the Representative and the
Franchisor or its affiliates;
(iii) The Representative, within 30 days before the expiration of the
Term, signs and delivers to the Franchisor the Franchisor's then current
form of Pizza Place Area Representative Agreement. There will be NO FEE
charged for successive terms. Upon signing and delivery by the Franchisor
and the expiration of the Initial Term, the Successor Pizza Place Area
Representative Agreement supersedes in all respects this Agreement, and the
terms of which may differ from the terms of this Agreement; and
(iv) The Representative has complied with the Franchisor's then
current qualification and training requirements.
(b) If the Representative has not met all of the conditions in Subsection
14.2 (a), the
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Franchisor may elect not to enter into a Successor Pizza Place Area
Representative Agreement if it provides the Representative with written notice
of its intention not to enter before the expiration of this Agreement.
ARTICLE 15
DEFINITIONS
Section 15.1 Definitions
As used in this Agreement, the Exhibits attached and any other document
signed incidental to this Agreement and any exhibits to these documents, the
following terms have the following meanings:
"Agreement" means this Pizza Place Area Representative Agreement, as
amended, supplemented or otherwise modified by an agreement in writing signed by
the Representative and the Franchisor under Section 16.2.
"Agreement Date" means the signing date of this Agreement.
"Area" means the Representative's area of responsibility where he or she
may sell Franchises as stated in Section 1.2.
"Authorized Materials" means: (i) those written or recorded materials
provided by the Franchisor to the Representative for purposes of soliciting
prospective Franchisees, including the FOC, Franchise Agreement and exhibits,
brochures and applications; (ii) written or recorded materials prepared by the
Representative upon the specific written request of, or that have previously
been approved in writing by the Franchisor; and (iii) general written
correspondence prepared by the Representative that is based upon, and not
inconsistent with (i) or (ii) above, nor inconsistent with policies and
procedures of the Franchisor stated in this Agreement and otherwise in writing
by the Franchisor. No materials are considered Authorized Materials if the
Franchisor has notified the Representative (or the Representative is otherwise
aware) that the materials are no longer Authorized Materials; the materials are
not current or are misleading and the Franchisor has notified the Representative
(or the Representative is otherwise aware) that the materials are no longer
correct or are misleading; or the materials later become inconsistent with
facts, policies or procedures the Franchisor states in writing to the
Representative. The Representative will make no representations that would not,
if written, be Authorized Materials.
"Business" means the Pizza Place Franchise a Franchisee is authorized to
establish and
32
operate under the Franchise Agreement.
"Business Affiliate" means any employee, officer, director, agent,
consultant, representative, contractor, supplier, distributor, franchisee or
other business contact of the Franchisor.
"Business Day" means a day other than Saturday, Sunday or a U.S. national
holiday.
"Competitive Business" means a business in competition with the Franchisor
or any of its franchisees, that is engaged, wholly or partially, directly or
indirectly, in the sale of pizza through kiosk or mobile unit.
"Confidential Information" means all information, knowledge, know-how and
technologies that the Franchisor designates as confidential, proprietary or
trade secrets including the Pizza Place Manuals, financial information,
marketing strategies and marketing programs.
"Continuing Payments" means the payments to the Representative stated in
Subsection 4.2(c).
"Designee" means one or more representatives of the Franchisor who are
independent contractors and are appointed by the Franchisor to perform certain
of the Franchisor's duties under this Agreement or as stated in ARTICLE 4 of the
Franchise Agreement.
"Enforcement Costs" means the costs stated in Section 16.8.
"FAM" means Franchise Arbitration and Mediation, Inc.
"FOC" means the Franchisor's current Franchise Offering Circular
(Single-Unit) and all exhibits and supplements.
"Franchise" means the rights granted to a Franchisee under Pizza Place
Franchise Agreement.
"Franchise Agreement" means the Pizza Place Franchise Agreement signed
between the Franchisor and a Franchisee.
"Initial Training" means the training stated in Section 2.1.
"Notice of Default" means the notices stated in Section 8.4.
"Option Fee" means the fee stated in Subsection 14.2(a)(iii).
33
"Pizza Place Manuals" means all manuals produced by, or for the benefit of,
the Franchisor and loaned to the Representative, now existing or later produced,
and any revisions to these manuals prepared for the internal use of the
Franchised Business.
"Proprietary Marks" means the trade name and logo "Pizza Place" and all
other trademarks, service marks, trade names, logos and commercial symbols
presently owned by the Franchisor or its affiliates or later acquired or adopted
by the Franchisor as part of the System.
"Representative Fee" means the fee stated in Section 4.1.
"Royalty Fee" means the fee stated in Subsection 3.1(b) of the Franchise
Agreement.
"Royalty Payment" means the payment to the Representative stated in
Subsection 4.2(b).
"System" means the Franchisor's system for operating a Pizza Place Kiosk.
The System includes specific standards and procedures and Proprietary Property
that may be changed.
"Term" means the term of the Agreement stated in Section 14.1.
"Turnkey Package Fee" means the fee stated in Subsection 3.1(a) of the
Franchise Agreement.
"Turnkey Package Fee Payment" means the fee stated in Subsection 4.2(a).
Section 15.2 Other Definitional Provisions.
(c) All of the terms defined in this Agreement have these defined meanings
when used in other documents issued under, or delivered under this Agreement
unless the context otherwise requires or unless specifically otherwise defined
in the other document; and
(d) The term "person" includes any corporation, partnership, estate, trust,
association, branch, bureau, subdivision, venture, associated group, individual,
government, institution, instrumentality and other entity, enterprise,
association or endeavor of every nature and kind.
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ARTICLE 16
GENERAL PROVISIONS
Section 16.1 SUCCESS OF THE REPRESENTATIVE'S BUSINESS.
THE REPRESENTATIVE AGREES THAT THE SUCCESS OF THE BUSINESS VENTURE
CONTEMPLATED BY THIS AGREEMENT DEPENDS PRIMARILY UPON THE ABILITY OF THE
REPRESENTATIVE AS AN INDEPENDENT BUSINESS OWNER. THE REPRESENTATIVE AGREES THAT
NEITHER THE FRANCHISOR NOR ANY OTHER PERSON HAS GUARANTEED OR WARRANTED THAT THE
REPRESENTATIVE WILL SUCCEED IN THE OPERATION OF HIS OR HER BUSINESS OR HAS
PROVIDED ANY SALES OR INCOME PROJECTIONS OF ANY KIND TO THE REPRESENTATIVE. THE
REPRESENTATIVE AGREES THAT THERE HAVE BEEN NO REPRESENTATIONS, PROMISES,
GUARANTEES OR WARRANTIES OF ANY KIND MADE BY THE FRANCHISOR TO INDUCE THE
REPRESENTATIVE TO SIGN THIS AGREEMENT. THE REPRESENTATIVE AGREES THAT THE
REPRESENTATIVE HAS REVIEWED THE FOC AND HAS RECEIVED ALL INFORMATION THAT, IN
THE OPINION OF THE REPRESENTATIVE, IS NECESSARY FOR THE REPRESENTATIVE TO DECIDE
WHETHER TO ENTER INTO THIS AGREEMENT.
Section 16.2 Amendments.
Except as specifically provided in this Agreement, the provisions of this
Agreement may not be amended, supplemented, waived or changed orally, but only
by a written document signed by the party as to whom enforcement of any
amendment, supplement, waiver or modification is sought and making specific
reference to this Agreement. The President of the Franchisor has the authority
to sign any amendment for the Franchisor. No other officer, employee or agent of
the Franchisor has authority to sign any amendment. This Section is expressly
subject to Section 16.5.
Section 16.3 Binding Effect.
All of the terms of this Agreement, whether so expressed or not, are
binding upon, benefit of, and are enforceable by the parties and their
respective personal representatives, legal representatives, heirs, successors
and permitted assigns.
35
Section 16.4 Notices.
All notices, requests, consents and other communications required or
permitted under this Agreement will be in writing (including telex, telecopied
and telegraphic communication) and will be (as elected by the person giving
notice) hand delivered by messenger or courier service, telecopied,
telecommunicated, or mailed (airmail if international) by registered or
certified mail (postage prepaid), return receipt requested, addressed to:
If to the Franchisor: With a copy to:
American Kiosk Corporation ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Representative:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to any other address as any party may designate by notice complying with the
terms of this Section. Each notice is deemed delivered: (a) on the date
delivered if by personal delivery; (b) on the date telecommunicated if by
telecopy or telegraph; (c) on the date of transmission with confirmed answer
back if by telex, telefax or other telegraphic method; and (d) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, if mailed.
Section 16.5 Headings.
The headings and subheadings in this Agreement are for convenience of
reference only, are not to be considered a part of this Agreement and do not
limit or otherwise affect in any way the meaning or interpretation of this
Agreement.
36
Section 16.6 Severability.
(a) If any provision of this Agreement or any other agreement entered into
this Agreement is contrary to, prohibited by or deemed invalid under applicable
law or regulation, that provision will be inapplicable and omitted to the extent
so contrary, prohibited or invalid, but the remainder of this Agreement will not
be invalidated and will be given full force and effect so far as possible. If
any provision of this Agreement may be construed in two or more ways, one of
which would render the provision invalid or otherwise voidable or unenforceable
and another of which would render the provision valid and enforceable, the
provision has the meaning that renders it valid and enforceable.
(b) If any applicable and binding law or rule of any jurisdiction requires
a greater notice of the termination or non-renewal of this Agreement than is
required under this Agreement, or the taking of some other action not required
under this Agreement, or if under any applicable and binding law or rule of any
jurisdiction, any provision of this Agreement or any specification, standard or
operating procedure required by the Franchisor is invalid or unenforceable, the
notice and/or other action required by the law or rule is substituted for the
comparable provisions of this Agreement. The Franchisor has the right, in its
sole discretion, to modify the invalid or unenforceable provision,
specification, standard or operating procedure to the extent required to be
valid and enforceable.
Section 16.7 Waivers.
The failure or delay of any party at any time to require performance by
another party of any provision of this Agreement, even if known, does not affect
the right of that party to require performance of that provision or to exercise
any right, power or remedy under this Agreement. Any waiver by any party of any
breach of any provision of this Agreement should not be construed as a waiver of
any continuing or succeeding breach of that provision, a waiver of the provision
itself, or a waiver of any right, power or remedy under this Agreement. No
notice to or demand on any party in any case will, of itself, entitle that party
to any other or additional notice or demand in similar or other circumstances.
37
Section 16.8 Enforcement Costs.
If any legal action or other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in any provisions of this Agreement, the successful or
prevailing party is entitled to recover reasonable attorneys' fees, court costs
and all expenses even if not taxable as court costs (including all fees, costs
and expenses incident to arbitration, appellate, bankruptcy and post-judgment
proceedings), incurred in that action or proceeding, in addition to any other
relief to which the party may be entitled. Attorneys' fees include paralegal
fees, administrative costs, investigative costs, costs of expert witnesses,
court reporter fees, sales and use taxes, if any, and all other charges billed
by the attorneys to the prevailing party. If the Franchisor engages legal
counsel for any failure by the Representative to pay when due any monies owed
under this Agreement or submit when due any reports, information or supporting
records, or for any failure otherwise to comply with this Agreement, the
Representative must reimburse the Franchisor for any of the above-listed
expenses incurred by it.
Section 16.9 Jurisdiction and Venue.
Each of the parties irrevocably and unconditionally (a) agrees that any
suit, action or legal proceeding arising from this Agreement must be brought in
the District Court of the United States, in the district where the principal
place of business of the Franchisor is then located or, if this court lacks
jurisdiction, the courts of record of the state and county where the principal
place of business of the Franchisor is then located; (b) consents to the
jurisdiction of each court in any suit, action or proceeding; (c) waives any
objection that it, he or she may have to the laying of venue of any suit, action
or proceeding in any of these courts; and (d) agrees that service of any court
paper may be effected on the party by mail at the last known address, as
provided in this Agreement, or in any other manner as may be provided under
applicable laws or court rules in the state in which the principal place of
business of the Franchisor is then located.
Section 16.10 Remedies Cumulative.
Except as otherwise expressly provided in this Agreement, no remedy in this
Agreement conferred upon any party is intended to be exclusive of any other
remedy. Every remedy is cumulative and is in addition to every other remedy
given under this Agreement or now or later existing at law or in equity or by
statute or otherwise. No single or partial exercise by any party of any right or
remedy under this Agreement precludes any other or additional exercise of any
right or remedy.
38
Section 16.11 Effectiveness; Counterparts.
This Agreement is not effective or binding and enforceable against the
Franchisor until it is accepted by the Franchisor at its home office in Palm
Beach Gardens, Florida and signed by the President of the Franchisor. No other
officer, employee or agent of the Franchisor has authority to accept and/or sign
this Agreement for the Franchisor and the Representative is advised not to incur
any expenses under this Agreement until the Representative has received a final
signed copy of this Agreement from the Franchisor's home office signed by its
President. This Agreement may be signed in one or more counterparts, each of
which is deemed an original, but all of which together are one and the same
instrument. Confirmation of signing by telex or by telecopy or telefax of a
facsimile signature page is binding upon any party to the confirmation.
Section 16.12 Consents, Approvals and Satisfaction.
All consents or approvals required of the Franchisor are not binding upon
the Franchisor unless the consent or approval is in writing and signed by the
President of the Franchisor. No other officer, employee or agent of the
Franchisor has authority to sign any consent or approval for the Franchisor. The
Franchisor's consent or approval, whenever required, may be withheld if any
default by the Representative exists under this Agreement, or unless the
Agreement expressly states otherwise, for any other reason in the sole
discretion of the Franchisor. If the satisfaction of the Franchisor is required
in this Agreement, unless the Agreement expressly states otherwise, the
satisfaction is determined in the sole discretion of the Franchisor.
Section 16.13 Governing Law.
Except to the extent governed by the United States Trademark Act of 1946
(▇▇▇▇▇▇ Act, 15 U.S.C. ss.ss.1051 et seq., or the United States Arbitration
Act, 9 U.S.C. ss.ss.1 et seq.), this Agreement and any other agreement between
the parties and all transactions contemplated by this Agreement are governed by,
and construed and enforced in accordance with, the internal laws of the State of
Florida without regard to principles of conflicts of laws.
Section 16.14 Interpretation.
Each of the parties agree that it, he or she has have been or has had the
opportunity to have been represented by its, his or her own counsel throughout
the negotiations and at the signing of this Agreement and all of the other
documents signed incidental to this Agreement and, therefore, it, he or she will
not, while this Agreement is effective or after its termination, claim or assert
that any provisions of this Agreement or any of the other documents should be
construed against the drafter of this Agreement or any of the other documents.
39
Section 16.15 Entire Agreement.
This Agreement, its Exhibits and all other written agreements related to
this Agreement and expressly referenced in this Agreement, represent the entire
understanding and agreement between the parties on the subject matter of this
Agreement, and supersede all other negotiations, understandings and
representations, if any, made between the parties. No representations,
inducements, promises or agreements, oral or otherwise, if any, not embodied in
this Agreement are of any effect.
Section 16.16 Survival.
All obligations of the Franchisor and the Representative that expressly or
by their nature survive the expiration or termination of this Agreement,
continue in full force and effect after its expiration or termination and until
they are satisfied or by their nature expire.
Section 16.17 Force Majeure.
Neither the Franchisor nor the Representative is liable for loss or damage
or deemed to be in breach of this Agreement if its, his or her failure to
perform its, his or her obligations results solely from the following causes
beyond its, his or her reasonable control, specifically: (a) transportation
shortages, inadequate supply of equipment, merchandise, supplies, labor,
material, or energy, or voluntarily waiving the right to acquire or use any of
these causes in order to accommodate or comply with the orders, requests,
regulations, recommendations, or instructions of any federal, state, or
municipal government or any department or agency of any federal, state or
municipal government; (b) compliance with any law, ruling, order, regulation,
requirement, or instruction of any federal, state, or municipal government or
any department or agency of any federal, state or municipal government; or (c)
war, strikes, natural disaster or acts of God. Any delay resulting from any of
these causes extend performance accordingly or excuse performance, as may be
reasonable.
Section 16.18 Third Parties.
Except as provided in this Agreement to the contrary for any affiliates of
the Franchisor, nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons other than the parties and their respective personal
representatives, other legal representatives, heirs, successors and permitted
assigns. Except as provided in this Agreement to the contrary for any Designee
of the Franchisor, nothing in this Agreement is intended to relieve or discharge
the obligation or liability of any third persons to any party to this Agreement,
nor does any provision give any third persons any right of subrogation or action
over or against any party to this Agreement.
IN WITNESS WHEREOF, the parties have signed and delivered this Agreement on
the Agreement Date.
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Witnesses: REPRESENTATIVE:
-------------------------------- ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------- ---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
FRANCHISOR:
AMERICAN KIOSK CORPORATION
By:
-------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
--------------------------------
41
STATE OF FLORIDA
COUNTY OF
This instrument was signed before me on ______________, 199____, by
____________________, who personally appeared before me at the time of
notarization.
NOTARY PUBLIC - STATE OF FLORIDA
sign
-------------------------------
print
-------------------------------
Personally Known ____ OR Produced Identification ____
Type of Identification Produced:
---------------------------------------------
My Commission Expires:
STATE OF FLORIDA
COUNTY OF
This instrument was signed before me on ______________, 199____, by
_________________________, who personally appeared before me at the time of
notarization.
NOTARY PUBLIC - STATE OF FLORIDA
sign
-------------------------------
print
-------------------------------
Personally Known ____ OR Produced Identification ____
Type of Identification Produced:
---------------------------------------------
My Commission Expires:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
This instrument was signed before me on ______________, 19___, by ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, as President of American Kiosk Corporation, a Delaware corporation,
for the corporation. He personally appeared before me at the time of
notarization.
NOTARY PUBLIC - STATE OF FLORIDA:
sign
-------------------------------
print
-------------------------------
Personally Known _____ OR Produced Identification _____
Type of Identification Produced:
------------------------------------------
My Commission Expires:
43
Exhibit A to Pizza Place Area Representative Agreement
PERFORMANCE SCHEDULE
Number of Units
Year to be sold in Each Year Total Units
---- ----------------------- -----------
, 1998 _____0 _____0
, 1999 ____15 ____15
, 2000 ____20 ____35
, 2001 ____25 ____60
, 2002 ____30 ____90
, 2003 ____40 ___130
, 2004 ____50 ___180
, 2005 ____50 ___230
, 2006 ____50 ___280
, 2007 ____40 ___320
, 2008 ____40 ___360
44
Exhibit B to Pizza Place Area Representative Agreement
AREA REPRESENTATIVE'S AFFIDAVIT
RE: FRANCHISE OFFERING CIRCULAR
STATE OF _____________ )
) ss.
COUNTY OF ____________ )
BEFORE ME, the undersigned personally appeared, who being first duly
sworn on oath, deposes and says:
1. My full name is: __________________________________________________.
2. My business address and telephone number are:
_______________________________
_______________________________
_______________________________
( ) _____ - ____________
3. My home address and telephone number are:
_______________________________
_______________________________
( ) _____ - ____________
4. My present employer is: ___________________________________________.
5. My present title is: ______________________________________________.
6. My social security number is: ________ - ________ - ______________.
7. My birth date is: ________ / _________ / __________
8. The attached Employment History fully and accurately discloses my
principal occupations, titles and the names and locations of prior employers,
and the beginning and ending dates of each employment, including month and year,
during the 5 years before the date of this Affidavit.
9. There are no administrative, criminal, arbitration or civil actions
(or a material
45
action irrespective of allegations) pending against me alleging a violation of
any franchise, antitrust or securities law, fraud, unfair or deceptive
practices, or comparable allegations.
10. During the 10-year period immediately before the date of this
Affidavit, I have not been convicted of a felony or pleaded nolo contendere to a
felony charge or been held liable in a civil action by final judgment or been
the subject of a material complaint or other legal proceeding if the felony,
civil action, complaint, or other legal proceeding involved violation of any
franchise, antitrust or securities law, fraud, unfair or deceptive practices or
comparable allegations.
11. I am not subject to any currently effective injunctive or
restrictive order or decree involving any franchise or under any federal, state
or Canadian franchise, securities, antitrust, trade regulation or trade practice
law as a result of a concluded or pending action or proceeding brought by a
public agency.
12. I have not been subject to any order of any national securities
association or national securities exchange (as defined in the Securities and
Exchange Act of 1934) suspending or expelling me from membership in the
association or exchange.
13. I am a licensed real estate and/or business broker or a license is
not necessary to sell franchises in the jurisdictions in which I will be selling
Pizza Place Franchises.
14. I understand that American Kiosk Corporation and the law firm of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.A. are relying on the contents of this Affidavit for the
preparation of American Kiosk Corporation's Franchise Offering Circular ("FOC").
I have read a copy of the FOC and have found it to be accurate and complete, to
the best of my knowledge.
15. I will immediately notify American Kiosk Corporation of any change
in facts that would make any representations in this Affidavit false or
misleading.
16. This Affidavit is given for purposes of compliance with federal and
state franchise laws, and I understand that material penalties may be imposed on
me and American Kiosk Corporation for any violation of these laws.
Further Affiant sayeth not.
------------------------------------
46
STATE OF ______________
COUNTY OF _____________
This instrument was signed on _____________, 199__, by _________________,
who personally appeared before me at the time of notarization.
NOTARY PUBLIC - STATE OF __________________
sign
-------------------------------
print
-------------------------------
Personally Known ____ or Produced Identification ____
Type of Identification Produced:
---------------------------------------------
My Commission Expires:
47
EMPLOYMENT HISTORY
By: ____________________________________
Name: ____________________________________
--------------------------------------------------------------------------------
Instructions for completion: For the five years before the date of the
Affidavit, list principal occupations, titles, and the names and locations of
all prior employers, and the beginning and ending dates of each employment.
Example: From January 1987 to January 1990, I worked for ABC Company
as Vice President of Sales, in charge of the sales program
for the company's widget product line. From January 1985 to
December 1986, I worked for XYZ Company as a sales
representative, selling its ▇▇▇▇▇▇ product line in the State
of Ohio.
48
